FORM 10-KSB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED] for the transition period from
Commission file number: 000-30007
NORTHBOROUGH HOLDINGS, INC
(Name of small business issuer in its charter)
COLORADO 000-30007 050508624
--------------- --------------------- -------------------
(State of (Commission File No.) (IRS Employer ID No.)
Incorporation)
1250 Turks Head Building
Providence, RI 02903
401-272-5800
--------------------------------------------------
(Address of Principal Executive Offices)
NADEAU & SIMMONS, P.C.
1250 TURKS HEAD BUILDING
PROVIDENCE, RI 02903
401-272-5800
--------------------------------------------------
(Name and Address of agent for service)
Securities registered pursuant to Section 12(b) of the Securities
Exchange Act:
Title of each class Name of each exchange
on which registered
Not Applicable NONE
Securities registered pursuant to section 12(g) of the Securities
Exchange Act:
COMMON STOCK,
NO PAR VALUE PER SHARE NASD
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB
[ ]
As of December 31, 2000, 1,200,000 shares of the issuer's Common Stock
were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
The following documents are following by reference into the annual report:
a)-1. The Company's Form 10-QSB, filed July 18, 2000 for the
quarter ending March 31, 2000;
The Company's Form 10-QSB, filed August 14, 2000
for the quarter ending June 30, 2000;
The Company's Form 10-QSB, filed November 14, 2000 for
the quarter ending September 30, 2000;
all other reports filed pursuant to section 13(a) or 15(d) since the end of
the period covered by the above reports.
(a)-2. All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the
date hereof and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
de-registers all securities covered hereby then remaining unsold shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents, except as to any portion of any future
Annual or Quarterly Report to Stockholders which is deemed to be modified or
superseded for purposes of this Registration Statement to the extent that such
statement is replaced or modified by a statement contained in a subsequently
dated document incorporated by reference or contained in this Registration
Statement.
(a)-3 The description of the Company's common stock which is contained in the
Form 10SB12G, Registration Statement filed under Section 12 of the Securities
Exchange Act of 1934, including any amendments or reports filed for the
purpose of updating such description.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
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IMPORTANT FACTORS RELATED TO
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
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The statements contained in this registration statement that are not purely
historical are forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including statements regarding the Company's
expectations, hopes, intentions or strategies regarding the future. All
forward-looking statements included in this document are based on information
available to the Company on this date, and the Company assumes no obligation
to update any such forward-looking statements. It is important to note that
the Company's actual results could differ materially from those in such
forward-looking statements. Among the factors that could cause actual results
to differ materially are the risk factors that may be listed from time to time
in the Company's reports on Form 10-QSB, 10-KSB and registration statements
filed under the Securities Act.
Forward-looking statements encompass the following:
- - expectation that the Company can secure additional capital;
- - continued expansion of the Company's operations through joint ventures and
acquisitions;
- - success of existing and new marketing initiatives undertaken by the Company;
and
- - success in controlling the cost of services provided and general
administrative expenses as a percentage of revenues.
The forward-looking statements included in this document are based on current
expectations that involve a number of risks and uncertainties. These
forward-looking statements were based on assumptions that:
- - the Company would continue to expand;
- - capital will be available to fund the Company's growth at a reasonable
cost;
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- - competitive conditions within the industry would not change materially
or adversely;
- - demand for the Company's product would remain strong;
- - there would be no material adverse change in the Company's operations
or business; and
- - changes in laws and regulations or court decisions will not adversely or
significantly alter the operations of the Company.
Assumptions relating to the above statements involve judgments with respect
to future economic, competitive, regulatory and market conditions, and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although
the Company believes that the assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate and,
therefore, there can be no assurance that the forward-looking information
will prove to be accurate.
In light of the significant uncertainties inherent in the forward-looking
information included in this document, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives or plans of the Company will be achieved.
BUSINESS DESCRIPTION
Northborough Holdings, Inc. ("Northborough" or the "Company"), through its
wholly owned subsidiary Northborough Realty Holdings, LLC, is seeking to expand
its operations and take advantage of what it sees as a burgeoning opportunity in
the non-performing loan and distressed asset market. After four (4) years of
operation, we have established and shown the expertise necessary to remain
consistently profitable and obtain above market rates of return on equity
invested in non-performing commercial and residential loans. Since its
inception four and one-half(4 1/2) years ago, the Company has essentially been
run on a part time basis by its officers. However, the Company sees significant
opportunities to with the slowing economy causing loan defaults on the rise.
The looming credit problems facing the banks is resulting in increased
inventory of non-performing loan obligations. With the extensive experience
of its officers, established both through the operations of the Company and
their individual work experiences, we seek to become a leader in the acquisition
of non-performing and sub-performing loan obligations. By increasing its
available capital, solidifying the Company's infrastructure by investments in
technology and personnel as demand justifies, the Company believes it is
poised to take advantage of the coming market. Given the dramatic increase in
inventory and the financial institutions' willingness to quickly rid themselves
of this non performing obligations and improve their balance sheets, the Company
sees the coming twenty-four (24) month period as perhaps the best time for its
business since the early to mid 1990's.
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History
Background and Company Strategy
Northborough, is a holding company formed to engage directly in financial
services and to own all of the membership interests of Northborough Realty
Holdings, LLC, a Rhode Island limited liability company ("NRH"). NRH focuses
primarily on the acquisition, management and/or liquidation of non-performing
loan portfolios ("Asset Portfolios"), individual non-performing and under-
performing loans ("Assets") and distressed real estate, securities and
other properties for its own account and to manage for third party investors.
NRH began operations on May 29, 1996 and the officers of have extensive
experience in the areas of banking, real estate, law and acquisition and
management of commercial loans and loan portfolios. Further details with
regard to their experience is set forth in the section below-entitled
"Management."
The Company is seeking, identifying and developing business lines which will
produce above average, risk adjusted returns. Northborough is engaged in
due diligence to locate Asset Portfolios and Assets for its own acquisition
or by joint venture with other well-capitalized partners.
Having received "clearance" from the Securities and Exchange Commission ("SEC")
on a registration statement filed to allow the Company to become a fully
reporting registrant as defined by Section 12 of the Securities Exchange Act
of 1934 (the "Exchange Act"), the Company is seeking additional capital in the
form of a sale of equity and/or debt through lines of credit in order to
execute its growth strategy. The Company is considering making application
to the National Association of Securities Dealers ("NASD") later this year to
allow its common stock to be traded on the NASD monitored Over-the-Counter
Electronic Bulletin Board ("OTC:BB").
The primary business of the Company through NRH involves acquiring Asset
Portfolios and Assets at a substantial discount to face value and resolving them
to obtain a maximum recovery. The Company will also be involved in some highly
selective commercial mortgage banking and, lending. The Company also engages
in the acquisition, development, re-development, leasing and managing
of commercial real estate.
The Company expects to become a major presence in the Northeastern United
States in these and related areas in the next one (1) or two (2) years and will
expand operations to the South and Southwest over the next three (3) years.
The Company plans to expand its infrastructure so that it will have the
ability to service a larger organization than its current size. The current
officers and staff's extensive experience in distressed loan acquisitions, asset
management, real estate lending and development is very significant.
However, by solidifying its infrastructure and information processing
abilities, the Company will set itself on a course to become a national presence
in the non-performing debt and real estate market.
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The Company will focus its efforts on the following fronts:
Asset Management
The Company's primary business is the acquisitions on management of Assets
and Asset Portfolios consisting of distressed loans secured by real estate and
other collateral. The market for distressed loans has been reduced in the last
couple of years due to strengthening financial institutions and real estate
markets. However, there has continued to be significant opportunities to
acquire such Asset Portfolios and single Assets. With the slowing economy
and present increase in non-performing loan inventories the Company
believes a significant increase in opportunity is ahead. Furthermore, by
staying active in these areas and maintaining access to significant cash
reserves, the Company will be poised to take advantage of buying opportunities
during this next economic downturn.
Real Estate Investment
The Company also intends to become a significant investor in commercial
real estate properties throughout New England, with expansion into New York and
the Mid-Atlantic Region, and ultimately into Southern and Southwestern U.S.
