UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only
[X] Definitive Information Statement
Capitol Communities Corporation
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(Name of Registrant as Specified in Charter)
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CAPITOL COMMUNITIES CORPORATION
900 North Federal Highway, Suite 410
Boca Raton, Florida 33432
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NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD SEPTEMBER 27, 2002
To Our Stockholders:
The Annual Meeting of Stockholders of Capitol Communities Corporation
(the "Company") will be held Friday, September 27, 2002, at 10 a.m. Eastern
Standard Time, at the offices of the Company, 900 North Federal Highway, Suite
410, Boca Raton, Florida 33432.
The purposes of the meeting are:
1. To elect a Board of Directors to serve for the ensuing year;
2. To consider and act upon such other matters as may properly come
before the meeting or any adjournment thereof.
Holders of the Company's Common Stock of record at the close of
business on August 12, 2002, are entitled to receive notice of and to vote at
the meeting.
The accompanying Information Statement is furnished on behalf of the
Board of Directors of the Company, pursuant to Section 14(c) of the Securities
and Exchange Act of 1934 (the "Exchange Act"), to provide notice of the
Company's Annual Meeting of Stockholders.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
For the Board of Directors
/s/ Michael G. Todd
-------------------------------
Michael G. Todd, President
September 5, 2002
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CAPITOL COMMUNITIES CORPORATION
900 N. Federal Highway, Suite 410
Boca Raton, Florida 33432
INFORMATION STATEMENT
Annual Meeting of Shareholders
September 27, 2002
This information Statement is being furnished on behalf of the Board of
Directors of Capitol Communities Corporation (the "Company") to provide notice
of the Company's Annual Meeting of Stockholders to be held Friday, September 27,
2002, at 10 a.m. Eastern Standard Time at the principal place of business of the
Company, 900 N. Federal Highway, Suite 410, Boca Raton, Florida 33432. This
Information Statement is first being mailed or provided to stockholders of the
Company on or about September 5, 2002.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
VOTING AT MEETING
This Information Statement is first being sent or given to stockholders
on September 5, 2002. The common stock, $0.01 par value (the "Common Stock"), of
the Company is the only outstanding class of voting securities of the Company.
Stockholders of record at the close of business on August 12, 2002, the record
date for determining stockholders entitled to notice, are the only stockholders
entitled to vote at the meeting. As of the record date, there were 1,106 shares
of Common Stock outstanding and approximately 24,750,361 holders of the Common
Stock. Each record holder of the Company's Common Stock is entitled to one vote
for each share of common stock held.
The shares owned by Boca First Capital LLLP, a Florida limited
liability limited partnership ("Boca First Capital"), the controlling
shareholder of the Company, will be voted for the election of directors
recommended by the Board of Directors. See also discussion below, "SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
QUORUM FOR MEETING
The By-Laws of the Company require, for a quorum, the presence at the
meeting in person or by proxy, of the holders of a majority of the shares of
capital stock of the Company entitled to vote.
ELECTION OF DIRECTORS
Three (3) directors are to be elected to hold office for one year or
until their successors are elected and qualified. The Company has been informed
that Boca First Capital intends to nominate and cast its votes for the persons
named below. The affirmative vote of a majority of the shares of Common Stock
represented at the Annual Meeting is required to elect a director.
As of August 12, 2002, Boca First Capital is the beneficial owners of
approximately 16,000,000 shares or 64.7% of the common stock of the Company, and
as such can elect the three Directors named below to the Company's Board of
Directors at the stockholders annual meeting.
Brief biographies of the nominees for the Board of Directors of the
Company, setting forth the nominees ages as of August 12, 2002, an account of
their business experience and other information appear below. All such nominees
are members of the present Board of Directors.
Michael G. Todd 53: Mr. Todd has served as a Director and President of the
Company since 1995. He is also the sole Director and President of the Company's
wholly-owned subsidiary, Capitol Development of Arkansas, Inc. Mr. Todd has
extensive experience in the banking industry, having been the President and
Chief Executive Officer of two Southern California banks, Orange City Bank and
Bay Cities National Bank. Mr. Todd is a limited partner of Boca First Capital,
the controlling shareholder of the Company, and a managing member of Addison
Capital Group LLC ("Addison"), the general partner of Boca First Capital.
Thomas Blake 69: Mr. Blake has been a Director of the Company since March 1997,
when he was appointed by the Board of Directors to succeed Ronald J. Campbell.
