Form S-4/A Home System Group

[Amend] Registration of securities issued in business combination transactions

What is Form S-4/A?
  • Accession No.: 0001221508-03-000068 Act: 33 File No.: 333-105588 Film No.: 031042727
  • CIK: 0001172319
  • Submitted: 2003-12-08

FORM S-4/A-8 HTML

form_s4december.htm


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 8
FORM S-4/A

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

CORONATION ACQUISITION CORP.


(Exact name of Registrant as specified in its charter)

 

Nevada

 

6798

 

43-1954776


 
 

(State or jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial Classification Code Number)

 

(I.R.S. Employer Identification No.)

 

P.O. Box 741, Bellevue, Washington, 98009 (425) 453-0355


(Address, including zip code, and telephone number, including area code of registrant's principal executive offices)

 

P.O. Box 741, Bellevue, Washington, 98009


(Address of principal place of business or intended principal place of business)

 

Harry Miller
Chairman and Chief Executive Officer
CORONATION ACQUISITION CORP.
P.O. Box 741
Bellevue, Washington 98009
(425) 453-0355

Copies to:
Thomas Elliott
Chairman and Chief Executive Officer
SUPREME PROPERTY, INC.
P.O. Box 1164
Tinley Park, IL 60477
(708) 715-3516


(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Approximate date of proposed sale to the public:

Upon consummation of the Agreement and Plan of Exchange and Reorganization by and between Coronation Acquisition Corp. and Supreme Property, Inc. dated as of March 31, 2003 described in the enclosed Information statement/Prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

Cover Page 1


CALCULATION OF REGISTRATION FEE


Title of each class of securities to be registered

Amount to be registered (1)

Proposed maximum offering price per share (2)

Proposed maximum aggregate offering price

Amount of registration fee


Common Stock

6,898,652

$0.10

$ 689,865.20

$ 55.88


Notes:

  1. Represents the number of common shares of Coronation to be issued to the stockholders of Supreme pursuant to the Agreement and Plan of Exchange and Reorganization, excluding the shares to be issued to Messrs. Elliot, LeRoy and Yorel Consulting.
  2. Estimated solely for the purpose of calculating the registration fee in accordance with the provisions of Rule 457(f). There is no trading market for the shares and no underwriter will be used by selling stockholders as a result is difficult to predict what an arms-length buyer would be willing to pay for these shares. Book value is approximately $0.05 per share.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of these securities act of 1933 or until the registration statement shall become effective on such date as the commission, acting pursuant to said section 8(a), may determine.

Cover Page 2


Supreme Property, Inc.
431 E. 75th Street, Chicago, Illinois 60619
(773) 873-9860

Dear Stockholder:

      I am pleased to inform you that the board of directors of Supreme Property, Inc. has carefully considered and approved an agreement and plan of merger which provides for the merger of our company into Coronation Acquisition Corp., a Nevada fully reporting company. Pursuant to the agreement and plan of merger, each share of our stock will be converted into the right to receive 1.3953 shares of the common stock of Coronation Acquisition Corp.

      Our board of directors has determined that the agreement and plan of merger and the merger are fair to and in the best interests of our stockholders.

      Please carefully read the enclosed information statement/prospectus for information about the agreement and plan of merger and the merger. We are an Illinois corporation subject to the Business Corporation Act of the State of Illinois, which requires that the two-thirds of the holders of the voting power of all outstanding shares of our stock adopt the agreement and plan of merger before the merger can be completed. The holders of a majority (74.44%) of the voting power of all of our outstanding shares of stock have already acted by written consent to adopt the agreement and plan of merger. Accordingly, your approval is not required and we will not ask you to vote on the transaction. The enclosed information statement/prospectus should be considered the notice we are required to provide you under Section 7.10 of the Business Corporation Act of the State of Illinois.

      We expect to complete the merger before the end of our second fiscal quarter. Under the rules of the Securities and Exchange Commission, the merger may not be completed until 20 business days after the mailing of the enclosed information statement/prospectus.

      Please do not send in your stock certificates at this time. Promptly after the merger is completed you will receive instructions explaining how to exchange your stock certificates for stock certificates of Coronation Acquisition Corp., whose name will change to Supreme Realty Investments, Inc. on close of the merger.

      We look forward to the successful completion of the merger and to your continued support as a shareholder of Supreme Property, Inc.

                                                      Very truly yours,

                                                 Thomas Elliott

                                                      Thomas Elliott
                                                      President and Chief Executive Officer
                                                      Supreme Property., Inc.

December 5 , 2003

Cover Page 3


The information in this information statement/prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This information statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED DECEMBER 5 , 2003

INFORMATION STATEMENT/PROSPECTUS

CORONATION ACQUISITION CORP.                       SUPREME PROPERTY, INC.    

 This information statement/prospectus relates to the issuance of shares of common stock of Coronation Acquisition Corp. in connection with the acquisition by Coronation Acquisition Corp. of Supreme Property, Inc. pursuant to an agreement and plan of merger dated as of March 31, 2003. As a result of the merger, Supreme's stockholders will be entitled to receive 1.3953 shares of common stock of Coronation for each share of Supreme that they own. Shares of common stock of Coronation Acquisition Corp. to which this information statement/prospectus relate consist of:

  • 6,898,652 of the 27,000,000 shares of common stock of Coronation to be issued to the current stockholders of Supreme Property, Inc. at the closing of the merger.

We Are Not Asking You for a Proxy and You are Requested Not To Send Us a Proxy.

The shares of Coronation Acquisition Corp. and Supreme Property, Inc. are not traded on any national securities market or quotation system.

We will pay all expenses of this offering. We do not expect to pay underwriting discounts or commissions in connection with the issuance or resale of these shares, although we have agreed to pay a finder's fee in connection with merger. Any person receiving these fees may be deemed an underwriter within the meaning of the Securities Act of 1933, and any profit on the resale of the common stock purchased by them may be deemed to be underwriting discounts or commissions under the Securities Act.

After the merger we will operate as a real estate corporation. We do not intend in the foreseeable future to seek qualification as a REIT or a similar tax-advantaged pass through entity.

You should carefully consider the discussion in the section entitled "Risk Factors" beginning on page 16.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of the prospectus. Any representation to the contrary is a criminal offense.

- 1 -


TABLE OF CONTENTS

 

 

TABLE OF CONTENTS

2

     

 

SUMMARY INFORMATION

6

     

 

RISK FACTORS

14

  Risks Relating to the Merger

14

  Risks Related to Our Securities

15

  Risk Relating to the Business, Finances and Operations of Coronation Post Merger

15

     

 

FORWARD LOOKING STATEMENTS

18

     

 

TERMS OF THE TRANSACTION

18

  BACKGROUND OF THE MERGER

18

  REASONS FOR THE MERGER

18

  SUMMARY OF MERGER AGREEMENT

19

    General Terms

19

    Consideration to Be Received In the Merger

19

    Exchange of Shares

20

    Effective Time of the Merger

20

    Principal Representations and Warranties

20

    Conditions to the Consummation Of The Merger

21

    Termination of the Merger Agreement

22

    Expenses of Merger

23

  RELATED TRANSACTIONS TO MERGER

23

    Name Change

23

    Appointment of New Slate of Directors

23

    Issuance of Additional Shares of Coronation

23

    Cancellation of 3,650,000 Shares of Coronation

23

    Qualification of Shares Held by Mr. Miller for Resale

23

    Voluntary Escrow Agreement

24

  DESCRIPTION OF SECURITIES

24

    Common Stock

24

    Non-Cumulative Voting

25

    Dividends

25

    Transfer Agent

25

  COMPARISON OF STOCKHOLDER RIGHTS

25

  ACCOUNTING TREATMENT OF THE MERGER

27

  FEDERAL INCOME TAX CONSEQUENCES

27

  PRO FORMA FINANCIAL INFORMATION

28

    Unaudited Pro Forma Combined Consolidated Balance Sheet

29

    Unaudited Pro Forma Combined Consolidated Statement of Operations

30

    Notes to Unaudited Pro Forma Consolidated Financial Statements of Coronation

31

  SELLING STOCKHOLDERS

33


- 2 -


  INTERESTS OF NAMED EXPERTS AND COUNSEL

36

  DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

36

     

 

INFORMATION ABOUT CORONATION ACQUISITION CORP.

37

  DESCRIPTION OF BUSINESS

37

    Formation

37

    Coronation's Business Pre-Merger

37

    Governmental Regulation

37

    Employees

38

    Reports to Securities Holders

38

  DESCRIPTION OF PROPERTY

39

  LEGAL PROCEEDINGS

39

  MARKET PRICE OF SECURITIES AND RELATED STOCKHOLDER MATTERS

39

    Dividend Policy

39

    Recent Sales of Unregistered Securities

40

    Equity Compensation Plan

40

  FINANCIAL STATEMENTS

40

    Coronation Audited Annual Financial Statements for Period Ended December 31, 2002

41

    Coronation Unaudited Interim Financial Statements for Period Ended September 30, 2003

50

  MANAGEMENT DISCUSSION AND ANALYSIS

58

    2002 Business Environment

58

    Plan of Operations

58

  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS

59

     

 

INFORMATION ABOUT SUPREME PROPERTY, INC.

59

  Description of Business

59

    Formation

59

    Supreme's Business

60

    Total Number of Employees

60

    Competition

60

    Regulation

61

    Environmental Matters

62

  Description of Property

62

    Corporate Office of Supreme

62

    Investment Policies

63

    Investments in Real Estate or other Property Interests

63

    Investments in Real Estate Securities or other Passive Interests

64

    Investments in Mortgage Loans and Other Securities

64

    Investment Real Estate Owned

65

    Proposed Future Acquisitions

66

    Acquisition Procedures

67

    Other Real Property Considerations

67

    Financial Leverage

67

  Legal Proceedings

68

  Market Price of Securities and Related Stockholder Matters

68

    General

68

    Dividend Policy

68

    Recent Sales of Unregistered Securities

68

    Equity Compensation Plan

70

  Financial Statements

70

    Supreme Audited Annual Financial Statements for Period Ended December 31, 2002

71

    Supreme Interim Interim Financial Statements for Period Ended September 30, 2003

78

  Management Discussion and Analysis

83

    Overview

83

    Results of Operations

84


- 3 -


    Liquidity and Capital Resources

85

    Recent Accounting Pronouncements

85

  Changes and Disagreements with Accountants

86

     

 

VOTING AND MANAGEMENT INFORMATION

86

  MAJORITY STOCKHOLDERS CONSENT

86

  DISSENTER'S RIGHTS OF APPRAISAL OF STOCKHOLDERS OF SUPREME

88

  INTEREST OF DIRECTORS AND OFFICERS OF SUPREME IN THE MERGER

88

  INTEREST OF DIRECTORS AND OFFICERS OF CORONATION IN THE MERGER

88

  OUTSTANDING SHARES AND VOTING RIGHTS

88

    Supreme

88

    Coronation

88

    Record Date

86

  EXPENSES OF INFORMATION STATEMENT/PROSPECTUS

89

  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

89

    Coronation

89

    Supreme

90

  APPOINTMENT OF NEW DIRECTORS AND OFFICERS TO CORONATION

91

  OTHER OFFICERS AND SIGNIFICANT EMPLOYEES

93

  FAMILY RELATIONSHIPS AMONG DIRECTORS

93

  INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

93

  AUDIT COMMITTEE FINANCIAL EXPERT

93

  CODE OF ETHICS

94

  EXECUTIVE COMPENSATION

94

    Summary of Compensation of Executive Officers

94

    Summary Compensation Table

95

    Stock Options/SAR Grants

95

    Long-Term Incentive Plans

96

  COMPENSATION OF DIRECTORS

96

  EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT

96

  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

96

     

 

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

     

 

  INDEMNIFICATION OF DIRECTORS AND OFFICERS

97

  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

98

  UNDERTAKINGS

98

     

 

SIGNATURES

100

     

 

- 4 -


This information statement/prospectus incorporates important business and financial information about Coronation or Supreme that is not included in or delivered with the document. This information is available without charge to security holders upon written or oral request to:

  Harry Miller, President
Coronation Acquisition Corp.
P.O. Box 741
Bellevue, Washington, 98009
(425) 453-0355
OR: Thomas Elliott, President
Supreme Property, Inc.
431 E. 75th Street
Chicago, IL 60619
(773)873-9850

 

To obtain timely delivery, you must request the information no later than five business days before the close of the merger transaction.

- 5 -


SUMMARY INFORMATION

This summary contains selected information from this information statement/prospectus and may not contain all of the information that is important to you. To understand the merger more fully and for a more complete description of the legal terms of the merger, you should read this entire document carefully, including the attached Exhibits. In this information statement/prospectus, "Coronation" refers to Coronation Acquisition Corp. and "Supreme" refers to Supreme Property, Inc. and its wholly-owned subsidiary Supreme Capital Funding, Inc.

The Companies    
   
Coronation  
  Full Name, Address & Phone Number Coronation Acquisition Corp.
P.O. Box 741, Bellevue, WA, 98009
(425) 453-0355
  Business Coronation is a blank check company formed in the State of Nevada in 2000 solely for the purposes of effecting a merger or acquisition of an operating company.
   
Supreme  
  Full Name, Address & Phone Number Supreme Property, Inc.

431 E. 75th Street, Chicago, IL 60619

(773)873-9850

  Business Supreme is a privately-held, licensed real estate brokerage and real estate acquisition firm. Supreme has and plans to continue to acquire, develop, own and operate a portfolio of investment properties.

Supreme currently owns four properties. Supreme intends to diversify its portfolio of real estate as it makes future acquisitions of investment properties, by acquiring properties throughout the United States and by targeting, as opportunities present themselves, each of the following market segments: office, light industrial, retail, residential and special use realty markets.

After the merger we will operate as a real estate corporation. We do not intend in the foreseeable future to seek qualification as a REIT or a similar tax-advantaged pass through entity.

  Subsidiary Supreme Capital Funding Inc. is a wholly-owned subsidiary of Supreme. It is waiting the receipt of a mortgage banking license from the State of Illinois. This license was applied for in January 2003. On receipt of this license Supreme Capital Funding Inc. intends to provide mortgage origination and other mortgage banking services.
     
Merger Transaction  
  We have attached the merger agreement as Exhibit 2 to this information statement/prospectus. We encourage you to read the merger agreement because it is the legal document that governs the merger.
 

- 6 -


  Basics About This Merger Transaction On March 31, 2003, Coronation and Supreme signed an agreement and plan of exchange and reorganization. Under the terms of this merger agreement Supreme will merge into Coronation. After the transaction is completed, Supreme will no longer exist and Coronation, as the surviving entity, will carry on the business of Supreme. Coronation will be controlled by the former stockholders of Supreme and the board of directors of Coronation will be the board of directors of Supreme immediately prior to the merger. The name of Coronation will be changed to Supreme Realty Investments, Inc.  After the merger Coronation will operate as a real estate operating company with one wholly-owned subsidiary, Supreme Capital Funding, Inc.
  Majority Approval Already Obtained for Merger Majority stockholders of Coronation and Supreme holding over 74% of the issued and outstanding shares of each company have already approved the adoption of the merger agreement and the merger. As a result, no vote by the stockholders of Supreme will be taken because these actions have already been approved by the written consent of the holders of a majority of the outstanding shares of both companies as allowed by their respective corporate statutes. We have attached the form of stockholders' consent of Supreme as Exhibit 99.a to this information statement/prospectus.
     
  What Supreme Stockholders will receive in the Merger As a result of the merger, Supreme's stockholders will be entitled to receive 1.3953 shares of common stock of Coronation for each share of Supreme that they own. Coronation will not issue any fractional shares of common stock in connection with the merger. Instead, if fractional shares should occur as a result of the exchange rate, such fractional shares will be rounded down.
     
  Ownership of Coronation After the Merger Coronation will issue approximately 27,000,000 shares of common stock to Supreme stockholders in connection with the merger. Supreme's stockholders will own approximately 89.98% of the outstanding common stock of Coronation after the merger. As of December 5 , 2003 , there were 19,342,000 shares of Supreme outstanding and no warrants or options.
     
  Federal Tax Consequences of the Merger Coronation and Supreme intend that the merger qualify as a "reorganization" for federal income tax purposes. If the merger qualifies as a reorganization, stockholders of Supreme's shares will generally not recognize any gain or loss for federal income tax purposes on the exchange of their shares of Supreme for the common stock of Coronation in connection with the merger. The companies themselves, as well as the current holder of Coronation's common stock, will not recognize gain or loss as a result of the merger.
 

- 7 -


 
    The federal income tax consequences described above may not apply to all stockholders of Supreme's common stock. Your tax consequences will depend on your own situation. You should consult your tax advisor so as to fully understand the tax consequences of the merger to you.
  Accounting Treatment The merger will be treated as a "purchase" for accounting purposes.

Although Coronation will acquire Supreme in the merger, Supreme's stockholders will hold a majority of the voting interests in Coronation on completion of the merger. Accordingly, for accounting purposes, the acquisition will be a "reverse acquisition," and Supreme will be the "accounting acquirer."

  Supreme Stockholders have Appraisal or Dissenters Rights Under the Business Corporation Act of the State of Illinois, the stockholders of Supreme are entitled to appraisal or dissenters' rights in connection with the merger.
     
  Effective Time of Merger The merger will become effective at the date and time the certificate of merger is filed with the Secretary of State of the State of Nevada. It is anticipated that this filing will be made as soon as practicable after the last of the conditions precedent to the merger, as set forth in the merger agreement, has been satisfied or waived.
     
  No Regulatory Approval Required No regulatory approval is required in order to consummate the merger other than the successful registration of the shares to be issued in connection with the merger by the Securities and Exchange Commission and all applicable State securities regulators
     
Conditions to the Merger Coronation and Supreme will complete the merger only if specific conditions are satisfied or, in some cases, waived, including the following:
- receipt of all stockholder approvals;
- this Form S-4 having become effective under the Securities Act of 1933 and all state securities permits or authorizations necessary to issue the shares of Coronation have been obtained;
- no legal restraints or prohibitions which would prevent the consummation of the merger;
- the representations and warranties of Coronation and Supreme under the merger agreement must be materially true and correct;
- that there have been no material adverse change to the parties since signing the agreement; and
- the parties have performed all material obligations required to be performed by them under the merger agreement.


- 8 -


 
Termination of the Merger Agreement Coronation and Supreme can jointly agree to terminate the merger agreement at any time prior to completing the merger. In addition, either Coronation or Supreme can terminate the merger agreement if:
- the other party has breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the merger agreement; or
- a law or final and nonappealable court order prohibits the merger.
     
  Restrictions on the Ability to Sell Coronation's Stock Coronation will place appropriate legends on the certificates of any common stock of Coronation to be received by affiliates of Supreme which are subject to the resale rules of Rule 144. In addition, affiliates of Supreme have also acknowledged the resale restrictions imposed by Rule 145 under the Securities Act of 1933 on shares of common stock of Coronation to be received by them in the merger.

All shares of common stock of Coronation received by the stockholders of Supreme in connection with the merger will be freely transferable unless the shareholder is considered an affiliate of either Coronation or Supreme under the federal securities laws.

The majority stockholders of Supreme and others have agreed to enter into a voluntary escrow agreement regarding the resale of their shares. Under the escrow agreement the stockholders have agreed to not resell 75% the shares of Coronation they will receive under the merger until Coronation has obtained a minimum of $3,000,000 in new debt or equity financing to advance its business. At that time an additional 25% of the shares will be released for resale with an additional 25% being released every three months until 100% of the shares escrowed have been released.
 

  Expenses Supreme has agreed to pay all expenses incurred in connection with the merger, other than the preparation of the financial statements of Coronation, their SEC filings, exhibits, etc.


- 9 -


 
Related Transactions to Merger  
     
  Name Change Coronation and its stockholders have agreed to change the name of Coronation to "Supreme Realty Investments, Inc." concurrent with the closing of the merger agreement.
     
  Change of Directors of Coronation The current board of directors of Supreme will be appointed to the board of directors of Coronation at the close of the merger agreement. Mr. Miller, the sole director and officer of Coronation will resign at that time.
     
  Issuance of 1,650,000 Additional Shares to Two Parties The board of directors of Supreme and Coronation have agreed to issue 1,650,000 in connection with the merger agreement and closing of the merger to two parties under a separate registration statement. These parties were integral in introducing Supreme and Coronation to one another.
     
  Cancellation of 3,3650,00 Outstanding Shares of Coronation Mr. Miller has agreed to cancel 3,650,000 shares of common stock he currently holds in Coronation concurrently on the parties closing the merger agreement.
     
  Risks Related to Merger Agreement After the transaction is completed, Coronation's success will be totally dependent on the success of the business currently conducted by Supreme. There are no assurances that Supreme's business operations will be profitable after closing the merger agreement. (See "Risk Factors")

Qualification of Shares Held by Mr. Miller for Immediate Resale  
     
  Background Mr. Miller acquired 5,000,000 shares of Coronation on March 2, 2000 when Coronation was considered a blank check company. Mr. Miller has agreed to cancel 3,650,000 of these shares at the time of closing the merger agreement. The remaining 1,350,000 shares, which will represent 4.5% of the issued and outstanding share capital of Coronation on closing of the merger, cannot be sold pursuant to the resale rules of Rule 144 of the Securities Act of 1933 . In a letter to NASD Regulation, Inc., dated January 21, 2000, the Securities and Exchange Commission staff advised that securities acquired in a blank check company in a private transaction could only be sold if they were subsequently registered for resale.

The parties have agreed to register the remaining shares held by Mr. Miller in a separate registration statement to this Form S-4 to enable Mr. Miller to sell his shares in the future. Coronation may also register restricted shares of other stockholders at this time.


- 10 -


 
 No Trading Market The shares of Coronation are not quoted for trading on any national market or quotation system. There can be no certainty that the shares of Coronation will ever trade in a public market.
     

SELECTED FINANCIAL DATA

Coronation and Supreme have provided the following selected historical financial data to aid you in analyzing the financial aspects of the merger. The information is only a summary and you should read it together with Coronation's and Supreme's respective financial statements, which are included as part of this information statement/prospectus.

The unaudited pro forma consolidated financial data also set forth below gives effect to the merger of Supreme by Coronation under the purchase method of accounting, as required under the rules of the Securities and Exchange Commission. The selected unaudited pro forma consolidated financial data is based on estimates and assumptions. This data is not intended to represent or be indicative of the consolidated results of operations or financial conditions of Coronation that would have been reported had the merger been completed as of the dates presented, and is not intended to represent or be indicative of future consolidated results of operations or financial condition of Coronation.
 

Selected Historical Financial Data of Coronation
(
Unaudited)

 

Year Ended
December 31, 2002

As of Nine Month Period
Ended Sept. 30 , 2003

BALANCE SHEET DATA:    
     Current Assets:
     Other Assets:
     Total Assets:
     Total Liabilities:
     Retained Earnings (Deficit):
     Shareholder Equity (Deficit) :

$          0
0
0
2,836
(3,336)
(2,836)

$           0
0
0
0
0
(500)

     
INCOME STATEMENT DATA:    
     Total Income:
     Total Expenses:
     Net Profit (Loss):

$          0
2, 756
(2, 756)

$           0
1,858
(1,858)

 
 
 

 

- 11 -



Selected Historical Consolidated Financial Data of Supreme

(Unaudited)

 

Year Ended
December 31, 2002

As of Nine Month Period
Ended Sept. 30 , 2003

BALANCE SHEET DATA:    
     Current Assets:
     Loans & Securities Investments:
     Real Estate Investments:
Other Assets:
     Total Assets:
     Total Liabilities:
     Retained Earnings (Deficit):
     Shareholder Equity

$ 2,000
100,000

 1,947,515
27,434
2,076,949
1,300,664
 34,046
776,285

$           28,243
100,000

1, 893,897
21,524
2, 043,646
 1, 286,411
  (93,488)
757,235

     
INCOME STATEMENT DATA:    
     Total Income:
     Total Expenses:
     Net Profit (Loss):

$ 259,669
$ 224,924
$ 34,775

119,448
152,823
(83,375)

 

Selected Unaudited Pro Forma Combined Financial Data of Coronation and Supreme

 

Year Ended
December 31, 2002

As of Nine Month Period
Ended Sept. 30 , 2003

BALANCE SHEET DATA:    
     Current Assets:
     Loans & Securities Investments:
     Real Estate Investments:
     Other Assets:
     Total Assets:
     Total Liabilities:
     Retained Earnings (Deficit):
     Shareholder Equity

$ 2,000
100,000

1,947,515
27,434
2,076,949
1,303,054
31,156
773,895

$           28,243
100,000

1,893,897
21,524
2, 043,646
 1, 286,411
  (93,488)
756,735

     
INCOME STATEMENT DATA:    
     Total Income:
     Total Expenses:
     Net Profit (Loss):

$ 259,669
227, 680
3 2,019

119,448
154,681
(85,233)

- 12 -



COMPARATIVE HISTORICAL AND PRO FORMA PER SHARE DATA

The following tables set forth the historical net loss and book value per share of Coronation and Supreme and the pro forma combined per share data on an unaudited basis after giving effect to the merger using the purchase method of accounting. The data is derived from and should be read in conjunction with Coronation's audited financial statements and related notes, Supreme's audited financial statements and related notes, and the unaudited quarterly financial statements of Coronation and Supreme and related notes and the unaudited pro forma combined financial information and related notes, which are included elsewhere in this information statement/prospectus.

The unaudited pro forma combined per share data is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the merger had been consummated at the beginning of the earliest period presented, nor is it necessarily indicative of future operating results or financial position. The pro forma adjustments are estimates based on information and assumptions available at the time of the filing of this information statement/prospectus.

Neither Coronation or Supreme declared any cash dividends related to their respective common stock during the periods presented.

     
 

Year End
December 31, 2002

Year End
December 31, 2001

Historical Data Coronation    
Net income (loss) per share:    
     Basic and Diluted

($ 0.00 )

$ 0.00

     Book value per share as of the end of the period(1)

($ 0.00 )

$ 0.04

     
     
Historical Data Supreme    
Net income (loss) per share:    
     Basic and Diluted

$ 0.00

$ 0.01

     Book value per share as of the end of the period(1)

$ 0.04

$ 0.02

     
     
Historical Combined Data
of Coronation & Supreme
   
Net income (loss) per share:    
     Basic and Diluted

$ 0.00

$ 0.01

     Book value per share as of the end of the period(2)

$ 0.03

$ 0.01

     
Notes:
(1)   Historical book value per share is computed by dividing total stockholders' equity by the number of shares of Coronation or Supreme common stock outstanding at the end of the period.
(2)   Pro Forma combined per share book value is computed by dividing total stockholders' equity Coronation expected to be issued and outstanding (30,000,000) at the closing of the merger.

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Risk Factors

As a result of the merger, current Supreme stockholders will be acquiring Coronation common stock. You should consider all of the information included in this information statement/prospectus and its exhibits and all of the information incorporated by reference. In addition you should pay particular attention to the following risks relating to the merger and risks related to the operation of Coronation post merger.

Risks Relating to the Merger

1. As a stockholder of Coronation, you will have different rights and obligations than you currently have as a Supreme stock holderAs a result your rights as a shareholder may be more limited and you may not be able to influence business decisions of Coronation under Nevada Law to the same extent as you would under corporate laws of Illinois among other things.

Prior to the merger agreement, your rights and obligations as a Supreme stockholder are governed by the charter and bylaws of Supreme and the Business Corporation Act of the State of Illinois. Following the merger, you will become a stockholder of Coronation and your rights and obligations will be governed by the Nevada Revised Statutes of 2001, as amended and the articles and bylaws of Coronation. In some cases your rights as a shareholder may be more limited than your rights as a Supreme stockholder. A detailed description of the similarities and differences of Nevada and Illinois corporate law is provided elsewhere in this Form S-4.

2. The merger agreement may be a taxable transaction for Supreme stockholdersAs a result, the exchange could result in the realization of a gain or loss.

Although we believe that the merger agreement will be tax free, we cannot assure you that the IRS will not seek to treat this as a taxable transaction for Supreme stockholders. In the event the merger does not qualify as a tax free transaction, the transfers could result in the realization of gain or loss by the Supreme stockholders. In that case, under certain circumstances, losses, if any, realized by some Supreme stockholders with respect to the merger agreement could be disallowed.

3. No fairness opinion obtained with regard to the merger, therefore there is no assurance the value established for the shares of Supreme is in fact fair market value.

No professional opinion of legal counsel, public accountants, or investment bankers were obtained regarding the fairness of the proposed merger to Supreme's shareholders. The consideration to be received by the stockholders of Supreme and the other terms of the Merger were determined by the Board of Directors of Coronation and Supreme, which have inherent conflicts of interest, and may not reflect the value of the net assets of Supreme if an independent third party had been involved in negotiation of the terms of the Merger.

4. Interests of Supreme's Directors, Officers, and Key Employees in the Merger other than as Shareholders such as they will become the Board of Directors of Coronation and may enter into Employment Agreements.

In considering the recommendation of the board of directors of Supreme, you should be aware that the members of Supreme's management and of the board of directors of Supreme have interests in the merger that are different from, or in addition to, the interests of the Supreme's stockholders generally. The members of the board of directors of Supreme knew about these additional interests and considered them when they approved the reorganization agreement, such as:

  • As of April 24, 2003, directors and officers and their affiliates currently owned approximately 74.44% of all outstanding shares of the shares of Supreme entitled to vote at for the merger and which did vote by consent resolution in favor of the merger;

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  • On completion of the merger, Coronation may enter into employment arrangements with some or all of the executive officers of Supreme. To date such employment agreements have been reached with Mssrs. LeRoy, Mooring, and Brown, who are currently executive officers of Supreme. Mr. Elliott will remain as Chairman of the Board of Directors, but will not hold any executive office and will not enter into any employment agreements with the surviving company.

The directors and officers of Supreme may therefore have had different reasons to vote to approve the reorganization agreement and the merger than if they did not have these interests.

Risks Related to Our Securities

5. Our common stock currently is not listed or quoted for trading. Without a trading market you will have difficulty in selling your shares.

Our common stock currently is not qualified for listing and may never qualify for listing on an exchange or quoted market after the merger agreement is complete. We cannot assure you that an active trading market will develop or be sustained for our common stock. The market value of our common stock may be affected by many factors, including: governmental regulatory action; changes in tax laws; the level of our earnings; the market's perception of our business and our ability to generate distributions; the value of our assets and our market capitalization; the degree to which our management's interests are perceived to be aligned with the interests of our stockholders; the degree to which we use borrowings; external factors such as interest rates and conditions of the stock markets; and technical factors relating to the supply and demand for shares of our common stock.

6. We may issue further shares of our common stock after the merger, such issuance may have a dilutive effect for our current shareholders and may cause the price of our common stock to decline.

After the merger, we will have the ability to issue additional shares of common stock, preferred stock and other securities convertible into common stock. We intend to do this in order to acquire additional properties. The issuance of common stock or securities convertible into or exchangeable for our common stock could cause dilution of our existing security holders and a decrease in the market price of our common stock or preferred stock.

Risk Relating to the Business, Finances and Operations of Coronation Post Merger

7. We may not be able to successfully implement our business plan, as a result our earnings could decrease.

After the merger agreement, we intend to seek to raise additional equity or debt capital and to use the funds we raise, plus additional borrowings, to acquire additional income-producing properties, mortgages, and other loans secured by real estate. We cannot assure you that we will be successful in raising additional equity or debt capital or in obtaining additional debt financing on terms that would be acceptable to us. In addition, even if we raise additional equity or debt capital, we cannot be sure that we will be able to acquire any additional properties meeting our investment criteria on terms that would be acceptable to us. If we are not successful in raising additional capital, it could adversely affect our earnings and the price of our common stock. 

In addition, even if we raise additional equity or debt capital, we cannot be sure that we will be able to acquire any additional properties meeting our investment criteria on terms that would be acceptable to us.  If we raise additional equity but are not able to invest it in additional properties that generate net income for us at least equivalent to the levels generated by our existing properties, our earnings per share could decrease. Since we have not identified any additional properties that we will for certain acquire, you will not have an opportunity to review additional real estate investments prior to the time you decide whether or not to consent to the merger agreement.

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8. As a matter of course, investors will not have an opportunity to review additional real estate investments prior to our decision on such investments. You must instead rely on our investment committee, even if you disagree with its actions.

Our real estate investment decisions will be made by an investment committee consisting of directors and officers of the company. As a matter of course, investors will not have an opportunity to review additional real estate investments prior to the time we make such investments. You may not always agree with the real estate investment decisions of the investment committee, but these decisions will prevail.

9. Additional real estate that we may acquire after the merger may not generate additional earnings or cash available for dividend distribution to our stockholders, as a result you will only be able to benefit from holding our stock if the stock price appreciates.

We expect to acquire additional income-producing properties, mortgages, and other loans secured by real property after the merger agreement. These risks include the possibility that the properties or loans will not perform in accordance with our expectations, that we will pay too high of a purchase price for these additional properties or that we will underestimate financing costs, operating costs and the costs of any necessary improvements and repairs to additional properties. In addition, the economic returns from our real property investments may be affected by a number of factors, many of which are beyond our direct control. These factors include general and local economic conditions, the relative supply of like properties in the market area, interest rates on mortgage loans, the need for and costs of repairs and maintenance of the properties, government regulations and the cost of complying with them, taxes and inflation. As a result, the additional income-producing properties, mortgages, and loans secured by real property we acquire, if any, may not generate any additional earnings for us and may result in losses. We cannot assure you that acquiring additional properties will increase our earnings, and it may result in a reduction in our earnings. As a result, the amount of cash available for distribution to our stockholders and the market price of our common stock could decline after the merger agreement.

10. We may borrow money to buy more real estate, and this may limit our ability to pay dividend distributions to our stockholders, as a result you will only be able to benefit from holding our stock if the stock price appreciates.

We expect to acquire more income-producing properties, mortgages, and loans secured by real property after the merger agreement and to finance these acquisitions in part with additional borrowings. Our Articles of Incorporation and By-laws, do not limit the amount of indebtedness that we are able to incur in pursuit of our internal investment policies.  Such additional indebtedness may be incurred without the vote of shareholders.

An increase in our indebtedness would require additional cash for debt service which could result in less cash available for dividends to our stockholders and could increase the risk of default on our indebtedness. Payment of principal and interest on this indebtedness must be made before we can make dividend distributions on our common stock.

In addition, our borrowings will be secured by first mortgages on our real estate assets.

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This exposes us to a risk of losing our interests in the assets given by us as collateral for secured borrowings if we are unable to make the required principal and interest payments when due. In addition, these assets may not be available to our stockholders in the event of the liquidation of Coronation to the extent that they are used to satisfy the amounts due to our creditors.

11. Fluctuating interest rates may affect our earnings because we may borrow money using adjustable-rate mortgages, which could adversely affect our revenues and profitability.

In some cases, we may finance the acquisition of additional income-producing properties, mortgages, and loans secured by real property with adjustable-rate mortgage debt. The interest rates on this debt will adjust based on prevailing market interest rates. If interest rates increase, we will have to pay more interest on this debt, but would not necessarily be able to increase rental income from the apartment properties financed by these mortgages. Therefore, an increase in interest rates may reduce our earnings, and this may reduce the amount of funds available for distribution to stockholders and the market price of our common stock.

Changing interest rates may also affect the value of our mortgage investments and the rates at which we reinvest funds obtained from loan repayments.  As interest rates increase, the interest we receive from reinvested funds will generally increase, but the value of our existing loans at fixed rates will generally tend to decrease.  Ad interest rates decrease, borrowers generally tend to refinance or prepay their existing loans, and funds available for reinvestment will be invested at lower rates.  Therefore, changes in interest rates may reduce our earnings and the value of our loan portfolio.

12. If we finance additional real estate with tax exempt debt, it will subject these properties to certain restrictions which could impair our ability to maintain or increase our profitability from these properties which could adversely affect our revenues and profitability.

We may use tax exempt housing bonds to finance the acquisition of additional apartment properties. While this type of financing offers lower interest rates than conventional financing, it subjects the financed property to numerous restrictive covenants, including a requirement that a percentage of the apartment units in each property be occupied by residents whose income does not exceed a percentage of the median income for the area in which the property is located. These covenants will remain in effect with respect to the apartment properties financed in this manner and it is possible that such covenants may cause the rents charged by these properties to be lowered, or rent increases foregone, in order to attract enough residents meeting the income requirements. In the event that we do not comply with these restrictions, the interest on the bonds could become subject to federal and state income tax, which would result in either an increase in the interest rate on the bonds or an early redemption of these bonds that would force us to obtain alternative financing or sell the properties securing the bonds.

13. The concentration of real estate in one geographical area may make us vulnerable to adverse changes in local economic condition which could adversely affect our revenues and profitability.

