SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
July 9th, 2001
----------------
Date of Report
(Date of Earliest Event Reported)
UNITED FILM PARTNERS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Texas 00-32681 76-0676164
- --------------- ----------- ------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
1224 N. Lincoln St., Burbank, CA 91506
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(Address of principal executive offices)
949-271-9198
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Registrant's telephone number
ILN BETHANY CORPORATION
15007 Grove Gardens, Houston, TX 77082
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(Former name and address of Registrant)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Reorganization dated July 9, 2001
(b) the ("Plan"), between the Registrant ("the Company"); United Film
Partners, Inc. , a Delaware corporation ("UFP"); and the stockholders of
UFP, as listed in the Plan (see exhibit 2.1), UFP's Stockholders became
the controlling stockholders of the Registrant in a transaction
viewed as an asset purchase. The Plan will be treated as a purchase of
UFP for accounting purposes, and the effective date of the Plan was July
9, 2001.
The Plan was adopted, ratified and approved by the sole shareholder,
officer and director of the Registrant, and by the unanimous consent
of the Board of Directors and the majority of the UFP Stockholders.
The source of the consideration used by UFP's Stockholders to acquire
their respective interest in the Registrant was the exchange of 100% of
the assets and liabilities of UFP for 30 million "unregistered" and
"restricted" shares of $0.0001 par value common stock of the Registrant,
pursuant to the Plan.
The basis of the "control" by UFP's Stockholders is stock ownership.
See the table below under Paragraph (b) of this Item.
The sole stockholder of the Registrant and the percentage of ownership of
such outstanding voting securities of the Registrant prior to the
completion of the Plan was ILN Industries, LLC, who owned 5,000,000
shares or 100%, as reported in the Registrant's 10-SB/12g, which has
been filed with the Securities and Exchange Commission.
Pursuant to the Plan, the Registrant was required:
1. To issue 30 Million "unregistered" and "restricted" shares of
$0.0001 par value common stock as the sole consideration for
the assets of UFP and the assumption of its liabilities;
2. Following resignations, in seriatim, of the director and
executive officers of the Registrant, to designate and elect,
in seriatim, Kevin Reem as President and Director; Stephen
Stotesbery as Secretary and director; and Terence M. O'Keefe
as Treasurer and Director of the Registrant, to serve until the
next annual meeting of stockholders and until their respective
successors are elected and qualified or until their prior
resignations or terminations.
Taking into account the shares issued to UFP's stockholders, there will
be 35 Million issued and outstanding shares of common stock of the
Registrant as a result of the foregoing.
A copy of the Plan of Reorganization is filed as an exhibit to this
Form 8-K and is incorporated in its entirety herein. The foregoing
description is modified by such reference.
(b) The following table contains information regarding the shareholdings
of UFP's current directors and executive officers and those persons or
entities who beneficially own more than 5% of its common stock (giving
effect to the exercise of the warrants held by each such person or entity):
Number of shares of Percent of
Common Stock Common Stock
Name Beneficially Owned Beneficially Owned
- -------------------- -------------------- ---------------
KEVIN REEM, PRESIDENT 10 MILLION 28.67%
1224 LINCOL ST.
BURBANK, CA 91506
STEPHEN STOTESBERY, SECRETARY 10 MILLION 28.67%
2715 ABBOT KINNEY BLVD. #15
VENICE CA 90291
TERENCE M. O'KEEFE, TREASURER 10 MILLION 28.67%
12111 BEATRICE STREET
CULVER CITY, CA 90230
ILN INDUSTRIES, LLC, SHAREHOLDER 5 MILLION 14%
15007 GROVE GARDENS
HOUSTON, TX 77082
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 9, 2001 the Company fully consummated the acquisition of UFP in
accordance with the "Plan" described in Item 1 above. The consideration
given for the assets and liabilities of UFP was the issuance of 30
Million "unregistered" and "restricted" shares of the Company's Stock.
The transaction was consummated July 9, 2001. See Item 1 above for
additional information regarding the transaction.
(a) See Item 1 of this Report. The consideration exchanged under the
Plan was negotiated at "arms length" between the directors and
executive officers of the Registrant and the United Film Partners,
Inc. Stockholders, and the Board of Directors of the Registrant used
criteria used in similar proposals involving the Registrant in the
past, including the relative value of the assets of the Registrant;
its present and past business operations; the future potential of
UFP; its management; and the potential benefit to the stockholders of
the Registrant. The Board of Directors determined in his good faith
that the consideration for the exchange was reasonable, under these
circumstances.
No director, executive officer or person who may be deemed to be an
affiliate of the Registrant had any direct or indirect interest in
UFP prior to the completion of the Plan.
(b) The Registrant, intends to continue the business operations
formerly conducted by United Film Partners, Inc., which are
described below under the caption Business.
BUSINESS
The Registrant, having purchased the assets of UFP will be engaged in
the business of actively pursuing development of film and television
properties and the sale of fully "packaged" film and television
properties. It is the overall business goal of The Registrant to
become a full service development company whose projects may be
completed and brought to market within a budget of $225,000 and
$700,000 per project. The company will be active in feature length
movie, MOW and T.V. series "Packaging."
PLAN OF OPERATIONS
The Company's current plan is to concentrate its business development
efforts on opportunities available in the film production business,
including made for TV series. The development of two motion picture
projects and 1 cable t.v. series will receive the bulk of the
company's management time and financial resources, if and when the
financial resources become available.
The Company is in the process of establishing itself as packager of
filmed entertainment products. The Company intends to cover an
untapped market based upon the knowledge that the sums of money
currently spent by the major studios far exceed the actual costs
required to develop and package motion pictures and TV shows.
Due to existing overhead and volume, a major studio may spend as
much as two million dollars ($2,000,000.00) and two years time
developing a concept to the point of beginning production on that
particular project. The Company is positioned to exploit that market
as the foundation of the company's future.
The Company's major marketing strategy is based on selling "within
budget" fully "Packaged" productions to the marketplace at highly
competitive prices. This includes video and cable distribution outlets
in addition both the domestic and foreign markets. The growing
availability for viewers in countries outside the USA to receive USA
cable network productions from HBO, Show Time and others, has increased
demand for the type of programming that The Company is planning to
"Package".
The Company will establish sales outlets, through strategic alliances,
through out its market place. A strong company representative network,
coupled with well-chosen, competently packaged projects will provide a
basis for success. Under its marketing plan the company is also
developing relationships with writers and independent producers to assure
that the Company has a constant flow of projects under review. Included in
this stream of projects are feature length films, made for TV films
"MOW's", mini series for TV, TV feature series, Cable T.V. Series.
While each has a different market place, they all, as in any business,
want the most for the least cost. The company has as one of its missions,
the cost efficient packaging of its projects. Cost efficiency will become
a hallmark of UFP and will be the source of the company's internal growth.
To date The Company's current business activities have consisted primarily of
developing a business plan, assembling a management team, and pursuing
packaging opportunities and financing.
DESCRIPTION OF PROPERTY
The Company owns only intellectual property and it's assets are based on
the value of that property. These values are based on the sales values
of the properties and are calculated at an industry standard 2% of
the projects budget or Writers Guild of America minimums. The company's
executive offices are located in Burbank, CA. The company believes the
office space will be sufficient for the near future and has plans to
move into a larger space when and if operational financing is secured.
MANAGEMENT
Names Title or Position Ages
Kevin Reem President/CEO and Director 38
Stephen Stotesbery Secretary/EXECVP and Director 34
Terence M. O'keefe Treasurer/EXECVP and Director 40
Michael Mendieta CFO **
RESUME
KEVIN REEM, Chief Executive Officer, President and Director.
Kevin Reem is a multiple award winning film and video
producer with over twenty years experience in the entertainment
industry. His many skills encompass producing, directing,
production management, postproduction supervising, AVID digital
editing, and writing. Kevin is the creator of Magic Window
Productions, a production company that has developed marketing tapes,
television programs, promotional trailers, theme park films and
commercials. He ran Magic Window productions for six years, and then
went on to successfully create a production company for
Soundelux/Hollywood Edge. Kevin has held management and producer
positions with the Walt Disney Company in three major divisions,
The Disney Channel, Walt Disney Home Video International and
Walt Disney Imagnineering. As an "Imagineer" he worked as producer,
director, and designer on the multi-formatted films that are
currently playing at EPCOT center and Tokyo Disneyland. At the
Disney Channel he wrote and produced television trailers and specials.
As a producer for Walt Disney Home Video he ran the production
division, conceptualizing, writing, supervising and producing product
as well as marketing material for the company.
STEPHEN STOTESBERY, Secretary, Executive VP and Director.
Stepehn Stotesbery is an active producer and production manager with
10 years experience in the entertainment industry. He has been a SAG
signatory producer since 1996 and a member of the International Alliance
of Theatrical and Stage Employees since 1992. In 1995, Mr. Stotesbery
collaborated with Vanguard Productions to produce "The Bad Pack"; an
action packed feature starring Robert Davi, Ralph Mueller and Roddy
Piper. In 1996 he began working as a freelance budgeting and scheduling
consultant, creating budgets and schedules for over 30 features
with budgets ranging from $300,000 to $32,000,000.
In October 1997, Drew packaged an animated feature entitled
Penguinmania for Lee Taylor of Taylor Productions and in November
of 1998, he joined forces with Kevin Reem as a development consultant.
Mr. Stotesbery studied Television Production and Theatrical Stage
Lighting at the University of Wisconsin-Madison earned his Honors Degree
of Bachelor of Fine Arts in Filmmaking from the University of
Wisconsin-Milwaukee, where he studied producing, directing, and writing
for live action and animation. Mr. Stotesbery produced, directed and
wrote several short live action dramas, a documentary and several animated
shorts while studying for his degree, including the films, "When It
Touches Both Hoops," which won an award for Best Drama at the Wisconsin
Media Arts Festival and "Novas Ordo Seclorum" which won an award
for best editing.
TERENCE M. O'KEEFE, Treasurer, Executive VP and Director.
Mr. O'Keefe has worked in the film industry for over fifteen years
and draws upon his seasons of experience to make his film productions
so successful. He graduated from Northeastern University with a
Bachelor of Science Degree in Public Communications and received
his Masters Degree in Film Production from Loyola Marymount
University.
Mr. O'Keefe served as Director of Multimedia for one of the largest
mortgage Bank Company in the United States, Countrywide Funding
Company. While there, he was responsible for the design and
implementation of the new Multimedia department, which used
CD-ROM and the latest interactive technology. He also wrote,
produced and directed many of their industrial films and television
commercials, including The 60 second Refinance commercial which
won a Telly Award for best regional spot.
Mr. O'Keefe formed Vanguard Productions in 1986 to establish a
production company with a vision of making high quality independent
films for the global market. Vanguard Productions currently has one
feature film in post production and two feature films in development
and their first feature, "We The People," debuted at the 1995 Cannes
Film Festival and was one of only two American films selected to
screen at the 1995 Moscow Film Festival. Vanguard Productions
also co-produced with Showcase Entertainment the feature film
"The Bad Pack," starring Robert Davi, Roddy Piper and Ralf Moeller
and with World International Network on the coming of age drama,
"Wanted," starring Timothy Busfield, Michael Sutton, Tracy Gold,
and Robert Culp in which Mr. O'Keefe also served as writer/director.
