SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
December 31, 2001
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Date of Report
(Date of Earliest Event Reported)
MOVE FILMS, INC
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(Exact Name of Registrant as Specified in its Charter)
Texas 00-32691 76-0676168
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
13325 Mulholland Drive, Beverly Hills, CA 90210
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(Address of principal executive offices)
949-862-5842
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Registrant's telephone number
Expresso Express, Inc
618 Cardiff, Irvine, CA 92606
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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 December
31, 2001 the ("Plan"), between the Registrant ("the Company") and the
general partners of Motion Entertainment Group, a California Partnership
("Motion"), as listed in the Plan (see exhibit 2.1), the general
partners of Motion became the controlling stockholders of the Registrant
in a transaction viewed as an asset purchase. The Plan will be treated
as an acquisition of Motion for accounting purposes, and the effective
date of the Plan was December 31, 2001.
The Plan was adopted, ratified and approved by the officers and
directors of the Registrant and by the general partners of Motion.
The source of the consideration used by Motion to acquire its respective
interest in the Registrant was the exchange of 100% of the assets and
liabilities of Motion for 15 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 Motion is stock ownership. See the table
below under Paragraph (b) of this Item.
The percentage of ownership of the outstanding voting securities of the
Registrant prior to the completion of the Plan by all of the Directors
and Officers total 20,500,000 common shares or 77%.
Pursuant to the Plan, the Registrant was required:
1. To issue 15 Million "unregistered" and "restricted" shares
of $0.0001 par value common stock as the sole consideration
for the assets of Motion;
2. For Jennifer Baker to transfer her personal holdings of 15
Million shares of $0.0001 par value common stock and Simon
Gaunt to transfer his personal holdings of 5 Million shares
of $0.0001 par value common stock to the Registrant for
cancellation.
2. Following resignations, in seriatim, of the director and
executive officers of the Registrant, to designate and elect,
in seriatim, Christopher Eberts as President and Director;
Jonathan Cooper as Secretary and Director; and Michael Abbott
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 for the assets of Motion and the
shares cancelled out in regards to the Plan of Reorganization, there
will be 21,612,500 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 the Registrant'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
- -------------------- -------------------- ---------------------
Christopher Eberts 5,175,000 23.9%
13325 Mulholland Drive
Beverly Hills, CA 90210
Jonathan M. Cooper 5,175,000 23.9%
1041 N. Formosa Ave
Santa Monica East Building, Ste 210
West Hollywood, CA 90046
Michael Abbott 5,175,000 23.9%
2137 Mayview Drive
Los Angeles, CA 90027
ILN Industries, LLC 4,995,000 23.1%
15007 Grove Gardens
Houston, TX 77082
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 31, 2001 the Company fully consummated the acquisition of
Motion in accordance with the "Plan" described in Item 1 above. The
consideration given for the assets of Motion was the issuance of 15
Million "unregistered" and "restricted" shares of the Company's Stock.
The transaction was consummated December 31, 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 general partners of
Motion. Stockholders and 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
Motion; 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
Motion prior to the completion of the Plan.
(b) The Registrant, intends to continue the business operations
formerly conducted by Motion, which are described below
under the caption BUSINESS, and disengage from its original business
plans to participate in the drive-thru coffee industry. Since the
acquisition, the Registrant has changed its name to "MOVE FILMS,
INC" (see item 5).
BUSINESS
The Registrant, having purchased the assets of Motion Entertainment
Group will be engaged in the business of development, production, and
distribution of full length feature film properties. It is the
overall business goal of the Registrant to become an entertainment
production company focusing on small to medium range commercially
viable feature films.
PLAN OF OPERATIONS
The Company's current plan is to concentrate its business development
efforts on opportunities available for producing films with
production budgets of $4-$10 million range. The development and
production of 6 to 8 such properties over the first 2 years will
receive the majority of managements focus and the company's financial
resources. Through work completed by the executive team prior to the
formation of the company, and assets transferred into the company by
the management team and others, the Company already owns a number of
properties that have been developed. With these properties, the
producers of the Company will actively begin the process of closing
production and distribution deals for these properties. In the
second year, the company will begin looking at the development of
film properties with budgets exceeding $10 million to be produced
in the third year of operation.
The Company is in the process of establishing itself as a premier
producer of small to medium range theatrical films. Based upon the
knowledge that the entertainment industry is a high potential, yet
high risk proposition for investors, the directors of the company
are focused on a strategy that minimalizes the financial risk of
each property while trying to exploit the potential upside of any
possible hit property.
The Company recognizes that films produced for $4-$10 million are
probable for domestic box office release, but also recognizes that
the company can break even if a property is release on video or
DVD. However, if in the case that a film property released in the
theatres does well at the box office, the profitability of the
film could be outstanding.
While film production is always a risk with minimal guarantees,
producers can do a lot to boost the potential that a film will
secure theatrical release and be successful. The most important
thing a producer can do is to find and develop great content.