While we plan to diversify our portfolio of properties across several geographic regions and property types, we do not have specific limitations on the total percentage of our real estate properties that may be located in any one area. Consequently, properties that we own may be located in the same or a limited number of geographical regions. Currently, all four of our apartment properties are located in Chicago, Illinois.

- 17 -


We do not have a policy that prohibits us from acquiring properties in markets in which we already own a property. Adverse changes in the economic conditions of the geographic regions in which our properties are concentrated may have an adverse effect on real estate values, rental rates, and occupancy rates. Any of these could reduce the rental income we earn from our real estate portfolio or the market value of these properties.

14. Our real estate investments may be illiquid and their value may decrease either of which would adversely affect our revenues and profitability.

Our investments in income-producing properties, mortgages, and loans secured by real property are relatively illiquid. Our ability to sell these assets, and the price we receive upon their sale, will be affected by the number of potential buyers, the number of competing properties on the market in the area and a number of other market conditions. As a result, we cannot assure you that we will be able to sell these properties without incurring a loss.

FORWARD LOOKING STATEMENTS

Certain statements and other information contained herein concerning future, proposed, and intended activities of Coronation post-merger or other matters that are not historical facts are forward-looking statements (as defined in the Securities Act of 1933). When used herein, the words "believe," "expect," "anticipate," "estimate," and similar expressions are intended to identify forward-looking statements. By their nature, forward-looking statements are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include those discussed under these "Risk Factors."

TERMS OF THE TRANSACTION

In addition to the other information contained in this information statement/prospectus, Supreme stockholders should carefully consider the following factors in evaluating the merger agreement, Coronation and its business.

Background of the Merger

Coronation was formed specifically to search for and engage in a merger or acquisition of a business opportunity. Coronation became a reporting issuer under the Securities Act of 1934 in July 2002. Since that time Mr. Miller, the President of Coronation, has reviewed a number of business plans. In late February or early March 2003, Mr. Miller was provided a business plan for Supreme by a long time business acquaintance Mr. Nick Segounis. Mr. Miller reviewed the plan and subsequently asked Mr. Segounis to introduce him to Mr. Thomas Elliott the President of Supreme. Mr. Miller shared information about Coronation with Mr. Elliott and after each company completed its respective review, Messrs. Miller and Elliott negotiated an agreement and plan of exchange and reorganization. This merger agreement was subsequently signed by the parties on March 31, 2003.

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Reasons for the Merger

The respective board of directors and majority stockholders of each company spent considerable time reviewing the terms of the merger, the background of their respective business operations, management and the future business potential and plans of the combined entities.

Based on these and other considerations, the board of directors of each company together with their respective majority stockholders believe that the transactions contemplated by the merger agreement, including the name change of Coronation, share cancellation by Mr. Miller, and issuance of additional shares to Mr. Nick Segounis and SG Financial Services Group among other things are fair and in the best interest of each company.

The majority stockholders of Supreme believe that Supreme will benefit from the merger by the fact that Supreme will now be a reporting issuer with the Securities and Exchange Commission and as a result will be able to seek a listing for its shares on an exchange or quotation system. The board of directors and majority stockholders of Supreme believe this will also assist Supreme in raising the capital it requires to advance its business plans.

Summary of the Merger Agreement

The following contains, among other things, a summary of the material features of the merger agreement. This Summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the executed merger agreement a copy of which is attached to this information statement/prospectus as Exhibit 2 and is hereby incorporated by reference.

General Terms.

On March 31, 2003, Coronation and Supreme entered into an agreement and plan of exchange and reorganization which provides that subject to certain conditions, Supreme will be merged with Coronation with Coronation surviving the merger. Coronation, as the surviving entity will carry on the business of Supreme and own all of its assets and liabilities. The merger will become effective at the date and time that the certificate of merger is filed with the Secretary of State of Nevada or such later time as may be specified by the parties. Coronation and Supreme anticipate that this filing will be made as soon as practicable after the last of the conditions precedent to the merger, as set forth in the merger agreement, has been satisfied or waived.

Consideration to Be Received In the Merger.

At the effective time of the merger, each issued and outstanding share of Supreme will be converted into the right to receive 1.3953 shares of the common stock of Coronation. Coronation will not issue any fractional shares of common stock in connection with the merger. If fractional shares should occur as a result of the exchange rate, such fractional shares will be rounded down. Coronation will issue approximately 27,000,000 shares in exchange for all of the outstanding capital stock of Supreme.

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Exchange of Shares.

The transfer agent of Supreme, Interstate Transfer Company of 6084 South 900 East, Suite 101, Salt Lake City, Utah 84121 will act as exchange agent in the merger. Subject to the terms and conditions of the merger agreement, Coronation will make available to the exchange agent from time to time on its request certificates representing the common stock of Coronation issuable in exchange for the outstanding shares of Supreme. As promptly as practicable after the effective time of the merger, Coronation will cause the exchange agent to send to each holder of record of shares of Supreme a letter of transmittal and instructions. Thereafter, holders of shares of Supreme may surrender their certificates to the exchange agent, together with a duly executed letter of transmittal. In exchange for such share certificates, holders will receive Coronation common stock certificates representing the applicable whole number of Coronation shares as described under "Consideration to be Received in the Merger" above. Stockholders of un-exchanged shares of Supreme will not be entitled to receive any dividends or distributions payable by Coronation with respect to those shares until the applicable Supreme certificate is surrendered. On surrender, however, subject to applicable laws, former Supreme stockholders will receive such distributions in respect of the whole Coronation shares received.

To exercise their appraisal and dissenter's rights, Supreme's shareholders must:

1) deliver a written demand for payment to Supreme within twenty days of receiving this information statement/prospectus, demanding payment for his or her shares if the merger is completed;

2) Upon receipt of such demand, Supreme will send to those stockholders delivering written demands for payment a statement of its estimate of the fair value of the Supreme's shares within the later of (a) 10 days after the effective date of the merger or (b) 30 days after such stockholder delivers a written demand for payment to Supreme. Financial information about Supreme required to be provided under Section 11.70 of the Illinois Business Corporation Act will accompany this statement. Supreme will also send such stockholders a commitment to pay for their shares at their estimated fair value, plus accrued interest, upon transmittal to Supreme of the certificates representing, or other evidence of ownership of, such shares. If the merger occurs, Supreme will pay to each dissenter who transmits to Supreme his or her certificate or other evidence of ownership the amount Supreme estimates to be the fair value of such dissenter's shares, plus accrued interest, accompanied by a written explanation of how the interest was calculated;

3) A stockholder who does not agree with Supreme's estimate of fair value or the amount of interest due must notify Supreme in writing of the stockholder's estimate of the shares' fair value and the amount of interest due and demand payment for the difference and the interest due within 30 days from the delivery of Supreme's statement of its estimate of fair value;

4) Stockholders who fail to notify Supreme of their estimate of fair value or the amount of interest due within this period will lose their rights to dispute the amounts estimated and determined by Supreme;

5) If a stockholder and Supreme are unable to agree on the fair value of the shares and accrued interest within 60 days from delivery to Supreme of the stockholder's estimate of fair value and accrued interest, Supreme will either pay the difference in value that the stockholder demanded with interest or file a petition in the Circuit Court of Cook County, State of Illinois, requesting the court to determine the fair value of the shares and the interest due. Supreme will make all dissenters, whether or not residents of Illinois, whose demands remain unsettled, parties to any such proceeding and all parties will be served with a copy of the petition. Stockholders who do not live in Illinois may be served by registered or certified mail or by publication as provided by law.

6) If the court's determination of fair value and interest due exceeds the amount paid by Supreme, then each dissenting stockholder made a party to the proceeding is entitled to judgment for the difference plus interest. The court may appoint one or more persons as appraisers to receive evidence and to determine the fair value. The court will determine all costs of the proceeding, including the reasonable compensation and expenses of the appraisers. Fees and expenses of counsel and experts for any party are excluded. If the fair value of the shares as determined by the court materially exceeds the amount of Supreme's estimate, or if no estimate was made, then all or any part of such expenses may be assessed against Supreme. However, if a stockholder's estimated fair value materially exceeds the fair value that the court determines, then all or any part of such expenses may be assessed against the stockholder. Under certain circumstances, the court may also assess the fees and expenses of counsel and experts to a stockholder or to Supreme.

Further information about the appraisal and dissenter's rights of Supreme stockholders is provided in this Form S-4 under the sub-heading "Voting and Management Information - Dissenter's Rights of Appraisal of Stockholders of Supreme" and the full text of the relevant corporate act provisions are attached as Exhibit 4.3.

Effective Time of the Merger.

The merger will become effective at the date and time the certificate of merger is filed with the Secretary of State of the State of Nevada or at such later time as may be specified therein. It is anticipated that this filing will be made as soon as practicable after the last of the conditions precedent to the merger, as set forth in the merger agreement, has been satisfied or waived.

Principal Representations and Warranties.

The merger agreement contains a number of representations and warranties of Supreme, including those regarding due incorporation and good standing, capitalization, corporate authority to enter into the contemplated transactions, required consents and filings with government entities, absence of violation of any material agreement or debt instrument, financial statements, information supplied for use in this information statement/prospectus, absence of changes or events, compliance with law, brokers and advisors, and taxes.

The merger agreement also includes a number of representations and warranties of Coronation, including those regarding due incorporation and good standing, capitalization, corporate authority to enter into the contemplated transactions, required consents and filings with government entities, reports filed with the Securities and Exchange Commission, financial statements, information supplied for use in this information statement/prospectus, litigation, taxes, no payment to employees, officers or directors, compliance with laws, absence of violation of any material agreement or debt instrument, brokers and advisors and state takeover statutes.

Many of these representations and warranties are subject to a material adverse effect qualifier, which, for purposes of the merger agreement, means, with respect to Coronation or Supreme, as the case may be, a material adverse effect on the business, assets, liabilities, results of operations, condition (financial or otherwise) or prospects of either party and its subsidiaries, taken as a whole.

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The representations and warranties contained in the merger agreement will not survive the merger, but they form the basis of conditions to Coronation's and Supreme's obligations to complete the merger.

Conditions to the Consummation Of The Merger.

Conditions to Each Party's Obligations to Effect the Merger. Each party's obligation to consummate the merger is subject to the satisfaction or waiver of the following conditions:

  (a) Shareholder Approvals. The irrevocable consent of the holders of a majority of the outstanding shares of each company delivered on filing this information statement/prospectus with the Securities and Exchange Commission will be in full force and effect and will constitute the requisite consent of the stockholders of each party to the merger and the adoption of the merger agreement under their respective governing corporate laws and their articles of incorporation and bylaws.
  (b) Form S-4 Registration Statement. The registration statement, of which this information statement/prospectus is a part, will have become effective under the Securities Act of 1933 and all applicable state securities laws and will not be the subject of any stop order or proceedings seeking a stop order and no stop order or similar restraining order will be threatened or entered by the Securities and Exchange Commission or any state securities administration preventing the merger. In addition, 20 business days must have elapsed since this information statement/prospectus was mailed to Supreme' stockholders.
  (c) No Injunctions or Restraints. No judgment, order, decree, statute, law, ordinance, rule or regulation entered, enacted, promulgated, enforced or issued by any court or other governmental entity of competent jurisdiction or other legal restraint or prohibition will be in effect preventing the consummation of the merger.

Additional Conditions to Obligations of Coronation. The obligation of Coronation to consummate the merger is further subject to the satisfaction of the following additional conditions, which may be waived in writing exclusively by Coronation:

  (a) Representations and Warranties. The representations and warranties of Supreme included in the merger agreement to the extent qualified as to a material adverse effect will be true and correct in all respects, and to the extent the representations are not qualified as to a material adverse effect will have been true and correct in all material respects as of the date of the merger agreement and at and as of the effective time of the merger, as if made at and as of that time except to the extent expressly made as of an earlier date, in which case on that date. Supreme will have delivered to Coronation an officer's certificate, in form and substance satisfactory to Coronation and its counsel, relating to the matters addressed in this clause (a) and clauses (b) and (c) below.

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  (b) Performance of Obligations of Supreme. Supreme will have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing of the merger.
  (c) No Material Adverse Change. Since the date of the merger agreement there will not have occurred any material adverse change in the business, assets, liabilities, results of operations, condition (financial or otherwise) or prospects of Supreme and its subsidiaries, taken as a whole.

Additional Conditions to Obligations of Supreme. The obligation of Supreme to effect the merger is subject to the satisfaction of each of the following additional conditions, any of which may be waived in writing exclusively by Supreme:

  (a) Representations and Warranties. The representations and warranties of Coronation included in the merger agreement to the extent qualified as to a material adverse effect will be true and correct in all respects, and to the extent the representations are not qualified as to a material adverse effect will have been true and correct in all material respects, as of the date of the merger agreement and at and as of the effective time of the merger, as if made at and as of that time except to the extent expressly made as of an earlier date, in which case on that date. Coronation will have delivered to Supreme an officer's certificate, in form and substance satisfactory to Supreme and its counsel, relating to the matters addressed in this clause (a) and clauses (b) and (c) below.
  (b) Performance of Obligations of Coronation. Coronation will have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing of the merger.
  (c) No Material Adverse Change. Since the date of the merger agreement there will not have occurred any material adverse change in the business, assets, liabilities, results of operations, condition (financial or otherwise) of Coronation.

Termination of the Merger Agreement.

The merger agreement may be terminated at any time prior to the effective time of the merger:

  (a) by mutual written consent of Coronation and Supreme;
  (b) by Supreme, if Coronation shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the merger agreement, which breach is not cured by December 31, 2003;
  (c) by Coronation, if Supreme shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the merger agreement, which breach is not cured by December 31, 2003;
  (d) by either Coronation or Supreme if the merger has not been consummated by December 31, 2003; provided, however, the right to terminate the merger agreement under this clause (b) will not be available to any party whose breach of any obligation under the merger agreement resulted in the failure of the merger to occur on or before that date;

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Expenses of Merger.

Supreme has agreed to pay all expenses incurred in connection with the merger, other than the preparation of financial statements, SEC filings, exhibits, etc. of Coronation.

Related Transactions to Merger

Name Change.

Coronation has agreed to change its name concurrently with closing the merger agreement. The new name "Supreme Realty Investments, Inc." is intended to convey more clearly a sense of Coronation's business after the merger with Supreme. Approval of the name change requires the affirmative consent of at least a majority of the outstanding shares of Common Stock of Coronation. 100% of the shares of common stock of Coronation have been voted by consent resolution in support of this action.

Appointment of New Slate of Directors.

Under the terms of the merger agreement, Mr. Harry Miller will resign from the board of directors of Coronation and Messrs. Thomas Elliott, Jean LeRoy, and Elbert Shaw will be appointed as new directors of Coronation at the time of closing the merger. The appointment of the new directors at the time of closing the merger has been approved by consent resolution of 100% of the shares issued and outstanding. (See Voting and Management Information for complete information about Messrs. Elliott, LeRoy, and Shaw ).

Issuance of Additional Shares of Coronation.

The board of directors of Supreme and Coronation have agreed to issue 1,650,000 shares of the common stock of Coronation to two parties, Mr. Nick Segounis (300,000 shares) and SG Financial Services Group (1,350,000 shares) . These shares will qualified for under a separate registration statement and be issued to Mr. Nick Segounis and SG Financial Services Group, which is wholly-owned by Mr. John Coleridge, on or shortly after the closing of the merger agreement. These two parties were integral in introducing Supreme and Coronation to one another.

Cancellation of 3,650,000 Shares of Coronation.

Mr. Harry Miller has agreed to return to Coronation's treasury for cancellation 3,650,000 shares of common stock he acquired on March 2, 2000. Mr. Miller will retain 1,350,000 shares of common stock of Coronation of the 5,000,000 shares he previously held. Mr. Miller is currently the sole director, officer and stockholder of Coronation.

Qualification of Shares Held by Mr. Miller for Resale.

Mr. Harry Miller, Coronation's sole officer, director and stockholder just prior to the merger will hold 1,350,000 shares of common stock of Coronation on closing of the merger agreement. This number will represent 4.5% of the total issued and outstanding shares of Coronation at that time. Although Mr. Miller acquired these shares on March 2, 2000, over three years ago, he is unable to sell these securities pursuant to Section 4(1) or Rule 144 of the Securities Act of 1933 as Coronation was a blank check company at the time he acquired these shares.

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Section 4(1) and Rule 144 provide an exemption from the registration requirements of the Securities Act of 1933 when reselling securities acquired in a private transaction or securities which are held by directors, officers, 10% holders or other affiliates. The exemption is available subject to certain hold periods and informational requirements being met. If Coronation had been an operational company versus a blank check company at the time Mr. Miller acquired his shares in Coronation he would be able to sell approximately 299,879 shares per quarter on close of the merger agreement pursuant to Rule 144.

In a letter to NASD Regulation, Inc. dated January 21, 2000, the Securities and Exchange Commission staff advised that persons who hold securities in blank check companies are probably underwriters of those securities. As a result, the only way securities of a blank check company may be resold is through registration under the Securities Act of 1933. It is for this reason the parties have agreed to register for resale the 1,350,000 shares of common stock of Coronation Mr. Miller will continue to hold after the close of the merger agreement under a separate registration statement to this Form S-4..

Mr. Miller may chose to sell all or none of the shares he holds in negotiated private transactions or wait until the shares of Coronation are quoted for trading on a national market or quotation system and then offer his stock at prevailing market prices, or again at privately negotiated prices. There can be no certainty that the shares of Coronation will ever trade in a public market.

Voluntary Escrow Agreement

The stockholders of Supreme and Coronation have agreed to enter into a voluntary escrow agreement on close of the merger. The escrow agreement is being entered into in order to assist management in raising funds either through future securities offerings or traditional bank financing. The stockholders have agreed to a release formula whereby 25% of their stockholdings will be released immediately; thereafter, 75% of their stockholdings will be held in escrow will not be released until Coronation has obtained $ 3,000,000 in new funding to advance its business plans. After this initial funding has been obtained 25% of the total amount number of shares held in escrow will be released immediately on a pro rata basis every three months until no shares remain in escrow. The Supreme stockholders will be the owners of record of the escrow shares and will be entitled to all rights as holders of such shares (including voting and dividend rights), but will not be able to transfer such shares until the certificates are released by the escrow agent. The escrow agreement will terminate when all of the shares of Coronation common stock held in escrow have been released and distributed to Supreme's stockholders.  A copy of the escrow agreement has been attached as Exhibit 4.2.

Description of Securities

Common Stock.

Coronation is authorized to issue 100,000,000 shares of common stock, par value $0.00001 per share. Coronation has no other classes of stock. As of December 5 , 2003, Coronation had outstanding 5,000,000 shares of common stock. All shares of the common stock are equal to each other with respect to voting, dividend rights and liquidation rights.

- 24 -


Special meetings of the stockholders may be called by the President or board of directors of Coronation, or on the request of holders of at least ten percent of the outstanding voting shares. Stockholders of shares of the common stock are entitled to one vote at any meeting of the stockholders for each share of the common stock they own as of the record date fixed by the board of directors. At any meeting of stockholders, a quorum consists of fifty percent plus one of the outstanding shares of the common stock of Coronation entitled to vote, represented in person or by proxy.

There is no conversion, pre-emptive or other subscription rights or privileges with respect to any share. Reference is made to the certificate of incorporation and bylaws of Coronation as well as to the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of shares in the capital stock of Coronation. It should be noted that the Bylaws may be amended by the board of directors without notice to the stockholders.

Non-Cumulative Voting.

The shares of the common stock of Coronation do not have cumulative voting rights, which means that the holders of more than fifty percent of the shares of the common stock voting for election of directors may elect all the directors if they choose to do so. In such event, the holders of the remaining shares aggregating less than fifty percent will not be able to elect directors.

Dividends.

The payment of dividends by Coronation, if any, in the future, rests within the discretion of its Board of Directors and will depend, among other things, on its earnings, its capital requirements and its financial condition, as well as other relevant factors. Coronation has not paid a cash or stock dividend and does not anticipate paying any cash or stock dividends in the foreseeable future. (See Risk Factors).

Transfer Agent.

The transfer agent for the common stock of Coronation is Nevada Agency & Trust Co., 50 West Liberty Street, Suite 880, Reno, Nevada 89501. After the merger, the transfer agent will be Interstate Transfer Company of 6084 South 900 East, Suite 101, Salt Lake City, Utah 84121.

Comparison of Stockholder Rights

A summary comparison of material differences between the rights of a Coronation stockholder under Coronation's articles of incorporation and bylaws (left column) and the rights of a Supreme stockholder under Supreme's current certificate of incorporation and bylaws (right column) is shown below. These summaries are not complete. We encourage stockholders to refer to the relevant portions of Coronation's articles of incorporation and bylaws, and Supreme's current certificate of incorporation and bylaws and the relevant provisions of Nevada and Illinois corporate law, respectively.

- 25 -


Coronation

 

Supreme

     
General
Coronation is a Nevada corporation subject to the provisions of the Chapter 78 of the Nevada Revised Statutes.   Supreme is a Illinois corporation subject to the provisions of the Business Corporation Act of the State of Illinois.
The rights of Coronation stockholders are governed by Coronation's articles of incorporation and bylaws, in addition to Nevada law.   The rights of Supreme stockholders are governed by Supreme's articles of incorporation and bylaws, in addition to Illinois law.
     
Amendment of Articles/Certificate of Incorporation
The articles of incorporation and by-laws of Coronation are silent as to amendment of the articles of incorporation. Under Nevada law, amendment of the articles of incorporation requires: (1) an authorization by the board; followed by (2) notification to all stockholders setting forth the proposed amendment; and (3) a vote of the majority of all outstanding voting shares.   Supreme's articles of incorporation and bylaws may be amended by the shareholders in accordance with a duly adopted resolution of the board of directors. Under Illinois law, amendment of the articles of incorporation requires: (1) an authorization by the board; followed by (2) a vote of the majority of all outstanding voting shares and a majority of all outstanding shares entitled to vote thereon as a class.
 
Directors    
Number    
The articles of Coronation provide that the number of directors shall be not more than nine nor less than one, with the actual number to be determined by the board of directors   Bylaws of Supreme provide that the number of directors shall be no less than one and no more than ten, with the actual number to be determined prior to the election of directors at the annual meeting of stockholders.
The current number of directors is one (1).   The current number of directors is two (2).
 
Removal
Nevada laws provide that directors may be removed with or without cause by a vote of stockholders holding two-thirds of the outstanding shares entitled to vote.   The Supreme bylaws provide that directors may be removed either with or without cause by a majority of the shares entitled to vote in the election of directors.
 
Vacancies
The Coronation bylaws provide that a vacancy occurring in the board of directors may be filled by a majority of the remaining directors, even if less than a quorum. The board of directors may elect a director at any time to fill any vacancy.   The Supreme bylaws provide that a vacancy on the board of directors may be filled by vote of the Supreme board of directors. If, however, the number of directors is less than a quorum, vacancies may be filled by vote of a majority of the directors then in office.
 

- 26 -


 
Special Meetings Of Stockholders
The Coronation bylaws provide that a special meeting of the stockholders may be called in accordance with the articles and the laws of Nevada.   The Supreme bylaws provide that a special meeting of stockholders for any purpose may be called at any time by:
  • the chief executive officer;
  • request of a majority of Supreme' board of directors; or
  • Supreme' corporate secretary upon the written request of the holders of not less than 25% of the shares of stock outstanding entitled to vote.
     
Stockholder Action Without Meeting
The Coronation bylaws provide that any action which may be taken at a meeting of the stockholders may be taken without a meeting if a consent resolution in writing, setting forth the action so taken, shall be signed by a majority, or greater if required to pass that action, by the stockholders entitled to vote.   The Supreme bylaws provide that any action required or permitted to be voted on may be consented to in writing without a meeting so long as such written consent sets forth the action so taken and is signed by the holders of outstanding shares entitled to vote thereon having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

Accounting Treatment of the Merger

On closing of the merger agreement, based on management's consultation with the auditors for Supreme and the auditors of Coronation, it appears that the proper accounting treatment is a so-called "reverse acquisition," whereby Supreme will account for the transaction as a purchase of Coronation. Supreme is deemed to be the "acquirer" due to the common stockholders of Supreme ultimately controlling the reorganized company.

The merger will be treated as a "purchase" for accounting purposes.

Federal Income Tax Consequences

The following discussion is limited to the material federal income tax consequences of the proposed merger and does not discuss state, local, or foreign tax consequences or all of the tax consequences that might be relevant to an individual stockholder of Supreme. Mr. Warren Soloski, Esq., a licensed securities and tax attorney practicing in Los Angeles, California, has provided Supreme with an opinion as to the tax consequences of the merger, it is his opinion given the facts presented that the merger will qualify for federal income tax purposes as a tax free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"). As such, Coronation and Supreme will not recognize a gain or loss as a result of the merger. Nor will the stockholders of Coronation and Supreme recognize a gain or loss.

- 27 -


These conclusions are based on the federal income tax laws currently in effect, including the Internal Revenue Code of 1986, as amended, final and proposed Treasury Regulations, published rulings and administrative practices of the Internal Revenue Service and court decisions which are subject to change, and in some cases not binding on the Internal Revenue Service or the court. Any change could alter the tax consequences of this merger. No advance income tax rulings have been sought from the Internal Revenue Service with respect to any of the transactions contemplated under the merger agreement. If the Internal Revenue Service were to successfully challenge Coronation and Supreme's determinations described above, Coronation may be required to recognize taxable income in an amount equal to the value of the shares of common stock of Coronation issued to the stockholders of Supreme.

You Are Urged to Consult Your Own Tax Advisor as to Specific Tax Consequences to You by the Merger Including Tax Return Reporting Requirements and the Applicability and Effect of Federal, State, Local, Foreign, and Other Applicable Tax Laws.

Pro Forma Financial Information

The pro forma unaudited combined consolidated balance sheet and statement of operation for the year ended December 31, 2002 were prepared based upon audited historical statements of operations of Coronation and Supreme after giving effect to the merger as a purchase of Supreme by Coronation using the purchase method of accounting and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined consolidated financial statements.

Under the purchase method of accounting, the total estimated purchase price, calculated as described in Note 1 to these unaudited pro forma condensed combined consolidated financial statements, is allocated to the net tangible and intangible assets of Supreme acquired in connection with the merger, based on an estimate of their fair values as of the completion of the merger.

The accompanying pro forma combined condensed consolidated financial statements are provided for informational purposes only. They are not necessarily indicative of the results that will be achieved for future periods. The accompanying pro forma condensed consolidated financial statements do not purport to represent what Coronation's results of operations or financial position would actually have been if the merger had, in fact, occurred on December 31, 2002. You should read the accompanying pro forma condensed consolidated financial statements and the related notes in conjunction with the audited and unaudited financial statements included elsewhere in this information statement/prospectus.

[Pro Forma Statements Begin on Next Page]

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CORONATION ACQUISITION CORP.

Unaudited Pro Forma Combined Consolidated Balance Sheet

As of December 31, 2002

 
   

Historical

       
   


Coronation

 


Supreme

 

Pro Forma Adjustments

 

Pro Forma
Combined

ASSETS:                
Current Assets:                
Cash & Cash Equivalents $

            -0-       

$

2,000

$

 

$

2,000

Marketable Securities  

-

 

-

     

-

Accounts Receivable  

-

 

-

     

-

Prepaid Expenses  

-

 

-

     

-

Total Current Assets

 

-0-       

 

2,000

     

2,000

Loans & Securities Investments:

               

Investments in Partnerships

 

-

 

-

     

-

Real Estate Loans

 

-

 

-

     

-

Real Estate Loans held for Sale

 

-

 

-

     

-

Investments in Affiliates

 

-

 

100,000

     

100,000

Total Loans & Securities Investments

 

-

 

100,000

     

100,000

Real Estate Investments:                
Existing Properties  

-

 

425,700

     

425,700

New Property Acquisitions  

-

 

1,540,300

     

1,540,300

Gross Properties  

-

 

1,966,000

     

1,966,000

Less: Accumulated Deprec.  

-

 

(18,485)

     

(18,485)

Land & Other Non-Depreciable
Property
 

-

 

-

     

-

Total Real Estate Investments

 

-

 

1,947,515

     

1,947,515

                 

Total Investments before Loss
Reserves

 

-

 

2,047,515

     

2,047,515

Less: Loan Loss Reserves  

-0-        

 

-0-

     

-0-

Total Investments

 

-

 

2,047,515

     

2,047,515

Other Assets:                
Goodwill and Other Intangible
Assets
 

-

 

30,000

     

30,000

Less: Amortization  

-

 

(12,000)

     

(12,000)

Furniture/Fixtures/Equipment  

-

 

11,140

     

11,140

Less: Accumulated Deprec.  

-

 

(1,706)

     

(1,706)

Total Other Assets

 

-0-        

 

27,434

     

27,434

                 

TOTAL ASSETS

 

-0-       

 

2,076,949

     

2,076,949

LIABILITIES:                
Current Liabilities  

446

 

5,064

     

5,510

Notes Payable  

2,390

 

40,600

     

42,990

Mortgages Payable  

-

 

1,255,000

     

1,255,000

Total Liabilities

 

2,836

 

1,300,664

     

1,303,500

STOCKHOLDER'S EQUITY:                
Common Stock  

50

 

19,342

     

1,984

Preferred Stock  

n/a

 

-0-

     

n/a

Additional Paid In Capital  

450

 

722,897

     

740,755

Retained Earnings(Deficit)  

(3,336)

 

34,046

       

Total Stockholder Equity

 

(2,836)

 

885,316

     

882,480

                 

TOTAL LIABILITIES & EQUITY

   $

-0-        

$

2,076,949

$

2,076,949


The accompanying notes are an integral part of these financial statements.

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CORONATION ACQUISITION CORP.

Unaudited Pro Forma Combined Consolidated Statement of Operations

As of December 31, 2002

 
   

Historical

       
   


Coronation

 


Supreme

 

Pro Forma Adjustments

 

Pro Forma
Combined

REVENUES:                

Rental Income

$

-0-       

$

174,864

$

 

$

174,864

Mortgage Interest Income

 

-

 

-0-

     

-0-

Investment Income

 

-

 

-0-

     

-0-

Fee Income

 

-

 

84,835

     

84,835

Gain on Sale of Loans

 

-

 

-0-

     

-0-

TOTAL REVENUES

 

-0-       

 

259,699

     

259,699

                 
EXPENSES:  

-

           

Salaries, Commissions, and Employee Benefits

 

-

 

49,553

     

49,553

General & Administrative

 

2,756

 

26,958

     

29,714

Property Operating Expenses

 

-

 

79,805

     

79,805

Interest Expense

 

-

 

43,723

     

43,723

Depreciation and Amortization

 

-

 

24,885

     

24,885

TOTAL EXPENSES

 

2,756

 

224,924

     

227,680

   

-

           

NET INCOME (LOSS) Before Taxes and Extraordinary Items

 

(2,756)

 

34,775

     

32,019

Provision for Income Taxes

 

-

 

(5,216)

     

(4,802)

Extraordinary Gains(Losses)

 

-

 

-0-

     

-0-

NET INCOME

 

(2,756)

 

29,558

     

27,216

 

             

 

                 
 

Per Share Data -Basic

   

-

           
Weighted Average Common Shares Outstanding  

5,000,000

 

19,342,000

       
                 
NET INCOME(LOSS) Before Taxes and Extraordinary Items

$

(0.00)

$

(0.00)

$

 

$

 
                 

NET INCOME

 

(0.00)

$

(0.00)

$

     
                 
 

Per Share Data -Diluted

Weighted Average Common Shares Outstanding      

19,342,000

       
                 
NET INCOME (LOSS) Before Extraordinary Items

$

(0.00)

$

(0.00)

$

 

$

 

Extraordinary Gains (Losses)

               

NET INCOME

$

(0.00)

$

(0.00)

$

     
                 

The accompanying notes are an integral part of these financial statements.

- 30 -


Notes to Unaudited Pro Forma Consolidated Financial Statements of Coronation

Note 1 -  Basis of Pro Forma Presentation

On March 31, 2003, Coronation and Supreme entered into a merger agreement, which will result in Supreme merging into Coronation with Coronation as the surviving entity in a transaction to be accounted for using the purchase method. For a discussion regarding the primary reasons for this transaction, see "Reasons for the Transaction" on page 22.

The unaudited pro forma combined consolidated financial statements provide for the issuance of approximately 27,000,000 million shares of Coronation's common stock, based upon an exchange ratio of 1.3953 for each share of Supreme outstanding as of December 5 , 2003. The actual number of shares of Coronation common stock to be issued will be determined based on the actual number of shares of Supreme common stock outstanding at the completion of the merger.

On closing of the merger agreement, based on management's consultation with the auditors for Supreme and the auditors of Coronation, it appears that the proper accounting treatment is a so-called "reverse acquisition," whereby Supreme will account for the transaction as a purchase of Coronation. Supreme Property, Inc. is deemed to be the "acquirer" due to the common stockholders of Supreme ultimately controlling the reorganized company.

The merger will be treated as a "purchase" for accounting purposes.

Under the purchase method of accounting, the total estimated purchase price is allocated to Supreme's net tangible and intangible assets based on their estimated fair values as of the date of the completion of the merger. Based on the preliminary valuation, and subject to material changes upon development of a final valuation and other factors as described in the introduction to these unaudited pro forma combined consolidated financial statements on page 20 of this proxy statement-prospectus, the preliminary estimated purchase price is allocated as follows:

           
Cash and cash equivalents  

$

2,000

 
Loans and Securities Investments    

100,000

 
Real Estate Investments    

1,947,515

 
Prepaid and other assets    

0

 
Accounts payable and accrued liabilities    

(5,064

)
Long-term debt    

(1,255,00

)
Other long-term liabilities    

(40,600

)
         
  Net tangible assets assumed  

$

748,851

 
         
Net tangible assets assumed  

$

748,851

 
Amortizable intangible assets    

-0-

 
Goodwill    

30,000

 
        *
         
         
  Total preliminary estimated purchase price allocation  

$

778,851

 
         

Of the total estimated purchase price, a preliminary estimate of $748,851 has been allocated to net tangible assets assumed and approximately $ -0- has been allocated to amortizable intangible assets acquired. The depreciation and amortization related to the fair value adjustment to net tangible assets and the amortization related to the amortizable intangible assets are reflected as pro forma adjustments to the unaudited pro forma condensed combined consolidated statements of operations.

- 31 -


Of the total estimated purchase price, approximately $30,000 has been allocated to goodwill. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill is not deductible for tax purposes.

In accordance with the Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," goodwill resulting from business combinations completed subsequent to June 30, 2001 will not be amortized but instead will be tested for impairment at least annually (more frequently if certain indicators are present). In the event that the management of the combined company determines that the goodwill has become impaired, the combined company will incur an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made.

Pro forma adjustments are necessary to reflect the estimated purchase price, to adjust amounts related to Supreme's net tangible and intangible assets to a preliminary estimate of their fair values, to reflect the amortization expense related to the estimated amortizable intangible assets, to reflect changes in depreciation and amortization expense resulting from the estimated fair value adjustments to net tangible assets, to adjust certain Supreme amounts to conform to Coronation' accounting policies, and to reflect the income tax effect related to the pro forma adjustments.

The unaudited pro forma condensed combined consolidated financial statements do not include any adjustments for liabilities relating to Emerging Issues Task Force (EITF) No. 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." Coronation is in the process of making these assessments and estimates of these costs are not currently known. The expected result of recording liabilities relating to EITF No. 95-3 will be primarily related to accrued liabilities (severance and facilities costs) with an offsetting increase in goodwill.

Coronation has not identified any pre-acquisition contingencies where the related asset, liability or impairment is probable and the amount of the asset, liability or impairment can be reasonably estimated. Prior to the end of the purchase price allocation period, if information becomes available which would indicate it is probable that such events have occurred and the amounts can be reasonably estimated, such items will be included in the purchase price allocation.

Note 2 -Pro Forma Adjustments

The pro forma adjustments included in the unaudited pro forma condensed combined consolidated financial statements are as follows:  

     
(a)   Adjustment to record the difference between the preliminary estimate of the fair value and the historical amount of Supreme's inventory of real estate property. An adjustment to the statement of operations has not been recorded as it does not have a continuing impact on the business.
 

- 32 -


     
(b)   Adjustment to the deferred tax assets based on a preliminary estimate of the tax assets which can be utilized by the combined company and to reflect the deferred tax liability primarily resulting from the pro forma adjustments related to intangible assets.
     
(c)   Adjustment to record the difference between the preliminary estimate of the fair value and the historical amount of Supreme's property and equipment and the resulting adjustment to depreciation expense.
(d)   Adjustments to eliminate historical intangible assets of Supreme and record the decrease in amortization expense.
     
