UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
Amendment No. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from ______________ to ________________
Commission file number - 000-22813
CENTERPOINT CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3853272
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
18 East 50th St. 10 Floor New York, New York 10022
--------------------------------------------------
(Address of principal executive offices - Zip code)
Registrant's telephone number, including area code: (212) 758-6622
Former name, former address and former fiscal year, if changed since last
report.
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes ___ No X
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by checkmark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes ____ No ____
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date.
Common stock, par value $.01 per share, 6,005,339 shares outstanding as of
July 19, 2002.
TABLE OF CONTENTS
Page
Part I - Financial Information 2
UNAUDITED CONSOLIDATED BALANCE SHEET 3
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THE THREE MONTHS ENDED March 31, 2002 4
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY 5
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7-12
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 13
Part II - Other Information 14
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
1
CENTERPOINT CORPORATION
March 31, 2002
Part I - Financial Information
2
CENTERPOINT CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEET
March 31, 2002
Mar. 31
2002
ASSETS $'000
Current:
Cash and cash equivalents $ 19
Prepaid expenses 41
-------
TOTAL CURRENT ASSETS 60
-------
Other Assets:
Investment in Bion 11,763
Deferred debt cost 472
-------
TOTAL OTHER ASSETS 12,235
-------
TOTAL ASSETS 12,295
=======
LIABILITIES
Accounts payable 87
Amounts due to related and affiliated parties 43
Accrued expenses and other payables 109
-------
TOTAL CURRENT LIABILITIES 239
-------
Commitments and Contingencies
Stockholders' equity:
Common stock, par value $0.01 per share:
Authorised 20,250,000 shares;
6,005,339 shares outstanding 50
Additional paid-in capital 19,116
Accumulated deficit (7,110)
-------
Total Stockholders' equity 12,056
-------
LIABILITIES & SHAREHOLDERS' EQUITY 12,295
=======
See Notes to Consolidated Financial Statements
3
CENTERPOINT CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
3 Months ended March 31, 2002 and 2001
Mar. 31 Mar. 31
2002 2001
US $'000 US $'000
Revenue (Expenses):
General and administrative expenses (287) (45)
Write-down of TRG loan (1,061)
Loss on foreign currency translation (667)
Interest income 8 162
---------- ----------
Net income (2,007) 117
---------- ----------
Income attributable to common shareholders (2,007) 117
========== ==========
Earnings Per Share:
Basic and Diluted $ (0.33) $ 0.02
Weighted Average Number of Shares
Outstanding During the Period:
Basic and Diluted 6,002,908 5,999,089
========== ==========
See Notes to Consolidated Financial Statements
4
CENTERPOINT CORPORATION
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
March 31, 2002
Accumulated
Additional Other SHARE-
Common Stock Paid-In Comprehensive Accumulated HOLDERS
Shares Amount Capital TRG Loan Income Deficit EQUITY
$'000 $'000 $'000 $'000 $'000 $'000
Balance January 1, 2002 5,999,089 50 18,635 (4,316) (667) (5,103) 8,599
Realization of Accumulated
Comprehensive Income 667 667
Shares issued for services 6,250 9 - - - 9
Assignment of TRG Loan - 4,316 - - 4,316
Deferred Debt Cost 472 472
Net Income (2,007) (2,007)
-----------------------------------------------------------------------------
Balance March 31, 2002 6,005,339 50 19,116 - - (7,110) 12,056
=============================================================================
See Notes to Consolidated Financial Statement
5
CENTERPOINT CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW
March 31, 2002
Mar. 31 Mar. 31
2002 2001
$'000 $'000
Net income from continuing operations (2,007) 117
Adjustments to reconcile net income to net
cash provided by operating activities:
Write-down of TRG Loan 1,061 -
Stock issuance for services 9 -
Realized loss on foreign currency translation 667 -
Other operating activities 1
Changes in assets and liabilities:
Prepaid expenses 2 18
Accounts payable and accrued expenses 71 (21)
Related party payables 3 (80)
Accrued expenses (48) -
------ -----
Net cash provided by operating activities (242) 35
------ -----
Investing activities
Investment in Bion (8,500) -
------ -----
Net cash used in financing activities (8,500) -
------ -----
Net increase/(decrease) in cash (8,742) 35
Effects of exchange rate changes on cash - 21
Cash, beginning of period 8,761 1,095
------ -----
Cash, end of period 19 1,151
====== =====
Supplemental information on non-cash investing
activities:
Assignment of Loan to TRG as consideration for the
purchase of Bion common stock 3,263 -
====== =====
See Notes to Financial Statements
6
CENTERPOINT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
1. Basis of Presentation
The accompanying unaudited consolidated condensed financial statements of
Centerpoint Corporation (the "Company") have been prepared in accordance with
the instructions to Form 10-QSB. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. For a
summary of the Registrant's accounting principles, and other footnote
information, reference is made to the Form 10-K for the year ended December
31, 2001. All adjustments necessary for the fair presentation of the results
of operations for the interim periods covered by this report have been
included. All of such adjustments are of a normal and recurring nature. The
results of operations for the three months ended March 31, 2002 are not
necessarily indicative of the operating results for the full year.