This not only takes experience in the industry, but time and
focus on the producers parts to ensure each property is of top
quality before it is produced. Besides the Company's management
team bringing years of award winning experience to the table,
the development philosophy of the company will be to find and
develop less than 12 projects at a time, thus ensuring each
project will receive the necessary focus to become a great
property.
The Company's content will be focused on going after mass-
audiences by producing only commercially viable content.
In particular, most of our content will be focused on males,
14-25 years of age. The Company will look to produce comedies,
action/adventure, and fresh, hip drama's dealing with both
fantasy and real life. The company also recognizes the great
opportunity to merge pop music and music stars with these
particular genres, especially targeted at these markets.
To keep the expenses of our properties down, the company will
often seek to use 'rising talent', or exploit other forms of
celebrity status, rather than sign only mega-stars to our
pictures. Major talent often times command major contracts,
thus increasing the risk that a property can become
profitable.
To date The Company's current business activities have consisted
primarily of developing properties, and developing financing
and distribution channels.
DESCRIPTION OF PROPERTY
The Company owns only intellectual property and it's assets are
based on the value of that property. The value of these properties
are based on script acquisition memos, average script price based
on past sales history, and previous resources that have been spent
on developed projects.
The company's executive offices are located in Beverly Hills, 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. However, it is the goal of
the management team to keep overhead costs low and reasonable,
thus additional office space and other expenditures will be
acquired only when needed.
MANAGEMENT
Names Title or Position Ages
Christopher Eberts President/CEO and Director 36
Jonathan Cooper Secretary/EXECVP and Director 25
Michael Abbott Treasurer/EXECVP and Director 31
Michael Mendieta CFO **
RESUME
CHRISTOPHER EBERTS, Chief Executive Officer, President and Director.
Christopher Eberts is currently president of PNR Films. Mr. Eberts
has produced a number of major theatrical films including
'The Watcher' which was number 1 at the box office worldwide for
3 weeks. Other films that Mr. Eberts has produced include: 'Chasing
Holden', 'Half Past Dead' with Steven Segal, 'Illusion', 'A Day in
the Life of America', and is currently working on 'The Big White'.
Prior to making these films, Christopher was a Vice President for
Production for Twentieth Century Fox. Mr. Eberts began his career
with Central Capital Corporation and, based in Montreal and New
York, as an Associate in the Merchant Banking division.
JONATHAN COOPER, Secretary, Executive VP and Director.
Mr. Cooper is currently with PNR Entertainment, and consults for
DataTrust (digital rights management technology), Metatron (laser
projector), and Eneftech (energy generation solutions). Cooper was
with the Global Corporate Strategy and Development Team for Level
3 Communications, Inc. For Level 3 Communications, Inc., his
responsibilities included strategic support for M&A deals, market
intelligence, and design of a market strategy for both the
infrastructure (collocation and power) and session technology
products (VoIP, Managed Modem, interactive gaming and presence),
and creation and implementation of Level 3's channel strategy for
the media and entertainment industry. Mr. Cooper was also a
process consultant with Andersen Consulting (Accenture). At
Andersen Consulting, he designed, built, and implemented Health
Care applications for both PPO and HMO solutions.
MICHAEL ABBOTT, Treasurer, Executive VP and Director.
Mr. Abbott is currently the VP of Development for PNR Films.
Before PNR, Abbott worked as a financial analyst at Savoy
Pictures, a mid-size motion-picture production and distribution
company in Los Angeles, calculating the P&A budgets for such
feature films as 'Circle of Friends,' 'The Show,' and 'Tales from
the Hood.' Michael also worked for No Prisoner Productions where
he spearheaded the development of 'The Fireflies', a $35M actioner
for MGM and 'Mai: The Psychic Girl', a $30M feature for Sony. Mr.
Abbott is the Co-Producer for the $55M motion picture 'Battlestar
Gallactica.' Michael Abbott was the recipient of the 'Best
Producer' Moxie! Award at the 2000 Santa Monica Film Festival
for the documentary which he produced on rave culture, 'Synergy:
Visions of Vibe' (www.synergythemovie.com).
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 were
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.
HENRY N. EHRLICH, Consultant, Marketing/Promotions.
Mr. Ehrlich formerly served for over 20 years as Paramount Studios'
Senior Publicist, and has been serving as Executive Consultant for
Paramount Studios' Motion Pictures Division for the past 16 years.
Prior to that, Mr. Ehrlich was the formal President of The Publicist
Guild of America and currently lectures for the University of
Southern California and the University of California, Los Angeles.
MANAGEMENT RESPONSIBILITIES
As CEO, Christopher Eberts will be focused on solidifying key
distribution relationships, raising capital, along with acting as
an on-site producer for most projects. Mr. Eberts, through his
numerous contacts he has developed over the years, including
studious, film funds, producers, and talent, along with his
experience in the industry, will be able lead properties through
development, production, and distribution.
