-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UW+0Dm9OmE3x7jIAnbHdY8DG/9wgc7TnUr8TQfpTohlNVSGbRzFvZhXtWmRYHR2/ kAy/QeXd9/e79h6BAurVuQ== 0000950124-01-501139.txt : 20010515 0000950124-01-501139.hdr.sgml : 20010515 ACCESSION NUMBER: 0000950124-01-501139 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20010430 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METEOR INDUSTRIES INC CENTRAL INDEX KEY: 0000912875 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO & HOME SUPPLY STORES [5531] IRS NUMBER: 841236619 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12401 FILM NUMBER: 1634140 BUSINESS ADDRESS: STREET 1: 1401 BLAKE STREET STREET 2: SUITE 200 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3035721135 MAIL ADDRESS: STREET 1: 1401 BLAKE STREET STREET 2: SUITE 200 CITY: DENVER STATE: CO ZIP: 80202 8-K 1 c62442e8-k.txt FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 30, 2001 ACTIVE IQ TECHNOLOGIES, INC. (Exact Name of Registrant as Specified in Charter) Minnesota 0-27968 41-2004369 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 601 Carlson Parkway, Suite 1500 Minnetonka, Minnesota 55305 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (952) 449-5000 Meteor Industries, Inc. 1401 Blake Street, Suite 200 Denver, Colorado 80202 (Former Name or Former Address, if Changed Since Last Report) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. (a) Merger Transactions Pursuant to an Agreement and Plan of Merger dated as of January 11, 2001, as amended April 27, 2001 (the "Merger Agreement"), by and among Meteor Industries, Inc. (the "Registrant"), activeIQ Technologies Inc., a Minnesota corporation ("AIQ") and MI Merger, Inc., Minnesota corporation and a wholly-owned subsidiary of the Registrant ("Merger Sub"), AIQ merged with and into Merger Sub (the "Merger"). The surviving corporation in the Merger was renamed AIQ, Inc. In addition, pursuant to the Merger Agreement, the Registrant was reincorporated under Minnesota law by merging with and into AIQ Acquisition Corp., a Minnesota corporation (the "Reincorporation Merger"). The surviving corporation in the Reincorporation Merger was renamed Active IQ Technologies, Inc., a Minnesota corporation. The Registrant's shareholders approved both the Merger and the Reincorporation Merger on March 27, 2001, and both transactions became effective on April 30, 2001. Pursuant to the Merger Agreement, in exchange for shares of AIQ common stock, each shareholder of AIQ common stock is entitled to receive one share of the Registrant's common stock (after giving effect to the reincorporation Merger). At the time of the Merger there were 4,385,911 shares of common stock of AIQ outstanding, excluding 400,000 shares held by the Registrant, which were cancelled upon the effective time of the Merger. In addition to receiving shares of the Registrant's common stock, each of the former AIQ shareholders is entitled to receive a warrant to purchase two shares of the Registrant's common stock for every three shares of AIQ common stock held by such shareholder. The warrants, which expire on April 30, 2006, are exercisable at a price of $5.50 per share. The Registrant may redeem the warrants at a price of $.01 per warrant share upon notice to the holders thereof after the closing price of the Registrant's common stock (as quoted on the Nasdaq Small Cap Market) has averaged $7.50 for 14 consecutive days. (b) Disposition of Substantially All of Registrant's Assets. The Merger Agreement further provided that prior to the closing, the Registrant was required to dispose of all of its assets relating to its petroleum distribution business. Accordingly, concurrent with the Merger, the Registrant sold to Capco Energy, Inc. ("Capco") all of its shares of capital stock of Meteor Enterprises, Inc., its wholly-owned subsidiary, which owned, directly or indirectly, all of the Registrant's petroleum-related assets (the "Asset Sale") for a purchase price of $5,500,000 (the "Asset Sale"). The purchase price was paid to Registrant by delivery of (i) cash in the amount of $4,697,501, (ii) a 9-month promissory note in the principal amount of $500,000 (which note is secured by 1,500,000 shares of Capco common stock beneficially held by a Capco affiliate), and (iii) 100,833 shares of the Registrant's common stock held by Capco, which the parties valued at $3.00 per share. Capco is a significant shareholder of the Registrant and 3 members of the Registrant's board of directors (as it existed prior to the Asset Sale and Merger) were also directors of Capco. Business Valuation Services delivered a fairness opinion to the Registrant that the consideration 1 3 paid by Capco for the Registrant's assets was fair. The Registrant's shareholders approved of the Asset Sale on March 27, 2001. ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT. (a) Change in Registrant's Certifying Accountant. (i) On May 9, 2001, the Registrant dismissed PricewaterhouseCoopers LLP as the Registrant's independent public accountants. The Registrant's Board of Directors participated in and approved the decision to change public accountants. (ii) The reports of PricewaterhouseCoopers LLP on the Registrant's financial statements for the past two fiscal years contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principle. (iii) In connection with its audits for the two most recent fiscal years and through May 9, 2001, there have been no disagreements with PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make reference thereto in their report on the financial statements for such years. (iv) During the two most recent fiscal years and through May 9, 2001, there have been no reportable events (as defined in Regulation S-K Item 304(a)(1)(v)). (v) The Registrant has requested that PricewaterhouseCoopers LLP furnish it with a letter addressed to the Commission stating whether or not it agrees with the above statements. A copy of such letter, dated May 14, 2001, is filed as Exhibit 16.1 to this Form 8-K. (b) New Independent Public Accountants. On May 9, 2001, the Registrant's board of directors retained Arthur Andersen LLP to be the Registrant's principal independent accountants. During the two most recent fiscal years and through May 9, 2001, the Registrant has not consulted with Arthur Andersen LLP regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Registrant's financial statements, and either a written report was provided to the Registrant or oral advice was provided that Arthur Andersen LLP concluded was an important factor considered by the Registrant in reaching a decision as to the accounting, auditing or financial reporting issue; or(ii) any matter that was the subject of a disagreement, as that term is defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions to Item 304 of Regulation S-K, or a reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K. 2 4 ITEM 5. OTHER EVENTS. On April 30, 2001, the Registrant's board of directors extended by six months the expiration date of the Registrant's outstanding public warrants to purchase an aggregate of 690,000 shares of the Registrant's common stock to December 4, 2001. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Business Acquired. ACTIVEIQ TECHNOLOGIES INC. (A DEVELOPMENT STAGE COMPANY) Financial statements as of December 31, 1999 and 2000 together with report of independent public accountants 3 5 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To activeIQ Technologies Inc.: We have audited the accompanying balance sheets of activeIQ Technologies Inc. (a Minnesota corporation in the development stage) as of December 31, 1999 and 2000, and the related statements of operations, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2000, and for the period from inception (April 11, 1996) to December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 activeIQ Technologies Inc. as of December 31, 1999 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, and for the period from inception (April 11, 1996) to December 31, 2000, in conformity with accounting principles generally accepted in the United States. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company is a development stage enterprise with no significant operating results to date. The factors discussed in Note 1 to the financial statements raise a substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Arthur Andersen LLP Minneapolis, Minnesota, March 23, 2001 4 6 ACTIVEIQ TECHNOLOGIES INC. (A DEVELOPMENT STAGE COMPANY) Balance sheets
December 31, December 31, 1999 2000 ------------- ------------ ASSETS: Current assets- Cash and cash equivalents $ 409,917 $ 1,349,457 Prepaid expenses -- 57,285 ----------- ------------ Total current assets 409,917 1,406,742 Property and equipment, net 17,092 549,116 Prepaid royalties -- 500,001 Other assets, net 46,655 216,072 ----------- ------------ $ 473,664 $ 2,671,931 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities- Bank line of credit $ 200,000 $ 97,529 Accounts payable 88,592 257,509 Accrued expenses 713 83,141 Current portion of capital lease obligation -- 19,058 ----------- ------------ Total current liabilities 289,305 457,237 ----------- ------------ Deferred revenue -- 306,000 Capital lease obligation, net of current portion -- 27,158 Commitments and contingencies (Notes 1 and 6) Stockholders' equity- Capital stock, $.01 par value, 6,666,666 shares authorized, 373,626 and 3,835,911 common shares issued and outstanding 3,736 38,359 Additional paid-in capital 1,144,385 5,633,040 Stock subscription receivables (328,750) (312,500) Deferred compensation -- (172,813) Warrants -- 170,881 Deficit accumulated during the development stage (635,012) (3,475,431) ----------- ------------ Total stockholders' equity 184,359 1,881,536 ----------- ------------ $ 473,664 $ 2,671,931 =========== ============
The accompanying notes are an integral part of these balance sheets. 5 7 ACTIVEIQ TECHNOLOGIES INC. (A DEVELOPMENT STAGE COMPANY) Statements of operations
Period from inception Year ended (April 11, ----------------------------------------- 1996) to December 31, December 31, December 31, December 31, 1998 1999 2000 2000 ------------ ------------ ------------ ------------ REVENUES $ -- $ -- $ -- $ -- ---------- ---------- ------------ ------------ OPERATING EXPENSES: Selling, general and administrative 12,305 393,149 1,978,697 2,397,635 Depreciation and amortization -- 20,833 112,544 133,377 Product development -- -- 609,344 621,493 Loss on disposal of assets -- -- 105,360 105,360 ---------- ---------- ------------ ------------ Total operating expenses 12,305 413,982 2,805,945 3,257,865 ---------- ---------- ------------ ------------ Loss from operations (12,305) (413,982) (2,805,945) (3,257,865) ---------- ---------- ------------ ------------ OTHER INCOME (EXPENSE): Other income 86,613 -- 7,500 95,910 Interest expense (33,076) (24,445) (41,974) (117,782) Loss on available-for-sale securities (185,724) (23,554) -- (195,694) ---------- ---------- ------------ ------------ Total other expense (132,187) (47,999) (34,474) (217,566) ---------- ---------- ------------ ------------ Net loss $(144,492) $(461,981) $(2,840,419) $(3,475,431) ========== ========== ============ ============ BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.79) $ (1.92) $ (1.65) $ (5.87) ========== ========== ============ ============ BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 183,667 240,394 1,717,731 592,448 ========== ========== ============ ============
The accompanying notes are an integral part of these financial statements. 6 8 ACTIVEIQ TECHNOLOGIES INC. (A DEVELOPMENT STAGE COMPANY) Statements of stockholders' equity (deficit)