(e)   Adjustment to reflect the preliminary estimate of the fair value of goodwill.
     
(f)   Adjustment to reflect the estimated direct transaction costs.
     
(g)   Adjustment to record the present value of certain other long-term liabilities.
     
(h) Adjustment to record the income tax effect of the pro forma adjustments and reflect the tax benefit associated with the Supreme net loss.
     
(i) Adjustment to eliminate capitalized debt issuance costs of Supreme and the related decrease in amortization expense.

Note 3 -  Pro Forma Earnings Per Share

The pro forma basic and diluted earnings per share are based on the weighted average number of shares of Coronation common stock outstanding and weighted average number of Supreme common stock outstanding multiplied by the exchange ratio. The weighted average number of Coronation diluted shares has been adjusted to reflect cancellation of 3,650,000 shares of common stock and the issuance of 1,650,000 shares to two unrelated parties at the time of the merger closing.

Selling Stockholders

In general the persons to whom we issue securities under this registration statement will be able to resell Coronation's securities in the public market (assuming one develops) without further registration and without being required to deliver a prospectus. However, certain persons who receive Coronation's securities may want to resell those securities in distributions that would require the delivery of a prospectus. With the consent of the board of directors of Coronation, this prospectus may be used by selling stockholders who may wish to sell securities. As used in this prospectus, "selling security holders" may include donees, distributees and pledgees of securities received from a named selling security holder. The board of directors may limit its consent to a specified time period and subject its consent to certain limitations and conditions, which may vary by agreement.

- 33 -


Selling security holders may sell securities from time to time in one or more of the following transactions:

  •  
through any securities exchange that may quote the common stock of Coronation in the future;
  •  
in the over-the-counter market;
  •  
in transactions other than on such exchange or in the over-the-counter market including negotiated transactions and other private transactions);
  •  
in short sales (sales of shares completed by the delivery of borrowed stock) of the common stock, in transactions to cover short sales or otherwise in connection with short sales;
  •  
pledge to secure debts and other obligations or on foreclosure of a pledge;
  •  
through put or call options, including the writing of exchange-traded call options, or other hedging transactions related to the common stock; or
  •  
in a combination of any of the above transactions.

Selling security holders may enter into hedging transactions from time to time in which a selling security holder may:

  •  
in a combination of any of the above transactions.
  •  
enter into transactions with a broker-dealer or any other person in connection with which such broker-dealer or other person will engage in short sales of common stock, in which case such broker-dealer or other person may use shares of common stock received from the selling security holder to close out its short positions
  •  
sell common stock short itself and redeliver shares offered by this prospectus to close out its short positions or to close out stock loans incurred in connection with their short positions;
  •  
enter into option or other types of transactions that require the selling security holder to deliver common stock to a broker-dealer or any other person, who will then resell or transfer the common stock under this prospectus; or
  •  
loan or pledge the common stock to a broker-dealer or any other person, who may sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares under this prospectus.

Selling security holders may use broker-dealers or other persons to sell their shares in transactions that may include one or more of the following:

  •  
loan or pledge the common stock to a broker-dealer or any other person, who may sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares under this prospectus.
  •  
a block trade in which a broker-dealer or other person may resell a portion of the block, as principal or agent, in order to facilitate the transaction;

- 34 -


  •  
purchases by a broker-dealer or other person, as principal, and resale by the broker-dealer or other person for its account; or
  •  
ordinary brokerage transactions and transactions in which a broker solicits purchasers.

Resales by selling security holders may be made directly to investors or through securities firms acting as underwriters, brokers or dealers. When resales are to be made through a securities firm, the securities firm may be engaged to act as the selling security holder's agent in the resale of the shares by the selling security holder, or the securities firm may purchase securities from the selling security holder as principal and thereafter resell the securities from time to time. The fees earned by or paid to the securities firm may be the normal stock exchange commission or negotiated commissions or underwriting discounts to the extent permissible. Securities may be sold at a fixed offering price, which may be changed, at the prevailing market price at the time of sale, at prices related to such prevailing market price or at negotiated prices. The securities firm may resell the securities through other securities dealers, and commissions or concessions to those other dealers may be allowed. We and such selling security holders may indemnify any securities firm participating in such transactions against certain liabilities, including liabilities under the Securities Act of 1933 and may reimburse them for any expenses in connection with an offering or sale of securities. We may also agree to indemnify the selling security holder against any such liabilities or reimburse them for expenses. Profits, commissions and discounts on sales by persons who may be deemed to be underwriters within the meaning of the Securities Act of 1933 may be deemed underwriting compensation under the Securities Act of 1933.

Selling security holders may also offer shares of common stock covered by this information statement/prospectus by means of prospectuses under other registration statements or pursuant to exemptions from the registration requirements of the Securities Act of 1933, including sales that meet the requirements of Rule 144 or Rule 145(d) under the Securities Act of 1933. Selling security holders should seek the advice of their own counsel about the legal requirements for any sales by them.

The terms of the acquisition of shares of common stock by the selling security holder may include a provision for the sharing or reallocation of the selling security holder's costs in connection with the resale of the securities, including the cost of registering the securities issued in the acquisition and preparing and printing the amendment or supplement, commissions and other costs of resale.

This prospectus will be amended or supplemented, if required by the Securities Act of 1933 and the rules of the Securities and Exchange Commission, to disclose the name of the selling security holder, the participating securities firm, if any, the number of shares of common stock involved and other information concerning the resale, including the terms of any distribution, including the names of any underwriters, brokers, dealers or agents and any discounts, commissions, concessions or other items constituting compensation. We may agree to keep the registration statement relating to the offering and sale by the selling security holders of Coronation's securities continuously effective until a fixed date or the date on which the shares may be resold without registration under the Securities Act of 1933.

Selling stockholders should be aware that the anti-manipulative rules under the Securities Exchange Act of 1934, including Regulation M, may apply to their sales in the market.

- 35 -


Regulation M consists of six rules. Rule 100 is a definitional rule. Rule 101 covers the activities of underwriters, broker-dealers, and others participating in a distribution. Rule 102 governs the activities of issuers and selling security holders. Rule 103 pertains to Nasdaq passive market making. Rule 104 governs stabilization transactions and certain post-offering activities by the underwriters, and Rule 105 governs short selling in anticipation of a public offering. With certain exceptions, Regulation M precludes us and any selling stockholder, any affiliated purchasers and any broker-dealer or other person who participates in a distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchase made in order to stabilize the price of a security in connection with a market offering. We strongly recommend selling stockholders to consult with their own legal counsel to ensure compliance with Regulation M. All of the foregoing may affect the marketability of the shares of common stock of Coronation post-merger.

Interests of Named Experts and Counsel

Derwin Richardson, Esq., corporate counsel for Supreme, is to receive 139,593 shares of the common stock of Coronation post-merger as consideration for legal services rendered in connection with his involvement in the preparation of this information statement/prospectus.

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

The merger agreement described in this information statement/prospectus provides for Coronation to indemnify and hold harmless, any officer, director, or employees of Coronation or Supreme against losses, claims, liabilities, expenses (including reasonable attorneys' fees and expenses), judgments, fines and amounts paid in settlement in accordance herewith in connection with any threatened or actual claim, action, suit, proceeding or investigation.

In the event that a claim for indemnification against such liabilities (other than the payment by Coronation of expenses incurred or paid by a director, officer or controlling person of Coronation in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.

Coronation will, unless in the opinion of its counsel, that the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

- 36 -


INFORMATION ABOUT CORONATION ACQUISITION CORP.

Description of Business

Formation.

Coronation was incorporated on February 9, 2000 in the State of Nevada, to engage in any lawful corporate undertaking, including, but not limited to, acquiring a business through a merger and acquisition.

Coronation's Business Pre-Merger.

Coronation has been in the developmental stage since inception and has no operations to date. Coronation has never commenced any operational activities other than issuing shares to its sole stockholder and looking for a suitable merger or acquisition candidate. As such, Coronation can be defined as a "shell" or "blank check" company, whose sole purpose at this time is to locate and consummate a merger or acquisition with a private entity.

Coronation will adopt the business of Supreme on successfully closing the merger agreement.

Governmental Regulation.

Sarbanes-Oxley Act of 2002. On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, or the SOA. SOA imposes a wide variety of new requirements on both U.S. and non-U.S. companies, that file or are required to file periodic reports with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Many of these new requirements will effect Coronation and its board of directors. For instance, under SOA Coronation is required to:

  •  
form an audit committees in compliance with SOA;
  •  
have its chief executive office and chief financial officer certify its financial statements;
  •  
ensure its directors and senior officers forfeit all bonuses or other incentive-based compensation and profits received from the sale of its securities in the twelve month period following initial publication of any of its financial statements that later require restatement;
  •  
disclose any off-balance sheet transactions as required by SOA;
  •  
prohibit all personal loans to directors and officers;
  •  
insure directors, officers and 10% stockholders file their Forms 4's within two days of a transaction;
  •  
adopt a code of ethics and file a Form 8-K when ever there is a change or waiver of this code; and
  •  
insure Coronation's auditor is independent as defined by SOA.

- 37 -


SOA has required Coronation to review its current procedures and policies to determine whether they comply with the SOA and the new regulations promulgated under SOA. Coronation will continue to monitor its compliance with all future regulations that are adopted under the SOA and will take whatever actions are necessary to ensure that Coronation is in compliance.

Investment Company Act of 1940. Although Coronation is subject to regulation under the Securities Act of 1933 and the Securities Exchange Act of 1934, management believes Coronation will not be subject to regulation under the Investment Company Act of 1940 insofar as Coronation will not be engaged in the business of investing or trading in securities. In the event that Coronation engages in a business combination which result in it holding passive investment interests in a number of entities, it could be subject to regulation under the Investment Company Act of 1940. In such an event, Coronation would be required to register as an investment company and could be expected to incur significant registration and compliance costs. Coronation has obtained no formal determination from the Securities and Exchange Commission as to the status of Coronation under the Investment Company Act of 1940 and, consequently, any violation of such Act would subject us to material adverse consequences. Coronation presently believes it is exempt from the Investment Company Act of 1940 via Regulation 3a-2 thereto.

Investment Advisor Act of 1940. Coronation is not an "investment adviser" under the Federal Investment Adviser Act of 1940, which classification would involve a number of negative considerations. Accordingly, Coronation does not and will not furnish or distribute advice, counsel, publications, writings, analysis or reports to anyone relating to the purchase or sale of any securities within the language, meaning and intent of Section 2(a)(11) of the Investment Adviser Act of 1940, 15 U.S.C.

Employees.

Coronation has had no full time or part time employees since its inception. Mr. Harry Miller, President of Coronation, has allocated a portion of his time to the activities of Coronation without compensation. Mr. Miller will cease to be a director or officer or providing his time to the business of Coronation on close of the merger agreement. The director, officers and employees of Supreme will become the directors, officers and employees of Coronation on close of the merger. Further details about Supreme's employees may be found under the heading "Information About Supreme Property, Inc. -Employees" in this information statement/prospectus.

Reports to Securities Holders.

Coronation is required to file annual reports on Form 10-KSB and quarterly reports on Form 10-QSB with the Securities Exchange Commission on a regular basis, and will be required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a current report on Form 8-K.

You may read and copy any materials Coronation files with the Securities and Exchange Commission at their Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

- 38 -


Additionally, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

Description of Property

Coronation currently maintain a mailing address at P.O. Box 741, Bellevue, Washington 98009, which is the address of its current President. Coronation has not paid for the use of this mailing address.

Coronation's office address will change to the address of Supreme on close of the merger agreement. It will also be deemed to own the properties currently held by Supreme which are outlined under "Information About Supreme Property, Inc. -Description of Property" found elsewhere in this information statement/prospectus.

Legal Proceedings

Coronation has not been party to any legal or regulatory proceedings since its inception nor is Coronation aware of any such proceedings pending.

Market Price of Securities and Related Stockholder Matters

The Common Stock of Coronation is not listed on a public market. It is unlikely that the Common Stock of Coronation will be accepted for trading on any exchange or quotation system until completion of the merger. Management anticipates that if any such trading market develops after the merger it will be on one the over the counter markets and will be considered a "penny stock". There is no assurance that a trading market will ever develop or, if such a market does develop, that it will continue for the common stock of Coronation. At present there are no common stock or other securities that are: (i) subject to outstanding options or warrants to purchase, or securities convertible into, common equity of the registrant; (ii) that could be sold pursuant to Rule 144 under the Securities Act or that the registrant has agreed to register under the Securities Act for sale by security holders; or (iii) that is being or has been proposed to be, publicly offered by the registrant unless such common equity is being offered pursuant to an employee benefit plan or dividend reinvestment plan) , the offering of which could have a material effect on the market price of the registrant's common equity.

As of December 5, 2003, Coronation has one stockholder of record holding 5,000,000 common shares.

Dividend Policy.

Coronation has not declared or paid any cash dividends since inception. Although there are no restrictions that limit Coronation's ability to pay dividends on its common shares, Coronation intends to retain future earnings, if any, for use in the operation and expansion of its new business adopted in connection with the merger and does not intend to pay any cash dividends in the foreseeable future.

- 39 -


Recent Sales of Unregistered Securities.

On March 2, 2000, Coronation issued 5,000,000 shares of its common stock to Harry Miller, the President of Coronation at the time of issue, for an aggregate total of $500. Coronation relied on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended, for the issuance of these securities.

All of these shares are considered "restricted" shares as defined in Rule 144 under the Securities Act of 1933, as amended and may never be sold under Rule 144 as they were issued out at the time Coronation was considered a "blank check" company. This opinion was given by the Securities and Exchange Commission staff in a letter to NASD Regulation, Inc. dated January 21, 2000, where in it advised, that while the facts and circumstances are critical, resales of securities acquired in a blank check company, other than through a registration and conformance with the blank check offering rules of Rule 419 of the Securities Act of 1933, cannot be sold under Rule 144. It is for this reason 1,350,000 shares of the 5,000,000 shares previously issued to Mr. Miller three years ago are being registered for resale under this information statement/prospectus.

Equity Compensation Plan

We do not have any securities authorized for issuance under any equity compensation plans.

Financial Statements

The audited financial statements of Coronation for the year ended December 31, 2002, the unaudited financial statements of Coronation for the quarter ended September 30, 2003, are included below:

- 40 -


 

Financial Statements

 

 

CORONATION ACQUISITION CORP.
(A DEVELOPMENT STAGE COMPANY)

 

FINANCIAL STATEMENTS

DECEMBER 31, 2002 AND 2001

- 41 -


 

CORONATION ACQUISITION CORP.

TABLE OF CONTENTS  PAGE #  
     
Independent Auditor's Report
 

 1
 

 
Financial Statements

 

 

 
Balance Sheet    

2

 

 
Statement of Operations

3

 

 
Statement of Stockholders' Equity

 4

 

 
Statement of Cash Flows 

5

 
   

 

 
Notes of Financial Statements

6 - 7

 

       

 

- 42 -


GEORGE STEWART, CPA
2301 SOUTH JACKSON STREET, SUITE 101-G
SEATTLE, WASHINGTON 98144
(206) 328-8554 FAX(206) 328-0383
 

INDEPENDENT AUDITORS REPORT

 

To the Board of Directors
Coronation Acquisition Corp.
Bellevue, Washington

I have audited the accompanying balance sheets of Coronation Acquisition, Corp., (A Development Stage Company) as of December 31, 2002 and 2001, and the related statements of operations, stockholders' equity and cash flows for the years ended December 31, 2002 and 2001 and February 9, 2000, (inception), to December31, 2002. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards in the United States. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Coronation Acquisition, Corp., (A Development Stage Company) as of December 31, 2002 and 2001, and the results of its operations and cash flows for the years ended December 31, 2002 and 2001 and February 9, 2000, (inception), to December 31, 2002 in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note #4 to the financial statements, the Company has had no operations and has no established source of revenue. This raises substantial doubt about its ability to continue as a going concern. Management's plan in regard to these matters is also described in Note #4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

s/ George Stewart
March 25, 2003

1

- 43 -


Coronation Acquisition Corp.

(A Development Stage Company)

             

Balance Sheet

             
Assets

December

 

December

 
     

31, 2002

 

31, 2001

 
Current Assets
 
 
Cash

$              -

 

$              -

 
     
 
 
                          Total Current Assets

0

 

0

 
           
Other Assets

0

 

0

 
     
 
 
                          TOTAL ASSETS

$              -

$              -



             
Liabilities and Stockholders' Equity        
             
Current Liabilities        
Officers Advances (Note #6)

$       2,390

 

$           80

 
Accounts Payable

446

 

0

 
     
 
 
Total Current Liabilities

2,836

 

80

 
             
Stockholder's Equity        
Common stock, $.00001 par value, authorized        
100,000,000 shares; 5,000,000 shares issued        
and outstanding at December 31, 2002 and        
December 31, 2001 respectively

50

 

50

 
Additional paid in capital

450

 

450

 
Deficit accumulated during the development        
stage

(3,336)

 

(580)

 
     
 
 
Total Stockholder's Equity (Deficit)

(2,836)

 

(80)

 
             
             
TOTAL LIABILITIES AND        
STOCKHOLDER'S EQUITY (DEFICIT)

$             -

$             -

See notes to financial statements

2

- 44 -


 

Coronation Acquisition Corp.

(A Development Stage Company)

             
             

Statement of Operations

           

February 9, 2000

   

Year Ended

 

Year Ended

 

(inception)

   

Dec 31,

 

Dec 31,

 

to Dec 31,

   

2002

 

2001

 

2002

   
 
 
Income          
  Revenue

$                 -

 

$               -

 

$                   -

             
Expenses          
                        General and Administrative

2,756

 

0

 

3,336

   
 
 
                        Total Expenses

2,756

 

0

 

3,336

             
                        Net Loss

$        (2,756)

$               -

$          (3,336)




             
Net Loss per share          
Basic and diluted

($0.0006)

 

$               -

 

$        (0.0007)

             
             
Weighted average number of          
common shares outstanding

5,000,000

5,000,000

5,000,000




             

See notes to financial statements

3

- 45 -


Coronation Acquisition Corp.

(A Development Stage Company)

                 

Statement of Stockholder's Equity

                 
                 
               

Deficit

           

 

 

accumulated

   

Common Stock

 

Additional

 

during

   
 

Paid-in

 

development

   

Shares

 

Amount

 

capital

 

stage

   
 
 
 
                 
March 2, 2000                
issued for cash  

5,000,00

 

$            50

 

$           450

 

$                -

                 
                 
Net loss year ended                
December 31, 2000              

(580)

                 
Balance December 31, 2000

5,000,00

50

450

$         (580)





                 
Net loss year ended                
December 31, 2001              

0

                 
Balance December 31, 2001

5,000,000

$            50

$           450

$         (580)





                 
Net loss year ended                
December 31, 2002              

(2,756)

                 
Balance December 31, 2002

5,000,000

$            50

$           450

$       (3,336)

                 

See notes to financial statements

4

- 46 -



Coronation Acquisition Corp.

(A Development Stage Company)

             
             

Statement of Cash Flows

             
           

February 9, 2000

   

Year Ended

 

Year Ended

 

(inception)

   

Dec 31,

 

Dec 31,

 

to Dec 31,

   

2002

 

2001

 

2002

   
 
 
Cash Flows from Operating Activities          
             
                      Net (Loss)

$      (2,756)

 

$               

 

$      (3,336)

             
                      Adjustments to reconcile net loss to cash          
                      (used) in operating activities          
             
                     Changes in assets and liabilities          
                     Accounts Payable

446

 

0

 

446

                     Officers Notes Payable

0

 

0

 

0

                     Officers Advances Payable

2,310

0

2,310

   
 
 
                     Net Cash (used) in operating results

0

 

0

 

(500)

   
 
 
             
Cash flows from Financing Activities          
                     Proceeds from issuance of common stock

0

 

0

 

500

   
 
 
             
Net increase (decrease) in cash

0

 

0

 

0

             
Cash at Beginning of Period

0

 

0

 

0

   
 
 
Cash at End of Period

$                -

$             -

$               -




See notes to financial statements

5

- 47 -


CORONATION ACQUISITION, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001

 

Note 1 - History and Organization of the Company

The Company was organized February 9, 2000, under the laws of the State of Nevada as Coronation Acquisition, Corp. The company currently has no operations and, in accordance with SFAS # 7, is considered a development stage company.

On March 2, 2000, the Company issued 5,000,000 shares of its $0.00001 par value common stock for cash of $ 500.

Note 2 - Accounting Policies and Procedures

The company has not determined its accounting policies and procedures, except as follows:

The company uses the accrual method of accounting.

Earnings per share is computed using the weighted average number of shares of common stock outstanding.

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid since inception.

In April 1998, the American Institute of Certified Public Accountant's issued Statement of Position 98-5 ("SOP 98-5"), Reporting on the Costs of Start-up Activities which provides guidance on the financial reporting of start-up costs and organization costs. It requires costs of start-up activities and organization costs to be expensed as incurred. SOP 98-5 is effective for fiscal years beginning after December 15, 1998, with initial adoption reported as the cumulative effect of a change in accounting principle.

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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

- 48 -


Note 3 - Warrants and Options

There are no warrants or options outstanding to issue any additional shares of common stock of the Company.

Note 4 - Going Concern

The company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has no current source of revenue. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. It is management's plan to seek additional capital through further equity financing's and seeking necessary bank loans.

Note 5 - Related Party Transactions

The Company neither owns nor leases any real or personal property. Office services are provided without charge by Harry Miller, the sole officer and director of the Company. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The sole officer and director of the Company is involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, he may face a conflict in selecting between the Company and his other business interests. The Company has not formulated a policy for the resolution of such conflicts.

Note 6 - Officers Advances

While the Company is seeking additional capital, an officer of the Company has advanced funds to the Company to pay for any costs incurred by it. These funds are interest free. The balances due Mr. Miller were $ 2,390 and $ 80 on December 31, 2002 and December 31, 2001 respectively.

- 49 -


Unaudited Interim Financial Statements of Coronation Acquisition Corp.

 

CORONATION ACQUISITION CORP

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED FINANCIAL STATEMENTS

 

SEPTEMBER 30, 2003 AND 2002

 

 

- 50 -


CORONATION ACQUISITION CORP


 

TABLE OF CONTENTS

PAGE #


Financial Statements
 
 
     Balance Sheet
 

1

      Statement of Operations
 

2

      Statement of Stockholders' Equity
 

3

       Statement of Cash Flows
 

4

Notes of Financial Statements

5-6




- 51 -


Coronation Acquisition, Corp.
(A Development Stage Company)
 

(Unaudited) Balance Sheet

Assets

Sept. 30,
2003     

Sept. 30,
2002     

December
31, 2002  

December
31, 2001  

 

Current Assets
     Cash

$             -

$             -

$             -

$             -


            Total Current Assets

0

0

0

0

     Other Assets

0

0

0

0


TOTAL ASSETS

$             -

$             -

$             -

$             -

 
         
Liabilities and Stockholders' Equity        
     Current Liabilities        
     Officers' Advances (Note #6)

$             0

$         2,390

$     2,390

$           80

     Accounts Payable

0

0

446

0


            Total Current Liabilities

0

2,390

2,836

80

Stockholders' Equity: Common stock, $.001 par value, authorized 100,000,000 shares; 900,100 shares issued and outstanding at 03/31/03 03/31/02, 12/31/02 and 12/31/01 respectively

Additional paid in capital

Deficit accumulated during the development stage

 

50

450

0

 

50

450

( 2,390 )

 

50

450

(3,336)

 

50

450

(580)


     Total Stockholders' Equity (Deficit)

(500)

( 2,890 )

(2,836)

(80)

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

$             -

$             -

$             -

$             -

See accompanying notes

1

- 52 -


Coronation Acquisition, Corp.
(A Development Stage Company)

(Unaudited) Statement of Operation

 

Nine Months   
Ended Sept. 30,
 2003         

Nine Months   
Ended Sept. 30,
2002        

Year Ended
Dec. 31,
2002   

Year Ended
Dec. 31,
2001    

 
Income        
     Revenue

$                -

$                -

$                -

$                -

Expenses
     General and Administrative

1,858

2,310

2,756

0

 
     Total Expenses

1,858

2,310

2,756

0

     Net Loss

$     (1,858)

$          ( 2,310 )

$      (2,756)

$                0

         
Net Loss per share
     Basic and diluted

$   (0.0000)

$        0.0000

$   ( 0.0006)

$ 0.0000

         
         
Weighted average number of
common shares outstanding


5,000,000


5,000,000


5,000,000


5,000,000

 

See accompanying notes

2

- 53 -


Coronation Acquisition, Corp.
(A Development Stage Company)

(Unaudited) Statement of Stockholders' Equity

 


Common Stock


 

Additional Paid-In Capital

 

Deficit
accumulated
during
development
stage

Shares

Amount  
 
Balance December 31, 2001

5,000,000

$

50

$

450

$

(580)

Net loss nine months ended
     September 30, 2002
           


(210)

Balance September 30, 2002

5,000,000

 

50

 

450

 

(790)

 
Balance December 31, 2002

5,000,000

 

50

 

450

 

(2,276)

Issue for Cash

0

0

0

0

Net loss nine months ended
     September 30, 2003
           

(1,858)

Balance September 30, 2003

5,000,000

 

50

 

450

 

(4,134)


Net loss year ended
     December 31, 2002


(2,276)

Balance December 31, 2002

1,052,600

50

450

(3,336)

 

See accompanying notes

3

- 54 -


Coronation Acquisition, Corp.
(A Development Stage Company)

(Unaudited) Statement of Cash Flows

 

Nine Months   
Ended Sept 30,
2003         

Nine Months   
Ended Sept 30,
2002        

Year Ended
Dec. 31,   
2002   

Year Ended
Dec. 31,   
2001   

 
Cash Flows from Operating Activities        
     Net (Loss)

$       (1,858)

$      ( 2,310 )

$       (2,756)

$                   -

     Adjustments to reconcile net loss
     to cash (used) in operating activities
       
     Changes in assets and liabilities
          Accounts Payable
          Officers Advances Payable


0
0


0
2,310


446
2,310


0
80

 
     Net Cash (used) in operating results

0

0

0

(500)

 
Cash Flows from Financing Activities
     Proceeds from issuance of common stock


0


0


0


500

 
         
Net increase (decrease) in cash

0

0

0

580

Cash at Beginning of Period

0

0

0

0

Cash at End of Period

$                   -

$              0

$                   -

$             580

         

See accompanying notes

4

- 55 -


CORONATION ACQUISITION, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2003 and 2002

 

Note 1 - History and Organization of the Company

The Company was organized February 9, 2000, under the laws of the State of Nevada as Coronation Acquisition, Corp. The company currently has no operations and, in accordance with SFAS #7, is considered a development stage company.

On March 2, 2000, the company issued 5,000,000 share of its $0.00001 par value common stock for cash of $500.


Notes 2 - Accounting Policies and Procedures

The Company has not determined its accounting policies and procedures, except as follows:

The Company uses the accrual method of accounting.

Earnings per share is computed using the weighted average number of shares of common stock outstanding.

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid since inception.

In April 1998, the American Institute of Certified Public Accountant's issued Statement of Position 98-5 ("SOP 98-5"), Reporting on the Costs of Start-up Activities which provides guidance on the financial reporting of start-up costs and organization costs. It requires costs of start-up activities and organization costs to be expensed as incurred. SOP 98-5 is effective for fiscal years beginning after December 15, 1998, with initial adoption reported as the cumulative effect of a change in accounting principle.

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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.


Note 3 - Warrants and Options

There are no warrants or options outstanding to issue any additional shares of common stock of the Company.

 

5

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Note 4 - Going Concern

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has no current source of revenue. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. It is management's plan to seek additional capital through further equity financing's and seeking necessary bank loans.
 

Note 5 - Related Party Transactions

The Company neither owns nor leases any real or personal property. Office services are provided without charge by Harry Miller, the sole officer and director of the Company. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The sole officer and director of the Company is involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, he may face a conflict in selecting between the Company and his other business interests. The Company has not formulated a policy for the resolution of such conflicts.


Note 6 - Officers Advances

While the Company is seeking additional capital, an officer of the Company has advanced funds to the Company to pay for any costs incurred by it. These funds are interest free. The balances due to Mr. Miller were $0 and $290 on September 30, 2003 and September 30, 2002, respectively, Mr. Miller having forgiven the advance of $4,272.

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Management Discussion and Analysis

2002 Business Environment.

The equity markets in 2002 were volatile to say the least. Given the market uncertainty it was difficult for many new and established companies to raise capital. Accounting scandals, new regulatory requirements, September 11th and concerns about America going war added to the tension in the securities market place and the economy in general. As a result, the interest in becoming a public company either through an initial public offering or through a merger with a reporting company was diminished in 2002 over previous years. Many in the securities market anticipate that the markets will remain volatile in 2003. Although Coronation plans to merge with Supreme there can be no guarantee that its new business model will be successful given the current market and business conditions.

On May 10, 2003, pursuant to the terms of the merger agreement, Coronation received $4,700 from Supreme to satisfy its outstanding liabilities.

Plan of Operations.

Coronation was formed to seek, investigate and, if such investigation warrants, merge or acquire an interest in business opportunities presented to it by persons or companies who or which desire to seek the perceived advantages of a Securities Exchange Act of 1934 registered corporation. Coronation did not restrict its search to any specific business, industry, or geographical location and it was open to participate in a business venture of virtually any kind or nature. On March 31, 2003, Coronation entered into a merger agreement with Supreme which it expects to complete by the end of the second quarter of 2003.

Mr. Miller was introduced to Supreme by Nick Segounis and SG Financial Services Group in late February or early March 2003. Mr. Miller was not aware of and did not have a relationship with Supreme prior to this introduction. Mr. Miller has known Mr. Segounis for over twenty years on a social basis.

In March 2003, Mr. Miller received a complete due diligence package on Supreme and its business which included details about its officers and directors, properties, financial plans and capital requirements, audited financial statements, risk factors and competitive position among other things. After review of this material Mr. Miller contacted Mr. Elliott, the President of Supreme to gather further information and to negotiate the terms of the merger agreement signed by the parties March 31, 2003.

On completion of the merger the former stockholders of Supreme will own approximately 89.98% of Coronation. The board of directors of Supreme immediately prior to the merger will be the directors of Coronation and Mr. Miller will resign. Coronation will change its name to "Supreme Realty Investments, Inc." and the business, assets, and liabilities of Supreme will become the business, assets and liabilities of Coronation.  Coronation will operate as real estate operating company with one wholly owned subsidiary, Supreme Capital Funding Inc. There is no plan in the foreseeable future for Coronation to seek qualification as a REIT or a similar tax-advantaged pass through entity post-merger.

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Treatment of Reverse Merger/Acquisition Transaction. The Securities and Exchange Commission considers a reverse merger/acquisition transaction to be a capital transaction in substance, rather than a business combination. That is, the transaction will be equivalent to the issuance of stock by Supreme for the net monetary assets of Coronation, accompanied by a recapitalization. As a result, the post-reverse merger/acquisition comparative historical financial statements for Coronation will be those of Supreme, with appropriate footnote disclosure concerning the changes in the capital structure of the privately-held company effected at the merger closing date.

Coronation's Cash Needs. Coronation's cash needs will be the cash needs of Supreme Property Inc. on closing of the merger as Supreme Property Inc. will be merged into Coronation. If the merger fails to close, Mr. Miller the sole director and officer will continue to advance funds to Coronation as may be required. The only cash requirements of Coronation in that case would be to pay for its audit and auditor review of its financial statements which is estimated to be under $3,000. Coronation currently has no cash on hand.

Changes and Disagreements with Accountants

We have had no change in, or disagreements with, our principal independent accountant during our past two fiscal years or since our inception.

INFORMATION ABOUT SUPREME PROPERTY, INC.

Description of Business

Formation.

Supreme's predecessor, Supreme Property Management & Sales, Inc. was incorporated on March 25, 1998, in the State of Illinois, by Norvella Maddox and John W. Davis, to engage as a privately-held, licensed real estate brokerage and property management firm. Upon Ms. Maddox death in February, 2000, Mr. Davis formed a new company, Supreme Property Management and Development, Inc. to hold his 50% of the predecessor company's assets. In a negotiated settlement with Mr. Davis, Ms. Maddox's heirs received the bulk of the assets of Supreme Property Management and Sales, Inc. and operated under that name from a different location.

In April, 2000, Mr. Davis sold the remaining assets to Thomas Elliott for $36,000. Those assets consisted of furniture and equipment, the company name(Supreme Property Management & Development, Inc.) and logo, and the remaining property management contracts. Furniture/Fixtures/Equipment were valued at $6,000 and the remaining intangibles were valued at $30,000. To avoid the obvious conflict presented by the similar names, Mr. Elliott changed the name to Supreme Property, Inc. in December 2000, and commenced operations in January, 2001. In February, 2002, the State of Illinois granted Supreme Property, Inc. its new articles of incorporation.

Supreme Capital Funding, Inc. was incorporated on April 29, 2002, as a wholly-owned subsidiary of Supreme Property, Inc. , to provide mortgage origination and other mortgage banking services. In January, 2003, Supreme Capital Funding, Inc. applied for a mortgage banking license from the State of Illinois and will commence operations upon issuance of the license. To date, the license application had been approved but is still awaiting issuance. It is through this subsidiary that Supreme intends to invest in mortgage loans and other securities discussed below.

In December, 2002, Supreme discontinued its property management operations to concentrate its efforts on the acquisition of real property for Supreme's own portfolio and the origination and acquisition of mortgage loans through its wholly-owned subsidiary.

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Supreme is considered a development stage company as defined by the Securities and Exchange Commission.

Supreme's Business.

Supreme currently has four principal business activities:

(1) to acquire, operate, and dispose of real properties or interests in real properties;
(2) to provide real estate development services for other property owners;
(3) to make real estate loans directly to borrowers; and
(4) to originate, acquire, sell, and broker real estate loans to and from lending institutions and institutional investors.

Supreme seek to generate income for distribution to its stockholders from a combination of rents, interest, mortgage origination fees, developers' fees, and proceeds from the sale of its investments.

After the merger, the board of directors of Supreme intends to operate the surviving company as a real estate operating company. There is no plan in the foreseeable future for the surviving company to seek qualification as a REIT or a similar tax-advantaged pass through entity post-merger.

Supreme's focus before and after the merger will be to acquire, develop, own and operate investment real estate, principally apartment buildings, office buildings, light industrial facilities, community shopping centers, and special use properties.

Currently, Supreme owns four properties all of which are located in Chicago, Illinois. Supreme intends to diversify its holdings portfolio of investment real estate by acquiring properties throughout the United States and by targeting, as opportunities present themselves, real estate properties in each of the fore mentioned segments.

Total Number of Employees

Supreme operates under the direction of its board of directors and corporate officers. Mr. Thomas Elliott, the chief executive officer and president of Supreme has day-to-day management responsibilities, including identifying prospective property acquisitions, marketing, finance, overseeing third-party managers and general administrative responsibilities. Currently, Supreme has a total of seven (7) full-time and three(3) part-time employees.

Competition

Our apartment building properties compete directly with other multifamily properties and single family homes that are available for rent in the markets in which our properties are located. The apartment building properties also compete for tenants with the new and existing home market. Any office building properties we acquire in the future will compete with numerous alternatives for tenants in the local markets in which they are located. Other community shopping centers, light industrial facilities and residential communities that we may acquire in the future will also compete for tenants with other similar properties in the same local markets.

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In addition, we compete with other investors for acquisitions and development projects, and any such competitors have greater resources than we do, including greater cash resources, greater access to debt and equity markets and greater management and leasing resources and expertise.

Regulation

General. Apartment building properties are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, activity centers and other common areas. Supreme believe that, under present laws, ordinances and regulations, each of its existing properties has the permits and approvals necessary to operate. Commercial and other properties are also subject to regulation.

Americans with Disabilities Act. All of Supreme's properties, as well as any newly developed or acquired properties, must comply with the Americans with Disabilities Act to the extent that the properties are "public accommodations" and/or "commercial facilities" as defined by the statute. Compliance with the Americans with Disabilities Act requirements could require removal of structural barriers to handicapped access in certain public areas of our properties where such removal is readily achievable. The act does not, however, consider residential properties, such as multifamily properties or community-based residential facilities, to be public accommodations or commercial facilities, except to the extent portions of such facilities, such as a leasing office, are open to the public. Commercial properties, such as shopping centers or office buildings are considered public accommodations. To the extent possible through leases, Supreme intends to require that our commercial tenants comply with the Americans with Disabilities Act. Supreme will, of course, remain responsible for compliance with respect to common areas in commercial properties. Although Supreme believes that each of our existing properties are either exempt or substantially complies with all present requirements under the Americans with Disabilities Act and applicable state laws, Supreme may be incorrect in its assessment given the complex nature of the rules and regulations. Noncompliance could result in imposition of fines or an award of damages to private litigants. If required changes involve greater expenditures than Supreme currently anticipates, or if the changes must be made on a more accelerated basis than Supreme anticipates, its ability to pay accrued dividends could be adversely affected. Supreme believes that its competitors face similar costs to comply with the requirements of the Americans with Disabilities Act.