As Executive VP of Business Affairs, Jonathan Cooper primary
duties will include raising capital, creating strategic
relationships and co-production partnerships in the industry,
business planning, and marketing. Cooper's diverse business and
entertainment background will prove useful for reducing the risk
associated with developing unproven content, while ensuring the
corporation is positioned to maximize potential profitability.
Cooper will also assist with the development and production of
our films.
As Executive VP for Development and Production, Michael Abbott
will be in charge of finding and developing appropriate content
for Move Films. Development includes finding great scripts,
polishing scripts through re-writes, packaging scripts for talent,
financing, and distribution deals, and green-lighting the projects.
Mr. Abbott will also be an on-site producer for our films.
EXECUTIVE COMPENSATION
Once funding is secured, the Company will enter into employment
agreements with each of Eberts, Cooper, and Abbott. Their
respective Employment agreements, Eberts, Cooper, and Abbott
will receive an annual salary of at least the following
(increasing for inflation according to the terms of their
agreements):
Executive Annual base salary
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Christopher Eberts, CEO $100,000
Jonathan Cooper, VP of Business Affairs $100,000
Michael Abbott, VP of Development & Production $100,000
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.
UNCERTAINTY OF FUTURE CAPITAL REQUIREMENTS
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
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.
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
December 31, 2001.
VOTING CONTROL
By virtue of their collective ownership of approximately 72% 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 may be deemed to be a "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 December 31, 2001, the Board of Directors of the Company
approved the formation of a special committee (the Committee) to
implement, oversee and manage the 2002 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: Christopher Eberts, Jonathan Cooper, and Michael Abbott.
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 2002 Stock Incentive Plan
incorporated by reference in this document as exhibit 3.3.
The Registrant had received UNANIMOUS WRITTEN CONSENT from its
shareholders to change the company name to "MOVE FILMS, INC."
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Jennifer Baker and Simon Gaunt resigned as officers and directors
of the Registrant effective upon completion of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
(a) Financial Statements of Businesses Acquired.
Financial Statements are being prepared and will be filed as an
amendment to this Form 8-k within 60 days of the date January 14,
2002.
(b) Pro Forma Financial Information.
Combined Balance Sheets, Combined Statements of Operations of Move
Films, Inc and Motion are being prepared and will be filed within
60 days of the date January 14, 2002.
ITEM 8. CHANGE IN FISCAL YEAR
Not Applicable
EXHIBITS
2.1. Agreement and Plan of Reorganization between Motion and the
Registrant
3.1. Articles of Amendment
3.2. Minutes of Special Meeting, 12-31-01
3.3. Minutes of Special Meeting, 12-31-01
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Current Report on Form
8-K to be signed on its behalf by the undersigned hereunto duly
authorized.
MOVE FILMS, INC.
January 14, 2002 By /s/ Christopher Eberts
--------------------------------
Christopher Eberts, President
Exhibit 2.1
Date: December 31, 2001
AGREEMENT AND PLAN OF REORGANIZATION among Expresso Express,
Inc, a Texas Corporation ("Expresso" or "Registrant")(formally "ILN
Pelham Corporation") and Motion Entertainment Group, a California
Partnership ("Motion").
WHEREAS, the Board of Directors, the beneficial owners of
Expresso, and the general partners of Motion have adopted resolutions
pursuant to which Expresso shall acquire and Motion shall exchange the
assets and liabilities described in Exhibit B hereof (hereinafter,
respectively, the "Assets" or the "Liabilities"), which is
incorporated herein by reference;
WHEREAS, the sole consideration for the Assets shall be the
issuance of 15,000,000 shares of "unregistered" and "restricted"
$0.0001 par value common stock of Expresso, and the assumption of
the Liabilities;
WHEREAS, Jennifer Baker will transfer 15,000,000 shares of
$0.0001 par value common stock and Simon Gaunt will transfer
5,000,000 shares of $0.0001 par value common stock of Expresso to
the Registrant for cancellation.
WHEREAS, all common stock issued regarding this plan be deemed
validly issued, fully paid and non-assessable; and
WHEREAS, Motion 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, Expresso and the general partners of Motion
shall adopt this plan of reorganization and agree as follows:
1. PURCHASE AND SALE OF ASSETS
1.1. PURCHASE AND SALE. Expresso hereby agrees to acquire
and Motion hereby agrees to exchange the Assets and Liabilities
owned by Motion as of December 31, 2001.
1.2. CONSIDERATION FOR THE ASSETS. The consideration paid for
the Assets shall consist solely of 15,000,000 "unregistered" and
"restricted" shares of $0.0001 par value common stock of Expresso to
be issued in exchange therefore, and the assumption of the
Liabilities.
