EXHIBIT 99.1
ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made this 26th day of October,
1999, among AMCI International, Inc., a Utah corporation ("AMCI"); and OSCM-One
Xxxx.xxx, Inc., a Florida corporation ("OSCM").
W I T N E S S E T H:
RECITALS
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WHEREAS, OSCM has an 80% ownership interest in CCM Computer
Accessories, Inc. ("CCM"), a New York corporation ("CCM"), is subject to a "Put"
requiring it to purchase and has an option to purchase the remaining 20%
ownership interest in CCM and owns various assets related to its e-commerce
through its Xxxxxx.xxx virtual shopping mall, all as set forth in Exhibit A
hereto (the "OSCM Assets"), all of which OSCM wishes to sell to AMCI and AMCI
wishes to acquire.
WHEREAS, the respective Boards of Directors of AMCI and OSCM have
adopted resolutions pursuant to which AMCI shall acquire and OSCM shall sell the
OSCM Assets; and
WHEREAS, the sole consideration for the OSCM Assets shall be the
exchange of $0.001 par value common stock of AMCI (which shares are all
"restricted securities" as defined in Rule 144 of the Securities and Exchange
Commission) as outlined in Exhibit B; and
WHEREAS, OSCM shall acquire in exchange the "restricted securities" of
AMCI in a reorganization within the meaning of Section 368(a)(1)(C), Section 351
or other tax exempt Sections, rules or regulations of the Internal Revenue Code
of 1986, as amended, to the extent any such Sections, rules or regulations are
applicable to this Agreement and the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, it is agreed:
Section 1
Exchange of Stock
-----------------
1.1 Number of Shares. AMCI shall issue 2,207,898 shares or an amount
----------------
equal to approximately sixty percent (60%) of its post-Agreement outstanding
$0.001 par value common voting stock in exchange for the OSCM Assets, subject to
the assumption of liabilities related to the OSCM Assets as carried on the books
and records of OSCM. All of the shares of AMCI common stock to be issued to
OSCM shall be "restricted securities" as defined in Rule 144 of the Securities
and Exchange Commission, and shall be issued in accordance with and
subject to applicable securities laws, rules and regulations, and, when issued
for the consideration indicated, shall be deemed fully paid and non-assessable.
1.2 Further Assurances. At the Closing and from time to time
------------------
thereafter, OSCM shall execute such additional instruments and take such other
action as AMCI may request in order to exchange and transfer clear title and
ownership in the OSCM Assets to AMCI, without further consideration..
1.3 Funding. OSCM anticipates receiving a firm commitment for a
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post-Agreement investment of $25,000,000 into AMCI. $5,000,000 of this sum
will be paid to OSCM as additional consideration for the OSCM Assets, $1,000,000
of which has been paid; $1,000,000 to be paid on December 31, 1999; and
$3,000,000 to be paid by January 2, 2000; provided, however, if the $25,000,000
is not received within the time anticipated or within a reasonable time
thereafter, the requirement to pay any unpaid balance of the $5,000,000 to OSCM
shall be void.
1.4 Resignations of Present Directors and Executive Officers and
------------------------------------------------------------
Designation of New Directors and Executive Officers. On Closing, the present
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directors and executive officers of AMCI shall designate the directors nominated
by OSCM to serve in their place and stead, until the next respective annual
meetings of the stockholders and the Board of Directors of AMCI, and until their
respective successors shall be elected and qualified or until their respective
prior resignations or terminations, who shall be: Xxxx Xxxxx and Xxxxxx Xxxxx;
and then, the present directors and executive officers of AMCI shall resign, in
seriatim.
1.5 Change of Name and Forward Split. Following the Closing of this
--------------------------------
Agreement, to the extent required by Regulation 14 of the Securities and
Exchange Commission, a Proxy Statement or Information Statement shall be
prepared and mailed to the stockholders of AMCI to amend the Articles of
Incorporation of AMCI to change its name to "Xxxxxx.xxx, Inc." or some similar
name selected by the newly designated and constituted Board of Directors of AMCI
and to effect a forward split of the post-Agreement outstanding securities of
AMCI on a basis of 5.435034 for one, resulting in there being 20,000,000 post-
split and post-Agreement outstanding shares of AMCI's common stock.
1.6 Securities and Exchange Commission Filings. Promptly after
------------------------------------------
Closing, the newly designated directors and executive officers named in Section
1.4 shall cause an 8-K Current Report dated as of the Closing to be filed with
the Securities and Exchange Commission; and OSCM shall promptly file its
required Schedule 13D with the Securities and Exchange Commission.
1.7 Closing. Closing shall take place on the exchange of duly
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executed copies of this Agreement and any related exhibits by AMCI and OSCM, and
the satisfaction or waiver of any required conditions to Closing of the parties
set forth in Sections 5 and 6 hereof.
1.8 Allocation of Consideration. The parties have agreed that the
----------------------------
consideration for the OSCM assets shall be allocated $800,000 to the stock of
CCM and the balance to the assets of Xxxxxx.xxx.
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Section 2
Closing
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The Closing contemplated by Section 1 shall be held at the offices of
Xxxxxxx X. Xxxxxxxxxx, Esq., Suite 205 Hermes Building, 000 Xxxx 000 Xxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000, on or before ten days following the execution and
delivery of this Agreement, unless another place or time is agreed upon in
writing by the parties. The Closing may be accomplished by wire, express mail
or other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of AMCI
--------------------------------------
AMCI represents and warrants to, and covenants with OSCM as follows:
3.1 Corporate Status. AMCI is a corporation duly organized, validly
----------------
existing and in good standing under the laws of the State of Utah and is
licensed or qualified as a foreign corporation in all states in which the nature
of its business or the character or ownership of its properties makes such
licensing or qualification necessary (Utah only). AMCI is a publicly held
company, having previously and lawfully offered and sold a portion of its
securities in accordance with applicable federal and state securities laws,
rules and regulations. AMCI is a "reporting issuer" as that term is defined
under the Securities Exchange Act of 1934, as amended (the "1934 Act"); it is
"current" in the filing of all reports required to be filed by it; and the
registrations statements and reports previously filed by it with the Securities
and Exchange Commission are true and correct in every material respect and do
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading. Its common stock is
nominally quoted on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. (the "NASD") under the symbol "AMMN."
3.2 Capitalization. The current pre-Agreement authorized capital
--------------
stock of AMCI consists of 50,000,000 shares of $0.001 par value common voting
stock, of which approximately 1,471,932 shares are issued and outstanding, all
fully paid and non-assessable. Except as otherwise provided herein, there are
no outstanding options, warrants or calls pursuant to which any person has the
right to purchase any authorized and unissued common stock of AMCI. None of
these securities have been issued with or subject to "registration rights" of
any type of nature.
3.3 Financial Statements. The financial statements of AMCI furnished
--------------------
to OSCM, consisting of audited financial statements for the year ended December
31, 1998, and the period ended June 30, 1999, attached hereto as Exhibit C and
incorporated herein by reference,
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are correct and fairly present the financial condition of AMCI at such dates and
for the periods involved; such statements were prepared in accordance with
generally accepted accounting principles consistently applied, and no material
change has occurred in the matters disclosed therein, except as indicated in
Exhibit D, which is attached hereto and incorporated herein by reference. Such
financial statements do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading.
3.4 Undisclosed Liabilities. AMCI has no liabilities of any nature
-----------------------
except to the extent reflected or reserved against in its balance sheets,
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit D.
3.5 Interim Changes. Since the date of its balance sheets, except as
---------------
set forth in Exhibit D, there have been no (1) changes in financial condition,
assets, liabilities or business of AMCI which, in the aggregate, have been
materially adverse; (2) damages, destruction or losses of or to property of
AMCI, payments of any dividend or other distribution in respect of any class of
stock of AMCI, or any direct or indirect redemption, purchase or other
acquisition of any class of any such stock; or (3) increases paid or agreed to
in the compensation, retirement benefits or other commitments to its employees.
3.6 Title to Property. AMCI has good and marketable title to all
-----------------
properties and assets, real and personal, reflected in its balance sheets, and
the properties and assets of AMCI are subject to no mortgage, pledge, lien or
encumbrance, except for liens shown therein or in Exhibit D, with respect to
which no default exists.
3.7 Litigation. There is no litigation or proceeding pending, or to
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the knowledge of AMCI, threatened, against or relating to AMCI, its properties
or business, except as set forth in Exhibit D. Further, no officer, director or
person who may be deemed to be an "affiliate" of AMCI is party to any material
legal proceeding which could have an adverse effect on AMCI (financial or
otherwise), and none is party to any action or proceeding wherein any has an
interest adverse to AMCI.
3.8 Books and Records. From the date of this Agreement to the
-----------------
Closing, AMCI will (1) give to OSCM or its representatives full access during
normal business hours to all of AMCI's offices, books, records, contracts and
other corporate documents and properties so that OSCM or its representatives may
inspect and audit them; and (2) furnish such information concerning the
properties and affairs of AMCI as OSCM or its representatives may reasonably
request.