Fair Housing Amendments Act of 1988. The Fair Housing Amendments Act requires multifamily properties first occupied after March 13, 1990 to be accessible to the handicapped. Noncompliance with the act could result in the imposition of fines or an award of damages to private litigants. If our existing properties are not in substantial compliance with applicable laws, Supreme may be responsible for any deficiencies.

Rent Control Legislation. State and local rent control laws in certain jurisdictions limit a property owner's ability to increase rents and to recover from tenants increases in operating expenses and the costs of capital improvements. Enactment of such laws has been considered from time to time in some jurisdictions, although none of the jurisdictions in which Supreme presently operate has adopted such laws. Supreme does not presently intend to develop or acquire multifamily properties in markets that are either subject to rent control or in which rent limiting legislation exists.

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Environmental Matters

Under various federal, state, and local environmental laws, regulations, and ordinances, a current or previous owner of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at such property, and may be held liable to a governmental entity or to third parties for property damage and for investigation and cleanup costs incurred by such parties in connection with the contamination. Such laws typically impose cleanup responsibility without regard to whether the owner or operator knew of, or caused the presence of the contaminants. The costs of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect an owner's ability to sell or rent such real estate or to borrow using such real estate as collateral. In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and costs it incurs in connection with the contamination. Persons who arrange for the disposal or treatment of hazardous or toxic substances may be held liable for the costs of investigation, remediation, or removal of such hazardous or toxic substances at or from the disposal or treatment facility, regardless of whether such facility is owned or operated by such person. Finally, the owner of a site may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site.

Certain federal, state and local laws, regulations and ordinances govern the removal, encapsulation or disturbance of asbestos containing materials when such materials are in poor condition or in the event of building remodeling, renovation or demolition. Such laws may impose liability for the release of such materials and may provide for third parties to seek recovery from owners or operators of real estate for personal injury associated with asbestos. In connection with Supreme's ownership and operation of its properties, Supreme may be potentially liable for costs in connection with these matters.

Supreme believes that its current property holdings are each in compliance in all material respects with all federal, state and local laws, ordinances and regulations regarding hazardous or toxic substances or petroleum products. Supreme has not been notified by any governmental authority, and are not otherwise aware, of any material noncompliance, liability or claim relating to hazardous or toxic substances or petroleum products in connection with any of its properties.

Description of Property

Corporate Office of Supreme

Supreme's offices are located in Chicago, Illinois. Supreme is currently in the third year of a five-year lease at an annual rental of $7,200. Supreme is currently in negotiations with another office building leasing representative for 5,000 square feet of space in Tinley Park, Illinois to house Supreme's headquarters. It is estimated that the annual rental rate will be priced between $14 - $18 per foot plus an allocation of common area expenses. To date, no lease agreement has been reached.

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Investment Policies

Investment policies are established by the Board of Directors with respect to investing in real property interests and loans secured by real property. Such policies may be changed by the directors in response to economic and market conditions without vote of the stockholders, however the Board will promptly notify the shareholders in writing of any such change in policies. The percentage of assets invested in any one type of investment, property, loan, or security is set by the Board of Directors during its annual meeting. Under our current investment policy, not more than 20% of Supreme's total assets may be invested in any one property, loan, or security. Currently, we have exceeded this guideline with respect to one property which we hold as we have approximately 23% of our current total assets invested with that property. We expect this percentage will drop to below 20% as we develop our business model.

The number or amount of mortgages or other loans securing any one piece of real property may not exceed 90% of the property's appraised value.

Supreme's excess funds are generally held as cash or invested in short-term, highly liquid, interest-bearing securities, which may include short-term municipal bonds, time deposits, money market funds, commercial paper, and U.S. government securities.

Investments in Real Estate or other Property Interests.

Supreme acquires real property either directly in fee simple, or indirectly through ownership of beneficial interests land trusts or partnerships that hold title to the real property. Supreme believes that, in some cases acquiring indirect interests in real property is advantageous because it gives us flexibility in addressing the financial and risk management considerations presented by the particular property when debt financing may not be appropriate or when Supreme is trying to avoid exposing its entire portfolio to litigation as the result of personal injuries resulting from environmental hazards or other unforeseen conditions on the property.

Supreme's policy is to acquire properties primarily for current income. However, income from, and appreciation of its properties may be adversely affected by general and local economic conditions, neighborhood values, competitive overbuilding, weather, casualty losses, and other factors beyond its control. The value of real properties may also be affected by the cost of compliance with regulations and liability under applicable environmental laws, changes in interest rates, and the availability of financing. Income properties are also adversely affected if a significant number of tenants are unable to pay rent or if available space cannot be rented on favorable terms.

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To help to mitigate these risks, our present policy goal is to diversify Supreme's portfolio across the following different property types, in rapidly-growing suburban areas, near large population centers, in the following economic regions or "belts":

Property Type

% of Total

  Economic Region

% of Total

Office Buildings

5%

  Energy Belt
(Houston, Dallas, New Orleans)

5%

Shopping Centers

25%

  Rust Belt
(Chicago, Detroit, Cleveland)

45%

Apartment Buildings

40%

  Sun Belt
(Atlanta, Orlando, Miami)

25%

Hotel/Motel

10%

  Hi-Tech Belt
(Boston, NJ, Wash. DC. San Francisco,
San Diego)

25%

Special Use
(Golf Courses, Marinas, etc.)

20%

 

TOTAL:

100%

  TOTAL:

100%

Currently 100% of portfolio is held in apartment buildings located in Chicago, Illinois.

Investments in Real Estate Securities or other Passive Interests

From time to time, Supreme will also invest in interests of others primarily engaged in real estate activities. Supreme will invest in the common stock of other public and private real estate operating companies, real estate investment trusts, partnerships, or joint ventures. The primary activities Supreme will consider are industrial buildings and low-income housing developments. Supreme's acquisition committee will apply the same underwriting criteria as applied in its direct investments.

Investments in Mortgage Loans and Other Securities

Mortgage Banking Operations

Supreme, through its subsidiary Supreme Capital Funding, Inc., will acquire 1st or 2nd mortgages, on single-family dwellings and apartment buildings, insured or guaranteed by the FHA, VA, or private mortgage insurance, which are held by banks or other institutional lenders. Not more than 20% of our total assets may be invested in any type of mortgage and not more than 1% of our total assets may be invested in any one mortgage.

Supreme will acquire these mortgages and package them for resale. Supreme applies the same rigorous underwriting analysis to the acquisition of these loans that Supreme does to the direct acquisition of property. Supreme look to enhance its total returns through increased yields or, upon sale, the realization of some or all of the discount at which they were acquired.

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Direct Lending and Joint Participation

In some cases, particularly land development (or redevelopment), Supreme 's Acquisition Committee will apply the same underwriting criteria as applied in its direct investments to make direct loans to developers for the construction and sale of multi-family housing or commercial properties.

Loan Origination and Brokerage

To generate fees associated with the origination of mortgage loans, Supreme will rely on the relationships of the senior management of Supreme Capital Funding, Inc. They have extensive experience in the mortgage lending and real estate finance industries and have cultivated extensive contacts with banks, wholesale lenders, other mortgage brokers, and direct borrowers. Supreme will use a variety of web-based lead generation tools along with direct marketing and solicitation of loan business from homebuyers and real estate brokers. Since Supreme's focus will be on residential borrowers with substandard credit, banks and other institutional lenders make referrals to Supreme for loan opportunities that they do not wish to underwrite.

Management of Supreme has brokerage relationships with several national mortgage lenders who underwrite the loan packages. Supreme intends to submit to its loan packages to those lenders. No formal agreement in place at this time between Supreme and any mortgage lenders. Origination fees, administration fees, and document processing fees will be paid to Supreme at loan closing, by the lender, out of the loan proceeds.

Investment Real Estate Owned

Supreme currently own property interests in the following properties:


Description


Encumbrances


Initial Cost


Cost Capitalized

Gross amount carried at close of period

Accumulated Depreciation

Date of        Construction

             
12-Unit Apartment Bldg(1)


$      480,000


$      600,000


-0-


$      600,000


$       10,909


N/A

6-Unit Apartment Bldg(2)


$      400,000


$      500,000


-0-


$      500,000


$         7,576


N/A

6-Unit Apartment Bldg(3)


$       151,000


$      586,000


-0-


$      586,000


$             -0-


N/A

4-Unit Apartment Bldg(4)


$       224,000


$      280,000


-0-


$      280,000


-0-


N/A

 

TOTALS

$  1,255,000

$   1,966,000

-0-

$   1,966,000

$       18,485

 
             

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Notes:

  1. 12-unit apartment building in Chicago, Illinois, acquired by Installment Agreement for Warranty Deed at a cost of $600,000, which carries a non-recourse mortgage note in the amount of $480,000, which bears interest at a rate of 7%, and is due on June 1, 2004. Property is currently 92% occupied and stable.
  2. 6-unit apartment building in Chicago, Illinois acquired by Installment Agreement for Warranty Deed at a cost of $500,000, which carries a non-recourse mortgage note in the amount of $400,000, which bears interest at a rate of 7% and is due on July 1, 2004. Property is currently 100% occupied and stable.
  3. 4-unit apartment building in Chicago, Illinois acquired by Installment Agreement for Warranty Deed at a cost of $280,000, which carries a non-recourse mortgage note in the amount of $224,000, which bears interest at a rate of 7% and is due on August 1, 2004. Property is currently 100% occupied and stable.
  4. 6-unit apartment building in Chicago, Illinois, acquired by Installment Agreement for Warranty Deed at a cost of $586,000, which carries a non-recourse first mortgage note in the amount of $131,000, which bears interest at a rate of 7% and is due on February 1, 2031, and a second mortgage note in the amount of $20,000, which bears interest at a rate of 6.25%, and is due on May 5, 2007. Property is currently unoccupied and scheduled for demolition. Supreme plans to erect a new, 5-unit townhome development on the site at a cost of $700,000. Construction will be financed with all equity and the townhome units will then be sold for approximately a$190,000 - $210,000 each. The existing mortgages will paid out of proceeds from the sale of the units.

Proposed Future Acquisitions

Supreme's strategy is acquire under-valued properties from banks, other institutional lenders, and/or third-party companies who have regained control through past defaults, foreclosures, delinquent tax sales, or other "distressed" situations. Supreme relies primarily on its relationships with banks, mortgage lenders, real estate developers, probate attorneys, and commercial real estate brokers who wish to dispose of these under-performing properties. Among the properties Supreme is currently considering:

 
  •  
88-acres, raw land, in University Park, Illinois, for acquisition and development of 280 townhouses and single-family homes in a new, suburban subdivision. Currently in negotiations with site owners.
 
  •  
27,000 SF office building in Tinley Park, Illinois (to be partially occupied as corporate headquarters). Currently in negotiations with builder/developer. Estimated construction cost, $2,700,000. Current market rents, $14 - $18/SF.
 
  •  
195-acre golf course in Crete, Illinois. Currently in negotiations with probate attorney representing estate of deceased owner and his heirs. Asking price $4,500,000
 
  •  
180-unit garden apartment complex in Charlotte, Carolina . Currently in due diligence review and investigation. Asking price, $2,800,000.
 
  •  
25,000 SF strip shopping center in Country Club Hills, Illinois. Currently in negotiations with mortgage holder's agent. Asking price $900,000.
 
  •  
A 300-slip boat marina and storage facility in Wilmington, Carolina . Development cost estimated a $3,600,000. Currently in negotiations with land owner and city officials for development rights along the coastal waterway.

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Supreme must raise a significant amount of capital if it is to acquire any of the above mentioned properties given its current financial condition.

Acquisition Procedures

Prior to making any acquisitions, Supreme conducts an acquisition review and analysis. Supreme estimates the value of the property based upon a recent independent appraisal and a valuation report prepared by Supreme's V.P., of Acquisitions. Supreme makes an on-site inspection of the property, and where appropriate, Supreme requires further inspections by qualified engineers, architects, and environmental consultants. Supreme obtains all relevant data concerning the demographics of the location, rental rates, operating costs, taxes, etc. Supreme then has its legal counsel and title examiners review the title and any other documents that might affect title. The final report is then presented to the acquisition committee for approval or rejection based upon Supreme's policies and portfolio diversification and yield objectives.

The acquisition committee is made up of four officers and two members of the board of directors of Supreme, one of whom is an outside director. Mr. Elbert Shaw, who is a board member at Advance Bank, and the Village Manager of University Park, Illinois, currently serves as an outside director.

Other Real Property Considerations

Real property investments are subject to varying degrees of risk. Yields from Supreme's real properties depend on their net income and capital appreciation. Property interests are also illiquid and their value may decrease. Therefore, Supreme has a limited ability to vary its property interests quickly in response to changes in economic or other conditions.

Uninsured or underinsured losses may affect the value of, or Supreme's return from, its property interests. Supreme's properties have comprehensive insurance coverage in amounts Supreme believe are sufficient to permit the replacement of the properties in the event of total loss. There are certain types of losses that are uninsurable like, earthquakes, floods, other natural disasters, or acts of war and insurrection. Also, inflation, changes in local building codes or zoning laws may make the use of insurance proceeds for the replacement of a property impractical.

Financial Leverage

From time to time, Supreme may use secured debt financing to fund Supreme's real property investments when Supreme does not have sufficient capital available to enable it to acquire a particular property. It is Supreme's policy to limit the amount of debt used to acquire properties to less than 90% of the property's value.

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Legal Proceedings

Supreme has not been party to any legal or regulatory proceedings since its inception nor is management of Supreme or Coronation aware of any such proceedings pending.

Market Price of Securities and Related Stockholder Matters

General.

The securities of Supreme are not listed for trading on a national securities market or quotation system. As of December 5 , 2003, Supreme had 43 stockholders of record holding 19,342,000 shares of common stock in the equity of Supreme. Stockholders who have held their securities for the requisite period of one year would be able to sell these securities pursuant to Rule 144 under the Securities Act of 1933, as amended, if these securities were listed for trading on a national securities market or a quotation system.

Dividend Policy.

Supreme has not declared or paid any cash dividends since inception and does not intend to pay any cash dividends in the foreseeable future.

Recent Sales of Unregistered Securities.

On November 1, 2002, we issued 9,400,000 shares common stock of Supreme to two directors and officers of Supreme on exercise of stock options granted that year, for an aggregate total consideration of $94,000. We relied on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended, for the issuance of these securities. All of these shares are "restricted" shares as defined in Rule 144 under the Securities Act of 1933, as amended as these shares are held by "affiliates". These shares may only be offered for public sale under Rule 144, or otherwise, pursuant to a registration statement or other exemption from registration under the Securities Act of 1933.

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The following table describes all common stock issued in the past three years:


                Name                 


Date Issued

Original
 Investment


How Paid


# of Shares

Allison, Laverne & Christine

06-21-02

$ 2,000.

Cash

20,000

ALM KLM Enterprises

11-01-02

20,000.

Services

200,000

Banks, Willie Mae

12-20-01

7,500.

Services

75,000

Beasley, Eugene

12-20-01

10,000.

Services

100,000

Brown, Carlos

08-19-02

10,000.

Cash

20,000

Dashevsky, Jeffery

04-22-02

63,210

Services

632,100

Davis, Andrew

12-20-01

1,500.

Services

15,000

DUBAROS CORP.

11-06-02

11,000.

Cash

22,000

Elliott, Thomas

12-20-01
11-1-02

580,000

50,000

Cash & Services

5,000,000

5,000,000

Elliott, Portia

12-20-00

20,000.

Cash

200,000

Elliott, Jarred

12-20-01

5,000.

Gift

50,000

Fletcher, Antoinette

12-20-01

35,000.

Cash

350,000

Fouch, Brent

04/22/02

63,210

Services

632,100

Gastile-Tate, Valerie

12-20-01

2,500.

Services

25,000

Hale, Les

09-09-02

2,000.

Cash

20,000

Haywood, Frederic

06-21-02

5,000.

Cash

50,000

Head, Kerry

04-22-02

16,125

Services

161,250

Jones, Jennifer

12-20-01

2,000.

Services

20,000

Jones, Steven

08-19-02

2,000.

Cash

20,000

KIMBARK MANAGEMENT, LLC

12-04-02

5,000.

Cash

50,000

LeRoy, Jean

12-20-01

20,000.

Cash

200,000

Lloyd, Anthony

12-24-02

2,000.

Cash

4,000

Marshall, Kyle

11-22-02

5,000.

Cash

50,000

Palmore, Mary

12-10-02

2,500.

Cash

25,000

Reid, David Jr.

06-21-02

35,000.

Property

350,000

Reid, David III

06-21-02

5,000.

Gift

50,000

Richardson, Derwin Atty.

11-17-02

300,000.

Services

100,000

Roberts, Robert

12-20-01

2,500.

Services

25,000

Rose, Jailyn

12-20-01

5,000.

Gift

50,000

Sabree, Naim

11-22-02

10,000.

Property

100,000

Sales, S.L. and Marlene

09-09-02

2,500.

Cash

25,000

Singleteary, Steven

12-20-01

5,000.

Cash

50,000

Smith, Bruce

12-04-02

5,000.

Cash

50,000

Swain, John Sr.

12-20-00

35,000.

Cash

350,000

SUPREME CAPITAL FUNDING, INC.

04-22-02

100,000

Cash & Property

100,000

Thomas, Ron

11-12-02

2,000.

Cash

4,000

Thomas, Ron and Donna Gibson

11-12-02

4,000.

Cash

8,000

Tillman, Jimmy

12-20-01

10,000.

Property

100,000

Washington, Manuel

12-17-02

5,000.

Cash

25,000

Whittenburg, William

12-20-00

35,000.

Services

350,000

Williams, James

04-22-02

50,955

Services

509,550

YOREL CONSULTING, INC.

11-1-02

42,000.

Services

4,200,000

Youngblood, Kamisha

11-22-02

2,000.

Cash

10,000

   
 

TOTALS

 

1,976,500.

 

19,342,000

- 69 -


Equity Compensation Plan

The following table provides information as of December 31, 2002, with respect to Supreme's compensation plans under which its equity securities are authorized for issuance:

 

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance

 

(a)

(b)

(c)

Equity compensation plans approved by security holders

-0-

-0-

-0-

Equity compensation plans not approved by security holders

-0-

-0-

-0-

Total

-0-

-0-

-0-

Financial Statements

The audited financial statements of Supreme for the year ended December 31, 2002, and unaudited financial statements for the period ended September 30, 2003, are included below:

The audited financial statements of Supreme for the year ended December 31, 2002, and unaudited financial statements for the period ended September 30, 2003, are included below:

- 70 -


Audited Financial Statements of Supreme Property, Inc. for year ended December 31, 2002

Richard Walker and Co.
Certified Public Accountant
Member - Illinois CPA Society 
 
                                                               
 

   433 East 75th Street
Chicago, Illinois 60619
 (773) 846-6690 / Fax (773) 846-6688

 

 

Supreme Property, Inc.
431 E. 75th Street
Chicago, Illinois 60619

We have audited the accompanying financial statements balance sheets of Supreme Property, Inc. (an Illinois corporation), as of December 31, 2002 and December 31, 2001, and the related statements of operations and cash flows for the years ended 31, 2002 and December 31, 2001 . The accompanying financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audit.

We conducted our audit in accordance with auditing standards accepted in the United States of America. 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 include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also included 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 Supreme Property, Inc. as of December 31, 2001 and December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.



Richard Walker
 
Richard Walker & Co.
March 15, 2003
 

As amended November 25, 2003

 

- 71 -



SUPREME PROPERTY, INC.

Consolidated Statement of Financial Position

As of December, 2002

 

2000

2001

2002

ASSETS:

Unaudited 

     Current Assets:

 

 

 

          Cash & Cash Equivalents

25,000

$              730

$             2,000

          Marketable Securities

-

-

-

          Accounts Receivable

-

57,277

-

          Prepaid Expenses

-

734

-

 

Total Current Assets

25,000

58,011

2,000

     Loans & Securities Investments:

 

 

 

          Investments in Partnerships

-

-

-

          Real Estate Loans

-

-

-

          Real Estate Loans held for Sale

-

-

-

          Investments in Affiliates

-

-

100,000

 

Total Loans & Securities Investments

-0-

-0-

100,000

     Real Estate Investments:

 

 

 

          Existing Properties

-

-0-

425,700

          New Property Acquisitions

-

425,700

1,540,300

 
          Gross Properties

 

425,700

1,966,000

          Less: Accumulated Deprec.

-

(4,174)

(18,485)

          Land & Other Non-Depreciable Property

-

-

-

 

Total Real Estate Investments

-0-

421,526

1,947,515

       

Total Investments before Loss Reserves

-0-

421,526

2,047,515

          Less: Loan Loss Reserves

 

-0-

-0-

 

Total Investments

-0-

421,526

2,047,515

     Other Assets:

 

 

 

           Goodwill and Other Intangible Assets

30,000

30,000

30,000

           Less: Amortization

-0-

(6,000)

(12,000)

          Furniture/Fixtures/Equipment

6,000

9,140

11,140

          Less: Accumulated Deprec.

-0-

(1,306)

(1,706)

 

Total Other Assets

36,000

31,834

27,434

 

 

 

 

TOTAL ASSETS

61,000

512,101

2,076,949

 
LIABILITIES:

 

 

 

     Current Liabilities

-

16,044

5,064

     Notes Payable

36,000

50,000

40,600

     Mortgages Payable

-

288,900

1,255,000

 

Total Liabilities

36,000

354,944

1,300,664

SHAREHOLDER'S EQUITY:

 

 

 

          Common Stock, $.001 par value
          100,000,000 auth., 19,342,000 outstanding

10,000

10,000

19,342

          Preferred Stock, 6.95% Series A, Convertible

-0-

-0-

-0-

          Additional Paid In Capital

15,000

142,669

722,897

          Retained Earnings (Deficit)

-0-

4,488

34,046

 

Total Shareholder Equity

25,000

157,157

776,285

 
       

TOTAL LIABILITIES & EQUITY

61,000

$ 512,101

$ 2,076,949

 

The accompanying notes are an integral part of these financial statements.

- 72 -



SUPREME PROPERTY, INC.

Statement of Earnings

For the years ending December 31, 2002

 

2001

2002

 

 

 

REVENUES:

 

 

 

 

     Rental Income

 

-0-

 

$                 174,864

     Mortgage Interest Income

 

-0-

 

-0-

     Investment Income

 

-0-

 

-0-

     Fee Income

 

166,748

 

84,835

     Gain on Sale of Loans

 

-0-

 

-0-

TOTAL REVENUES

 

166,748

 

259,699

 

 

 

 

 

EXPENSES:

 

 

 

 

     Salaries, Commissions, and Employee Benefits

 

80,617

 

49,553

     General & Administrative

 

34,969

 

26,958

     Property Operating Expenses

 

-0-

 

79,805

     Interest Expense

 

34,402

 

43,723

     Depreciation and Amortization

 

11,480

 

24,885

                    TOTAL EXPENSES

 

161,468

 

224,924

 

 

 

 

 

NET INCOME (LOSS) Before Taxes and Extraordinary Items

 

5,280

 

34,775

Provision for Income Taxes

 

(792)

 

(5,216)

Extraordinary Gains (Losses)

 

-0-

 

-0-

NET INCOME

 

4,488

 

29,558

Add: Depreciation and Amortization

 

11,480

 

24,885

 

 

 

 

 


Per Share Data -Basic

Weighted Average Common Shares Outstanding

 

10,000,000

 

19,342,000

 

 

 

 

 

NET INCOME (LOSS) Before Taxes and Extraordinary Items

 

$ 0.00

 

$ 0.00

 

 

 

 

 

NET INCOME

 

0.00

 

0.00

 

 

 

 

 


Per Share Data -Diluted

Weighted Average Common Shares Outstanding

 

10,000,000

 

19,342,000

 

 

 

 

 

NET INCOME(LOSS) Before Extraordinary Items

 

$ 0.00

 

$ 0.00

Extraordinary Gains (Losses)

 

 

 

 

NET INCOME

 

0.00

 

0.00

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

- 73 -


SUPREME PROPERTY, INC.

Statement of Cash Flows

For the years ending December 31, 2002

 

2001

2002

     
CASH FLOW FROM OPERATING ACTIVITIES:        
     Net Income  

4,488

 

29,558

     Adjustments to reconcile net income to net cash provided by
     operating activities:
       
          Depreciation & Amortization  

11,480

 

26,191

          (Increase) Decrease in Receivables  

(57,277)

 

57,277

          (Increase) Decrease in Prepaid Expenses  

(734)

 

734

          Increase ( Decrease) in Current Liabilities  

16,044

 

(10,980)

NET CASH FROM OPERATING ACTIVITIES

 

(25,999)

 

102,780

CASH FLOW FROM INVESTING ACTIVITIES:        
     Purchase of Furniture/Fixtures/Equipment  

(3,140)

 

(2,000)

     Purchase of Real Estate Improvements  

(425,700)

 

(1,114,600)

     Purchase of Land  

-

 

-

     Investments in Partnerships  

-

 

-

     Purchase of Real Estate Loans  

-

 

-

     Real Estate Loans Originated  

-

 

-

     Investment in Affiliates  

-

 

(100,000)

     Proceeds from the Sale of:        
          Furniture/Fixtures/Equipment  

-

 

-

         Real Estate Improvements  

-

 

-

         Land  

-

 

-

         Partnership Interests  

-

 

-

        Real Estate Loans  

-

 

-

        Affiliates  

-

 

-

NET CASH FROM INVESTING ACTIVITIES

 

(428,840)

 

(1,216,600)

CASH FLOW FROM FINANCING ACTIVITIES:        
     Proceeds from:        
          Borrowings - Notes  

25,000

 

-0-

          Borrowings - Mortgages  

288,900

 

430,432

          Issuance of Common Stock  

127,669

 

589,570

          Issuance of Preferred Stock  

-

 

-

     Payments for:        
          Debt Repayment  

(11,000)

 

(9,400)

          Cash Dividends-Preferred  

-

 

-

          Cash Dividends-Common

-

-

          Repurchase of Treasury Stock  

-

 

-

NET CASH FROM FINANCING ACTIVITIES

 

430,569

 

1,010,602

         
          Net Change in Cash  

(24,270)

 

1,270

          Cash Balance, January 1  

25,000

 

730

         
          Cash Balance, December 31  

730

 

2,000

The accompanying notes are an integral part of these financial statements.

- 74 -


SUPREME PROPERTY, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
 

NOTE-1 SIGNIFICANT ACCOUNTING POLICIES

            Basis of Presentation. A summary of the significant accounting policies of Supreme Property, Inc. is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management which is responsible for their integrity and objectivity. The accounting policies use conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. The financial statements herein are presented using the accrual basis of accounting.

            Nature of Operations. The Company provides real property management, development, and brokerage services. The property management operations were discontinued in December, 2002.

            Revenue Recognition. All residential leases are for 1 year or less. Thus, rental revenues are recognized in the month they are earned. Revenues from fees income include brokerage commissions, management fees, development fees, and referral fees. All fee-base revenues are recognized when the service has been performed and the fee is due and payable.

            Investment in Affiliates. Investments in companies in which The Company has the ability to influence operations and finances are accounted for by the equity method. The Company has one wholly-owned subsidiary, Supreme Capital Funding, Inc., of which it owns 100% of the outstanding common stock. As are result of applying the equity method, the investment in this company was originally recorded at cost. The subsidiary has not commenced operations, so there were no earnings or losses during the period to adjust to reflect the Company's share of such earnings or losses.

            Real Estate Investments. Real Estate Investments are recorded at cost. Accumulated Depreciation has been computed using the straight-line method, based on the an estimated useful life of 27.5 years.



Description



Encumbrances



Initial Cost



Cost Capitalized

Gross amount
carried at
close of period


Accumulated Depreciation


Date of
Construction

             
12-Unit Apartment Bldg(1)

$ 480,000

$ 600,000

-0-

$ 600,000

$ 10,909

N/A

6-Unit Apartment Bldg(2)

$ 400,000

$ 500,000

-0-

$ 500,000

$ 7,576

N/A

6-Unit Apartment Bldg(3)

$ 151,000

$ 586,000

-0-

$ 586,000

$ -0-

N/A

4-Unit Apartment Bldg(4)

$ 224,000

$ 280,000

-0-

$ 280,000

-0-

N/A

 

TOTALS

$ 1,255,000

$ 1,966,000

0

$ 1,966,000

$ 18,485

 
             

Notes:  
  1. 12-unit apartment building in Chicago, Illinois, acquired by Installment Agreement for Warranty Deed at a cost of $600,000, which carries a non-recourse mortgage note in the amount of $480,000, which bears interest at a rate of 7%, and is due on June 1, 2004. Property is currently 92% occupied and stable.
  2. 6-unit apartment building in Chicago, Illinois acquired by Installment Agreement for Warranty Deed at a cost of $500,000, which carries a non-recourse mortgage note in the amount of $400,000, which bears interest at a rate of 7% and is due on July 1, 2004. Property is currently 100% occupied and stable.
  3. 4-unit apartment building in Chicago, Illinois acquired by Installment Agreement for Warranty Deed at a cost of $280,000, which carries a non-recourse mortgage note in the amount of $224,000, which bears interest at a rate of 7% and is due on August 1, 2004. Property is currently 100% occupied and stable.
  4. 6-unit apartment building in Chicago, Illinois, acquired by Installment Agreement for Warranty Deed at a cost of $586,000, which carries a non-recourse first mortgage note in the amount of $131,000, which bears interest at a rate of 7% and is due on February 1, 2031, and a second mortgage note in the amount of $20,000, which bears interest at a rate of 6.25%, and is due on May 5, 2007. Property is currently unoccupied and scheduled for demolition. Supreme plans to erect a new, 5-unit town home development on the site at a cost of $700,000. Construction will be financed with all equity and the town home units will then be sold for approximately a$190,000 - $210,000 each. The existing mortgages will paid out of proceeds from the sale of the units.

 - 75 -


                Notes Payable. Notes Payable includes $15,600 balance due on Supreme Property, Inc.'s purchase of substantially all of the assets from its predecessor company, Supreme Property Management & Sales, Inc.,(i.e., John Davis) and a $25,000 note due to Thomas Elliott, President of Supreme Property, Inc., for amounts loaned to the company during its capitalization phase. The terms of the note to John Davis are 0% interest , amortized over 60 months at $600.00/month. The terms of the note to Thomas Elliott are 0% interest, payable in full at the end of 36 months.

            Mortgages Payable. Four(4) parcels of property are being purchase by Installment Agreement for Warranty Deed, over a term of thirty(30) years. The notes bear interest at the rate of 7% per annum. Principal and interest are payable in monthly installments of $8,349.55, with balloon payments of the outstanding principal on maturity dates in June, July, and August, of 2004. The following table describes the principal payment due in each of the 5 succeeding years as required by paragraph 10 of SFAS 47.

 

Principal Payments Each Year

 

2003

2004

2005

2006

2007

 
12-Unit Apartment Bldg(1)

5,052

474,948

-0-

-0-

-0-

 
6-Unit Apartment Bldg(2)

4,210

395,790

-0-

-0-

-0-

 
6-Unit Apartment Bldg(3)

1,589

149,411

-0-

-0-

-0-

 
4-Unit Apartment Bldg(4)

2,358

221,642

-0-

-0-

-0-

 
 
 
TOTALS

13,209

1,241,791

-0-

-0-

-0-

 

            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, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

            Goodwill. In March , 1998, Supreme Property Management and Sales, Inc. was founded by Norvella Maddox and John Davis, each owning 50% of the common stock outstanding. Upon Ms. Maddox death in February, 2000, Mr. Davis formed a new company, Supreme Property Management and Development, Inc. to hold his 50% of the predecessor company's assets. In a negotiated settlement with Mr. Davis, Ms. Maddox's heirs received the bulk of the assets of Supreme Property Management and Sales, Inc. and operated under that name from a different location.

            In April, 2000, Mr. Davis then sold the remaining assets to Thomas Elliott for $36,000. Those assets consisted of furniture and equipment, the company name (Supreme Property Management & Development, Inc.) and logo, and the remaining property management contracts. Furniture/Fixtures/Equipment were valued at $6,000 and the remaining intangible, namely Goodwill, was valued at $30,000. To avoid the obvious conflict presented by the similar names of the two companies, Mr. Elliott changed the name to Supreme Property, Inc. in December 2000. In February, 2002, the State of Illinois granted Supreme Property, Inc. its new charter.

            Goodwill is amortized over a 5- year period. It is management's impairment policy to review the value of its Goodwill annually and write down, or expense it against earnings only in those periods when its recorded value exceeds its fair value. In management's opinion, such is not the case at this time.

- 76 -


NOTE-2 EMPLOYEE BENEFIT PLAN

            The Company maintains a non-qualified incentive employee benefit plan. The purpose of the plan is to provide a means of performance-based incentive compensation for the Company's key employees. Key employees may be issued shares of the Company's common stock or options to purchase common stock as part of their compensation package.

NOTE-3 COMMITMENTS

            Employment Obligations. The Company has entered into automatically renewing, one-year employment agreements with its V.P. of Finance, V.P. of Property Management, and V.P. of Acquisitions. In the event of termination other than for cause, the contracted employee will receive a lump sum benefit equal to the average compensation in the three most highly compensated years. Upon termination, all options and rights to acquire common shares vest on the effective date of termination.

        Lease Obligations. In April, 2000, Supreme Property, Inc. began leasing office space at an annual rental rate based on the amount of square footage the Company occupies. The lease expires in April, 2004, with a five year renewal option. The annual rent is as follows:

2000

$         4,950.

2001

6,900.

2002

7,200.

2003

7,500.

2004

1,950.

 

TOTAL

$        28,500.

 

 

- 77 -


Unaudited Interim Financial Statements of Supreme Property, Inc.

SUPREME PROPERTY, INC.

(unaudited)

Consolidated Statement of Financial Position

As of September 30, _____

 

 

2002

2003

ASSETS:

 

Unaudited

Unaudited

Current Assets:

 

 

 

Cash & Cash Equivalents

 

39,446

$  12,103

Marketable Securities

 

 

-

Accounts Receivable

 

17,160

16,140

Prepaid Expenses

 

734

-

 

Total Current Assets

 

57,360

28,243

Loans & Securities Investments:

 

 

 

Investments in Partnerships

 

 

-

Real Estate Loans

 

 

-

Real Estate Loans held for Sale

 

 

-

Investments in Affiliates

 

100,000

100,000

 

Total Loans & Securities Investments

 

100,000

100,000

Real Estate Investments:

 

 

 

Existing Properties

 

425,700

425,700

New Property Acquisitions

 

600,000

1,540,300

 

Gross Properties

 

1,025,700

1,966,000

Less:  Accumulated Deprec.

 

( 11,447 )

( 72,103 )

Land & Other Non-Depreciable Property

 

-0-

-0-

 

Total Real Estate Investments

 

1,014,253

1,893,897

 

 

 

 

Total Investments before Loss Reserves

 

1,114,253

1,993,879

Less: Loan Loss Reserves

 

 

-0-

 

Total Investments

 

1,114,253

1,993,897

Other Assets:

 

 

 

Goodwill and Other Intangible Assets

 

30,000

30,000

Less: Amortization

 

( 10,500 )

( 16,500 )

Furniture/Fixtures/Equipment

 

11,140

11,140

Less:  Accumulated Deprec.

 

( 1,410 )

( 3,116 )

 

Total Other Assets

 

29,230

21,524

 

 

 

 

TOTAL ASSETS

 

1,200,843

2,043,646

 
LIABILITIES:

 

 

 

Current Liabilities

 

3,500

2,640

Notes Payable

 

44,200

37,600

Mortgages Payable

 

776,000

1,245,094

 

Total Liabilities

 

823,700

1,286,411

SHAREHOLDER'S EQUITY:

 

 

 

Common Stock,  $.001 par value  100,000,000 auth., 19,342,000 outstanding

 

16,705

19,342

Preferred Stock, 6.95% Series A, Convertible

 

-0-

-0-

Additional Paid In Capital

 

377,425

831,381

Retained Earnings (Deficit)

 

( 16,987 )

( 93,488 )

 

Total Shareholder Equity

 

377,143

757,235

 

 

 

 

TOTAL LIABILITIES & EQUITY

 

1,200,843

$         2,043,646

 

 

- 78 -


SUPREME PROPERTY, INC.