The Company was originally incorporated in Delaware on August 9, 1995 under
the name of North Atlantic Acquisition Corp. to serve as a vehicle to effect a
merger, exchange of capital stock, asset acquisition or other business
combination with an operating business. On August 27, 1997 the Company
consummated an initial public offering consisting of 800,000 Units and 150,000
shares of Class B Common Stock, with each Unit consisting of one share of
Class A Common Stock and one warrant to purchase shares of Class A Common
Stock, which resulted in net proceeds to the Company of approximately
$8,000,000.
On August 18, 1998, the Company and Trident Rowan Group, Inc. ("TRG" or
"Trident Rowan") entered into a definitive agreement and plan of merger and
reorganization, as amended (the "Merger Agreement"), pursuant to which Moto
Guzzi Corp. merged with and into the Company, with the Company as the
surviving corporation (the "Merger"). Prior to the Merger, TRG and its
majority-owned subsidiary, OAM S.p.A. ("OAM"), together owned all the
outstanding common stock of Moto Guzzi Corp. The Merger, which occurred on
March 5, 1999, was treated as a reverse acquisition of the Company. The
results of operations and cash flows prior to the date of the merger are those
of Moto Guzzi Corp. Following the Merger, the Company changed its name to
Moto Guzzi Corporation, adopted the December 31 financial reporting year of
Moto Guzzi Corp. and financial statements were prepared using the accounting
principles of Moto Guzzi Corp.
In September 2000, the Company sold all its operating subsidiaries to Aprilia
S.p.A. ("Aprilia") and changed its name to Centerpoint Corporation.
The financial statements for the period ended March 31, 2002 are shown in U.S.
dollars because all of the Company's material operating entities were based
and operated in the U.S. For the similar period ending March 31, 2001, the
Company's financial statements were translated to U.S. dollars since the
functional currency was the Italian lire.
7
In December 2001, the Board of the Company met to evaluate the alternative
strategies and investments available to the Company. Investec Ernst & Co.,
who had been hired in June 2001 to assist in this process, presented to the
Board their conclusions on a number of potential investments. After review of
the possible investments, the Board resolved to approve the acquisition of
19,000,000 shares of Bion Environmental Technologies, Inc., a publicly-held
Colorado corporation ("Bion"). Bion is an environmental service company
focused on the needs of confined animal feeding operations. Bion is engaged
in two main areas of activity: waste stream remediation and organic soil
and fertilizer production. Bion's waste remediation service business provides
confined animal feeding operations (primarily in the swine and dairy
industries) with treatment for the animal waste outputs. In this regard, Bion
treats their entire waste stream in a manner which cleans and reduces the
waste stream thereby mitigating pollution of the air, water (both ground and
surface) and soil, while creating value-added organic soil and fertilizer
products. Bion's soil and fertilizer products are being used for a variety of
applications including school athletic fields, golf courses and home and
garden applications.