Mr. O'Keefe's latest co-venture was with Lions Gate Films on the
feature "Route 666," starring Lou Diamond Phillips and Lori Petty.
R. MICHAEL MENDIETA, Chief Financial Officer.
R. Michael Mendieta was the Director of Finance / Accounting,
International Television Distribution for Sony Pictures Entertainment.
Some of Mendieta's primary responsibilities are overseeing the annual
budget, quarterly forecasts, and four-year plans for Sony Pictures
Entertainment international revenues. He analyzes the financial impact
of new agreements and business opportunities, oversees quarterly
marketing reports for international marketing and oversees financial
reporting for thirteen territories. Prior to working at Sony, Mr.
Mendieta was the Director of Home Video & Television Reporting,
International / Domestic for DreamWorks S.K.G. He prepared monthly
internal and external financials in accordance with FAS 53, interfaced
between operations, production, and corporate finance / accounting
regarding contract administration and home video and television
matters. Prior to DreamWorks S.K.G., Mr. Mendieta was Manager of
Financial Reporting for A&M Records.
R. Michael Mendieta graduated from Bowling Green State University
with a Bachelors of Science degree in Business Administration majoring
in Accounting with a minor in Computer Science. He graduated from the
University of Southern California with a MBA in Entertainment Finance.
MANAGEMENT RESPONSIBILITIES:
As CEO, Kevin Reem's duties will be to oversee the packaging and
development of The Company's motion picture and television projects. He
will be responsible for establishing and maintaining a strong market
position for the Company in the industry. He will oversee and ensure
implementation of the company operational strategies. Mr. Reem will be
responsible for developing strong national and international
relationships with investment and industry resources as well as
maintaining and nurturing existing resources.
As Executive VP's of Development, Stephen Stotesbery
and Terence M. O'Keefe's will utilize their industry contacts to acquire
properties that will help the Company remain versatile and competitive
in an ever changing international and domestic market. Working with
writers, directors, agents and casting directors they will develop and
package each project to make it a marketable commodity in the motion
picture and/or television industry. Once a project is fully developed
and packaged they will use their knowledge of the film industry to
ascertain the best production avenue that will guarantee the most success
and profit for the sale each project.
As CFO, R. Michael Mendieta will institute accounting and
finance policies and procedures for the Company. He will solely
responsible for creating and implementing business processes and
integrated accounting software. Mr. Mendieta will oversee annual
budget preparation and monthly budget variance analysis as well as
manage accounting.
EXECUTIVE COMPENSATION
Once funding is secured, the Company will enter into employment
agreements with each of Reem, Stotesbery, O'Keefe and R. Michael
Mendieta effective as of July 9th, 2001. Under their respective
Employment agreements, Reem, Stotesbery, O'Keefe and Mendieta will
receive
An annual salary of at least the following, increasing for inflation
according to the terms of their agreements:
Executive Annual base salary
Kevin Reem, CEO $100,000
Stephen Stotesbery Secretary $100,000
Terence M. O'Keefe, Treasurer $100,000
R. Michael Mendieta, CFO $100,000
In addition during the development stage the Company will enter into
consulting agreements in which each Executive will receive the
following restricted stock grants pursuant to the 2001 stock incentive
plan and stock grant agreement to be filed with SEC registration form S-8.
Executive Development Salary
Kevin Reem, CEO 100,000 shares
Stephen Stotesbery 100,000 shares
Secretary
Terence M. O'Keefe, Treasurer 100,000 shares
R. Michael Mendieta, CFO 100,000 shares
An annual bonus based upon the Company's achievement of operating targets
as Established each year by the three executives acting together, and in
good faith as the board of directors. This bonus is based on a sliding
scale, which is based on a percent of the targeted earnings before
interest, taxes, depreciation, and non-film amortization, which is
referred to as EBITDA, in accordance with the terms of their respective
employment agreements.
RISK FACTORS
Limited Operating History.
The Company has only a limited operating history upon which an
evaluation of the Company and its prospects can be based. Its prospects
must be considered in light of the risks, expenses and difficulties
frequently encountered by companies in their early stage of development,
particularly companies in new and rapidly evolving markets. To address
these risks, it must, among other things, respond to competitive
developments. There can be no assurance that the Company will be
successful in addressing such risks.
FUTURE CAPITAL REQUIREMENTS
Uncertainty of Future Funding.
The Company presently has extremely limited operating capital. It will
require substantial additional funding in order to realize Its goals of
commencing nationwide marketing of its products and services. Depending
upon the growth of its business operations, and the acceptance of its
products and services, the Company will need to raise substantial
additional funds through equity or debt financing, which may be very
difficult for such a speculative enterprise. There can be no assurance
that such additional funding will be made available to the Company, or
if made available, that the terms thereof will be satisfactory to the
Company. Furthermore, any equity funding will cause a substantial
decrease in the proportional ownership interests of existing
stockholders.
GOVERNMENT REGULATION
The Company is not currently subject to direct regulation by any
government agency, other than regulations applicable to businesses
generally.
LIMITED MARKET FOR COMMON STOCK
Limited Market for Shares. Any market price that may develop for shares
of common stock of the Company is likely to be very volatile, and
factors such as success or lack thereof in developing and marketing
the Company's products and services, competition, governmental
regulation and fluctuations in operating results may all have a
significant effect. In addition, the stock markets generally have
experienced, and continue to experience, extreme price and volume
fluctuations which have affected the market price of many small
capital companies and which have often been unrelated to the operating
performance of these companies. These broad market fluctuations, as well
as general economic and political conditions, may adversely affect
the market price of the Company's common stock in any market that
may develop.
DILUTION
Dilution usually results from the substantially lower prices paid by
insiders for their securities in a company when compared with the
price being paid by other investors. Financial Statements of the Company
and the Pro Forma Combined Balance Sheets and Statements of Operations
of the Registrant and UFP taking into account the completion of the Plan,
and as described under Item 7 have not been completed to date.
The issuance of the securities to the UFP stockholders will substantially
dilute the interest of other stockholders in the Registrant.
FUTURE SALES OF COMMON STOCK
There is presently no market for the shares of common stock of
the Registrant. See the Risk Factor "Limited Market for Common Stock;
Limited Market for Shares," above. Future sales of securities pursuant
to Rule 144 of the Securities and Exchange Commission may have an
adverse impact on any market which may develop in the Registrant's
securities. Presently, Rule 144 requires a one year holding period
prior to public sale of "restricted securities" in accordance with this
Rule; the Directors could each sell (i) an amount equal to 1% of the
total outstanding securities of the Registrant in any three month period
or (ii) the average weekly reported volume of trading in such
securities on all national securities and exchanges or reported through
the automated quotation system of a registered securities association
during the four calendar weeks preceding the filing of notice under
Rule 144 (this computation is not available to OTC Bulletin Board
companies), with the one year holding period to have commenced on
July 9, 2001.
VOTING CONTROL
By virtue of their collective ownership of approximately 85.71% of
the Registrant's outstanding voting securities, the current
Directors have the ability to elect all of the Registrant's
directors, who in turn elect all executive officers, without
regard to the votes of other stockholders. Collectively, these
persons may be deemed to have absolute control over the management
and affairs of the Registrant.
DEPENDENCE ON KEY PERSONAL
The Registrant's performance is substantially dependent on the
performance of its executive officers and key employees. Given
the Registrant's early stage of development, the Registrant is
dependent on its ability to retain and motivate high quality
personnel, especially its current management. The Registrant
does not have a "key person" life insurance policy on any of
its employees. The loss of the services of any of its executive
officers or other key employees could have a material adverse
effect on the business, operating results or financial
condition of the Registrant.
DIVIDENDS
The Registrant does not anticipate paying dividends on its common
stock in the foreseeable future. Future dividends, if any, will
depend upon the Registrant's earnings, if any, and subscribers
who anticipate the need of cash dividends from their investment
should refrain from the purchase of the Shares being offered hereby.
PENNY STOCK
The Registrant's securities are deemed to be "penny stock"
as defined in Rule 3a51-1 of the Securities and Exchange Commission;
This designation may have an adverse effect on the development of
any public market for the Registrant's shares of common stock or,
if such a market develops, its continuation, as broker-dealers are
required to personally determine whether an investment in the
securities is suitable for customers prior to any solicitation of
any offer to purchase these securities.
Penny stocks are securities (i) with a price of less than five dollars
per share; (ii) that are not traded on a "recognized" national exchange;
(iii) whose prices are not quoted on the NASDAQ automated quotation
system (NASDAQ-listed stocks must still meet requirement (i)above);
or (iv) of an issuer with net tangible assets less than $2,000,000
(if the issuer has been in continuous operation for at least three
years) or $5,000,000 (if in continuous operation for less than three
years), or with average annual revenues of less than $6,000,000 for the
last three years.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and
Rule 15g-2 of the Securities and Exchange Commission require broker-
dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually
signed and dated written receipt of the document before effecting any
transaction in a penny stock for the investor's account. Potential
investors in the Registrant's common stock are urged to obtain and read
such disclosure carefully before purchasing any shares that are
deemed to be "penny stock."
Further, Rule 15g-9 of the Securities and Exchange Commission requires
broker-dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to
that investor. This procedure requires the broker-dealer to (i) obtain
from the investor information concerning his or her financial situation,
investment experience and investment objectives; (ii) reasonably
determine, based on that information, that transactions in penny stocks
are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating
the risks of penny stock transactions; (iii) provide the investor with
a written statement setting forth the basis on which the broker-dealer
made the determination in (ii)above; and (iv) receive a signed and
dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment
experience and investment objectives. Compliance with these
requirements may make it more difficult for purchasers of the
Registrant's common stock to resell their shares to third parties
or to otherwise dispose of them.
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
The Bylaws of the Registrant provide for indemnification to the fullest
extent allowed under the Texas Business Corporations Act. Generally,
under this Act, a corporation has the power to indemnify any person
who is made a party to any civil, criminal, administrative or
investigative proceeding, other than action by or any right of the
corporation, by reason of the fact that such person was a director,
officer, employee or agent of the corporation, against expenses,
including reasonable attorney's fees, judgments, fines and amounts
paid in settlement of any such actions; provided, however, in any
criminal proceeding, the indemnified person shall have had no reason
to believe the conduct committed was unlawful. It is the position
of the Securities and Exchange Commission that indemnification
against liabilities for violations of the federal securities laws,
rules and regulations is against public policy.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
See Item 1.
On July 10th. 2001, the Board of Directors of the Company approved
the formation of a special committee (the Committee) to implement,
oversee and manage the United Film Partners, Inc. 2001 Stock Incentive
Plan( the Plan) and Stock Grant Agreements. The following persons
were nominated by the Board of Directors of the company as the
Directors of the Committee, to serve until the next annual meeting of
the Board and until their successors are elected and qualify, or until
their earlier resignation or termination: Kevin Reem, Terence M.