(unaudited)

Statement of Earnings

For the 9 months ended September 30, ____

 

2002

2003

 

 

Unaudited

 

Unaudited

REVENUES:

 

 

   

Rental Income

 

$      88,800

 

$     119,448

Mortgage Interest Income

 

 

 

-0-

Investment Income

 

 

 

-0-

Fee Income

 

31,819

 

-0-

Gain on Sale of Loans

 

 

 

-0-

   

TOTAL REVENUES

 

120,247

 

119,448

 

 

 

 

 

EXPENSES:

 

 

 

 

Salaries, Commissions, and Employee Benefits

 

37,164

 

28,376

General & Administrative

 

19,739

 

14,332

Property Operating Expenses

 

49,778

 

37,303

Interest Expense

 

21,326

 

26,257

Depreciation and Amortization

 

  18,664

 

  46,555

   

TOTAL EXPENSES

 

146,671

 

152,823

 

 

 

 

 

NET INCOME (LOSS) Before Taxes and

Extraordinary Items

 

( 26,424 )

 

( 33,375 )

Provision for Income Taxes

 

-0-

 

-0-

Extraordinary Gains(Losses)

 

-0-

 

(50,000)

   

NET INCOME

 

( 26,424 )

 

( 83,375 )


 

 

 

 

 

Weighted Average Common Shares Outstanding

 

10,000,000

 

19,342,000

 

   

 

 

NET INCOME(LOSS) Before Taxes and

Extraordinary Items

 

$     .00

 

$ (.00)

         ( .01)

 

 

 

 

 

NET INCOME

 

.00

 

( .01)

 

 

 

 

 


Weighted Average Common Shares Outstanding

 

10,000,000

 

19,342,000

 

   

 

 

NET INCOME (LOSS) Before Extraordinary Items

 

$     .00

 

$         ( .01)

Extraordinary Gains (Losses)

 

 

 

 

NET INCOME

 

.00

 

( .01)


- 79 -


SUPREME PROPERTY, INC.

(unaudited)

Statement of Cash Flows

For the years ending September 30, ____

 

2002

2003

         
CASH FLOW FROM OPERATING ACTIVITIES:        
     Net Income (Loss)  

( 26,424 )

 

( 83,375 )

     Adjustments to reconcile net income to net cash provided by
     operating activities:
       
          Depreciation & Amortization  

18,664

 

46,555

          (Increase) Decrease in Receivables  

-0-

 

16,140

          (Increase) Decrease in Prepaid Expenses  

-0-

 

734

          Increase ( Decrease) in Current Liabilities  

-0-

 

( 1,347 )

NET CASH FROM OPERATING ACTIVITIES

 

( 7,760 )

 

( 21,293 )

CASH FLOW FROM INVESTING ACTIVITIES:        
     Purchase of Furniture/Fixtures/Equipment  

-

 

-

     Purchase of Real Estate Improvements  

(600,000)

 

(940,300)

     Purchase of Land  

-

 

-

     Investments in Partnerships  

-

 

-

     Purchase of Real Estate Loans  

-

 

-

     Real Estate Loans Originated  

-

 

-

     Investment in Affiliates  

-

 

(100,000)

     Proceeds from the Sale of:        
          Furniture/Fixtures/Equipment  

-

 

-

         Real Estate Improvements  

-

 

-

         Land  

-

 

-

         Partnership Interests  

-

 

-

        Real Estate Loans  

-

 

-

        Affiliates  

-

 

-

NET CASH FROM INVESTING ACTIVITIES

 

(600,000)

 

(1,040,300)

CASH FLOW FROM FINANCING ACTIVITIES:        
     Proceeds from:        
          Borrowings - Notes  

-0-

 

-0-

          Borrowings - Mortgages  

480,000

 

477,010

          Issuance of Common Stock  

175,686

 

612,992

          Issuance of Preferred Stock  

-

 

-

     Payments for:        
          Debt Repayment  

( 9,190 )

 

( 18,306 )

          Cash Dividends-Preferred  

-

 

-

          Cash Dividends-Common

-

-

          Repurchase of Treasury Stock  

-

 

-

NET CASH FROM FINANCING ACTIVITIES

 

646,496

 

1,071,696

         
          Net Change in Cash  

38,736

 

10,103

          Cash Balance, January 1  

730

 

2,000

         
          Cash Balance, September 30  

39,466

 

12,103


-80 -


SUPREME PROPERTY, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2003

NOTE-1 SIGNIFICANT ACCOUNTING POLICIES

            Basis of Presentation. A summary of the significant accounting policies of Supreme Property, Inc. is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management which is responsible for their integrity and objectivity. The accounting policies use conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. The financial statements herein are presented using the accrual basis of accounting.

Adjustments. These interim statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading.

            Nature of Operations. The Company provides real property management, development, and brokerage services. The property management operations were discontinued in December, 2002. General and Administrative Expenses include $50,000 paid for financial consulting services rendered in conjunction with the Plan of Exchange and Reorganization entered into on March 31, 2003.

            Revenue Recognition. All residential leases are for 1 year or less. Thus, rental revenues are recognized in the month they are earned. All other revenues are recognized when the service has been performed and the fee is due and payable.

            Investment in Affiliates. Investments in companies in which The Company has the ability to influence operations and finances are accounted for by the equity method. The Company has one wholly-owned subsidiary, Supreme Capital Funding, Inc., of which it owns 100% of the outstanding common stock. As are result of applying the equity method, the investment in this company was originally recorded at cost. The subsidiary has not commenced operations, so there were no earnings or losses during the period to adjust to reflect the Company's share of such earnings or losses.

            Real Estate Investments. Real Estate Investments are recorded at cost. Accumulated Depreciation has been computed using the straight-line method, based on the an estimated useful life of 27.5 years.



Description



Encumbrances



Initial Cost


Cost          
 Capitalized

Gross amount
carried at
close of period


Accumulated
Depreciation


Date of
Construction

             
12-Unit Apartment Bldg(1)


$    480,000


$    600,000


-0-


$    600,000

$      27,274

N/A

6-Unit Apartment Bldg(2)


$    400,000


$    500,000


-0-


$    500,000


$      21,211


N/A

6-Unit Apartment Bldg(3)


$    151,000


$    586,000


-0-


$    586,000


$      15,982


N/A

4-Unit Apartment Bldg(4)


$    224,000


$    280,000


-0-


$    280,000


$       7,636


N/A

 

TOTALS

$ 1,255,000

$ 1,966,000

-0-

$ 1,966,000

$     72,103

 

- 81 -


Notes:  
  1. 12-unit apartment building in Chicago, Illinois, acquired by Installment Agreement for Warranty Deed at a cost of $600,000, which carries a non-recourse mortgage note in the amount of $480,000, which bears interest at a rate of 7%, and is due on June 1, 2004. Property is currently 92% occupied and stable.
  2. 6-unit apartment building in Chicago, Illinois acquired by Installment Agreement for Warranty Deed at a cost of $500,000, which carries a non-recourse mortgage note in the amount of $400,000, which bears interest at a rate of 7% and is due on July 1, 2004. Property is currently 100% occupied and stable.
  3. 4-unit apartment building in Chicago, Illinois acquired by Installment Agreement for Warranty Deed at a cost of $280,000, which carries a non-recourse mortgage note in the amount of $224,000, which bears interest at a rate of 7% and is due on August 1, 2004. Property is currently 100% occupied and stable.
  4. 6-unit apartment building in Chicago, Illinois, acquired by Installment Agreement for Warranty Deed at a cost of $586,000, which carries a non-recourse first mortgage note in the amount of $131,000, which bears interest at a rate of 7% and is due on February 1, 2031, and a second mortgage note in the amount of $20,000, which bears interest at a rate of 6.25%, and is due on May 5, 2007. Property is currently unoccupied and scheduled for demolition. Supreme plans to erect a new, 5-unit town home development on the site at a cost of $700,000. Construction will be financed with all equity and the town home units will then be sold for approximately a$190,000 - $210,000 each. The existing mortgages will paid out of proceeds from the sale of the units.

            Notes Payable. Notes Payable includes $12,600 balance due on Supreme Property, Inc.'s purchase of substantially all of the assets from its predecessor company, Supreme Property Management & Sales, Inc., (i.e., John Davis) and a $25,000 note due to Thomas Elliott, President of Supreme Property, Inc., for amounts loaned to the company during its capitalization phase. The terms of the note to John Davis are 0% interest , amortized over 60 months at $600.00/month. The terms of the note to Thomas Elliott are 0% interest, payable in full at the end of 36 months.

            Mortgages Payable. Four (4) parcels of property are being purchase by Installment Agreement for Warranty Deed, over a term of thirty (30) years. The notes bear interest at the rate of 7% per annum. Principal and interest are payable in monthly installments of $8,349.55, with balloon payments of the outstanding principal on maturity dates in June, July, and August, of 2004. The following table describes the principal payment due in each of the 5 succeeding years as required by paragraph 10 of SFAS 47.

 

Principal Payments Each Year

 

2003

2004

2005

2006

2007

 
12-Unit Apartment Bldg(1)

5,052

474,948

-0-

-0-

-0-

 
6-Unit Apartment Bldg(2)

4,210

395,790

-0-

-0-

-0-

 
6-Unit Apartment Bldg(3)

1,589

149,411

-0-

-0-

-0-

 
4-Unit Apartment Bldg(4)

2,358

221,642

-0-

-0-

-0-

 
 
 
TOTALS

13,209

1,241,791

-0-

-0-

-0-

 

            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, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Proposed Acquisitions. Any proposed property acquisitions are considered reasonably possible, as defined by SFAS 5, as more than remote, but less than likely.

            Goodwill. In March , 1998, Supreme Property Management and Sales, Inc. was founded by Norvella Maddox and John Davis, each owning 50% of the common stock outstanding. Upon Ms. Maddox death in February, 2000, Mr. Davis formed a new company, Supreme Property Management and Development, Inc. to hold his 50% of the predecessor company's assets. In a negotiated settlement with Mr. Davis, Ms. Maddox's heirs received the bulk of the assets of Supreme Property Management and Sales, Inc. and operated under that name from a different location.

In April, 2000, Mr. Davis then sold the remaining assets to Thomas Elliott for $36,000. Those assets consisted of furniture and equipment, the company name(Supreme Property Management & Development, Inc.) and logo, and the remaining property management contracts.

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Furniture/Fixtures/Equipment were valued at $6,000 and the remaining intangibles, namely Goodwill and the value of the remaining management contracts, were valued at $30,000. To avoid the obvious conflict presented by the similar names of the two companies, Mr. Elliott changed the name to Supreme Property, Inc. in December 2000. In February, 2002, the State of Illinois granted Supreme Property, Inc. its new charter.

Goodwill is amortized over a 5- year period. It is management's impairment policy to review the value of its Goodwill annually and write down, or expense it against earnings only in those periods when its recorded value exceeds its fair value. In management's opinion, such is not the case at this time.

NOTE-2 EMPLOYEE BENEFIT PLAN

The Company maintains a non-qualified incentive employee benefit plan. The purpose of the plan is to provide a means of performance-based incentive compensation for the Company's key employees. Key employees may be issued shares of the Company's common stock or options to purchase common stock as part of their compensation package.

NOTE-3 COMMITMENTS

            Employment Obligations. The Company has entered into automatically renewing, one-year employment agreements with its V.P. of Finance, V.P. of Property Management, and V.P. of Acquisitions. In the event of termination other than for cause, the contracted employee will receive a lump sum benefit equal to the average compensation in the three most highly compensated years. Upon termination, all options and rights to acquire common shares vest on the effective date of termination.

            Lease Obligations. In April, 2000, Supreme Property, Inc. began leasing office space at an annual rental rate based on the amount of square footage the Company occupies. The lease expires in April, 2004, with a five year renewal option. The annual rent is as follows:

2000

$  4,950.

2001

6,900.

2002

7,200.

2003

7,500.

2004

1,950.

 

TOTAL

$ 28,500.

 

 

Management Discussion and Analysis

Overview

Supreme began operations in January, 2001. Supreme acquired substantially all of the assets of its predecessor company, Supreme Property Management & Sales, Inc., and has operated as a realty and property management firm for two years. In 2002, Supreme discontinued operating as a property management firm, and continued to acquire properties for its own portfolio. As of December 5 , 2003, Supreme owned a portfolio of four apartment buildings. The apartments are located in Chicago, Illinois and contain an aggregate of 28 units.

Supreme's principal business objective is to generate income for distribution to its stockholders from a combination of rents, fees, interest, and the proceeds from the sale of its portfolio investments. In 2003, Supreme expects to complete the merger of Supreme into Coronation, and will attempt to obtain a listing on either the OTC Bulletin Board or other national securities exchange and to raise additional financing either through an equity or debt offering(s) or bank loans. Supreme intends to use the proceeds of any additional capital raised to acquire "distressed" properties from banks and other institutional lenders, at a substantial discount to market value.

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In January, 2003, Supreme applied for a mortgage banking license in the State of Illinois. Promptly on issuance of that license, Supreme intends to begin originating, purchasing, and selling mortgage loans through its wholly-owned subsidiary, Supreme Capital Funding, Inc.

Results of Operations

Revenues from Continuing Operations. Rental revenue increased to $176,864 for the year ended December 31, 2002 compared to $0 rental revenue for the year ended December 31, 2001. Likewise, during the interim 9 -month period ending September 30, 2003 rental revenues increased to $ 119,448 compared to $ 88,428 during the same 9 -month period ending September 30, 2002. The increase in rental revenue can be attributed to the fact we were non-operational in 2001 and had acquired 28 apartment units which all but six were rented in 2002. As of September 30, 2003, 25 units were rented and 3 remained vacant.

Fee income and other income decreased from $166,748 in the year ended December 31 2001 to $84,835 in the year ended December 31 2002, or 49.2%. This decrease was primarily due to a reduction in real estate brokerage staff and the attendant reduction in fee income from real estate brokerage operations.

Expenses from Continuing Operations. Total expenses from continuing operations increased from $161,224 for the year ended December 31, 2001 to $224,924 for the year ended December 31, 2002, a net increase of $63,700 described below:

  1. Property, operating and maintenance expenses increased by $79,805 for the year ended December 31, 2002 compared to the year ended December 31, 2001. This reflects the fact we now operate four apartment buildings. This cost is offset by the increase in revenue directly attributable to these properties.
  2. Depreciation and amortization increased from approximately $11,480 for the year ended December 31, 2001 to $24,885 for the year ended December 31, 2002.
  3. Interest expense increased by approximately $9,321 or 21% for the year ended December 31, 2002 compared to the year ended December 31, 2001 due to the interest rate on the mortgages associated with the apartment buildings acquired.
  4. General and administrative expenses decreased by approximately $8,011 or 22.9% for the year ended December 31, 2002 compared to the year ended December 31, 2001 primarily a result of lower utility costs and better operating efficiency.
  5. Salaries, commissions and employees benefits decreased by approximately $11,064 or 38.53% for the year ended December 31, 2002 compared to the year ended December 31, 2001 directly as a result of reduced outlays for real estate brokerage commissions.

Net Income from Operations. Net income from operations for the year ended December 31, 2001 was $ 4,448 versus $29,5558 for the year ended December 31, 2002. Total funds from operation (adding back in depreciation and amortization) was $54,444 for the year ended December 31, 2002 as compared to $ $11,480 for the year ended December 31, 2001. Net loss from operations during the 9 -month interim period ended September 30, 2003 was 83,375 compared to 26,424 for the same 9 -month interim period ended September 30, 2002. The net loss reflects extraordinary expenses of $50,000 for legal, accounting, consulting, and other fees and expenses paid to outside parties for services rendered in association with and related to the merger.

 

- 84 -


Liquidity and Capital Resources

For the years ended December 31, 2002 and December 31, 2001, Supreme's net cash provided by operating activities totaled ($102,780) and ($25,999), respectively.

As of December 31, 2002, Supreme's unrestricted cash resources were $2,000 as compared to $730 as at December 31, 2001. The cash flow from Supreme's existing properties will not fund its future liquidity requirements.

The principal source of Supreme's capital has been from funds received from operations and the use of non-recourse debt in association with the acquisition of its real properties. Supreme intends to use its future capital to pay for non-recurring expenses related to the preparation of an equity or debt offering and to acquire more properties.

Supreme intends to increase its liquidity by issuing different classes of convertible preferred stock or convertible debentures to institutional investors in future offerings and by using cash provided from operations of its mortgage banking subsidiary and rents from its properties. At present, Supreme has no plans to increase its borrowings or add any new bank debt liabilities.

Supreme intends to use the proceeds of any debt or equity to acquire more properties and to pay off the existing long-term liabilities, namely the balloon mortgage payments coming due in Summer, 2004 . Further, from time to time Supreme's management may elect to distribute some of its taxable income in the form of dividends to its stockholders . That could limit the amount of cash Supreme will have available for other business purposes or to grow through the use of retained earnings.

Much of Supreme's ability to raise capital is dependent upon the relative attractiveness shares of its shares, and the supply of shares of competitive real estate entities currently trading in the marketplace. Management of Supreme believes that it has identified a unique niche in its market by acquiring "distressed" properties and under-performing real estate loans from banks and other lending institutions. "Distressed" properties are properties that are not being operated at optimal efficiency and "under-performing" loans are loans that are currently past due or in default.

Cash provided by operations, equity transactions, and borrowings from affiliates and lending institutions have generally provided the primary sources of liquidity to Supreme. Historically, Supreme has used these sources to fund operating expenses, satisfy its debt service obligations and fund distributions to stockholders.

Recent Accounting Pronouncements

In August 2001, the FASB issued Financial Accounting Standard No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("FAS 144"). FAS 144 establishes a model for measurement and reporting the impairment of assets to be disposed of by sale and addresses accounting for a segment of a business accounted for as a discontinued operation. FAS 144 is effective for fiscal years beginning after December 15, 2001. Supreme has accounted for the write down of its real estate and discontinued operations segment in accordance with FAS 144.

- 85 -


In December 2002, the FASB issued Financial Accounting Standard No. 148, "Accounting for Stock-Based Compensation -Transition and Disclosure" ("FAS 148"), an Amendment of Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation" ("FAS 123"). FAS 148 amends FAS 123 to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation. It also amends the disclosure provisions of that Statement to require prominent disclosure about the effects on reported net income of an entity's accounting policy decisions with respect to stock-based employee compensation.

Changes and Disagreements with Accountants

Supreme has had no change in, or disagreements with, its principal independent accountant during the past two fiscal years or since its inception.

VOTING AND MANAGEMENT INFORMATION

Majority Stockholders Consent

As previously stated, we are not asking you for a proxy and you are requested not to send us a proxy. Stockholders holding more than 74% of the outstanding share of Supreme have approved the adoption of the merger agreement and the merger. As a result, no vote by the stockholders of Supreme will be taken as these actions have already been approved by the written consent of the stockholders of a majority of the outstanding shares of Supreme. as allowed by Section 7.10 of the Business Corporation Act of the State of Illinois. We have attached the form of stockholders' consent as Exhibit 99.a to this information statement/prospectus.

Coronation has only one stockholder of record and he is the sole director of Coronation. He has voted 100% of the issued and outstanding shares of Coronation for the adoption of the merger agreement, the merger, name change of Coronation to "Supreme Realty Investments, Inc.", the appointment of new directors on close of the merger and related stock issuances to the merger.

Dissenter's Rights of Appraisal of Stockholders of Supreme

Under Illinois law, stockholders of Supreme's shares who do not vote in favor of the merger and who follow the procedures set forth under Illinois law may require the combined company to pay in cash the fair value of his or her shares as determined under Sections 11.65 and 11.70 of the Illinois Business Corporation Act. We have attached the text of Sections 11.65 and 11.70 of the Illinois Business Corporation Act to this document as Exhibit 4.3. In order to exercise those statutory rights, strict compliance with these statutory provisions is required. Each stockholder who may desire to exercise those rights should carefully review and adhere to those provisions.

A dissenting stockholder of Supreme who desires to pursue his or her rights to demand payment must deliver a written demand for payment to Supreme within twenty days of receiving this information statement/prospectus, demanding payment for his or her shares if the merger is completed.

- 86 -


The initial written objection of a dissenting stockholder of Supreme should be delivered to Supreme's office at: 431 E. 75th Street, Chicago, Illinois 60619 Attn: Thomas Elliott, President of Supreme. It is recommended that this objection be sent by registered or certified mail, return receipt requested.

A dissenting Supreme stockholder that delivers the required written demand for payment with Supreme prior to the transaction closing date need not have voted against the merger, but a vote in favor of the merger will constitute a waiver of that stockholder's statutory dissenter's rights.

Supreme will send to those stockholders delivering written demands for payment a statement of its estimate of the fair value of the Supreme's shares within the later of (a) 10 days after the effective date of the merger or (b) 30 days after such stockholder delivers a written demand for payment to Supreme. Financial information about Supreme required to be provided under Section 11.70 of the Illinois Business Corporation Act will accompany this statement. Supreme will also send such stockholders a commitment to pay for their shares at their estimated fair value, plus accrued interest, upon transmittal to Supreme of the certificates representing, or other evidence of ownership of, such shares. If the merger occurs, Supreme will pay to each dissenter who transmits to Supreme his or her certificate or other evidence of ownership the amount Supreme estimates to be the fair value of such dissenter's shares, plus accrued interest, accompanied by a written explanation of how the interest was calculated.

A stockholder who does not agree with Supreme's estimate of fair value or the amount of interest due must notify Supreme in writing of the stockholder's estimate of the shares' fair value and the amount of interest due and demand payment for the difference and the interest due within 30 days from the delivery of Supreme's statement of its estimate of fair value. Stockholders who fail to notify Supreme of their estimate of fair value or the amount of interest due within this period will lose their rights to dispute the amounts estimated and determined by Supreme

If a stockholder and Supreme are unable to agree on the fair value of the shares and accrued interest within 60 days from delivery to Supreme of the stockholder's estimate of fair value and accrued interest, Supreme will either pay the difference in value that the stockholder demanded with interest or file a petition in the Circuit Court of Cook County, State of Illinois, requesting the court to determine the fair value of the shares and the interest due. Supreme will make all dissenters, whether or not residents of Illinois, whose demands remain unsettled, parties to any such proceeding and all parties will be served with a copy of the petition. Stockholders who do not live in Illinois may be served by registered or certified mail or by publication as provided by law.

If the court's determination of fair value and interest due exceeds the amount paid by Supreme, then each dissenting stockholder made a party to the proceeding is entitled to judgment for the difference plus interest. The court may appoint one or more persons as appraisers to receive evidence and to determine the fair value. The court will determine all costs of the proceeding, including the reasonable compensation and expenses of the appraisers. Fees and expenses of counsel and experts for any party are excluded. If the fair value of the shares as determined by the court materially exceeds the amount of Supreme's estimate, or if no estimate was made, then all or any part of such expenses may be assessed against Supreme. However, if a stockholder's estimated fair value materially exceeds the fair value that the court determines, then all or any part of such expenses may be assessed against the stockholder. Under certain circumstances, the court may also assess the fees and expenses of counsel and experts to a stockholder or to Supreme.

- 87 -


Interest of Directors and Officers of Supreme in the Merger

In considering the recommendation of the board of directors of Supreme, you should be aware that members of Supreme's management and of the board of directors of Supreme have interests in the merger that are different from, or in addition to, the interests of the Supreme's stockholders generally. The members of the board of directors of Supreme knew about these additional interests and considered them when they approved the reorganization agreement, such as:

 
  •  
As of December 5 , 2003, directors and officers and their affiliates currently own approximately 74.44% of all outstanding shares of the shares of Supreme entitled to vote at for the merger and which did vote by consent resolution in favor of the merger;
 
  •  
On completion of the merger, Coronation may enter into employment arrangements with some or all of the executive officers of Supreme which, among other things, will enable such executive officers;

The directors and officers of Supreme may therefore have had different reasons to vote to approve the reorganization agreement and the merger than if they did not have these interests.

Interests of Director and Office of Coronation in the Merger

Mr. Miller, the sole director and officer of Coronation is an arm's length party to Supreme. He will not receive any personal advantage monetary or otherwise other than his share ownership of 1,350,000 shares of common stock which he will retain in Coronation.

Outstanding Shares and Voting Rights

Supreme.

At May 27, 2003 (the "record date"), Supreme had 19,342,000 shares outstanding. These are the securities that would have been entitled to vote if a meeting was required to be held. Each share is entitled to one vote. The outstanding shares of Supreme at the close of business on the record date for determining stockholders who would have been entitled to notice of and to vote on any matter submitted to stockholders at a meeting of stockholders, were held by approximately forty-three (43) stockholders of record. The majority stockholders have agreed by written consent in lieu of a stockholders meeting to the merger agreement and an escrow agreement which requires the agreement of a number of other stockholders. The complete text of the merger agreement and escrow agreement are attached as Exhibit 2 and Exhibit 4.3 respectively to this information statement/prospectus.

- 88 -


Coronation.

As at May 27, 2003 (the "record date"), Coronation had 5,000,000 shares of common stock outstanding held by one stockholder who voted for the merger agreement and related transactions, including changing the name of Coronation the appointment of new directors on close of the merger and returning to the treasury of Coronation 3,650,000 of those shares he currently holds on closing of the merger among other matters.

Record Date

The close of business on May 27, 2003, has been fixed as the record date for the determination of stockholders of Supreme and Coronation entitled to receive this information statement/prospectus.

Expenses of Information Statement/Prospectus

The expenses of mailing this information statement/prospectus will be borne by the Supreme, including expenses in connection with the preparation and mailing of this information statement/prospectus and all documents that now accompany or may hereafter supplement it. It is contemplated that brokerage houses, custodians, nominees, and fiduciaries may be requested to forward the information statement/prospectus to the beneficial owners of the stock held of record by such persons and that the Supreme will reimburse them for their reasonable expenses incurred in connection therewith.

Security Ownership of Certain Beneficial Owners and Management

Coronation.

The following table sets forth information concerning the ownership of shares of Coronation immediately before and after consummation of the merger agreement, with respect to stockholders who were known to the Board of Directors of Supreme and Coronation to be beneficial owners of more than 5% of the shares outstanding of each respective company as of December 5 , 2003, and executive officers and directors of Coronation individually and as a group. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such shares and holds the shares directly.

[Continued on Next Page]

 

- 89 -


 

 

Name and Address of Beneficial Owner

Shares Beneficially Owned(1)

Percent of Voting Stock(1)

Before Share Exchange

After Share Exchange

Before Share Exchange

After Share Exchange

Harry Miller(2)
401 Detwiller Lane
Bellevue, WA 98004

5,000,000

1,350,000

100%

4.5%

Thomas Elliott(3)
15 Iliad Drive
Tinley Park, IL 60602

0

13,953,000

0%

46.53%

Jean LeRoy(4)
555 Barton Avenue
Chicago, IL 60602

0

6,139,320

0%

20.47%

Director and Officers as a Group

5,000,000

20,092,320

100%

67%

Notes:

  1. Coronation only has one class of shares outstanding - common stock. The above table assumes 29,987,900 shares will be issued and outstanding on close of the merger agreement. This is an estimate as the shares to be issued to the stockholders of Supreme will be rounded up if they are an odd number.
  2. Mr. Miller is the sole director, officer and stockholder of Coronation as of the date of this information statement/prospectus. He will cease to be a director and officer of Coronation on close of the merger. He has agreed to return to treasury 3,650,000 shares he currently holds in Coronation as part of the merger.
  3. Mr. Elliott is expected to be a director, officer and 5% holder on close of the merger.
  4. Mr. LeRoy is expected to be a director, officer and 5% holder on close of the merger. He will hold 5,860,260 of his 6,139,320 shares in the name of Yorel Consulting, Inc. which is wholly-owned by Mr. LeRoy.

Supreme.

The following table sets forth information concerning the ownership of shares of Supreme as of December 5 , 2003, with respect to stockholders who were known to the Board of Directors of Supreme to be beneficial owners of more than 5% of the shares outstanding and executive officers and directors of Supreme individually and as a group. Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to such shares and holds the shares directly.

- 90 -



Name and Address of Beneficial Owner


Nature of Ownership

Shares Beneficially Owned


Percent of Class

Thomas Elliott
15 Iliad Drive
Tinley Park, IL 60477
Direct - Officer/Director

10,000,000

51.70%

Yorel Consulting, Inc.
27 N. Wacker
Chicago, IL 60602
Investment Holding Co. for the benefit of Jean LeRoy

4,200,000

21.71%

Jean LeRoy, CFO
555 Barton Ave.
Evanston, IL 60202
Direct- Officer/Director

200,000

 

1.03%

Directors and Officers as a Group  

14,400,000

74.44%

Appointment of New Directors and Officers to Coronation

Mr. Harry Miller, the current director and officer of Coronation will resign his positions with the Coronation at the close of the merger agreement and two new directors, Messrs. Thomas Elliott and Jean LeRoy will be appointed as part of the merger transactions. All of the information set forth in this section regarding the "Election of Directors" pertains to those executives of Supreme who will become directors and officers of Coronation on the close of the merger agreement. Messrs Elliott , LeRoy and Shaw anticipated positions with Coronation post-merger, age and business experience is as follows:

Thomas Elliott, 48, JD, MBA

President/CEO

Mr. Elliott's background covers a broad spectrum of real estate and development activities including master planning, financing, site acquisition, zoning, development, management, and sales of several major residential and commercial properties throughout the United States.

More specifically, over the past 25 years, his duties have included performing feasibility studies and market analysis, arranging mortgage financing, providing contract administration, coordinating construction, and property management activities for single- and multi-family residential developments, elderly hi-rises, regional shopping malls, urban strip centers, and low-rise office complexes.

Prior to acquiring Supreme in April, 2000, Mr. Elliott was employed as:

  • Real Estate Attorney (1993-2001); advising clients on the planning, negotiation, and financing of real estate transactions.
  • Sr. Project Manager, Mesirow/Stein Real Estate Services, Inc.(1991-1993); Large real estate development firm. Duties included supervision of master planning, financing, site acquisition, zoning, and development of several major residential and commercial properties in Chicago, Washington, DC, and St. Louis, MO.

- 91 -


  • Assistant Commissioner, City of Chicago, - Dept. of Housing(1989-1991). Local government housing agency. Duties included planning and oversight of all major multi-family housing rehab projects throughout Chicago.

Mr. Elliott is a licensed real estate broker who also holds: Doctor of Jurisprudence (JD, Real Estate Law) Illinois Institute of Technology Chicago Kent College of Law; Master of Business Administration (MBA, Finance) Devry University Keller Graduate School of Management, Chicago, IL; and Bachelor of Science (BS, Bus. Admin/Econ.) Culver-Stockton College, Canton, MO.

Jean LeRoy, 35, BSEE, MBA

V.P., Investor Relations/Treasurer

Mr. Leroy's background includes extensive experience in the design, development, implementation, integration, and customization of information technology and accounting systems for the financial services, computing, and communication industries. Over the past 14 years he has performed these services for several Fortune 500 companies and leaders in their respective industries.

Prior to coming to Supreme in January, 2002 Mr. LeRoy was employed as :

  • Systems Engineer, EMC Corp(2001-2002).; Major information technology firm. Duties included design, development, implementation, integration, and customization of information technology and accounting systems.
  • Management Consultant, Adventis Corp(1997-2001); Major management consulting firm. Duties included consulting for the design and integration of information technology systems for 3M Corp(manufacturing), BellSouth Wireless(telecommunications), and Reuters, Inc(news and information services).

Mr. LeRoy holds a Bachelor of Science (BS, Electronic Engineering) from Devry University and a Master of Business Administration (MBA, Finance) from DePaul University.

Elbert Shaw, 53, BS

Outside Director/Chairman, Audit Committee

Mr. Shaw's background includes commercial banking, and city government. More specifically, Mr. Shaw has served as Village Manager (Mayor) of the City of University Park, IL for the past 5 years and as a board member of Advance Bank for 2 years.

Mr. Shaw holds a Bachelor of Science degree from the Illinois Wesleyan University, Bloomington, Illinois.

- 92 -


Other Officers and Significant Employees

The following table outlines the name, age, position and background of individuals who are not executive officers but are expected to make a significant contribution to Coronation following the merger.:

Name Age Position with Supreme Background
Carl Brown, MBA 35 Acquisitions Analyst

July, 2002

Financial Analyst
Arthur Mooring 45 Property Manager
July, 2002
Property Manager
Antonio Cadet, CPA 37 Accountant
February, 2003
Staff Accountant

In July, 2003, Supreme automatically renewed, its one-year employment agreements with its Acquisitions Analyst and Property Manager. In the event of termination other than for cause, the contracted employee will receive a lump sum benefit equal to the average compensation in the three most highly compensated years. Upon termination, all options and rights to acquire common shares vest on the effective date of termination.

Family Relationships Among Directors

None.

Involvement in Certain Legal Proceedings.

During the past five years, none of the proposed directors or officers have been:

    1. a general partner or executive officer of any business against which any bankruptcy petition was filed, either at the time of the bankruptcy or two years prior to that time;
    2. convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
    3. subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
    4. found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Audit Committee Financial Expert.

Coronation will not initially have an audit committee financial expert serving on the new board of directors of Coronation or an audit committee at the time of the merger. Coronation intends to look at the feasibility and benefit of such an expert would add to Coronation.

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It is unlikely, however, Coronation will be able to attract an independent financial expert to serve on Coronation's board of directors at this stage of its development. In order to entice such a director to join Coronation's board of directors, Coronation would probably need to acquire directors' errors and omission liability insurance and provide some form of meaningful compensation to such a director; two things which the new board of directors of Coronation will examine the feasibility of these measures after the completion of the merger.

Code of Ethics.

Coronation adopted a Code of Ethics which was filed as Exhibit 21 to its Form 10-KSB filed March 31, 2003. The public may obtain a copy of Coronation's Code of Ethics on written request without charge from Coronation at either: P.O. Box 741, Bellevue, Washington, 98009; or from Supreme's office at 431 E. 75th Street, Chicago, Illinois 60619 which will become Coronation's office on close of the merger.

Executive Compensation

Summary of Compensation of Executive Officers.

No compensation of any kind was paid to Coronation's sole officer and director, Mr. Harry Miller, over the last three years.

The current board of directors of Supreme will become the board of directors of Coronation on closing of the merger. The following table summarizes the compensation paid to Supreme's President and Chief Executive Officer during the last three complete fiscal years. No other officer or director received annual compensation in excess of $100,000 during the last three complete fiscal years.

[Continued on Next Page]

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Summary Compensation Table

SUMMARY COMPENSATION TABLE

Name and Principal Position

Year

Annual Compensation

Long Term Compensation

All Other Compen- sation

   

Salary

Bonus

Other Annual Compen- sation

Awards Payouts  
         

Securities Under Options/ SARs Granted

Restricted Shares or Restricted Share Units

LTIP Payouts

 
Thomas Elliott, President, CEO and Director 2002
2001
2000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
5,000,000(1)
5,000,000(2)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Jean LeRoy, CFO 2002
2001
2000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
4,200,000(3)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil

Notes:

  1. Represents 5,000,000 options that were exercisable at $0.01 per share. The aggregate deemed value of this stock compensation is $50,000.
  2. Represents 5,000,000 options that were exercisable at $0.01 per share. The aggregate deemed value of this stock compensation is $50,000.
  3. Represents 4,200,000 options that are exercisable at $0.01 per share. The aggregate deemed value of this stock compensation is $42,000.

Stock Options/SAR Grants.

No grants of stock options or stock appreciation rights were made during the fiscal year ended December 31, 2002 to Coronation's named executive officers or any other parties.

Supreme issued an aggregate total of 9,400,000 stock options which were immediately exercised for 9,400,000 shares in Supreme.

Aggregate Option/SAR Exercises

Aggregate Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

(a)

(b)

(c)

(d)

(e)

Name

Shares Acquired on Exercise (#)

Value Realized ($)

Number of Securities Underlying Unexercised Options/SARs at FY-End (#)
Exercisable/Unexercisable

Value of Unexercised In-the Money Options/SARs at FY-End ($)
Exercisable/Unexercisable

Thomas Elliott, President, CEO and Director

5,000,000

50,000

0/0

0/0

Jean LeRoy, CFO

4,200,000

42,000

0/0

0/0

 

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Long-Term Incentive Plans.

There are no arrangements or plans in which Coronation does or will provide post-merger pension, retirement or similar benefits for directors or executive officers, except that Coronation's directors and executive officers may receive stock options at the discretion of its board of directors. Coronation does not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to its directors or executive officers, except that stock options may be granted at the discretion of Coronation's board of directors.

Compensation of Directors.

Coronation has no plans or arrangement pursuant to which its directors are to be compensated for their services in their capacity as directors except for the granting from time to time of incentive stock options. The board of directors may award special remuneration to any director undertaking any special services on behalf of Coronation other than services ordinarily required of a director. Other than indicated in this information statement/prospectus, we do not anticipate that any director will receive and/or accrued any compensation for his services as a director, including committee participation and/or special assignments.