3.9 Tax Returns. To the extent required by applicable law, AMCI has
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filed all federal and state income or franchise tax returns required to be filed
or has received currently effective extensions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter if there is
---------------
no Closing), AMCI and its representatives will keep confidential any information
which they obtain from
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OSCM concerning the properties, assets and business of OSCM. If the transactions
contemplated by this Agreement are not consummated by October 31, 1999, AMCI
will return to OSCM all written matter with respect to OSCM obtained by AMCI in
connection with the negotiation or consummation of this Agreement.
3.11 Corporate Authority. AMCI has full corporate power and authority
-------------------
to enter into this Agreement and to carry out its obligations hereunder and will
deliver to OSCM or its representatives at the Closing a certified copy of
resolutions of its Board of Directors authorizing execution of this Agreement by
AMCI's officers and performance thereunder, and that the directors adopting and
delivering such resolutions are the duly elected and incumbent directors of
AMCI.
3.12 Due Authorization. Execution of this Agreement and performance
-----------------
by AMCI hereunder have been duly authorized by all requisite corporate action on
the part of AMCI, and this Agreement constitutes a valid and binding obligation
of AMCI and performance hereunder will not violate any provision of the Articles
of Incorporation, Bylaws, agreements, mortgages or other commitments of AMCI.
3.13 Environmental Matters. AMCI has no knowledge of any assertion by
---------------------
any governmental agency or other regulatory authority of any environmental lien,
action or proceeding, or of any cause for any such lien, action or proceeding
related to the business operations of AMCI or AMCI's predecessors. In addition,
to the best knowledge of AMCI, there are no substances or conditions which may
support a claim or cause of action against AMCI or any of AMCI's current or
former officers, directors, agents or employees, whether by a governmental
agency or body, private party or individual, under any Hazardous Materials
Regulations. "Hazardous Materials" means any oil or petrochemical products,
PCB's, asbestos, urea formaldehyde, flammable explosives, radioactive materials,
solid or hazardous wastes, chemicals, toxic substances or related materials,
including, without limitation, any substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
or "toxic substances" under any applicable federal or state laws or regulations.
"Hazardous Materials Regulations" means any regulations governing the use,
generation, handling, storage, treatment, disposal or release of hazardous
materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery
Act and the Federal Water Pollution Control Act.
3.14 Access to Information Regarding OSCM. AMCI acknowledges that it
------------------------------------
has been delivered copies of what has been represented to be documentation
containing all material information respecting OSCM and the OSCM Assets; that it
has had a reasonable opportunity to review such documentation and discuss it, to
the extent desired, with its legal counsel, directors and executive officers;
that it has had, to the extent desired, the opportunity to ask questions of and
receive responses from the directors and executive officers of OSCM, and with
the legal and accounting firms of OSCM, with respect to such documentation; and
that to the extent requested, all questions raised have been answered to AMCI's
complete satisfaction.
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Section 4
Representations, Warranties and Covenants of OSCM
-------------------------------------------------
OSCM represents and warrants to, and covenants with, AMCI as follows:
4.1 Ownership. OSCM owns the OSCM Assets, free and clear of any
---------
liens or encumbrances of any type or nature whatsoever, and has full right,
power and authority to convey the OSCM Assets without qualification or consents
of any others.
4.2 Corporate Status. OSCM is a corporation duly organized, validly
----------------
existing and in good standing under the laws of the State of Florida and is
licensed or qualified as a foreign corporation in all states or foreign
countries and provinces in which the nature of OSCM's business or the character
or ownership of OSCM properties makes such licensing or qualification necessary.
4.4 Financial Statements. The financial statements of OSCM furnished
--------------------
to AMCI, consisting of audited financial statements for the year ended December
31, 1998 and the period February 27, 1997 (Inception) through December 31, 1997,
and unaudited financial statements for the three month periods ended March 31,
1998 and 1999, attached hereto as Exhibit E and incorporated herein by
reference, are correct and fairly present the financial condition of OSCM as of
these dates and for the periods involved, and such statements were prepared in
accordance with generally accepted accounting principles consistently applied,
and no material change has occurred in the matters disclosed therein, except as
indicated in Exhibit F, which is attached hereto and incorporated herein by
reference. The OSCM Assets are properly booked on the balance sheets of OSCM in
accordance with generally accepted accounting principals. These financial
statements do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
4.5 Confidentiality. Until the Closing (and continuously if there is
---------------
no Closing), OSCM and its representatives will keep confidential any information
which they obtain from AMCI concerning its properties, assets and business. If
the transactions contemplated by this Agreement are not consummated by October
31, 1999, OSCM will return to AMCI all written matter with respect to AMCI
obtained by them in connection with the negotiation or consummation of this
Agreement.
4.6 Investment Intent. OSCM is acquiring the shares to be exchanged
-----------------
and delivered to it under this Agreement for investment and not with a view to
the sale or distribution thereof, and OSCM has no commitment or present
intention to liquidate AMCI or to sell or otherwise dispose of the AMCI shares.
OSCM shall execute and deliver to AMCI on the Closing an Investment Letter
attached hereto as Exhibit G and incorporated herein by reference, acknowledging
the "unregistered" and "restricted" nature of the shares of AMCI being received
under the Agreement in exchange for the OSCM Assets; receipt of certain material
information regarding AMCI, including, but not limited to its 10-SB Registration
Statement and all reports subsequently filed with the Securities and Exchange
Commission; and whereby OSCM will
6
compromise and/or waive any claims it has or may have against CCM by reason of
the purchase of any securities of CCM prior to the Closing of the Agreement.
4.7 Corporate Authority. OSCM has full corporate power and authority
-------------------
to enter into this Agreement and to carry out its obligations hereunder and will
deliver to AMCI or its representative at the Closing a certified copy of
resolutions of its Board of Directors authorizing execution of this Agreement by
its officers and performance thereunder.
4.8 Due Authorization. Execution of this Agreement and performance
-----------------
by OSCM hereunder have been duly authorized by all requisite corporate action on
the part of OSCM, and this Agreement constitutes a valid and binding obligation
of OSCM and performance hereunder will not violate any provision of the Articles
of Incorporation, Bylaws, agreements, mortgages or other commitments of OSCM.
With the exception of consents of its stockholders or its Board of Directors, as
may be required by applicable law, no consents or authorizations of any type or
nature whatsoever are required to convey the OSCM Assets to AMCI.
4.9 Access to Information Regarding AMCI. OSCM acknowledges that it
------------------------------------
has been delivered copies of what has been represented to be documentation
containing all material information respecting AMCI and its present and
contemplated business operations, potential acquisitions, management and other
factors; that it has had a reasonable opportunity to review such documentation
and discuss it, to the extent desired, with its legal counsel, directors and
executive officers; that it has had, to the extent desired, the opportunity to
ask questions of and receive responses from the directors and executive officers
of AMCI, and with the legal and accounting firms of AMCI, with respect to such
documentation; and that to the extent requested, all questions raised have been
answered to its complete satisfaction.
Section 5
Conditions Precedent to Obligations of OSCM
--------------------------------------------
All obligations of OSCM under this Agreement are subject, at their
option, to the fulfillment, before or at the Closing, of each of the following
conditions:
5.1 Representations and Warranties True at Closing. The
----------------------------------------------
representations and warranties of AMCI contained in this Agreement shall be
deemed to have been made again at and as of the Closing and shall then be true
in all material respects and shall survive the Closing.
5.2 Due Performance. AMCI shall have performed and complied with all
---------------
of the terms and conditions required by this Agreement to be performed or
complied with by it before the Closing.
5.3 Officers' Certificate. OSCM shall have been furnished with a
---------------------
certificate signed by the President of AMCI, in such capacity, attached hereto
as Exhibit H and incorporated herein by reference, dated as of the Closing,
certifying (1) that all representations and warranties of AMCI contained herein
are true and correct; and (2) that since the date of the
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financial statements (Exhibit C hereto), there has been no material adverse
change in the financial condition, business or properties of AMCI, taken as a
whole.
5.4 Assets and Liabilities of AMCI. Unless otherwise agreed, AMCI
------------------------------
shall have no assets and no liabilities at Closing, and all costs, expenses and
fees incident to the Agreement shall have been paid.
5.5 Resignation of Directors and Executive Officers and Designation
----------------------------------------------------------------
of New Directors and Executive Officers. The present directors and executive
---------------------------------------
officers of AMCI shall resign, and shall have designated nominees of OSCM as
outlined in Section 1.4 hereof as directors and of AMCI to serve in their place
and stead, until the next respective annual meetings of the stockholders and
Board of Directors of AMCI, and until their respective successors shall be
elected and qualified or until their respective prior resignations or
terminations; and then, such directors and executive officers shall resign, in
seriatim.
5.7 Name Change and Forward Split. Following the Closing of this
-----------------------------
Agreement, to the extent required by Regulation 14 of the Securities and
Exchange Commission, a Proxy Statement or Information Statement shall be
prepared and mailed to the stockholders of AMCI to amend the Articles of
Incorporation of AMCI to change its name to "Xxxxxx.xxx, Inc." or some similar
name selected by the newly designated and constituted Board of Directors of AMCI
and to effect a forward split of the post-Agreement outstanding securities of
AMCI on a basis of 5.435034 for one, resulting in there being 20,000,000 post-
split and post-Agreement outstanding shares of AMCI's common stock.