On January 15, 2002, the Company closed the transaction with Bion by
purchasing 19,000,000 shares of restricted stock of Bion in exchange for
approximately $8.5 million in cash (substantially all of the Company's cash),
the TRG Promissory Note (including accrued interest and reduced by the write-
down see below), and the assignment of 65% of the Company's claims with
respect to the escrow accounts and claims against IMI (see below).
Unrestricted stock of Bion is traded on the OTC/BB market under the ticker
"BION".
The 65% of the claims that were assigned to Bion from the Company are the
Company's claims against Aprilia, S.p.A., an Italian corporation ("Aprilia"),
the purchaser of the Company's motorcycle operations and Banca di
Intermediazione Mobiliare IMI S.p.A., an Italian corporation ("IMI"), the
investment banker for the Company in the transaction. The Aprilia claim is
for funds paid to Aprilia, though disputed by the Company, from an escrow
account set up for contingent liabilities related to the sale of the
motorcycle operations. The claim against IMI is with regard to a dispute in
calculating the fee they received as investment banker in the sale of the
motorcycle operations to Aprilia. The total of these two claims is
approximately $7,945,000. The 65% of these claims that Bion received for the
sale of its shares of common stock to the Company was valued in the Bion
transaction at $2,487,000. This represents a 52% discount from the full
amount of the claim for an aggregate discounted value of $3,826,154. The
$3,826,154 value ascribed to the claim was arrived at through an internal
allocation made by Bion management based on its own evaluation of the relevant
facts and circumstances and its review of a fairness opinion that was provided
by an investment banking firm with regard to the transaction as a whole, and
there is no assurance that this, or any, amount will ever be recovered.
On January 15, 2002, effective immediately prior to the Company's transaction
with Bion, the Company's note receivable from TRG for $4,324,274 was written
down by $1,061,274 as part of the transaction. The Company also assigned the
entire loan of $3,263,000, after the write down, to Bion for the purchase of
Bion's shares of common stock by the Company. (See below and Form 8-K dated
January 15, 2002).
8
In addition, an escrow account that was set up for contingent liabilities for
the sale of the motorcycle operations and eventual rights to the balance of
these funds amounting to approximately $875,000 which is not valued on the
Company's books.
Immediately upon consummation of this transaction, Bion purchased a 57.7%
majority interest in the Company from OAM. The total consideration paid by
Bion consisted of (i) $3,700,000 in cash, (ii) the assignment of the TRG
Promissory Note (including accrued interest and reduced by the write-down
see above) and related loan guarantees, (iii) the assignment of the 65%
interest in the Company's claims with respect to the escrow accounts and
claims against IMI (see above), (iv) the issuance of 1,000,000 shares of
Bion's common stock, and (v) the issuance of a warrant to acquire 1,000,000
shares of Bion's common stock at a price of $0.90, with expiration date of
January 10, 2007.
Under the Subscription Agreement and related Registration Rights Agreement,
Bion agreed among other things (i) file a with SEC a Registration Statement
with respect to the Bion Shares, as soon as practicable, and within 90 days of
the Company's filing with the SEC of its December 31, 2001 Form 10-K, which
was filed on July 2, 2002 and to use its best efforts to cause such
Registration Statement to be declared effective as soon as practicable
thereafter, (ii) to use its best efforts to cause the Bion Shares to be
distributed to the Company's common stockholders in a tax efficient manner in
accordance with applicable law, and (iii) to use its best efforts to hold an
Annual Meeting of Bion Shareholders during 2002, in accordance with its by-
laws and applicable law (a meeting was held April 4, 2002). It is expected
that the distribution will occur during the second half of calendar 2002.
When that distribution occurs, approximately 11,000,000 of Bion's shares will
be distributed back to Bion. Bion has advised the Company that it intends to
cancel such shares.
David Mitchell, a director of the Company, is the Chairman, President, Board
member and a principal stock and warrant holder of Bion. Additionally a
portion of the proceeds of the Bion Investment were used to pay off $718,485
of indebtedness of Bion owed to Mr. Mitchell.