The acquisitions of real estate shall primarily come about through the
Company's foreclosure on collateral securing loans it has purchased. However,
the Company will also purchase real estate through distressed sale scenarios,
such as foreclosures, receiverships, bankruptcy proceedings, and estate
sales. This approach to acquisition remains particularly important in a time
of rising real estate prices. It is the Company's belief that the recovery in
the real estate market is pushing prices to a point which might eclipse the
inherent value of the asset. As such, to avoid being a purchaser at the peak
of the market, the Company will seek to acquire properties from distressed
sellers at a discount to current market price. The Company looks for properties
that are fundamentally sound, but may be available at distressed
prices as a result of mismanagement, an excessive debt burden, or other similar
problems. The Company will target a wide range of commercial real estate
properties, including office buildings, retail, industrial and multi-tenant
residential properties. While the recovered/recovering real estate markets
have narrowed the dramatic discounts to market value which distressed sales
have produced over the past five (5) years, significant opportunities
remain for those investors who are able to identify assets in those areas where
demand for space continues to grow on a solid and non-speculative basis.
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Commercial Lending
The Company shall also engage in a limited amount of direct lending to
small businesses and commercial real estate borrowers. The Company can perform
a range of commercial mortgage banking services, such as origination,
underwriting, placement, selling and servicing. This is an area of great growth
potential given the large number of commercial real estate loans outstanding
throughout the Northeast and the nation, many of which are refinanced each year.
Initially, the Company intends to focus on bridge loans to borrowers
who have an immediate need for capital to acquire or improve real estate or to
make investments in their business interests in preparation for sale or
refinancing. Given the immediacy of the need for such funds, the Company can
command significant fees and points in addition to the above market interest
rates as permitted by law. Such loans can be held by the Company or placed with
third party investors. The Company will seek loans where the borrower has
substantial collateral (almost always real estate or other fixed assets)
with significant equity available in case of default. Normally, the
Company looks for loan-to-value ratios of 70% or less before making such loans.
Personal guaranties will also generally be required.
Longer Term Opportunities
(A) Small Business Investment Corporation. The Company may wish to register
itself or a wholly-owned subsidiary as, or joint venture with, a Small Business
Investment Company (an "SBIC") under the U.S. Small Business Administration's
(the "SBA") 7(a) Program. This would enable the Company to make or broker SBA
guaranteed loans to small business for start-up, acquisitions, and expansion.
Controlling or operating with an SBIC would also enable the Company to make
equity investments and/or take warrants in the borrowers as further conditions
to the loans.
The Markets, Operations, and Business Development Strategy
Loan Portfolio Acquisition and Resolution
The Company and its principals believe that the deep drop in the real
estate market, as well as the overall economy in the late 1980's and early
1990's has caused a significant and lasting change in the real estate, banking
and commercial lending industries. When real estate values were
imperiled in the late 1980's as a result of the Tax Reform Act of 1986 and
other factors, banks and other lending institutions were left with a large
amount of defaulted loan obligations secured by real estate mortgages. These
defaults, poor management and other economic factors caused many
banking institutions to fail. Those that did not fail still had to raise
or maintain sufficient capital to reserve against bad loans. One of the ways
such loan reserve requirements were dealt with was to sell off defaulted loan
portfolios. This was a relatively new process for most lending institutions
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and at first was often done in an inefficient manner. However, over the
past ten (10) years, these institutions have developed procedures and policies
in an attempt to make such sales a normal part of their business practices.
There has also emerged a market for companies to manage and resolve
Asset Portfolios for third parties. The substantial volume of under-performing
and non-performing loans and foreclosed assets combined with the under-staffing
of management by banks and insurance companies has convinced many such
institutions to hire third parties to manage and resolve these Assets. The
Resolution Trust Company (the "RTC") and the Federal Deposit Insurance Company
(the "FDIC") were also forced to contract out the resolution of certain Asset
Portfolios. Also, in the late 1980's and early 1990's many banks and
savings and loans did fail and were taken over by the FDIC and/or the RTC.
These government agencies set about liquidating the loan portfolios of these
institutions in formal auctions and individual asset sales. Such auctions
continue today on a regular basis.
Given this recent history, it appears that a permanent market has emerged
in the areas of Asset Portfolio acquisition, management and resolution
services. Various institutions, including commercial banks, governmental
agencies, insurance companies and other financial institutions
make such assets available for acquisition at a discount from their face
value. Through negotiation and/or foreclosure these loans are either paid out
or collected by sale of the collateral and/or judicial process.
As with many things, timing is everything. The inventory of defaulted loans
appeared to have diminished in the late 1990's due to the
recovering/recovered real estate market and overall economy. The banks,
insurance companies and other financial institutions which survived the
tumult have generally emerged in a stronger position with smaller portfolios of
loans in default (relative to assets). They have also attempted to establish
better staffed loan workout departments and more experienced loan officers to
handle the collection and sale of such Assets Portfolios. Also,
more participants entered the market as buyers of such Assets the
availability of deeply discounted loans diminished. Nonetheless, the Company
believes that the time is ripe to increase its available funds for acquisition
of individual loans and loan portfolios in preparation of the inevitable dip
in the economic cycle. It is our belief that the combination of competition
for market share by lending institutions combined with increases in market
price of the underlying collateral is leading to a significant increase in
the level of marginal loans and ultimately the number of loan defaults. For
some time now there has been a "continuing erosion in commercial loan quality
despite the economy's overall vigor." Wall Street Journal. Bank Stocks are
Facing Added Pressure From Worry Over Loans, Portfolio Losses, Sept. 14, 1999".
Even in the bull market, which many consider to be the best in history,
the total of nonperforming loans at the 25 largest banks in the United States
has increased significantly. Id; See also Section 5 of this Executed
Summary. This trend, combined with the increase in bank consolidation and
the fact that financial institutions have embraced the idea of disposing of
underperforming assets through outright third party sales in order to improve
the their balance sheets, make it likely that the available inventory of Assets
should continue to increase in the near future. This increase in inventory
of non-performing loans will ultimately result in greater margins/discounts to
the face value of the assets and asset portfolios.
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By establishing and maintaining a greater presence in this market,the Company
believes it can continue to make significant returns during the current period
while maintaining sufficient liquidity to take advantage of market anomalies in
anticipation of a time where there are more dramatically discounted loan
portfolios. Even were such market adjustment not to develop for an
extended period, the Company's personnel are experienced and adept at
locating and purchasing assets at prices which allows for competitive
current returns and appreciation through value-added activities.
Most Assets and Asset Portfolios the Company will purchase will be in
payment default when acquired. Once purchased, the Company assumes control of
the management of the Asset or Asset Portfolio, which includes servicing and
resolution. Normally, the Company will not renew or refinance the obligations,
but will look to recovery through either (i) a payoff from the borrower
(often accomplished by refinancing through a third party lender) or (ii)
foreclosure and sale of the collateral. However, in some instances where the
Asset has been acquired at a substantial discount and the borrower agrees to
continue to pay in accordance with the loan terms, the Company will choose to
hold the Asset due to its high current rate of return and related collateral
value.
The Company believes that currently its greatest opportunity for return
is to purchase for its own accord Assets and Asset Portfolios. However, in
some instances the Company will perform due diligence and investigatory services
for third party investors. The Company can assist the third party in
preparation of its bid for the Assets and in the acquisition. The Company can
either serve as a partner in the acquisition and own a portion of the Asset or
it can act as an outside contractor to manage and resolve the Asset for a fee.
Many of the Assets and Asset Portfolios that are purchased by the Company
will be primarily tied to the real estate securing the loan. However, there
will also be some collateralized business loans, which will be resolved based
either on the cash flow of the business, real estate owned by the business
and/or other collateral securing the loan. The Company will obtain
information and learn of Asset Portfolios and individual Assets available
for sale from many different sources. The management of the Company have
established relationships with various financial institutions from which they
have purchased assets before and there will be repeat business and referrals
from those sellers. The reputations and relationships that management has
established with various asset sellers will be further solidified by the
Company gaining reputation as an active portfolio purchaser with sufficient
resources and a steady commitment to the market. There are also additional
sources of business from joint venture partners or investors who will seek
the Company's assistance in Asset Portfolio purchases and management,
as well as other related business opportunities developed and initiated by
management of the Company.