Deficit accumulated Common Additional Stock Deferred during the stock paid-in subscription compen- development shares Amount capital receivable sation Warrants stage --------- --------- ----------- ------------ ---------- --------- ------------ ISSUANCE OF COMMON STOCK IN APRIL 1996 FOR CASH AT $.01 PER SHARE 228,000 $ 2,280 $ 720 $ -- $ -- $ -- $ -- Net loss -- -- -- -- -- -- (36,706) --------- --------- ----------- ---------- ---------- --------- ------------ BALANCE, December 31, 1996 228,000 2,280 720 -- -- -- (36,706) Unrealized loss on available-for- sale securities -- -- -- -- -- -- -- Net income -- -- -- -- -- -- 8,167 Comprehensive loss -- -- -- -- -- -- -- --------- --------- ----------- ---------- ---------- --------- ------------ BALANCE, December 31, 1997 228,000 2,280 720 -- -- -- (28,539) Repurchase of shares from shareholder in May 1998 (76,000) (760) 760 -- -- -- -- Unrealized gain on available-for- sale securities -- -- -- -- -- -- -- Net loss -- -- -- -- -- -- (144,492) Comprehensive loss -- -- -- -- -- -- -- --------- --------- ----------- ---------- ---------- --------- ------------ BALANCE, December 31, 1998 152,000 1,520 1,480 -- -- -- (173,031) Issuance of common stock in May 1999 in exchange for intellectual property 83,333 833 61,667 -- -- -- -- Capital contribution from shareholders in August 1999 -- -- 47,180 -- -- -- -- Issuance of common stock in August through September 1999 at $1.50 per share 88,266 883 131,517 -- -- -- -- Issuance of common stock in October 1999 for services at $1.50 per share 27,027 270 40,271 -- -- -- -- Issuance of common stock in October and November 1999 at $37.50 per share 23,000 230 862,270 (328,750) -- -- -- Unrealized loss on available-for- sale securities -- -- -- -- -- -- -- Net loss -- -- -- -- -- -- (461,981) Comprehensive loss -- -- -- -- -- -- -- --------- --------- ----------- ---------- ---------- --------- ------------ BALANCE, December 31, 1999 373,626 3,736 1,144,385 (328,750) -- -- (635,012) Issuance of common stock in March 2000 at $37.50 per share 4,667 47 174,953 -- -- -- -- Issuance of warrants in June 2000 in payment of legal fees -- -- -- -- -- 22,682 -- Issuance of common stock in June 2000 at $.38 per share (net of offering costs of $10,000) 1,856,634 18,567 677,545 -- -- -- -- Repayment of stock subscription receivable -- -- -- 16,250 -- -- -- Conversion of accounts payable to common stock in June 2000 at $.38 per share 216,216 2,162 78,919 -- -- -- -- Issuance of options as part of severance in June 2000 -- -- 25,800 -- -- -- -- Issuance of common stock in July 2000 for assets at $2.50 per share 151,200 1,512 376,488 -- -- -- -- Issuance of common stock in August through December 2000 at $2.75 per share (net of offering costs of $408,578) 956,780 9,568 2,079,050 -- -- 133,949 -- Issuance of common stock in September 2000 at $2.75 per share to director 100,000 1,000 274,000 -- -- -- -- Issuance of warrants in August 2000 in conjunction with stockholder note payable -- -- -- -- -- 14,250 -- Conversion of notes payable to common stock in September 2000 at $2.75 per share 20,000 200 54,800 -- -- -- -- Deferred compensation related to September and November 2000 option grants -- -- 227,500 -- (227,500) -- -- Issuance of options to consultant in October 2000 -- -- 90,000 -- -- -- -- Issuance of common stock in December 2000 in payment of accounts payable 29,515 295 80,871 -- -- -- -- Issuance of common stock in December 2000 for assets at $2.75 per share 127,273 1,272 348,729 -- -- -- -- Deferred compensation expense -- -- -- -- 54,687 -- -- Net loss -- -- -- -- -- (2,840,419) --------- --------- ----------- ---------- ---------- --------- ------------ BALANCE, December 31, 2000 3,835,911 $ 38,359 $5,633,040 $(312,500) $(172,813) $170,881 $(3,475,431) --------- --------- ----------- ---------- ---------- --------- ------------
Accumulated other Compre- comprehensive hensive income (loss) Total loss ------------- ------------ ---------- ISSUANCE OF COMMON STOCK IN APRIL 1996 FOR CASH AT $.01 PER SHARE $ -- $ 3,000 Net loss -- (36,706) --------- ------------ BALANCE, December 31, 1996 -- (33,706) Unrealized loss on available-for- sale securities (28,135) (28,135) $ (28,135) Net income -- 8,167 8,167 ---------- Comprehensive loss -- -- $ (19,968) --------- ------------ ---------- BALANCE, December 31, 1997 (28,135) (53,674) Repurchase of shares from shareholder in May 1998 -- -- Unrealized gain on available-for- sale securities 28,353 28,353 $ 28,353 Net loss -- (144,492) (144,492) ---------- Comprehensive loss -- -- $(116,139) --------- ------------ ---------- BALANCE, December 31, 1998 218 (169,813) Issuance of common stock in May 1999 in exchange for intellectual property -- 62,500 Capital contribution from shareholders in August 1999 -- 47,180 Issuance of common stock in August through September 1999 at $1.50 per share -- 132,400 Issuance of common stock in October 1999 for services at $1.50 per share -- 40,541 Issuance of common stock in October and November 1999 at $37.50 per share -- 533,750 Unrealized loss on available-for- sale securities (218) (218) $ (218) Net loss -- (461,981) (461,981) ---------- Comprehensive loss -- -- $(462,199) --------- ------------ ---------- BALANCE, December 31, 1999 -- 184,359 Issuance of common stock in March 2000 at $37.50 per share -- 175,000 Issuance of warrants in June 2000 in payment of legal fees -- 22,682 Issuance of common stock in June 2000 at $.38 per share (net of offering costs of $10,000) -- 696,112 Repayment of stock subscription receivable -- 16,250 Conversion of accounts payable to common stock in June 2000 at $.38 per share -- 81,081 Issuance of options as part of severance in June 2000 -- 25,800 Issuance of common stock in July 2000 for assets at $2.50 per share -- 378,000 Issuance of common stock in August through December 2000 at $2.75 per share (net of offering costs of $408,578) -- 2,222,567 Issuance of common stock in September 2000 at $2.75 per share to director -- 275,000 Issuance of warrants in August 2000 in conjunction with stockholder note payable -- 14,250 Conversion of notes payable to common stock in September 2000 at $2.75 per share -- 55,000 Deferred compensation related to September and November 2000 option grants -- -- Issuance of options to consultant in October 2000 -- 90,000 Issuance of common stock in December 2000 in payment of accounts payable -- 81,166 Issuance of common stock in December 2000 for assets at $2.75 per share -- 350,001 Deferred compensation expense -- 54,687 Net loss -- (2,840,419) --------- ------------ BALANCE, December 31, 2000 $ -- $ 1,881,536 --------- ------------
The accompanying notes are an integral part of these financial statements 7 9 ACTIVEIQ TECHNOLOGIES INC. (A DEVELOPMENT STAGE COMPANY) Statements of cash flows
Period from inception Year ended (April 11, ------------------------------------------ 1996) to December 31, December 31, December 31, December 31, 1998 1999 2000 2000 ------------ ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (144,492) $ (461,981) $(2,840,419) $(3,475,431) Adjustments to reconcile net loss to cash flows from operating activities- Depreciation and amortization -- 20,833 112,544 133,377 Realized loss on sale of available-for-sale securities 185,724 23,554 -- 195,694 Loss on disposal of asset -- -- 105,360 105,360 Common stock and options issued for services -- 40,541 320,000 360,541 Issuance of options as part of severance -- -- 25,800 25,800 Deferred compensation expense -- -- 54,687 54,687 Amortization of original issue discount -- -- 14,250 14,250 Changes in operating assets and liabilities- -- Prepaid expenses -- -- 20,715 20,715 Accounts payable -- 88,592 272,767 361,359 Accrued expenses -- 713 88,428 89,141 Prepaid royalties -- -- (150,000) (150,000) Other assets -- (4,988) (261,028) (266,016) ------------ ------------ ------------ ------------ Cash flows provided by (used in) operating activities 41,232 (292,736) (2,236,896) (2,530,523) ------------ ------------ ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment -- (17,092) (267,103) (284,195) Proceeds from sale of available-for-sale securities 132,253 1,750 -- 366,286 Purchases of available-for-sale securities (20,875) -- -- (370,963) ------------ ------------ ------------ ------------ Cash flows provided by (used in) investing activities 111,378 (15,342) (267,103) (288,872) ------------ ------------ ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in bank line of credit (182,501) (41,827) (102,471) 97,529 Proceeds from stockholder note payable -- 55,000 355,000 211,163 Proceeds from sale of common stock -- 666,150 3,191,010 3,860,160 ------------ ------------ ------------ ------------ Cash flows provided by (used in) financing activities (182,501) 679,323 3,443,539 4,168,852 ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (29,891) 371,245 939,540 1,349,457 CASH AND CASH EQUIVALENTS, beginning of period 68,563 38,672 409,917 -- ------------ ------------ ------------ ------------ CASH AND CASH EQUIVALENTS, end of period $ 38,672 $ 409,917 $ 1,349,457 $ 1,349,457 ============ ============ ============ ============ SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest $ 33,076 $ 24,445 $ 37,517 $ 113,325 NONCASH INVESTING AND FINANCING ACTIVITIES: Issuance of warrants in payment of legal fees -- -- 22,682 22,682 Issuance of stock in payment of accounts payable -- -- 162,247 162,247 Conversion of notes payable to common stock -- -- 55,000 55,000 Issuance of common stock for equipment -- -- 378,000 378,000 Issuance of common stock for license fees -- -- 350,001 350,001 Conversion of notes payable on advance on product purchases -- -- 306,000 306,000 Issuance of common stock in exchange for intellectual property -- 62,500 -- 62,500 Receipt of available-for-sale securities for payment on stockholder notes 142,180 -- -- 142,180 Issuance of common stock to director -- -- 225,000 225,000 Purchase of common stock with nonrecourse note receivable -- 312,500 -- 312,500
The accompanying notes are an integral part of these financial statements. 8 10 ACTIVEIQ TECHNOLOGIES INC. (A DEVELOPMENT STAGE COMPANY) Notes to financial statements 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS activeIQ Technologies Inc. (the Company) was incorporated in Minnesota on April 11, 1996, and is considered a development stage company. The Company was formed to develop and provide Internet commerce application software and services. Since its inception, the Company's efforts have been devoted to the development of its principal product and raising capital. The Company is in the development stage and has yet to generate any significant revenues. Substantial time may pass before the Company realizes significant revenue, if any. Further, during the period required to develop significant revenue, the Company may require additional funds that may not be available. The Company is subject to risks and uncertainties common to growing technology-based companies, including rapid technological change, growth and commercial acceptance of the Internet, dependence on suppliers and users for product, new product development, new product introductions and other activities of competitors, dependence on key personnel, security and privacy issues, dependence on strategic relationships and limited operating history. The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has incurred $3,475,431 in cumulative losses since inception. This factor creates an uncertainty about the Company's ability to continue as a going concern. Management plans to raise additional capital through the issuance of capital stock. Such capital may not be available or, if available, may not be available on terms acceptable to the Company. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. CASH AND CASH EQUIVALENTS The Company includes as cash equivalents certificates of deposit and all other investments with maturities of three months or less when purchased which are readily convertible into known amounts of cash. The Company maintains its cash in high-quality financial institutions. The balances, at times, may exceed federally insured limits. AVAILABLE-FOR-SALE SECURITIES During the years ended December 31, 1998 and 1999, the Company sold certain available-for-sale securities. For purpose of determining gross realized gains, the cost of available-for-sale securities is based on specific identification. PROPERTY AND EQUIPMENT Property and equipment are recorded at cost. Depreciation is provided for using the straight-line method over periods ranging from 3 to 10 years. Maintenance, repairs and minor renewals are expensed when incurred. Property and equipment consists of the following:
December 31, December 31, 1999 2000 ------------ ------------ Computer equipment $ 7,293 $ 158,928 Furniture and equipment 9,799 82,741 Software -- 383,128 Leasehold improvements -- 4,427 Less- Accumulated depreciation -- (80,108) ------------ ------------ Net property and equipment $ 17,092 $ 549,116 ============ ============