O'Keefe, and Stephen Stotesbery.
In addition the Board of Directors of the Company also approved the
execution and the filing of SEC form S-8 in order to register all
shares of common stock granted under the 2001 Stock Incentive Plan
incorporated by reference in this document as exhibit 3.4.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The sole officer and director of ILN Bethany Corporation resigned as
an officer and director of ILN Bethany Corporation effective upon
completion of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
UNITED FILM PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2001
(UNAUDITED)
UNITED FILM PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
Page
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FINANCIAL STATEMENTS
Balance Sheets F-2
Statement of Operations During F-3
the Development Stage
Statement of Cash Flows F-4
Statement of Stockholder's Equity F-5
NOTES TO FINANCIAL STATEMENTS F-6 to F-8
United Film Partners, Inc.
A Development Stage Company
Balance Sheets as of September 30, 2001
(Unaudited)
ASSETS
Cash $ 0
Accounts receivable 0
Inventory 890,000
Other (deferred tax asset, less
valuation allowance of $185) 0
TOTAL ASSETS $890,000
========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Accounts payable 0
Other 0
TOTAL LIABILITIES 0
--------
STOCKHOLDERS' EQUITY
Preferred stock ($.0001 par value; 20,000,000
shares authorized; none outstanding) 0
Common stock ($.0001 par value; 120,000,000
shares authorized; 35,650,000 outstanding) 3,565
Additional paid in capital 889,924
Stock subscription receivable 0
Accumulated deficit (3,489)
--------
Net stockholders' equity 890,000
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $890,000
========
United Film Partners, Inc.
A Development Stage Company
Pro Forma Balance Sheets as of December 31, 2001
(Unaudited)
ASSETS
Cash $1,751,000
Accounts receivable 0
Inventory 890,000
Other (deferred tax asset, less valuation
allowance of $185) 0
TOTAL ASSETS $2,641,000
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable 0
Other 0
TOTAL LIABILITIES 0
---------
STOCKHOLDERS' EQUITY
Preferred stock ($.0001 par value; 20,000,000
shares authorized; none outstanding) 0
Common stock ($.0001 par value; 120,000,000
shares authorized; 41,487,500 outstanding) 2,003,649
Additional paid in capital 889,840
Stock subscription receivable 0
Accumulated deficit (252,489)
----------
Net stockholders' equity 2,641,000
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,641,000
==========
F-2
United Film Partners, Inc.
A Development Stage Company
Statement Of Operations
(Unaudited)
Actuals through Actuals through Pro Forma thru
July 9, 2001 September 30, 2001 December 31, 2001
Project Sales $0 $0 $0
Executive 0 0 0
Producer Fees
Financing Revenue 0 0 0
Profit Participation 0 0 0
Revenue
Total Revenues 0 0 0
Cost Of Sales 0 0 0
Gross Margin 0 0 0
Advertising / 0 0 0
Initial Public
Offering
Bank Fees 0 0 250
Equipment / Supplies 0 585 12,000
Office Rent 0 0 12,000
Telephone & 0 60 3,250
Utilities
Postage / Messenger 0 101 1,375
Miscellaneous 300 560 875
Travel 0 0 875
Printing 0 100 625
General Accounting 0 0 3,000
Audit Fees 0 600 1,500
Payroll 0 0 111,500
Transfer Agent 0 180 0
Contigency 0 0 6,750
Story Rights 0 0 70,000
Legal Fees 0 0 10,000
Professional Fees 938 0 0
Casting Fees 0 0 10,000
Script Breakdown 0 0 1,500
/Budgeting
Promotions 0 0 3,500
Pay or Play Fees 0 0 0
Total operating 1,238 2,186 249,000
expenses
Operating income(1,238) (2,186) (249,000)
Depreciation 0 0 0
Interest income 0 0 0
Net income ($1,238) ($2,186) ($249,000)
Earnings per share ($0) ($0) ($0)
Weighted average 5,000,000 20,325,000 36,068,750
shares outstanding
F-3
United Film Partners, Inc.
A Development Stage Company
Statement of Cash Flows
(Unaudited)
ITD through ITD through Pro forma ITD through
July 9, 2001 September 30, 2001 December 31, 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($1,238) ($3,489) ($252,489)
<caption>
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN
OPERATING ACTIVITIES
Amortization and 0 0 0
Depreciation
<caption>
CHANGES IN OPERATING ASSETS AND LIABILITIES
Accounts receivable 0 0 0
Accounts payable 0 0 0
Inventory 0 0 0
Other 0 0 0
Net cash used in (1,238) (3,489) (252,489)
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Other 0 0 0
Net cash used in 0 0 0
operating activities
CASH FLOWS FROM FINANCING ACTIVITIES
Contirubted capital** 1,738 (76) (76)
Proceeds from stock 500 3565 2,003,565
issuance
Stock subscription (1,000) 0 0
receivable
Net cash provided by 1,238 3,489 2,003,489
financing activities
Net increase in cash 0 0 1,751,000
and cash equivalents
Cash and cash 0 0 0
equivalents -
beginning of period
Cash and cash $ 0 $ 0 $1,751,000
equivalents -
end of period
** as of July 9th
F-4
United Film Partners, Inc
A Development Stage Company
Statement Of Stockholder's Equity
(Unaudited)
<table>
<caption>
Common Preferred Additional Stock Accumulated Total
Description Shares Amount Shares Amount Paid In Subscription Deficit Stock
Capital Receivable Retained holder's
Earnings Equity
- --------------------------------------------------------------------------------------------------------------
Stock issued 5,000,000 $500 0 $0 $500 ($1,000) $0 $0
for cash
Contributed 0 0 0 0 1,238 0 0 1,238
capital
Net loss and 0 0 0 0 0 0 (1,238) (1,238)
cumulative
loss during
development
stage
- --------------------------------------------------------------------------------------------------------------
Balance, 5,000,000 500 0 0 1,738 (1,000) (1,238) 0
July 9,
2001
==============================================================================================================
Stock issued 30,650,000 3,065 0 0 0 1,000 0 4,065
for cash
Contributed 0 0 0 0 888,186 0 0 888,186
capital
Net income and 0 0 0 0 0 0 (2,251) (2,251)
cumulative
earnings
- --------------------------------------------------------------------------------------------------------------
Balance, 35,650,000 3,565 0 0 889,924 0 (3,489) 890,000
September
30, 2001
==============================================================================================================
Stock issued 837,500 2,000,000 0 0 0 0 0 2,000,000
for cash
Contributed 0 0 0 0 0 0 0 0
capital
Net income 0 0 0 0 0 0 (249,000) (249,000)
and
cumulative
earnings
- --------------------------------------------------------------------------------------------------------------
Balance, 41,487,500 2,003,649 0 0 889,840 0 (252,489) 2,641,000
December
31, 2001
==============================================================================================================
F-5
NOTE 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITY
United Film Partners, Inc. (A Development Stage Company)(the
Company) was acquired by ILN Bethany Corporation on July 9th,
2001, to continue the operations of United Film Partners, Inc.
as a public entity.
The Company's current plan is to concentrate its business
development efforts on opportunities available in the film
production business, including made for TV series and feature
films. The development of two motion picture projects and 1
cable t.v. series will receive the bulk of the company's
management time and financial resources, if and when the
financial resources become available.
The Company is in the process of establishing itself as packager
of filmed entertainment products. The Company intends to cover
an untapped market based upon the knowledge that the sums of
money currently spent by the major studios far exceed the actual
costs required to develop and package motion pictures and TV
shows. Due to existing overhead and volume, a major studio may
spend as much as two million dollars ($2,000,000.00) and two
years time developing a concept to the point of beginning
production on that particular project. The Company is positioned
to exploit that market as the foundation of the company's
future.
The Company's major marketing strategy is based on selling
"within budget" fully "Packaged" productions to the marketplace
at highly competitive prices. This includes video and cable
distribution outlets in addition both the domestic and foreign
markets. The growing availability for viewers in countries
outside the USA to receive USA cable network productions from
HBO, Show Time and others, has increased demand for the type
of programming that The Company is planning to "Package".
The Company will establish sales outlets, through strategic
alliances, through out its market place. A strong company
representative network, coupled with well-chosen, competently
packaged projects will provide a basis for success. Under its
marketing plan the company is also developing relationships
with writers and independent producers to assure that the
Company has a constant flow of projects under review. Included
in this stream of projects are feature length films, made for
TV films "MOW's", mini series for TV, TV feature series, Cable
T.V. Series. While each has a different market place, they all,
as in any business, want the most for the least cost. The
company has as one of its missions, the cost efficient
packaging of its projects. Cost efficiency will become a
hallmark of UFP and will be the source of the company's
internal growth.
To date The Company's current business activities have
consisted primarily of developing a business plan, assembling
a management team, and pursuing packaging opportunities and
financing. As of September 30th, 2001, the Company had not yet
commenced any formal business operations. The Company's fiscal
year end is December 31.
The Company's ability to commence operations is contingent upon
its ability to raise the capital it will require through the
issuance of equity securities, debt securities, bank borrowings
or a combination thereof.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those
estimates.
INCOME TAXES
The Company follows Statement of Financial Accounting Standards
No. 109 (FAS 109), "Accounting for Income Taxes". FAS 109 is
an asset and liability approach that requires the recognition
of deferred tax assets and liabilities for the expected future
tax consequences of the difference in events that have been
recognized in the Company's financial statements compared to
the tax returns.
ADVERTISING
Advertising costs will be expensed as incurred.
NET LOSS PER COMMON SHARE
Basic net loss per common share is computed by dividing net
loss applicable to common shareholders by the weighted-average
number of common shares outstanding during the period.
Diluted net loss per common share is determined using the
weighted-average number of common shares outstanding during the
period, adjusted for the dilutive effect of common stock
equivalents, consisting of shares that might be issued upon
exercise of common stock options. In periods where losses are
reported, the weighted-average number of common shares
outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.
CASH AND CASH EQUIVALENTS
The company considers all highly liquid investments with
original maturities of three months or less to be cash
equivalents.
DEVELOPMENT STAGE COMPANY
The Company has been devoting its efforts to activities
such as raising capital, establishing sources of information,
and developing markets for its planned operations. The
Company has not yet generated any revenues and, as such,
it is considered a development stage company.
F-6
NOTE 2. RELATED PARTY TRANSACTIONS
The Company Canceled and reissued 5,000,000 shares of common
stock to ILN Industries, LLC, which is 100% owned by the
President and sole director of the Company in July 2001. These
shares were issued pursuant to the Plan of Reorganization (The
Plan) consummated on July 9th, 2001, incorporated by reference
in this document as exhibit 2.1.