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The Company will generally fund its purchase of the Assets and Asset Portfolios
with the combination of cash on hand, equity raised through private and
public offerings, debt or lines of credit with lending institutions, and
internal cash flow. The amount of Assets or Asset Portfolios purchased will
greatly depend upon the availability of capital, the availability of
Assets and Asset Portfolios, and the success of offers made by the Company to
purchase those Assets and Asset Portfolios. The process the Company undergoes
in making an offer to purchase an Asset or an Asset Portfolio is well
established. Generally, the Company's management conducts an extensive
evaluation of the individual loan or loans which make up the pool offered
for sale. There may be certain instances where there are unusually large
number of Assets which are offered for sale, and as a result the Company will
perform extensive investigation with regard to an adequate sampling in order
to determine an appropriate bid price for the pool. A typical examination
of a credit file includes reviewing and analyzing all information made
available by the seller. It generally includes review of the credit and
collateral files, the legal documents, and all relevant material that may be
available (including in some instances correspondence, taxes, judgment and
other records) and an analysis of the underlying collateral. The underlying
collateral will be viewed by conducting site inspections, appraisals or other
valuations from experts with experience in that market. The Company will also
review and consider ongoing economic information and meet with individuals
familiar with local markets where the real estate or other collateral is
located. The Company has an advantage to the original lender when it performs
its review because it can base its valuation on the present value of the
collateral and the estimated total cash flow from the resolution of the Asset.
Generally, these loans will be resolved prior to their maturity, as it is
the Company's intention not to refinance or renew the purchased assets. The
goal is to expedite the recovery.
The review of Assets and Asset Portfolios is conducted by management and
employees with substantial experience in the analysis of non-performing and
under-performing loans. Management has a broad range of experience includes
commercial lending with major financial institutions, legal experience in
commercial lending, collection, workout and bankruptcy, and commercial real
estate development and management. When determining what to bid on an Asset,
management will work together to form bids based upon the value of the
underlying collateral, the likely cash flow and the likely time and expense
necessary to obtain sufficient recovery.
Commercial Lending
In addition to acquiring loan portfolios, the Company may engage in both
brokering and/or making a limited amount direct loans to commercial borrowers.
The market to betargeted by the Company will be borrowers seeking commercial
loans who have been unsuccessful in obtaining loans from more traditional
lenders. These instances may range from borrowers who must obtain funding on
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very short notice to those who are seeking lenders of last resort because
of troubled credit histories or immediate need for capital. The Company
believes these can still be good credit risks provided the Company obtains
sufficient collateral. Furthermore the lender is compensated for the immediate
availability of funds and the increased credit risk through significant
fees and interest rates. The Company has and will further develop a network of
commercial lenders which can act as participants or joint venture parties in
these loan transactions. The emergence of a market for securitized commercial
real estate mortgage pools may also provide the Company with an available
outlet for loans it makes. The level of the Company's involvement in the
direct lending market will be limited in the near terms, but we believe that
developing a market presence among the institutional buyers will provide an
increase in the number of commercial real estate loans the Company could make
directly with its own capital. Also, increased exposure to institutions engaged
in the securitization of loans might increase the Company's ability to
obtain access to the institutions managing those loans held in such
securitized pools. Such pools have defaulted loans which may provide Assets for
the Company to acquire at discount to face value. The Company will initially
focus primarily upon acting as a commercial loan broker. The risk of loss is
much greater when the Company's own capital is not forced to make the loan,
even if the intent is to sell the loan to a third party. There is an increasing
number of bank and non-bank lenders in the market place looking to make such
commercial loans that rely on third party brokers for leads.
SBA Lending
A longer term goal of the Company might be to establish itself as a
non-bank lender to better qualified borrowers using government guaranty programs
through the SBA. The Company could establish and fund a wholly owned
subsidiary to provide capital to small business and entrepreneurs
through the use of SBA guaranteed loans. The Company's subsidiary could
qualify as a SBIC under the SBA's guidelines and make loans for financing
commercial real estate, machinery and equipment or a business acquisition.
This program allows the Company to participate in a growing and profitable
lending area while limiting the risk of loss by use of SBA loan guarantees.
We believe the market for small commercial real estate loans is under served
by larger lending institutions which often have large minimum loan sizes and
limited terms.
Acquisition Candidates
It is impossible to predict the manner in which the Company may participate
in a business opportunity. Specific business opportunities will be reviewed
as well as the respective needs and desires of the Company of the opportunity
and, upon the basis of that review and the relative negotiating strength of the
Company, the legal structure or method deemed by management to be
suitable will be selected. Such structure may include, but is not limited
to leases, purchase and sale agreements, licenses, joint ventures and other
contractual arrangements. The Company may act directly or indirectly through an
interest in a partnership, corporation or other form of organization.
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Strategic Teaming Relationships
The Company has entered into, and is attempting to enter into, strategic
partnering relationships with several major banking and financial industry
participants to significantly broaden its reach within its target market.
Several of these key relationships will be disclosed under special circumstances
and the execution of confidentiality agreements.
Competition
The competition the Company will meet in the Asset acquisition areas is
somewhat fragmented. There are national, local and regional competitors in the
Asset acquisition and Asset management markets. Many of these competitors are
larger and have far greater financial resources than the Company does. The
Company also anticipates based on its management's prior experience that
there will continue to be increasing competition and a market for Asset
Portfolios and individual Assets which may limit the near term profit margins in
the Asset acquisition business. However, the Company believes it can remain a
competitive bidder and the management's extensive experience, commitment and
relative conservative approach will enable the Company to uncover opportunities
that more recently arrived competitors in the market will miss. Nonetheless,
the Company believes it may in the near term have to raise its bids for assets
higher than it would have in the depths of the recession in the early 1990's.
The Company will also have to have access to significant capital in order to be
a competitive bidder for Asset Portfolios.
Since the primary focus of the Company will be in the Asset acquisition and
management field, its entry into the commercial mortgage banking and commercial
lending and residential mortgage business will be initially limited. Although
these businesses are fragmented, there are certain major national competitors
as well as local and regional entities which command a significant market
share. If competitors have superior access to capital sources, it will
give them an advantage.
Operations and Facilities
The Company's registered and records office is at 17 West Cheyenne Mountain
Boulevard, Colorado Springs, Colorado 80906. Realty's principal office is at
1250 Turks Head Building, Providence, RI 02903.
ITEM 2. DESCRIPTION OF PROPERTY
A. The Company's registered and records office is at 17 West
Cheyenne Mtn. Blvd., Colorado Springs, Colorado 80906. Realty's principal
office is at 1250 Turks Head Building, Providence, RI 02903.
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The Company has no full time employees. Until additional
capital is raised, the officers of the Company serve as unpaid employees in that
all of the officers are shareholders in the Company. Holdings and/or Realty,
may from time to time pay to the officers of the Company a salary or fee for
services rendered in handling the activities of Holdings and/or Realty
pursuant to the instructions of the Board of Directors. Such payments may
be as a result of a successful liquidation of an Asset or for some other
performance on behalf of the Company.
The Company does not own any real estate used in its operations
except for investment purposes. The Company leases its offices, with
Realty leasing space in 1250 Turks Head Building, Providence, Rhode Island and
Holdings leasing space at _______________. The leases currently require no
cash payment, but if capital is raised as assumed in the Company's
projections set forth ITEM 2.B. hereof, then the Company will require additional
office space and will begin to pay rent as estimated in said Projections.
B. INVESTMENT IN REAL ESTATE AND REAL ESTATE MORTGAGES
The Company seeks to acquire nonperforming or underperforming
loans secured by real estate and other collateral at a discount to face
value. Similarly, the Company seeks to acquire real estate from
distressed sellers at a discount to current market price. The Company
looks for properties that are fundamentally sound, but may be available at
distress prices as a result of mismanagement, an excessive debt burden, or other
similar problems. The Company targets a wide range of commercial real
estate properties, including office buildings, retail, industrial and
multi-tenant residential properties.
ITEM 3. LEGAL PROCEEDINGS
Other than ordinary routine litigation incidental to the business of the
Company, no material legal proceedings to which the Company (or any of its
directors and officers in their capacities as such) is party or to which
property of the Company is subject is pending and no such material proceeding
is known by management of the Company to be contemplated.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There has been no public trading market for the Company's Common Stock.
Holders of Common Stock are entitled to receive such dividends as may be
declared by the Company's Board of Directors. No dividends on the Common
Stock have been paid by the Company, nor does the Company anticipate that
dividends will be paid in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OR
PLAN OF OPERATION
The following discussion should be read in conjunction with the Financial
Statements and notes thereto.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
December 31, 2000
=====================================
YEAR ENDING DECEMBER 31, 2000
=====================================
Except for historical information, the discussion in this Form 10-KSB
contains forward-looking statements that involve risks and uncertainties. These
statements may refer to the Company's future plans, objectives, expectations
and intentions. These statements may be identified by the use of words such
as "expect", "anticipate", "believe", "intend", "plan" and similar expressions.
The Company's actual results could differ materially from those anticipated
in such forward-looking statements. Factors that could contribute to these
differences include, but are not limited to, the risks discussed in the
section titled "Market Risks and other Business Factors" later in this Form
10-KSB.