9 11 The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net cash flows expected to be generated by the assets. If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. In 2000, the Company determined that a license agreement with a related party was impaired due to the discontinuation of the agreement. The Company recorded an impairment charge of $100,000 for the balance of the asset, during 2000. SOFTWARE DEVELOPMENT COSTS Effective January 1, 1999, the Company implemented Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." Pursuant to SOP 98-1, software development costs are expensed during the preliminary project stage. For the years ended December 31, 1998, 1999 and 2000, the Company expensed all software or other development costs as research and development since such costs were incurred during the preliminary project stage. INCOME TAXES The Company accounts for income taxes using the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are reduced by a valuation allowance to the extent that realization is not assured. NET LOSS PER COMMON SHARE Basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Basic and diluted loss per share is the same as the Company recorded a net loss in all periods presented. Options and warrants totaling 46,664 and 1,428,027 for the years ended December 31, 1999 and 2000, were excluded from the computation of diluted loss per share as their effect is antidilutive. COMPREHENSIVE INCOME Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income," establishes standards for reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income consists of the Company's net income (loss) and net unrealized gain on available-for-sale securities and is presented in the statement of stockholders' equity (deficit). USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate results could differ from those estimates. DERIVATIVES On January 1, 1999, the Company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes accounting and reporting standards requiring that every derivative instrument, including certain derivative instruments embedded in other contracts, be recorded on the balance sheet at fair value. As the Company does not currently engage or plan to engage in derivative or hedging activities, the adoption of SFAS No. 133 had no impact to the Company's results of operations, financial position or cash flows. 2 BANK LINE OF CREDIT The Company had a $200,000 revolving line of credit with a bank which expired May 2000. Outstanding borrowings were $200,000 at December 31, 1999. In June 2000, the Company paid down a portion of the revolving line of credit and refinanced the balance of $100,000 under a term note with the same bank which is due June 2001. The term note requires monthly principal and interest payments of $1,358. Borrowings under the term note accrue interest at prime plus 1 percent (10.50 percent at December 31, 2000) and are personally guaranteed by one of the Company's stockholders. Borrowings totaling $97,529 were outstanding at December 31, 2000. 10 12 3 STOCKHOLDER NOTE PAYABLE In August 2000, one of the Company's stockholders advanced the Company $300,000 under a promissory note which was scheduled to mature on October 31, 2001. The note called for interest at 8 percent. In conjunction with the promissory note, the stockholder was granted a warrant to purchase 20,000 shares of the Company's common stock at $2.75 per share. The Company recorded original issue discount of $14,250, which was amortized to interest expense in 2000. In December 2000, the Company signed an agreement with the shareholder, as discussed further in Note 6, to convert the outstanding balance of this note to an advance on fees payable upon the resale of the Company's products which is recorded as deferred revenue in the accompanying balance sheet. 4 INCOME TAXES Through December 31, 2000, the Company generated a net operating loss for tax reporting purposes of approximately $3,200,000, which, if not used, will begin to expire in 2019. Future changes in the ownership of the Company may place limitations on the use of this net operating loss carryforward. The Company has recorded a full valuation allowance against its deferred tax asset, which consists primarily of operating loss carryforwards, due to the uncertainty of realizing the related benefit. 5 STOCKHOLDERS' EQUITY STOCK SPLITS In May 1999, the Company declared a 1,140-for-1 stock split. In June 2000, the Company declared a 1-for-15 reverse stock split. The stock splits have been retroactively reflected in the accompanying financial statements. COMMON STOCK SALES In May 1999, the Company issued 83,333 shares of common stock valued at $.75 per share in exchange for intellectual property. The intellectual property is recorded in other assets in the accompanying balance sheet and is being amortized over 24 months. During August through September 1999, the Company sold 88,266 shares of common stock through a private placement, resulting in $132,400 of net proceeds. During November 1999 and March 2000, the Company sold an additional 14,667 and 4,667 shares of common stock, resulting in net proceeds of $533,750 and $175,000, respectively. In June 2000, the Company conducted a rights offering whereby existing shareholders purchased 1,856,634 shares of common stock for net proceeds of $712,362. During August through December 2000, the Company sold 956,780 shares of common stock in a private placement for net proceeds of $2,222,567. NONRECOURSE NOTE RECEIVABLE In October 1999, a director of the Company purchased 8,333 shares of the Company's common stock at $37.50 per share in exchange for a nonrecourse note totaling $312,500. The note is due and payable in full 90 days following the date the individual ceases to be a director of the Company and is recorded as stock subscription receivable on the accompanying balance sheet. In the event that the director ceases to be a member of the Company's board of directors through October 2001, the Company shall have the option to repurchase up to 3,333 shares of the common stock held by the director for $37.50 per share. WARRANTS In June 2000, the Company issued 22,682 warrants to purchase common stock at $1.00 per share for payment of legal fees to the law firm discussed in Note 6. In addition to the warrants discussed above and in Note 3, the Company has issued warrants through December 31, 2000 to purchase 108,012 shares of common stock at exercise prices ranging from $2.75 to $60.00 per share primarily in conjunction with certain financings. The fair value of these warrants has been recorded as a separate caption in stockholders' equity. The warrants expire through July 2007. 11 13 STOCK OPTION PLAN The Company has a 1999 Stock Option Plan and 2000 Director Stock Option Plan (the Plans), pursuant to which options to acquire an aggregate of 1,550,000 shares of the Company's common stock may be granted as determined by the board of directors. Stock options, stock appreciation rights, restricted stock and other stock and cash awards may be granted under the Plans. In general, options vest over a period of approximately 3 years and expire 10 years from the date of grant. Information regarding the Company's stock options is summarized below:
Weighted Range of average option exercise Shares exercise price price ---------- -------------- --------------- Outstanding at December 31, 1998 - $ - $ - Granted 46,997 29.52 15.00-37.50 Canceled or expired - - - Exercised - - - ---------- ------ ------------ Outstanding at December 31, 1999 46,997 29.52 15.00-37.50 Granted 1,277,000 1.34 1.00-2 .75 Canceled or expired (55,000) 14.27 1.00-37.50 Exercised - - - ---------- ------ ------------ Outstanding at December 31, 2000 1,268,997 $ 2.07 $ 1.00-37.50 ========== ====== ============ Options exercisable at December 31, 2000 500,253 $ 2.26 $ 1.00-37.50 ========== ====== ============
Options outstanding at December 31, 1999 have a weighted average remaining contractual life of 3.39 years. Options outstanding at December 31, 2000 have a weighted average remaining contractual life of 6.19 years. The Company recorded deferred compensation for the difference between the exercise price and the deemed fair value of the Company's common stock on options to purchase 130,000 shares at exercise prices of $1.00 in September and December 2000. The Company has recorded a deferred compensation charge of $227,500 related to such options, which will be amortized over a three-year vesting period. The Company recognized $54,687 of deferred compensation expense during the year ended December 30, 2000. The Company has adopted the disclosure only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation." Accordingly, the Company accounts for its stock option plan in accordance with Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees." Under APB Opinion No. 25, no compensation expense is recognized if the exercise price of the employee stock option or warrant equals the market price on the grant date. Had compensation costs been recognized based upon the fair value of options at the grant date consistent with the provisions of SFAS No. 123, the Company's results would have been as follows:
December 31 ----------------------------------------- 1998 1999 2000 ---------- ----------- ------------ Net loss: As reported $(144,492) $(461,981) $(2,840,419) Pro forma (144,492) (475,480) (2,968,959) Basic and diluted net loss per share: As reported (0.79) (1.92) (1.65) Pro forma (0.79) (1.98) (1.73)
The fair value of each option granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 6.1 percent, expected life of five years, expected dividend yield of 0 percent and expected volatility of 0 percent. The weighted average fair value of options granted was $0.48 for 2000. 12 14 6 COMMITMENTS AND CONTINGENCIES OPERATING LEASES The Company leases space for its activities under a lease which expired in December 2000. The lease is renewable for an additional one-year term as defined in the lease. Monthly base rent including utilities is $4,988. Rent expense was $55,913 for the year ended December 31, 2000. The Company entered a lease for its administrative office under a sublease which expires in February 2001. Monthly base rent is $5,000 and the Company is required to pay the sublandlord its pro rata share of operating expenses. Rent expense was $18,500 for the year ended December 31, 2000. CAPITAL LEASES The Company leases certain office equipment and furniture under capital lease obligations which expire through January 2004. Payments are $3,068 per month. Amounts included in property and equipment totaled $84,225. EMPLOYMENT AGREEMENTS The Company has entered into employment agreements with two of its officers. One agreement requires salary of $100,000 commencing upon the completion of a private placement offering of at least $2,500,000 and a payment of $250,000 upon completion of an initial public offering of at least $10,000,000. The other agreement requires annual compensation of $100,000 upon the completion of a private placement offering of at least $2,500,000. The Company completed a $2,600,000 offering in December 2000 which will cause the compensation element of the officers' salaries to commence. RELATED-PARTY TRANSACTIONS The law firm of one of the Company's stockholders provides legal services to the Company. Total cost incurred was $0, $48,580 and $225,922 for the years ended December 31, 1998, 1999 and 2000, respectively. Accounts payable to the same stockholder was $35,049 and $62,362 at December 31, 1999 and 2000, respectively. The Company's $300,000 promissory note discussed in Note 3 was borrowed from a stockholder of the Company. In addition, in July 2000 the Company purchased software and related maintenance from this stockholder in exchange for the issuance of 151,200 shares of the Company's common stock valued at $2.50 per share. LICENSING AGREEMENT In December 2000, the Company modified its software licensing agreement with one of its shareholders and entered into a reseller arrangement which allows the Company to resell the third party's software. In conjunction with the agreement, the Company paid $150,000 in cash and issued 127,273 shares of common stock valued at $2.75 per share as consideration for a nonrefundable, prepaid minimum royalty. This total amount of $500,001 is recorded as other assets in the accompanying balance sheet. Royalties payable under the reseller agreement will be applied to this balance. Also in December 2000, the Company signed an agreement with this same shareholder to exchange the Company's $300,000 promissory note and $6,000 of accrued interest for an advance on fees payable upon the resale of the Company's products. Accordingly, such amounts have been recorded as deferred revenue in the accompanying balance sheet. 7 SUBSEQUENT EVENTS MERGERS On January 12, 2001, the Company completed its acquisition of Edge Technologies Incorporated by merging a wholly owned subsidiary of the Company with and into Edge Technologies Incorporated. In connection with this transaction, the Company issued 325,000 shares of its common stock and $300,000 of cash to the former shareholders of Edge Technologies Incorporated. The merger agreement further provides that if the Company merges with a publicly traded company within 120 days of the merger date, the former Edge Technologies Incorporated shareholders will receive shares of common stock in the publicly traded company valued at $893,750 and $400,000 in cash. If, however, the Company does not merge with a public company within 120 days of the closing of the proposed merger, then the former Edge Technologies Incorporated shareholders will be entitled to another 325,000 shares of the Company's common stock and $400,000 in cash. In October 2000, the Company also entered into a letter of intent to merge with and into a wholly owned subsidiary of Meteor Industries, Inc., a publicly traded company. The agreement is subject to approval of the shareholders and boards of directors of both companies, regulatory review and due diligence. Pending these approvals, the completion of the merger is expected in 2001. 