The Company issued 30,000,000 shares of common stock to the
shareholders of United Film Partners, Inc. a Delaware
corporation in July 2001. These shares were issued pursuant to
the Plan of Reorganization (The Plan) consummated on July 9th,
2001, incorporated by reference in this document as exhibit
2.1..
The Company issued 400,000 shares of common stock pursuant to
the 2001 stock incentive plan approved by the board on July 10th
2001 (see Item 5) to the Executive management team.
Executive Shares issued
Kevin Reem, CEO 100,000 shares
Stephen Stotesbery, Secretary 100,000 shares
Terence M. O'Keefe, Treasurer 100,000 shares
R. Michael Mendieta, CFO 100,000 shares
The Company issued 250,000 shares of common stock pursuant to
the 2001 stock incentive plan approved by the board on July 10th
2001 which vested on October 1st to Henry L. Jan a member of the
corporate development team. (see Item 5)
NOTE 3. INCOME TAXES
On September 30, 2001, the Company had a net operating loss of
approximately $3,489. This loss may be used to offset federal
income taxes in future periods. However, if subsequently
there are ownership changes in the Company, as defined in
Section 382 of the Internal Revenue Code, the Company's
ability to utilize net operating losses available before
the ownership change may be restricted to a percentage of
the market value of the Company at the time of the ownership
change. Therefore, substantial net operating loss
carry forwards could, in all likelihood, be limited or
eliminated in future years due to a change in ownership as
defined in the Code. The utilization of the remaining
carry forwards is dependent on the Company's ability to
generate sufficient taxable income during the carry forward
periods and no further significant changes in ownership.
The Company computes deferred income taxes under the
provisions of FASB Statement No. 109 (SFAS 109), which
requires the use of an asset and liability method of
accounting for income taxes. SFAS No. 109 provides for the
recognition and measurement of deferred income tax benefits
based on the likelihood of their realization in future years.
A valuation allowance must be established to reduce deferred
income tax benefits if it is more likely than not that, a
portion of the deferred income tax benefits will not be
realized. It is Management's opinion that the entire
deferred tax benefit of $1??? resulting from the net operating
loss may not be recognized in future periods. Therefore, a
valuation allowance equal to the deferred tax benefit of
$186 has been established, resulting in no deferred tax
benefits as of the balance sheet date.
NOTE 4. GOING CONCERN AND MANAGEMENT'S PLANS
As shown in the accompanying financial statements, the
Company incurred a net loss of $3,489 for the period from
inception (April 2, 2001) to September 30, 2001. The ability of
the Company to continue as a going concern is dependent upon its
ability to obtain financing and achieve profitable operations.
The Company anticipates meeting its cash requirements through
the financial support of its shareholders until such time as
it finds operating capital. The financial statements do not
include any adjustments that might be necessary should the
Company be unable to continue as a going concern.
F-7
NOTE 5. STOCKHOLDER'S EQUITY
SALE OF SHARES
In July 2001, the Company issued 35,000,000 shares of common
stock pursuant to the Plan of Reorganization (The Plan)
consummated on July 9th, incorporated by reference
in this document as exhibit 2.1.
In July the Company issued 400,000 shares of common stock
pursuant to the 2001 stock incentive plan approved by the board
on July 10th 2001 to the Executive management team. (see Item 5)
In September the Company issued 250,000 shares of common
stock pursuant to the 2001 stock incentive plan approved by the
board on July 10th 2001 which vested on October 1st to Henry L.
Jan a member of the corporate development team. (see Item 5)
CAPITAL CONTRIBUTED
In quarter ending September 30th 2001, the shareholders of the
Company contributed $2,186 to pay for the Company's
organizational and operating expenses and review fees.
PREFERRED STOCK
The Board of Directors is authorized to establish the rights
and preferences of preferred stock. To date, the Board of
Directors has not established those rights and preferences.
F-8
ITEM 8. CHANGE IN FISCAL YEAR
Not Applicable
EXHIBITS
2.1. Agreement and Plan of Reorganization between United Film
Partners, Inc. and ILN Bethany Corporation.
3.1 Certificate of Amendment to Articles of Incorporation of ILN
Bethany Corporation.
3.2. Minute of Special Meeting of ILN Bethany Corporation
3.3 Minute of Special Meeting of United Film Partners, Inc. July 9th
3.4 Minute of Special Meeting of United Film Partners, Inc. July 10th
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Current Report on Form
8-K/A to be signed on its behalf by the undersigned hereunto duly
authorized.
United Film Partners, Inc.
November 12, 2001 By /s/ Kevin Reem
--------------------------------
Kevin Reem, President
Exhibit 2.1
Date: July 9, 2001
AGREEMENT AND PLAN OF REORGANIZATION among ILN Bethany
Corporation, a Texas Corporation ("Bethany" or "Registrant"); ILN
Industries, LLC, a Texas Limited Liability Company hereof (the
"Bethany Shareholder"), being the owner of record of all of the
issued and outstanding stock of Bethany; United Film Partners, Inc.,
a Delaware Corporation ("UFP"); and the shareholders of UFP hereof
(collectively the "UFP Shareholders").
WHEREAS, the respective Boards of Directors of Bethany and UFP
and the shareholders of UFP have adopted resolutions pursuant to
which Bethany shall acquire and UFP shall exchange the assets and
liabilities described in Exhibit B hereof (hereinafter, respectively,
the "Assets" or the "Liabilities"), which is incorporated herein by
reference; and
WHEREAS, the sole consideration for the Assets shall be the
exchange of 30,000,000 "unregistered" and "restricted" shares of
$0.0001 par value common stock of Bethany, and the assumption of the
Liabilities; and
WHEREAS, ILN Industries, LLC, after the effectuation of this
plan, will transfer its 5,000,000 shares of $0.0001 par value common
stock of Bethany (issued originally on April 2, 2001) to the Registrant
for cancellation. The Registrant will then issue to ILN Industries,
LLC 5,000,000 unregistered and restricted shares of $0.0001 par
value common stock of the Registrant.
WHEREAS, the UFP Shareholders shall acquire in exchange such
shares of the Company in a reorganization within the meaning of
Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as
amended;
NOW, THEREFORE, Bethany, UFP and the Shareholders of UFP shall
adopt this plan of reorganization and agree as follows:
1. PURCHASE AND SALE OF ASSETS
1.1. PURCHASE AND SALE. Bethany hereby agrees to acquire and
UFP hereby agrees to exchange the Assets owned by UFP as of June 30,
2001.
1.2. CONSIDERATION FOR THE ASSETS. The consideration paid for
the Assets shall consist solely of 30,000,000 "unregistered" and
"restricted" shares of $0.0001 par value common stock of Bethany to
be issued in exchange therefor, and the assumption of the
Liabilities.
1.3. DELIVERY OF SHARES. Upon the execution and delivery by
UFP of an assignment or assignments and other instruments required or
necessary to transfer the Assets to Bethany, Bethany shall deliver
one stock certificate to or certificates to each of the UFP
Stockholders in the amount set opposite in the amount set opposite
their respective names as listed on Exhibit A hereto representing
30,000,000 "unregistered" and "restricted" shares of common stock of
Bethany in the aggregate.
1.4. FURTHER ASSURANCES. At the Closing and from time to time
thereafter, UFP shall execute such additional instruments and take
such other action as Bethany may request in order to exchange and
transfer clear title and ownership in the Assets to Bethany.
1.5. RESIGNATION OF PRESENT DIRECTORS AND EXECUTIVE OFFICERS
AND DESIGNATION OF NEW DIRECTORS AND EXECUTIVE OFFICERS. On Closing,
Henry Jan shall resign as director and officers of Bethany and
designate the directors and executive officers nominated by UFP to
serve in their place and stead, until the next respective annual
meetings of the stockholders and Board of Directors of UFP, and until
their respective successors shall be elected and qualified or until
their respective prior resignations or terminations, who shall be:
Kevin Reem, President and Director; Terence M. O'Keefe, Treasurer and
Director; and Stephen Stotesbery, Secretary and Director.
1.6. CHANGE OF NAME. The signatures of the sole Bethany
shareholder and Director in this Plan shall represent an unanimous
written consent to change the Company name "Bethany" to "United Film
Partners, Inc." by amending the Articles of Incorporation.
1.7. CLOSING. The Plan will be deemed to be closed on receipt
of all the signatures of UFP Stockholders holding 100% of the current
outstanding shares of UFP.
2.0. CLOSING.
2.1. PLACE. The Closing contemplated herein shall be held at
the offices of ILN Industries, LLC. 15007 Grove Gardens, Houston, TX
77082, unless another place or time is agreed upon in writing by the
parties without requiring the meeting of the parties hereof. All
proceedings to be taken and all documents to be executed at the
Closing shall be deemed to have been taken, delivered and executed
simultaneously, and no proceeding shall be deemed taken nor documents
deemed executed or delivered until all have been taken, delivered and
executed. The date of Closing may be accelerated or extended by
agreement of the parties.
2.2. EXECUTION OF DOCUMENTS. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or
transmission required by this Agreement or any signature required
thereon may be used in lieu of an original writing or transmission or
signature for any and all purposes for which the original could be
used, provided that such copy, facsimile telecommunication or other
reproduction shall be a complete reproduction of the entire original
writing or transmission or original signature.
3.0 REPRESENTATIONS AND WARRANTIES OF BETHANY
Bethany represents and warrants as follows:
3.1. CORPORATE ORGANIZATION AND GOOD STANDING. Bethany is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Texas, and is qualified to do business
as a foreign corporation in each jurisdiction, if any, in which its
property or business requires such qualification.
3.2. REPORTING COMPANY STATUS. Bethany has filed with the
Securities and Exchange Commission a registration statement on Form
10-SB which became effective pursuant to the Securities Exchange Act
of 1934 and is a reporting company pursuant to Section 12(g)
thereunder.
3.3. CAPITALIZATION. Bethany's authorized capital stock
consists of 100,000,000 shares of Common Stock, $.0001 par value, of
which 5,000,000 shares are issued and outstanding, and 20,000,000
shares of non-designated preferred stock of which no shares are
designated or issued.
3.4. ISSUED STOCK. All the outstanding shares of its Common
Stock are duly authorized and validly issued and non-assessable.
3.5. STOCK RIGHTS. Except as set out by attached schedule,
there are no stock grants, options, rights, warrants or other rights
to purchase or obtain Bethany Common or Preferred Stock issued or
committed to be issued.
3.6. CORPORATE AUTHORITY. Bethany has all requisite corporate
power and authority to own, operate and lease its properties, to
carry on its business as it is now being conducted and to execute,
deliver, perform and conclude the transactions contemplated by this
agreement and all other agreements and instruments related to this
agreement.
3.7. AUTHORIZATION. Execution of this agreement has been duly
authorized and approved by Bethany_s board of directors.
3.8. SUBSIDIARIES. Except as set out by attached schedule,
Bethany has no subsidiaries.
3.9. FINANCIAL STATEMENTS. Bethany's financial statements
dated April 30, 2001(the "Bethany Financial Statements"), fairly
present the financial condition of Bethany as of the date therein and
the results of its operations for the periods then ended in
conformity with generally accepted accounting principles consistently
applied.