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Plan of Operation
1. PLAN OF OPERATION FOR THE NEXT 12 MONTHS
The plan of operation for the next twelve months is to engage
in those activities described in Item 1 under the BUSINESS OF COMPANY
section. The corporate policy regarding these activities will be formed through
a generation of ideas and direction from a Board of Directors. The
day-to-day operations and decisions will be delegated to a senior management
team directed by a chief executive officer with counsel and implementation from
experienced officers. The four primary officers of the Company who will be
responsible for the day-to-day implementation of the corporate policy and
direction will be James R. Simmons, Scott B. Adams, Richard Nadeau, Jr. and
Kevin Gillis. All four were founding members of Realty. Realty has been
in the business of acquiring defaulted loan obligations from financial
institutions and collecting said obligations through negotiation or
foreclosure on the collateral securing the loan. Its emphasis has been on
purchasing individual assets from New England banks. These assets are
generally smaller loans ($150,000 to $300,000) which are ripe for immediate
restructure or conversion to foreclosure or refinance. The Company's
success will largely be driven by the proven experience of its management who
have already demonstrated the viability of the Company's business plan through
the experiences of Realty. The collective practical experience of this group
in the areas of business the Company will engage in is important in the
operations of the Company. Each brings a specific set of skills and
knowledge that include commercial banking, loan workout, real estate,
environmental liability and law. These individuals have already developed the
necessary contacts and demonstrated their abilities with major financial
institutions such that they are now called on a regular basis to acquire
individual or bulk sale assets. The principals are critical as there is truly a
"barrier of entry" into the Asset acquisition business which has already been
bridged by this group. Further, management has developed a system of performing
due diligence on these assets and a proven formula for successful bidding.
Realty has earned over $1.4 million net profit on an original capital
investment of $300,000 in its three and one-half (3.5) years of operation,
having experienced average rates of return on equity of over fifty percent
(50%). Realty has also identified and acquired medium and long-term
"performing"assets at significant discounts which provide ongoing cash
flow. These asset are typically loans which had historic payment defaults, but
which Realty has resurrected by restructuring the payment provisions or
convincing the borrower to reinstate to avoid lose of the collateral.
14
2. NEED FOR ADDITIONAL FINANCING
No commitments to provide additional funds have been made
by management or other stockholders. Accordingly, there can be no
assurance that any additional funds will be available to the Company to allow
it to cover its expenses. However, given its current operations and extended
business plan, the Company has sufficient cash flow and line of credit
availability to continue to execute the business plan of the Company.
However, the proposed rate of growth and financial projections assume raising
$3,000,000 through the issuance and sale of convertible preferred equity in the
Company. If such capital is not raised through such an offering, the Company's
growth proportions may not be met. Nonetheless, Realty would still
have sufficient cash flow and debit availability to continue along its
historical operational history.
Results of Operations
Assets
Cash increased from $5,910 at December 31, 1999 to $50,456 at December 31,
2000 due to collection of Notes payable (see the corresponding reduction in
Notes Receivable and Mortgage Loans and Other Receivables. In addition, a
Certificate of Deposit was redeemed and converted to cash. The CD is
accounted for under the heading "Other Assets"). Mortgage Loans and Other
Receivables decreased from $436,778 at December 31, 1999 to $258,725 at December
31, 2000 due to payment of the receivables (with these payments reflected as
Cash on the Balance Sheet). Other Assets, including a Certificate of Deposit
(CD), decreased from $105,000 at December 31, 1999 to $300 at December 31, 2000
as a result of the CD being redeemed and converted to Cash.
Liabilities and Equity
Notes Payable decreased from $37,000 at December 31, 1999 to 0 at December
31, 2000 as a result of payment of a Line of Credit from Cash. Income Taxes
Payable increased from $250 at December 31, 1999 to $123,767 at
December 31, 2000 due to the restructuring of the Company from a limited
liability company owned by individuals to a limited liability company wholly
owned by a corporation. Accrued Distributions decreased from $240,000
December 31, 1999 to 0 at December 31, 2000 as a result of distributions being
paid out to equity holders in Fiscal Year 2000. Members' Equity decreased from
389,957 at December 31, 1999 to 0 at December 31, 2000 due to the corporate
restructuring from an individually-owned limited liability company to a
limited liability company wholly owned by a corporation.
15
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
issued by the Financial Accounting Standards Board, under which deferred tax
assets and liabilities are provided on differences between the carrying
amounts for financial reporting and the tax basis of assets and liabilities for
income tax purposes using the enacted tax rates. Under SFAS 109, deferred tax
assets may be recognized for temporary differences that will result in
deductible amounts in future periods. A valuation allowance is recognized if on
the weight of available evidence it is more likely than not that some portion
or the entire deferred tax asset will not be realized.
F-1
ITEM 8. FINANCIAL STATEMENTS
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
PAGE
Independent Auditors' Report 1
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Changes in Equity 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
F-2
INDEPENDENT AUDITORS' REPORT
To the Stockholders
Northborough Holdings, Inc. and Subsidiary
Providence, Rhode Island
We have audited the accompanying consolidated balance sheets of Northborough
Holdings, Inc. and Subsidiary as of December 31, 2000 and 1999, and the
related consolidated statements of operations, changes in equity, and cash
flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Northborough Holdings, Inc. and Subsidiary as of December 31, 2000 and 1999,
and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
/s/Rooney, Plotkin & Willey, LLP
ROONEY, PLOTKIN & WILLEY, LLP
February 9, 2001
F-3
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
Consolicated Balance Sheets
December 31,
2000 1999
----------- ---------
ASSETS
Cash $ 50,456 $ 5,910
Notes Receivable (Note 2) 120,325 108,994
Mortgage Loans and Other
Receivable, Net (Note 3) 258,725 436,778
Real Estate Under Operating
Lease, Net (Notes 4 and 10) 158,893 164,857
Other Assets (Note 5) 300 105,000
----------- ---------
Total Assets $ 588,699 $ 821,539
=========== ==========
LIABILITIES AND EQITY
Liabilities:
Note Payable, Bank (Note 6) $ - $ 37,000
Income Taxes Payable (Note 7) 123,767 250
Accrued Distributions - 240,000
Accrued Expenses 14,500 15,000
Long-Term Debt (Note 8) 122,783 136,682
Security Deposit 2,650 2,650
----------- ----------
Total Liabilities 263,700 431,582
----------- ----------
Equity: (Note 1A)
Members' Equity - 389,957
Common Stock (Note 9) 1,200 -
Additional Paid-In Capital 132,729 -
Retained Earnings 191,070 -
----------- ----------
Total Equity 324,999 389,957
----------- ----------
Total Liabilities and Equity $ 588,699 $ 821,539
=========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Operations
Years Ended December 31,
2000 1999
----------- ------------
Operating Revenues:
Interest Income $ 305,204 $ 150,492
Fee Income 9,803 31,327
Gain on Disposition of
Mortgage Loans $ 140,689 70,950
----------- ------------
Total Operating Revenues 455,696 252,769
General and Administrative Expenses 73,193 31,036
----------- ------------
Income from Operations 382,503 221,733
----------- ------------
Other Income (Expense):
Rental Income, Net (Note 10) 21,011 24,474
Interest Income 5,710 4,529
Interest on Note Payable, Bank (18,415) (1,984)
----------- ------------
Total Other Income 8,306 27,019
----------- ------------
Income before Provision for Income Taxes 390,809 248,752
Provision for Income Taxes (Note 7) 123,767 250
----------- ------------
Net Income $ 267,042 $ 248,502
=========== ============
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Equity
Additional
Common Paid-In Retained Members'
Stock Capital Earnings Equity Total
----------- ------------- ------------ ----------- ----------
Balance,
December 31, 1998 $ - $ - $ - $ 481,455 $ 481,455
Net Income - - - 248,502 248,502
Distributions to Members - - - (340,000) (340,000)
----------- ------------- ------------ ------------ -----------
Balance,
December 31, 1999 - - - 389,957 389,957
Net Income, Prior to
Exchange of Members'
Equity for Common
Stock - - - 75,972 75,972
Distributions to Members
Prior to Exchange - - - (332,000) (332,000)
----------- ------------ ------------ ------------ -----------
Subtotal Members'
Equity - - - 133,929 133,929
Exchange of Members'
Equity for Common
Stock 1,200 132,729 - (133,929) -
Net Income, After
Exchange of Members'
Equity for Common
Stock - - 191,070 - 191,070
----------- ------------ ------------ ------------ -----------
Balance,
December 31, 2000 $ 1,200 $ 132,729 $ 191,070 $ - $324,999
=========== ============ ============ ============ ===========
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
Years Ended December 31,
2000 1999
------------ ------------
Operating Activities:
Net Income $ 267,042 $ 248,502
------------ ------------
Adjustments to Reconcile Net
Income to Net Cash
Provided by Operating Activities:
Depreciation 5,964 5,996
Bad Debt Expense 7,999 -
Gain on Disposition of Mortgage Loans (140,689) (70,950)
Change In:
Accrued Expenses (500) 15,000
Income Taxes Payable 123,517 -
------------ ------------
Total Adjustments (3,709) (49,954)
------------ ------------
Net Cash Provided by Operating Activities 263,333 198,548
------------ ------------
Investing Activities:
Notes Receivable (75,000) (70,000)
Repayments on Notes Receivable 63,669 14,640
Purchases of Mortgage Loans and Other
Receivable (242,735) (221,200)
Repayments Collected on Mortgage Loans 56,372 23,992
Proceeds on Disposition of Mortgage Loan 497,106 215,950
Maturity of Certificate of Deposit 100,000 -
Other 4,700 (4,583)
------------ ------------
Net Cash Provided by (Used in) Investing
Activities 404,112 (41,201)
------------ ------------
Financing Activities:
Proceeds from Issuance of Long-Term
Debt - 139,000
Net Repayments on Note Payable, Bank (37,000) (193,000)
Principal Payments on Long-Term Debt (13,899) (2,318)
Distributions to Members (572,000) (100,000)
------------ ------------
Net Cash Used in Financing Activities (622,899) (156,318)
------------ ------------
Increase in Cash 44,546 1,029
Cash, Beginning of Year 5,910 4,881
------------ ------------
Cash, End of Year $ 50,456 $ 5,910
============ ============
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Year for Interest $ 29,804 $ 3,999
============ ============
Supplemental Disclosures of Non-Cash Investing and Financial Activities:
During 2000 the Company issues common stock of $1,200 and recorded additional
paid-in capital of $132,729 in an exchange for members' equity as part of a
reorganization of the Company.