Section 6
Conditions Precedent to Obligations of AMCI
-------------------------------------------
All obligations of AMCI under this Agreement are subject, at AMCI's
option, to the fulfillment, before or at the Closing, of each of the following
conditions:
6.1 Representations and Warranties True at Closing. The
----------------------------------------------
representations and warranties of OSCM contained in this Agreement shall be
deemed to have been made again at and as of the Closing and shall then be true
in all material respects and shall survive the Closing.
6.2 Due Performance. OSCM shall have performed and complied with all
---------------
of the terms and conditions required by this Agreement to be performed or
complied with by them before the Closing.
6.3 Officers' Certificate. AMCI shall have been furnished with a
---------------------
certificate signed by the President of OSCM, in such capacity, attached hereto
as Exhibit I and incorporated herein by reference, dated as of the Closing,
certifying (1) that all representations and warranties of OSCM contained herein
are true and correct; and (2) that since the date of the financial statements
(Exhibit E), there has been no material adverse change in the financial
condition, business or properties of OSCM, taken as a whole.
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6.4 Prior Issued Common Stock of AMCI. All pre-Agreement outstanding
---------------------------------
common stock of AMCI shall not be subject to any challenge by OSCM or the newly
designated directors and executive officers regarding the authorization,
issuance or fully paid status thereof or otherwise, as Closing of this Agreement
shall be evidence of their satisfaction of the lawful issuance of these
securities, based upon the representations of AMCI set for in Section 3.2
hereof.
6.5 Funding. OSCM will receive a firm commitment for an investment
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of $25,000,000 within 30 days of Closing.
Section 7
Termination
-----------
Prior to Closing, this Agreement may be terminated (1) by mutual
consent in writing; (2) by either the directors of AMCI or OSCM if there has
been a material misrepresentation or material breach of any warranty or covenant
by the other party; or (3) by either the directors of AMCI or OSCM if the
Closing shall not have taken place, unless adjourned to a later date by mutual
consent in writing, by the date fixed in Section 2.
Section 8
General Provisions
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8.1 Further Assurances. At any time, and from time to time, after
------------------
the Closing, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
8.2 Waiver. Any failure on the part of any party hereto to comply
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with any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties hereunder
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that no broker or finder has acted for it in connection with this Agreement, and
agrees to indemnify and hold harmless the other parties against any fee, loss or
expense arising out of claims by brokers or finders employed or alleged to have
been employed by it.
8.4 Notices. All notices and other communications hereunder shall be
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in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first-class registered or certified mail, return receipt requested,
as follows:
AMCI: 0000 Xxxxxx Xxxxxx Xxxx
Xxxxx, XX 00000
With a copy
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to: Xxxxxxx X. Xxxxxxxxxx, Esq
Suite 205, 000 X. 000 X.
Xxxx Xxxx Xxxx, XX 00000
OSCM: 00 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
With a copy
to. Xxxxx Xxxxxxxx, Esq.
0000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
8.5 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
8.6 Headings. The section and subsection headings in this Agreement
--------
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.7 Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the laws of the State of Utah, except to the
extent pre-empted by federal law, in which event (and to that extent only),
federal law shall govern; all actions to enforce this Agreement shall be brought
in the courts of the State of Utah or the United States District Courts situated
in the State of Utah, only.
8.8 Assignment. This Agreement shall inure to the benefit of, and be
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binding upon, the parties hereto and their successors and assigns.
8.9 Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8.10 Default. In the event of any default hereunder, the prevailing
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party in any action to enforce the terms and provisions hereof shall be entitled
to recover reasonable attorney's fees and related costs.
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement
effective the day and year first above written.
AMCI INTERNATIONAL, INC.
Date: October 25, 1999 By /s/ Xxxxx X. Xxxxxxx
---------------------------
Xxxxx X. Xxxxxxx, President
OSCM-ONE XXXX.XXX, INC.
Date: October 25, 1999 By /s/ Xxxx Xxxxx
---------------------------
Xxxx Xxxxx, President
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EXHIBIT A
OSCM ASSETS
80% interest in CCM.
All liability of the "Put" respecting the remaining 20% of CCM and all
right to purchase the remaining 20% of CCM.
All assets related to its e-commerce through its Xxxxxx.xxx virtual
shopping mall, including, but not limited to all software, web sites and related
technology, customers and customer lists, patents, trademarks and trade names
and each and every thing, item, technology or otherwise, as may be related
thereto, subject to related liabilities.
EXHIBIT B
AMCI Shares to be Issued
in Exchange
-------------------
OSCM-One Xxxx.xxx, Inc. 2,207,898
00 Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
EXHIBIT C
AMCI INTERNATIONAL, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1998
AND
JUNE 30, 1999
AMCI INTERNATIONAL, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1998
CONTENTS
Independent Auditors' Report.............................. 3
Balance Sheet............................................. 4
Statements of Operations.................................. 5
Statements of Stockholders' Equity (Deficit).............. 6
Statements of Cash Flows.................................. 7
Notes to the Financial Statements......................... 9
XXXXX, XXXXXX
& COMPANY, LLC
__________________________
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors
AMCI International, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of AMCI International, Inc.
(a development stage company) as of December 31, 1998 and the related
statements of operations, stockholders' equity (deficit), and cash flows
for the years ended December 31, 1998 and 1997 and from inception on July
26, 1983 through December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide 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 AMCI International,
Inc. (a development stage company) as of December 31, 1998 and the results
of its operations and its cash flows for the years ended December 31, 1998
and 1997 and from inception on July 26, 1983 through December 31, 1998 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage company and has no
established source of revenue which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Xxxxx, Xxxxxx & Company
Xxxxx, Xxxxxx & Company
Salt Lake City, Utah
March 9, 1999
AMCI INTERNATIONAL, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
------
December 31,
1998
------------
CURRENT ASSETS
Cash $ -
Total Current Assets -
----------
TOTAL ASSETS $ -
==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 9,881
Total Current Liabilities 9,881
-----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 50,000,000 shares authorized
of $0.001 par value, 1,471,391 shares issued
and outstanding 1,471
Additional paid-in capital 73,654
Deficit accumulated during the development stage (85,006)
Total Stockholders' Equity (Deficit) (9,881)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ -
===========
The accompanying notes are an integral part of these financial statements
4
AMCI INTERNATIONAL, INC
(The Development Stage Company)
Statements of Operations
From
Inception on
For the Years Ended July 26,
December 31 1983 Through
--------------------------- December 31,
1998 1997 1998
-------- ------- --------
REVENUES $ - $ - $ -
-------- ------- --------
EXPENSES 10,869 4,136 85,006
-------- ------- --------
NET LOSS (10,869) (4,136) (85,006)
======== ======= ========
BASIC LOSS PER SHARE OF
COMMON STOCK $ (0.01) $ (0.00)
======== =======
The accompanying notes are an integral part of these financial statements
5
AMCI INTERNATIONAL, INC.
(A Development Stage Company
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Common Stock Additional During the
---------------------------- Paid-in Development
Shares Amount Capital Stage
------------ ---------- ---------- -------------
At inception on July 26, 1983 - $ - - $ -
Common stock issued for services
at $0.20 per share 4,772 5 949 -
Common stock issued for cash at
approximately $2.00 per share
12,500 12 24,988 -
Common stock issued to acquire
subsidiary recorded at
predecessor cost of $0.00 27,000 27 (27) -
Net loss from inception July 26,
1983 to December 31, 1994 - - - (27,155)
----------- ------- --------- ---------
Balance, December 31, 1994 44,272 44 25,910 (27,155)
Net loss for the year ended
December 31, 1995 - - - (100)
----------- ------- --------- ---------
Balance, December 31, 1995 44,272 44 25,910 (27,155)
Common stock issued for services
at approximately $0.03 per share
1,427,088 1,427 39,800 -
Stock split adjustment 31 - -
Contributed capital - - 1,920 -
Net loss for the year ended
December 31, 1996 - - - (42,746)
----------- ------- --------- ---------
Balance, December 31, 1996 1,471,391 1,471 67,630 (70,001)
Contributed capital - - 2,991 -
Net loss for the year ended
December 31, 1997 - - - (4,136)
----------- ------- -------- ---------
Balance, December 31, 1997 $ 1,471,391 $ 1,471 $ 70,621 $ (74,137)
----------- ------- -------- ---------
Contributed capital - - 3,033 -
Net loss for the year ended
December 31, 1998 - - - (10,869)
----------- ------- -------- ---------
Balance, December 31, 1998 1,471,391 $ 1,471 $ 73,654 $ (85,006)
=========== ======= ======== =========
The accompanying notes are an integral part of these financial statements
6
AMCI INTERNATIONAL, INC.