1.3. DELIVERY OF SHARES. Upon the execution and delivery by
Motion of an assignment or assignments and other instruments required
or necessary to transfer the Assets to Expresso, the Expresso
shareholder shall deliver one stock certificate to each of the Motion
Stockholders in the amount set opposite their respective names as
listed on Exhibit A hereto representing 15,000,000 "restricted" and
"unregistered" shares of common stock of Expresso in the aggregate.
1.4. FURTHER ASSURANCES. At the Closing and from time to time
thereafter, Motion shall execute such additional instruments and
take such other action as Expresso may request in order to exchange
and transfer clear title and ownership in the Assets to Expresso.
1.5. RESIGNATION OF PRESENT DIRECTORS AND EXECUTIVE OFFICERS
AND DESIGNATION OF NEW DIRECTORS AND EXECUTIVE OFFICERS. On
Closing, Jennifer Baker and Simon Gaunt shall resign as director and
officers of Expresso and designate the directors and executive
officers nominated by Motion to serve in their place and stead, until
the next respective annual meetings of the stockholders and Board of
Directors of Expresso, and until their respective successors shall be
elected and qualified or until their respective prior resignations or
terminations, who shall be: Christopher Eberts, President and
Director; Jonathan Cooper, Secretary and Director; and Michael Abbott,
Treasurer and Director.
1.6. CHANGE OF NAME. Subsequent to the Closing of this
Agreement, the Expresso shall adopt such resolutions as necessary
for the purpose of amending the Expresso's Articles of Incorporation
to change the name of the Company to "Move Films, Inc," or any name
similar if unavailable in the State of Texas. All the signatures in
this plan constitutes a written consent for the name change.
1.7. CLOSING. The Plan will be deemed to be closed on
receipt of all the signatures from the Motion partners collectively
holding 100% ownership of Motion.
2.0. CLOSING.
2.1. PLACE. The Closing contemplated herein shall be held at
the offices of Motion Entertainment Group, 13325 Mulholland Drive,
Beverly Hills, CA 90210, 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 EXPRESSO
Expresso represents and warrants as follows:
3.1. CORPORATE ORGANIZATION AND GOOD STANDING. Expresso 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. Expresso 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. REPORTING COMPANY FILINGS. Expresso has timely filed and
is current on all reports required to be filed by it pursuant to
Section 13 of the Securities Exchange Act of 1934.
3.4. CAPITALIZATION. Expresso's authorized capital stock
consists of 100,000,000 shares of Common Stock, $.0001 par value,
of which 26,612,500 shares are issued and outstanding, and
20,000,000 shares of non-designated preferred stock of which no
shares are designated or issued.
3.5. ISSUED STOCK. All the outstanding shares of its Common
Stock are duly authorized and validly issued and non-assessable.
3.6. CORPORATE AUTHORITY. Expresso 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 Expresso's board of directors.
3.8. SUBSIDIARIES. Except as set out by attached schedule,
Expresso has no subsidiaries.
3.9. FINANCIAL STATEMENTS. Expresso's financial statements dated
October 31, 2001(the "Expresso Financial Statements"), fairly present
the financial condition of Expresso 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 Expresso Financial Statements,
Expresso 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 significant material adverse change
in the business, properties, or financial condition of Expresso
since the date of the Expresso Financial Statements.
3.12. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of Expresso, any pending,
threatened, or existing litigation, bankruptcy, criminal, civil,
or regulatory proceeding or investigation, threatened or
contemplated against Expresso or against any of its officers.
3.13. CONTRACTS. Except as set out by attached schedule,
Expresso 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, Expresso
has good and marketable title to all the real property and good and
valid title to all other property included in the Expresso Financial
Statements. Except as set out in the balance sheet thereof, the
properties of Expresso 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 Expresso.
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 Expresso 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 Expresso Financial Statements are adequate to cover any such
taxes that may be assessed against Expresso in respect of its
business and its operations during the periods covered by the
Expresso 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 Expresso is subject or by which Expresso is bound.
4.0. NOT APPLICABLE
5.0. REPRESENTATIONS AND WARRANTIES OF MOTION
Motion represents and warrants as followed:
5.1. OWNERSHIP. Motion owns the Assets, free and clear of
any liens or encumbrances of any type or nature whatsoever, except
the Liabilities, and Motion has full right, power and authority to
convey these Assets without qualification.
5.2. 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.
5.3. GOOD STANDING. Motion is a partnership duly organized,
validly existing, and in good standing under the laws of the State
of California and is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property or
business requires such qualification.
5.4. CORPORATE AUTHORITY. Motion 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.
5.5. AUTHORIZATION. Execution of this Agreement has been
duly authorized and approved by the general partners of Motion.
5.6. SUBSIDIARIES. Except as set out by attached schedule,
Motion has no subsidiaries.
5.7. FINANCIAL STATEMENTS. Motion's financial statements
dated as of December 31, 2001, copies of which will have been
delivered by Motion to Expresso, (the "Motion Financial
Statements"), fairly present the financial condition of Motion 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.
