UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to __________
Commission File Number: 333-28249
PRIME AIR, INC.
(Exact name of Registrant as specified in charter)
NEVADA Applied For
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
8598 112 STREET, FT. SASKATCHEWAN, ALBERTA, CANADA T8L 3V8
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (403) 998-3400
Check whether the Issuer (1) has filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such fling requirements for the past 90 days. (1) Yes
[X] No [ ] (2) Yes [X] No [ ]
State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At April 30, 1999, there were
19,647,560 shares of the Registrant's Common Stock outstanding.
PART I
ITEM 1. FINANCIAL STATEMENTS
The financial statements attached hereto and included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles nave been condensed or omitted.
However, in the opinion of management, all adjustments (which include only
normal recurring accruals) necessary to present fairly the financial position
and results of operations for the periods presented have been made. The
results for interim periods are not necessarily indicative of trends or of
results to be expected for the full year. These financial statements should
be read in conjunction with the financial statements and notes thereto
included in the Company's annual report on Form 10-KSB for the year ended
December 31, 1998.
<PAGE>
PRIME AIR INC.
(A Development Stage Company)
(A Nevada Corporation)
Consolidated Financial Statements
March 31, 1999 and 1998 and December 31, 1998
(Unaudited - See Notice to Reader)
Notice to Reader
Balance Sheets
Statements of Operations and Deficit
Statements of Cash Flows
Notes to Financial Statements
<PAGE>
Koch & Associates
_________________________________________
Ste 601 - 938 Howe Street, Vancouver, B.C. V6Z 1N9 Tel (604)684-5700 Fax
(604)684-7211
NOTICE TO READER
We have compiled the consolidated balance sheet of Prime Air Inc., a
Nevada company, as at March 31, 1999 and statements of loss and deficit for
the three month period then ended from information provided by management. We
have not audited, reviewed or otherwise attempted to verify the accuracy or
completeness of such information. Readers are cautioned these statements may
not be appropriate for their purposes.
"Koch & Associates"
April 28, 1999 Certified Management Accountants
Vancouver, B.C.
<PAGE>
PRIME AIR, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(all figures in US dollars)
(UNAUDITED - SEE NOTICE TO READER)
March 31 March 31 December 31
1999 1998 1998
(Unaudited) (Unaudited) (Audited)
ASSETS
Current Assets
Cash and short-term deposits $ 6,595 $ 11,328 7,433
Prepaid expenses and deposit 1,545 - 3,091
GST recoverable 5,116 1,587 5,116
13,256 12,915 15,640
Capital Assets (Note 4) 587,675 607,868 592,843
$ 600,931 $ 620,783 608,483
LIABILITIES
Current Liabilities
Accounts payable and accruals $ 75,809 $ 104,471 79,405
Notes and advances payable
(Note 5) 3,254 3,495 109,754
Notes and advances from
related parties (Note 6) - 5,400 -
79,063 113,366 189,159
SHAREHOLDERS' EQUITY
Capital Stock (Note 7)
Authorized:
50,000,000 common shares with
a stated par value of $
.001/share 3,000,000
preferred cumulative
convertible shares with a
stated par value of $
.001/share Issued:
19,647,560 common shares 19,648 7,140 18,013
(March 31, 1998 14,280,426;
December 31, 1998 18,013,110)
Share subscription receivable - (20) -
Capital in excess of par value 1,507,873 1,355,740 1,381,498
1,527,521 1,362,860 1,399,511
Accumulated Deficit During
Development Stage (1,005,653) (855,443) (980,187)
521,868 507,417 419,324
$ 600,931 $ 620,783 608,483
Approved on Behalf of the
Board:
Director
Director
See Accompanying Notes