13 15 (b) Pro Forma Financial Information. Not applicable. (c) Exhibits 2.1 Stock Purchase Agreement by and between Capco Energy, Inc. and Meteor Industries, Inc. dated as of January 30, 2001. (1) 2.2 First Amendment to Stock Purchase Agreement by and between Capco Energy, Inc. and Meteor Industries, Inc. dated April 27, 2001. 2.3 Agreement and Plan of Merger by and among Meteor Industries, Inc., activeIQ Technologies, Inc. and MI Merger, Inc. dated January 11, 2001. (2) 2.4 First Amendment to Agreement and Plan of Merger by and among Meteor Industries, Inc., activeIQ Technologies, Inc. and MI Merger, Inc. dated April 27, 2001. 2.5 Agreement and Plan of Merger by and between Meteor Industries, Inc. and AIQ Acquisition Corp. dated April 27, 2001. 3.1 Articles of Incorporation of AIQ Acquisition Corp. 3.2 Articles of Merger relating to the merger of Meteor Industries, Inc. with and into AIQ Acquisition Corp. 10.1 Form of Merger Warrant issued to former shareholders of activeIQ Technologies, Inc. 16.1 Letter regarding Registrant's change in independent public accountants. 99.1 Press Release dated May 1, 2001. - --------------- (1) Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K filed with the Commission on February 13, 2001. (2) Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K filed with the Commission on February 13, 2001. 14 16 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ACTIVE IQ TECHNOLOGIES, INC. (formerly Meteor Industries, Inc.) Date: May 14, 2001 By: /s/ Kenneth W. Brimmer --------------------------------------- Kenneth W. Brimmer Chairman, Chief Executive Officer and Chief Financial Officer 15 17 EXHIBIT INDEX 2.1 Stock Purchase Agreement by and between Capco Energy, Inc. and Meteor Industries, Inc. dated as of January 30, 2001. (1) 2.2 First Amendment to Stock Purchase Agreement by and between Capco Energy, Inc. and Meteor Industries, Inc. dated April 27, 2001. 2.3 Agreement and Plan of Merger by and among Meteor Industries, Inc., activeIQ Technologies, Inc. and MI Merger, Inc. dated January 11, 2001. (2) 2.4 First Amendment to Agreement and Plan of Merger by and among Meteor Industries, Inc., activeIQ Technologies, Inc. and MI Merger, Inc. dated April 27, 2001. 2.5 Agreement and Plan of Merger by and between Meteor Industries, Inc. and AIQ Acquisition Corp. dated April 27, 2001. 3.1 Articles of Incorporation of AIQ Acquisition Corp. 3.2 Articles of Merger relating to the merger of Meteor Industries, Inc. with and into AIQ Acquisition Corp. 10.1 Form of Merger Warrant issued to former shareholders of activeIQ Technologies, Inc. 16.1 Letter regarding Registrant's change in independent public accountants. 99.1 Press Release dated May 1, 2001. - --------------- (1) Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K filed with the Commission on February 13, 2001. (2) Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K filed with the Commission on February 13, 2001. 16 EX-2.2 2 c62442ex2-2.txt FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT 1 EXHIBIT 2.2 FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this "First Amendment") is made by and between Capco Energy, Inc., a Colorado corporation ("Purchaser") and Meteor Industries, Inc., a Colorado corporation ("Seller"). WHEREAS, Meteor Industries, Inc. and Capco Energy, Inc. executed a Stock Purchase Agreement, dated January 30, 2001 (the "Stock Purchase Agreement"), pursuant to which Purchaser is to acquire all of the issued and outstanding stock of Meteor Enterprises, Inc. ("MEI"), a wholly owned subsidiary of Seller; WHEREAS, Purchaser now desires to pay a certain portion of the Purchase Price (as defined in the Stock Purchase Agreement) with a note instead of cash; WHEREAS, the parties have discovered that Exhibit B to the Stock Purchase Agreement is incomplete and does not include the property, currently operated by Meteor Marketing, Inc., located at 28599 Highway 34, Brush, Colorado, also referred to as "Petrostop" and whereas the parties now wish to add Petrostop to Exhibit B; WHEREAS, Purchaser and Seller now wish to amend the provisions of the Stock Purchase Agreement as set forth below: NOW THEREFORE, in consideration of the mutual promises, covenants, provisions and representations contained herein and in the Stock Purchase Agreement, the parties hereto agree as follows: 1) Capitalized terms shall have the meanings set forth herein. Capitalized terms not defined herein shall have the meanings set forth in the Stock Purchase Agreement. 2) Section 1.2 of the Stock Purchase Agreement is hereby amended and restated in its entirety to read as follows: 1.2 EFFECTIVE DATE AND CLOSING. The effective date (the "Effective Date") of this transaction shall be immediately preceding the closing of the merger between activeIQ Technologies, Inc. and the Seller (the "Merger") pursuant to an Agreement and Plan of Merger dated January 11, 2001. The closing of the transactions contemplated herein (the "Closing") shall occur at a mutually agreeable time and place, but in no event later than April 30, 2001 or such later date as Seller and Purchaser may mutually agree. 3) Section 1.4 of the Stock Purchase Agreement is hereby amended and restated in its entirety to read as follows: 1.4 PAYMENT OF PURCHASE PRICE. The total Purchase Price shall be paid as follows: 2 1.4(a) At Closing, Purchaser shall deliver to Seller (i) a note, in the principal amount of $500,000 and bearing interest at a rate of 10% per annum, together with a stock pledge agreement in substantially the forms attached to this First Amendment as Annex A, (ii) cash in the amount of $4,697,501 by certified check or wire transfer of immediately available funds, and (iii) 100,833 shares of Meteor Industries, Inc., common stock owned by Purchaser. 4) Exhibit B to the Stock Purchase Agreement is hereby replaced with the Revised Exhibit B attached hereto. 5) Except as specifically modified herein, the parties agree to abide by and be bound by all the original terms and conditions of the Stock Purchase Agreement including any attachments thereto. 6) This First Amendment may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. AGREED TO AND ACCEPTED this 27th day of April, 2001. PURCHASER: CAPCO ENERGY, INC. By: /s/ Ilyas Chaudary --------------------------------- Ilyas Chaudhary, President SELLER: METEOR INDUSTRIES, INC. By: /s/ Edward J. Names --------------------------------- Edward J. Names, President Annex A -- Form of Note and Stock Pledge Agreement (omitted) Annex B -- List of Facilities Currently or Formerly Owned or Operated by the Subsidiaries (omitted) 2 EX-2.4 3 c62442ex2-4.txt FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER 1 EXHIBIT 2.4 FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (the "Amendment") is dated as of April 27, 2001, by and among activeIQ Technologies Inc., a Minnesota corporation ("AIQ"), Meteor Industries, Inc., a Colorado corporation ("MI") and MI Merger, Inc., a Minnesota corporation and a wholly-owned subsidiary of MI ("Merger Sub"). W I T N E S S E T H WHEREAS, on January 11, 2001, the parties hereto executed that certain Agreement and Plan of Merger (the "Merger Agreement") pursuant to which Merger Sub would merge with and into AIQ and all of the outstanding shares of AIQ would be exchanged for shares of "New MI," the reincorporated successor corporation of MI; WHEREAS, all defined terms not otherwise defined (or redefined) herein shall have the meaning ascribed to such term in the Merger Agreement; WHEREAS, Article II of the Merger Agreement provided that Merger Sub would merge with and into AIQ, with AIQ being the surviving corporation and a wholly-owned subsidiary of New MI upon the effective time of the Merger; and WHEREAS, the parties hereto wish to amend the Merger Agreement in order to provide that AIQ shall merge with and into Merger Sub, with Merger Sub being the surviving corporation and a wholly-owned subsidiary of New MI upon the effective time of the Merger. NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Amendment of Merger Agreement. (a) Definition of "Merger". Notwithstanding anything to the contrary contained in the Merger Agreement, the term "Merger" as used in the Merger Agreement (as hereby amended) shall mean the merger of AIQ with and into Merger Sub, with Merger Sub as the surviving corporation. (b) Amendment of Article II. The paragraph in the Merger Agreement that immediately precedes Section 2.1 thereof shall be amended and restated in its entirety to read as follows: "Subject to the satisfaction or waiver of the conditions set forth in ARTICLE VII, at the Effective Time (i) MI will merge with and into New MI (the "Reincorporation Merger"), (ii) AIQ will merge with and into Merger Sub, (iii) Merger Sub will become a wholly-owned subsidiary of New MI, (iv) Merger Sub will change its name to "AIQ, Inc." or such other name acceptable to AIQ, and (v) New MI will change its name to "Active IQ Technologies, Inc." or such other name acceptable to AIQ. Merger Sub, as a wholly-owned subsidiary of New MI after giving effect to the Merger, shall be defined herein as the "Surviving Company." The Reincorporation Merger will be effected pursuant to the Reincorporation Articles of Merger and the Merger will be effected pursuant to the Articles of Merger, both pursuant to the provisions of, and with the effect provided in, Section 302A.641 of the MBCA." 2 (c) Amendment of Section 2.3(f). Section 2.3(f) of the Merger Agreement is hereby deleted in its entirety. (d) Amendment of Section 7.1(d). Section 7.1(d) of the Merger Agreement is hereby amended and restated in its entirety to read as follows: "(d) Federal Tax Opinion. The parties shall have received a tax opinion addressed to AIQ and MI by counsel or independent certified public accountants acceptable to AIQ based on customary reliance and subject to customers qualifications, to the effect that for federal income tax purposes: (i) The Merger will qualify as a reorganization under Section 368(a) of the Code. New MI and AIQ will each be a party to the reorganization within the meaning of Section 368(b) of the Code. (ii) No gain or loss will be recognized by shareholders of AIQ and MI upon the receipt of the Surviving Company Common Stock pursuant to Section 356(a)(1)(B) of the Code." (e) Amendment of Section 7.3(b). Section 7.3(b) of the Merger Agreement is hereby amended to add the following sentence: "For purposes of this Section 7.3(b), a promissory note in the principal amount of $500,000 to be delivered by Capco to MI in connection with the Asset Sale shall constitute "cash" or "cash equivalents" for the purposes of computing Available Cash under this Section 7.3(b)." (f) Amendment to Section 7.2. A new subparagraph (i) of Section 7.2 shall be added, as follows: (i) Indemnity Agreement. AIQ, New Meteor and the Surviving Company shall have executed and delivered to Meteor an Indemnity Agreement in substantially the form of ANNEX A attached hereto. (g) Amendment of Exhibit B. Notwithstanding anything to the contrary contained in the Merger Agreement, the term "Articles of Merger" as used in the Merger Agreement and this Amendment shall mean the articles of merger in substantially the form attached hereto as ANNEX B. (h) Amendment of Article VI. Article VI of the Merger Agreement is hereby amended to add a new Section 6.17 as follows: "6.17 Preparation of Securities Reports. (a) The officers and directors of MI as of the Effective Time shall prepare (but not sign) New MI's Quarterly Report on Form 10-Q to be filed with the SEC on or before May 15, 2001 in connection with MI's quarter ended March 31, 2001 (the "First Quarter 10-Q"), and shall deliver such quarterly report to New MI on or before May 11, 2001. When delivered to New MI, the First Quarter 10-Q shall be accompanied by a written representation from Edward J. Names to the effect that, to the best of his knowledge, the information set forth in the First Quarter 10-Q is true and accurate and complies in all respects with the Exchange Act, including all rules and regulations promulgated thereunder. 