3.10. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against in the Bethany Financial Statements,
Bethany did not have at that date any liabilities or obligations
(secured, unsecured, contingent, or otherwise) of a nature
customarily reflected in a corporate balance sheet prepared in
accordance with generally accepted accounting principles.
3.11. NO MATERIAL CHANGES. Except as set out by attached
schedule, there has been no material adverse change in the business,
properties, or financial condition of Bethany since the date of the
Bethany Financial Statements.
3.12. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of Bethany, any pending, threatened,
or existing litigation, bankruptcy, criminal, civil, or regulatory
proceeding or investigation, threatened or contemplated against
Bethany or against any of its officers.
3.13. CONTRACTS. Except as set out by attached schedule,
Bethany is not a party to any material contract not in the ordinary
course of business that is to be performed in whole or in part after
the date of this agreement.
3.14. TITLE. Except as set out by attached schedule, Bethany
has good and marketable title to all the real property and good and
valid title to all other property included in the Bethany Financial
Statements. Except as set out in the balance sheet thereof, the
properties of Bethany are not subject to any mortgage, encumbrance,
or lien of any kind except minor encumbrances that do not materially
interfere with the use of the property in the conduct of the business
of Bethany.
3.15. TAX RETURNS. Except as set out by attached schedule, all
required tax returns for federal, state, county, municipal, local,
foreign and other taxes and assessments have been properly prepared
and filed by Bethany for all years for which such returns are due
unless an extension for filing any such return has been filed. Any
and all federal, state, county, municipal, local, foreign and other
taxes and assessments, including any and all interest, penalties and
additions imposed with respect to such amounts have been paid or
provided for. The provisions for federal and state taxes reflected
in the Bethany Financial Statements are adequate to cover any such
taxes that may be assessed against Bethany in respect of its business
and its operations during the periods covered by the Bethany
Financial Statements and all prior periods.
3.16. NO VIOLATION. Consummation of the Acquisition will not
constitute or result in a breach or default under any provision of
any charter, bylaw, indenture, mortgage, lease, or agreement, or any
order, judgment, decree, law, or regulation to which any property of
Bethany is subject or by which Bethany is bound.
4.0. REPRESENTATIONS AND WARRANTIES OF UFP AND THE UFP
STOCKHOLDERS
UFP and the UFP Stockholders represent and warrant as follows:
4.1. OWNERSHIP. UFP owns the Assets, free and clear of any
liens or encumbrances of any type or nature whatsoever, except the
Liabilities, and UFP has full right, power and authority to convey
these Assets without qualification.
4.2. CONDITION OF THE ASSETS. At the time of Closing, the
Assets shall be in good and marketable condition, suitable for the
uses for which they were intended and, reasonable wear and tear
excepted, shall be free of any material defect.
4.3. CORPORATE ORGANIZATION AND GOOD STANDING. UFP is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware and is qualified to do
business as a foreign corporation in each jurisdiction, if any, in
which its property or business requires such qualification.
4.4. CORPORATE AUTHORITY. UFP has all requisite corporate
power and authority to own, operate and lease its properties, to
carry on its business as it is now being conducted and to execute,
deliver, perform and conclude the transactions contemplated by this
Agreement and all other agreements and instruments related to this
agreement.
4.5. AUTHORIZATION. Execution of this Agreement has been duly
authorized and approved by UFP's board of directors and shareholders.
4.6. SUBSIDIARIES. Except as set out by attached schedule,
UFP has no subsidiaries.
4.7. FINANCIAL STATEMENTS. UFP's financial statements dated
as of June 30, 2001, copies of which will have been delivered by UFP
to Bethany prior to the Acquisition Date (the "UFP Financial
Statements"), fairly present the financial condition of UFP as of the
date therein and the results of its operations for the periods then
ended in conformity with generally accepted accounting principles
consistently applied.
4.8. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against in the UFP Financial Statements, UFP
did not have at that date any liabilities or obligations (secured,
unsecured, contingent, or otherwise) of a nature customarily
reflected in a corporate balance sheet prepared in accordance with
generally accepted accounting principles.
4.9. NO MATERIAL CHANGES. Except as set out by attached
schedule, there has been no material adverse change in the business,
properties, or financial condition of UFP since the date of the UFP
Financial Statements.
4.10. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of UFP, any pending, threatened, or
existing litigation, bankruptcy, criminal, civil, or regulatory
proceeding or investigation, threatened or contemplated against UFP
or against any of its officers.
4.11. CONTRACTS. Except as set out by attached schedule, UFP
is not a party to any material contract not in the ordinary course of
business that is to be performed in whole or in part at or after the
date of this agreement.
4.12. TITLE. Except as set out by attached schedule, UFP has
good and marketable title to all the real property and good and valid
title to all other property included in the UFP Financial Statements.
Except as set out in the balance sheet thereof, the properties of UFP
are not subject to any mortgage, encumbrance, or lien of any kind
except minor encumbrances that do not materially interfere with the
use of the property in the conduct of the business of UFP.
4.13. TAX RETURNS. Except as set out by attached schedule, all
required tax returns for federal, state, county, municipal, local,
foreign and other taxes and assessments have been properly prepared
and filed by UFP for all years for which such returns are due unless
an extension for filing any such return has been filed. Any and all
federal, state, county, municipal, local, foreign and other taxes and
assessments, including any and all interest, penalties and additions
imposed with respect to such amounts have been paid or provided for.
The provisions for federal and state taxes reflected in the UFP
Financial Statements are adequate to cover any such taxes that may be
assessed against UFP in respect of its business and its operations
during the periods covered by the UFP Financial Statements and all
prior periods
4.14. NO VIOLATION. Consummation of the Acquisition will not
constitute or result in a breach or default under any provision of
any charter, bylaw, indenture, mortgage, lease, or agreement, or any
order, judgment, decree, law, or regulation to which any property of
UFP is subject or by which UFP is bound.
5.0. CONDITIONS PRECEDENT TO OBLIGATIONS OF UFP
All obligations of UFP under this Plan are subject, at their
option, to the fulfillment, before or at the Closing, of each of the
following conditions:
5.1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties of Bethany contained in this Plan
shall be deemed to have been made again at and as of the Closing and
shall then be true in all material respects and shall survive the
Closing.
5.2. DUE PERFORMANCE. Bethany shall have performed and
complied with all of the terms and conditions required by this Plan
to be performed or complied with by it before the Closing.
5.3. OFFICERS' CERTIFICATE. UFP shall have been furnished with
a certificate signed by the President of Bethany, in such capacity,
attached hereto as Exhibit H and incorporated herein by reference,
dated as of the Closing, certifying (1) that all representations and
warranties of Bethany contained herein are true and correct; and (2)
that since the date of the financial statements (Exhibits C), there
has been no material adverse change in the financial condition,
business or properties of Bethany, taken as a whole.
5.4. ASSETS AND LIABILITIES OF BETHANY. Unless otherwise
agreed, Bethany shall have no assets and no liabilities at Closing,
and all costs, expenses and fees incident to the Plan shall have been
paid.
5.5. RESIGNATION OF DIRECTORS AND EXECUTIVE OFFICERS AND
DESIGNATION OF NEW DIRECTORS AND EXECUTIVE OFFICERS. The present
directors and executive officers of Bethany shall resign, and shall
have designated nominees of UFP as outlined in Section 1.5 hereof as
directors and executive officers of Bethany to serve in their place
and stead, until the next respective annual meetings of the
stockholders and Board of Directors of Bethany, and until their
respective successors shall be elected and qualified or until their
respective prior resignations or terminations.
6.0. CONDITIONS PRECEDENT TO OBLIGATIONS OF BETHANY
All obligations of Bethany under this Plan are subject, at
Bethany's option, to the fulfillment, before or at the Closing, of
each of the following conditions:
6.1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties of UFP contained in this Plan shall be
deemed to have been made again at and as of the Closing and shall
then be true in all material respects and shall survive the Closing.
6.2. DUE PERFORMANCE. UFP shall have performed and complied
with all of the terms and conditions required by this Plan to be
performed or complied with by them before the Closing.
6.3. OFFICERS' CERTIFICATE. Bethany shall have been furnished
with a certificate signed by the President of UFP, in such capacity,
attached hereto as Exhibit I and incorporated herein by reference,
dated as of the Closing, certifying (1) that all representations and
warranties of UFP are true and correct; and (2) that since the date
of the financial statements (Exhibit E), there has been no material
adverse change in the financial condition, business or properties of
UFP, taken as a whole.
6.4. BOOKS AND RECORDS. The Board of Directors of UFP shall
have caused UFP to make available all books and records of UFP,
including minute books and stock transfer records; provided, however,
only to the extent requested in writing by Bethany at Closing.
7.0. TERMINATION
7.1. TERMINATING THE PLAN. Prior to Closing, this Plan may be
terminated (1) by mutual consent in writing;(2) by either the sole
director of Bethany or UFP and the UFP Stockholders if there has been
a material misrepresentation or material breach of any warranty or
covenant by the other party; or (3) by either the sole director of
Bethany or the directors of UFP if the Closing shall not have taken
place, unless adjourned to a later date by mutual consent in writing,
by the date fixed in Section 2.
8.0. ARBITRATION
8.1. SCOPE. The parties hereby agree that any and all claims
(except only for requests for injunctive or other equitable relief)
whether existing now, in the past or in the future as to which the
parties or any affiliates may be adverse parties, and whether arising
out of this agreement or from any other cause, will be resolved by
arbitration before the American Arbitration Association within the
State of Texas.
8.2. CONSENT TO JURISDICTION, SITUS AND JUDGEMENT. The parties
hereby irrevocably consent to the jurisdiction of the American
Arbitration Association and the situs of the arbitration (and any
requests for injunctive or other equitable relief) within the State
of Texas. Any award in arbitration may be entered in any domestic or
foreign court having jurisdiction over the enforcement of such
awards.
8.3. APPLICABLE LAW. The law applicable to the arbitration and
this agreement shall be that of the State of Texas, determined
without regard to its provisions which would otherwise apply to a
question of conflict of laws.
8.4. DISCLOSURE AND DISCOVERY. The arbitrator may, in its
discretion, allow the parties to make reasonable disclosure and
discovery in regard to any matters which are the subject of the
arbitration and to compel compliance with such disclosure and
discovery order. The arbitrator may order the parties to comply with
all or any of the disclosure and discovery provisions of the Federal
Rules of Civil Procedure, as they then exist, as may be modified by
the arbitrator consistent with the desire to simplify the conduct and
minimize the expense of the arbitration.
8.5. RULES OF LAW. Regardless of any practices of arbitration
to the contrary, the arbitrator will apply the rules of contract and
other law of the jurisdiction whose law applies to the arbitration so
that the decision of the arbitrator will be, as much as possible, the
same as if the dispute had been determined by a court of competent
jurisdiction.