During 1999 the Company declared $240,000 of member distributions which were
paid in January 2000.
The accompanying notes are an integral part of these consolidated financial
statements.
F-7
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
1. SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:
A. ORGANIZATION AND PRINCIPLES OF CONSOLIDATION:
These consolidated financial statements include Northborough
Holdings, Inc. (NHI), a Colorado corporation, and its wholly owned
subsidiary, Northborough Realty Holdings, LLC (NRH), a Rhode Island
limited liability company. NHI and NRH are collectively referred
to as "the Company". All significant inter-company balances and
transactions have been eliminated in consolidation.
NHI was organized on November 20, 1999 to become the holding
company for NRH. On March 13, 2000, NHI acquired full ownership of
NRH in an exchange of common stock and additional paid-in capital
for members' equity. During 1999 there was no activity in NHI.
NRH was organized on May 29, 1996 and terminates no later than May
29, 2046.
The Company is principally engaged in the acquisition and
subsequent sale of distressed financial assets, primarily
commercial mortgage loans acquired from financial institutions and
other entities at a discount. The Company manages these assets by
collecting payments based on the original terms or renegotiated
terms, or by foreclosure and liquidation of the collateral. The
Company also originates mortgage loans, performs collections
activity for a fee and operates a rental property acquired in a
foreclosure transaction.
B. NOTES RECEIVABLE:
Notes receivable represent mortgage financing originated by the Company.
Notes receivable are recorded at the aggregate lower of cost or market
and are collateralized by commercial property, personal guarantees, and
other business assets. Management believes that the value of such
collateral is in excess of the notes receivable as of December 31, 2000
and 1999 and therefore, no allowance has been provided.
C. MORTGAGE LOANS AND OTHER RECEIVABLE, NET:
Mortgage loans and other receivable represent notes and other financial
assets acquired at a discount and are recorded at cost. All
mortgage loans and the other receivable are collateralized by
commercial property. Management believes that the value of such
collateral is in excess of cost as of December 31, 2000 and 1999
and therefore, no allowance has been provided.
F-8
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
------------------------------------------
1. SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:(Continued)
D. REAL ESTATE UNDER OPERATING LEASE:
Real estate acquired through foreclosure is recorded at the fair
value of the property at the time of the foreclosure auction. The
property acquired is primarily used as an income-producing asset.
Capitalizable improvements to real property are recorded at cost.
Depreciation is provided using the straight-line method over the
estimated useful lives of the related assets.
E. REVENUE RECOGNITION:
Discount amortization revenue is recognized to the extent payments
received are earned and is included in operating revenues as
interest income. Gain or loss on the disposition of these
financially distressed assets is calculated based on gross proceeds
from the sale of the asset or collateral, less the expenses related
to the sale or foreclosure, less the book value of the asset.
F. INCOME TAXES:
The Company's provision for income taxes for 2000 is based on NHI's
share of the distributive income of NRH. NRH net income for 2000
was allocated between the period prior to and subsequent to the
acquisition of NRH by NHI (see Note 1A) based on the per-share,
per-day ownership of NRH. Upon the acquisition of NRH by NHI, NRH
became disregarded as an entity separate from NHI for income tax
purposes. As such, all of the activity of NRH will be reported on
the income tax return of NHI.
Prior to the acquisition of NRH by NHI, NRH, by unanimous consent
of its members, elected to be treated as a partnership for income
tax purposes and as such was not taxed. Under subchapter K of the
Internal Revenue Code each member was taxed separately on their
distributive share of the Company's income whether or not that
income was actually distributed.
F-9
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
-------------------------------------------
1. SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:(Continued)
G. USE OF ESTIMATES:
The preparation of consolidated 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 consolidated financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual amounts could differ from those
estimates.
H. RECLASSIFICATIONS:
Certain reclassifications have been made to the 1999 financial
statements in order for them to conform to the current year
presentation.
2. NOTES RECEIVABLE:
Notes receivable originated by the Company consist of the following:
2000 1999
---- ----
10.00% note receivable of $56,000 due in
monthly principal installments of $467
plus interest from July 1, 1998 to
May 1, 2001. The note is due in full
June 1, 2001. Secured by real estate,
personal guarantee and other business
assets. $ 41,325 $ 46,994
Note receivable of $50,000 due in monthly
principal installments of $1,000 for
August and September 1999, $2,000 for
October 1999 to January 2000, and $5,000
for February and March 2000, plus accrued
interest. The note was paid in full in
August 2000. - 44,000
F-10
14.00% note receivable of $20,000 due in
monthly principal installments of $1,000
from November 1, 1999 through June 1, 2001,
plus interest. Secured by real estate,
other business assets, and a personal
guarantee. 4,000 18,000
2. NOTES RECEIVABLE: (Continued)
2000 1999
16.00% note receivable of $75,000 due in
monthly payments of interest only. The
remaining principal and interest on the
loan is due in full January 2001.
Secured by real estate, other business
assets, and a personal guarantee. 75,000 -
-------- --------
Total Notes Receivable $ 120,325 $108,994
-------- --------
3. MORTGAGE LOANS AND OTHER RECEIVABLE, NET:
Mortgage loans and other receivable acquired
at a discount consist of the following:
2000 1999
---- ----
Original Principal Amount $407,720 $972,394
Unamortized Discount (148,995) (535,616)
-------- -------
Mortgage Loans and Other Receivable, Net $258,725 $436,778
-------- --------
Original loans consist of the following at December 31, 2000:
Principal
Unamortized
Amount Discount
9.05% mortgage loan, due 1998 $ 191,220 $ 635
10.00% mortgage loan, due 2002 144,261 110,600
10.50% mortgage loan, due 2012 34,713 24,641
10.50% mortgage loan, due 2002 7,441 3,034
Other non-interest bearing secured
receivable, due 1995 30,085 10,085
--------- --------
Totals $407,720 $ 148,995
--------- --------
F-11
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
------------------------------------------
3. MORTGAGE LOANS AND OTHER RECEIVABLE, NET: (Continued)
Original loans consist of the following at December 31, 1999:
Principal Unamortized
Amount Discound
--------- -----------
8.30% mortgage loan, due 2008 $ 437,400 $ 266,083
10.50% mortgage loan, due 1989 242,404 187,404
8.00% mortgage loan, due 1996 99,585 9,485
9.05% mortgage loan, due 1998 68,735 635
10.50% mortgage loan, due 2012 40,231 28,559
11.50% mortgage loan, due 1999 32,700 24,700
10.50% mortgage loan, due 2002 21,254 8,665
Other non-interest bearing secured
receivable, due 1995 30,085 10,085
--------- ---------
Totals $ 972,394 $ 535,616
The discounts are based on imputed interest rates ranging from 8.00% to
11.50%.