<PAGE>
PRIME AIR, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(all figures in US dollars)
(UNAUDITED - SEE NOTICE TO READER)
Three Months Three Months Year Ended
Ended March 31 Ended March 31 December 31
1999 1998 1998
(Unaudited) (Unaudited) (Audited)
Direct Costs
Flight operations $ - $ - -
Administrative and General
Audit and accounting 1,287 - 27,685
Advertising - - 3,949
Amortization 5,168 5,648 20,673
Automotive - - -
Bad debts - - 1,933
Consulting fees 3,299 - 9,862
Insurance 1,601 1,977 5,043
Interest and service charges 65 - 1,041
Legal - 3,586 9,840
Management remuneration - - -
Office and general 20,958 2,578 8,737
Rent - airport facility - - 67
Repair and maintenance 138 - 5,047
Telephone and utilities 2,721 6,025 15,280
Transfer agent and filing fees 100 3,544 13,825
Travel, promotion and entertainment - 3,166 29,823
35,337 26,524 152,805
Other Income (Expense)
Gain (loss) on foreign exchange
conversion 9,871 - 286
Interest income - - 1,251
9,871 - 1,537
Net Loss (25,466) (26,524) (151,268)
Net Loss Per Common Share $ (0.0013) $ (0.0019) (0.0089)
Weighted Average Common Shares
Outstanding 19,102,743 13,792,450 16,943,937
(Giving effect to 2:1 share split)
See Accompanying Notes
<PAGE>
PRIME AIR, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(all figures in US dollars)
(UNAUDITED - SEE NOTICE TO READER)
Three Months Three Months Year ended
Ended March 31 Ended March 31 December 31
1999 1998 1998
(Unaudited) (Unaudited) (Audited)
NET INFLOW (OUTFLOW) OF CASH
RELATED TO THE FOLLOWING
ACTIVITIES:
OPERATING
Net loss $ (25,466) $ (26,524) (151,268)
Non-cash charge - amortization 5,168 5,648 20,673
(20,298) (20,876) (130,595)
Change in non-cash working
capital balances relating to
operations (2,050) 20,816 (10,870)
(22,348) (60) (141,465)
FINANCING
Notes and advances payable (106,500) - 106,259
Notes and advances from related
parties - - (5,400)
Issue of capital stock 128,010 - 36,651
21,510 0 137,510
INVESTING
Acquisition of capital assets - - -
NET CASH INFLOW (OUTFLOW) (838) (60) (3,955)
CASH, BEGINNING OF PERIOD 7,433 11,388 11,388
CASH, END OF PERIOD $ 6,595 $ 11,328 7,433
See Accompanying Notes
<PAGE>
PRIME AIR, INC.
(A Development Stage Company)
Consolidated Statements of Shareholders' Equity and Deficit
(all figures in US dollars)
Capital in Accumulated
Excess of Share Deficit During
Common Shares (Less than) Subscriptions Development
Shares Amount Par Value Receivable Stage
Balance at
Inception on
March 10, 1989 - $ - $ - $ - $ -
Issue of common
shares for cash
at $ .001/share 630,237 630 - - -
Net loss for the
year ended
March 31, 1990 - - - - (17,956)
Balance, March 31,
1990 630,237 630 - - (17,956)
Issue of common
shares for cash
at $ .001/share 157,559 158 - - -
Net loss for the
year ended
March 31, 1991 - - - - (49,419)
Balance, March 31,
1991 787,796 788 - - (67,375)
Net loss for the
year ended
March 31, 1992 - - - - (10,990)
Balance, March 31,
1992 787,796 788 - - (78,365)
Issue of common
shares for cash
at $ .277/share 132,088 132 36,499 - -
at $ .214/share 17,069 17 3,628 - -
Net loss for the
year ended
March 31, 1993 - - - - (38,426)
Balance, March 31,
1993 936,953 937 40,127 - (116,791)
Issue of common
shares for
services
at nominal value 92,173 92 (92) - -
Issue of common
shares for cash
at $ .001/share 300,000 300 - - -
at $ .109/share 3,340 3 361 - -
at $ .154/share 23,634 24 3,619 - -
at $ .280/share 19,401 19 5,400 - -
at $ .330/share 23,161 23 7,624 - -
at $ .463/share 87,445 88 40,330 - -
at $ .694/share 15,756 16 10,907 - -
at $ .925/share 7,878 8 7,274 - -
Net loss for the
year ended
March 31, 1994 - - - - (36,272)
Balance, March 31,
1994 1,509,741 $ 1,510 $ 115,550 $ - $ (153,063)
See Accompanying Notes
<PAGE>
PRIME AIR INC.