Mr. Blake is the Director, Business/ Finance, of Glenwood L. Garvey Associates,
an urban planning and consulting firm. As Special Advisor to Self-Cleaning
Environments USA, Inc., a manufacturer of environmentally friendly waste
disposal units, Blake provides consulting services regarding business planning,
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financing, and marketing. He is the founder and former principal of Thomas C.
Blake Consulting, an advisory service firm, and was Chief Executive Officer of
Interstate Group Administrators, Inc., a benefit services company. He is a
director of West Coast Savings & Loan and formerly was a director of various
other financial institutions.
Raymond C. Baptista 59: Mr. Baptista has been a Director of the Company since
May , 2001. He was appointed by the Board of Directors to succeed Robert R.
Neyland upon Mr. Neyland's resignation from the Board. Mr. Baptista has 25 years
experience in banking and finance, both nationally and internationally. He has
also been actively involved in real estate acquisitions and development and was
president and CEO of a national real estate management company. Mr. Baptista has
served as the Company's Vice President of Finance since October, 1997.
The Board of Directors held 12 meetings or meetings by teleconference
during the fiscal year ended September 30, 2001. All Directors attended or
participated by teleconference at least eighty percent of the meetings. The
Company has no audit, nominating or compensation committees.
EXECUTIVE OFFICERS
The By-Laws of the Company provide for the election of executive
officers annually at the meeting of the Board of Directors following the annual
meeting of stockholders. Executive officers serve until their successors are
chosen and qualified or until their death, resignation or removal.
Brief statements setting forth the age, as of the date of this
Information Statement, the offices held and the business experience during the
past five years of each executive officer appearing below.
Michael G. Todd 53: Chairman of the Board and President. For the biography of
Mr. Todd see "Election of Directors."
David Paes 47: Vice President and Treasure. Mr. Paes is Executive Vice President
and a controlling shareholder of Maumelle Enterprises, a real estate management
company that currently provides management and administrative service to the
Company. He has been involved in real estate development as a chief financial
officer of two real estate land companies since 1977, and is a certified public
accountant.
Raymond C. Baptista 59: Vice President of Finance and Secretary. Mr. Baptista
has 25 years experience in banking and finance, both nationally and
internationally. He has also been actively involved in real estate acquisitions
and development and was president and CEO of a national real estate management
company.
Ashley Bloom 28: Vice President. Mr. Bloom is a certified public accountant and
has been involved in real estate development since 1998, primarily in South
Florida. Prior to developing real estate, Mr. Bloom was an associate in the
South Florida Financial Advisory Services of Coopers & Lybrand LLP, with a focus
on litigation consulting and corporate finance, including cash flow budgeting,
financial modeling, economic analysis and financial due diligence. Mr. Bloom is
the son of Howard Bloom, a limited partner of Boca First, the controlling
shareholder of the Company.
RELATED TRANSACTIONS
Services Provided by Affiliated Companies
The Company has paid fees or expects to pay fees to certain affiliated
companies for various types of services, and will continue to do so in the
future. These arrangements are summarized below.
MAUMELLE ENTERPRISES, INC. AGREEMENT. The Company has an oral agreement
with Maumelle Enterprises, Inc. ("Maumelle Enterprises") to provide management
and administrative services for the Maumelle Property. Currently, Maumelle
Enterprises manages the Company's inventory of property, oversees any sale of
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property, and manages administrative matters such as ensuring payment of taxes,
mortgages and other expenditures incurred in management of the property.
Maumelle Enterprises also represents the Company at local and state hearings
that may affect the Company's property. Maumelle Enterprises now only receives
10% of its funds from the Company. David Paes, an officer of the Company and
Mary Peyton, an officer of the Company's subsidiaries own 100% of the
outstanding shares of Maumelle Enterprises, as of the date of this Report. Mary
Peyton, the President of Capitol Homes, Inc., a wholly owned subsidiary of the
Company, receives a salary of $24,000 per annum as an officer of Maumelle
Enterprises. Mr. Paes, vice president, treasurer and assistant secretary of the
Company, receives a salary of $58,000 per annum as an officer of Maumelle
Enterprises.
Under the oral management and administrative services agreement,
payment to Maumelle Enterprises for management services depends upon the actual
services rendered in a given month and the current liquidity of the Company. If
funds are not available, Maumelle Enterprises has agreed to defer payment of its
management fees to the extent possible. For the fiscal year ended September 30,
2001, the Company paid Maumelle Enterprises $73,618 in expenses, which included
overhead expenses, and salaries. No management fees were accrued during the
fiscal year ended September 30, 2001.