4. REAL ESTATE UNDER OPERATING LEASE, NET:
Real estate under operating lease consists of the following:
2000 1999
Land and Improvements $ 60,075 $ 60,075
Building and Improvements 114,500 114,500
Subtotal 174,575 174,575
Less Accumulated Depreciation 15,682 9,718
--------- ---------
Real Estate Under Operating Lease, Net $ 158,893 $ 164,857
--------- ---------
The Company is a lessor of the above real estate. See Note 10.
5. OTHER ASSETS:
At December 31, 2000 other assets consisted of accrued interest
receivable of $300. At December 31, 1999 other assets consisted of a
$100,000 certificate of deposit and an other deposit of $5,000. The
certificate of deposit matured in December 2000.
F-12
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
------------------------------------------
6. NOTE PAYABLE, BANK:
The Company has a combined $1,000,000 credit facility consisting of a
$750,000 ($400,000 in 1999) demand line-of-credit and $250,000
available on a term loan agreement with a local bank. Interest on the
demand line-of-credit is payable monthly and is at the lender's base
rate, which was 9.50% and 8.50% at December 31, 2000 and 1999,
respectively. Interest on the available term loan would be at either
the lender's base rate or at a fixed rate based on the lender's cost
of funds plus 2.25%. The credit facility is subject to certain covenant
provisions including, but not limited to, maintenance of a debt to
worth ratio and an operating cash flow to debt service ratio. It is
secured by all of the assets of the Company and the personal guarantee
of the stockholders.
7. PROVISION FOR INCOME TAXES:
The components of the provision for income taxes are as follows:
2000 1999
----- ----
Current:
Federal $ 95,141 $ -
State 28,626 250
----------- ------
Total Provision for Income Taxes $ 123,767 $ 250
----------- ------
8. LONG-TERM DEBT:
Long-term debt consists of an 8.59% mortgage note payable to a local
bank. The mortgage is due in monthly principal installments of $1,159
plus interest. A final installment of principal and interest is due
September 30, 2004. The mortgage includes certain covenant provisions
including, but not limited to, maintenance of the property, insurance
coverage and the maintenance of an operating cash flow to debt service
ratio. Interest expense on all debt was $29,804 and $3,999 at
December 31, 2000 and 1999, respectively. The mortgage note payable
matures as follows:
Year ending December 31,
2001 $ 13,908
2002 13,908
2003 13,908
2004 81,059
----------
$ 122,783
----------
F-13
NORTHBOROUGH HOLDINGS, INC. AND SUBSIDAIRY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
------------------------------------------
1. Capital Stock:
The capital stock of the Company at December 31, 2000 and 1999 is as
follows:
2000 1999
Common Stock, $.001 Par Value
Authorized Shares 50,000,000 50,000,000
Issued and Outstanding Shares 1,200,000 -
Series A Convertible Preferred Stock,
$.001 Par Value
Authorized Shares 50,000,000 50,000,000
Issued and Outstanding Shares - -
The common stock and preferred stock are identical in all respects
except for certain rights held by preferred stockholders in regard to
any voluntary or involuntary liquidation, dissolution, or winding-up of
the Company.
10. RENTAL INCOME:
The Company leases its land, building and improvements (see Note 4)
under an operating lease. The initial five-year term of the lease
expires December 31, 2002. The lease is renewable, at the lessee's
option, for one additional five-year term. The base monthly rent was
$3,050 and $2,850 for 2000 and 1999, respectively, and it increases
$200 per year during the initial lease term. Rental income for the
years ended December 31, 2000 and 1999 was $44,577 and $42,723,
respectively and is presented net of depreciation, property taxes,
mortgage interest (see Note 8), and repair and maintenance charges.
The initial lease term includes a provision for additional rent based
on the cost of land improvements incurred by the Company.
Future minimum rental receipts under this operating lease are as
follows:
Year ending December 31,
2001 $ 46,654
2002 49,054
16
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act, requires the Company's officers,
directors and persons who beneficially own more than ten percent of the Common
Stock to file reports of securities ownership and changes in such ownership
with the Securities and Exchange Commission. Officers, directors and greater
than ten percent beneficial owners also are required by rules promulgated
by the Securities and Exchange Commission to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely upon review of the copies of such forms furnished to the
Company, or written representations that no Form 5 filings were required, the
Company believes that during 2000 all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with on a timely basis.
EXECUTIVE OFFICERS AND BOARD OF DIRECTORS
The members of the Board of Directors provide expertise in research and
development, capital acquisition, promotion, mergers and acquisitions, and
corporate law. Their technical acumen, along with their wish to see the
Company successful has made their presence on the Board a resource to the
management team.
The following table and biographical data sets forth certain information
regarding the both the directors and the executive officers of the Company.
Name Age Position
- ----------------------------------------------------
James R. Simmons 37 President, CEO, Director
Richard Nadeau, Jr. 41 Vice President, Director,
Secretary
Scott B. Adams 37 Vice President, Director,
Treasurer
Kevin A. Gillis 42 Director
17
All current directors hold office until the 2001 annual meeting of the
Company's shareholders and until their successors are duly elected and
qualified; thereafter, directors will be elected annually. The executive
officers are appointed annually by the Board of Directors and serve at the
discretion of the Board. No family relationships exist among any of the
directors and executive officers of the Company.
Officers will hold their positions at the pleasure of the board of directors,
absent any employment agreement, of which none currently exists or is
contemplated. There is no arrangement or understanding between the directors
and officers of the Company and any other person pursuant to which any
director or officer was or is to be selected as a director or officer.
The directors and officers of the Company will devote their time to the
Company's affairs on an "as needed" basis. As a result, the actual amount of
time which they will devote to the Company's affairs is unknown and is likely
to vary substantially from month to month.
MANAGEMENT
The Company will have as directors, officers and employees very high
quality individuals with extensive experience in the areas of banking,
commercial lending, work-out, real estate, and law. The structure of the
Company shall include a Board of Directors, which will be drawn from leaders
in the financial services, banking, real estate and legal industries.
The following is a more detailed description of the officers' experience:
1. James R. Simmons - Mr. Simmons is an attorney with extensive experience
in the areas of commercial lending, banking, loan work-out,
foreclosure, and creditor's rights. Mr. Simmons is a shareholder
of the law firm Nadeau & Simmons, P.C., a Rhode Island professional
corporation, with an extensive practice in banking, commercial law,
corporate finance, securities, commercial real estate and development, and
related commercial litigation.
As a member of Northborough Realty Holdings, LLC, Mr. Simmons has been
integral in the location, acquisition and work-out of various assets held
by that company. Mr. Simmons brings a wealth of knowledge relating to
distressed real estate, commercial lending, foreclosure and creditor's
rights along with a thorough and practical understanding
of the financial aspects of such transactions. Mr. Simmons is a
graduate of the University of Hartford and the George Washington
University School of Law sits on the Banks and Trusts Committee of
the Rhode Island Bar Association and has acted as legal counsel to
some of the largest financial institutions in the nation.
18
2. Scott B. Adams- Mr. Adams' professional background has principally
been as a commercial banker where he had spent over ten years
underwriting and managing large corporate banking relationships.
As a vice-president of a major regional bank, his responsibilities
included negotiating some of the largest and most difficult loan
workouts. These invaluable banking experiences combined with
ownership and management of Condor Capital Corp., a significant
real estate holding company with investments across New England,
provided Mr. Adams with the knowledge and expertise which assisted
in the startup of Northborough Realty Holdings, LLC. As a member
and Operating Manager for the last four years Mr. Adams has
successfully developed relationships at major New England Banks
which has asserted in the development of strong deal flow with
continued positive results.
3. Richard Nadeau, Jr.- Mr. Nadeau is the founder and a shareholder of
the law firm Nadeau & Simmons, P.C. in Providence, Rhode Island.
Mr. Nadeau's primary experience is in the areas of commercial
lending and creditor's rights, including loan work outs, bankruptcy
and receiverships. Mr. Nadeau's background as a principal in
Northborough Realty Holdings, LLC and Westminster Holdings Company,
each of which locates, acquires and works out commercial and
real estate non-performing loans, will be crucial to the success of
the Company.