On January 24, 2002, David Mitchell was elected as the Company's President and
CEO. David Mitchell is a founder, stockholder, option holder, former CEO of
the Company and currently is the only director of the Company. Following the
Bion Investment and Bion acquisition of Centerpoint Shares, all of the
Company's directors, other than David Mitchell, resigned from their positions
on the Company's Board of Directors. Bill Spier, one of the Company's
Directors until he resigned on January 24, 2002, sits on Bion's advisory
board. On January 21, 2002, Howard Chase, a director of the Company until he
resigned on January 15, 2002, joined the Board of Directors of Bion.
The Company has a cash flow deficit from operations and relies on the
financial support of Bion, its majority shareholder. Taking into
consideration that Bion has incurred operating losses and has, in addition, an
accumulated deficit and shortage of funds, there can be no assurance that any
funds required during the next twelve months or thereafter can be generated
from operations or that if such required funds are not internally generated
that such funds will be available from external sources.
9
2. Related Party Transactions
On June 13, 2001 the Company, TRG and OAM entered into the TRG Loan Agreement
("TRG Loan") wherein subject to the terms and certain conditions set forth
therein the Company agreed to lend TRG $4,200,000. The loan bears interest at
a rate of 5% per annum, is repayable in full on the earlier of June 13, 2002
and the date on which the Company causes or permits a liquidation of the
Company, and was secured by the 300,000 shares of the Company common stock
currently owned by the TRG and 1,200,000 of the shares of the Company common
stock owned by OAM. In connection with the TRG Loan, OAM also entered into
the OAM Guaranty wherein it guaranteed TRG's obligations under the TRG Loan
Agreement. OAM's liability to the Company under the OAM Guaranty is limited
to the value of the Company shares pledged by OAM. On January 15, 2002, in
connection with the transaction with Bion, the Company assigned the loan to
Bion for the purchase of Bion's shares of common stock. Bion then assigned
the loan to OAM for the purchase of the Company's common stock. Prior to
these transactions, the Company wrote-off $1,061,274 of this loan (See Note 1
- - Basis of Presentation). For the three months ending March 31, 2002,
interest of $8,055 was recorded on the TRG Loan which represents interest
accrued through January 15, 2002, the date of the Bion transaction.
On March 14, 2002, the Company and Bion entered in an agreement effective
January 15, 2002 where the Company will pay $12,000 a month for management
services, support staff and office space. In addition, Bion will advance to
the Company sums needed to bring its filings with the SEC current, distribute
Bion shares to its shareholders, to locate and acquire new business
opportunities and for on-going expenses. Bion shall have no obligation to
make any advances in excess of $500,000. All sums due Bion shall be evidenced
by a convertible revolving promissory note. As additional consideration,
Bion received a warrant to purchase 1,000,000 shares of the Company's common
stock at $3.00 per share until March 14, 2007. This warrant was valued at
$472,000 using the Black-Scholes pricing model and will be amortized over
the life of the warrant. As of March 31, 2002 Bion had advanced the Company
a total of $42,683.
3. Outstanding Claims
Aprilia Claims under the Share Purchase Agreement; Request for Arbitration
Pursuant to the terms, and subject to the conditions, of the Share Purchase
Agreement and the Escrow Agreement relating to the sale of Moto Guzzi's
operating subsidiaries, Lit. 9,375 million (approximately US$ 4,548,000) of
the proceeds of the sale were placed into escrow.
10
By letter dated December 21, 2000, legal counsel for Aprilia filed a claim
against Centerpoint under the Share Purchase Agreement alleging (i) that it
had failed to receive a resignation and release from Mr. Roeth, an executive
and director of MGI Motorcycle GmbH, a subsidiary of the Company before the
sale to Aprilia, and (ii) that the campaign recall with respect to certain
Moto Guzzi motorcycles was more critical than that forecast in the Management
Date Financial Statements and August 3, 2000 letter. By letter dated February
5, 2001 Centerpoint's Italian legal counsel responded to the December 21, 2000
letter specifically denying the alleged claims and requesting that the parties
meet to negotiate a release of the escrow funds, as provided for in the August
3, 2000 letter.