(A Development Stage Company)
Consolidated Statements of Shareholders' Equity and Deficit
(all figures in US dollars)
Capital in Accumulated
Excess of Share Deficit During
Common Shares (Less than) Subscriptions Development
Shares Amount Par Value Receivable Stage
Balance
Forward 1,509,741 $ 1,510 $ 115,550 $ - $ (153,063)
Issue of
common shares
for services
at nominal
value 937,478 937 (937) - -
Issue of
common shares
for cash
at
$ .374/share 248,692 249 92,697 - -
at
$ .463/share 304,089 304 140,286 - -
Net loss for
the period
ended
June 28, 1994 - - - - (40,947)
Balance,
June 28,
1994 3,000,000 3,000 347,596 - (194,010)
Share
subscription
at
$ .367/share - - (7,313) (20) -
Net loss for
the year ended
December 31,
1994 - - - - (135,530)
Balance,
December 31,
1994 3,000,000 3,000 340,283 (20) (329,540)
Issue of
common shares
for cash
and/or
services at
an average of
$ .234/share 562,550 563 131,192 - -
Net loss for
the period
ended
December 31,
1995 - - - - (71,266)
Balance,
December 31,
1995 3,562,550 3,563 471,475 (20) (400,806)
Issue of
common shares
for cash
at
$ .500/share 1,510,558 1,511 753,769 - -
Issue of
common shares
for services
at nominal
value 1,483,673 1,483 - - -
Net loss for
the period
ended
December 31,
1996 - - - - (238,416)
Balance,
December 31,
1996 6,556,781 $ 6,557 $1,225,244 $ (20) $ (639,222)
See Accompanying Notes To Financial Statements
<PAGE>
PRIME AIR INC.
(A Development Stage Company)
Consolidated Statements of Shareholders' Equity and Deficit
(all figures in US dollars)
Capital in Accumulated
Excess of Share Deficit During
Common Shares (Less than) Subscriptions Development
Shares Amount Par Value Receivable Stage
Balance
Forward 6,556,781 $ 6,557 $ 1,225,244 $ (20) $ (639,222)
Issue of
common shares
for services
at nominal
value 328,000 328 - - -
Issue of
common shares
for debt
settlements:
at
$ .500/share 124,252 124 62,001 - -
at
$ .504/share 36,380 36 18,303 - -
at
$ .530/share 94,800 95 50,192 - -
Net loss for
the year ended
December 31,
1997 - - - - (189,697)
Balance,
December 31,
1997 7,140,213 7,140 1,355,740 (20) (828,919)
Issue of
common shares
for debt
settlements:
at
$ .3935/share 10,000 10 3,863 - -
at
$ .4006/share 18,215 18 7,279 - -
Issue of common
shares for
services
at nominal
value 1,663,727 1,664 - - -
8,832,155 8,832 1,366,882 (20) (828,919)
Two for one
stock split,
May 18, 1998 8,832,155 8,832 (8,832) - -
17,664,310 17,664 1,358,050 (20) (828,919)
Issue of
common shares
for debt
settlement:
at
$ .25/share 64,800 65 16,135 - -
Issue of
common
shares for
services
at nominal
value 290,000 290 - - -
Transfer Agent
adjustment (6,000) (6) - - -
Write off of
uncollectable
share
subscription
receivable - - 7,313 20 -
Net loss for
the year ended
December 31,
1998 - - - - (151,268)
Balance,
December 31,
1998 18,013,110 18,013 1,381,498 - (980,187)
Issue of
common
shares for
debt
settlement:
at
$ .20/share 624,450 624 126,376 - -
Issue of
common shares
for services
at nominal
value 1,010,000 1,010 - - -
Net loss for
the three months
ended
March 31, 1999 - - - - (25,466)
Balance,
March 31,
1999 19,647,560 $19,648 $1,507,874 $ - $ (1,005,653)
See Accompanying Notes To Financial Statements
<PAGE>
PRIME AIR INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(Unaudited - See Notice to Reader)
1. Incorporation and Principles of Consolidation
The Company was incorporated under the laws of the State of Delaware, USA on
April 4, 1996 and acquired all of the assets, liabilities and shareholders of
a previous Utah Corporation of the same name. The Utah Corporation was
reincorporated on August 30, 1993 as Astro Enterprises, Inc. On June 28,
1994, pursuant to appropriate shareholder agreements, Astro Enterprises, Inc.
acquired all outstanding shares of Prime Air Inc. (a Canadian Corporation) in
exchange for shares of its capital stock on a .787796 to 1 basis, thereby
providing the shareholders of Prime Air Inc. with 90% of the outstanding
capital stock of Astro Enterprises, Inc. Astro Enterprises, Inc. then changed
its name to Prime Air, Inc. Upon incorporation of the Delaware Company, the
Utah Corporation was dissolved on May 15, 1996.