5.8. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in the Motion Financial
Statements, Motion 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.
5.9. 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 Motion since the
date of the Motion Financial Statements.
5.10. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of Motion, any pending, threatened,
or existing litigation, bankruptcy, criminal, civil, or regulatory
proceeding or investigation, threatened or contemplated against
Motion or against any of its officers.
5.11. CONTRACTS. Except as set out by attached schedule,
Motion 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.
5.12. TITLE. Except as set out by attached schedule, Motion
has good and marketable title to all the real property and good
and valid title to all other property included in the Motion
Financial Statements. Except as set out in the balance sheet
thereof, the properties of Motion 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 Motion.
5.13. 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 Motion 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 Motion Financial
Statements are adequate to cover any such taxes that may be
assessed against Motion in respect of its business and its
operations during the periods covered by the Motion Financial
Statements and all prior periods
5.14. 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 Motion is subject or by which Motion is
bound.
6.0. CONDITIONS PRECEDENT TO OBLIGATIONS OF MOTION
All obligations of Motion under this Plan are subject, at
their 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 Expresso 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. Expresso 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.
6.3. OFFICERS' CERTIFICATE. Motion shall have been furnished
with a certificate signed by the President of Expresso, 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 Expresso 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 Expresso, taken as a
whole.
6.4. ASSETS AND LIABILITIES OF EXPRESSO. Unless otherwise
agreed, Expresso shall have no assets and no liabilities at Closing,
and all costs, expenses and fees incident to the Plan shall have
been paid.
6.5. RESIGNATION OF DIRECTORS AND EXECUTIVE OFFICERS AND
DESIGNATION OF NEW DIRECTORS AND EXECUTIVE OFFICERS. The present
directors and executive officers of Expresso shall resign, and
shall have designated nominees of Motion as outlined in Section
1.5 hereof as directors and executive officers of Expresso to
serve in their place and stead, until the next respective annual
meetings of the stockholders and Board of Directors of Expresso,
and until their respective successors shall be elected and
qualified or until their respective prior resignations or
terminations.
7.0. CONDITIONS PRECEDENT TO OBLIGATIONS OF EXPRESSO
All obligations of Expresso under this Plan are subject, at
Expresso's option, to the fulfillment, before or at the Closing, of
each of the following conditions:
7.1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties of Motion 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.
7.2. DUE PERFORMANCE. Motion 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.
7.3. OFFICERS' CERTIFICATE. Expresso shall have been furnished
with a certificate signed by the general partners of Motion, attached
hereto as Exhibit I and incorporated herein by reference, dated as of
the Closing, certifying (1) that all representations and warranties
of Motion 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 Motion,
taken as a whole.
7.4. BOOKS AND RECORDS. Motion shall have caused Motion to
make available all books and records of Motion; provided, however,
only to the extent requested in writing by Expresso at Closing.
8.0. TERMINATION
8.1. TERMINATING THE PLAN. Prior to Closing, this Plan may
be terminated (1) by mutual consent in writing;(2) by either the
sole director of Expresso or the general partners of Motion 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 Expresso or general partners of Motion 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.
9.0. ARBITRATION
9.1. 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.
9.2. 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.
9.3. 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.
9.4. 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.
9.5. 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.
9.6. 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.
9.7. 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.
9.8. 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.
9.9. 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.
9.10. SURVIVAL. The provisions for arbitration contained
herein shall survive the termination of this agreement for any
reason.
10.0. GENERAL PROVISIONS.
10.1. 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.
10.2. 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.
10.3. 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.
10.4. 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 Motion, to:
Motion Entertainment Group
13325 Mulholland Drive
Beverly Hills, CA 90210
If to Expresso, to:
Expresso Express, Inc
92 Corporate Park
Ste. C #273
Irvine, CA 92606-510
10.5. GOVERNING LAW. This agreement shall be governed by
and construed and enforced in accordance with the laws of the
State of Texas.
10.6. 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.
10.7. 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.
10.8. 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.
10.9. NO REVERSE SPLIT. All stockholders of Expresso,
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.
10.10. 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.
EXPRESSO EXPRESS, INC
Date: 12-31-01 /s/ Jennifer Baker
Jennifer Baker, President & Director
Date: 12-31-01 /s/ Simon Gaunt
Simon Gaunt, Director
SHAREHOLDER OF EXPRESSO EXPRESS, INC.