2 3 (b) The officers and directors of MI as of the Effective Time shall provide to New MI all financial and other information relating to MI's business and operations necessary to prepare New MI's Quarterly Report on Form 10-Q to be filed with the SEC on or before August 14, 2001 in connection with New MI's quarter ended June 30, 2001 (the "Second Quarter 10-Q"), including without limitation a balance sheet as of the Effective Time and an income statement for the period from April 1, 2001 through the Effective Time, and shall deliver such information to New MI on or before August 1, 2001. The information required to be provided to New MI pursuant to this Section 6.17(b) shall be accompanied by a written representation of Edward J. Names to the effect that, to the best if his knowledge, such information is true and accurate and complies in all respects with the Exchange Act, including all rules and regulations promulgated thereunder. (c) The parties hereto understand and acknowledge the importance to the shareholders of AIQ that New MI file its Exchange Act reports in a timely manner. Accordingly, in the event the officers and directors of MI fail to furnish New MI with the completed First Quarter 10-Q or the information necessary to complete New MI's Second Quarter 10-Q by the dates set forth in this Section 6.17, New MI shall issue to the shareholders of AIQ as of the Effective Time an aggregate of Two Hundred Thousand (200,000) shares of New MI common stock for each failure to timely provide to New MI the prepared First Quarter 10-Q or information necessary to complete the Second Quarter 10-Q." 2. Counterpart Execution. This Amendment may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 3. Ratification of Merger Agreement. Except as expressly modified or amended by the provisions of Section 1 hereof, all other terms and conditions of the Merger Agreement, including all exhibits and schedules thereto, shall remain in full force and effect. [SIGNATURE PAGE FOLLOWS.] 3 4 IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed on the date first written above by their respective officers. ACTIVEIQ TECHNOLOGIES INC. By: /s/ Kenneth W. Brimmer ----------------------------------------- Kenneth W. Brimmer Chairman and Chief Executive Officer METEOR INDUSTRIES, INC. By: /s/ Edward J. Names ----------------------------------------- Edward J. Names President and Chief Executive Officer MI MERGER, INC. By: /s/ Edward J. Names ----------------------------------------- Edward J. Names President and Chief Executive Officer Exhibit A - Form of Indemnity Agreement (omitted) Exhibit B - Form of Articles of Merger (omitted) 4 EX-2.5 4 c62442ex2-5.txt AGREEMENT AND PLAN OF MERGER 1 EXHIBIT 2.5 AGREEMENT AND PLAN OF MERGER This Agreement and Plan of Merger (the "Plan") is adopted as of April 27, 2001, by and between AIQ Acquisition Corp., a Minnesota corporation ("AIQ"), and Meteor Industries, Inc., a Colorado corporation ("METEOR"). WHEREAS, AIQ is a corporation duly organized and existing under the laws of the State of Minnesota; WHEREAS, METEOR is a corporation duly organized and existing under the laws of the State of Colorado; WHEREAS, on the date hereof, AIQ has authority to issue 40,000,000 shares of undesignated capital stock, of which 1,000 shares of Common Stock, par value $.01 per share (the "Minnesota Common Stock") are issued and outstanding, all of which are owned by METEOR; WHEREAS, on the date hereof, AIQ also has authority to issue 365,000 shares of Series B Convertible Preferred Stock, par value $1.00 per share (the "Minnesota Preferred Stock"), none of which has been issued or is outstanding; WHEREAS, on the date hereof, METEOR has authority to issue 10,000,000 shares of Common Stock, par value $.001 per share (the "Colorado Common Stock"), of which 3,895,505 shares are issued and outstanding; WHEREAS, on the date hereof, METEOR has authority to issue 365,000 shares of Series B Convertible Preferred Stock, par value $1.00 per share (the "Colorado Preferred Stock"), of which 365,000 shares are issued and outstanding; WHEREAS, the respective boards of directors of AIQ and METEOR have determined that, for the purpose of effecting the reincorporation of METEOR in the State of Minnesota, it is advisable and in the best interests of such corporations and their respective shareholders that METEOR merge with and into AIQ upon the terms and conditions herein provided; and WHEREAS, the respective boards of directors of AIQ and METEOR have unanimously approved this Plan and have directed that this Plan be submitted to a vote of their respective shareholders. NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein, METEOR and AIQ hereby agree to merge as follows: 1. Merger. Subject to the terms and conditions hereinafter set forth, METEOR shall be merged with and into AIQ, which shall be the surviving corporation in the merger (the "Merger"). The Merger shall be effective on the date and at the time properly executed articles of merger consistent with the terms of this Merger Agreement and Section 302A.615 of the Minnesota Business Corporations Act (the "MBCA") is filed with the Secretary of State of the State of Minnesota and a certificate of merger is also filed with the Secretary of the State of Colorado as required by Section 7-111-105 of the Colorado Business Corporations Act (the "Effective Time"). 1 2 2. Principal Office of AIQ. The principal office of AIQ is 601 Carlson Parkway, Suite 1500, Minnetonka, Minnesota 55305. 3. Corporate Documents. The Articles of Incorporation AIQ, as in effect immediately prior to the Effective Time, shall continue to be the Articles of Incorporation of AIQ as the surviving corporation without change or amendment until further amended in accordance with the provisions thereof and applicable law. The Bylaws of AIQ, as in effect immediately prior to the Effective Time, shall continue to be the Bylaws of AIQ as the Surviving corporation without change or amendment until further amended in accordance with the provisions thereof and applicable law. 4. Directors and Officers. The directors and officers of METEOR at the Effective Time shall be and become directors and officers, holding the same titles and positions, of AIQ at the Effective Time, and after the Effective Time shall serve in accordance with the Bylaws of AIQ. 5. Succession. At the Effective Time, AIQ shall succeed to METEOR in the manner of and as more fully set forth in Section 302A.641, Subdivisions 2 and 3 of the MBCA, and in Section 7-111-106 of the Colorado Business Corporations Act. 6. Further Assurances. From time to time, as and when required by AIQ or by its successors and assigns, there shall be executed and delivered on behalf of METEOR such deeds and other instruments, and there shall be taken or caused to be taken by it such further and other action, as shall be appropriate or necessary in order to vest or perfect in or to confer of record or otherwise in METEOR the title to and possession of all the interests, assets, rights, privileges, immunities, powers, franchises and authority of METEOR, and otherwise to carry out the purposes and intent of this Merger Agreement, and the officers and directors of AIQ are fully authorized in the name and on behalf of METEOR or otherwise to take any and all such actions and to execute and deliver any and all such deeds and other instruments. 7. Common Stock of METEOR. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of Colorado Common Stock outstanding immediately prior thereto shall be changed and converted automatically into one fully paid and nonassessable share of Minnesota Common Stock. 8. Preferred Stock of METEOR. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of Colorado Preferred Stock outstanding immediately prior thereto shall be changed and converted automatically into one fully paid and nonassessable share of Minnesota Preferred Stock. 9. Stock Certificates. At and after the Effective Time, all of the outstanding certificates which prior to that time represented shares of Colorado Common Stock shall be deemed for all purposes to evidence ownership of and to represent shares of Minnesota Common Stock into which the shares of the Colorado Common Stock represented by such certificates have been converted as herein provided. All of the outstanding certificates which prior to the Effective Time represented shares of Colorado Preferred Stock shall be deemed for all purposes 2 3 to evidence ownership of and to represent shares of Minnesota Preferred Stock into which the shares of Colorado Preferred Stock have been converted as herein provided. The registered owner on the books and records of METEOR or its transfer agent of any such outstanding stock certificate shall, until such certificate shall have been surrendered for transfer or otherwise accounted for to AIQ or its transfer agent, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the shares of Minnesota Common Stock or Minnesota Preferred Stock evidenced by such outstanding certificate as above provided. 10. Options. Each option to purchase shares of Colorado Common Stock granted under METEOR's 1994 Stock Option Plan of METEOR (the "Option Plan") or its 1998 Incentive Equity Plan (the "Equity Plan"), which are outstanding at the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become an option to purchase the same number of shares of Minnesota Common Stock at the same option price per share, and upon the same terms and subject to the same conditions as set forth in the Plan, as in effect immediately prior to the Effective Time. The same number of shares of Minnesota Common Stock shall be reserved for purposes of the Plan as is equal to the number of shares of Colorado Common Stock so reserved as of the Effective Time. As of the Effective Time, AIQ hereby assumes both the Option Plan and the Equity Plan and all obligations of METEOR under such plans, including all outstanding options, stock appreciation rights and other awards or portions thereof granted pursuant to such plans. 11. Warrants of METEOR. Each warrant to purchase shares of Colorado Common Stock that are outstanding at the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become an option to purchase the same number of shares of Minnesota Common Stock at the same exercise price per share, and upon the same terms and subject to the same conditions as set forth in each such warrant. The same number of shares of Minnesota Common Stock shall be reserved for issuance as is equal to the total number of shares of Colorado Common Stock issuable upon exercise of all of the warrants to purchase Colorado Common Stock outstanding at the Effective Time. At the Effective Time, AIQ assumes all of the obligations of METEOR under all such outstanding warrants to purchase Colorado Common Stock. 12. Common Stock of AIQ. At the Effective Time, the previously outstanding 1,000 shares of Common Stock of AIQ registered in the name of METEOR and which shall, by reason of the Merger, be reacquired by AIQ, shall be retired and shall resume the status of authorized and unissued shares of Common Stock of AIQ, and no shares of Minnesota Common Stock or other securities of AIQ shall be issued in respect thereof. 13. Amendment. At any time before or after approval by the shareholders of METEOR, this Plan may be amended in any manner (except that Sections 7 and 8 and any of the other principal terms may not be amended without the approval of the shareholders of METEOR) as may be determined in the judgment of the respective Boards of Directors of AIQ and METEOR to be necessary, desirable or expedient in order to clarify the intention of the parties hereto or to effect or facilitate the purposes and intent of this Merger Agreement. 3 4 14. Abandonment. This Merger Agreement and the Merger contemplated hereby are subject to approval by the holders of a majority of the outstanding shares of Colorado Common Stock and Colorado Preferred Stock; this Agreement shall be terminated and the Merger shall be abandoned unless they shall have so approved on or before April 16, 2001. At any time before the Effective Time, this Merger Agreement may be terminated and the Merger contemplated hereby may be abandoned by the Board of Directors of either METEOR or AIQ or both, notwithstanding approval of this Merger Agreement by the sole shareholder of AIQ or the shareholders of METEOR, or both. 15. Rights and Duties of AIQ. At the Effective Time and for all purposes the separate existence of METEOR shall cease and shall be merged with and into AIQ which, as the surviving corporation, shall thereupon and thereafter possess all the rights, privileges, immunities, licenses and franchises (whether of a public or private nature) of METEOR; and all property (real, personal and mixed), all debts due on whatever account, all choses in action, and all and every other interest of or belonging to or due to METEOR shall continue and be taken and deemed to be transferred to and vested in AIQ without further act or deed; and the title to any real estate, or any interest therein, vested in METEOR shall not revert or be in any way impaired by reason of such Merger; and AIQ shall thenceforth be responsible and liable for all the liabilities and obligations of METEOR; and, to the extent permitted by law, any claim existing, or action or proceeding pending, by or against METEOR may be prosecuted as if the Merger had not taken place, or AIQ may be substituted in the place of such corporation. Neither the rights of creditors nor any liens upon the property of METEOR shall be impaired by the Merger. If at any time AIQ shall consider or be advised that any further assignment or assurances in law or any other actions are necessary or desirable to vest the title of any property or rights of METEOR in AIQ according to the terms hereof, the officers and directors of AIQ are empowered to execute and make all such proper assignments and assurances and do any and all other things necessary or proper to vest title to such property or other rights in AIQ, and otherwise to carry out the purposes of this Merger Agreement. 