**10Ksb Out Today**
biz.yahoo.com
September 30, 1999
POWER CELL INC (POCE)
Annual Report (SEC form 10KSB)
Security Ownership of Certain Beneficial Owners and Management... 9
Item 12. Certain Relationships and Related Transactions................... 11
Item 13. Exhibits, List and Reports on Form 8-K........................... 12
Signatures....................................................... 13
Index to Financial Statements.................................... F-1
Index to Exhibits................................................ E-1
PART I
Item 1. Description of Business.
The Company was incorporated on April 26, 1986 under the laws of the State of Colorado. The Company conducted its initial public offering in December 1986. From its inception until May 1987, the Company evaluated various business opportunities. In May 1987, the Company and Balzac Investments, Inc. ("Balzac") entered into a Merger Agreement. At the time, Balzac owned the rights to a battery charger product which consisted of a reserve battery encased in hard form plastic that was designed to be carried in a car and used to charge a "dead" automotive battery (the "Product"). The merger was completed in February 1988 and, as a result of the merger, the Company obtained the rights to manufacture, market and distribute the Product and all related technology in the United States and its territories. The former shareholders of Balzac retained the international rights to the Product. On December 27, 1988, the United States Patent and Trademark Office issued a United States' Letter Patent to the Company relating to certain features of the Product. The Product has also been approved for patent protection in at least five (5) foreign countries.
On October 9, 1992, the Company formed a limited partnership with Reserve Battery, Inc., the general partner, and certain additional parties, by entering into an Agreement of Limited Partnership. The limited partnership formed by such parties, the name of which is Reserve Battery Cell, L.P. (the "Limited Partnership"), was formed for the purpose of developing, manufacturing, marketing and selling the Product. The Company's limited partnership interest in the Limited Partnership is currently 7.28%. In connection with forming the Limited Partnership, the Company entered into a License with the Limited Partnership pursuant to which it licensed its intellectual property rights in the Product to the Limited Partnership in return for royalties on sales of the Product.
In the spring of 1997, the Company was informed that all activities and operations of the Limited Partnership had ceased due to the lack of funding. As a result, at such time, for all practical purposes the operations of the Company ceased. The Company currently has virtually no assets or ongoing operations and has not engaged in any business activities since 1997. The Company has spent no funds on research and development activities during the last two fiscal years. From 1997 through the present, other than satisfying its periodic reporting obligations under the Exchange Act, the Company has been virtually inactive. Therefore, the Company believes it is still in the development stage. The Company currently has no full time or part time employees.
After reviewing the Company's prospects, management believed that it would be possible to develop a strategy for the Company to enter into a business combination with a privately held company as a reasonable alternative for such company to the more traditional initial public offering, or "IPO", and would provide the shareholders of the Company a reasonable opportunity to recover some value on their investment. The Company also considered raising capital by means of a public or private debt or equity offering in order to continue operations. However, such alternatives did not appear feasible on the basis that the Company has virtually no assets or revenues.
On March 9, 1999, the Company entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Park Pharmacy Corporation, a privately-held Texas corporation ("Park"), and Joe B. Park, Thomas R. Baker and David W. Frauhiger, the shareholders of Park (collectively, the "Selling Shareholders"), which provides for, among other things, the acquisition (the "Reverse Acquisition") by the Company of all of the issued and outstanding shares of capital stock of Park in exchange for the issuance by the Company of shares of a newly authorized and designated series of Preferred Stock, par value $.0001 per share, of the Company (the "Series A Preferred Stock"). Upon the Closing (the "Closing") of the Reverse Acquisition: (i) Park will become a wholly-owned subsidiary of the Company, (ii) the Selling Shareholders will control approximately 80% of the votes entitled to be cast at any meeting of the Company's shareholders, and (iii) the Selling Shareholders' designees shall constitute five out of the six members on the Company's Board of Directors. Therefore, the Selling Shareholders will have effective control of the Company after the Reverse Acquisition.
In connection with the transactions contemplated by the Stock Purchase Agreement, the Board of Directors has approved Articles of Amendment to the Articles of Incorporation of the Company which will change the corporate name of the Company to "Park Pharmacy Corporation" and will create a new class of Preferred Stock of the Company and increase the number of authorized shares of capital stock.
Pursuant to the terms of the Stock Purchase Agreement, the Closing of the Reverse Acquisition is conditioned upon, among other things, the approval of the Stock Purchase Agreement and the authorization and designation of the Series A Preferred Stock by a majority of the outstanding shares of Common Stock, par value $.0001 per share, of the Company (the "Company Common Stock"). In addition, pursuant to the Colorado Business Corporation Act and the Bylaws of the Company, the amendments to the Articles of Incorporation must be approved by a majority of the outstanding shares of Company Common Stock. A special meeting of the shareholders to be held on October 12, 1999 (the "Special Meeting") has been called by the Company, at which meeting the shareholders will vote on the Stock Purchase Agreement and transactions contemplated thereby, as well as the amendments to the Articles of Incorporation.
Park was incorporated on June 10, 1998, under the laws of the state of Texas and is in the development stage. Park's plan of operation for the next twelve months is to close the transaction with the Company, acquire Rx-Pro.Com, Inc., a Texas corporation that currently operates two on-line pharmacy Web sites, and to acquire independent non-Internet retail pharmacies, including pharmacies with associated home health care facilities.
(The transactions contemplated by the Stock Purchase Agreement are described in greater detail in the Company's Definitive Proxy Statement filed with the Securities and Exchange Commission on September 7, 1999.) Item 2. Description of Property.
Item 2. Description of Property.
The Company has a nominal amount of office space, which is located at the residence of James C. Rambin. Mr. Rambin provides such space on an informal basis and free of charge. There are no other offices or properties of the Company.
Item 3. Legal Proceedings.
Neither the Company nor its property is presently subject to any material litigation nor, to the Company's knowledge, is any material litigation threatened against the Company or its properties.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
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