Employment Contracts and Termination of Employment or Change of Control.

Coronation has no plans or arrangements in respect of remuneration received or that may be received by its proposed executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

Certain Relationships and Related Transactions

There have been no related party transactions, or any other transactions or material relationships between Supreme and the proposed board of directors or Coronation and the proposed board of directors and none is anticipated.

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PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
 

Indemnification of Directors and Officers

The Articles of Incorporation of Coronation allows Coronation on a case by case basis to indemnify the directors and officers of Coronation to the fullest extent permitted by Nevada law.  Nevada law presently provides that in the case of a non-derivative action (that is, an action other than by or in the right of a corporation to procure a judgment in its own favor), a corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding by reason of the fact that the person is or was an agent of the corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe that the conduct of the person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that the person did not act in good faith and in a manner that the person reasonably believed to be in the best interests of the corporation or that the person had reasonable cause to believe that the person's conduct was unlawful.

With respect to derivative actions, Nevada law provides that a corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was an agent of the corporation, against expenses actually and reasonably incurred by that person in connection with the defence or settlement of the action if the person acted in good faith, in a manner the person believed to be in the best interests of the corporation and its stockholders. Indemnification is not permitted to be made in respect of any claim, issue, or matter as to which the person shall have been adjudged to be liable to the corporation in the performance of that person's duty to the corporation and its stockholders, unless and only to the extent that the court in which the proceeding is or was pending determines that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses, and then only to the extent that the court shall determine.

The agreement and plan of exchange and reorganization (the "merger agreement") described in this registration statement provides for Coronation and Supreme to indemnify and hold harmless, any officer, director, or employees of Coronation or Supreme against losses, claims, liabilities, expenses (including reasonable attorneys' fees and expenses), judgments, fines and amounts paid in settlement in accordance herewith in connection with any threatened or actual claim, action, suit, proceeding or investigation.

INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING CORONATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS THEREFORE UNENFORCEABLE.

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Exhibits and Financial Statement Schedules

Exhibit
Number

   

Description

 
 

 
 

 2 .1

    Agreement and Plan of Exchange and Reorganization dated as of March 31, 2003 by and among Coronation Acquisition Corp. and Supreme Property, Inc.
 

2.2

    Amending Agreement by and among Coronation Acquisition Corp. and Supreme Property, Inc. dated as of October 15, 2003.
 

 3.1

    Articles of Incorporation as amended of Coronation Acquisition Corp. 
 

 3.2

    Articles of Amendment of Coronation Acquisition Corp.
 

3.3

    Bylaws of Coronation Acquisition Corp.
 

 3.4

    Articles of Incorporation of Supreme Property, Inc.
 

3.5

    Articles of Amendment of Supreme Property, Inc.
 

 3.6

    Bylaws of Supreme Property Inc.
 

 4.1

    Specimen Common Stock Certificate of Coronation Acquisition Corp.
 

4.2

    Escrow Agreement of Former Supreme Property, Inc. Stockholders
 

4.3

    Illinois Dissenter's Rights
 

5

    Legal Opinion and Consent of Counsel.
 

8

    Federal Income Tax Opinion of Counsel
 

21

    Subsidiaries of Supreme Property, Inc.
 

23.1

    Consent of Richard Walker and Co.
 

23.2

    Consent of George Stewart
 

99.a

    Form of Written Consent of Majority Stockholders of Supreme Property, Inc.

Undertakings

The undersigned registrant hereby undertakes:

(a)(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

      (i)  To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
      (ii)  To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

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  (iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
      (2)    That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) The undersigned registrant hereby undertakes:

 (1)  

That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

 (2)  

That every prospectus (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 (3)  

That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(4)  

To respond to requests for information that is incorporated by reference into the information statement/prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(5)  

To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
  (6)   Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the

- 99 -


  opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Bellevue, State of Washington, on December 5 , 2003

   
  CORONATION ACQUISITION CORP.
 

 

By

 /s/ Harry Miller
 
  Harry Miller, President, Chief Financial Officer, Secretary, Treasurer & Sole Director
   
  SUPREME PROPERTY, INC.
 
/s/ Thomas Elliott
 
  Thomas Elliott, President
   
  /s/ Jean LeRoy
 
  Jean LeRoy, Chief Financial Officer
   
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
   
  /s/ Thomas Elliott
 
  December 5 , 2003 Thomas Elliott, President
  SUPREME PROPERTY, INC.
   
   
 
/s/ Jean LeRoy
 
  December 5 , 2003 Jean LeRoy, Chief Financial Officer
  SUPREME PROPERTY, INC.
   
 
/s/ Harry Miller
 
  December 5 , 2003  Harry Miller, President, Chief Financial Officer, Secretary, Treasurer & Sole Director
  CORONATION ACQUISITION CORP.

100



MERGER AGREEMENT HTML

exhibit2_1.htm


EXHIBIT 2 .1

Agreement and Plan of Exchange and Reorganization Dated as of March 31, 2003
By and Between Coronation Acquisition Corp. and Supreme Property, Inc.

 

AGREEMENT

and

PLAN OF EXCHANGE

and

REORGANIZATION

by and between

CORONATION ACQUISITION CORP.

and

SUPREME PROPERTY, INC.

 

 

Dated for reference March 31, 2003


TABLE OF CONTENTS

RECITALS  4
ARTICLE 1. THE EXCHANGE 5
  1.1 THE EXCHANGE 5
  1.2 CLOSING 5
  1.3 EFFECTIVE DATE 5
  1.4 EFFECT OF THE EXCHANGE ON BYLAWS 5
  1.5 BOARD OF DIRECTORS OF PUBLICCO 6
  1.6 NAME OF THE CORPORATION 6
  1.7 SHAREHOLDER APPROVAL 6
  1.8 DISSENTER'S RIGHTS 6
  1.9 EXCHANGE RATIOS AND OTHER EXCHANGE CONSIDERATIONS 6
  1.10 EXCHANGE OF CERTIFICATES 7
     
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF PUBLICCO 8
  2.1 ORGANIZATION, STANDING, AND POWER 8
  2.2 SUBSIDIARIES OR OTHER AFFILIATED ENTITIES 9
  2.3 CAPITAL STRUCTURE 9
  2.4 SEC DOCUMENTS 9
  2.5 FINANCIAL STATEMENTS 10
  2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS 10
  2.7 LITIGATION 10
  2.8 TAXES 11
  2.9 NO PAYMENTS TO EMPLOYEES 11
  2.10 BROKERS AND ADVISORS; SCHEDULE OF FEES AND EXPENSES 12
  2.11 COMPLIANCE WITH LAWS 12
  2.12 CONTRACTS; DEBT INSTRUMENTS 13
  2.13 STATE TAKEOVER STATUTES. 13
     
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SUPREME 13
  3.1 ORGANIZATION, STANDING, AND POWER 13
  3.2 SUBSIDIARIES OR OTHER AFFILIATED ENTITIES 14
  3.3 CAPITAL STRUCTURE 14
  3.4 FINANCIAL STATEMENTS 14
  3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS 14
  3.6 LITIGATION 15
  3.7 TAXES 15
  3.8 BROKERS AND ADVISORS; SCHEDULE OF FEES AND EXPENSES 16
  3.9 COMPLIANCE WITH LAWS 16
  3.10 CONTRACTS; DEBT INSTRUMENTS 16
     
ARTICLE 4. COVENANTS 17
  4.1 CONDUCT OF BUSINESS PENDING EXCHANGE 17
     
ARTICLE 5. ADDITIONAL COVENANTS 20
  5.1 PREPARATION OF THE FORM S-4; CONSENT SOLICITATIONS 20
  5.2 ACCESS TO INFORMATION; CONFIDENTIALITY 20
  5.3 TAX MATTERS 21
  5.4 PUBLIC ANNOUNCEMENTS 21
  5.5 LISTING 21
  5.6 TRANSFER AND GAINS TAXES 21
  5.7 INDEMNIFICATION 22
  5.8 FEES AND EXPENSES 22
     
ARTICLE 6. CONDITIONS 23
  6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE EXCHANGE 23
  6.2 CONDITIONS TO OBLIGATIONS OF SUPREME 23
  6.3 CONDITIONS TO OBLIGATIONS OF PUBLICCO 24
     
ARTICLE 7. TERMINATION, AMENDMENT, AND WAIVER 25
  7.1 TERMINATION 25
  7.2 AMENDMENT 26
  7.3 EXTENSION; WAIVER 26
     
ARTICLE 8. GENERAL PROVISIONS 26
  8.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES 26
  8.2 NOTICES 26
  8.3 INTERPRETATION 28
  8.4 COUNTERPARTS 28
  8.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES 28
  8.6 GOVERNING LAW 29
  8.7 ASSIGNMENT 29
  8.8 ENFORCEMENT 29
  8.9 SEVERABILITY 29
  8.10 EXCULPATION 30
  8.11 JOINT AND SEVERAL OBLIGATIONS 30
     
EXHIBIT A  - NEVADA ARTICLES OF MERGER OR EXCHANGE  
EXHIBIT B  - ILLINOIS ARTICLES OF MERGER OR EXCHANGE  
SCHEDULE 1  - PUBLICCO SEC DOCUMENTS  
SCHEDULE 2  - PUBLICCO LIABILITIES AND OBLIGATIONS  
SCHEDULE 3  - PUBLICCO SHAREHOLDERS  
SCHEDULE 4  - SUPREME LIABILITIES AND OBLIGATIONS  


    
THIS AGREEMENT AND PLAN OF EXCHANGE and REORGANIZATION (this "Agreement") dated for reference this 31st day of March, 2003, by and between CORONATION ACQUISITION CORP., a Nevada corporation, (hereinafter referred to as "PublicCo"), and SUPREME PROPERTY, INC., an Illinois corporation, (hereinafter referred to as SUPREME).

 

RECITALS

  1. The Board of Directors of PublicCo and the Board of Directors of Supreme deem it advisable and in the best interests of their respective shareholders, upon the terms and subject to the conditions contained herein, that the outstanding common stock of Supreme shall be exchanged for the newly-issued common stock of PublicCo(the "Exchange").
  2. Upon the terms and subject to the conditions set forth herein, PublicCo shall execute Articles of Merger or Exchange (the "Nevada Articles of Exchange")in substantially the form attached hereto as EXHIBIT A and shall file such Nevada Articles of Merger in accordance with Nevada law to effectuate the Merger.
  3. Concurrently with the filing of the Nevada Articles of Merger, Supreme shall execute Articles of Merger, Consolidation, or Exchange (the "Illinois Articles of Exchange") in substantially the form attached hereto as EXHIBIT B and shall file such Illinois Articles of Exchange in accordance with Illinois law to effectuate the Exchange.
  4. For federal income tax purposes, it is intended that the Exchange shall qualify as a reorganization under Section 368(a)(1)(B) of the Internal Revenue Code, as amended (the "Code"), and that this Agreement shall constitute a plan of reorganization under Section 368(a)(1)(B) of the Code.
  1. PublicCo and Supreme desire to make certain representations, warranties and agreements in connection with the Exchange.

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein, the parties hereto hereby agree as follows:


ARTICLE 1. THE EXCHANGE

1.1 THE EXCHANGE. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with provisions of the Illinois Business Corporation Act of 1983, as amended, and Chapter 92A of the Nevada Revised Statutes of 2001, as amended, all of the outstanding common stock of Supreme shall be acquired in exchange for 90% of the outstanding common stock PublicCo, and other valuable consideration. Thereafter, Supreme shall become a wholly-owned subsidiary of PublicCo.

1.2 CLOSING. The closing of the Exchange (the "Closing") will take place commencing at 9:00 a.m., local time, on the date to be specified by the parties, which (subject to satisfaction or waiver of the conditions set forth in Article 6) shall be no later than the third business day after satisfaction or waiver of the conditions set forth in Section 6.1(a) (the "Closing Date"), at the offices of Action Stocks, Inc., 990 Highland Drive  - Suite 106, Solana Beach, California, 92075, unless another date or place is agreed to in writing by the parties.

1.3 EFFECTIVE DATE. The Exchange shall become effective (the "Effective Date") at such time as PublicCo and Supreme shall agree should be specified in the Illinois Articles of Exchange, and the Nevada Articles of Exchange (not to exceed three (3) days after the Nevada Articles of Exchange are accepted for record by the Secretary of State). Unless otherwise agreed, the parties shall cause the Effective Date to occur on the Closing Date. As soon as practicable on or following the Closing Date: (i) PublicCo and Supreme shall execute and file the Articles of Exchange with the Office of the Secretary of State of the State of Nevada, and (ii) PublicCo and Supreme shall then execute and file the Illinois Articles of Exchange with the Office of the Secretary of State of the State of Illinois, and shall make all other filings and recordings required, with respect to the Exchange, under the laws of the states of Nevada and Illinois, respectively.

1.4 EFFECT OF THE EXCHANGE ON BYLAWS. The Bylaws of Supreme, as in effect immediately prior to the Effective Date of the Exchange, shall continue in full force and effect after the Exchange as the bylaws of Supreme and, until further amended, in accordance with the laws of the State of Nevada until the same shall be amended or repealed in accordance with the provisions thereof.


1.5 BOARD OF DIRECTORS OF PUBLICCO. The Board of Trustees of PUBLICCO shall consist of the members of Supreme's Board of Directors immediately prior to the Effective Date of the Exchange, who shall continue to serve for the balance of their unexpired terms or their earlier death, resignation, or removal, along with one(1) member from PublicCo's Board of Directors immediately prior to the Effective Date of the Exchange, and one(1) independent director nominated and elected by the voting shareholders of PUBLICCO stock.

1.6 NAME OF THE CORPORATION. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article 6, the Board of Directors of PublicCo shall change the corporation's name to SUPREME REALTY INVESTMENT TRUST, INC., and that shall remain the name of PUBLICCO.

1.7 SHAREHOLDER APPROVAL. PublicCo shall seek the requisite approval its shareholders to the extent required by laws of the State of Nevada to effectuate the transactions contemplated by this Exchange Agreement. Supreme shall seek the requisite approval its shareholders to the extent required by laws of the State of Illinois to effectuate the transactions contemplated by this Exchange Agreement.

1.8 DISSENTER'S RIGHTS. Pursuant to Section 92A.390 of the Nevada Revised Statutes of 2001, as amended, the holders of PublicCo common stock have no right of dissent with respect to this Exchange Agreement. Pursuant to Chapter 805, Section 11.65 of the Illinois Compiled Statutes, holders of Supreme common stock do have the right to dissent with respect to this Exchange Agreement.

1.9 EXCHANGE RATIOS AND OTHER EXCHANGE CONSIDERATIONS. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article 6:

(a) Each of the issued and outstanding shares of common stock of SUPREME shall be tendered and exchanged for 1.3953 validly issued, fully paid, and nonassessable shares of no par, common stock of PUBLICCO. Each certificate, properly endorsed and nominally representing shares of common stock of SUPREME shall be evidence of ownership of said common stock as of the Effective Date. The holders of such certificates shall be required to surrender the same in exchange for the properly registered certificates evidencing ownership of shares of the common stock of PUBLICCO.


(b) As additional consideration, SUPREME will assume Four thousand seven hundred and 00/100($4,700.00) of PUBLICCO'S existing liabilities.

(c) PUBLICCO shall issue 1,350,000 shares of its common stock to SG Financial Services Group and 300,000 shares of its common stock to Nick Segounis for their role in introducing SUPREME and PUBLICCO. And,

(d) Mr. Miller will return to the treasury of PUBLICCO 3,650,000 share of the 5,000,000 shares of common stock he currently holds in PUBLICCO for cancellation and PUBLICCO shall cancel the 3,650,000 shares of common stock returned to treasury by Mr. Miller.

1.10 EXCHANGE OF CERTIFICATES.

(a) EXCHANGE AGENT. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article 6, the parties shall appoint Interstate Transfer Company (the "Exchange Agent"), of 6084 S. 900 E. Street, Suite 101, Salt Lake City, Utah, 84121 to act as exchange agent for the exchange of the certificates representing the issued and outstanding shares of PublicCo and Supreme, respectively.

(b) EXCHANGE PROCEDURE. As soon as practicable after the Effective Date, PublicCo shall use commercially reasonable efforts to cause the Exchange Agent to mail to each holder of record of a certificate, which, prior to the Effective Date, represented shares Supreme common stock, (i) a letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in a form and have such other provisions as PublicCo may reasonably specify, and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the shares of PublicCo. Upon surrender to the Exchange Agent, a Certificate for cancellation, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Exchange Agent, the holder of such Certificate shall be entitled to receive in exchange therefor, the shares of PublicCo into which the shares of Supreme Common Stock theretofore represented by such Certificate shall have been exchanged, at the rate designated in Section 1.9 above.


(c) NO PRE-CLOSING DIVIDENDS. The Board of Directors of PublicCo and Supreme, respectively warrant and represent that no dividends were declared at any time prior to the Closing Date.

(d) FRACTIONAL SHARES. No certificates or scrip representing fractional shares of PublicCo shall be issued pursuant to this Agreement. If such fractional shares should occur as a result of the exchange rate, such fractional shares shall be rounded down to the nearest whole share.

(e) LOST CERTIFICATES. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by PUBLICCO or the Exchange Agent, the posting by such person of a bond in such reasonable amount as PUBLICCO or the Exchange Agent may direct (but consistent with the practices PUBLICCO applies to its own shareholders) as indemnity against any claim that may be made against them with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the PUBLICCO Common Shares to which the holders thereof are entitled pursuant to Section 1.9.

 

ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF PUBLICCO

The Board of Directors of PublicCo hereby warrant and represent to the Board of Directors of Supreme the following:

2.1 ORGANIZATION, STANDING, AND POWER. PublicCo has been duly organized and is validly existing and in good standing under the laws of the State of Nevada. PublicCo has all requisite corporate power and authority to own, operate, lease, and encumber its properties and carry on its business as now being conducted. The PublicCo Articles of Incorporation, as amended (the "PublicCo Articles") are in effect, and no dissolution, revocation or forfeiture proceedings regarding PublicCo have been commenced. PublicCo is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed, individually or in the aggregate, would not have a material adverse effect on the business, properties, assets, financial condition or results of operations of PublicCo. PublicCo has delivered to Supreme complete and correct copies of the PublicCo Articles of Incorporation, Bylaws (the "PublicCo Bylaws"), and a Certificate of Good Standing issued by the Office of the Secretary of State of Nevada, in each case, as amended or supplemented to the date of this Agreement.


2.2 SUBSIDIARIES OR OTHER AFFILIATED ENTITIES. PublicCo has no ownership or equity interests in any affiliate, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, syndicate, cartel, or other business combination or other legal entity.

2.3 CAPITAL STRUCTURE. PublicCo has authorized capital stock consisting of 100,000,000 shares of $.0001 par value, common stock, of which 5,000,000 shares have been issued and outstanding.

2.4 SEC DOCUMENTS. To the best of their knowledge, the Board of Directors of PublicCo have filed all required reports, schedules, forms, statements and other documents with the SEC since January 1 2002, through the date hereof (the "PublicCo SEC Documents"). SCHEDULE 1 contains a complete list of all PublicCo SEC Documents filed by PublicCo with the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), between January 1, 2002 and the date of this Agreement. All of the PublicCo SEC Documents (other than preliminary material), as of their respective filing dates, complied in all material respects with all applicable requirements of the Securities Act and the Exchange Act and, in each case, the rules and regulations promulgated thereunder applicable to such PublicCo SEC Documents. None of the PublicCo SEC Documents, at the time of filing, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein in order to make the statements therein, not misleading, except to the extent such statements have been modified or superseded by later PublicCo SEC Documents filed and publicly available prior to the date of this Agreement.


2.5 FINANCIAL STATEMENTS. To the best of their knowledge, the Board of Directors represent that the financial statements of PublicCo included in the PublicCo SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles ("GAAP") (except, in the case of unaudited statements, as permitted by the applicable rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly presented in all material respects, in accordance with the applicable requirements of GAAP and the applicable rules and regulations of the SEC, the financial position of PublicCo as of the dates thereof and the consolidated results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except for liabilities and obligations set forth in the PublicCo SEC Documents or in SCHEDULE 2, attached hereto, PublicCo has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of PublicCo or in the notes thereto in which, individually, or in the aggregate would have a material adverse effect.

2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the most recent audited financial statements included in the PublicCo SEC documents, PublicCo has conducted its business only in the ordinary course and there have not been, (a) any material adverse change in the business, financial condition or results of operations of PublicCo, nor has there been any occurrence or circumstance that, with the passage of time, would reasonably be expected to result in a material adverse change.

2.7 LITIGATION. There is no suit, action, or proceeding pending in which service of process has been received by an employee, officer, or director of PublicCo or, to the knowledge of PublicCo threatened in writing against or affecting PublicCo, that would reasonably be expected to (i) have a material adverse effect or (ii) prevent the consummation of any of the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any court or governmental entity or arbitrator outstanding against PublicCo, having, or which, insofar as reasonably can be foreseen in the future, would have any such effect.


2.8 TAXES. For a taxable years for which the Internal Revenue service can assert a tax liability, PublicCo has filed all tax returns and reports required to be filed by it and all such returns and reports are accurate and complete in all material respects. PublicCo has paid all taxes shown on such returns and reports as required to be paid by it, and has complied in all material respects with all applicable laws, and has, within the time period prescribed by law, withheld and paid over to the proper governmental entities all amounts required to be so withheld and paid over under applicable laws and regulations. The most recent audited financial statements contained in the PublicCo SEC Documents reflect an adequate reserve for all material taxes payable by PublicCo, if any, for all taxable periods and portions thereof through the date of such financial statements. Since the PublicCo Financial Statement Date, PublicCo has incurred no liability for taxes arising from a prohibited transaction, or has incurred no material liability for taxes other than in the ordinary course of business. No event has occurred, and no condition or circumstance exists, which presents a material risk that any material tax described in the preceding sentences will be imposed upon PublicCo. PublicCo is not the subject of any audit, examination, or other proceeding in respect of federal income Taxes, and to PublicCo's knowledge, no audit, examination or other proceeding in respect of federal income Taxes is being considered by any Tax authority. As used in this Agreement, "taxes" shall include all taxes, charges, fees, levies and other assessments, including, without limitation, income, gross receipts, excise, property, sales, withholding including, without limitation, dividend withholding and withholding required pursuant to Sections 1445 and 1446 of the Code), social security, occupation, use, service, license, payroll, franchise, transfer and recording taxes, fees and charges, including estimated taxes, imposed by the United States or any taxing authority (domestic or foreign), and any interest, fines, penalties or additional amounts attributable to, or imposed upon, or with respect to any such taxes, charges, fees, levies or other assessments.

2.9 NO PAYMENTS TO EMPLOYEES, OFFICERS OR DIRECTORS. There are no arrangements, agreements or plans pursuant to which cash and non-cash payments which will become payable


(and the maximum aggregate amount which may be payable thereunder) to each employee, officer or director of PublicCo as a result of the Exchange or a termination of service subsequent to the consummation of the Exchange. Except otherwise provided for in this Agreement, there is no employment or severance contract, or other agreement requiring payments, cancellation of indebtedness or other obligation to be made on a change of control or otherwise as a result of the consummation of any of the transactions contemplated by this Agreement or as a result of a termination of service subsequent to the consummation of any of the transactions contemplated by this Agreement, with respect to any employee, officer or director of PublicCo. There is no agreement or arrangement with any employee, officer or other service provider under which PublicCo has agreed to pay any tax that might be owed under with respect to payments to such individuals.

2.10 BROKERS AND ADVISORS; SCHEDULE OF FEES AND EXPENSES. No broker, investment banker, financial advisor or other person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of PublicCo.

2.11 COMPLIANCE WITH LAWS. PublicCo has not violated or failed to comply with any statute, law, ordinance, regulation, rule, judgment, decree or order of any governmental entity applicable to its business,

properties or operations, except to the extent that such violation or failure would not reasonably be expected to have a material adverse effect.

2.12 CONTRACTS; DEBT INSTRUMENTS. PublicCo has not received a written notice that it is in violation of or in default under (nor to the knowledge of PublicCo does there exist any condition which upon the passage of time or the giving of notice or both would cause such a violation of or default under) any material loan or credit agreement, note, bond, mortgage, indenture, lease, permit, concession, franchise, license or any other material contract, agreement, arrangement or understanding, to which it is a party or by which it or any of its properties or assets is bound, nor to the Knowledge of PublicCo does such a violation or default exist, except to the extent that such violation or default, individually or in the aggregate, would not reasonably be expected to have a material adverse effect. Except for any of the following expressly


identified in PublicCo SEC Documents, SCHEDULE 2 sets forth a list of each material loan or credit agreement, note, bond, mortgage, indenture and any other agreement or instrument pursuant to which any indebtedness is outstanding or may be incurred. For purposes of this Section 2.12, "indebtedness" shall mean (i) indebtedness for borrowed money, whether secured or unsecured, (ii) obligations under conditional sale or other title retention agreements relating to property purchased by such person, (iii) capitalized lease obligations, (iv) obligations under interest rate cap, swap, collar or similar transaction or currency hedging transactions (valued at the termination value thereof) and (v) guarantees of any such indebtedness of any other person.

2.13 STATE TAKEOVER STATUTES. PublicCo has taken all action necessary to exempt the transactions contemplated by this Agreement between Supreme and PublicCo from the operation of any "fair price," "moratorium," "control share acquisition" or any other anti-takeover statute or similar statute enacted under the laws of the State of Nevada or federal laws of the United States or similar statute or regulation (a "Takeover Statute").

 

ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SUPREME

The Board of Directors of Supreme hereby warrant and represent to the Board of Directors of PublicCo the following:

3.1 ORGANIZATION, STANDING, AND POWER. Supreme has been duly organized and is validly existing and in good standing under the laws of the State of Illinois. Supreme has all requisite corporate power and authority to own, operate, lease, and encumber its properties and carry on its business as now being conducted. The Supreme Articles of Incorporation, as amended (the "Supreme Articles") are in effect, and no dissolution, revocation or forfeiture proceedings regarding Supreme have been commenced. Supreme is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed, individually or in the aggregate, would not have a material adverse effect


on the business, properties, assets, financial condition or results of operations of Supreme. Supreme has delivered to PublicCo complete and correct copies of the Supreme Articles of Incorporation, Bylaws (the "Supreme Bylaws"), and a Certificate of Good Standing issued by the Office of the Secretary of State of Illinois, in each case, as amended or supplemented to the date of this Agreement.

3.2 SUBSIDIARIES OR OTHER AFFILIATED ENTITIES. Supreme owns a majority equity interest in its mortgage banking subsidiary, Supreme Capital Funding, Inc.("Capital"). Capital is an Illinois corporation that is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the requisite corporate power and authority to own, operate, lease, and encumber real properties, and carry on its business as now being conducted. Supreme has no ownership or equity interests in any other affiliate, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, syndicate, cartel, or other business combination or other legal entity.

3.3 CAPITAL STRUCTURE. Supreme has authorized capital stock consisting of 100,000,000 shares of $.01 par value, common stock, of which 19,342,000 shares have been duly issued and are now outstanding.

3.4 FINANCIAL STATEMENTS. The financial statements of Supreme included in the preliminary materials have been prepared in accordance with generally accepted accounting principles ("GAAP") (except, in the case of unaudited statements), applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly presented in all material respects, in accordance with the applicable requirements of GAAP. The financial position of Supreme as of the dates thereof and the consolidated results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Supreme has no other liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of PublicCo or in the notes thereto in which, individually, or in the aggregate would have a material adverse effect.

3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the most recent financial statements included in the preliminary materials, Supreme has conducted its business only in the ordinary course and there have not been, (a) any material adverse change in the business, financial condition or results of operations of Supreme, nor has there been any occurrence or circumstance that, with the passage of time, would reasonably be expected to result in a material adverse change.


3.6 LITIGATION. There is no suit, action, or proceeding pending in which service of process has been received by an employee, officer, or director of Supreme or, to the knowledge of Supreme threatened in writing against or affecting Supreme, that would reasonably be expected to (i) have a material adverse effect or (ii) prevent the consummation of any of the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any court or governmental entity or arbitrator outstanding against Supreme, having, or which, insofar as reasonably can be foreseen in the future, would have any such effect.

3.7 TAXES. For the taxable years for which the Internal Revenue service can assert a tax liability, Supreme has filed all tax returns and reports required to be filed by it and all such returns and reports are accurate and complete in all material respects. Supreme has paid all taxes shown on such returns and reports as required to be paid by it, and has complied in all material respects with all applicable laws, and has, within the time period prescribed by law, withheld and paid over to the proper governmental entities all amounts required to be so withheld and paid over under applicable laws and regulations. Since the Supreme Financial Statement Date, Supreme has incurred no liability for taxes arising from a prohibited transaction, or has incurred no material liability for taxes other than in the ordinary course of business. No event has occurred, and no condition or circumstance exists, which presents a material risk that any material tax described in the preceding sentences will be imposed upon Supreme. Supreme is not the subject of any audit, examination, or other proceeding in respect of federal income Taxes, and to Supreme's knowledge, no audit, examination or other proceeding in respect of federal income Taxes is being considered by any Tax authority. As used in this Agreement, "taxes" shall include all taxes, charges, fees, levies and other assessments, including, without limitation, income, gross receipts, excise, property, sales, withholding including, without limitation, dividend withholding and withholding required pursuant to Sections 1445 and 1446 of the Code), social security, occupation, use, service, license, payroll, franchise, transfer and recording taxes, fees and charges, including estimated taxes, imposed by the United States or any taxing authority (domestic or foreign), and any interest, fines, penalties or additional amounts attributable to, or imposed upon, or with respect to any such taxes, charges, fees, levies or other assessments.


3.8 BROKERS AND ADVISORS; SCHEDULE OF FEES AND EXPENSES. No broker, investment banker, financial advisor or other person, other than Action Stocks, Inc., ("Action"),is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Supreme.

3.9 COMPLIANCE WITH LAWS. Supreme has not violated

or failed to comply with any statute, law, ordinance, regulation, rule, judgment, decree or order of any governmental entity applicable to its business, properties or operations, except to the extent that such violation or failure would not reasonably be expected to have a material adverse effect.

3.10 CONTRACTS; DEBT INSTRUMENTS. Supreme has not received a written notice that it is in violation of or in default under (nor to the knowledge of Supreme does there exist any condition which upon the passage of time or the giving of notice or both would cause such a violation of or default under) any material loan or credit agreement, note, bond, mortgage, indenture, lease, permit, concession, franchise, license or any other material contract, agreement, arrangement or understanding, to which it is a party or by which it or any of its properties or assets is bound, nor to the knowledge of Supreme does such a violation or default exist, except to the extent that such violation or default, individually or in the aggregate, would not reasonably be expected to have a material adverse effect. SCHEDULE 4 sets forth a list of each material loan or credit agreement, note, bond, mortgage, indenture and any other agreement or instrument pursuant to which any indebtedness is outstanding or may be incurred. For purposes of this Section 3.11, "indebtedness" shall mean (i) indebtedness for borrowed money, whether secured or unsecured, (ii) obligations under conditional sale or other title retention agreements relating to property purchased by such person, (iii) capitalized lease obligations, (iv) obligations under interest rate cap,swap, collar or similar transaction or currency hedging transactions (valued at the termination value thereof) and (v) guarantees of any such indebtedness of any other person.


ARTICLE 4. COVENANTS

4.1 CONDUCT OF BUSINESS PENDING EXCHANGE. During the period from the date of this Agreement to the Effective Date, except as consented to in writing, or as expressly provided for in this Agreement, both parties shall use commercially reasonable efforts to:

    1. conduct its business only in the usual, regular, and ordinary course and in substantially the same manner as heretofore conducted;
    2. preserve intact its business organizations and goodwill;
    3. confer on a regular basis with one or more representatives of the other party to report operational matters of materiality and, subject to Section 4.3, any proposals to engage in material transactions;
    4. promptly notify the other party of any material emergency or other material change in the condition (financial or otherwise), business, properties, assets, liabilities or the normal course of its businesses or of any material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated);
    5. promptly deliver to the other party true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement;
    6. maintain its books and records in accordance with GAAP consistently applied and not change in any material manner any of its methods, principles or practices of accounting in effect at the Financial Statement Date, except as may be required by the SEC, applicable law or GAAP;
    7. duly and timely file all reports, tax returns and other documents required to be filed with federal, state, local and other authorities, subject to extensions permitted by law, not make or rescind any express or deemed election relative to taxes (unless required by law;
    8. not acquire, enter into any option to acquire, or exercise an option or other right or election or enter into any other commitment or contractual obligation (each, a "Commitment") for the acquisition of any real property or, except as permitted in a budget approved in writing by the other party;
    9. encumber assets or commence construction of, or enter into any commitment to develop or construct other real estate projects, except in the ordinary course of its business;
    10. incur or enter into any Commitment to incur additional indebtedness (secured or unsecured)
    11. terminate, or enter into any Commitment to modify, amend or terminate, any indebtedness (secured or unsecured) in existence as of the date hereof;
    12. not amend the Articles of Incorporation or the Bylaws;
    13. make no change in the number of shares of capital stock issued and outstanding, except as described in Section 2.3(b) of this Agreement;
    14. grant no options or other right or commitment relating to its shares of capital stock or any security convertible into its shares of capital stock or any security the value of which is measured by shares of beneficial interest, or any security subordinated to the claim of its general creditors;
    15. not amend or waive any rights under any of the PublicCo Stock Options or PublicCo Stock Rights;
    16. authorize, declare, set aside or pay any dividend or make any other distribution or payment with respect to any common stock, preferred stock or indirectly redeem, purchase or otherwise acquire any shares of capital stock or any option, warrant or right to acquire, or security convertible into, shares of capital stock;
    17. not sell, lease, mortgage, subject to lien or otherwise dispose of any assets, except in that is made in the ordinary course of business and is the subject of a binding contract in existence on the date of this Agreement;
    18. not make any loans, advances or capital contributions to, or investments in, any other person; and
    19. not enter into any new, or amend or supplement any existing, contract, lease or other agreement;
    20. not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent financial statements (or the notes thereto) furnished to the other party or incurred in the ordinary course of business and consistent with past practice;
    21. not guarantee the indebtedness of another Person, enter into any "keep well" or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing;
    22. not enter into any commitment with any officer, director, affiliate, or with any consultant;
    23. not increase any compensation or enter into or amend any employment agreement with any of its officers, directors or employees;
    24. not accept a promissory note in payment of the exercise price payable under any option to purchase shares of PublicCo Common Stock;
    25. not enter into any Tax Protection Agreement;
    26. not settle or compromise any material federal, state, local or foreign tax liability; and
    27. not authorize, recommend, propose or announce an intention to do any of the foregoing prohibited actions, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing prohibited actions.

 

ARTICLE 5. ADDITIONAL COVENANTS

5.1 PREPARATION OF THE FORM S-4; CONSENT SOLICITATIONS. As promptly as practicable after execution of this Agreement, the respective parties and their investment advisors, shall prepare and file with the SEC under the Securities Act, one or more registration statements on Form S-4 (such registration statements, together with any amendments or supplements thereto, the "Form S-4"). The respective parties will cause the Form S-4 to comply as to form in all material respects with the applicable provisions of the Securities Act, the Exchange Act and the rules and regulations thereunder. Each party shall furnish all information about itself and its business and operations and all necessary financial information to the other as the other may reasonably request in connection with the preparation of the Form S-4. Supreme will duly call, give notice of, and, as soon as practicable following the date of this Agreement, give notice of this action to its stockholders (the "Supreme Notice of Board Action") for the purpose of obtaining the Supreme Stockholder Approvals. Supreme shall, through its Board of Directors, recommend to its stockholders approval of this Agreement, the Exchange and the transactions contemplated by this Agreement.

5.2 ACCESS TO INFORMATION; CONFIDENTIALITY. Each of the parties shall afford to the other parties and to the officers, employees, accountants, counsel, financial advisors and other representatives of such other party, reasonable access during normal business hours prior to the Effective Date to all their respective properties, books, contracts, commitments, personnel and records and, during such period, each of the parties shall, furnish promptly to the other party a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws and all other information


concerning its business, properties and personnel as such other party may reasonably request. Each of the parties shall use commercially reasonable efforts to cause its officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to, hold any nonpublic information in confidence, notwithstanding the execution and delivery of this Agreement or the termination hereof.

5.3 TAX MATTERS. Both parties shall use its commercially reasonable efforts before and after the Effective Date to cause the Exchange to qualify as a "reorganization" under the provisions of Sections 368(a) of the Code and to obtain the opinions of counsel referred to in Sections 6.2(e) and 6.3(e).