On November 10, 1996, Prime Air Inc (a Nevada corporation) was formed, the
purpose of which will be to change the domicile of the Company to the State of
Nevada.
These consolidated financial statements include the accounts of the Company
and its wholly-owned operating subsidiary, Prime Air Inc. (the Canadian
Corporation) and have been prepared in accordance with U.S. GAAP standards.
2. Nature of Operations / Going Concern Considerations
The Company is presently in its developmental stage and currently has minimal
sources of revenue to provide incoming cash flows to sustain future
operations. The Company's present activities relate to the construction and
ultimate exclusive operation of an international passenger and cargo air
terminal facility in the Village of Pemberton, British Columbia and the
operation of scheduled flight services between that facility and certain major
centers in Canada and the United States in conjunction with Voyageur Airways
Limited. Terminal building construction was substantially completed in May
1997. The future successful operation of the Company is dependent upon its
ability to obtain the financing required to complete the terminal construction
and commence operation thereof on an economically viable basis.
These consolidated financial statements have been prepared on a "going
concern" basis which assumes the company will be able to realize its assets,
obtain the required financing and discharge its liabilities and commitments in
the normal course of business.
<PAGE>
PRIME AIR INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(Unaudited - See Notice to Reader)
3. Significant Accounting Policies
Capital Assets
Air Terminal Construction Costs: Expenditures relating directly to the
construction of the air terminal facility and related engineering and design
have been recorded in the accounts of the Company at cost, net of amortization
thereof which is provided on a straight-line basis over the 30 year term of
the property lease.
Furniture and Equipment: Furniture and equipment are stated at cost, net of
amortization which is provided for at the rate of 20% per annum on the
declining balance basis.
Reporting Currency
All amounts in these consolidated financial statements are reported in U.S.
funds being converted from Canadian funds where applicable at the average
annual rate as posted by the Internal Revenue Service of the United States as
follows:
1998: $ 0.6743 U.S. / $ 1. CDN
4. Capital Assets
1999 1998
Accumulated Net Book Net Book
Cost Amortization Value Value
Air terminal
construction costs $ 652,084 $ 67,080 $ 585,004 $ 590,007
Furniture and equipment 5,153 2,482 2,671 2,836
$ 657,237 $ 69,562 $ 587,675 $ 592,843
5. Notes and Advances Payable
The notes and advances payable are unsecured, non-interest bearing and are
without specific terms of repayment.
6. Related Party Transactions
During the three months ended March 31, 1999, the Company issued 800,000
restricted common shares to a director at nominal value pursuant to a
management contract. Also during the year ended December 31, 1998, the
company borrowed $106,500 from a shareholder. During the first quarter
of 1999 the Company converted $92,000 of such debt to 423,200 shares of
Common Stock of the company. The remaining balance of $ 14,500 is due
and payable by the Company immediately upon receiving funding to commence
operations or upon demand at any time after July 31, 1999. During the
first quarter of 1999 the company borrowed $45,400, $35,000 of which has
been converted to 201,250 shares of Common Stock of the company.
<PAGE>
PRIME AIR INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(Unaudited - See Notice to Reader)
7. Capital Stock
Authorized:
50,000,000 common shares with a
stated par value of $ .001/share
3,000,000 preferred cumulative convertible shares
with a stated par value of $ .001/share
Common Shares Issued:
Number of Shares Consideration
To August 31, 1993
- for cash 300,000 $ 300
Prime Air Inc. share exchange
- June 28, 1994 2,700,000 350,296
During year ended December 31, 1995
- for cash 562,550 131,756
Balance at December 31, 1995 3,562,550 482,352
During year ended December 31, 1996
- for cash 1,510,558 755,279
- consulting and related
services 1,483,673 1,483
2,994,231 756,762
Balance, December 31, 1996 6,556,781 $1,239,114
During the year ended
December 31, 1997
- shares-for-debt settlements 255,432 130,751
- consulting and related
services 328,000 328
583,432 131,079
Balance, December 31, 1997 7,140,213 $1,370,193
During the year ended
December 31, 1998
- shares-for-debt settlements 93,015 27,370
- consulting and related
services 1,953,727 1,954
- Transfer Agent correction (6,000) (6)
2,040,742 29,318
9,180,955 1,399,511
- "Two for One" share split 8,832,155 __________
Balance, December 31, 1998 18,013,110 1,399,511
During the three months ended
March 31, 1999
- shares-for-debt settlements 624,500 127,000
- consulting and related
services 1,009,950 1,010
Balance, March 31, 1999 19,647,650 $ 1,527,521
<PAGE>
PRIME AIR INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(Unaudited - See Notice to Reader)
7. Capital Stock (continued)
In July, 1997, management of the Company voluntarily halted trading of
its common shares based upon the conclusion that information concerning
the history of the Company provided by former management may not have
been complete.