8.6. FINALITY AND FEES. Any award or decision by the American
Arbitration Association shall be final, binding and non-appealable
except as to errors of law or the failure of the arbitrator to adhere
to the arbitration provisions contained in this agreement. Each
party to the arbitration shall pay its own costs and counsel fees
except as specifically provided otherwise in this agreement.
8.7. MEASURE OF DAMAGES. In any adverse action, the parties
shall restrict themselves to claims for compensatory damages and\or
securities issued or to be issued and no claims shall be made by any
party or affiliate for lost profits, punitive or multiple damages.
8.8. COVENANT NOT TO SUE. The parties covenant that under no
conditions will any party or any affiliate file any action against
the other (except only requests for injunctive or other equitable
relief) in any forum other than before the American Arbitration
Association, and the parties agree that any such action, if filed,
shall be dismissed upon application and shall be referred for
arbitration hereunder with costs and attorney's fees to the
prevailing party.
8.9. INTENTION. It is the intention of the parties and their
affiliates that all disputes of any nature between them, whenever
arising, whether in regard to this agreement or any other matter,
from whatever cause, based on whatever law, rule or regulation,
whether statutory or common law, and however characterized, be
decided by arbitration as provided herein and that no party or
affiliate be required to litigate in any other forum any disputes or
other matters except for requests for injunctive or equitable relief.
This agreement shall be interpreted in conformance with this stated
intent of the parties and their affiliates.
8.10. SURVIVAL. The provisions for arbitration contained
herein shall survive the termination of this agreement for any
reason.
9.0. GENERAL PROVISIONS.
9.1. FURTHER ASSURANCES. From time to time, each party will
execute such additional instruments and take such actions as may be
reasonably required to carry out the intent and purposes of this
agreement.
9.2. WAIVER. Any failure on the part of either party hereto to
comply with any of its obligations, agreements, or conditions
hereunder may be waived in writing by the party to whom such
compliance is owed.
9.3. BROKERS. Each party agrees to indemnify and hold harmless
the other party against any fee, loss, or expense arising out of
claims by brokers or finders employed or alleged to have been
employed by the indemnifying party.
9.4. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if
delivered in person or sent by prepaid first-class certified mail,
return receipt requested, or recognized commercial courier service,
as follows:
If to UFP, to:
United Film Partners, Inc.
1224 N. Lincoln St.
Burbank, CA 91506
If to Bethany, to:
ILN Bethany Corporation
C/O ILN Industries
P.O. Box 6162
Burbank, CA 91510
9.5. GOVERNING LAW. This agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Texas.
9.6. ASSIGNMENT. This agreement shall inure to the benefit of,
and be binding upon, the parties hereto and their successors and
assigns; provided, however, that any assignment by either party of
its rights under this agreement without the written consent of the
other party shall be void.
9.7. COUNTERPARTS. This agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Signatures sent by facsimile transmission
shall be deemed to be evidence of the original execution thereof.
9.10. REVIEW OF AGREEMENT. Each party acknowledges that it has
had time to review this agreement and, as desired, consult with
counsel. In the interpretation of this agreement, no adverse
presumption shall be made against any party on the basis that it has
prepared, or participated in the preparation of, this agreement.
9.11. NO REVERSE SPLIT. All stockholders of Bethany, including
those to receive shares pursuant to Section 1.3 hereof, shall be
protected against any reverse split that occurs in the reorganized
company for a period of two years following Closing, and in the event
of any such reverse split, such stockholders shall be entitled to
have the reorganized company issue them additional shares to increase
their respective stock holdings as though such reverse split had
never been effected.
9.12. SCHEDULES. All schedules attached hereto, if any, shall
be acknowledged by each party by signature or initials thereon.
IN WITNESS WHEREOF, the parties have executed this Agreement
and Plan of Reorganization effective the day and year first above
written.
ILN BETHANY CORPORATION
Date: 7/9/01 /s/ Henry L. Jan
Henry L. Jan, President
BETHANY STOCKHOLDER
Date: 7/9/01 /s/ Henry L. Jan
Henry L. Jan, ILN Industries, LLC
United Film Partners, Inc.
Date: 7/9/01 /s/ Kevin Reem
Kevin Reem, President
UFP STOCKHOLDERS
Date: 7/9/01 /s/ Terence M. O'Keefe
Terence M. O'Keefe
Date: 7/9/01 /s/ Kevin Reem
Kevin Reem
Date: 7/9/01 /s/Stephen Stotesbery
Stephen Stotesbery
EXHIBIT A
STOCKHOLDERS OF UNITED FILM PARTNERS, INC.
Name and Address Number of Shares Number of Shares
Owned of UFP of Bethany to be
Received in
Exchange
Terence M. O'Keefe 500 10,000,000
12111 Beatrice Street
Culver City, CA 90230
Stephen Stotesbery 500 10,000,000
2715 Abbot Kinney Blvd. #15
Venice, CA 90291
Kevin Reem 500 10,000,000
1224 N. Lincoln St.
Burbank, CA 91506
Initialed: /s/hj 7/9/01 /s/kr 7/9/01
Bethany Date UFP Date
EXHIBIT B
ASSETS AND LIABILITIES OF UFP
The list of Assets provided by UFP to Bethany as of June 30,2001:
COMPANY ASSETS - SCREENPLAYS / TELEPLAYS / BOOKS
TITLE OF PROPERTY GENRE OF PROPERTY MARKET VALUE
TRAILER PARK QUIRKY ADVENTURE COMEDY $ 88,614.00
DEFIANCE ACTION THRILLER $ 88,614.00
MEXICAN BOUNTY ACTION ADVENTURE $ 88,614.00
TIGER'S PAW HIGH ADVENTURE $ 88,614.00
RAMOUS IV SCIENCE FICTION $ 88,614.00
BEOWULF EPIC MEDIEVAL LOVE STORY $ 88,614.00
THE GUARD NEVER SLEEPS COMEDY ADVENTURE $ 88,614.00
THE CASE OF THE MISSING CORPSE COMEDY SPOOF $ 88,614.00
KEY WEST EPISODIC DETECTIVE SERIES $ 88,614.00
UNTITLE TBD $ 92,474.00
TOTAL VALUE OF PROPERTIES $ 890,000.00
============
UFP CURRENTLY HAS NO LIABILITIES.
Initialed: /s/hj 7/9/01 /s/kr 7/9/01
Bethany Date UFP Date
EXHIBIT C
ILN BETHANY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF APRIL 30, 2001
ILN BETHANY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
Page
----
INDEPENDENT AUDITOR'S REPORT F-2
FINANCIAL STATEMENTS
Balance Sheet F-3
Statement of Loss and Accumulated Deficit During F-4
the Development Stage
Statement of Cash Flows F-5
Statement of Stockholder's Equity F-6
NOTES TO FINANCIAL STATEMENTS F-7 to F-9
F-1
Independent Auditor's Report
----------------------------
Stockholders and Board of Directors
ILN Bethany Corporation (A Development Stage Company)
Houston, Texas
We have audited the accompanying balance sheet of ILN Bethany
Corporation (A Development Stage Company), as of April 30, 2001, and
the related statements of loss and accumulated deficit during the
development stage, cash flows, and stockholder's equity for the period
from inception (April 2, 2001) to April 30, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of ILN
Bethany Corporation (A Development Stage Company) at April 30,
2001, and the results of its operations and its cash flows for the
period from inception (April 2, 2001) to April 30, 2001, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 4 to
the financial statements, the Company has incurred a loss of $1,238 from
inception (April 2, 2001) to April 30, 2001, which raises substantial
doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 4. The
financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Dohan and Company, CPA's
May 2, 2001
Miami, Florida
F-2
ILN BETHANY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
April 30, 2001
ASSETS
Deferred tax asset, less valuation allowance of $186 $ -
TOTAL ASSETS $ -
=========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES $ -
---------
TOTAL LIABILITIES -
---------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
STOCKHOLDER'S EQUITY
Preferred Stock, $.0001 par value, 20,000,000 shares
authorized; none outstanding $ -
Common Stock, $.0001 par value, 100,000,000 shares
authorized; 5,000,000 shares issued and outstanding 500
Additional paid-in capital 1,738
Stock subscription receivable (1,000)
Deficit accumulated during the development stage (1,238)
---------
TOTAL STOCKHOLDER'S EQUITY -
---------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ -
=========
See accompanying notes.
F-3
ILN BETHANY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT DURING THE DEVELOPMENT STAGE
For the period from inception (April 2, 2001) to April 30, 2001
EXPENSES
Organizational expenses $ 300
Professional fees 938
---------
NET LOSS BEFORE INCOME TAX $(1,238)
INCOME TAXES -
---------
NET LOSS AND ACCUMULATED DEFICIT DURING THE
DEVELOPMENT STAGE $(1,238)
=========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
(BASIC AND DILUTED) 5,000,000
=========
NET LOSS PER SHARE (BASIC AND DILUTED) $ (0.00)
=========
See accompanying notes.
F-4
ILN BETHANY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the period from inception (April 2, 2001) to April 30,2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,238)
---------
NET CASH USED BY OPERATING ACTIVITES (1,238)
---------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital Contributed 1,238
---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,238
---------
NET INCREASE IN CASH AND EQUIVALENTS FOR THE PERIOD
AND CUMULATIVE DURING THE DEVELOPMENT STAGE -
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD -
---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ -
=========
SUPPLEMENTAL DISCLOSURES
Interest paid $ -
Income taxes paid $ -
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES
Common stock issued for stock subscriptions receivable $ 1,000
---------
See accompanying notes.
F-5
ILN BETHANY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDER'S EQUITY
Accumulated
Deficit
Common Stock Additional Stock During the Total
-------------------- Paid-In Subscription Development Stockholder's
Description Shares Amount Capital Receivable Stage Equity
- -----------------------------------------------------------------------------------------------
Common stock issued
for cash 5,000,000 $ 500 $ 500 $(1,000) -
Contributed capital - - 1,238 - - 1,238
Net loss and cumulative
loss during the
development stage - - - (1,238) (1,238)
- -----------------------------------------------------------------------------------------------
BALANCE,
April 30, 2001 5,000,000 $ 500 $ 1,738 $(1,000) $(1,238) $ -
===============================================================================================
See accompanying notes.
F-6
NOTE 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITY
ILN Bethany Corporation (A Development Stage Company)(the
Company) was incorporated in Texas on April 2, 2001, to serve
as a vehicle to effect a merger, exchange of capital stock,
asset acquisition or other business combination with a domestic
or foreign private business. At April 30, 2001, the Company
had not yet commenced any formal business operations. The
Company's fiscal year end is December 31.
The Company's ability to commence operations is contingent upon
its ability to identify a prospective target business and raise
the capital it will require through the issuance of equity
securities, debt securities, bank borrowings or a combination
thereof.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those
estimates.
INCOME TAXES
The Company follows Statement of Financial Accounting Standards
No. 109 (FAS 109), "Accounting for Income Taxes". FAS 109 is
an asset and liability approach that requires the recognition
of deferred tax assets and liabilities for the expected future
tax consequences of the difference in events that have been
recognized in the Company's financial statements compared to
the tax returns.