SUBLEASING OF OFFICE SPACE. During the fiscal year-ended September 30,
2001, the Company subleased its principal office space in Torrance, California
from DTC, a California partnership. The partnership, owned equally by Michael G.
Todd and John W. DeHaven, charged the Company $2,230 per month. The Company paid
DTC the total of $18,302 and accrued $1,190 in rental payments for the fiscal
year ended September 30, 2001.
SUBSEQUENT EVENTS
CHANGE OF CONTROL: On July 17, 2002, Boca First Capital, LLLP ("Boca
First"), a Florida limited liability limited partnership acquired control of
Capitol Communities Corporation (the "Company") in an exchange of 16 million
shares of Common Stock of the Company held by Michael G. Todd, the Company's
president, and Prescott Investments, L.P. ("Prescott"), a Nevada limited
partnership beneficially owned by Mr. Todd for a combined 33% interest in Boca
First. Boca First is controlled by its general partner, Addison Capital Group
LLC ("Addison"), a Nevada limited liability company. The manger/members of
Addison are Howard Bloom, an individual residing in the State of Florida,
Kenneth Richardson, an individual residing in the State of Florida and Michael
G. Todd, an individual residing in the State of California ("Addison Managers").
CHANGE OF PRINCIPAL PLACE OF BUSINESS: Subsequent to the Company's
fiscal year-end, effective July 22, 2002, the Company moved its principal place
of business to 900 North Federal Highway, Suite 410, Boca Raton, Florida 33432,
pursuant to a change of control in the Company on July 17, 2002. The Company
currently subleases its principal office space in Boca Raton from B&G Acceptance
Corporation ("B&G"), a Florida corporation controlled by Howard Bloom for $2,200
a month. The Company also pays a management fee, which includes supplies,
telephone and office personnel of $3,800 to B&G. Mr. Bloom is a limited partner
of Boca First and a managing member of Addison, the general partner of Boca
First Capital.
NON-QUALIFIED EMPLOYEE INCENTIVE STOCK PLAN OF CAPITOL COMMUNITIES
CORPORATION. On March 6, 2002, the Company filed a Registration Statement on
Form S-8 to register 3,000,000 shares. The Non-qualified Employee Incentive
Stock Plan ("Plan") was approved by a majority of the shareholders by written
consent, with the controlling shareholders voting to approve the Plan. As of
August 15, 2002, options for 2,475,000 shares have been granted, 200,000 to
officers and directors, and a total of 1,675,000 shares have been issued upon
the exercise of such options, with no shares issued to officers and directors.
As of August 15, 2002, there remains 525,000 shares of common stock remaining
for future issuance under the Plan.
MOTION TO DISMISS BANKRUPTCY. On August 22,2002, Capitol Development of
Arkansas, Inc., the Company's wholly-owned subsidiary ("Operating Subsidiary"),
filed a Motion to Dismiss Chapter 11 Proceeding with the United States
Bankruptcy Court Eastern District of Arkansas, Little Rock Division. The Motion
was filed by the Operating Subsidiary instead of a Plan of Reorganization
predicated on the payment of all secured creditors.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of shares of
Common Stock as of September 30, 2001, for (i) each person who is known by the
Company to be the beneficial owner of more than a 5% interest in the Company,
(ii) directors of the Company, (iii) the sole "named executive officer" of the
Company, as defined in Item 402(a)(2) of SEC Regulation S-B, and (iv) the
directors and named executive officer of the Company as a group. Unless
otherwise indicated in the footnotes, all such interests are owned directly, and
the indicated person or entity has sole voting and investment power.
Name and
Title of Class address of Amount and Percent of
beneficial nature of bene- class
owner(1) ficial owner
Common Stock Michael G. Todd(2) 2,897,589 shares 68.59%
Common Stock Raymond Baptista 0 shares 0%
Common Stock Thomas Blake 0 shares 0%
Common Stock Director and Executive
Officers as a Group 2,897,589 shares 68.59%
(1) Unless otherwise indicated, the address of the beneficial owner is 900 N.
Federal Highway, Suite 410, Boca Raton, Florida 33432.
(2) All of these shares are owned by Prescott Investments, L.P., and Granite
Industries LLC. Michael G. Todd is the sole managing member of Granite
Industries LLC, which is the managing general partner of Prescott LP. Todd
is the sole "named executive officer" of the Company, as defined in Item
402(a)(2) of SEC Regulation S-B.
BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, as well as beneficial owners of more than 10 percent of
any class of securities which is registered under the Exchange Act to file
initial reports of ownership and reports of changes in ownership of securities
of the Company with the Securities and Exchange Commission (the "SEC").
Executive officers and directors are required to furnish the Company with copies
of all reports filed with the SEC. Based solely on a review of the copies of
such reports furnished to the Company during the fiscal year ended September 30,
2001, all beneficial ownership reports required to be filed pursuant to Section
16(a) by directors, officers and beneficial owners of 10% of the Company's
outstanding Common Stock have been filed.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFERS
The following table sets forth certain information with respect to the
compensation that was paid for the fiscal year ended September 30, 2001, to the
Company's executive officers.
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The following table sets forth the aggregate compensation paid by the
Company for services rendered during the period indicated:
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Other Securities All
and Annual Restricted Underlying Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary($) Bonus($) sation($) Award(s)($) SARs(#) Payouts($) sation($)
- -------- ---- --------- -------- --------- ----------- ---------- ---------- ---------
Michael 9/30/00 240,000(1) 0 0 0 0 0 0
Todd,
Chairman/
President
David 9/30/01 0 0 0 0 0 0 0
Paes (2)
Vice president,
Treasurer & Ass.
Secretary
Ray Baptista(3) 0 0 0 0 0 0 0
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(1) Michael G. Todd has been employed as President of the Company since November
1994. During fiscal year, Mr. Todd was paid $30,000, which is deferred and
current compensation for the period October 1, 2000, through September 30, 2001.
For the fiscal year, Mr. Todd deferred $210,000. Mr. Todd was suppose to accrue
one-half or $10,000 of his $20,000 per month salary, but to the financial
condition of the Company has accrued more than scheduled.
(2) David Paes has been Vice-President of the Company since July 1995, and
devotes approximately 40% of his time to its operations. Paes has received no
salary or other compensation from the Company from October 1, 1999 through
September 30, 2001.
(3) Raymond C. Baptista has been Vice President of the Company since October,
1997.
The Company's written employment agreement, which agreed to pay Todd
$20,000 a month to perform his duties of President, expired on September 30,
2000. On April 24, 2002, the Company executed a new employment agreement with
Mr. Todd, with an annual salary of $120,000; however, Mr. Todd has agreed to
defer compensation until the Company has operating funds available to pay normal
operating funds. The Company is not party to any other employment agreements.
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EQUITY COMPENSATION PLAN INFORMATION(1)
Plan No. of Securities Weighted-average No. of securities re-
Category to be issued upon exercise price of maining available
exercise of out- outstanding options, for future issuance under
standing options, warrants & rights equity compensation plan
warrants & rights (excluding securities reflect-
ed in column (a))
None -0- -0- -0-
Total -0- -0- -0-
(1) See discussion above, "Subsequent Events."
DIRECTOR COMPENSATION
Outside directors are compensated for their services in the amount of
$500 per month. Outside director Thomas Blake has agreed to defer such
compensation until the Treasurer of the Company determines that sufficient funds
are available to make such payments. Such compensation has been deferred since
April 1994, and continues to be deferred. For the fiscal year ended September
30, 2001, the Company had a deferred liability in the amount of $6,000 for
outside directors' compensation.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Joel S. Baum, P.A., has served as the
independent auditors of the Company for the fiscal year ended September 30,
2001, and has been appointed by the Board of Directors to serve as the Company's
independent auditors for the fiscal year ending September 30, 2002. The
accounting firm of Joel S. Baum has informed the Company that it will not have
representatives at the Company's Annual Meeting.
AUDIT FEES
The Company's outside auditors billed an aggregate of $17,400 for
professional services rendered for the audit of the Company's annual financial
statements for the year ended September 30, 2001, and for the reviews of the
financial statements included in the Company's quarterly statements on Form
10-QSB for that year.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
None.
ALL OTHER FEES
No other fees were billed to the Company by its principal accountant,
other than audit fees discussed above, "AUDIT FEES."
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal intended to be presented by a stockholder at the Company's
2002 Annual Meeting of Stockholders must be received in writing at the Company's
principal executive offices by December 1, 2002 so that it may be considered by
the Company for inclusion in the proxy statement and form of proxy or in the
information statement relating to the meeting.
By Order of the Board of Directors
/s/ Michael G. Todd
----------------------------------
Michael G. Todd
President
September 5, 2002
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