Date: 12-31-01 /s/ Henry Jan
Henry L. Jan, Executive Director
ILN Industries, LLC
MOTION ENTERTAINMENT GROUP
Date: 12-31-01 /s/ Christopher Eberts
Christopher Eberts, General Partner
Date: 12-31-01 /s/ Jonathan Cooper
Jonathan Cooper, General Partner
Date: 12-31-01 /s/ Michael Abbott
Michael Abbott, General Partner
EXHIBIT A
Motion Entertainment Group
13325 Mulholland Drive
Beverly Hills, CA 90210
Name and Address Ownership of Number of Common
Motion Entertainment Group Shares of Expresso to be
Received in Exchange
Christopher Eberts 33.34% 5,000,000
13325 Mulholland Drive
Beverly Hills, CA 90210
Jonathan Cooper 33.33% 5,000,000
1041 N. Formosa Ave
Santa Monica Easst Building, Ste 210
West Hollywood, CA 90046
Michael Abbott 33.33% 5,000,000
2137 Mayview Drive
Los Angeles, CA 90027
EXHIBIT B
Motion Entertainment Group
13325 Mulholland Drive
Beverly Hills, CA 90210
ASSETS OF MOTION
As of December 31, 2001
Scripts Owned:
Mustang Sally $1,250,000
In Harms Way $1,000,000
Happy Endings $750,000
String Along $750,000
A Life Apart $500,000
Total Value $4,250,000
----------
Developed Projects with Options:
Wicked Kingdom $450,000
Last Night $400,000
Abattoir $250,000
Armada $250,000
Ballad of the Rivers $300,000
Under The Mat $150,000
Crimson Sails $200,000
The President $400,000
The Four Tablets $150,000
The Monkeys Paw $450,000
Circus $350,000
Night Witches $200,000
Total Value $3,550,000
----------
Total Asset Value $7,800,000
==========
EXHIBIT C
EXPRESSO EXPRESS, INC
(formally ILN PELHAM CORPORATION)
BALANCE SHEET
October 31, 2001
(unaudited)
ASSETS
Cash $ -
Fixed Assets
Tangible Assets -
Intangible Assets (drink recipes, business plan,
employee handbook, internet domain) 5,050
Other 300
---------
TOTAL ASSETS $ 5,350
=========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Accounts payable $ -
Accrued liabilities 300
Other -
---------
TOTAL LIABILITIES $ 300
---------
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; 26,412,500 shares issued and outstanding 2,641
Additional paid-in capital 4,918
Stock subscription receivable 0
Deficit accumulated (2,809)
---------
NET STOCKHOLDERS' EQUITY 4,750
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,050
=========
See accompanying notes.
EXPRESSO EXPRESS, INC
(formally ILN PELHAM CORPORATION)
PRO FORMA STATEMENT OF OPERATIONS
October 31, 2001
(unaudited)
For the four April 2, 2001
Months Ending (inception)
October 31, 2001 to October 31, 2001
REVENUE
General Revenue $ - $ -
----------- -----------
Total Revenues - -
General Cost of Sales - -
----------- -----------
GROSS MARGIN - -
OPERATING EXPENSES
Organization Expense 271 571
Professional Fees 1,300 2,238
----------- -----------
Total Operating Expenses 1,571 2,809
OPERATING INCOME (1,571) (2,809)
Depreciation - -
Interest income - -
----------- -----------
NET INCOME $(1,571) $(2,809)
=========== ===========
Earnings per share $ - -
=========== ===========
Weighted average shares
outstanding 5,000,000 15,706,250
=========== ===========
See accompanying notes.
EXPRESSO EXPRESS, INC
(formally ILN PELHAM CORPORATION)
STATEMENT OF CASH FLOWS
October 31, 2001
(unaudited)
For the four April 2, 2001
Months Ending (inception)
October 31, 2001 to October 31, 2001
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Loss $ (1,571) $(2,809)
Adjustments to
reconcile net loss to
net cash used in
operating activities:
Amortization and
depreciation - -
Changes in Operating
assets and liabilities:
Accounts receivable - -
Accounts payable &
accrued liabilities 300 300
Inventory - -
Other (300) (300)
----------- -----------
Net Cash used in
operating activities (1,571) (2,809)
CASH FLOWS FROM INVESTING
ACTIVIES: - -
----------- -----------
Net cas used in
operating activities - -
CASH FLOWS FROM FINANCING
ACTIVITIES:
Contributed Capital 571 1,809
Stock subscription
receivable 1,000 1,000
----------- -----------
Net cash provided by
financing activities 1,571 2,809
Net increases in cash and
cash equivalents - -
Cash and cash equivalents -
beginning of period - -
----------- -----------
CASH AND CASH EQUIVALENTS -
END OF PERIOD - -
=========== ===========
See accompanying notes.
EXPRESSO EXPRESS, INC
(formally ILN PELHAM CORPORATION)
STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited)
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, (Audited)
April 30, 2001 5,000,000 $ 500 $ 1,738 $(1,000) $(1,238) $ -
===============================================================================================
Common stock issued
for cash - - - - - -
Contributed capital - - - - - -
Net loss and cumulative
earnings - - - - (300) (300)
- -----------------------------------------------------------------------------------------------
BALANCE (unaudited),
September 30, 2001 5,000,000 $ 500 $ 1,738 $(1,000) $(1,538) $(300)
===============================================================================================
Common stock issued
for cash - - - - - -
Common stock issued
for assets 20,000,000 2,000 - - - 2,000
Common stock issued
pursuant to 2001
stock incentive plan 1,412,500 141 - - - 141
Contributed capital - - 3,180 1,000 - 4,180
Net loss and cumulative
loss during the
development stage - - - - (1,271) (1,271)
- -----------------------------------------------------------------------------------------------
BALANCE (unaudited),
October 31, 2001 26,412,500 $2,641 $4,918 - $(2,809) $4,750
===============================================================================================
See accompanying notes.