On June 4, 2001 Aprilia's legal counsel sent a letter to Centerpoint which
reiterated the claims in its December 21, 2000 letter and alleged the
following: (i) that the cost of the recall campaign was estimated by Aprilia
to be approximately Lit. 4,500 million (approximately US$ 2,183,000), which
exceeded the Management Date Financial Statement amount with respect to the
recall campaign by Lit. 2,676 million (approximately US$ 1,298,000), (ii) that
technical problems related to various motorcycles were likely to cost Aprilia
approximately Lit. 5,308 million (approximately US$ 2,575,000), and that such
technical problems had not been disclosed to Aprilia in connection with the
sale of the Moto Guzzi operations to Aprilia, and that Aprilia was entitled to
reimbursement of such costs, (iii) that Aprilia was entitled to reimbursement
of Lit. 148.5 million (approximately US$ 72,000) incurred by Aprilia in
connection with the termination of Mr. Roeth, an executive of MGI Motorcycle
GmbH, (iv) that Aprilia was entitled to reimbursement of Lit. 378 million
(approximately US$ 183,000) in respect of unjustified credit notes issued by
MGI Motorcycle GmbH in favor of dealers and distributors, and (v) that
breaches of accounting principles by Moto Guzzi North America entitled it to
claims against Centerpoint in the amount of Lit. 1,100 million (approximately
US$ 534,000) (collectively with (i), (ii), (iii) and (iv), the "Alleged
Claims").
On July 13, 2001 Centerpoint's Italian counsel sent a letter to Aprilia's
counsel contesting all of the Alleged Claims.
By letter dated July 13, 2001 Aprilia requested that IMI, the escrow agent
under the Escrow Agreement, pay them Lit. 7,611 million (approximately US$
3,692,000) in respect of the Alleged Claims. On July 26, 2001, in spite of
being aware of Centerpoint contesting of each of the Alleged Claims and its
intention to seek arbitration, IMI advised Centerpoint that it had paid Lit.
7,611 million (approximately US$ 3,692,000) from the escrow account to Aprilia
in respect of the Alleged Claims.
Pursuant to the Share Purchase Agreement and Escrow Agreement, each of which
provides that disputes among the parties be arbitrated, the Company filed with
the International Arbitration Court of the International Chamber of Commerce a
Request for Arbitration in Accordance with Article 4 of the ICC Rules of
Arbitration relating to the Alleged Claims and the payment by IMI. Subsequent
to the Company's filing, a committee was formed in Milano, Italy to hear the
case. The Company is requesting restitution of the Lit. 7,611 million
(approximately US$ 3,692,000) paid to Aprilia, plus interest and costs. The
Arbitration committee was constituted on November 16, 2001, and a decision is
expected to be rendered within twelve to eighteen months of the original
filing date.
11
Dispute with IMI Regarding its Fee
IMI, the Company's investment adviser in connection with the sale of the
operating subsidiaries, acted as fiduciary for the closing. At the Closing,
but without the prior approval, knowledge or consent of the Company, IMI was
paid Lit. 11,401 million, (approximately US$ 5,532,000) in respect of fees and
expenses claimed by IMI to be due it under its engagement letter with TRG and
OAM. Since early July 2000, the Company and TRG have disputed IMI's
interpretation of the calculation of the fee due it under its engagement
letter, following indication by IMI of its basis of calculation. The dispute
relates to the respective interpretations of the Company, TRG and IMI of the
term "Total Transaction Value" as that term is used in the engagement letter.
Since that time, the Company and TRG discussed and sought to negotiate with
IMI concerning its alleged amount of the fee. IMI refused to engage in
negotiations and did not present any calculation of the fee to the Company or
TRG prior to the closing. After the closing and actual payment to IMI of the
alleged fee, IMI then presented a calculation and an invoice to the Company
for fees and expenses alleged by IMI to be due it under the engagement letter
in the amount of Lit. 11,401 million (approximately US$ 5,532,000). In
addition to disputing the amount of the fee paid to IMI, the Company believes
that IMI had no right to cause its fee to be deducted from the sale proceeds,
as the Company was not a party to the engagement letter, and did not consent
to any such deduction. On February 11, 2002 the Company brought a suit
against IMI before the Civil Section of the Court of Milano, seeking
reimbursement of Lit. 8,766 million (approximately US$ 4,253,000) of the Lit.