(A Development Stage Company
Statement of Cash Flows
From
Inception on
For the Years Ended July 26,
December 31 1983 Through
----------------------- December 31,
1998 1997 1998
--------- -------- ------------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (10,869) $ (4,136) $ (85,006)
Adjustments to reconcile net loss to net cash used
by operating activities:
Contributed capital for expenses 3,033 2,991 7,944
Stock issued for services - - 42,181
Increase (decrease) in accounts payable 7,836 1,145 9,881
--------- -------- ---------
Net Cash Used by Operating Activities - - (25,000)
--------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
--------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash - - 25,000
--------- -------- ---------
Net Cash Provided by Financing Activities - - 25,000
--------- -------- ---------
NET INCREASE (DECREASE) IN CASH - - -
--------- -------- ---------
CASH AT BEGINNING OF PERIOD - - -
CASH AT END OF PERIOD $ - $ - $ -
========= ======== =========
CASH PAID FOR:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
NON-CASH FINANCING ACTIVITIES
Contributed capital for expenses $ 3,033 $ 2,991 $ 7,944
Common stock issued for services $ - $ - $ 42,181
The accompanying notes are an integral part of these financial statements
AMCI INTERNATIONAL, INC.
(A Development Stage Company
Notes to the Financial Statements
December 31, 1998
NOTE 1 - ORGANIZATION AND HISTORY
The Company was incorporated on July 26, 1983 under the laws of State of
Utah as HJK, Ltd. The purpose of the business was to acquire and operate
or lease natural resource properties and engage in mining, milling,
production, buying and developing natural resource properties. On August
16, 1985 the Company issued 5,400,000 shares common stock to acquire 100%
of the common stock of AMCI International, Inc. (AMCI). AMCI was engaged
in manufacturing and selling quality furniture. The subsidiary was
involuntarily dissolved on December 31, 1987. Presently, the Company is
seeking a new business opportunity.
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a calendar year end.
b. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
c. Basic Loss Per Share
The computations of basic loss per share of common stock are based on the
weighted average number of shares outstanding during the period of the
financial statements.
d. Provision for Taxes
At December 31, 1998, the Company had net operating loss carryforwards of
approximately $58,000 that may be offset against future taxable income
through 2013. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance
the carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation account of the
same amount.
e. 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 revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
AMCI INTERNATIONAL, INC.
(A Development Stage Company
Notes to the Financial Statements
December 31, 1998
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course
of business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a
going concern. It is the intent of the Company to seek a merger with an
existing, operating company. Until that time, shareholders of the Company
have committed to meeting its minimal operating needs.
NOTE 3 - STOCK TRANSACTIONS
On June 15, 1996, the Company issued 200,000 shares common stock for
services rendered valued at $40,000.
On November 1, 1996, the Board of Director approved a 200 for 1 reverse
stock split and issued 1,227,088 shares of post split common stock for
services rendered, valued at $1,227. The reverse stock split has been
applied retroactively to the financial statements.
AMCI INTERNATIONAL, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 1999 and December 31, 1998
CONTENTS
Balance Sheets................................................. 3
Statements of Operations....................................... 4
Statements of Stockholders' Equity (Deficit)................... 5
Statements of Cash Flows....................................... 7
Notes to the Financial Statements.............................. 8
AMCI INTERNATIONAL, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
------
June 30, December 31,
1999 1998
------------ ---------
CURRENT ASSETS (Unaudited)
Cash $ - $ -
-------- ---------
Total Current Assets - -
-------- ---------
TOTAL ASSETS $ - $
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 13,854 $ 9,881
-------- ---------
Total Current Liabilities 13,854 9,881
-------- ---------
TOTAL LIABILITIES 13,854 9,881
-------- ---------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 50,000,000 shares authorized
of $0.001 par value, 1,471,391 shares issued
and outstanding 1,471 1,471
Additional paid-in capital 74,894 73,654
Deficit accumulated during the development stage (90,219) (85,006)
-------- ---------
Total Stockholders' Equity (Deficit) (13,854) (9,881)
-------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
$ - $ -
======== =========
The accompanying notes are an integral part of these financial statements
3
AMCI INTERNATIONAL, INC
(The Development Stage Company)
Statements of Operations
(Unaudited)
From
For the For the Inception on
Three Months ended Six Months Ended July 26,
June 30, June 30, 1983 Through
---------------------------- -------------------------- June 30,
1999 1998 1999 1998 1999
--------- -------- --------- -------- ---------
REVENUES $ - $ - $ - $ - $ -
EXPENSES 947 8,565 5,213 8,565 90,219
---------- -------- --------- -------- ---------
NET INCOME $ (947) $ (8,565) (5,213) $ (8,565) $ (90,219)
========== ======== ========= ======== =========
BASIC NET LOSS PER
SHARE OF COMMON
STOCK $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ======== ========= ========
BASIC WEIGHTED AVERAGE
OF SHARES OUTSTANDING 1,471,391 1,471,391 1,471,391 1,471,391
========== ========= ========== ========= =========
The accompanying notes are an integral part of these financial statements
4
AMCI INTERNATIONAL, INC.
(A Development Stage Company
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Common Stock Additional During the
------------------------- Paid-in Development
Shares Amount Capital Stage
--------- --------- --------- ---------
At inception on July 26, 1983 - $ - $ - $ -
Common stock issued for services
at $0.20 per share 4,772 5 949 -
Common stock issued for cash at
approximately $2.00 per share
12,500 12 24,988 -
Common stock issued to acquire
subsidiary recorded at
predecessor cost of $0.00 27,000 27 (27) -
Net loss from inception July 26,
1983 to December 31, 1994 - - - (27,155)
----------- ------- -------- ---------
Balance, December 31, 1994 44,272 44 25,910 (27,155)
Net loss for the year ended
December 31, 1995 - - - (100)
----------- ------- -------- ---------
Balance, December 31, 1995 44,272 44 25,910 (27,255)
Common stock issued for services
at approximately $0.03 per share
1,427,088 1,427 39,800 -
Stock split adjustment 31 - -
Contributed capital - - 1,920 -
Net loss for the year ended
December 31, 1996 - - - (42,746)
----------- ------- -------- ---------
Balance, December 31, 1996 1,471,391 1,471 67,630 (70,001)
Contributed capital - - 2,991 -
Net loss for the year ended
December 31, 1997 - - - (4,136)
----------- ------- -------- ---------
Balance, December 31, 1997 $ 1,471,391 $ 1,471 $ 70,621 $ (74,137)
----------- ------- -------- ---------
Contributed capital - - 3,033 -
Net loss for the year ended
December 31, 1998 - - - (10,869)
----------- ------- -------- ---------
Balance, December 31, 1998 1,471,391 $ 1,471 $ 73,654 $ (85,006)
=========== ======= ======== =========
The accompanying notes are an integral part of these financial statements
5
AMCI INTERNATIONAL, INC.
(A Development Stage Company
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Common Stock Additional During the
------------------------ Paid-in Development
Shares Amount Capital Stage
---------- -------- ----------- -----------------
Balance, December 31, 1998 1,471,391 $ 1,471 $ 73,654 $ (85,006)
Contributed capital (unaudited) - - 1,240 -
Net loss for the six months ended
June 30, 1999 (unaudited) - - - (5,213)
--------- ------- -------- ---------
Balance, June 30, 1999 (unaudited)
1,471,391 $ 1,471 $ 74,894 $ (90,219)
========= ======= ======== =========
The accompanying notes are an integral part of these financial statements
6
AMCI INTERNATIONAL, INC.
(A Development Stage Company
Statement of Cash Flows
(Unaudited)
From
For the For the Inception on
Three Months ended Six Months Ended July 26,
June 30, June 30, 1983 Through
---------------------- -------------------- June 30,
1999 1998 1999 1998 1999
------ ------ ------ ------ ------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (947) $ (8,565) $ (5,213) $ (8,565) $ (90,219)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Contributed capital for expenses 1,000 1,747 1,240 1,747 9,184
Stock issued for services - - - - 42,181
Increase (decrease) in accounts
payable (53) 6,818 3,973 6,818 13,854
------- -------- -------- -------- ---------
Net Cash Used by Operating
Activities - - - - (25,000)
------- -------- -------- -------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES: - - - - -
------- -------- -------- -------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock for cash - - - - 25,000
------- -------- -------- -------- ---------
Net Cash Provided by Financing
Activities - - - - 25,000
------- -------- -------- -------- ---------
NET INCREASE (DECREASE)
IN CASH - - - - -
------- -------- -------- -------- ---------
CASH AT BEGINNING OF PERIOD - - - - -
------- -------- -------- -------- ---------
CASH AT END OF PERIOD $ - $ - $ - $ - -
======= ======== ======== ======== =========
CASH PAID FOR:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
NON-CASH FINANCING ACTIVITIES
Contributed capital for expenses $ 1,000 $ 1,747 $ 1,240 $ 1,277 $ 9,184
Common stock issued for services $ - $ - $ - $ - $ 42,181
The accompanying notes are an integral part of these financial statements
7
AMCI INTERNATIONAL, INC.
(A Development Stage Company
Notes to the Financial Statements
December 31, 1998
NOTE 1 - ORGANIZATION AND HISTORY
The Company was incorporated on July 26, 1983 under the laws of State of
Utah as HJK, Ltd. The purpose of the business was to acquire and operate
or lease natural resource properties and engage in mining, milling,
production, buying and developing natural resource properties. On August
16, 1985 the Company issued 27,000 shares common stock to acquire 100% of
the common stock of AMCI International, Inc. (AMCI). AMCI was engaged in
manufacturing and selling quality furniture. The subsidiary was
involuntarily dissolved on December 31, 1987. Presently, the Company is
seeking a new business opportunity.