4. Kevin Gillis - Mr. Gillis has over twenty years of experience in
residential and commercial real estate investment and development.
He is the Chief Executive Officer and a shareholder in Condor
Capital Corp., a holding company for real estate investments across
the New England region. As a former executive with both major and
independent oil companies, Mr. Gillis gained broad experience in
site reconnaissance, construction, and the regulations and industry
practices arising out of environmentally contaminated properties.
As a member of Northborough Realty Holdings, LLC, Mr. Gillis has
been invaluable in quantifying the risks associated with properties
that have been the subject of an environmental assessment.
Additionally his knowledge in the construction and development
fields is applicable in a wide variety of situations.
Indemnification of Officers and Directors
As permitted by Colorado law, the Company's Articles of Incorporation provide
that the Company will indemnify its directors and officers against expenses
and liabilities they incur to defend, settle, or satisfy any civil or criminal
action brought against them on account of their being or having been Company
directors or officers unless, in any such action, they are adjudged to have
acted with gross negligence or willful misconduct. Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that, in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in that Act and is, therefore, unenforceable.
19
Exclusion of Liability
Pursuant to the Colorado Business Corporation Act, the Company's Articles of
Incorporation exclude personal liability for its directors for monetary
damages based upon any violation of their fiduciary duties as directors,
except as to liability for any breach of the duty of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, acts in violation of Section 7-106-401 of the
Colorado Business Corporation Act, or any transaction from which a director
receives an improper personal benefit. This exclusion of liability does not
limit any right which a director may have to be indemnified and does not
affect any director's liability under federal or applicable state securities
laws.
Company management has no current plans to use any outside consultants or
advisors and has not yet adopted policies regarding their use. Ultimately,
the policies to be used in selecting consultants or advisors will include
examining the services to be provided, the term of service and the total
amount of fees that may be paid.
Board of Directors
Colorado provides that a corporation's board of directors may be divided into
various classes with staggered terms of office. Our directors are elected for
a term of three years and until their successors are elected and qualified.
Number of Directors
Our board of directors currently consists of two directors. The number of
directors on our board may only be changed by a vote of a majority of our
directors, subject to the rights of the holders of any outstanding series of
our Company's preferred stock to elect additional directors.
Removal of Directors
Our directors, or the entire board, may be removed for cause by the
affirmative vote of the holders of at least 50% of the outstanding shares of
common stock entitled to vote in the election of directors, voting as a single
class and subject to the rights of the holders of any outstanding series of
our Company's preferred stock.
Filling Vacancies on the Board of Directors
Any newly created directorships in our board of directors, resulting from any
increase in the number of authorized directors or any vacancies, may be filled
by a majority of the remaining members of such board of directors, even though
less than a quorum, or in the case of our company, by a sole remaining
director, subject to the rights of holders of any outstanding series of
preferred stock. Newly created directorships or decreases in directorships in
our board of directors are to be apportioned among the classes of directors so
as to make all classes as nearly equal in number as practicable, provided that
no decreases in the number of directors in our board of directors may shorten
the term of any director then in office.
20
To the extent reasonably possible, any newly created directorship will be
added to the class of directors whose term of office is to expire at the
latest date following the creation of that directorship, unless otherwise
provided for by resolution of the majority of the directors then in office.
Any newly eliminated directorship will be subtracted from the class whose
office is to expire at the earliest date following the elimination of the
directorship, unless otherwise provided for by resolution of the majority of
the directors then in office.
Ability to Call Special Meetings
Special meetings of our Company's stockholders may be called by our board of
directors, by affirmative vote of a majority of the total number of authorized
directors at that time, regardless of any vacancies, or by the chief executive
officer.
Advance Notice Provisions for Stockholder Nominations and Proposals
Our bylaws allow stockholders to nominate candidates for election to the board
of directors at any annual or any special stockholder meeting at which the
board of directors has determined that directors will be elected. In
addition, the bylaws allow stockholders to propose business to be brought
before any annual stockholder meeting. However, nominations and proposals may
only be made by a stockholder who has given timely written notice to the
Secretary of our Company before the annual or special stockholder meeting.
Under our Company's bylaws, to be timely, notice of stockholder nominations or
proposals to be made at an annual stockholder meeting must be received by the
Secretary of our Company no less than 60 days nor more than 90 days before the
first anniversary of the preceding year's annual stockholder meeting. If the
date of the annual meeting is more than 30 days before or more than 60 days
after the anniversary of the preceding year's annual stockholder meeting,
notice will also be timely if delivered within 10 days of the date on which
public announcement of the meeting was first made by our Company.
In addition, if the number of directors to be elected is increased and no
public announcement is made by us naming all of the nominees or specifying the
size of the increased board of directors at least 70 days before the first
anniversary of the preceding year's annual meeting, or, if the date of the
annual meeting is more than 30 days before or 60 days after the anniversary
of the preceding year's annual meeting, at least 70 days before the annual
meeting, a stockholder's notice will be considered timely, with respect to the
nominees for any new positions created by the increase, if it is delivered to
the Secretary of our company within 10 days of the date on which public announce
ment of the meeting was first made by us.
21
Under our bylaws, to be timely, notice of a stockholder nomination to be made
at a special stockholder meeting must be received no less than 60 days, nor
more than 90 days, before a special meeting at which directors are to be
elected or within 10 days of the date on which public announcement of the
special meeting was first made by our Company.
A stockholder's notice to us must set forth all of the following:
- -all information required to be disclosed in solicitations of proxies for
election of directors, or information otherwise required by applicable law,
relating to any person that the stockholder proposes to nominate for election
or reelection as a director, including that person's written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected
- -a brief description of the business the stockholder proposes to bring before
the meeting, the reasons for conducting that business at that meeting and any
material interest of the stockholder in the business proposed
- -the stockholder's name and address as they appear on our books and the class
and number of shares which are beneficially owned by the stockholder
- -The chairman of our stockholder meeting will have the power to determine
whether the nomination or proposal was made by the stockholder in accordance
with the advance notice procedures set forth in our bylaws.
- -If the chairman determines that the nomination or proposal is not in
compliance with advance notice procedures, the chairman may declare that the
defective proposal or nomination will be disregarded.
Director Compensation
The directors of our Company, who are all executive officers as well, are not
compensated for serving.
Limitation of Liability and Indemnification
Our Articles of Incorporation provide that a director of our Company shall not
be personally liable to the Company or any of its shareholders for monetary
damages for breach of fiduciary duty as a director, except for liability:
(i) for any breach of the director's duty of loyalty to the Company or its
shareholders,
(ii) for acts or omissions not in good faith or which involve gross
negligence, intentional misconduct or a knowing violation of law,
22
(iii) for any unlawful distribution as set forth in the Colorado Model Business
Corporation Act of Colorado; or
(iv) for any transaction from which the director derived an improper personal
benefit. These provisions may have the effect in certain circumstances of
reducing the likelihood of derivative litigation against directors. While
these provisions may eliminate the right to recover monetary damages from
directors in various circumstances, rights to seek injunctive or other
non-monetary relief is not eliminated.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE FOR NORTHBOROUGH HOLDINGS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of December 31, 2000, information with respect
to the beneficial ownership of the Company's outstanding Common Stock by (i)
each director and executive officer of the Company, (ii) all directors and
executive officers of the Company as a group, and (iii) each shareholder who
was known by the Company to be the beneficial owner of more than 5% of the
Company's outstanding Common Stock. Pursuant to the beneficial ownership
rules under the Securities Exchange Act of 1934, as amended, each 5% named
person and all directors and executive officers as a group are deemed to be
the beneficial owners of securities that may be acquired within 60 days of
December 31, 2000 through the exercise of options or warrants. Accordingly,
the number of shares and percentages set forth opposite each shareholder's
name in the table below assumes the exercise of all such options and
warrants. However, the number of shares of Common Stock issuable upon
exercise by any given shareholder are not included in calculating the
percentage of Common Stock beneficially owned by any other shareholder.
Except as otherwise indicated, the persons or entities listed below have sole
voting and investment power with respect to all shares of Common Stock
beneficially owned by them.
As of December 31, 2000 the directors and officers of the Company as a group,
owned beneficially, directly or indirectly, or exercised control or direction
over an aggregate of 1,200,000 Common Shares or approximately 100% of the
issued and outstanding Common Shares. See "Directors and Officers".