NOTE 1. ORGANIZATION AND MERGER
ILN Pelham Corporation ("Pelham" or the "Company") was incorporated
in the State of 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. The
Company entered into a business combination and acquired all of the
assets and liabilities of The Expresso Express, on October 2, 2001,
pursuant to an agreement and Plan of Reorganization.
The Expresso Express was a Sole Proprietorship formed on September 14,
2001, created to engage in the drive-thru espresso business. Subsequent
to the Agreement and Plan of reorganization, the name ILN Pelham
Corporation was changed to Expresso Express, Inc. The Agreement and
Plan of Reorganization set forth that Pelham would issue 20,000,000
shares to the owner of The Expresso Express. At the time of said
issuance, Pelham had 5,000,000 shares outstanding. Immediately after
this issuance, the owner of The Expresso Express, owned 20,000,000 of
the total outstanding of 25,000,000 shares, or 80 %.
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, 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.
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.
NOTE 2. INCOME TAXES
At October 31, 2001, the Company had a net operating loss of
approximately $2,809. 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 3. GOING CONCERN AND MANAGEMENT'S PLANS
As shown in the accompanying financial statements, the Company incurred
a net loss of $2,809 for the period from inception (April 2,2001) to
October 31, 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 initial cash
requirements through the financial support of its shareholders. The
financial statements do not include any adjustments that might be
necessary should the Company be unable to continue as a going concern.
NOTE 4. STOCKHOLDER'S EQUITY
SALE OF SHARES
As of October 2001, the Company has issued 26,412,500 shares of common
stock for a total of $2,641. In addition to the 25,000,00 shares issued
as described in footnote number 1 above, another 1,412,500 shared were
issued pursuant to the 2001 Stock Incentive Plan.
CAPITAL CONTRIBUTED
As of October 2001, the shareholders of the Company have contributed
$4,918 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.
EXHIBIT D
None.
EXHIBIT E
Motion Entertainment Group
13325 Mulholland Drive
Beverly Hills, CA 90210
December 31, 2001
BALANCE SHEET
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash $ -
OTHER ASSETS
Scripts $ 4,250,000
Developed Projects with Options $ 3,550,000
TOTAL ASSETS $ 7,800,000
==========
LIABILITIES $ -
----------
TOTAL LIABILITIES -
==========
EXHIBIT F
None.
EXHIBIT G
ACKNOWLEDGEMENT AND APPROVAL OF TERMS AND CONDITIONS
Pursuant to that certain Agreement and Plan of Reorganization
(the "Plan") between the undersigned, Motion Entertainment Group
"Motion" and Expresso Express, Inc ("Expresso"), 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, Expresso 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 Motion for shares of Expresso
results in a decrease in the actual percentage of ownership that my
shares of Motion represented in Motion 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 for any shares issued to me for a long period of time, the
minimum of which will be one (1) year, as these shares are
"unregistered" and "restricted" 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 Motion for use by Expresso as they are made to induce you to
issue me the shares of Expresso 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 "restricted" and
"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
Expresso, all shares of Expresso to be issued and delivered to
me 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.
Motion Entertainment Group
Date: 12-31-01 /s/ Christopher Eberts
Christopher Eberts
Date: 12-31-01 /s/ Jonathan Cooper
Jonathan Cooper
Date: 12-31-01 /s/ Michael Abbott
Michael Abbott
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of EXPRESSO EXPRESS, INC, a Texas
corporation ("Expresso"), represents and warrants the following as
required by the Agreement and Plan of Reorganization (the "Plan")
between Expresso and Motion Entertainment Group, a California
Partnership ("Motion").
1. That the undersigned, Jennifer Baker, is the President
of Expresso and has been authorized and empowered by its
Board of Directors to execute and deliver this Certificate
to Motion;
2. Based upon the personal knowledge, information and belief
of the undersigned and opinions of counsel for Expresso
regarding the Plan:
(i) All representations and warranties of Expresso contained
within the Plan are true and correct;
(ii) Expresso has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) There have been no material adverse changes in the financial
position of Expresso as set forth in its financial
statements for the period ending October 31, 2001, except
as set forth in Exhibit D to the Plan.