16. Consent to Service of Process. AIQ hereby irrevocably appoints the Secretary of the State of Colorado and the successors of such officer its attorney in the State of Colorado upon whom may be served any notice, process or pleading in any action or proceeding against it to enforce against AIQ any obligation of METEOR or to enforce the rights of a dissenting shareholder of METEOR. IN WITNESS WHEREOF, this Agreement and Plan of Merger, having first been duly approved by resolution of the Boards of Directors of METEOR and AIQ, has been executed on behalf of each of said two corporations by their respective duly authorized officers. METEOR INDUSTRIES, INC., AIQ ACQUISITION CORP., a Colorado corporation a Minnesota corporation By: /s/ Edward J. Names By: /s/ Edward J. Names ------------------------------ ------------------------------- Edward J. Names Edward J. Names President and CEO Chief Executive Officer 4 EX-3.1 5 c62442ex3-1.txt ARTICLES OF INCORPORATION 1 EXHIBIT 3.1 ARTICLES OF INCORPORATION OF AIQ ACQUISITION CORP. The undersigned hereby creates a corporation under Chapter 302A of the Minnesota Statutes and adopts the following Articles of Incorporation: ARTICLE 1 NAME The name of the Corporation is AIQ Acquisition Corp. ARTICLE 2 REGISTERED OFFICE The address of the registered office of the Corporation is 90 South Seventh Street, Suite 3300, Minneapolis, Minnesota 55402. ARTICLE 3 CAPITAL A. The Corporation is authorized to issue forty million (40,000,000) shares of capital stock, having a par value of one cent ($.01) per share in the case of common stock, and having a par value as determined by the Board of Directors in the case of preferred stock, to be held, sold and paid for at such times and in such manner as the Board of Directors may from time to time determine in accordance with the laws of the State of Minnesota. B. In addition to any and all powers conferred upon the Board of Directors by the laws of the State of Minnesota, the Board of Directors shall have the authority to establish by resolution more than one class or series of shares, either preferred or common, and to fix the relative rights, restrictions and preferences of any such different classes or series, and the authority to issue shares of a class or series to another class or series to effectuate share dividends, splits or conversion of the Corporation's outstanding shares. C. The Board of Directors shall also have the authority to issue rights to convert any of the Corporation's securities into shares of stock of any class or classes, the authority to issue options to purchase or subscribe for shares of stock of any class or classes, and the authority to issue share purchase or subscription warrants or any other evidence of such option rights which set forth the terms, provisions and conditions thereof, including the price or prices at which such shares may be subscribed for or purchased. Such options, warrants and rights, may be 2 transferable or nontransferable and separable or inseparable from other securities of the Corporation. The Board of Directors is authorized to fix the terms, provisions and conditions of such options, warrants and rights, including the conversion basis or bases and the option price or prices at which shares may be subscribed for or purchased. D. Three Hundred Sixty-Five Thousand (365,000) shares of the Corporation's capital stock are hereby designated as "Series B Convertible Preferred Stock," par value $1.00 per share. The powers, designations, preferences and relative, participating, optional or other special rights of the shares of this series of Convertible Preferred Stock and the qualifications, limitations and restrictions of such preferences and rights shall be as follows: 1. Dividends. No dividends shall be paid on any shares of Series B Convertible Preferred Stock. 2. Liquidation Preference. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, the holder of each share of Series B Convertible Preferred Stock shall be entitled to receive, out of the assets of the Corporation available for distribution to its stock holders, before any payment or distribution shall be made on the Common Stock or any other series of Preferred Stock, as the case may be, an amount per share equal to $2.00. If the assets and funds to be distributed among the holders of Series B Convertible Preferred Stock shall be insufficient to permit the payment of the full aforesaid preferential amount to such holders, then the entire assets and funds of the corporation legally available for the distribution shall be distributed among the holders of the Series B Convertible Preferred Stock. After payment has been made to the holders of the Series B Convertible Preferred Stock, the remaining assets of the Corporation available for distribution to the holders of the Common Stock shall be distributed, among the holders of the Series B Convertible Preferred Stock and Common Stock pro rata based on the number of Shares of Common Stock held by each at the time of such liquidation (assuming conversion of all such Series B Convertible Preferred Stock). (b) For purposes of this subparagraph 2, a merger or consolidation of the Corporation with or into any other corporation or corporations, or the merger of any other corporation or corporations into the Corporation, or the sale or any other corporate reorganization, in which shareholders of the Corporation receive distributions as a result of such consolidation, merger, sale of assets or reorganization, shall be treated as a liquidation, dissolution or winding up of the Corporation, unless the stockholders of the Corporation hold more than fifty percent (50%) of the voting equity securities of the successor or surviving corporation immediately following 2 3 such consolidation, merger, sale of assets or reorganization in which event such consolidation, merger, sale of assets or reorganization shall not be treated as a liquidation, dissolution or winding up. 3. Conversion. The Series B Convertible Preferred Stock may be converted into shares of the Corporation's Common Stock on the following terms and conditions (the "Conversion Rights"): (a) Option to Convert. Holders of the Series B Convertible Preferred Stock shall have the right to convert all or a portion of their shares into units, each unit consisting of one share of Common Stock and one warrant to purchase Common Stock at any time or from time to time upon notice to the Corporation on the terms and conditions set forth herein prior to the date fixed for redemption of such shares. (b) Conversion Ratio. Each share of Series B Convertible Preferred Stock may be converted into one (1) unit, each unit consisting of one (1) fully paid and nonassessable share of Common Stock and one (1) warrant to purchase one share of Common Stock (subject to adjustment pursuant to subparagraph 3(d) below). In the event that upon conversion of shares of Series B Convertible Preferred Stock a holder shall be entitled to a fraction of a unit, no fractional unit shall be issued and in lieu thereof the Corporation shall pay to such holder cash equal to the fair value of such fraction of a unit. (c) Mechanics of Conversion. Upon the election of a holder of the Series B Convertible Preferred Stock to convert shares of such Preferred Stock, the holder of the shares of Series B Convertible Preferred Stock which are converted shall surrender the certificate or certificates therefor, duly endorsed, at the office of the corporation or any authorized transfer agent for such stock and warrants together with a written statement that such holder elects to convert its preferred stock to common stock and warrants. The Corporation or its transfer agent shall promptly issue and deliver at such office to such holder of Series B Convertible Preferred Stock a certificate or certificate for the number of shares of Common Stock to which such holder is thereby entitled and a warrant certificate for the same number of warrants. The effective date of such conversion shall be a date not later than 30 days after the date upon which the holder provides written notice of his election to convert to the Corporation or transfer agent. (d) Adjustment of Conversion Rate and Terms of Warrants. If the Corporation shall at any time, or from time to time, effect a change in the number of outstanding shares of Common Stock in the form of a stock split or reverse stock split and not effect a corresponding change of the Series B Convertible Preferred Stock, or if the Corporation at any time or from time to time after the effective date hereof shall make or issue, or fix 3 4 a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, then and in each such event the number of units issuable upon conversion of the Series B Convertible Preferred Stock shall be proportionately increased or decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date. Also in such event, the terms of the warrants issued or issuable as part of the units shall be proportionately adjusted as to the number of shares to be issued upon the exercise of such warrants and as to the exercise price of such warrants. (e) No Impairment. The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all of the provisions of this paragraph 3 and in the taking of all such actions as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series B Convertible Preferred Stock against impairment. (f) Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Convertible Preferred Stock and the exercise of the warrants issuable upon the conversion of units, such number of its shares of Common Stock as shall time to time be sufficient to effect the conversion of all outstanding shares of Series B Convertible Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all outstanding shares of Series B Convertible Preferred Stock, the Corporation will take such corporate action as is necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. (g) Warrants Issuable Upon Conversion. The warrants to be issued as part of the units upon conversion of the Series B Convertible Preferred Stock shall be in a form determined by the Board of Directors and be exercisable until May 15, 2005, at an exercise price of $2.50 per share (subject to adjustment pursuant to Section 3(d) above). 4. Status of Converted or Reacquired Stock. In case any shares of Series B Convertible Preferred Stock shall be converted pursuant to paragraph 3 hereof, the shares so converted shall cease to be a part of the authorized capital stock of the Corporation. 4 5 5. Voting Rights. Each share of Series B Convertible Preferred Stock entitles the holder to one (1) vote and with respect to each such vote, a holder of shares of Series B Convertible Preferred Stock shall have full voting rights and powers equal to the voting rights and powers of a holder of shares of Common Stock, share for share, and shall be entitled to notice of any shareholders' meeting in accordance with the Bylaws of the Corporation, and shall be entitled to vote with holders of Common Stock together as a single class. 6. Redemption Provisions. Shares of the Series B Convertible Preferred Stock are not redeemable. 