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a calendar year end.
b. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
c. Basic Loss Per Share
The computations of basic loss per share of common stock are based on the
weighted average number of shares outstanding during the period of the
financial statements.
d. Provision for Taxes
At June 30, 1999, the Company had net operating loss carryforwards of
approximately $89,000 that may be offset against future taxable income
through 2014. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance
the carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation account of the
same amount.
e. 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 revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
8
AMCI INTERNATIONAL, INC.
(A Development Stage Company
Notes to the Financial Statements
December 31, 1998
f. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation. Such adjustments are of a normal, recurring nature.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course
of business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a
going concern. It is the intent of the Company to seek a merger with an
existing, operating company. Until that time, shareholders of the Company
have committed to meeting its minimal operating needs.
NOTE 3 - STOCK TRANSACTIONS
On June 15, 1996, the Company issued 200,000 shares common stock for
services rendered valued at $40,000.
On November 1, 1996, the Board of Director approved a 200 for 1 reverse
stock split and issued 1,227,088 shares of post split common stock for
services rendered, valued at $1,227. The reverse stock split has been
applied retroactively to the financial statements.
9
EXHIBIT D
None.
EXHIBIT E
OSCM-ONE XXXX.XXX, INC.
FINANCIAL STATEMENTS
FOR THE YEAR DECEMBER 31, 1998
AND
FOR THE PERIOD ENDED MARCH 31, 1999
OSCM-ONE XXXX.XXX, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998
AND
THE PERIOD FEBRUARY 27, 1997 (INCEPTION)
THROUGH DECEMBER 31, 1997
CONTENTS
Page
----
Independent auditors' report 2
Balance sheets 3
Statement of loss 4
Statement of stockholders' equity 5
Statements of cash flows 6
Notes to financial statements 7
CERTIFIED PUBLIC ACCOUNTANTS
00 XXXX 00XX XXXXXX
XXX XXXX, XXX XXXX 00000-0000
XXXXXXX XXXXX, CPA TELEPHONE: (000) 000-0000
XXXXX XXXXXXXXX, CPA TELECOPIER: (000) 000-0000
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
One Stop Communications Corp.
We have audited the accompanying balance sheets of OSCM-One Xxxx.Xxx, Inc.
(a development stage company) as of December 31, 1998, and the related
statements of operations, stockholders' equity, and cash flows for the year
ended December 31, 1998. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of OSCM-One Xxxx.Xxx, Inc.
as of December 31, 1998, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial
statements, the Company has incurred net losses since its inception and has
experienced severe liquidity problems. Those conditions raise substantial
doubt about the Company's ability to continue as a going concern.
Management's plans in regard to those matters also are described in Note 1.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
New York, New York
July 7, 1999
OSCM-ONE XXXX.XXX, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31,
ASSETS
1998 1997
---- ----
Current assets
Cash $ -- $ 182
Prepaid expenses 30,000 --
------- -----
Total current assets 30,000 182
Organization costs, less accumulated amortization 120 150
------- -----
$30,120 $ 332
======= =====
SHAREHOLDERS' EQUITY
Shareholders' equity
Common stock, $.001 par value, 50,000,000
shares authorized, 11,696,600 shares and
4,062,400 shares issued and outstanding, respectively 11,697 4,062
Additional paid-in capital 1.028,353 11,438
Accumulated deficit (593,930) (15,168)
---------- --------
446,120 332
Less: loans receivable officers (416,000) --
---------- --------
$ 30,120 $ 332
========== ========
OSCM-ONE XXXX.XXX, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF LOSS
FOR THE YEAR ENDED DECEMBER 31, 1998
AND
THE PERIOD FEBRUARY 27, 1997 (INCEPTION)
THROUGH DECEMBER 31, 1997
Feb. 27, 1997
(inception) to
1998 1997 Dec. 31, 1998
---- ---- -------------
General and administrative expenses
Write-off of advances to related companies $ 513,000 $ -- $ 513,000
Other expenses 65,732 15,168 80,900
Amortization 30 -- 30
---------- ---------- ---------
Total general and administrative expenses 578,762 15,168 593,930
---------- ---------- ---------
Net loss $ (578,762) $ (15,168) $(593,930)
========== ========== =========
Net loss per share (basic and diluted) $(0.093) $ (0.011)
========== ==========
Weighted average number of
common shares outstanding 6,208,613 1,321,684
========== ==========
OSCM-ONE XXXX.XXX, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1998
AND
THE PERIOD FEBRUARY 27, 1997 (INCEPTION)
THROUGH DECEMBER 31, 1997
Common Stock Additional Paid-in Notes
Shares Amount Capital Deficit Receivable Total
------ ------ ------------------ ------- ---------- ------
Balance, February 27, 1997 -- $ -- $ -- $ $ -- $
Issuance of common stock,
to officer at formation of Co. 4,000,000 4,000 -- -- -- 4,000
Issuance of common stock, 66,800 66 12,534 -- -- 12,600
Repurchase of common stock, (4,400) (4) (1,096) -- -- (1,100)
Net loss for the period -- -- -- (15,168) -- (15,168)
Balance, December 31, 1997 4,062,400 4,062 11,438 (15,168) -- 332
---------- ------- ---------- --------- --------- ---------
Issuance of common stock, 2,434,200 2,435 606,115 -- -- 608,550
Issuance of common stock,
for notes receivable to officers 5,200,000 5,200 410,800 -- (416,000) --
Net loss for the year -- -- -- (578,762) -- (578,762)
---------- ------- ---------- --------- --------- ---------
Balance, December 31, 1998 11,696,600 $11,697 $1,028,353 $(593,930) $(416,000) $ 30,120
========== ======= ========== ========= ========= =========
OSCM-ONE XXXX.XXX, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
AND
THE PERIOD FEBRUARY 27, 1997 (INCEPTION)
THROUGH DECEMBER 31, 1997
Feb 27, 1997
(inception) to
1998 1997 Dec. 31, 1998
---- ---- -------------
Operating activities
Net loss $(578,762) $(15,168) (593,930)
Adjustments to reconcile net loss to net cash
used in operating activities
Amortization 30 -- 30
--------- -------- ----------
Net cash used in operating activities (578,732) (15,168) (593,900)
--------- -------- ----------
Investing activities
Organizational costs -- (150) (150)
--------- -------- ----------
Net cash used in investing activities -- (150) (150)
--------- -------- ----------
Financing activities
Proceeds from issuance of common stock 578,550 15,500 604,050
--------- -------- ----------
Net cash provided by financing activities 578,550 15,500 604,050
--------- -------- ----------
Net increase (decrease) in cash (182) 182 --
Cash, beginning of period 182 -- --
--------- -------- ----------
Cash, end of period $ -- $ 182 $ --
========= ======== =========
Supplemental disclosures
Interest paid on a cash basis $ -- $ --
========= ========
Income taxes paid on a cash basis $ -- $ --
========= ========
Non-cash investing and financing activities
Issuance of common stock
for prepaid expenses $ 30,000
=========
Issuance of common stock
for notes receivable officers $ 416,000
=========
Notes receivable officers $(416,000)
==========
Note 1-Significant accounting policies
The Company, a Florida corporation, was incorporated on February 27, 1997.
The Company, commenced its operations in March 1999, as a provider of
internet and communications technologies. Operations prior to that time
were devoted primarily to raising capital, obtaining financing, and
administrative functions.
Development State
As of December 31, 1998, the Company is considered to be a development-
stage entity, since it had not realized significant revenues from planned
principal operations. Accordingly, the within financial statements include
cumulative statements of loss and statements of cash flows for the period
from February 27, 1997 through December 31, 1998.
Going concern
The Company incurred operating losses of $578,762 and $15,168 for the year
ended December 31, 1998, and for the period ended December 31, 1997,
respectively. During 1998 the Company funded its working capital needs
through the issuance of its common stock. Approximately $580,000 was
raised in connection with said stock issuance. The Company's continual
ability to operate is dependent on its ability to raise additional capital
and generate income through the sale of its products when it commences
operations. There can be no assurance that the above will occur at any
time or in a manner that allows the Company to continue its operations in
its present form.
Intangible assets
Intangible assets consist of organization costs which are amortized over a
period of five years using the straight-line method.
Use of Estimates
Generally accepted accounting principles require 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 revenues and
expenses during the reporting period. The Company utilizes estimates in
measuring and projecting revenue, in providing for an allowance for
doubtful accounts and in recording accrued liabilities. Actual results
could differ from those estimates.
Loss Per Share
On March 3, 1997, the FASB issued Statement of Financial Accounting
Standard No. 128, "Earnings Per Share" (SFAS 128). SFAS 128 provides for
the calculation of Basic and Diluted earnings per share. Basic earnings
per share includes no dilution and is computed by dividing income available
to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the
potential dilution of securities that could share in the earnings of the
entity. The Company has adopted this pronouncement during the period ended
December 31, 1997 and it had no effect on loss per share.