Number of Shares Percentage
Name and Address(1) Beneficially Owned of Class Owned
James R. Simmons 300,000 25%
105 Riverview Ave.
Middletown, RI 02842
23
Richard Nadeau, Jr. 300,000 25%
29 Homestead Ave.
North Smithfield, RI 02896
Scott B. Adams 300,000 25%
45 Annawamscutt Road
Barrington, RI 02806
Kevin P. Gillis 300,000 25%
16 Foxmeadow Lane
Arlington, MA 02174
(1) The persons listed are the sole officers and directors of the Company.
Management has no plans to issue any additional securities to management,
promoters or their affiliates or associates and will do so only if such
issuance is in the best interests of shareholders of the Company and complies
with all applicable federal and state securities rules and regulations.
Although the Company has a very large amount of authorized but unissued common
and preferred stock that may be issued without further shareholder approval or
notice, it is the intention of the Company to avoid inhibiting certain
transactions by not having to proxy shareholders each time management needs to
authorize additional shares.
DIVIDENDS
The Company has never paid dividends with respect to the Common Stock and
currently does not have any plans to pay cashdividends in the future. There
are no contractual restrictions on the Company's present or future ability
to pay dividends. Future dividend policy is subject to the discretion of the
Board of Directors and is dependent upon a number of factors, including future
earnings, capital requirements and the financial condition of the Company.
The Colorado Corporation Code provides that a corporation may not pay
dividends if the payment would reduce the remaining net assets of the
corporation below the corporation's stated capital plus amounts constituting
a liquidation preference to other security holders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
Other than as described under "Promoters", no director or senior officer of
the Company and no person or company holding more than 10% of the Common
Shares, or any associate or affiliate thereof, has any material beneficial
interest in any transaction completed within three years prior to the date of
this prospectus or in any proposed transaction, which has or will materially
affect the Company. See "Conflicts of Interest".
24
CONFLICTS OF INTEREST
The Company's directors and officers are, or may become, in their individual
capacities, officers, directors, controlling shareholders and/or partners of
other entities engaged in a variety of businesses. Thus, there exist
potential conflicts of interest including, among other things, time, effort
and corporate opportunity, involved in participation with such other business
entities. Each member of management will devote such effort and attention to
the Company as the Company requires. There is presently no requirement
contained in the Company's By-Laws which requires that management of the
Company disclose to the Company business opportunities which come to their
attention. The members of management do, however, have a fiduciary duty of
loyalty to the Company to disclose to the Company any business opportunities
in the Company's line of business which come to their attention in their
capacity as an officer or director of the Company or otherwise. Excluded from
this duty are opportunities which the person learns about through his
involvement as a manager, officer or director of another business. Richard
Nadeau, Jr. and James R. Simmons may face conflicts as officers and/or
directors of the Company and serving as a contractor providing legal services
to the Company through the law firm of Nadeau & Simmons, P.C., including but
not limited to issues of U.S. securities laws, corporate legal matters and
collection matters.
The Company intends to indemnify its officers and directors to the full extent
permitted by Colorado law. Under Colorado law, a corporation may indemnify its
agents for expenses and amounts paid in third party actions and, upon court
approval in derivative actions, if the agents acted in good faith and with
reasonable care. A majority vote of the Board of Directors, approval of the
stockholder or court approval is required to effectuate indemnification.
Insofar as indemnification for liabilities arising under the Securities Act,
as amended, may be permitted to officers, directors or persons controlling the
Company, the Company has been advised that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by an officer, director or
controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such officer, director or controlling
person in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in such Act and will be governed by the final adjudication of such
issue.
Transactions between the Company and its officers, directors, employees and
affiliates will be on terms no less favorable to the Company than can be
obtained from unaffiliated parties. Any such transactions will be subject to
the approval of a majority of the disinterested members of the Board of
Directors.
25
Named Executive Officers
No executive compensation has been paid to date to the Holdings Directors,
Officers or Affiliates or other persons who were executive officers of
Holdings. The following are proposed salaries for the Company's Directors,
Officers, affiliates for the fiscal year beginning January 1, 2000 will be
paid until the earlier of July 1, 2000 or vote of the Board of Directors. The
Company only intends to pay the officers a fixed salary upon the raising of
capital or described in ITEM 2.B until such time the officers set forth under
Management above will continue to perform as they previously have as members
of Realty and will only be paid upon vote of the Board of Directors.
Long Term
Compensation
Annual Compensation
Compensation Awards
------------ --------- ------------ --------------
Securities
Name and Principal Other Annual Underlying All Other
Position Salary Compensation Options/(1)/
Compensation
($) ($) (#) ($)-
- ------------------ -------- ----------- ------------- ------------
James R. Simmons, CEO 40,000 None None None
Scott B. Adams,VP 40,000 None None None
Richard Nadeau, Jr., VP 40,000 None None None
Kevin A. Gillis, VP 40,000 None None None
Director Compensation
The Company does not currently reimburse directors for expenses incurred, if
any, in attending meetings of the Board of Directors. The Company does not
currently pay director fees to directors for their service on the Board.
Options Granted To Executive Officers
There are currently no options to purchase Common Shares granted to the Named
Executive Officers.
Employment Agreements
There are currently no employment agreements. It is not anticipated that
these will be implemented in the near future.
26
Directors' and Officers' Insurance
The Company intends to purchase liability insurance for the directors and
officers of the Company. No part of this premium will be paid by the
directors or officers of the Company.
STOCK OPTION PLAN
The Company does not currently maintain a stock option plan
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS AND PROMOTERS
No director, senior officer, promoter or other member of management or their
respective associates or affiliates have been indebted to the Company at any
time during the period ended December 31, 2000 or since that date.
PROMOTERS
James R. Simmons, Richard Nadeau, Jr., Scott B. Adams and Kevin Gillis may be
considered to be promoters ("Promoters") of the Company as they took the
initiative in founding and organizing the Company.
PART IV
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following documents are filed herewith or have been included as exhibits
to previous filings with the Commission and are incorporated herein by this
reference:
Exhibit No. Exhibit
x 2.10 Agreement and Plan of Share Exchange
x 2.11 Articles of Share Exchange
# 3(a) Articles of Incorporation
# 3(b) Bylaws
# 4(a) Agreements Defining Certain Rights of
Shareholders
# 4(b) Specimen Stock Certificate
x 5.10 Legal Opinion (Nadeau & Simmons, P.C.) -
Investment Representation Letter
27
7 Not applicable
9 Not applicable
11 Not applicable
14 Not applicable
16 Not applicable
21 Not applicable
x 23.1 Consent of Counsel
(contained in Exhibit 5.1)
## 24.1 Consent of CPA.
27 Financial Data Schedule
28 Not applicable
## 99.1 Safe Harbor Compliance Statement
____________________________
x filed herewith
# previously filed
## incorporated herein by reference from Registrant's Definitive
Information Statement, filed on Schedule 14C on June 12, 2000.
(b) REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the 2000 fiscal
year.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this annual report on Form 10KSB to be signed on
its behalf by the undersigned hereunto duly authorized.
NORTHBOROUGH HOLDINGS
By: /s/ James R. Simmons
________________________________
JAMES R. SIMMONS
President
Date: March 31, 2001
28
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Henry Stevens, his true and lawful
attorneys-in-fact and agents with full power of substitution and
re-substitution, for then and in their name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement and to file the same with all
exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all
intents and purposes as they might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
This power of attorney may be executed in counterparts.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on
the dates indicated.
SIGNATURE TITLE DATE
- --------- -------- -------------------------
/s/ Richard Nadeau, Jr. VP, Secretary March 31, 2001
/s/ Scott B. Adams VP, Treasurer March 31, 2001
/s/ Kevin A. Gillis Director March 31, 2001
29
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
EXHIBITS
TO
FORM 10-KSB
---------------------------
NORTHBOROUGH HOLDINGS, INC.
EXHIBIT INDEX
(a) EXHIBITS
The following documents are filed herewith or have been included as exhibits
to previous filings with the Commission and are incorporated herein by this
reference:
Exhibit No. Exhibit
# 3(a) Articles of Incorporation
# 3(b) Bylaws
# 4(a) Agreements Defining Certain Rights of
Shareholders
# 4(b) Specimen Stock Certificate
x 5.10 Legal Opinion (Nadeau & Simmons, P.C.) -
Investment Representation Letter
7 Not applicable
9 Not applicable
11 Not applicable
14 Not applicable
16 Not applicable
21 Not applicable
x 23.1 Consent of Counsel
(contained in Exhibit 5.1)
x 24.1 Consent of CPA.
27 Financial Data Schedule
28 Not applicable
x 99.1 Safe Harbor Compliance Statement
____________________________
x filed herewith
# previously filed