7. Preferences Generally. The Corporation shall not authorize or issue any securities having any rights or preferences senior or preferential to or pari passu with those of the Series B Convertible Preferred Stock without the vote of the holders of a majority of the Series B Convertible Preferred Stock, voting separately as a class, in addition to any other vote required by law. 8. Notices. Any notice required to be given to holders of shares of Series B Convertible Preferred Stock shall be deemed given upon deposit in the United States mail, postage prepaid, addressed to such holder of record at his address appearing on the books of the corporation, or upon personal delivery of the aforementioned address. ARTICLE 4 SHAREHOLDER RIGHTS A. No shareholder of the Corporation shall have any preemptive rights. B. No shareholder of the Corporation shall have any cumulative voting rights. ARTICLE 5 INCORPORATOR The name and address of the incorporator, who is a natural person of full age, is: WILLIAM M. MOWER 90 SOUTH 7TH STREET, SUITE 3300 MINNEAPOLIS, MN 55402 ARTICLE 6 WRITTEN ACTION BY LESS THAN ALL OF THE DIRECTORS Any action required or permitted to be taken at a Board meeting, other than an action requiring shareholder approval, may be taken by written action of the Board of 5 6 Directors if signed by the number of directors that would be required to take the same action at a meeting at which all directors were present. ARTICLE 7 LIMITED LIABILITY OF DIRECTORS To the fullest extent permitted by law, a director shall have no personal liability to the Corporation or its shareholders for breach of fiduciary duty as a director. Any amendment to or repeal of this Article 7 shall not adversely affect any right or protection of a director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. ARTICLE 8 BUSINESS COMBINATIONS AND CONTROL SHARE ACQUISITIONS Pursuant to Sections 302A.671, Subd. 1(a) and 302A.673, Subd. 3 (b)(1) of the Minnesota Business Corporation Act, the Corporation elects not to be subject to the provisions of Sections 302A.671 and 302A.673 of the Act. IN WITNESS WHEREOF, I have signed my name this 31st day of January, 2001. /s/ William M. Mower ----------------------------------- William M. Mower, Incorporator STATE OF MINNESOTA DEPARTMENT OF STATE FILED JAN 31 2001 /s/ Mary Kiffmeyer Secretary of State 6 EX-3.2 6 c62442ex3-2.txt ARTICLES OF MERGER 1 EXHIBIT 3.2 ARTICLES OF MERGER OF METEOR INDUSTRIES, INC., a Colorado corporation, WITH AND INTO AIQ ACQUISITION CORP., a Minnesota corporation To the Secretary of State State of Minnesota: THE UNDERSIGNED, Edward J. Names, Chief Executive Officer of Meteor Industries, Inc., a Colorado corporation ("METEOR"), and Edward J. Names, Chief Executive Officer of AIQ Acquisition Corp., a Minnesota corporation ("AIQ"), hereby certify as follows: 1. Attached as EXHIBIT A hereto is the Agreement and Plan of Merger for the merger of METEOR with and into AIQ, which has been duly adopted by the Board of Directors of METEOR and the Board of Directors of AIQ (these Articles of Merger, together with the attached Agreement and Plan of Merger, shall constitute a single document). 2. The Agreement and Plan of Merger has been approved by the shareholders of METEOR and the sole shareholder of AIQ pursuant to Chapter 302A of the Minnesota Business Corporations Act. 3. The merger shall be effective on the filing of these Articles of Merger with the Secretary of State of the State of Minnesota. 4. Article 1 of the Articles of Incorporation of AIQ shall be amended as follows: "ARTICLE 1 NAME The name of the Corporation is ACTIVE IQ TECHNOLOGIES, INC." IN WITNESS WHEREOF, the undersigned, being Chief Executive Officer of METEOR and Chief Executive Officer of AIQ have executed this documents on behalf of the respective corporations this 27th day of April, 2001. METEOR INDUSTRIES, INC. AIQ ACQUISITION CORP. By: /s/ Edward J. Names By: /s/ Edward J. Names ----------------------------------- -------------------------------- Edward J. Names Edward J. Names Chief Executive Officer Chief Executive Officer 2 EXHIBIT 3.2 EXHIBIT A [Omitted] STATE OF MINNESOTA DEAPRTMENT OF STATE FILED APR 30 2001 /s/ Mary Kiffmeyer Secretary of State EX-10.1 7 c62442ex10-1.txt FORM OF MERGER WARRANT 1 EXHIBIT 10.1 THE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS ("BLUE SKY LAWS"). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS WARRANT OR THE SECURITIES OR ANY INTEREST THEREIN MAY BE MADE EXCEPT (a) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE BLUE SKY LAWS OR (b) IF THE COMPANY HAS BEEN FURNISHED WITH BOTH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT NO REGISTRATION IS REQUIRED BECAUSE OF THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY LAWS, AND ASSURANCES THAT THE TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION WILL BE MADE ONLY IN COMPLIANCE WITH THE CONDITIONS OF ANY SUCH REGISTRATION OR EXEMPTION. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF ACTIVE IQ TECHNOLOGIES, INC. WARRANT NO. MW-____ Minneapolis, Minnesota April 30, 2001 This certifies that, for value received, ___________________________ _____________________________________, or its/his/her successors or assigns (the "Holder") is entitled to purchase from Active IQ Technologies, Inc. (the "Company") _______________________________ (__________) fully paid and nonassessable shares (the "Shares") of the Company's Common Stock, $.01 par value (the "Common Stock"), at an exercise price of $5.50 per share (the "Exercise Price"), subject to adjustment as herein provided. This Warrant may be exercised by Holder at any time after the date hereof; provided, however, that, Holder shall in no event have the right to exercise this Warrant or any portion thereof later than the five (5) year anniversary of the date hereof, at which time all of Holder's rights hereunder shall expire. This Warrant is subject to the following provisions, terms and conditions: 1. Exercise of Warrant. The rights represented by this Warrant may be exercised by the Holder, in whole or in part (but not as to a fractional share of Common Stock), by the surrender of this Warrant (properly endorsed, if required, at the Company's principal office in Minneapolis, Minnesota, or such other office or agency of the Company as the Company may designate by notice in writing to the Holder at the address of such Holder appearing on the books of the Company at any time within the period above named), and upon payment to it by certified check, bank draft or cash of the purchase price for such Shares. The Company agrees that the Shares so purchased shall have and are deemed to be issued to the Holder as the record owner of such Shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such Shares as aforesaid. Certificates for the Shares of Common Stock so purchased shall be delivered to the Holder within a reasonable time, not exceeding ten (10) days, after the rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant representing the number of Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be delivered to the Holder within such time. The Company may require that any such new Warrant or any certificate for Shares purchased upon the exercise hereof bear a legend substantially similar to that which is contained on the face of this Warrant. 2 2. Transferability of this Warrant. This Warrant is issued upon the following terms, to which Holder consents and agrees: (a) Until this Warrant is transferred on the books of the Company, the Company will treat the Holder of this Warrant registered as such on the books of the Company as the absolute owner hereof for all purposes without being affected by any notice to the contrary. (b) This Warrant may not be exercised, and this Warrant and the Shares underlying this Warrant shall not be transferable, except in compliance with all applicable state and federal securities laws, regulations and orders, and with all other applicable laws, regulations and orders. (c) The Warrant may not be transferred, and the Shares underlying this Warrant may not be transferred, without the Holder obtaining an opinion of counsel satisfactory in form and substance to the Company's counsel stating that the proposed transaction will not result in a prohibited transaction under the Securities Act of 1933, as amended ("Securities Act"), and applicable Blue Sky laws. By accepting this Warrant, the Holder agrees to act in accordance with any conditions reasonably imposed on such transfer by such opinion of counsel. (d) Neither this issuance of this Warrant nor the issuance of the Shares underlying this Warrant have been registered under the Securities Act. 3. Certain Covenants of the Company. The Company covenants and agrees that all Shares which may be issued upon the exercise of the rights represented by this Warrant, upon issuance and full payment for the Shares so purchased, will be duly authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue hereof, except those that may be created by or imposed upon the Holder or its property, and without limiting the generality of the foregoing, the Company covenants and agrees that it will from time to time take all such actions as may be requisite to assure that the par value per share of the Common Stock is at all times equal to or less than the effective purchase price per share of the Common Stock issuable pursuant to this Warrant. The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved free of preemptive or other rights for the exclusive purpose of issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 4. Adjustment of Exercise Price and Number of Shares. The Exercise Price and number of Shares are subject to the following adjustments: (a) Adjustment of Exercise Price for Stock Dividend, Stock Split or Stock Combination. In the event that (i) any dividends on any class of stock of the Company payable in Common Stock or securities convertible into or exercisable for Common Stock ("Common Stock Equivalents") shall be paid by the Company, (ii) the Company shall subdivide its then outstanding shares of Common Stock into a greater number of shares, or (iii) the Company shall combine its outstanding shares of Common Stock, by reclassification or otherwise, then, in any such event, the Exercise Price in effect immediately prior to such event shall (until adjusted again pursuant hereto) be adjusted immediately after such event to a price (calculated to the nearest full cent) determined by dividing (a) the number of shares of Common Stock outstanding immediately prior to such event, multiplied by the then existing Exercise Price, by (b) the total number of shares of Common Stock outstanding immediately after such event, and the resulting quotient shall be the adjusted Exercise Price per share. No adjustment of the Exercise Price shall be made if the amount of such adjustment shall be 2 3 less than $.05 per share, but in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time and together with the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to not less than $.05 per share. (b) Adjustment of Number of Shares Purchasable on Exercise of Warrants. Upon each adjustment of the Exercise Price pursuant to this Section, the Holder shall thereafter (until another such adjustment) be entitled to purchase at the adjusted Exercise Price the number of shares, calculated to the nearest full share, obtained by multiplying the number of shares specified in such Warrant (as adjusted as a result of all adjustments in the Exercise Price in effect prior to such adjustment) by the Exercise Price in effect prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price. (c) Notice as to Adjustment. Upon any adjustment of the Exercise Price and any increase or decrease in the number of shares of Common Stock purchasable upon the exercise of the Warrant, then, and in each such case, the Company within thirty (30) days thereafter shall give written notice thereof, by first class mail, postage prepaid, addressed to each Holder as shown on the books of the Company, which notice shall state the adjusted Exercise Price and the increased or decreased number of shares purchasable upon the exercise of the Warrants, and shall set forth in reasonable detail the method of calculation and the facts upon which such calculation is based. (d) Effect of Reorganization, Reclassification, Merger, etc. If at any time while this Warrant is outstanding there should be (i) any capital reorganization of the capital stock of the Company (other than the issuance of any shares of Common Stock in subdivision of outstanding shares of Common Stock by reclassification or otherwise and other than a combination of shares provided for in Section 4(a) hereof), (ii) any consolidation or merger of the Company with another corporation, or any sale, conveyance, lease or other transfer by the Company of all or substantially all of its property to any other corporation, which is effected in such a manner that the holders of Common Stock shall be entitled to receive cash, stock, securities, or assets with respect to or in exchange for Common Stock, or (iii) any dividend or any other distribution upon any class of stock of the Company payable in stock of the Company of a different class, other securities of the Company, or other property of the Company (other than cash), then, as a part of such transaction, lawful provision shall be made so that Holder shall have the right thereafter to receive, upon the exercise hereof, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such consolidation or merger, or of the corporation to which the property of the Company has been sold, conveyed, leased or otherwise transferred, as the case may be, which the Holder would have been entitled to receive upon such capital reorganization, reclassification of capital stock, consolidation, merger, sale, conveyance, lease or other transfer, if this Warrant had been exercised immediately prior to such capital reorganization, reclassification of capital stock, consolidation, merger, sale, conveyance, lease or other transfer. In any such case, appropriate adjustments (as determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth in this Warrant (including the adjustment of the Exercise Price and the number of Shares issuable upon the exercise of the Warrant) to the end that the provisions set forth herein shall thereafter be applicable, as near as reasonably may be, in relation to any shares or other property thereafter deliverable upon the exercise of the Warrant as if the Warrant had been exercised immediately prior to such capital reorganization, reclassification of capital stock, such consolidation, merger, sale, conveyance, lease or other transfer and the Holder had carried out the terms of the exchange as provided for by such capital reorganization, consolidation or merger. The Company shall not effect any such capital reorganization, consolidation, merger or transfer unless, upon or prior to the consummation thereof, the successor corporation or the corporation to which the property of the Company has been sold, conveyed, leased or otherwise transferred shall assume by written instrument 3 4 the obligation to deliver to the Holder such shares of stock, securities, cash or property as in accordance with the foregoing provisions such Holder shall be entitled to purchase. 