EXPRESSO EXPRESS, INC
By: /s/ Jennifer Baker
Jennifer Baker, President
EXHIBIT I
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the general partners of Motion Entertainment
Group, a California Partnership ("Motion"), represents and warrants
the following as required by the Agreement and Plan of Reorganization
(the "Plan") between Motion and EXPRESSO EXPRESS, INC, a Texas
Corporation ("Expresso") to-wit:
1. That the undersigned, Christopher Eberts, Jonathan Cooper,
and Michael Abbott are the general partners of Motion and have
been authorized to execute and deliver this Certificate to
Expresso;
2. Based upon the personal knowledge, information and belief
of the undersigned and opinions of counsel for Motion
regarding the Plan:
(i) All representations and warranties of Motion contained
within the Plan are true and correct;
(ii) Motion has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) There have been no material adverse changes in the
financial position of Motion as set forth in its financial
statements for the financial statements dated as of
December 31, 2001, except as set forth in Exhibit F to
the Plan.
MOTION ENTERTAINMENT GROUP
Date: 12-31-01 /s/ Christopher Eberts
Christopher Eberts
Date: 12-31-01 /s/ Jonathan Cooper
Jonathan Cooper
Date: 12-31-01 /s/ Michael Abbott
Michael Abbott
Exhibit 3.1
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
EXPRESSO EXPRESS, INC, 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 Expresso
Express, Inc, resolutions were duly adopted on January 7, 2002, 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 was as
followed:
RESOLVED, that the Articles of Incorporation of Expresso Express, Inc.
be amended by changing the name "Expresso Express, Inc" to "Move
Films, Inc." in ARTICLE ONE so that, as amended, said Articles shall
be and read as followed:
ARTICLE ONE, The name of the Corporation is Move Films, Inc.
SECOND: That there were 21,612,500 shares of common stock outstanding
and entitled to vote.
THIRD: The amendment of ARTICLE ONE was adopted by unanimous written
consent of all shareholders, in accordance with article 9.10 of the Texas
Business Corporations Act.
FOURTH: That said amendment was duly adopted in accordance with the
provisions of the Texas Business Corporations Act.
FIFTH: That the capital of said corporation shall not be reduced under
or by reason of said amendment.
IN WITNESS WHEREOF, the President of the Corporation has executed this
Certificate of Amendment on January 7, 2002.
/s/Christopher Eberts
Christopher Eberts, President
Exhibit 3.2
MINUTES OF THE BOARD OF DIRECTORS MEETING
EXPRESSO EXPRESS, INC
DATE: December 31, 2001
TIME: 10:30am
PLACE: 13325 Mulholland Drive, Beverly Hills, CA 90210
BOARD MEMBERS PRESENT:
Jennfier Baker PRESIDENT & DIRECTOR
Simon Gaunt SECRETARY/TREASURER & DIRECTOR
ALSO PRESENT WAS:
ILN Industries, LLC. BENEFICIAL OWNER OF EXPRESSO EXPRESS
RESOLVED, that the Company acquires assets of Motion Entertainment
Group ("Motion") described in Exhibit B in consideration
of 15,000,000 "restricted" and "unregistered" shares of the $0.0001
mill par value common stock of the Company and assume the
liabilities of Motion described in Exhibit B of the Agreement and
Plan of Reorganization (the "Plan") between the Company, and the
general partners of Motion, 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 issued, 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 Motion; and
compliance by Motion 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 general partners of Motion will 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: Christopher Eberts, Jonathan Cooper,
and Michael Abbott.
FURTHER, RESOLVED, that Christopher Eberts, be elected as
President; Jonathan Cooper be elected as Secretary; and
Michael Abbot be elected as Treasurer.
FURTHER, RESOLVED, if the Plan is completed as contemplated,
the Company accept the resignation of Jennifer Baker and
Simon Gaunt effective on the Closing.
Date: 12-31-01 /s/ Simon Gaunt
Simon Gaunt
/s/ Simon Gaunt
Simon Gaunt, Director
/s/ Jennifer Baker
Jennifer Baker, Director
Exhibit 3.3
MINUTES OF SPECIAL MEETING
OF BOARD OF DIRECTORS
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 :
CHRISTOPHER EBERTS - PRESIDENT
JONATHAN COOPER - SECRETARY
MICHAEL ABBOTT - 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
CHRISTOPHER EBERTS acted as Chairman and
JONATHAN COOPER 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 EXPRESSO EXPRESS, INC 2002 Stock Incentive Plan (the
Plan) and Stock Grant Agreement.
FURTHER, RESOLVED, that the following persons nominated by the
Board of Directors of Expresso Express, Inc. 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: Christopher
Eberts, Jonathan Cooper, and Michael Abbott.
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 2002 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/ Jonathan Cooper
Jonathan Cooper, Secretary
/s/ Christopher Eberts
Christopher Eberts, Director
/s/ Jonathan Cooper
Jonathan Cooper, Director
/s/ Michael Abbott
Michael Abbott, Director
DATE: 12-31-01
TIME: 11:00 am
PLACE: 13325 Mulholland Drive, Beverly Hills, CA 90210