8. Lease Commitment
The Canadian subsidiary corporation has entered into an Airport Lease and
Operating Agreement with The Corporation of The Village of Pemberton in
British Columbia whereby it has been granted an exclusive and irrevocable
lease over the lands and airport facilities associated with the Pemberton
Airport. The term of the Lease and Operating Agreement, including extension
options relating thereto, is for a total of 30 years with Terminal Rent
payable as follows:
$100 per annum for the initial six (6) years (1993 through 1998); and
thereafter
5% of gross receipts per annum derived from the operation of the Terminal
Facilities, excluding amounts received in connection with the sale of airline
tickets and other forms of transportation.
<PAGE>
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
The Company is a development stage company and conducts all operations
through its wholly owned subsidiary, Prime Air (BC). The Company has had no
material revenues in the past. Operations are expected to commence in late
1999.
During the last four years, the operations of the Company have been
funded from equity participation of the owners. Total cash raised from equity
funding from March 1992 to December 31, 1994 was $349,808, $131,755 for 1995
and $756,763 for 1996. No funds were raised during 1997, but the Company did
convert $130,751 of debt into common stock of the Company. No debt was
converted during 1998. In the three months ended March 31, 1999, the Company
converted debt of $127,000 into common stock of the Company.
The Company has realized a cumulative loss of $1,005,653 since March
1992, and anticipates similar losses until operations begin.
The Company presently has no cash on hand to allow operations to
commence. The Company expects to pay approximately $85,000 to cover legal,
insurance, and other essential expenses during the next 12 months whether
operations commence or not.
Prime Air (BC)'s sole fixed obligation is the payment of $100 CAD per
annum to the Village of Pemberton under the terms of its Airport Lease and
Operating Agreement.
The Company proposes to raise a minimum of $3,000,000 and a maximum of
$6,000,000 during the next year. However, there is no assurance that the
Company will be able to raise such funds during the next year. This funding
will provide sufficient cash to start operations, make capital improvements to
the Pemberton Airport and terminal building, and sustain flight operations for
some time.
An agreement dated October 30, 1998, was signed between the Company and
Chanen Painter & Company Limited, Investment Bankers to attempt to raise
capital on behalf of the Company.
Should operations commence during 1999, the Company anticipates hiring
approximately six full-time employees during the next 12 months.
PART II OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the quarter ended March 31, 1999, the Company sold the following shares
of common stock of the Company without registration under the Securities Act
of 1933:
a. On February 18, 1999, the Company issued 423,200 shares of its common stock
to TRD Investments Ltd., as repayment for monies advanced to the Company
during 1998.
b. Also on February 18, 1999, the Company issued 100,625 shares of common stock
to TRD Investments Ltd., for monies advanced to the Company during 1999.
c. Also on February 18, 1999, the Company issued 100,625 shares of common stock
to Dolphin Trading Ltd., as repayment for monies advanced to the Company
during 1999.
d. Also on February 18, 1999, the Company issued 400,000 shares of common stock
to Blaine Haug pursuant to the terms of his employment agreement through the
date of cancellation. See "Item 5. Other Information."
e. Also on February 18, 1999, the Company issued 400,000 shares of common stock
to Royle Smith pursuant to the terms of his employment agreement through the
date of cancellation. See "Item 5. Other Information."
All of the aforesaid securities set forth immediately above were issued
without registration under the Act by reason of the exemption from
registration afforded by the provisions of Section 4(2) thereof, as
transactions by an issuer not involving any public offering, each recipient of
securities having delivered appropriate investment representations to
Registrant with respect thereto and having consented to the imposition of
restrictive legends upon the certificates evidencing such securities. No
underwriting discounts or commissions were paid in connection with such
issuances.