Income taxes
The Company accounts for income taxes using the liability method, which
requires an entity to recognize deferred tax liabilities and assets for the
expected future tax consequences of events that have been recognized in the
Corporation's financial statement or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the difference
between the financial statement carrying
amounts and tax basis of liabilities and assets using enacted tax rates in
effect in years in which the differences are expected to reverse.
The Company currently has a net operating loss carryforward aggregating
approximately $600,000 which expires in 2012. The tax benefit of the loss,
estimated to be approximately $200,000 has been fully reserved as its
realization in future periods is not assured.
Note 2 - Shareholders' equity
During 1997, the Company issued 4 million shares of common stock to an
officer of the Company in conjunction with the formation of the Company.
The Company also sold 66,800 shares of its common stock in a private
placement to a limited group of investors for $16,600. Expenses related to
the offering, totaling $9,850, were charged to paid in capital. In July
1997 the Company repurchased 4,400 shares sold in the private placement for
$1,100.
During 1998, 2,434,000 non-restricted shares were issued for $0.25 per
share and an additional 5.2 million restricted shares were issued to the
officers of the Company at approximately 50% of market value. Said shares
were issued for $416,000 of notes receivable which appear in the
shareholders' equity section of the within balance sheet (see note 4). Of
the non-restricted shares issued in 1998, 250,000 shares were to
professionals in lieu of services performed for the Company and 120,000
shares were advanced to professionals for future services.
There are options outstanding to purchase 166,667 shares at $.25 per share.
Said options were issued to help the Company raise capital.
Note 3 - Loss on advances to related company
During 1998 the Company wished to purchase shares in Shani Technologies
LTD, ("Shani") an Israeli company partially owned by the Company's
officers, with whom they intended to enter into a joint venture and
transferred $513,000 to Shani. Said deal was never consummated. Shani
subsequently experienced financial difficulties and ceased operations. The
Company is in the process of initiating a lawsuit in Israel against Shani
for the recovery of said funds. Counsel has estimated the likelihood of
recovery of the funds to be very low.
Note 4 - Notes receivable officers
Consist of long-term non-recourse notes from shareholders for the issuance
of stock (see note 2).
Note 5 - Subsequent events
1. One Xxxx.Xxx
On March 9, 1999, the Company acquired 100% of One Xxxx.Xxx LTD. an Israeli
company which supplies internet and communications technologies.
Consideration for said company was not significant.
2. Xxxxxx Consulting and Management Ltd.
On March 24, 1999, the Company acquired all of the common shares of Xxxxxx
Consulting and Management Ltd. an Israeli financing company. Consideration
for said company was not significant.
3. CCM Computer Accessories
On June 30, 1999, the Company purchased 80% of CCM Computer Accessories
("CCM") from its shareholders for the amount of $800,000. Said amount is
payable as follows: $100,000 payable at signing, $100,000 payable in twelve
monthly installments, and $600,000 to be paid with shares of the Company as
follows: $150,000 in shares to be delivered upon signing, and nine monthly
installments of $50,000 each. The price of said shares will be the average
bid price for the twenty five business days prior to a week before the
payment due date. Additionally, the Company has obligated itself to
increase the cash inflows of "CCM" by $1.6 million over the next year.
During the first six months of 1999, "CCM" had approximately $825,000 in
gross revenues, and $65,000 in net income. On June 30, 1999, it had
approximately $20,000 in cash, $230,000 in receivables, $90,000 in
inventories, $15,000 in other assets, and $170,000 in liabilities.
4. Xxxxx Systems, Ltd.
On June 30, 1999, the Company purchased 40% of Xxxxx Systems, Ltd.
("Xxxxx"), an Israeli company for $424,020. Said amount is payable is
follows: $56,373 is due 7 days after signing, $122,549 is due 60 days after
signing, and $245,098 is due 120 days after signing. The Company will also
provide Xxxxx with $556,373 in financing within the next twelve months.
Upon receipt of the first installment, the Company will have full control
of all management functions.
During the first six months of 1999, Xxxxx had approximately $150,000 in
gross revenues, and $4,000 in net losses. On June 30, 1999, it had
approximately $115,000 in receivables, $15,000 in other assets and $140,000
in liabilities.
5. CMR Communications Ltd.
The Company has entered into a marketing agreement with CMR Communications
Ltd. ("CMR") an Israeli Company. Said agreement provides for the Company
to be the sole distributors for CMR's product subject to certain
conditions. The Company also has an option to acquire up to 40% of CMR.
6. Science Dynamics
On February 24, 1999, the Company signed an agreement with Science Dynamics
("SDC") to purchase $30 million in equipment on an as needed basis. The
Company has an option to
OSCM-ONE XXXX.XXX, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE-MONTH PERIODS ENDED MARCH 31, 1999 AND 1998
OSCM-ONE XXXX.XXX, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE-MONTH PERIODS ENDED MARCH 31, 1999 AND 1998
CONTENTS
Page
----
Consolidated balance sheets 3
Consolidated statements of operations 4
Consolidated statement of stockholders' equity 5
Consolidated statements of cash flows 6
Notes to consolidated financial statements 7
Consolidated supplementary information 13
OSCM-ONE XXXX.XXX, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
MARCH 31, 1999 AND 1998
ASSETS
1999 1998
---- ----
Current assets
Cash $380,177 $ 232
Accounts receivable 515,919 --
Prepaid expenses 31,045 --
-------- -----
Total current assets 927,141 232
Fixed assets, net of accumulated depreciation 4,894 --
-----
Organization costs, less accumulated amortization 112 142
-------- -----
$932,147 $ 374
======== =====
LIABILITIES AND SHAREHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
-------------------------------------------------------------
Current liabilities
Accounts payable $ 26,873 --
Accrued taxes 874,987 --
Accrued expenses 36,424 --
Loans payable - officer 11,008 --
Loans payable - other 8,956 --
---------- --------
Total liabilities 958,248 --
---------- --------
Shareholders' equity
Common stock $.001 par value, 50,000,000
shares authorized, 11,970,600 and 4,062,400
shares issued and outstanding, respectively 11,971 4,062
Additional paid-in capital 1,092,138 11,488
Accumulated deficit (669,529) (15,176)
---------- --------
Cumulative currency translations 319 --
---------- --------
434,899 374
Less: Notes receivable - officers (461,000) --
---------- --------
Net shareholders' equity (net capital deficiency) (26,101) 374
---------- --------
$ 932,147 $ 374
========== ========
OSCM-ONE XXXX.XXX, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE-MONTHS PERIOD ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
1999 1998
---- ----
Net sales $ 676 --
Selling, general and administrative expenses 76,346 8
----------- ----------
Operating loss (75,670) (8)
Interest Income 71 --
----------- ----------
Net loss (75,599) (8)
Gain on foreign currency translations 319 --
----------- ----------
Comprehensive net loss $ (75,280) $ (8)
=========== ==========
Net loss per share (basic and diluted) $ (0,006) $(0.000)
=========== ==========
Weighted average number of common
shares outstanding 11,760,533 4,062,591
=========== ==========
OSCM-ONE XXXX.XXX, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE-MONTHS PERIOD ENDED MARCH 31, 1999
(UNAUDITED)
Additional
Common Common Paid-in Foreign Notes
Stock Stock ------- Currency
Shares Amount Capital Deficit Translation Receivable
------ ------- ---------- ------- ----------- ----------
Balance, January 1, 1999 11,696,600 $11,697 $1,028,353 $(593,930) $ -- $(416,000)
Issuance of common stock 74,000 74 13,985 -- -- --
Issuance of common stock
for notes receivable to officers 200,000 200 49,800 -- -- (45,000)
Foreign currency
translation adjustment -- -- -- -- 319 --
Net loss for the year -- -- -- (75,599) -- --
---------- ------- ---------- --------- ----- ---------
Balance, March 31, 1999 11,970,600 $11,971 $1,092,138 $(669,529) $319 $(461,000)
========== ======= ========== ========= ===== =========
Total
-----
Balance, January 1, 1999 $ 30,120
Issuance of common stock 14,059
Issuance of common stock
for notes receivable to officers 5,000
Foreign currency
translation adjustment 319
Net loss for the year (75,599)
--------
Balance, March 31, 1999 $(26,101)
========
OSCM-ONE XXXX.XXX, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE-MONTH PERIOD ENDED MARCH 31, 1998 AND 1998
1999 1998
---------- ------
Operating activities
Net loss $ (75,599) $ (8)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation and amortization 219 8
Changes in operating assets and liabilities
Accounts receivable (515,919) --
Prepaid expenses (1,045) --
Accounts payable 26,873 --
Accrued taxes 874,987 --
Accrued expenses 36,424 --
--------- -----
Net cash provided by operating activities (345,940) --
--------- -----
Investing activities
Acquisition of fixed assets (5,105) --
--------- -----
Net cash used in investing activities (5,105) --
--------- -----
Financing activities
Proceeds from shareholders' loans 11,008 --
Proceeds from loans - other 8,956 --
Proceeds from issuance of common stock 19,059 50
--------- -----
Net cash provided by financing activities 39,023 50
--------- -----
Net increase in cash 379,858 50
Effect of foreign currency translation adjustments 319 --
--------- -----
Net increase in cash 380,177 50
Cash, beginning of period -- 182
--------- -----
Cash, end of period $ 380,177 $ 232
========= =====
Supplemental disclosures
Interest paid on a cash basis $ -- $ --
========= =====
Income taxes paid on a cash basis $ -- $ --
========= =====
Non-cash investing and financing activities
Issuance of common stock for notes receivable officers $ 45,000
=========
Notes receivable officers $ (45,000)
=========
Note 1 - Significant accounting policies
Basis of Presentation
The accompanying consolidated financial statements are unaudited but, in
the opinion of management of the Company, contain all adjustments necessary
to present fairly the financial position at March 31, 1999, the results of
operations for the three months ended March 31, 1998 and 1999. Except as
may be noted below, these adjustments are of a normal recurring nature.