5. Redemption of Warrants (a) Redemption Price. This Warrant may be redeemed at the option of the Company, at any time after the first anniversary of the date hereof following a period of fourteen (14) consecutive trading days where the per share average closing bid price of the Common Stock exceeds Seven and 50/100 Dollars ($7.50), on notice as set forth in Section 5(b) hereof, and at a redemption price equal to One Cent ($.01) for each Share purchasable under this Warrant; provided, however, that this Warrant may not be redeemed by the Company unless the Shares purchasable hereunder have been registered with the Securities and Exchange Commission or are otherwise freely tradable. For purposes of this Section, the closing bid price of the Common Stock shall be determined by the closing bid price as reported by Nasdaq so long as the Common Stock is quoted on the Nasdaq National Market or SmallCap Market Systems and, if the Common Stock is listed on a national securities exchange, shall be determined by the last reported sale price on the primary exchange on which the Common Stock is traded. (b) Notice of Redemption. In the case of any redemption of this Warrant, the Company shall give notice of such redemption to the Holder hereof as provided in this Section 5(b). Notice of redemption to the Holder of this Warrant shall be given by mailing by first-class mail, postage prepaid, a notice of such redemption not less than thirty (30) days prior to the date fixed for redemption. Any notice which is given in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Each such notice shall specify the date fixed for redemption, the place of redemption and the redemption price of $.01 per Share at which this Warrant is to be redeemed, and shall state that payment of the redemption price of the Warrant will be made up on surrender of this Warrant at such place of redemption, and that if not exercised by the close of business on the date fixed for redemption, the exercise rights of the Warrant shall expire unless extended by the Company. Such notice shall also state the current Exercise Price and the date on which the right to exercise the Warrant will expire unless extended by the Company. (c) Payment of Redemption Price. If notice of redemption shall have been given as provided in Section 5(b), the redemption price of $.01 per Share shall, unless the Warrant is theretofore exercised pursuant to the terms hereof, become due and payable on the date and at the place stated in such notice. On and after such date of redemption, the exercise rights of this Warrant shall expire. On presentation and surrender of this Warrant at such place of payment in such notice specified, this Warrant shall be paid and redeemed at the redemption price of $.01 per Share within tem (10) days thereafter. 6. No Rights as Shareholders. This Warrant shall not entitle the Holder as such to any voting rights or other rights as a shareholder of the Company. 7. Registration Rights. If at any time the Company shall propose to file any registration statement (other than any registration on Form S-4, S-8 or any other similarly inappropriate form, or any successor forms thereto) under the 1933 Act covering a public offering of the Company's Common Stock (the "Registration Statement"), it will notify the Holder hereof at least thirty (30) days prior to each such filing (the "Registration Notice") and will use its best efforts to include in the Registration Statement (to the extent permitted by applicable regulation), the Shares purchased or purchasable by the Holder upon the exercise of the Warrant to the extent requested by the Holder hereof within twenty (20) days after receipt of notice of such filing (which request shall specify the interest in this Warrant or the 4 5 Shares intended to be sold or disposed of by such Holder and describe the nature of any proposed sale or other disposition thereof); provided, however, that if a greater number of Shares is offered for participation in the proposed offering than in the reasonable opinion of the managing underwriter of the proposed offering can be accommodated without adversely affecting the proposed offering, then the amount of Shares proposed to be offered by such Holder for registration, as well as the number of securities of any other selling shareholders participating in the registration, shall be proportionately reduced to a number deemed satisfactory by the managing underwriter. The Company shall bear all expenses and fees incurred in connection with the preparation, filing, and amendment of the Registration Statement with the Commission, except that the Holder shall pay all fees, disbursements and expenses of any counsel or expert retained by the Holder and all underwriting discounts and commissions, filing fees and any transfer or other taxes relating to the Shares included in the Registration Statement. The Holder of this Warrant agrees to cooperate with the Company in the preparation and filing of any Registration Statement, and in the furnishing of information concerning the Holder for inclusion therein, or in any efforts by the Company to establish that the proposed sale is exempt under the 1933 Act as to any proposed distribution. The Holder understands that if the Company has not received such information requested by the Company in the Registration Notice within 20 days after Holder's receipt thereof, the Company shall have no obligation to include any of Holder's Shares in the Registration Statement. 8. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Minnesota. 9. Amendments and Waivers. The provisions of this Warrant may not be amended, modified or supplemented, and waiver or consents to departures from the provisions hereof may not be given, unless the Company agrees in writing and has obtained the written consent of the Holder. 10. Notices. All notices or communications hereunder, except as herein otherwise specifically provided, shall be in writing and if sent to the Holder shall be mailed, delivered, or telefaxed and confirmed to the Holder at his or her address set forth on the records of the Company; or if sent to the Company shall be mailed, delivered, or telefaxed and confirmed to Active IQ Technologies, Inc., 601 Carlson Parkway, Suite 1500, Minnetonka, Minnesota 55305, or to such other address as the Company or the Holder shall notify the other as provided in this Section. IN WITNESS WHEREOF, Active IQ Technologies, Inc. has caused this Warrant to be signed by its duly authorized officer in the date set forth above. ACTIVE IQ TECHNOLOGIES, INC. By: ------------------------------------- Its: ----------------------- 5 6 SUBSCRIPTION FORM (TO BE SIGNED ONLY UPON EXERCISE OF WARRANT) The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, ____________________ of the shares of Common Stock of Active IQ Technologies, Inc. (the "Shares") to which such Warrant relates and herewith makes payment of $_____________ therefor in cash, certified check or bank draft and requests that a certificate evidencing the Shares be delivered to, ____________________________, the address for whom is set forth below the signature of the undersigned: Dated: -------------------- ----------------------------------- (Signature) ----------------------------------- ----------------------------------- (Address) * * * ASSIGNMENT FORM (TO BE SIGNED ONLY UPON AUTHORIZED TRANSFER OF WARRANT) FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto _____________________________________ the right to purchase shares of Common Stock of Active IQ Technologies, Inc. to which the within Warrant relates and appoints ____________________ attorney, to transfer said right on the books of _________________ with full power of substitution in the premises. Dated: -------------------- ----------------------------------- (Signature) ----------------------------------- ----------------------------------- (Address) EX-16.1 8 c62442ex16-1.txt LETTER RE: CHANGE IN INDEPENDENT PUBLIC ACCOUNTANT 1 EXHIBIT 16.1 May 14, 2001 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Commissioners: We have read the statements made by Active IQ Technologies, Inc. (formerly Meteor Industries, Inc. (copy attached), which we understand will be filed with the Commission, pursuant to Item 4 of Form 8-K, as part of the Company's Form 8-K report dated April 30, 2001. We agree with the statements concerning our Firm in such Form 8-K. Very truly yours, PricewaterhouseCoopers LLP EX-99.1 9 c62442ex99-1.txt PRESS RELEASE 1 EXHIBIT 99.1 Press Release SOURCE: Meteor Industries, Inc. Meteor Industries, Inc. Completes Merger with Active IQ Technologies, Inc. DENVER, May 1 /PRNewswire/ -- Meteor Industries, Inc. (Nasdaq: METR - news, METRW - news) today announced it has completed its previously announced merger with Active IQ Technologies, Inc. (Nasdaq: AIQT - news). In a related and concurrent action, Meteor Industries announced that it has completed the sale of its operating business to its major shareholder, Capco Energy, Inc. (OTC Bulletin Board: CPEG - news). Under the terms of the merger, Meteor Industries issued new shares of common stock and warrants in exchange for all of the equity of Active IQ, such that Active IQ shareholders own approximately 50% of the merged company. Nasdaq trading under the symbol METR will cease effective April 30, 2001, and shares of the merged entity will commence trading May 1, 2001 under the symbol AIQT. Active IQ CEO, Kenneth Brimmer, commented, "We are pleased to have completed this important financing transaction. Active IQ is now positioned with approximately $5 million in cash to execute its business plan." About Meteor Industries, Inc. Meteor's present operating business is the distribution of refined petroleum products. Meteor's primary operations are in the Western United States. In April 2000, the company announced it would review strategic alternatives away from its historical business with the goal of enhancing shareholder value. About Active IQ Technologies, Inc. Active IQ Technologies, Inc. (www.activeiq.com) is headquartered in Minneapolis, with offices in Boston and Las Vegas. Active IQ Technologies provides products and services that address the eBusiness needs of small and medium-sized organizations. The company's Epoxy Network is a service-based solution that provides fully integrated eBusiness solutions to existing legacy applications. About Capco Energy, Inc. Capco, located in Orange, Calif., is a 20-year-old public energy company. The company's business is to explore, develop and produce oil and gas efficiently and secure strategic acquisitions, which enables the company to achieve its objectives. Capco currently holds investments in shares of various publicly traded companies, real estate assets and producing oil and gas properties. This press release contains certain "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 of the Securities and Exchange Act of 1934, as amended, concerning possible acquisition activities, all of which are based upon the current status of the Company's negotiation and assumption made by management, and are not intended to represent actual descriptions or predictions of the future. -----END PRIVACY-ENHANCED MESSAGE-----