ADVERTISING
Advertising costs will be expensed as incurred.
NET LOSS PER COMMON SHARE
Basic net loss per common share is computed by dividing net
loss applicable to common shareholders by the weighted-average
number of common shares outstanding during the period.
Diluted net loss per common share is determined using the
weighted-average number of common shares outstanding during the
period, adjusted for the dilutive effect of common stock
equivalents, consisting of shares that might be issued upon
exercise of common stock options. In periods where losses are
reported, the weighted-average number of common shares
outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.
CASH AND CASH EQUIVALENTS
The company considers all highly liquid investments with
original maturities of three months or less to be cash
equivalents.
DEVELOPMENT STAGE COMPANY
The Company has been devoting its efforts to activities
such as raising capital, establishing sources of information,
and developing markets for its planned operations. The
Company has not yet generated any revenues and, as such,
it is considered a development stage company.
F-7
NOTE 2. RELATED PARTY TRANSACTIONS
The Company issued 5,000,000 shares of common stock to ILN
Industries, LLC, which is 100% owned by the President and
sole director of the Company in April 2001. These shares
were issued for a total value of $1,000.
ILN Industries, LLC, the Company's sole shareholder
contributed capital in the amount of $1,238, per a signed
agreement dated April 2, 2001. The agreement calls for
ILN Industries, LLC to provide the following services,
without reimbursement from the Company, until the Company
enters into a business combination as described in Note 1:
a. Location and review of potential target companies
b. Payment of all corporate, organizational, and other
costs incurred by the Company.
NOTE 3. INCOME TAXES
At April 30, 2001, the Company had a net operating loss of
approximately $1,238. This loss may be used offset federal
income taxes in future periods. However, if subsequently
there are ownership changes in the Company, as defined in
Section 382 of the Internal Revenue Code, the Company's
ability to utilize net operating losses available before
the ownership change may be restricted to a percentage of
the market value of the Company at the time of the ownership
change. Therefore, substantial net operating loss
carryforwards could, in all likelihood, be limited or
eliminated in future years due to a change in ownership as
defined in the Code. The utilization of the remaining
carryforwards is dependent on the Company's ability to
generate sufficient taxable income during the carryforward
periods and no further significant changes in ownership.
The Company computes deferred income taxes under the
provisions of FASB Statement No. 109 (SFAS 109), which
requires the use of an asset and liability method of
accounting for income taxes. SFAS No. 109 provides for the
recognition and measurement of deferred income tax benefits
based on the likelihood of their realization in future years.
A valuation allowance must be established to reduce deferred
income tax benefits if it is more likely than not that, a
portion of the deferred income tax benefits will not be
realized. It is Management's opinion that the entire
deferred tax benefit of $186 resulting from the net operating
loss may not be recognized in future periods. Therefore, a
valuation allowance equal to the deferred tax benefit of
$186 has been established, resulting in no deferred tax
benefits as of the balance sheet date.
NOTE 4. GOING CONCERN AND MANAGEMENT'S PLANS
As shown in the accompanying financial statements, the
Company incurred a net loss of $1,238 for the period from
inception (April 2, 2001) to April 30, 2001. The ability of
the Company to continue as a going concern is dependent upon its
ability to obtain financing and achieve profitable operations.
The Company anticipates meeting its cash requirements through
the financial support of its shareholders until such time as
it finds a merger partner. The financial statements do not
include any adjustments that might be necessary should the
Company be unable to continue as a going concern.
F-8
NOTE 5. STOCKHOLDER'S EQUITY
SALE OF SHARES
In April 2001, the Company issued 5,000,000 shares of common
stock for a total of $1,000. A stock subscription receivable
was recorded in connection with this transaction.
CAPITAL CONTRIBUTED
In April 2001, the sole shareholder of the Company contributed
$1,238 to pay for the Company's organizational expenses and
audit fees.
PREFERRED STOCK
The Board of Directors is authorized to establish the rights
and preferences of preferred stock. To date, the Board of
Directors has not established those rights and preferences.
F-9
Initialed: /s/hj 7/9/01 /s/kr 7/9/01
Bethany Date UFP Date
EXHIBIT D
None.
Initialed: /s/hj 7/9/01 /s/kr 7/9/01
Bethany Date UFP Date
EXHIBIT E
United Film Partners, Inc.
From Inception (May 10, 2001) to June 30, 2001
BALANCE SHEET
UNAUDITED
ASSETS
CASH $ -
OTHER ASSETS
SCREENPLAYS $890,000
TOTAL ASSETS $890,000
========
LIABILITIES $ -
--------
TOTAL LIABILITIES -
========
Initialed: /s/hj 7/9/01 /s/kr 7/9/01
Bethany Date UFP Date
EXHIBIT F
None.
Initialed: /s/hj 7/9/01 /s/kr 7/9/01
Bethany Date UFP Date
EXHIBIT G
ACKNOWLEDGEMENT AND APPROVAL OF TERMS AND CONDITIONS
Pursuant to that certain Agreement and Plan of Reorganization
(the "Plan") between the undersigned, UFP, and the stockholders of
UFP, I acknowledge that I have approved this exchange; that I am
aware of all of the terms and conditions of the Plan; that I have
received and personally reviewed a copy of the Plan and any and all
material documents regarding the Company. I represent and warrant
that I have sufficient knowledge and experience to understand the
nature of the exchange and am fully capable of bearing the economic
risk of the loss of my entire cost basis.
I further understand that immediately prior to the completion
of the Plan, Bethany had no assets and no liabilities, of any
measurable value, and that in actuality, the completion of the Plan
and the exchange of my shares of UFP for shares of Bethany results
in a decrease in the actual percentage of ownership that my shares of
UFP represented in UFP prior to the completion of the Plan.
I understand that you have and will make books and records of
your Company available to me for my inspection in connection with
the contemplated exchange of my shares, options or warrants, and that
I have been encouraged to review the information and ask any
questions I may have concerning the information of any director or
officer of the Company or of accounting firms for the Company. I
understand that the accountant for the Company is Dohan and Company,
7700 North Kendall Drive, #204, Miami, FL, 33156-7564, Telephone
(305) 274-1366. I further understand that, upon the completion of the
Plan, no accountant, attorney, employee or consultant will have any
claim of any kind against the Company for any event or occurrence on
or prior to the completion of the Plan.
I also understand that I must bear the economic risk of
ownership of any of the Bethany shares for a long period of time, the
minimum of which will be one (1) year, as these shares are
"unregistered" shares and may not be sold unless any subsequent offer
or sale is registered with the United States Securities and Exchange
Commission or otherwise exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Act"), or other
applicable laws, rules and regulations.
I intend that you rely on all of my representations made
herein and those in the personal questionnaire (if applicable) I
provided to UFP for use by Bethany as they are made to induce you
to issue me the shares of Bethany under the Plan, and I further
represent (of my personal knowledge or by virtue of my reliance on
one or more personal representatives), and agree as follows, to-wit:
1. That the shares being acquired are being received for
investment purposes and not with a view Toward further distribution;
2. That I have a full and complete understanding of the phrase
"for investment purposes and not with a view toward further
distribution";
3. That I understand the meaning of "unregistered" shares and
know that they are not freely tradeable;
4. That any stock certificate issued by you to me in
connection with the shares being acquired shall be imprinted with a
legend restricting the sale, assignment, hypothecation or other
disposition unless it can be made in accordance with applicable laws,
rules and regulations;
5. I agree that the stock transfer records of your Company
shall reflect that I have requested the Company not to effect any
transfer of any stock certificate representing any of the shares
being acquired unless I shall first have obtained an opinion of legal
counsel to the effect that the shares may be sold in accordance with
applicable laws, rules and regulations, and I understand that any
opinion must be from legal counsel satisfactory to the Company and,
regardless of any opinion, I understand that the exemption covered by
any opinion must in fact be applicable to the shares;
6. That I shall not sell, offer to sell, transfer, assign,
hypothecate or make any other disposition of any interest in the
shares, options or warrants being acquired except as may be pursuant
to any applicable laws, rules and regulations;
7. I fully understand that my shares which are being exchanged
for shares of the Company are "risk capital," and I am fully capable
of bearing the economic risks attendant to this investment, without
qualification; and
8. I also understand that without approval of counsel for
Bethany, all shares of Bethany to be issued and delivered to me in
exchange for my shares of UFP shall be represented by one certificate
only and which such certificate shall be imprinted with the following
legend or a reasonable facsimile thereof on the front and reverse
sides thereof:
The shares, options or warrants of stock represented by this
certificate have not been registered under the Securities Act
of 1933, as amended, and may not be sold or otherwise
transferred unless compliance with the registration provisions
of such Act has been made or unless availability of an
exemption from such registration provisions has been
established, or unless sold pursuant to Rule 144 under the
Act.
Any request for more than one stock certificate must be
accompanied by a letter signed by the requesting stockholder setting
forth all relevant facts relating to the request. Bethany will
attempt to accommodate any stockholders' request where Bethany views
the request is made for valid business or personal reasons so long as
in the sole discretion of Bethany, the granting of the request will
not facilitate a "public" distribution of unregistered shares of
Bethany.
You are requested and instructed to issue a stock certificate
as follows, to-wit:
--------------------------------------------------------
(Name(s) and Number of Shares)
--------------------------------------------------------
(Address)
--------------------------------------------------------
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is desired,
put the initials JTRS after your names.
United Film Partners, Inc.
Date:7/9/01 /s/ Terence M. O'Keefe
Terence M. O'Keefe
Date:7/9/01 /s/ Kevin Reem
Kevin Reem
Date:7/9/01 /s/ Stephen Stotesbery
Stephen Stotesbery
Initialed: /s/hj 7/9/01 /s/kr 7/9/01
Bethany Date UFP Date
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of ILN Bethany Corporation, a
Texas corporation ("Bethany"), represents and warrants the following
as required by the Agreement and Plan of Reorganization (the "Plan")
between Bethany; United Film Partners, Inc., a Delaware corporation
("UFP"); and the UFP Stockholders, to-wit:
1. That the undersigned, Henry Jan, is the President of Bethany
and has been authorized and empowered by its Board of Directors to
execute and deliver this Certificate to UFP and the UFP Stockholders;
2. Based upon the personal knowledge, information and belief of
the undersigned and opinions of counsel for Bethany regarding the
Plan:
(i) All representations and warranties of Bethany contained
within the Plan are true and correct;
(ii) Bethany has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) have been no material adverse changes in the
financial position of Bethany as set forth in its financial
statements for the period ending April 30, 2001, except as set forth
in Exhibit D to the Plan.