11,401 million (US$ 5,532,000) paid to IMI at the closing. The first hearing
in the case, originally scheduled for May 27, 2002, was postponed to July 2,
2002 and as at May 15, 2002 IMI has not yet filed its defenses. On July 2,
2002, IMI and an attorney for the Company appeared before the Examining Judge
of the Civil Section of the Court of Milano. IMI filed a defense plea asking
for the rejection of the Company's claim. No discussion was made on the merit
of the case and the Judge fixed the next hearing for November 15, 2002 at
which time the Judge will interrogate both parties and see if it is possible
for a settlement.
4. Stockholders' Equity
During the quarter the following transactions occurred:
On February 5, 2002 the Company issued 6,250 shares of the Company's common
stock to an individual for legal services provided to the Company. Equity was
increased by $9,375 for the value of the shares issued based on the closing
price of the stock of $1.50 on the date of issuance.
12
CENTERPOINT CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Three Months Ended March 31, 2002 2001
$'000 $'000
Revenue (Expenses):
General and administrative expenses (287) (45)
Write-down of TRG loan (1,061) -
Loss on foreign currency translation (667) -
Interest income 8 162
------ ------
Net income attributable to common
shareholders (2,007) 117
====== ======
During the three months ended March 31, 2002, the Company recorded
administrative expenses of $287,000 including $134,000 for costs paid to an
investment banker for the Bion transaction, and additional administrative
costs including legal fees of $72,058, management fee of $30,000, consulting
fees of $27,500, insurance expense of $20,605 and other minor expenses. The
Company recorded interest income of $8,348 during the period, primarily from
interest earned on the TRG loan. In the corresponding period in 2001, the
Company recorded interest income of $162,000 on fixed interest securities and
selling, general and administrative expenses of $45,000 principally in respect
of compliance costs on continuing operations. The Company also had an expense
for the write-down of the TRG loan by $1,061,274. This was recorded in
connection with the assignments made to Bion in connection with the Company's
acquisition of Bion's common stock in January 2002. (See Note 1 to the
financial statements.) An additional expense of $667,000 was charged for the
realization of foreign exchange losses.
Liquidity and Financial Resources
At the time of the filing of this Report in July 2002, the Company has
approximately $14,000 of cash. In order to meet future costs, such as sums
needed to bring its filings with the SEC current, to distribute Bion shares to
its shareholders, to locate and acquire new business opportunities and for
ongoing expenses, loans from Bion will need to be made to the Company. Bion
has no obligation to make any advances in excess of $500,000 under its
management agreement with the Company. All sums due Bion are to be evidenced
by a convertible revolving promissory note. Taking into consideration that
Bion has incurred operating losses and has, in addition, an accumulated
deficit and limited funds, there can be no assurance that funds required
during the next twelve months or thereafter will be available from external
sources.
13
Part II - Other Information
Item 1. Legal Proceedings
Pursuant to the Share Purchase Agreement and the Escrow Agreement relating to
the sale of Moto Guzzi's operating subsidiaries, Lit. 9,375 million of the
proceeds of the sale were placed into escrow.
In December 21, 2000 and June 2001, legal counsel for Aprilia filed claims
against the Company under the Share Purchase Agreement alleging various
breaches of representations and warranties by Company.
On July 23, 2001, in spite of being aware of the Company contesting of each of
the alleged claims and its intention to seek arbitration, IMI advised the
Company that it had paid Lit. 7,610 million from the escrow account to Aprilia
in respect of the alleged claims.