5.4 PUBLIC ANNOUNCEMENTS. Each party will consult with the other party, and provide each other the opportunity to review and comment upon, before issuing any press release or other written public statements, including, without limitation, any press release or other written public statement which address in any manner the transactions contemplated by this Agreement, and shall not issue any such press release or make any such written public statement prior to such consultation, except as may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national securities exchange. The parties agree that the initial press release to be issued with respect to the transactions contemplated by this Agreement will be in the form agreed to by the parties prior to the execution of this Agreement.

5.5 LISTING. PublicCo shall use commercially reasonable efforts to cause the PublicCo Common Shares to be issued in the Exchange, to be approved for listing on the NASDAQ Small Cap Market ("Small Cap"), Over-The-Counter Bulletin Board ("OTCBB"), or Bulletin Board Exchange ("BBX") subject to official notice of issuance, as soon as practicable after the Effective Date.

5.6 TRANSFER AND GAINS TAXES. Each party shall cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added stock transfer and stamp taxes, any transfer, recording, registration and other fees and any similar taxes which become payable in connection with the transactions contemplated by this Agreement (together with


any related interests, penalties or additions to tax, "Transfer and Gains Taxes"). From and after the Effective Date, PUBLICCO shall pay or cause to be paid, without deduction or withholding from any amounts payable to the holders of PUBLICCO Common Shares, all Transfer and Gains Taxes (which term shall not in any event be construed to include for these purposes any Tax imposed under the Code).

5.7 INDEMNIFICATION. In the event of any threatened or actual claim, action, suit, proceeding or investigation, whether civil, criminal or administrative, including, without limitation, any action by or on behalf of (i) any or all security holders of PublicCo; (ii) any person who is now, or has been, at any time prior to the date hereof, or who becomes prior to the Effective Date of the Exchange, an officer, employee or director of PublicCo ("Indemnification Parties"); is, or is threatened to be, made a party based in whole or in part on, or arising in whole or in part out of, or pertaining to (i) the fact that he is or was an officer, employee or director of PublicCo or any action or omission by such person in his capacity as a director, or (ii) this Agreement or the transactions contemplated by this Agreement, whether in any case asserted or arising before or after the Effective Date of the Exchange, the Indemnifying Parties shall, from and after the Effective Date of the Exchange, indemnify and hold harmless, as and to the full extent permitted by applicable law, each the officers, employees, and directors of PUBLICCO against any losses, claims, liabilities, expenses (including reasonable attorneys' fees and expenses), judgments, fines and amounts paid in settlement in accordance herewith in connection with any such threatened or actual claim, action, suit, proceeding or investigation. The new Directors of PublicCo will obtain a Director's and Officer's Liability insurance policy which will insure the officers and directors of PublicCo from any claim arising out of an alleged wrongful act by such persons in their respective capacities as officers and directors of the PublicCo.

5.8 FEES AND EXPENSES. Expenses related to the preparation of the consent solicitations, S-4 registration statement, "Blue Sky" registrations, mailings, printing of new share certificates, delivery of those certificates, Edgar filing fees, etc. will be paid by SUPREME. All other expenses relating to the preparation of financial statements, SEC filings, exhibits, etc. will be paid by the respective parties incurring the expense.



ARTICLE 6. CONDITIONS

6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE EXCHANGE. The obligations of each party to effect the Exchange and to consummate the other transactions contemplated by this Agreement to occur on the Closing Date shall be subject to the fulfillment at or prior to the Closing Date of the following conditions:

    1. SHAREHOLDER APPROVALS. The PublicCo Stockholder Approvals and the SUPREME Shareholder Approvals shall have been obtained.

       

    2. FORM S-4. The Form S-4 shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings by the SEC seeking a stop order.
    3. NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Exchange or any of the other transactions contemplated hereby shall be in effect.
    4. BLUE SKY LAWS. PublicCo shall have received all state securities or "blue sky" permits and other authorizations necessary to issue the PublicCo Common Shares issuable in the Exchange.

6.2 CONDITIONS TO OBLIGATIONS OF SUPREME. The obligations of SUPREME to effect the Exchange and to consummate the other transactions contemplated to occur on the Closing Date are further subject to the following conditions, any one or more of which may be waived by Supreme:

      1. REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of PublicCo set forth in this Agreement, disregarding all qualifications and exceptions contained therein relating to materiality, shall be true and correct as of the Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties are expressly limited by their terms to another date, in which case such representations and warranties shall be true and correct as of such other date), except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material adverse effect.
      2. PERFORMANCE OF OBLIGATIONS OF PUBLICCO. PublicCo shall have performed in all material respects all obligations required to be performed by them under this Agreement at or prior to the Effective Date, and SUPREME shall have received a certificate signed on behalf of PublicCo by the chief executive officer or the chief operating officer of PublicCo, in such capacity, to such effect.
      3. MATERIAL ADVERSE CHANGE. Since the date of this Agreement, there shall have been no PublicCo material adverse change and SUPREME shall have received a certificate of the chief executive officer or chief operating officer of PublicCo, in such capacity, certifying to such effect.

6.3 CONDITIONS TO OBLIGATIONS OF PUBLICCO. The obligations of PUBLICCO to effect the Exchange and to consummate the other transactions contemplated to occur on the Closing Date are further subject to the following conditions, any one or more of which may be waived by PublicCo:

      1. REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of Supreme set forth in this Agreement, disregarding all qualifications and exceptions contained therein relating to materiality, shall be true and correct as of the Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties are expressly limited by their terms to another date, in which case such representations and warranties shall be true and correct as of such other date), except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material adverse effect.
      2. PERFORMANCE OF OBLIGATIONS OF SUPREME. Supreme shall have performed in all material respects all obligations required to be performed by them under this Agreement at or prior to the Effective Date, and PUBLICCO shall have received a certificate signed on behalf of Supreme by the chief executive officer or the chief operating officer of Supreme, in such capacity, to such effect.
      3. MATERIAL ADVERSE CHANGE. Since the date of this Agreement, there shall have been no material adverse change and PUBLICCO shall have received a certificate of the chief executive officer or chief operating officer of Supreme, in such capacity, certifying to such effect.

 

ARTICLE 7. TERMINATION, AMENDMENT, AND WAIVER

7.1 TERMINATION. This Agreement may be terminated at any time prior to the Closing Date by:

    1. mutual written consent duly authorized by the Board of Directors of Supreme and the Board of Directors of PublicCo.
    2. upon a breach of or failure to perform any representation, warranty, covenant, obligation or agreement on the part of PublicCo as set forth in this Agreement, or if any representation or warranty of PublicCo shall become untrue, in either case such that the conditions set forth in Section6.2(a) or Section 6.2(b), as the case may be, would be incapable of being satisfied by May 1, 2003 (or as otherwise extended);
    3. by PublicCo, upon a breach of any representation, warranty, covenant obligation or agreement on the part of SUPREME as set forth in this Agreement, or if any representation or warranty of SUPREME shall become untrue, in either case such that the conditions set forth in Section 6.3(a) or Section 6.3(b), as the case maybe, would be incapable of being satisfied by May 1, 2003 (or as otherwise extended); or
    4. by either SUPREME or PublicCo, if any judgment, injunction, order, decree or action by any governmental entity of competent authority preventing the consummation of the Exchange shall have become final and non-appealable.

7.2 AMENDMENT. This Agreement may be amended by the parties in writing by action of the respective Board of Directors of Supreme and PublicCo at any time before or after any Shareholder Approvals are obtained and prior to the filing of the Articles of Exchange with the respective Secretaries of State of Illinois and Nevada.

7.3 EXTENSION; WAIVER. At any time prior to the Effective Date, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered pursuant to this Agreement or (c) waive compliance with any of the agreements or conditions of the other party contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.

 

ARTICLE 8. GENERAL PROVISIONS

8.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement confirming the representations and warranties in this Agreement shall survive the Effective Date. This Section 8.1 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Date.

8.2 NOTICES. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be delivered personally, sent by overnight courier (providing proof of delivery) to the


parties or sent by telecopy (providing confirmation of transmission) at the following addresses or telecopy numbers (or at such other address or telecopy number for a party as shall be specified by like notice):

If to Supreme:    
SUPREME PROPERTY, INC.
15 Iliad Drive
Tinley Park, IL 60477
Attn: Thomas Elliott, Esq.
(708) 429-3893
(708) 429-3897 fax
[email protected] e-mail
   
     
With copy to:    
ACTION STOCKS, INC.
990 Highland Drive  - Suite 106
Solana Beach, CA 92075
Attn: Brent Fouch
(858) 481-6670
(858) 481-6144 fax
[email protected] e-mail
   

If to PublicCo:    
CORONATION ACQUISITION CORP.
P.O. Box 741
Bellevue, WA 98009
Attn: Harry Miller
[email protected]
   
     
With copy to:    
Alixe Cormick
VENTURE LAW CORPORATION
Suite 618 - 688 West Hastings Street
Vancouver, British Columbia, V6B 1P1
Telephone: (604) 659-9188
Facsimile: (604) 659-9178
[email protected]
   

All notices shall be deemed given only when actually received.

8.3 INTERPRETATION. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include"," includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation."

8.4 COUNTERPARTS. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed beach of the parties and delivered to the other party.

8.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement, and the other agreements entered into in connection with the Exchange (a) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral between the parties with respect to the subject matter of this Agreement and are not intended to confer upon any person other than the parties hereto any rights or remedies.


8.6 GOVERNING LAW. THE EXCHANGE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA,REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF. EXCEPT AS PROVIDED IN THE IMMEDIATELY PRECEDING SENTENCE, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,THE LAWS OF THE STATE OF ILLINOIS, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

8.7 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

8.8 ENFORCEMENT. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Its accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any federal court located in Illinois or in any state court located in Illinois this being in addition to another remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself (without making such submission exclusive) to the personal jurisdiction of any federal court located in Illinois or any state court located in Illinois in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court.

8.9 SEVERABILITY. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of


this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is enforceable.

8.10 EXCULPATION. This Agreement shall not impose any personal liability on any shareholder, trustee, trust manager, officer, employee or agent of SUPREME or PublicCo, and all Persons shall look solely to the property of SUPREME or PublicCo for the payment of any claim hereunder or for the performance of this Agreement.

8.11 JOINT AND SEVERAL OBLIGATIONS. In each case where both PublicCo, on the one hand, or SUPREME on other hand, are obligated to perform the same obligation hereunder, such obligation shall be joint and several.

IN WITNESS WHEREOF, each of the corporate parties hereto, pursuant to authority duly granted by the Board of Directors, has caused the Agreement of Exchange to be executed by an authorized officer.

 

Date:

 
By:
/s/ Harry Miller
________________________________
    Harry Miller, President
CORONATION ACQUISITION CORP.
     
     
 
By:
/s/ Thomas Elliott
____________________________________
    Thomas Elliott, President
SUPREME PROPERTY, INC.
     
     


 

EXHIBIT A - NEVADA ARTICLES OF MERGER OR EXCHANGE

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS
CHAPTER 92A)

    Office Use Only:

 

Important: Read attached instructions before completing form.

 

Articles of Merger
(Pursuant to Nevada Revised Statutes Chapter 92A)
(excluding 92A.200(4b))
- Remit in Duplicate -


Important: Read instructions before completing form
 


1) Name and jurisdiction of organization of each constituent entity (NRS 92A.200):

     Supreme Property Inc.                                                                                                        
Name of merging entity

   

   Illinois                                   
Jurisdiction

  Corporation                                         
 Entity type *
and,  

     Coronation Acquisition Corp.                                                                                               
Name of surviving entity

   Nevada                                
Jurisdiction

  Corporation                                        
 Entity type *   
   

2) Forwarding address where copies of process may be sent by the Secretary of State of
    Nevada (if a foreign entity is the survivor in the merger  - NRS 92A.190):

Attn:  Thomas Elliott                                                         

c/o:   Supreme Realty Investment Trust, Inc.                       

          P.O. Box 1164                                                       

         Tinley Park, IL  60477                                              
 

3) The undersigned declares that a plan of merger has been adopted by each constituent
    entity (NRS 92A.200).

 
* Corporation, non-profit corporation, limited partnership, limited-liability company or business trust.
 

 

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS CHAPTER 92A)
Page 2

 

 

4) Owner's approval (NRS 92A.200)(options a, b, or c may be used for each entity):

(a) Owner's approval was not required from:

________________________________________________________________________
Name of merging entity, if applicable

and, or;

________________________________________________________________________
Name of surviving entity, if applicable
 

(b) The plan was approved by the required consent of the owners of *:

     Supreme Property Inc.                                                                                        
Name of merging entity, if applicable

and, or;

     Coronation Acquisition Corp.                                                                               
Name of surviving entity, if applicable

 

* Unless otherwise provided in the certificate of trust or governing instrument of a business trust, a merger must be
   approved by all the trustees and beneficial owners of each business trust that is a constituent entity in the merger.

 

 

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS CHAPTER 92A)
Page 3

 

 

(c) Approval of plan of merger for Nevada non-profit corporation (NRS 92A.160):

The plan of merger has been approved by the directors of the corporation and by each
public officer or other person whose approval of the plan of merger is required by the
articles of incorporation of the domestic corporation.

________________________________________________________________________
Name of merging entity, if applicable

and, or;

________________________________________________________________________
Name of surviving entity, if applicable


 


 

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS CHAPTER 92A)
Page 4

 

 

5) Amendments, if any, to the articles or certificate of the surviving entity. Provide
    article numbers, if available. (NRS 92A.200)*:

1. THE NAME OF THE CORPORATION SHALL BE CHANGED TO SUPREME REALTY       

INVESTMENT TRUST, INC.                                                                                               

2. AN ADDITIONAL CLASS OF SERIES A, PREFERRED STOCK SHALL BE AUTHORIZED.

3.  THE NUMBER OF AUTHORIZED SHARES OF SERIES A, PREFERRED STOCK SHALL

BE 100,000,000                                                                                                                

6) Location of Plan of Merger (check a or b):

_____ (a) The entire plan of merger is attached;

or,

  X   (b) The entire plan of merger is on file at the registered office of the surviving
               corporation, limited-liability company or business trust, or at the records office
               address if a limited partnership, or other place of business of the surviving entity
               (NRS 92A.200).

7) Effective date (optional)**: _______________________________

 

 

* Pursuant to NRS 92A.180 (merger of subsidiary into parent  - Nevada parent owning 90% or more of subsidiary),
   the articles of merger may not contain amendments to the constituent documents of the surviving entity except that
   the name of the surviving entity may be changed. Amended and restated articles may be attached as an exhibit or
   integrated into the articles of merger. A resolution specifying the new changes or a form prescribed by the
   secretary of state must accompany the amended and restated articles.

** A merger takes effect upon filing the articles of merger or upon a later date as specified in the articles, which
    must not be more than 90 days after the articles are filed (NRS 92A.240).


 

 

DEAN HELLER
Secretary of State

202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684 5708

Articles of Merger
(PURSUANT TO NRS CHAPTER 92A)
Page 5

 

8) Signatures  - Must be signed by:

An officer of each Nevada corporation; All general partners of each Nevada
limited partnership; A manager of each Nevada limited-liability company with
managers or all the members if there are no managers; A trustee of each Nevada
business trust (NRS 92A.230)*:

   SUPREME PROPERTY, INC.                                                                                   
Name of merging entity

                                                        PRESIDENT                                      /      /2003
Signature                                              Title                                             Date

   CORONATION ACQUISITION CORP.                                                                       
Name of
surviving entity

                                                        PRESIDENT                                      /      /2003
Signature                                             Title                                              Date

* The articles of merger must be signed by each foreign constituent entity in the manner provided by the law
   governing it (NRS 92A.230). Additional signature blocks may be added to this page or as an attachment, as needed.

Failure to include any of the above information and remit the proper fees may cause this filing to be rejected.

 

 

 


EXHIBIT B - ILLINOIS ARTICLES OF MERGER OR EXCHANGE

Form BCA-11.25
(Rev. Jan. 1999)

ARTICLES OF MERGER
CONSOLIDATION OR EXCHANGE

File #

Jesse White
Secretary of State
Department of Business Services
Springfield, IL 62756
Telephone (217) 782-6961
http://www.sos.state.il.us

 

SUBMIT IN DUPLICATE

This space for use by
Secretary of State

Date

Filing Fee $

Approved:

        DO NOT SEND CASH!
Remit payment in check or money
order, payable to "Secretary of State."
Filing Fee is $100, but if merger or
consolidation involves more than 2
corporations, $50 for each additional
corporation.



1. Names of the corporations proposing to merge, and the state or country of their incorporation:

 


Name of Corporation

 State or Country
of Incorporation

 Corporation
File Number


CORONATION ACQUISITION CORP.(1)

NEVADA

C34489-2000



SUPREME PROPERTY, INC. ILLINOIS D6204-748-8



     



     



Note:   (1) Coronation Acquisition Corp.'s name will change at the time of  the merger to "Supreme Realty Investment, Inc."

2. The laws of the state or country under which each corporation is incorporated permits such merger, consolidation
    or exchange.

3. (a) Name of the acquiring corporation:  Coronation Acquisition Corp. to be renamed Supreme Realty Investment Trust, Inc.

    (b) it shall be governed by the laws of:   Nevada                                                                                                           


If not sufficient space to cover this point, add one or more sheets of this size.
 

4. Plan of consolidation is as follows:

           SEE ATTACHED "TERMS OF THE TRANSACTION"


       
5. Plan of consolidation was approved, as to each corporation not organized in Illinois, incompliance with the laws of the
    exchange state under which it is organized, and (b) as to each Illinois corporation, as follows:

    (The following items are not applicable to mergers under S. 11.30 - 90% owned subsidiary provisions. See
    Article 7.)

    (Only "X" one box for each Illinois corporation)

       
Name of Corporation By the shareholders, a reso-lution of the board of direc-tors having been duly
adopted and submitted to a
vote at a meeting of share-holders. Not less than the minimum number of votes required by statute and by the articles of incorporation voted in favor of the action taken.
                           (S. 11.20)
 
By written consent of the
shareholders having not less
than the minimum number of
votes required by statute and
by the articles of incorpora-tion. Shareholders who have not consented in writing have been given notice in accor-dance with S. 7.10 (S. 11.220)
 
By written consent
of ALL the share-holders entitled to vote on the action, in accordance with S. 7.10 & S. 11.20
 




       
SUPREME PROPERTY INC.

     
 

     
 

     
 

     

6. (Not applicable if surviving, new or acquiring corporation is an Illinois corporation)

     It is agreed that, upon and after the issuance of a certificate of merger, consolidation or exchange by the Secretary of
     State of the State of Illinois:
a.   The surviving, new or acquiring corporation may be served with process in the State of Illinois in any
proceeding for the enforcement of any obligation of any corporation organized under the laws of the State of
Illinois which is a party to the merger, consolidation or exchange and in any proceeding for the enforcement
of the rights of a dissenting shareholder of any such corporation organized under the laws of the State of Illinois
against the surviving, new or acquiring corporation.
b.   The Secretary of State of the State of Illinois shall be and hereby is irrevocably appointed as the agent of the
surviving, new or acquiring corporation to accept service of process in any such proceedings, and
c.   The surviving, new, or acquiring corporation will promptly pay to the dissenting shareholders of any
corporation organized under the laws of the State of Illinois which is a party to the merger, consolidation or
exchange the amount, if any, to which they shall be entitled under the provisions of "The Business
Corporation Act of 1983" of the State of Illinois with respect to the rights of dissenting shareholders.
 

7. (Complete this item if reporting a merger under S. 11.30 - 90% owned subsidiary provisions.)
 

a.  

The number of outstanding shares of each class of each merging subsidiary corporation and the number of such
shares of each class owned immediately prior to the adoption of the plan of merger by the parent corporation, are:
 

Name of Corporation Total Number of Shares
Outstanding
of Each Class
Number of Shares of Each Class
Owned Immediately Prior to
Merger by the Parent Corporation
     



     



     
b.   (Not applicable to 100% owned subsidaries)
The date of mailing a copy of the plan of merger and notice of the right to dissent to the shareholders of each merging
subsidiary corporation was _____________________ , _________.
                                                             (Month & Day) (Year)

Was written consent for the merger or written waiver of the 30-day period by the holders of all the outstanding shares of all subsidiary corporations received? 
  Yes    No

(If the answer is "No," the duplicate copies of the Articles of Merger may not be delivered to the Secretary of State
until after 30 days following the mailing of a copy of the plan of merger and of the notice of the right to dissent to
the shareholders of each merging subsidiary corporation.)
 
8. The undersigned corporations have caused these articles to be signed by their duly authorized officers, each of whom
affirms, under penalties of perjury, that the facts stated herein are true. (All signatures must be in BLACK INK.)
   
Dated     June __________ , 2003   CORONATION ACQUISITION CORP.
 
 
  (Month & Day)       (Year)   (Exact Name of Corporation)
 
 
   
attested by                                                                      by                                                                                   
  (Signature of Secretary or Assistant Secretary)        (Signature of President or Vice-President)
  Harry Miller, Secretary   Harry Miller, President
 
 
  (Type or Print Name and Title)   (Type or Print Name and Title)
       
Dated     June __________ , 2003   SUPREME PROPERTY, INC.
 
 
  (Month & Day)       (Year)   (Exact Name of Corporation)
 
 
   
attested by                                                                      by                                                                                   
  (Signature of Secretary or Assistant Secretary)        (Signature of President or Vice-President)
  Thomas Elliott, Secretary   Thomas Elliott, President
 
 
  (Type or Print Name and Title)   (Type or Print Name and Title)
       

 


Terms of Transaction


In March, 2003, SUPREME PROPERTY, INC. entered into an Agreement and Plan of Exchange and Reorganization to become a wholly-owned subsidiary of SUPREME REALTY INVESTMENT TRUST, INC. (fka CORONATION ACQUISITION CORP.) in a stock-for-stock exchange and reorganization plan. In the transaction 19,342,000 (100%) of the issued and outstanding shares of common stock of SUPREME PROPERTY, INC. will be exchanged for approximately 27,000,000 shares of common stock of SUPREME REALTY INVESTMENT TRUST, INC. at an exchange ratio of 1.3953:1. The former stockholders of SUPREME PROPERTY, INC. will control 90% of the share capital of SUPREME REALTY INVESTMENT TRUST, INC. (fka CORONATION ACQUISITION CORP.) on close of the transaction.

The members of the board of directors of SUPREME PROPERTY, INC. will serve as the members of the board of directors of SUPREME REALTY INVESTMENT TRUST, INC. (fka CORONATION ACQUISITION CORP.) on close of the transaction.

The board of directors of both companies are proposing the Exchange and Reorganization Plan in order to provide: (i) a greater opportunity for growth through the issuance of additional equity; (ii) opportunities to increase earnings and cash distribution through asset growth and economies of scale; and (iii) a reduction in investment risk through greater diversification of assets.


 

SCHEDULE 1  - PUBLICCO SEC DOCUMENTS

January 1, 2002  - March 31, 2003

Form

Description

Filing Date

File Number

10KSB Annual Report for period ended December 31, 2003. 2003-03-31

000-49770

10QSB Quarterly report for period ended September 30, 2002. 2002-11-14

000-49770

10QSB Quarterly report for period ended June 30, 2002. 2002-08-26

000-49770

10SB12G/A [Amend] 10SB Registration Statement [Section 12(g)] 2002-06-26

000-49770

10SB12G 10SB Registration Statement [Section 12(g)] 2002-04-30

000-49770



 

SCHEDULE 2  - PUBLICCO LIABILITIES AND OBLIGATIONS

 

Notes Payable. Includes $4,700 balance due for expenses advanced by Harry Miller, President of Coronation Acquisition Corp.


SCHEDULE 3  - PUBLICCO SHAREHOLDERS

Harry Miller

5,000,000

   
   

TOTAL

5,000,000



 



SCHEDULE 4  - SUPREME LIABILITIES AND OBLIGATIONS

Accounts Payable. Includes $5,064 balances due for office supplies, equipment rentals, other miscellaneous expenses, etc.

Notes Payable. Includes $15,600 balance due on Supreme Property, Inc.'s purchase of substantially all of the assets from its predecessor company, Supreme Property Management & Sales, Inc., and a $25,000 note due to Thomas Elliott, President of Supreme Property, Inc.

Mortgages Payable. Includes $1,255,000 due on four(4) parcels of property that are being purchase by Installment Agreement for Warranty Deed, over a term of thirty(30) years. The notes bear interest at the rate of 7% per annum. Principal and interest are payable in monthly installments of $8,349.55, with balloon payments of the outstanding principal on maturity dates in June, July, and August, of 2004.

Lease Obligations. In April, 2000 the Company began leasing office space at an annual rental rate based on the amount of square footage the Company occupies. The annual rent is as follows:

2000

$    4,950

2001

6,900

2002

7,200

2003

7,500

2004

1,950

TOTAL

   $   28,500

   

The lease expires in April, 2004, with a five year renewal option.

The Company is currently in negotiations with another office building leasing representative for 5,000 square feet of space in Tinley Park, Illinois. It is estimated that the annual rental rate will be priced between $14 - $18 per foot plus an allocation of common area expenses. To date, no lease agreement has been reached.

Employment Obligations. The Company has entered into automatically renewing, one-year employment agreements with its V.P. of Finance, V.P. of Property Management, and V.P. of Acquisitions. In the event of termination other than for cause, the contracted employee will receive a lump sum benefit equal to the average compensation in the three most highly compensated years. Upon termination, all options and rights to acquire common shares vest on the effective date of termination.


AMENDING AGREEMENT HTML

exhibit2_2.htm


EXHIBIT 2.2

AMENDING AGREEMENT

THIS AMENDING AGREEMENT (this "Amending Agreement") dated for reference the 15th day of October, 2003, by and between CORONATION ACQUISITION CORP., a Nevada corporation, (hereinafter referred to as "Coronation"), and SUPREME PROPERTY, INC., an Illinois corporation, (hereinafter referred to as "Supreme") amends the Agreement and Plan of Exchange and Reorganization dated March 31, 2003.

WHEREAS:

A.      On March 31, 2003, Coronation and Supreme entered into an agreement and plan of exchange and reorganization (the "Merger Agreement") whereby Supreme agreed to have its stockholders sell to Coronation all the issued and outstanding shares (the "Shares") of Supreme in exchange for shares of Coronation (the "Merger"). On close of the Merger Supreme was to become a wholly-owned subsidiary of Coronation.

B.      The parties have agreed to amend the Merger Agreement to extend the term of the Merger Agreement from May 1, 2003 to December 31, 2003 and that Supreme should be merged into Coronation on close of the Merger.

NOW THEREFORE, for valuable consideration and upon the mutual covenants and promises contained herein, the parties hereto agree as follows:

1.      Paragraph 1.1 The Exchange is replaced with the following paragraph:

"1.1 THE EXCHANGE. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with provisions of the Illinois Business Corporation Act of 1983, as amended, and Chapter 92A of the Nevada Revised Statutes of 2001, as amended, all of the outstanding common stock of Supreme shall be acquired in exchange for 90% of the outstanding common stock PublicCo, and other valuable consideration. Thereafter, Supreme shall merge into PublicCo, the separate corporate existence of Supreme shall cease and PublicCo shall continue as the surviving corporation. The surviving corporation after the Merger is hereinafter sometimes referred to as the "Surviving Corporation.""

2.     Article 1.4 Effect of the Exchange on Bylaws is replaced with the following paragraph:

"1.4 EFFECT OF THE EXCHANGE ON BYLAWS. The Bylaws of Coronation, as in effect immediately prior to the Effective Date of the Exchange, shall continue in full force and effect after the Exchange as the bylaws of the Surviving Corporation and, until further amended, in accordance with the laws of the State of Nevada until the same shall be amended or repealed in accordance with the provisions thereof."

3.     Article 1.5 Board of Directors of PublicCo. is replaced with the following paragraph:

"1.5 BOARD OF DIRECTORS OF THE SURVIVING CORPORATION. The Board of Directors of the Surviving Corporation shall consist of the members of Supreme's Board of Directors immediately prior to the Effective Date of the Exchange, who shall continue to serve for the balance of their unexpired terms or their earlier death, resignation, or removal, along with one(1) member from PublicCo's Board of Directors immediately prior to the Effective Date of the Exchange, and one(1) independent director nominated and elected by the voting shareholders of PUBLICCO stock."

4.     Article 1.6 Name of the Corporation. is replaced with the following paragraph:

"1.6 NAME OF THE SURVIVING CORPORATION. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article 6, the Board of Directors of PublicCo shall change the corporation's name to SUPREME REALTY INVESTMENTS, INC., and that shall remain the name of the Surviving Corporation."

5.     Article 7.1 Termination sections (a)(b)(c) & (d) is replaced with the following paragraphs:

"a. mutual written consent duly authorized by the Board of Directors of Supreme and the Board of Directors of PublicCo;

b. upon a breach of or failure to perform any representation, warranty, covenant, obligation or agreement on the part of PublicCo as set forth in this Agreement, or if any representation or warranty of PublicCo shall become untrue, in either case such that the conditions set forth in Section6.2(a) or Section 6.2(b), as the case may be, would be incapable of being satisfied by December 31, 2003 (or as otherwise extended);

c. by PublicCo, upon a breach of any representation, warranty, covenant obligation or agreement on the part of SUPREME as set forth in this Agreement, or if any representation or warranty of SUPREME shall become untrue, in either case such that the conditions set forth in Section 6.3(a) or Section 6.3(b), as the case maybe, would be incapable of being satisfied by December 31, 2003 (or as otherwise extended);

d. by either SUPREME or PublicCo, if any judgment, injunction, order, decree or action by any governmental entity of competent authority preventing the consummation of the Exchange shall have become final and non-appealable; or

e. by PublicCo or Suprem if the Closing Date has not occurred by December 31, 2003;"

6.      Exhibits A and B. are replaced in their entirety to reflect the new name of Coronation, the surviving corporation, post merger to Supreme Realty Investments, Inc. and the fact Supreme will be merged into Coronation with Coronation as the surviving corporation.

General

7.      All other terms of the Merger Agreement will remain the same.

8.      The Merger Agreement remains in full force and effect except as expressly amended by this Amending Agreement.

IN WITNESS WHEREOF the parties hereto have caused this Amending Agreement to be duly executed.

 

CORONATION ACQUISITION CORP.

/s/ Harry Miller


  SUPREME PROPERTY, INC.

/s/ Tom Elliott
 
By: Harry Miller, President   By: Tom Elliott, President

CORONATION ARTICLES OF INCORPORATION HTML

exhibit3_1.htm


EXHIBIT 3.1

ARTICLES OF INCORPORATION

OF

CORONATION ACQUISITION CORP.

ARTICLE I      NAME

The name of this corporation is Coronation Acquisition Corp.

ARTICLE III      DESIGNATED RESIDENT AGENT

The resident agent of the corporation where process may be served is:

Name  Address
Nevada Agency and Trust Company

50 West Liberty Street, Suite 880
Reno, Nevada 89501

ARTICLE III      PURPOSES

The purpose, object and nature of the business for which this corporation is organized are:

  1. to engage in any lawful activity; and

  2. to carry on such business as may be necessary, convenient, or desirable to accomplish the above purposes, and to do all other things incidental thereto which are not forbidden by law or by these Articles of Incorporation.

ARTICLE IV      DURATION

The corporation will have perpetual existence.

ARTICLE V      POWERS

The powers of the corporation will be those powers granted by 78.060 and 78.070 of the Nevada Revised Statutes under which this corporation is formed. In addition, the corporation will have the following specific powers:

  1. To elect or appoint officers and agents of the corporation and fix their compensation;

  2. To act as an agent for any individual, association, partnership, corporation, or other legal entity;
  3. To receive, acquire, hold, exercise rights arising out of the ownership or possession thereof, sell, or otherwise dispose of, shares or other interests in, or obligations of, individuals, associations, partnerships, corporations, or governments;

  4. To receive, acquire, hold, pledge, transfer, or otherwise dispose of shares purchased, directly or indirectly, out of earned surplus;

  5. To make gifts or contributions for the public welfare or for charitable, scientific or educational purposes.

ARTICLE VI AUTHORIZED CAPITAL STOCK

The total authorized capital stock of the corporation is 100,000,000 shares of common stock with a par value of $0.001. All stock when issued will be deemed fully paid and non-assessable. No cumulative voting, on any matter to which stockholders will be entitled to vote, will be allowed for any purpose.

The authorized stock of this corporation may be issued at such time, upon such terms and conditions and for such consideration as the Board of Directors will, from time to time, determine. Stockholders will not have pre-emptive rights to acquire unissued shares of the stock of this corporation.

ARTICLE VII      DIRECTORS

Section 1. Size of Board. Members of the governing board of this corporation shall be styled Directors. The number of directors of this corporation may consist of from one (1) to nine (9) directors, as determined, from time to time, by the then existing Board of Directors. Their qualifications, terms of office, manner of election, time and place of meeting, and powers and duties will be such as are prescribed by statute and in the bylaws of the corporation. The name and post office address of the directors constituting the first board of directors, which will be one (1) in number are:

Name  Address
Harry Miller P.O. Box 741
Bellevue, Washington 98009

Section 2. Powers of Board. In furtherance and not in limitation of the powers conferred by the laws of the State of Nevada, the Board of Directors is expressly authorized and empowered:

  1. To make, alter, amend and repeal the bylaws subject to the power of the shareholders to alter or repeal the bylaws made by the Board of Directors;
  2. Subject to the applicable provisions of the bylaws then in effect, to determine, from time to time, whether and to what extent, and at what times and places, and under what conditions and regulations, the account and books of the corporation, or any of them, will be open to shareholder inspection. No shareholder will have any right to inspect any of the accounts, books or documents of the corporation, except as permitted by law, unless and until authorized to do so by resolution of the Board of Directors or of the shareholders of the corporation;

  3. To issue stock of the corporation for consideration of any tangible or intangible property or benefit to the corporation including, but not limited to, cash, promissory notes, services performed, or for any other assets of value in accordance with the action of the Board of Directors without vote or consent of the shareholders and the judgement of the Board of Directors as to value received and in return therefore will be conclusive and said stock when issued will be fully paid and non-assessable;

  4. To authorize and issue, without shareholder consent, obligations of the corporation, secured and unsecured, under such terms and conditions as the Board, in its sole discretion, may determine, and to pledge or mortgage, as security therefore, any real or personal property of the corporation, including after acquired property;

  5. To determine whether any and if so what part of the earned surplus of the corporation will be paid in dividends to the shareholders, and to direct and determine other use and disposition of such earned surplus;

  6. To fix, from time to time, the amount of the profits of the corporation to be reserved as working capital or for any other lawful purpose;

  7. To establish bonus, profit-sharing, stock option or other types of incentive compensation plans for the employees, including officers and directors, of the corporation and to fix the amount of profits to be shared and distributed, and to determine the persons to participate in any such plans and the amount of their respective participations;

  8. To designate, by resolution or resolutions passed by a majority of the whole Board, one or more committees, each consisting of two or more directors, which to the extent permitted by law and authorized by the resolution of the bylaws will have and may exercise the powers of the Board;

  9. To provide for the reasonable compensation of its own members by bylaws, and to fix the terms and conditions upon which such compensation will be paid;

  10. In addition to the powers and authority herein before, or by statute, expressly conferred upon it, the Board of Directors may exercise all such powers and do all such acts and things as may be exercised or done by the corporation, subject, nevertheless, to the provisions of the laws of the State of Nevada, of these Articles of Incorporation, and of the bylaws of the corporation.

Section 3. Interested Directors. No contract or transaction between this corporation and any of its directors, or between this corporation and any other corporation, firm, association, or other legal entity will be invalidated by reason of the fact that the director of the corporation has a direct or indirect interest, pecuniary or otherwise, in such corporation, firm or association, or legal entity, or because the interested director was present at the meeting of the Board of Directors which acted upon or in reference to such contract or transaction, or because he participated in such action, provided that (1) the interest of each such director will have been disclosed to or known by the Board and a disinterested majority of the Board will have nonetheless ratified and approved such contract or transaction (such interested director or directors may be counted in determining whether a quorum is present for the meeting at which such ratification or approval is given); or (2) the conditions of N.R.S. 78.140 are met.

ARTICLE VIII      LIMITATION OF LIABILITY OF OFFICERS OR DIRECTORS

The personal liability of a director or officer of the corporation to the corporation or the shareholders for damages for breach of fiduciary duty as a director or officer will be limited to acts or omissions which involve intentional misconduct, fraud or a knowing violation of law.