ITEM 5. OTHER INFORMATION
Effective April 30, 1999, Blaine Haug, an officer and director of the Company
at such time, and Royle Smith, an officer of the Company at such time,
terminated their employment contracts with the Company. Also, in connection
with such terminations, Mr. Smith resigned as president of the Company. Mr.
Haug has been appointed as the interim president of the Company and remains a
director and chairman of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibits are included as part of this report:
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE
10.8 Cancellation of Employment Agreement 40
for Mr. Smith dated April 30, 1999
10.9 Cancellation of Employment Agreement 43
for Mr. Haug dated May 1, 1999
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter
ended March 31, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
PRIME AIR, INC.
Date: May 14, 1999 By /s/ Blaine Haug, President
Date: May 14, 1999 By /s/ Greg Duffy, Principal Financial
and Accounting Officer
EXHIBIT 10.8
PRIME AIR INC.
- - and -
ROYLE SMITH
CANCELLATION OF EMPLOYMENT AGREEMENT
April 30, 1999
CANCELLATION OF EMPLOYMENT AGREEMENT
THIS Agreement made effective as of April 30,1999 between:
PRIME AIR INC., 1950-1177 West Hastings Street, Vancouver, British Columbia
V6E 2K3
("Prime Air")
- - and -
ROYLE SMITH, 8598 112 Street, Fort Saskatchewan, Alberta T8L 3V8
(the "Employee")
RECITALS:
A.By an employment agreement made between Prime Air and the Employee as of
January 18, 1996 (the "Employment Agreement"), Prime Air employed the Employee
as its Chief Operating Officer;
B.Prime Air and the Employee each now wish to cancel and terminate the
Employment Agreement on the terms and conditions set out herein.
NOW THEREFORE for certain good and valuable consideration, the receipt and
sufficiency of which each party hereby acknowledges, the parties hereto
covenant and agree as follows:
ARTICLE 1
INTERPRETATION
Section 1.1 Definitions
In this Agreement, including the recitals hereto, unless the subject matter
otherwise requires, all capitalized and defined terms shall have the same
meaning as ascribed thereto in the Employment Agreement and shall be
interpreted and applied mutatis mutandis as required by the subject matter and
context of this Agreement.
Section 1.2 Interpretation Not Affected by Headings
The division of this Agreement into separate articles and sections and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
Section 1.3 Severability
If any covenant, obligation or agreement of this Agreement, or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the application of such
covenant, obligation or agreement to persons or circumstances other than those
as to which it is held invalid or unenforceable, shall not be affected thereby
and each covenant, obligation and agreement of this Agreement shall be
separately valid and enforceable to the fullest extent permitted by law.
ARTICLE 2
EFFECTIVE DATE
Section 2.1 Effective Date
This Agreement shall be effective as and from 11:59 p.m. (Vancouver time) on
April 30, 1999 (the "Effective Date").
ARTICLE 3
CANCELLATION OF EMPLOYMENT AGREEMENT
Section 3.1 Cancellation of Employment Agreement
Prime Air and the Employee each acknowledge and agree that the Employment
Agreement shall, on the Effective Date, be cancelled and terminated on the
terms and conditions set out herein, the intention being that as of the
Effective Date the Employment Agreement shall be of no further force or effect
and the rights and obligations of the parties in respect thereof shall be
entirely as set out herein.
ARTICLE 4
COMPENSATION OF EMPLOYEE
Section 4.1 Compensation of Employee
The Employee hereby acknowledges and agrees that he has received all
Compensation and other amounts to which it he is entitled pursuant to the
provisions of Article 3 of the Employment Agreement and hereby waives any
rights or claims he may now or in the future have in respect of additional
Compensation or any other rights, interest, property or amounts he may claim
as being payable to him pursuant to the terms of the Employment Agreement.
ARTICLE 5
WAIVER OF TERMINATION NOTICE
AND ADDITIONAL COMPENSATION
Section 5.1 Waiver of Termination Notice and Additional Compensation
In consideration of the mutual covenants set out herein and the payment of $10
now made by each party to the other, the receipt and sufficiency of which is
hereby acknowledged, each hereby waives its right to any notice of termination
of the Employment Agreement from the other and the right to any compensation
in connection therewith, including any claim the Employee may have for
additional Compensation or other remuneration pursuant to the provisions of
Articles 3 and 4 of the Employment Agreement.