Pursuant to the Share Purchase Agreement and Escrow Agreement, each of which
provides that disputes among the parties be arbitrated, the Company filed with
the International Arbitration Court of the International Chamber of Commerce a
Request for Arbitration in Accordance with Article 4 of the ICC Rules of
Arbitration relating to the Alleged Claims and the payment by IMI. Subsequent
to the Company's filing, a committee was formed in Milano, Italy to hear the
case. The company is requesting restitution of the Lit. 7,610 million
(approximately US$3,692,000) paid to Aprilia, plus interest and costs. The
Arbitration committee was constituted on November 16, 2001, and a decision is
expected to be rendered within twelve to eighteen months of the original
filing date.
Further details concerning the alleged claims and proceedings are set forth
under "Aprilia Claims Under the Stock Purchase Agreement" above, which is
incorporated herein by reference.
At the September 7, 2000 closing of the sale of the subsidiaries, in
accordance with an invoice previously submitted to them by IMI, but without
the prior approval, knowledge or consent of the Company, IMI was paid
Lit. 11,401 million, in respect of fees and expenses claimed by IMI to be due
it under its engagement letter with TRG and OAM. Since early July 2000, the
Company and TRG have disputed IMI's interpretation of the calculation of the
fee due it under its engagement letter, following initial indication by IMI of
its basis of calculation.
On February 11, 2002 the Company brought a suit against IMI before the Civil
Section of the Court of Milano, seeking reimbursement of Lit. 8,766 million
(approximately US$4,253,000) of the Lit. 11,401 million (US$5,532,000) paid to
IMI at the closing. The first hearing in the case, originally scheduled for
May 27, 2002, was postponed to July 2, 2002. On July 2, 2002, IMI and an
attorney for the Company appeared before the Examining Judge of the Civil
Section of the Court of Milano. IMI filed a defense plea asking for the
rejection of the Company's claim. No discussion was made on the merit of the
case and the Judge fixed the next hearing for November 15, 2002 at which time
the Judge will interrogate both parties and see if it is possible for a
settlement.
14
Item 2. Changes in Securities
The following securities were sold in the quarter ended March 31, 2002 without
registration under the Securities Act of 1933, as amended:
On February 5, 2002 we issued 6,250 shares of the Company's common stock to
Michael Beckert, an attorney, based on a price per share of $1.50 for fees
earned for legal services for the period ending January 31, 2002. In
connection with this transaction we relied on the exemption from registration
afforded by Section 4(2) and/or other provisions of the Securities Act of
1933, as amended. Mr. Beckert is a sophisticated investor and had access to
complete information concerning the Company. The certificate representing the
common stock issued bears a restrictive legend concerning the transfer of the
shares and stop transfer instructions have been provided to our transfer
agent.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibits
--------
None
Reports on Form 8-K
-------------------
The following current report on Form 8-K was filed during the
three months ended March 31, 2002:
Form 8-K dated January 15, 2002: Items 1,5 & 7
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by
the undersigned, thereunto duly authorized.
CENTERPOINT CORPORATION
September 27, 2002 /s/ David Mitchell
------------------------------------
David Mitchell
President
September 27, 2002 /s/ David Fuller
------------------------------------
David Fuller
Principal Accounting Officer
CERTIFICATIONS
I, David J. Mitchell, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
Centerpoint Corporation;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report; and
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report.
Dated: September 27, 2002
/s/ David J. Mitchell
------------------------------------
David J. Mitchell
Chief Executive Officer
(Principal Executive Officer)
16
I, David Fuller, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
Centerpoint Corporation;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report; and
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report.
Dated: September 27, 2002
/s/ David Fuller
------------------------------------
David Fuller
Principal Accounting Officer
(Principal Financial Officer)
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER OF
CENTERPOINT CORPORATION
PURSUANT TO 18 U.S.C. SECTION 1350
We certify that, to the best of our knowledge, the Quarterly Report on
Form 10-QSB of Centerpoint Corporation for the period ending March 31, 2002:
(1) complies with the requirements of Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of Bion
Environmental Technologies, Inc.
/s/ David J. Mitchell /s/ David Fuller
- -------------------------------- ----------------------------------
David J. Mitchell David Fuller
Chief Executive Officer Chief Financial Officer
September 27, 2002 September 27, 2002
17