The accompanying consolidated financial statements include the accounts of
the Company and its direct subsidiaries and joint ventures in which the
Company has a controlling interest.
Certain information and footnote disclosures formally included in financial
statements that have been prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules
and resolutions of the Securities and Exchange Commission, although
management of the Company believes that the disclosures contained in these
financial statements are adequate to make the information presented therein
not misleading. for further information, refer to the Company's
consolidated financial statements and notes thereto for the years ended
December 31, 1997 and 1998, as filed with the Securities and Exchange
Commission.
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 at
the date of the financial statements and the reported amounts of revenues
and expense during the reporting period. Actual results could differ from
those estimates. The results of operation for the three months ended March
31, 1999 are not necessarily indicative of the results of operations to be
expected for the full fiscal year ending December 31, 1999.
Principles of combination
These consolidated financial statements represent the operations of OSCM-
One Xxxx.Xxx, Inc. ("Company"), a Florida holding company. One Xxxx.Xxx
LTD. ("OSCM"), an Israeli company which supplies internet and
communications technologies, and Xxxxxx Consulting and Management Ltd.
("Xxxxxx"), an Israeli financing company.
On March 9, 1999, the Company acquired all of OSCM's common stock.
On March 24, 1999, the Company acquired all of the common shares of Xxxxxx.
Consideration for said companies was not significant. On March 31, 1999
only one segment of the consolidated group had conducted business in Israel
with one major customer.
The consolidated financial statements include the financial information of
OSCM from March 9, 1999, and Xxxxxx from March 24, 1999, the respective
dates of each acquisition.
All intercompany accounts and transactions have been eliminated in
consolidation.
Going concern
The Company incurred operating losses of $578,762 and $15,168 for the year
ended December 31, 1998, and for the period ended December 31, 1997,
respectively. During 1998 the Company funded its working capital needs
through the issuance of its common stock. Approximately $580,000 was
raised in connection with said stock issuance. The Company's continual
ability to operate is dependent on its ability to raise additional capital
and generate income through the sale of its products when it commences
operations.
There can be no assurance that the above will occur at any time or in a
manner that allows the Company to continue its operations in its present
form.
Fixed assets
Fixed assets are carried at cost. The Company uses the straight line
method for depreciating newly acquired fixed assets. The use of this
method, which differs from methods recognized by generally accepted
accounting principles, does not materially affect the account balances of
depreciation expense and accumulated depreciation.
Expenditures for maintenance and repairs are charged against operations as
incurred, and expenditures for additions, major renewals and betterments
are capitalized.
Intangible assets
Intangible assets consist of organization costs which are amortized over a
period of five years using the straight-line method.
Loss Per Share
On March 3, 1997, the FASB issued Statement of Financial Accounting
Standard No. 128, "Earnings Per Share" (SFAS 128). SFAS 128 provides for
the calculation of Basic and Diluted earnings per share. Basic earnings
per share includes no dilution and is computed by dividing income available
to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the
potential dilution of securities that could share in the earnings of the
entity. The Company has adopted this pronouncement during the period ended
December 31, 1997 and it had no effect on loss per share.
Income Taxes
The Company accounts for income taxes using the liability method which
requires an entity to recognize deferred tax liabilities and assets for the
expected future tax consequences of events that have been recognized in the
Corporation's financial statement or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the difference
between the financial statement carrying amounts and tax basis of
liabilities and assets using enacted tax rates in effect in years in which
the differences are expected to reverse.
Income tax expense (benefit) is determined on a separate company basis and
includes current Federal, foreign and state taxes and deferred taxes. For
U.S. purposes, the Company files its tax returns on a cash basis. The
Company currently has a net operating loss carryforward aggregating
approximately $675,000 which expires in 2012. The tax benefit of the loss,
estimated to be approximately $225,000 has been fully reserved as its
realization in future periods is not assured.
Foreign Currency Translation
Foreign currency denominated assets and liabilities of the subsidiaries
where the U.S. dollar is the functional currency and which have certain
transactions denominated in a local currency are remeasured as if the
functional currency was the U.S. dollar. The remeasurement of local
currency into U.S. dollar creates translation adjustments which are
included in income.
New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement No.
130, "Reporting Comprehensive Income." Statement No. 130 establishes
standards for the reporting and display of comprehensive income and its
components in the full set of financial statements, and does not address
recognition or measurement of comprehensive income and its components. The
adoption of this Statement had no material effect on the financial
statements.
Also in June 1997, the Financial Accounting Standards Board issued
Statement No. 131, "Disclosures about Segments of an Enterprise and Related
Information." Statement No. 131 establishes standards for the reporting of
financial information from operating segments in annual and interim
financial statements. This Statement requires that financial information
be reported on the basis that it is reported internally for evaluating
segment performance and deciding how to allocate resources to segments.
Because the Company is in a single line of business, it was not affected by
the adoption of this Statement.
In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities", which
is required to be adopted in years beginning after June 15, 1999. Because
the Company does not use derivatives, instruments or hedging activities,
management does not anticipate that the adoption of the new Statement will
have a material effect on earnings or the financial position of the
Company.
Concentrations of credit risk
Financial instruments that potentially subject the company to
concentrations of credit risk consist principally of trade receivables,
cash and cash equivalents marketable securities and short-term deposits.
The majority of the Company's cash and cash equivalents and short-term
deposits are invested in dollar and dollar-linked instruments with major
Israeli banks. Management believes that the financial institutions that
hold the Company's investments are financially sound, and accordingly,
minimal credit risk exists with respect to these investments.
The Company's trade receivables are derived from sales to customers located
primarily in Israel. The Company performs ongoing credit evaluations of
its customers and to date has not experienced any material losses. No
allowance was deemed necessary for the period ended March 31, 1999.
Additionally, all the receivables outstanding at March 31, 1999 were
collected at the time of the issuance of this statement.
Note 2 - Shareholders' equity
During the period of January 1, 1999 to March 31, 1999, 200,000 free shares
were issued to an officer at $.25 per share. $45,000 of said shares were
issued for notes receivable which appear in the shareholders' equity
section of the within balance sheet (see note 5). 74,000 shares were
issued to others at $.25 per share.
An officer has options outstanding to purchase 800,000 free shares at $.25
per share, and other individuals have options to purchase 220,667 shares at
$.25 per share. All of these options were granted to help the Company
raise capital.
Note 3 - Loans - officer
These consist of non-interest-bearing demand loans.
Note 4 - Loans - other
These consist of non-interest-bearing demand loans from unrelated third
parties.
Note 5 - Notes receivable officers
Consist of long-term non-recourse notes from shareholders for the issuance
of stock (see note 2).
Note 6 - Subsequent events
1. CCM Computer Accessories
On June 30, 1999, the Company purchased 80% of CCM Computer Accessories
("CCM") from its shareholders for the amount of $800,000. Said amount is
payable as follows: $100,000 payable at signing, $100,000 payable in twelve
monthly installments, and $600,000 to be paid with shares of the Company as
follows: $150,000 in shares to be delivered upon signing, and nine monthly
installments of $50,000 each. The price of said shares will be the average
bid price for the twenty five business days prior to a week before the
payment due date. Additionally, the Company has obligated itself to
increase the cash inflows of "CCM" by $1.6 million over the next year.
During the first six months of 1999, "CCM" had approximately $825,000 in
gross revenues, and $65,000 in net income. On June 30, 1999, it had
approximately $20,000 in cash, $230,000 in receivables, $90,000 in
inventories, $15,000 in other assets, and $170,000 in liabilities.
2. Xxxxx Systems, Ltd.
On June 30, 1999, the Company purchased 40% of Xxxxx Systems, Ltd.
("Xxxxx"), an Israeli company for $424,020. Said amount is payable is
follows: $56,373 is due 7 days after signing, $122,549 is due 60 days after
signing, and $245,098 is due 120 days after signing. The Company will also
provide Xxxxx with $556,373 in financing within the next twelve months.
Upon receipt of the first installment, the Company will have full control
of all management functions.
During the first six months of 1999, Xxxxx had approximately $150,000 in
gross revenues, and $4,000 in net losses. On June 30, 1999, it had
approximately $115,000 in receivables, $15,000 in other assets and $140,000
in liabilities.
3. CMR Communications Ltd.
The Company has entered into a marketing agreement with CMR Communications
Ltd. ("CMR") an Israeli Company. Said agreement provides for the Company
to be the sole distributors for CMR's product subject to certain
conditions. The Company also has an option to acquire up to 40% of CMR.