ILN BETHANY CORPORATION
By:/s/ Henry L. Jan
Henry L. Jan, President
Initialed: /s/hj 7/9/01 /s/kr 7/9/01
Bethany Date UFP Date
EXHIBIT I
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of United Film Partners Inc., a
Delaware Corporation ("UFP"), represents and warrants the following
as required by the Agreement and Plan of Reorganization (the "Plan")
between UFP; the UFP Stockholders; ILN Bethany Corporation, a Texas
Corporation ("Bethany") to-wit:
1. That the undersigned, Kevin Reem, is the President of UFP
and has been authorized and empowered by its Board of Directors to
execute and deliver this Certificate to Bethany;
2. Based upon the personal knowledge, information and belief of
the undersigned and opinions of counsel for UFP regarding the Plan:
(i) All representations and warranties of UFP contained
within the Plan are true and correct;
(ii) UFP has complied with all terms and provisions required
of it pursuant to the Plan; and
(iii) have been no material adverse changes in the
financial position of UFP as set forth in its financial statements
for the period ending June 30, 2001, except as set forth in Exhibit F
to the Plan.
United Film Partners, Inc.
By:/s/ Kevin Reem
Kevin Reem, President
Initialed: /s/hj 7/9/01 /s/kr 7/9/01
Bethany Date UFP Date
Exhibit 3.1
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
ILN Bethany corporation, a corporation organized and existing
under and by virtue of the General Corporation Law of the
State of Texas, does hereby certify:
FIRST: That at a meeting of the Board of Directors of ILN
Bethany corporation, resolutions were duly adopted setting
forth a proposed amendment of the Articles of Incorporation
of said corporation, declaring said amendment to be advisable
and calling a meeting of the stockholders of said corporation
for consideration thereof. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this
corporation be amended by changing the Articles thereof
numbered "1,6 " so that, as amended said Articles shall be
and read as follows:
ARTICLE ONE, The name of the Corporation is; United Film
Partners, Inc.
ARTICLE SIX, Principal Office and Registered Agent
The business address of the registered office of the
Corporation and the name of its registered agent is
Sharlene Reese
C/o
SouthWest Promotions
7113 Burnet RD. Ste. #210
Austin, Texas 78757
The reregistered agent is a resident of the State of Texas
SECOND: That thereafter, pursuant to resolution of its Board
of Directors, a special meeting of the shareholders of said
corporation was duly called and held, the amendment was adopted
by unamimous written consent of all shareholders in accordance
with article 9.10 of the Texas Business Corporations Act, and
any written notice required by such article has been given.
THIRD: That said amendments as duly adopted in accordance
with the provisions of the the Texas Business Corporations Act.
FOURTH: That the capital of said corporation shall not be
reduced under or by reason of said amendment.
IN WITNESS WHEREOF, said has caused its corporate seal to be
hereunto affixed and this certificate to be signed by
its authorized officer this day of July 9th, 2001
Kevin Reem,President
/s/ Kevin Reem
President
Exhibit 3.2
MINUTES OF THE BOARD OF DIRECTORS MEETING
FOR ILN BETHANY CORPORATION
DATE: JULY 9, 2001
TIME: 10:30am
PLACE: 15007 Grove Gardens, Houston, TX 77082
BOARD MEMBERS PRESENT:
Henry L. Jan PRESIDENT, SECRETARY, & DIRECTOR
ALSO PRESENT WAS:
ILN Industries, LLC. SOLE SHAREHOLDER OF BETHANY
RESOLVED, that the Company exchange the assets of United Film
Partners, Inc., a Delaware Corporation ("UFP") described in
Exhibit B in consideration of 30,000,000 "restricted" and
"unregistered" sharesof the $0.0001 mill par value common
stock of the Company and assume the liabilities of UFP described
in Exhibit B of the Agreement and Plan of Reorganization (the
"Plan") between the Company, UFP and the UFP Stockholders,
presented to a meeting of the Board of Directors;
FURTHER, RESOLVED, that in the good faith judgment of the
directors, the acquisition of the assets listed in Exhibit B
and the assumption of the liabilities listed in Exhibit B as
contemplated by the Plan is fair, just and equitable, and in
the best interest of the stockholders of the Company;
FURTHER, RESOLVED, that such shares, when transferred, be deemed
validly issued, fully paid and non-assessable;
FURTHER, RESOLVED, that the delivery of such shares be subject
to the execution and delivery of the Plan by each such
stockholder who is party to the Plan and UFP; and compliance
by UFP and its stockholders with all of the terms and provisions
thereof prior to Closing;
FURTHER, RESOLVED, that the officers of the Company be and they
hereby are authorized and directed to execute and deliver the
Plan and all other documents required or deemed necessary to
complete the Plan for and on behalf of the Company pursuant to
which the Company shall acquire the assets and assume the
liabilities described in Exhibit B to the Plan in exchange for
shares of the Company in a reorganization within the meaning of
Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as
amended;
FURTHER, RESOLVED, that on Closing, the following persons
nominated by the Board of Directors of UFP be designated as
the directors of the Company, to serve until the next annual
meeting of the stockholders and until their successors are
elected and qualify, or until his earlier resignation or
termination: Kevin Reem, Terence M. O'Keefe, and S. Drew
Stotesbery.
FURTHER, RESOLVED, that Kevin Reem, be elected as President;
Terence M. O'Keefe be elected as Treasurer; and S. Drew
Stotesbery be elected as Secretary.
FURTHER, RESOLVED, if the Plan is completed as contemplated,
the Company accept the resignation of Henry L. Jan effective
on the Closing.
Date: 7-09-01 /s/ Henry Jan
Henry L. Jan
Exhibit 3.3
MINUTES OF SPECIAL MEETING
OF BOARD OF DIRECTORS
OF UNTED FILM PARTNERS, INC.
The special meeting of the Board of Directors of the
Corporation was held on the date and at the time and place
set forth in the written waiver of Notice signed by the
Board of Directors, fixing such time and place, and prefixed
to the minutes of this meeting.
There were present the following :
KEVIN REEM-PRESIDENT
STEPHEN STOTESBERY aka S. Drew Stotesbery-SECRETARY
TERRY O'KEEFE-TREASURER
being all of the Directors of the Corporation.
Also present: United Film Partners, Inc.
KEVIN REEM 500 shares
STEPHEN STOTESBERY aka S. Drew Stotesbery 500 shares
TERRY O'KEEFE 500 shares
being all of the Shareholders of the Corporation.
The meeting was called to order by the President. It was moved,
seconded and unanimously carried that
KEVIN REEM acted as Chairman and
STEPHEN STOTESBERY acted as Secretary.
After discussion, upon motion duly made, seconded and carried, it was,
RESOLVED that United Film Partners, Inc., a Delaware Corporation,
exchange all the assets described in exhibit B of the Agreement and
Plan of Reorganization (the Plan) between United Film Partners, Inc,
the United Film Partners, Inc. stockholders and ILN Bethany corporation,
and all the United Film Partners, Inc. liabilities, for 30,000,000
"restricted" and " unregistered" shares of 0.0001 mill par common
stock of ILN Bethany corporation.
FURTHER RESOLVED, that on Closing, the Board of Directors approve the
dissolution of the Corporation as a Delaware Corporation as of this date.
FURTHER RESOLVED, that Kevin Reem, as President; Terence M. O'Keefe
as Treasurer; and Stephen Stotesbery as Secretary acting as the newly
appointed Board of Directors of ILN Bethany Corp., approve an
amendment to the articles of incorporation to change the name of ILN
Bethany corporation to United Film Partners, Inc.
FURTHER RESOLVED, that Kevin Reem, as President; Terence M. O'Keefe
as Treasurer; and Stephen Stotesbery as Secretary acting as the newly
appointed Board of Directors of ILN Bethany Corp approve an amendment
to the articles of incorporation to change the registered agent from
Henry Jan, 15007 Grove Gardens, Houston, Texas 77082 to Sharlene
Reese, C/o SouthWest Promotions; 7113 Burnet RD. Ste. #210;Austin,
Texas 78757.
There being no further business to come before the meeting, upon
motion duly made, seconded and unanimously carried, it was adjourned.
/s/ Stephen Stotesbery
Secretary
/s/Stephen Stotesbery
Director
/s/ Kevin Reem
Director
/s/ Terence M. O'keefe
Director
____________________________
Date7/09/01
/s/Stephen Stotesbery
Shareholder
/s/ Kevin Reem
Shareholder
/s/ Terence M. O'keefe
Shareholder
____________________________
Date 7/09/01
Exhibit 3.4
MINUTES OF SPECIAL MEETING
OF
BOARD OF DIRECTORS
OF
UNTED FILM PARTNERS, INC.
The special meeting of the Board of Directors of the Corporation
was held on the date and at the time and place set forth in the
written waiver of Notice signed by the Board of Directors, fixing
such time and place, and prefixed to the minutes of this meeting.
There were present the following :
KEVIN REEM-PRESIDENT
STEPHEN STOTESBERY -SECRETARY
TERRY O'KEEFE-TREASURER
being all of the Directors of the Corporation.
The meeting was called to order by the President.
It was moved, seconded and unanimously carried that
KEVIN REEM acted as Chairman and
STEPHEN STOTESBERY acted as Secretary.
After discussion, upon motion duly made, seconded
and carried, it was,
RESOLVED that the Board of Directors of the Company
be and they hereby are authorized and directed to
approve the formation of a special committee (the
Committee) to implement, oversee and manage the
United Film Partners, Inc. 2001 Stock Incentive
Plan( the Plan) and Stock Grant Agreement.
FURTHER, RESOLVED, that the following persons
nominated by the Board of Directors of UFP be
designated as the Directors of the Committee, to
serve until the next annual meeting of the Board
and until their successors are elected and qualify,
or until their earlier resignation or termination:
Kevin Reem, Terence M. O'Keefe, and Stephen
Stotesbery.
FURTHER, RESOLVED, that the Committee shall have
exclusive and final authority in each determination,
interpretation or other action affecting the Plan and
its Participants. The Committee shall have the sole
discretionary authority to interpret the Plan, to
establish and modify administrative rules for the Plan,
to impose such conditions and restrictions on Awards
as it determines appropriate, and to take such steps
in connection with the Plan and Awards granted hereunder
as it may deem necessary or advisable. The Committee
may be , subject to compliance with applicable legal
requirements, with respect to Participants who are not
subject to Section 16(b) of the Exchange Act, delegate
such of its powers and authority under the Plan as it
deems appropriate to designated officers or employees of
the Company. In addition, the Board may exercise any of
the authority conferred upon the Committee hereunder.
In the event of any such delegation of authority or
exercise of authority by the Board, references in the
Plan to the Committee shall be deemed to refer to the
delegate of the Committee or the Board, as the case may
be.
FURTHER, RESOLVED, that the Board of Directors of the
Company be and they hereby are authorized and directed
to approve and execute the filing of SEC form S-8 in
order to register all shares of common stock granted
under the 2001 Stock Incentive Plan.
There being no further business to come before the
meeting, upon motion duly made, seconded and
unanimously carried, it was adjourned.
/s/ Stephen Stotesbery
Secretary
/s/ Stephen Stotesbery
Director
/s/ Kevin Reem
Director
/s/ Terence M. O'Keefe
Director
Date 7/10/01