ARTICLE IX      INDEMNIFICATION

Each director and each officer of the corporation may be indemnified by the corporation as follows:

  1. The corporation may indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action or suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of the corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney= s fees), judgements, fines and amounts paid in settlement, actually and reasonably incurred by him in connection with the action, suit or proceeding, if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding, by judgement, order, settlement, conviction or upon plea of nolo contendere or its equivalent does not itself create a presumption that the person did not act in good faith and in a manner in which he reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was lawful.

  2. The corporation may indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action or suit by or in the right of the corporation, to procure a judgement in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of the corporation, partnership, joint venture, trust or other enterprise, against expenses including amounts paid in settlement and attorney= s fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit, if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals there from, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

  3. To the extent that a director, officer or employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this Article, or in defense of any claim, issue or matter therein, he must be indemnified by the corporation against expenses, including attorney= s fees, actually and reasonable incurred by him in connection with the defense.

  4. Any indemnification under subsection (a) and (b) unless ordered by a court or advanced pursuant to subsection (e), must be made by the corporation only as authorized in the specific case upon determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made:

    By the stockholders;

    1. By the Board of Directors by majority vote of a quorum consisting of directors who were not parties to the act, suit or proceeding;
    2. If a majority vote of a quorum consisting of directors who were not parties to the act, suit or proceeding so orders, by independent legal counsel in a written opinion; or
    3. If a quorum consisting of directors who were not parties to the act, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.
       

  5. Expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.

  6. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this section:

    1. Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the certificate or Articles of Incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to subsection (b) or for the advancement of expenses made pursuant to subsection (e) may not be made to or on behalf of any director or officer if a final adjudication established that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action.

    2. Continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.

ARTICLE X      PLACE OF MEETING; CORPORATE RECORD BOOKS

Subject to the laws of the State of Nevada, the shareholders and the directors will have the power to hold their meeting, and the directors will have the power to have an office or offices and to maintain the books of the corporation outside the State of Nevada, at such place or places as may from time to time be designated in the bylaws or by appropriate resolution.

ARTICLE XI      AMENDMENT OF ARTICLES

The provision of these articles of incorporation may be amended, altered or repealed from time to time to the extent and manner prescribed by the laws of the State of Nevada, and additional provisions authorized by such laws as are then in force may be added. All rights herein conferred on the directors, officers and shareholders are granted subject to reservation.

ARTICLE XII      INCORPORATORS

The names and post office addresses of the incorporators of this corporation are:

Name  Address
Harry Miller P.O. Box 741
Bellevue, Washington 98009

ARTICLE XIII      ELECTION REGARDING NRS 78.378-78.3793 AND 78.411-78.444

This corporation will NOT be governed by nor will the provisions of NRS 78.378 through and including 78.3793 and NRS 78.411 through and including 78.444 in any way whatsoever affect the management, operation or be applied to this corporation.

 

                                                                                                   /s/ Harry Miller

                                                                                         _______________________________
                                                                                                       Harry Miller, Incorporator

 

On February 5, 2000, personally appeared before me, a Notary Public, Harry Miller, who acknowledged that he executed the above instrument.

                                                                                                              /s/ Alixe B. Cormick

                                                                                                   _______________________________
                                                                                                                  Alixe B. Cormick
                                                                                                             Notary Public in and for the
                                                                                                             Province of British Columbia



CORONATION ARTICLES OF AMENDMENT HTML

exhibit3_2.htm


EXHIBIT 3.2

FILED # C3489-2000
    MAR 02 2000
                IN THE OFFICE OF

                Dean Heller
    DEAN HELLER SECRETARY OF STATE

CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF

CORONATION ACQUISITION CORP.

 

 

Pursuant to the provisions of section 78.209, Nevada Revised Statutes, the undersigned President and Secretary of Coronation Acquisition Corp. (the A Corporation@ ), does hereby certify the Board of Directors of the Corporation adopted a resolution to amend the original articles as follows:

Article VI which presently reads:

The total authorized capital stock of the Corporation is 100,000,000 shares of Common Stock, with a par value of $0.001. All stock when issued shall be deemed fully paid and non-assessable. No cumulative voting, on any matter which stockholders will be entitled to vote, will be allowed for any purpose.

The authorized stock of this corporation may be issued at such time, upon such terms and conditions and for such consideration as the Board of Directors shall, from time to time, determine. Shareholders will not have pre-emptive rights to acquire unissued shares of the stock of this corporation.

Is hereby amended to read as follows:

The total authorized capital stock of the Corporation is 100,000,000 shares of Common Stock, with a par value of $0.00001. All stock when issued shall be deemed fully paid and non-assessable. No cumulative voting, on any matter which stockholders will be entitled to vote, will be allowed for any purpose.

The authorized stock of this corporation may be issued at such time, upon such terms and conditions and for such consideration as the Board of Directors shall, from time to time, determine. Shareholders will not have pre-emptive rights to acquire unissued shares of the stock of this corporation.

The effect of the amendment on the currently issued and outstanding share capital is:

This amendment to the articles of incorporation does not change or adversely affect the rights or preferences of the holders of outstanding shares of any class or series.

General

This amendment was adopted unanimously by the Board of Directors without shareholder action, and shareholder approval is not required for this amendment.

The effective date of this amendment is immediately on filing with the Secretary of State.

/s/ Harry Miller

______________________________
Harry Miller, Sole Director & Officer

 

On the 14th Day of February, 2000, Harry Miller personally appeared before me, a Notary Public in and for the State of Washington, and acknowledged that he executed the above instrument.

                                                                                  /s/ Alixe B. Cormick

                                                                          ______________________________
                                                                              Notary Public in and for the
                                                                              Province of British Columbia


CORONATION BYLAWS HTML

exhibit3_3.htm


BYLAWS

OF

CORONATION ACQUISITION CORP.

(A NEVADA CORPORATION)

INDEX

                                                                                                                                      PAGE NUMBER

ARTICLE ONE: OFFICES                                                                                     

Section 1. Principal Office                                                                
Section 2. Other Offices                                                                    

ARTICLE TWO: MEETINGS OF SHAREHOLDERS                                                   

Section 1. Place                                                                                 
Section 2. Time of Annual Meeting                                                       
Section 3. Call of Special Meetings                                                      
Section 4. Conduct of Meetings                                                           
Section 5. Notice and Waiver of Notice                                                 
Section 6. Business and Nominations for Annual and Special Meetings  
Section 7. Quorum
Section 8. Voting Rights Per Share
Section 9. Voting of Shares
Section 10. Proxies
Section 11. Shareholder List
Section 12. Action Without Meeting
Section 13. Fixing Record Date
Section 14. Inspectors and Judges
Section 15. Voting for Directors

ARTICLE THREE: DIRECTORS

Section 1. Number; Term; Election; Qualification
Section 2. Resignation; Vacancies; Removal
Section 3. Powers
Section 4. Place of Meetings
Section 5. Annual Meetings
Section 6. Regular Meetings
Section 7. Special Meetings and Notice
Section 8. Quorum and Required Vote
Section 9. Action Without Meeting
Section 10. Conference Telephone or Similar Communications Equipment Meetings
Section 11. Committees
Section 12. Compensation of Directors

ARTICLE FOUR: OFFICERS

Section 1. Positions
Section 2. Election of Specified Officers by Board
Section 3. Election or Appointment of Other Officers
Section 4. Compensation
Section 5. Term; Resignation; Removal; Vacancies
Section 6. Chairman of the Board
Section 7. Chief Executive Officer
Section 8. President
Section 9. Vice Presidents
Section 10. Secretary
Section 11. Chief Financial Officer
Section 12. Treasurer
Section 13. Other Officers; Employees and Agents

ARTICLE FIVE: CERTIFICATES FOR SHARES

Section 1. Issue of Certificates
Section 2. Legends for Preferences and Restrictions on Transfer
Section 3. Facsimile Signatures
Section 4. Lost Certificates
Section 5. Transfer of Shares
Section 6. Registered Shareholders

ARTICLE SIX: GENERAL PROVISIONS

Section 1. Dividends
Section 2. Reserves
Section 3. Checks
Section 4. Fiscal Year
Section 5. Seal
Section 6. Gender

ARTICLE SEVEN: AMENDMENT OF BYLAWS


BYLAWS

OF

CORONATION ACQUISITION CORP.

ARTICLE ONE

OFFICES

Section 1. Principal Office. The principal office of Coronation Acquisition Corp., a Nevada corporation (the "Corporation"), shall be located at such place determined by the Board of Directors of the Corporation (the "Board of Directors") in accordance with applicable law.

Section 2. Other Offices. The Corporation may also have offices at such other places, either within or without the State of Nevada, as the Board of Directors may from time to time determine or as the business of the Corporation may require.

 

ARTICLE TWO

MEETINGS OF SHAREHOLDERS

Section 1. Place. All annual meetings of shareholders shall be held at such place, within or without the State of Nevada, as may be designated by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Special meetings of shareholders may be held at such place, within or without the State of Nevada, and at such time as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2. Time of Annual Meeting. Annual meetings of shareholders shall be held on such date and at such time fixed, from time to time, by the Board of Directors, provided, that there shall be an annual meeting held every calendar year at which the shareholders shall elect a board of directors and transact such other business as may properly be brought before the meeting.

Section 3. Call of Special Meetings. Special meetings of the shareholders shall be held if called in accordance with the procedures set forth in the Corporation's Articles of Incorporation (the "Articles of Incorporation") or the Nevada Corporations Code for the call of a special meeting of shareholders.

Section 4. Conduct of Meetings. The Chairman of the Board of Directors (or in his absence, the President, or in his absence, such other designee of the Chairman of the Board of Directors) shall preside at the annual and special meetings of shareholders and shall be given full discretion in establishing the rules and procedures to be followed in conducting the meetings, except as otherwise provided by law or in these Bylaws.

Section 5. Notice and Waiver of Notice. Except as otherwise provided by law, written or printed notice stating the place, date and time of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally or by first-class mail or other legally sufficient means, by or at the direction of the Chairman of the Board, President, or the persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If the notice is mailed at least thirty (30) days before the date of the meeting, it may be done by a class of United States mail other than first class. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at the address appearing on the stock transfer books of the Corporation, with postage thereon prepaid. If a meeting is adjourned to another time and/or place, and if an announcement of the adjourned time and/or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting unless the Board of Directors, after adjournment, fixes a new record date for the adjourned meeting. Whenever any notice is required to be given to any shareholder, a waiver thereof in writing signed by the person or persons entitled to such notice, whether signed before, during or after the time of the meeting stated therein, and delivered to the Corporation for inclusion in the minutes or filing with the corporate records, shall constitute an effective waiver of such notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the shareholders need be specified in any written waiver of notice. Attendance of a person at a meeting shall constitute a waiver of (a) lack of or defective notice of such meeting, unless the person objects at the beginning to the holding of the meeting or the transacting of any business at the meeting, or (b) lack of or defective notice of a particular matter at a meeting that is not within the purpose or purposes described in the meeting notice, unless the person objects to considering such matter when it is presented.

Section 6. Business and Nominations for Annual and Special Meetings. Business transacted at any special meeting shall be confined to the purposes stated in the notice thereof. At any annual meeting of shareholders, only such business shall be conducted as shall have been properly brought before the meeting in accordance with the requirements and procedures set forth in the Bylaws. Only such persons who are nominated for election as directors of the Corporation in accordance with the requirements and procedures set forth in the Bylaws shall be eligible for election as directors of the Corporation.

Section 7. Quorum. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Except as otherwise provided in the Articles of Incorporation or applicable law, shares representing a majority of the votes pertaining to outstanding shares which are entitled to be cast on the matter by the voting group constitute a quorum of that voting group for action on that matter. If less than a quorum of shares are represented at a meeting, the holders of a majority of the shares so represented may adjourn the meeting from time to time. After a quorum has been established at any shareholders' meeting, the subsequent withdrawal of shareholders, so as to reduce the number of shares entitled to vote at the meeting below the number required for a quorum, shall not affect the validity of any action taken at the meeting or any adjournment thereof. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.

Section 8. Voting Rights Per Share. Each outstanding share, regardless of class, shall be entitled to vote on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class are limited or denied by or pursuant to the Articles of Incorporation or the Nevada Corporations Code.

Section 9. Voting of Shares. A shareholder may vote at any meeting of shareholders of the Corporation, either in person or by proxy. Shares standing in the name of another corporation, domestic or foreign, may be voted by the officer, agent or proxy designated by the bylaws of such corporate shareholder or, in the absence of any applicable bylaw, by such person or persons as the board of directors of the corporate shareholder may designate. In the absence of any such designation, or, in case of conflicting designation by the corporate shareholder, the chairman of the board, the president, any vice president, the secretary and the treasurer of the corporate shareholder, in that order, shall be presumed to be fully authorized to vote such shares. Shares held by an administrator, executor, guardian, personal representative, or conservator may be voted by such person, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by such person, either in person or by proxy, but no trustee shall be entitled to vote shares held by such person without a transfer of such shares into his name or the name of his nominee. Shares held by or under the control of a receiver, a trustee in bankruptcy proceedings, or an assignee for the benefit of creditors may be voted by such person without the transfer thereof into his name. If shares stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary of the Corporation is given notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, then acts with respect to voting shall have the following effect: (a) if only one votes, in person or by proxy, his act binds all; (b) if more than one vote, in person or by proxy, the act of the majority so voting binds all; (c) if more than one vote, in person or by proxy, but the vote is evenly split on any particular matter, each faction is entitled to vote the share or shares in question proportionally; or (d) if the instrument or order so filed shows that any such tenancy is held in unequal interest, a majority or a vote evenly split for purposes hereof shall be a majority or a vote evenly split in interest. The principles of this paragraph shall apply, insofar as possible, to execution of proxies, waivers, consents, or objections and for the purpose of ascertaining the presence of a quorum.

Section 10. Proxies. Any shareholder of the Corporation, other person entitled to vote on behalf of a shareholder pursuant to law, or attorney-in-fact for such persons may vote the shareholder's shares in person or by proxy. Any shareholder of the Corporation may appoint a proxy to vote or otherwise act for such person by signing an appointment form, either personally or by his attorney-in-fact. An executed telegram or cablegram appearing to have been transmitted by such person, or a photographic, photostatic, or equivalent reproduction of an appointment form, shall be deemed a sufficient appointment form. An appointment of a proxy is effective when received by the Secretary of the Corporation (the "Secretary") or such other officer or agent which is authorized to tabulate votes, and shall be valid for up to 11 months, unless a longer period is expressly provided in the appointment form. The death or incapacity of the shareholder appointing a proxy does not affect the right of the Corporation to accept the proxy's authority unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy authority under the appointment is exercised. An appointment of a proxy is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest.

Section 11. Shareholder List. After fixing a record date for a meeting of shareholders, the Corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of the meeting, arranged by voting group with the address of, and the number and class and series, if any, of shares held by each. The shareholders' list must be available for inspection by any shareholder for a period of ten (10) days prior to the meeting or such shorter time as exists between the record date and the meeting and continuing through the meeting at the Corporation's principal office, at a place identified in the meeting notice in the city where the meeting will be held, or at the office of the Corporation's transfer agent or registrar. Any shareholder of the Corporation or such person's agent or attorney is entitled on written demand to inspect the shareholders' list (subject to the requirements of law), during regular business hours and at his expense, during the period it is available for inspection. The Corporation shall make the shareholders' list available at the meeting of shareholders, and any shareholder or agent or attorney of such shareholder is entitled to inspect the list at any time during the meeting or any adjournment. The shareholders' list is prima facie evidence of the identity of shareholders entitled to examine the shareholders' list or to vote at a meeting of shareholders.

Section 12. Action Without Meeting. Any action required or permitted by law to be taken at a meeting of shareholders may be taken without a meeting or notice if a consent, or consents, in writing, setting forth the action so taken, shall be dated and signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all voting groups and shares entitled to vote thereon were present and voted with respect to the subject matter thereof.

Section 13. Fixing Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purposes, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than seventy (70) days, and, in case of a meeting of shareholders, not less than ten (10) days, before the meeting or action requiring such determination of shareholders. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders or the determination of shareholders entitled to receive payment of a dividend, the date before the day on which the first notice of the meeting is mailed or the date on which the resolutions of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Section, such determination shall apply to any adjournment thereof, except where the Board of Directors fixes a new record date for the adjourned meeting.

Section 14. Inspectors and Judges. The Board of Directors in advance of any meeting may, but need not, appoint one or more inspectors of election or judges of the vote, as the case may be, to act at the meeting or any adjournment thereof. If any inspector or inspectors, or judge or judges, are not appointed, the person presiding at the meeting may, but need not, appoint one or more inspectors or judges. In case any person who may be appointed as an inspector or judge fails to appear or act, the vacancy may be filled by the Board of Directors in advance of the meeting, or at the meeting by the person presiding thereat. The inspectors or judges, if any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots and consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate votes, ballots and consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the person presiding at the meeting, the inspector or inspectors or judge or judges, if any, shall make a report in writing of any challenge, question or matter determined by him or them, and execute a certificate of any fact found by him or them.

Section 15. Voting for Directors. Unless otherwise provided in the Articles of Incorporation, directors shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.

 

ARTICLE THREE

DIRECTORS

Section 1. Number; Term; Election; Qualification. The number of directors of the Corporation shall be fixed from time to time, within the limits specified by the Articles of Incorporation, by resolution of the Board of Directors. Directors shall be elected in the manner and hold office for the term as prescribed in the Articles of Incorporation. Directors must be natural persons who are 18 years of age or older but need not be residents of the State of Nevada, shareholders of the Corporation or citizens of the United States.

Section 2. Resignation; Vacancies; Removal. A director may resign at any time by giving written notice to the Board of Directors or the Chairman of the Board. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. In the event the notice of resignation specifies a later effective date, the Board of Directors may fill the pending vacancy (subject to the provisions of the Articles of Incorporation) before the effective date if they provide that the successor does not take office until the effective date. Director vacancies shall be filled, and directors may be removed, in the manner prescribed in the Corporation's Articles of Incorporation.

Section 3. Powers. The business and affairs of the Corporation shall be managed by the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised and done by the shareholders.

Section 4. Place of Meetings. Meetings of the Board of Directors, regular or special, may be held either within or without the State of Nevada.

Section 5. Annual Meetings. Unless scheduled for another time by the Board of Directors, the first meeting of each newly elected Board of Directors shall be held, without call or notice, immediately following each annual meeting of shareholders.

Section 6. Regular Meetings. Regular meetings of the Board of Directors may also be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors.

Section 7. Special Meetings and Notice. Special meetings of the Board of Directors may be called by the President or Chairman of the Board and shall be called by the Secretary on the written request of any two directors. At least forty-eight (48) hours' prior written notice of the date, time and place of special meetings of the Board of Directors shall be given to each director. Except as required by law, neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Notices to directors shall be in writing and delivered to the directors at their addresses appearing on the books of the Corporation by personal delivery, mail or other legally sufficient means. Subject to the provisions of the preceding sentence, notice to directors may also be given by telegram, teletype or other form of electronic communication. Notice by mail shall be deemed to be given at the time when the same shall be received. Whenever any notice is required to be given to any director, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before, during or after the meeting, shall constitute an effective waiver of such notice. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting and a waiver of any and all objections to the place of the meeting, the time of the meeting and the manner in which it has been called or convened, except when a director states, at the beginning of the meeting or promptly upon arrival at the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened.

Section 8. Quorum and Required Vote. A majority of the prescribed number of directors determined as provided in the Articles of Incorporation shall constitute a quorum for the transaction of business and the act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless a greater number is required by the Articles of Incorporation. Whenever, for any reason, a vacancy occurs in the Board of Directors, a quorum shall consist of a majority of the remaining directors until the vacancy has been filled. If a quorum shall not be present at any meeting of the Board of Directors, a majority of the directors present thereat may adjourn the meeting to another time and place, without notice other than announcement at the time of adjournment. At such adjourned meeting at which a quorum shall be present, any business may be transacted that might have been transacted at the meeting as originally notified and called.

Section 9. Action Without Meeting. Any action required or permitted to be taken at a meeting of the Board of Directors or committee thereof may be taken without a meeting if a consent in writing, setting forth the action taken, is signed by all of the members of the Board of Directors or the committee, as the case may be, and such consent shall have the same force and effect as a unanimous vote at a meeting. Action taken under this Section 9 is effective when the last director signs the consent, unless the consent specifies a different effective date. A consent signed under this Section 9 shall have the effect of a meeting vote and may be described as such in any document.

Section 10. Conference Telephone or Similar Communications Equipment Meetings. Directors and committee members may participate in and hold a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground the meeting is not lawfully called or convened.

Section 11. Committees. The Board of Directors, by resolution adopted by a majority of the whole Board of Directors, may designate from among its members an executive committee and one or more other committees, each of which, to the extent provided in such resolution, shall have and may exercise all of the authority of the Board of Directors in the business and affairs of the Corporation except where the action of the full Board of Directors is required by applicable law. Each committee must have two or more members who serve at the pleasure of the Board of Directors. The Board of Directors, by resolution adopted in accordance with this Article Three, may designate one or more directors as alternate members of any committee, who may act in the place and stead of any absent member or members at any meeting of such committee. Vacancies in the membership of a committee may be filled only by the Board of Directors at a regular or special meeting of the Board of Directors. The executive committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required. The designation of any such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed upon it or such member by law.

Section 12. Compensation of Directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Similarly, members of special or standing committees may be allowed compensation for attendance at committee meetings or a stated salary as a committee member and payment of expenses for attending committee meetings. Directors may receive such other compensation as may be approved by the Board of Directors.

 

ARTICLE FOUR

OFFICERS

Section 1. Positions. The officers of the Corporation may consist of a Chairman of the Board, a Chief Executive Officer, a President, one or more Vice Presidents (any one or more of whom may be given the additional designation of rank of Executive Vice President or Senior Vice President), a Secretary, a Chief Financial Officer and a Treasurer. Any two or more offices may be held by the same person. Officers other than the Chairman of the Board need not be members of the Board of Directors. The Chairman of the Board must be a member of the Board of Directors.

Section 2. Election of Specified Officers by Board. The Board of Directors at its first meeting after each annual meeting of shareholders shall elect a Chairman of the Board, a Chief Executive Officer, a President, one or more Vice Presidents (including any Senior or Executive Vice Presidents), a Secretary, a Chief Financial Officer and a Treasurer.

Section 3. Election or Appointment of Other Officers. Such other officers and assistant officers and agents as may be deemed necessary may be elected or appointed by the Board of Directors, or, unless otherwise specified herein, appointed by the Chairman of the Board. The Board of Directors shall be advised of appointments by the Chairman of the Board at or before the next scheduled Board of Directors meeting.

Section 4. Compensation. The salaries, bonuses and other compensation of the Chairman of the Board and all officers of the Corporation to be elected by the Board of Directors pursuant to Section 2 of this Article Four shall be fixed from time to time by the Board of Directors or pursuant to its direction. The salaries of all other elected or appointed officers of the Corporation shall be fixed from time to time by the Chairman of the Board or pursuant to his direction.

Section 5. Term; Resignation; Removal; Vacancies. The officers of the Corporation shall hold office until their successors are chosen and qualified. Any officer or agent elected or appointed by the Board of Directors or the Chairman of the Board may be removed, with or without cause, by the Board of Directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer or agent appointed by the Chairman of the Board pursuant to Section 3 of this Article Four may also be removed from such office or position by the Board of Directors or the Chairman of the Board, with or without cause. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors, or, in the case of an officer appointed by the Chairman of the Board, by the Chairman of the Board or the Board of Directors. Any officer of the Corporation may resign from his respective office or position by delivering notice to the Corporation, and such resignation shall be effective without acceptance. Such resignation shall be effective when delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date and the Corporation accepts the future effective date, the Board of Directors may fill the pending vacancy before the effective date if the Board provides that the successor does not take office until such effective date.

Section 6. Chairman of the Board. The Chairman of the Board shall preside at all meetings of the shareholders and the Board of Directors. The Chairman of the Board shall also serve as the chairman of any executive committee.

Section 7. Chief Executive Officer. Subject to the control of the Board of Directors, the Chief Executive Officer, in conjunction with the President, shall have general and active management of the business of the Corporation, shall see that all orders and resolutions of the Board of Directors are carried into effect and shall have such powers and perform such duties as may be prescribed by the Board of Directors. In the absence of the Chairman of the Board or in the event the Board of Directors shall not have designated a Chairman of the Board, the Chief Executive Officer shall preside at meetings of the shareholders and the Board of Directors. The Chief Executive Officer shall also serve as the vice-chairman of any executive committee.

Section 8. President. Subject to the control of the Board of Directors, the President, in conjunction with the Chief Executive Officer, shall have general and active management of the business of the Corporation and shall have such powers and perform such duties as may be prescribed by the Board of Directors. In the absence of the Chairman of the Board and the Chief Executive Officer or in the event the Board of Directors shall not have designated a Chairman of the Board and a Chief Executive Officer shall not have been elected, the President shall preside at meetings of the shareholders and the Board of Directors. The President shall also serve as the vice-chairman of any executive committee.

Section 9. Vice Presidents. The Vice Presidents, in the order of their seniority, unless otherwise determined by the Board of Directors, shall, in the absence or disability of the President and the Chief Executive Officer, perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the Board of Directors, the Chairman of the Board or the Chief Executive Officer shall prescribe or as the President may from time to time delegate. Executive Vice Presidents shall be senior to Senior Vice Presidents, and Senior Vice Presidents shall be senior to all other Vice Presidents.

Section 10. Secretary. The Secretary shall attend all meetings of the shareholders and all meetings of the Board of Directors and record all the proceedings of the meetings of the shareholders and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the Board of Directors and shall keep in safe custody the seal of the Corporation and, when authorized by the Board of Directors, affix the same to any instrument requiring it. The Secretary shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President.

Section 11. Chief Financial Officer. The Chief Financial Officer shall be responsible for maintaining the financial integrity of the Corporation, shall prepare the financial plans for the Corporation and shall monitor the financial performance of the Corporation and its subsidiaries, as well as performing such other duties as may be prescribed by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President.

Section 12. Treasurer. The Treasurer shall have the custody of corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chairman of the Board and the Board of Directors at its regular meetings or when the Board of Directors so requires an account of all his transactions as Treasurer and of the financial condition of the Corporation. The Treasurer shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President.

Section 13. Other Officers; Employees and Agents. Each and every other officer, employee and agent of the Corporation shall possess, and may exercise, such power and authority, and shall perform such duties, as may from time to time be assigned to such person by the Board of Directors, the officer so appointing such person or such officer or officers who may from time to time be designated by the Board of Directors to exercise such supervisory authority.

 

ARTICLE FIVE

CERTIFICATES FOR SHARES

Section 1. Issue of Certificates. The shares of the Corporation shall be represented by certificates, provided that the Board of Directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates (and upon request every holder of uncertificated shares) shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman of the Board or a Vice Chairman of the Board, or the Chief Executive Officer, President or Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, representing the number of shares registered in certificate form.

Section 2. Legends for Preferences and Restrictions on Transfer. The designations, relative rights, preferences and limitations applicable to each class of shares and the variations in rights, preferences and limitations determined for each series within a class (and the authority of the Board of Directors to determine variations for future series) shall be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the Corporation will furnish the shareholder a full statement of this information on request and without charge. Every certificate representing shares that are restricted as to the sale, disposition, or transfer of such shares shall also indicate that such shares are restricted as to transfer, and there shall be set forth or fairly summarized upon the certificate, or the certificate shall indicate that the Corporation will furnish to any shareholder upon request and without charge, a full statement of such restrictions. If the Corporation issues any shares that are not registered under the Securities Act of 1933, as amended, or not registered or qualified under the applicable state securities laws, the transfer of any such shares shall be restricted substantially in accordance with the following legend:

A THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE LAW, OR (2) AT HOLDER'S EXPENSE, AN OPINION (SATISFACTORY TO THE CORPORATION) OF COUNSEL (SATISFACTORY TO THE CORPORATION) THAT REGISTRATION IS NOT REQUIRED."

Section 3. Facsimile Signatures. Any and all signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

Section 4. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed.

Section 5. Transfer of Shares. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 6. Registered Shareholders. The Corporation shall be entitled to recognize the exclusive rights of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Nevada.

 

ARTICLE SIX

GENERAL PROVISIONS

Section 1. Dividends. The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in cash, property, stock (including its own shares) or otherwise pursuant to law and subject to the provisions of the Articles of Incorporation.

Section 2. Reserves. The Board of Directors may by resolution create a reserve or reserves out of earned surplus for any proper purpose or purposes, and may abolish any such reserve in the same manner.

Section 3. Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 4. Fiscal Year. The fiscal year of the Corporation shall end on December 31 of each year, unless otherwise fixed by resolution of the Board of Directors.

Section 5. Seal. The Board of Directors may adopt a seal by resolution of the board. The corporate seal shall have inscribed thereon the name and state of incorporation of the Corporation. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

Section 6. Gender. All words used in these Bylaws in the masculine gender shall extend to and shall include the feminine and neuter genders.

 

ARTICLE SEVEN

AMENDMENT OF BYLAWS

Except as otherwise set forth herein, these Bylaws may be altered, amended or repealed or new Bylaws may be adopted at any meeting of the Board of Directors at which a quorum is present, by the affirmative vote of a majority of the directors present at such meeting.

SECRETARY= S CERTIFICATE OF ADOPTION OF

THE BYLAWS OF CORONATION ACQUISITION CORP.

I hereby certify:

That the foregoing Bylaws, constitute the Bylaws of said corporation as duly adopted by the Board of Directors of the Corporation on February ____, 2000.

IN WITNESS WHEREOF, I have hereunder subscribed my name this _____ day of February, 2000.

/s/ Harry Miller

____________________________

Harry Miller, Sole Director

 


SUPREME ARTICLES OF INCORPORATION HTML

exhibit34.htm


EXHIBIT 3.4

Articles of Incorporation of Supreme Property, Inc.

Form BCA-2.10

ARTICLES OF INCORPORATION

 

     (Rev. Jan. 1999)
Jesse White
Secretary of State
Department of Business Services
Springfield, IL 62756
Telephone (217) 782-6961
http://www.sos.state.il.us

This space for use by Secretary of State

Filed 2/15/2002

Jesse White Secretary of State


 

      62047488                          [image bar code]
                                            
        CP0687789

SUBMIT IN DUPLICATE

This space for use by
Secretary of State

Date  Filed 2/15/2002

Franchise Tax $   25.00
Filing Fee       $   75.00

Approved: BE  $ 100.00

Payment must be made by certified check, cashier's check, Illinois attorney's check, Illinois C.P.A.'s check or money order, payable to "Secretary of State."


                                                                                        BE
1. CORPORATE NAME:    SUPREME PROPERTY, INC.                                                                              

                                                                                                                                                                  
 (The corporate name must contain the word "corporation", "incorporated", "limited" or an abbreviation thereof)
 

2. Initial Registered Agent:  THOMAS                                       C                                       ELLIOTT               
                                       First Name                            Middle Initial                                   Last name

Initial Registered Office:          431   E  75TH  STREET                                                                                   
                                        Number                                  Street                                               Suite #

                                        CHICAGO              IL             COOK                                                60619           
                                       City                                         County                                             Zip Code


3. Purpose or purposes for which the corporation is organized:
    (If not sufficient space to cover this point, add one or more sheets of this size.)

THE TRANSACTION OF ANY LAWFUL BUSINESS FOR WHICH CORPORATIONS MAY BE
INCORPORATED UNDER THE ILLINOIS CORPORATION ACT OF 1983.
                                                    BUSINESS
 


4. Paragraph 1: Authorized Shares, Issued Shares and Consideration Received:

 

Class Par Value
per Share
Number of Shares
      Authorized
Number of Shares
Proposed to be Issued
Consideration to be Received Therefor





Common $        0.01      1,000,000 100,000

  $          1,000






         





         





         





 

TOTAL =

  $         1,000

Paragraph 2: The preferences, qualifications, limitations, restrictions and special or relative rights in respect of the shares
of each class are:
(If not sufficient space to cover this point, add one or more sheets of this size.)

(over)
 


 
5. OPTIONAL (a)    Number of directors constituting the initial board of directors of the corporation _____________.
  (b)    Names and addresses of the persons who are to serve as directors until the first annual meeting of
shareholders or until their successors are elected and qualify:
    Name Residential Address City, State, ZIP
   


         
   


         
   


         
   



6. OPTIONAL (a)    It is estimated that the value of all property to be owned by the
corporation for the following year wherever located will be:
    
$__________________
  (b)    It is estimated that the value of the property to be located within
the State of Illinois during the following year will be:
    
$__________________
  (c)    It is estimated that the gross amount of business that will be
transacted by the corporation during the following year will be:
 
$__________________
   (d)    It is estimated that the gross amount of business that will be
transacted from places of business in the State of Illinois during
the following year will be:
 

$__________________

7.  OPTIONAL     OTHER PROVISIONS
                          Attach a separate sheet of this size for any other provision to be included in the Articles of
                          Incorporation, e.g., authorizing preemptive rights, denying cumulative voting, regulating internal
                          affairs, voting majority requirements, fixing a duration other than perpetual, etc.


8.                                                   NAME(S) & ADDRESS(ES) OF INCORPORATOR(S)

 
Dated     January 16,           2002    
 
   
  (Month & Day)       (Year)    
 


Signature and Name

 


Address

       
  1. /S/   THOMAS ELLIOTT   1.   431 E 75TH ST
 
 
  Signature   Street
  THOMAS ELLIOTT   CHICAGO, IL 60619
 
 
  (Type or Print Name)   City/Town                    State                     ZIP Code
       
  2.     2.  
 
 
  Signature   Street
       
 
 
  (Type or Print Name)   City/Town                    State                     ZIP Code
       
  3.     3.  
 
 
  Signature   Street
       
 
 
  (Type or Print Name)   City/Town                    State                     ZIP Code
 
(Signatures must be in BLACK INK on original document. Carbon copy, photocopy or rubber stamp signatures may only be
used on conformed copies.)
NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and the
execution shall be by its president or vice president and verified by him, and attested by its secretary or assistant secretary.

FEE SCHEDULE

  • The initial franchise tax is assessed at the rate of 15/100 of 1 percent ($1.50 per $1,000) on the paid-in capital
       represented in this state, with a minimum of $25.
  • The filing fee is $75.
  • The minimum total due (franchise tax + filing fee) is $100.
  • (Applies when the Consideration to be Received as set forth in Item 4 does not exceed $16,667)
  • The Department of Business Services in Springfield will provide assistance in calculating the total fees if necessary.
    Illinois Secretary of State Springfield, IL 62756
    Department of Business Services Telephone (217) 782-9522 or 782-9523                                                          C-162.20

SUPREME ARTICLES OF AMENDMENT HTML

exhibit3_5.htm


EXHIBIT 3.5

Articles of Amendment of Supreme Property, Inc.

 

Form BCA-10.30

ARTICLES OF AMENDMENT


File # 6204-748-8

     (Rev. Jan. 1999)
Jesse White
Secretary of State
Department of Business Services
Springfield, IL 62756
Telephone (217) 782-6961
http://www.sos.state.il.us

FILED

APR 18 2002

JESSE WHITE
SECRETARY OF STATE

SUBMIT IN DUPLICATE

This space for use by
Secretary of State

Date  04-18-02

Franchise Tax $ 
Filing Fee       $   25.00
Penalty          $
Approved: z

Payment must be made by certified check, cashier's check, Illinois attorney's check, Illinois C.P.A.'s check or money order, payable to "Secretary of State."


                                                                                      
1. CORPORATE NAME:    SUPREME PROPERTY, INC.                                                                              
                                                                                                                                                (Note 1)

2. MANNER OF ADOPTION OF AMENDMENT
    The following amendment of the Articles of Incorporation was adopted on    April 1                                ,
 2002  
 in the manner indicated below. ("X" one box only)                        (Month & Day)
(Year)
  By a majority of the incorporators, provided no directors were named in the articles of incorporation and no directors
have been elected;
   

(Note 2)

  By a majority of the board of directors, in accordance with Section 10.10, the corporation having issued no shares
as of the time of adoption of this amendment;
   

(Note 2)

  By a majority of the board of directors, in accordance with Section 10.15, shares having been issued but shareholder
action not being required for the adoption of the amendment;
     
  By the shareholders, in accordance with Section 10.20, a resolution of the board of directors having been duly
adopted and submitted to the shareholders. At a meeting of shareholders, not less than the minimum number of
votes required by statute and by the articles of incorporation were voted in favor of the amendment;
     
  By the shareholders, in accordance with Sections 10.20 and 7.10, a resolution of the board of directors having been
duly adopted and submitted to the shareholders. A consent in writing has been signed by shareholders having not
less than the minimum number of votes required by statute and by the articles of incorporation. Shareholders who
have not consented in writing have been given notice in accordance with Section 7.10;