4. Science Dynamics
On February 24, 1999, the Company signed an agreement with Science Dynamics
("SDC") to purchase $30 million in equipment on an as needed basis. The
Company has an option to purchase 2.5 million shares of SDC at various
prices during the next 12 months. The Company is currently testing the
equipment to see if it meets its specifications.
Note - 7 Related party transactions
On March 30, 1999 Xxxxxx sold equipment to International Leasing LTD
("Leasing") for $5.3 Million. Leasing leased said equipment to
International Technologies and Developments, Inc. ("ITD"), a company owned
by an officer of the Company, for 36 months. ITD did not present Leasing
with suitable securities for its liability and, therefore, a buy-back
agreement was executed between the Leasing and Xxxxxx. If ITD were to
default on its payments to Leasing, then Leasing would return the equipment
to Xxxxxx and be refunded the purchase price. Xxxxxx'x above-mentioned
$5.3 Million in revenues were initially required to be deposited in a bank
with the balance due Leasing remaining in the bank until the end of the
lease term. Said transaction was not recorded because the equipment was
not yet delivered to Leasing at March 31,
1999, and the uncertainty of the fulfillment of the terms thereof. Value
Added Tax, however, was recorded on this financial statement because
Israeli law requires its payment upon presentation of an invoice even
before the actual sale transpires. The accounts receivable and the accrued
taxes appearing on the balance sheet represent Value Added Tax due the
Company from its client and the amount owed to the Israeli government. To
date, no equipment has been supplied to ITD and ITD has therefore not made
any payments to Leasing.
OSCM-ONE XXXX.XXX, INC., AND SUBSIDIARIES
CONSOLIDATED SUPPLEMENTARY INFORMATION
(UNAUDITED)
THREE-MONTHS PERIOD ENDED MARCH 31, 1999 AND 1998
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
1999 1998
---- ----
Payroll and related taxes $39,907 $ --
Royalty expenses 17,290 --
Professional fees 5,788 --
Bank charges 4,799 --
Travel 3,726 --
Office expense and sundry 1,963 --
Advertising 1,039 --
Telephone and facsimile 831 --
Rent 789 --
Depreciation and amortization 219 8
------- -----
$76,346 $ 8
======= =====
EXHIBIT F
None.
EXHIBIT G
Atlas Stock Transfer
0000 Xxxxx Xxxxx
Xxxxxx, Xxxx 00000
AMCI International, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Re:Acquisition of shares of AMCI International, Inc., a Utah corporation ("AMCI"
or the "Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Asset Purchase Agreement (the "Agreement")
between OSCM-One Xxxx.xxx, Inc. ("OSCM") and AMCI, the undersigned acknowledges
that he is authorized to sign on behalf of OSCM; that OSCM has approved this
exchange; that OSCM is aware of all of the terms and conditions of the
Agreement; that OSCM has received and reviewed a copy of any and all material
documents regarding the Company, including, but not limited to Articles of
Incorporation, Bylaws, financial statements and the Company's Registration
Statements and Reports as filed with the Securities and Exchange Commission via
XXXXX for the past twelve months. The undersigned represents and warrants that
no director or officer of the Company or any associate of either has solicited
this exchange; that the undersigned is an "accredited investor" as that term is
known under the general rules and regulations of the Securities and Exchange
Commission (see Exhibit "A" hereto); and/or, represents and warrants that the
undersigned has sufficient knowledge and experience to understand the nature of
the exchange and is fully capable of bearing the economic risk of the loss of
its entire cost basis.
The undersigned understands that you have and will make books and
records of your Company available to OSCM for its inspection in connection with
the contemplated exchange of shares, and that OSCM has been encouraged to review
the information and ask any questions that the undersigned may have concerning
the information of any director or officer of the Company or of the legal and
accounting firms for the Company. The undersigned understands that the
accounting firm for AMCI is Xxxxx, Xxxxxx & Company, Certified Public
Accountants, 00 Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxx Xxxx, Xxxx 00000;
Telephone #000-000-0000; and that legal counsel for AMCI is Xxxxxxx X.
Xxxxxxxxxx, Esq., 000 Xxxx 0xx Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000,
Telephone #000-000-0000.
The undersigned also understands that OSCM must bear the economic risk
of ownership of any of the AMCI shares for a long period of time, the minimum of
which will be one (1) year, as these shares are "unregistered" shares and may
not be sold unless any subsequent offer or sale is registered with the United
States Securities and Exchange Commission or
otherwise exempt from the registration requirements of the Securities Act of
1933, as amended (the "Act"), or other applicable laws, rules and regulations.
The undersigned intends that you rely on all of my representations
made herein and those in the personal questionnaire (if applicable) provided to
OSCM for use by AMCI as they are made to induce you to issue OSCM the shares of
AMCI under the Agreement, and the undersigned further represents (of my personal
knowledge or by virtue of my reliance on one or more personal representatives),
and agrees as follows, to-wit:
1. That the shares being acquired are being received for investment
purposes and not with a view toward further distribution;
2. That the undersigned has a full and complete understanding of the
phrase "for investment purposes and not with a view toward further
distribution";
3. That the undersigned understands the meaning of "unregistered
shares" and knows that they are not freely tradeable;
4. That any stock certificate issued by you to OSCM in connection
with the shares being acquired shall be imprinted with a legend restricting the
sale, assignment, hypothecation or other disposition unless it can be made in
accordance with applicable laws, rules and regulations;
5. The undersigned agrees that the stock transfer records of your
Company shall reflect that OSCM has requested the Company not to effect any
transfer of any stock certificate representing any of the shares being acquired
unless OSCM shall first have obtained an opinion of legal counsel to the effect
that the shares may be sold in accordance with applicable laws, rules and
regulations, and OSCM understands that any opinion must be from legal counsel
satisfactory to the Company and, regardless of any opinion, OSCM understands
that the exemption covered by any opinion must in fact be applicable to the
shares;
6. That OSCM shall not sell, offer to sell, transfer, assign,
hypothecate or make any other disposition of any interest in the shares being
acquired except as may be pursuant to any applicable laws, rules and
regulations;
7. OSCM is fully capable of bearing the economic risks attendant to
this investment, without qualification; and
8. OSCM also understands that without approval of counsel for AMCI,
all shares of AMCI to be issued and delivered to OSCM shall be represented by
one stock certificate only and which such stock certificate shall be imprinted
with the following legend or a reasonable facsimile thereof on the front and
reverse sides thereof:
The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be sold or otherwise transferred unless compliance with the
registration provisions of such Act has been made or unless
availability of an exemption from such registration provisions has
been established, or unless sold pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be accompanied by
a letter signed by the requesting stockholder setting forth all relevant facts
relating to the request. AMCI will attempt to accommodate any stockholders'
request where AMCI views the request is made for valid business or personal
reasons so long as in the sole discretion of AMCI, the granting of the request
will not facilitate a "public" distribution of unregistered shares of common
voting stock of AMCI.
You are requested and instructed to issue a stock certificate as
follows, to-wit:
OSCM-One Xxxx.xxx, Inc. 2,207,898 shares
00 Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Dated this ________ day of _______________________, 1999.
Very truly yours,
______________________________________
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
ASSET PURCHASE AGREEMENT
The undersigned, the President of AMCI International, Inc., a Utah
corporation ("AMCI"), represents and warrants the following as required by the
Asset Purchase Agreement (the "Agreement") between AMCI and OSCM-One Stop, Inc.,
a Florida corporation ("OSCM").
1. That he is the President of AMCI and has been authorized and
empowered by its Board of Directors to execute and deliver this Certificate to
OSCM.
2. Based on his personal knowledge, information, belief and
opinions of counsel for AMCI regarding the Agreement:
(i) All representations and warranties of AMCI contained within the
Agreement are true and correct;
(ii) AMCI has complied with all terms and provisions required of it
pursuant to the Agreement; and
(iii) There have been no material adverse changes in the financial
position of AMCI as set forth in its financial statements for
the year ended December 31, 1998, and the period ended June 30,
1999, except as set forth in Exhibit D to the Agreement.
AMCI INTERNATIONAL, INC.
By_________________________________
Xxxxx X. Xxxxxxx, President
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
ASSET PURCHASE AGREEMENT
The undersigned, the President of OSCM-One Xxxx.xxx, Inc., a Florida
corporation ("OSCM"), represents and warrants the following as required by the
Asset Purchase Agreement (the "Agreement") between OSCM and AMCI International,
Inc., a Utah corporation ("AMCI"):
1. That he is the President of OSCM and has been authorized and
empowered by its Board of Directors to execute and deliver this Certificate to
AMCI.
2. Based on his personal knowledge, information, belief:
(i) All representations and warranties of OSCM contained within the
Agreement are true and correct;
(ii) OSCM has complied with all terms and provisions required of it
pursuant to the Agreement; and
(iii) There have been no material adverse changes in the financial
position of OSCM as set forth in its financial statements for
the year ended December 31, 1998, and the period ended March
31, 1999, except as set forth in Exhibit F to the Agreement.
OSCM-ONE XXXX.XXX, INC.
By_________________________________
Xxxx Xxxxx, President