ARTICLE 6
INDEMNITIES
Section 6.1 Indemnity by Prime Air
Prime Air hereby indemnifies and holds the Employee harmless from and against
any actions, debts, liabilities or obligations properly incurred pursuant to
the Employment Agreement or arising in the reasonable and ordinary course of
business of Prime Air prior to the Effective Date, and from and against any
claims arising against the Employee, including costs and expenses incidental
thereto, relating to the Employee's employment prior to the Effective Date and
by reason of any action taken by the Employee pursuant to the Employment
Agreement.
Section 6.2 Indemnity by Employee
The Employee hereby indemnifies and holds Prime Air harmless from and against
any claims, actions, debts, costs, liabilities or obligations whatsoever, at
law or in equity, arising by way of any breach of the Employment Agreement
prior to the Effective Date by Prime Air, its employees, servants, agents or
persons for which it is responsible at law or by reason of any negligence or
wrongful act of Prime Air, its employees, servants, agents or persons for whom
it is responsible.
Section 6.3 Waiver of Additional Rights
The Employee hereby waives any rights, claims or privileges which may have
been granted by Prime Air to the Employee, either in writing or otherwise,
prior to the Effective Date, whether by resolution of the board of directors
of Prime Air, representation of officers of Prime Air, or otherwise, with
respect to serving as an officer or a director of Prime Air subsequent to the
Effective Date.
ARTICLE 7
GENERAL
Section 7.1 Waivers
The failure of either party to insist upon the strict performance of any of
the terms or provisions of this Agreement or to exercise any option, right or
remedy herein contained, shall not be construed as a waiver or as a
relinquishment for the future of such term, provision, option, right or
remedy, the same shall continue and remain in full force and effect.
Section 7.2 Amendments
This Agreement may not be modified or amended except with the written consent
of the parties hereto.
Section 7.3 Further Assurances
The parties hereto shall execute and deliver from time to time all other
appropriate supplemental agreements and other instruments, and take any other
actions necessary to make this Agreement effective, binding and enforceable as
between them.
Section 7.4 Binding Agreement
This Agreement shall be binding upon and enure to the benefit of each of the
parties including their respective successors and permitted assigns.
ARTICLE 8
EXECUTION
Section 8.1 Execution
In witness whereof the parties have executed this Agreement as of the day
first above written.
PRIME AIR INC.
/s Blaine Haug
/s Richard T. Shrieves
SIGNED, SEALED AND DELIVERED by Royle Smith in the presence of:
_____/s______________________
Greg Duffy
Witness
8598 112 Street, Fort Saskatchewan Alberta, Canada
Address
_____/s______________________
ROYLE SMITH
<PAGE>
EXHIBIT 10.9
PRIME AIR INC.
- - and -
BLAINE HAUG
CANCELLATION OF EMPLOYMENT AGREEMENT
April 30, 1999
CANCELLATION OF EMPLOYMENT AGREEMENT
THIS Agreement made effective as of April 30, 1999 between:
PRIME AIR INC., a British Columbia company with its registered office at
1950-1177 West Hastings Street, Vancouver, British Columbia V6E 2K3
("Prime Air")
- - and -
BLAINE HAUG, of P.O. Box 106 Arawak House, Grand Turk, Turks & Caicos Islands,
BWI
(the "Employee")
RECITALS:
A.By an employment agreement made between Prime Air and the Employee as of
January 18, 1996 (the "Employment Agreement"), Prime Air employed the Employee
as its Assistant General Manager;
B.Prime Air and the Employee each now wish to cancel and terminate the
Employment Agreement on the terms and conditions set out herein.
NOW THEREFORE for certain good and valuable consideration, the receipt and
sufficiency of which each party hereby acknowledges, the parties hereto
covenant and agree as follows:
ARTICLE 1
INTERPRETATION
Section 1.1 Definitions
In this Agreement, including the recitals hereto, unless the subject matter
otherwise requires, all capitalized and defined terms shall have the same
meaning as ascribed thereto in the Employment Agreement and shall be
interpreted and applied mutatis mutandis as required by the subject matter and
context of this Agreement.
Section 1.2 Interpretation Not Affected by Headings
The division of this Agreement into separate articles and sections and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
Section 1.3 Severability
If any covenants, obligation or agreement of this Agreement, or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application
of such covenant, obligation or agreement to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each covenant, obligation and agreement of this Agreement
shall be separately valid and enforceable to the fullest extent permitted by
law.
ARTICLE 2
EFFECTIVE DATE
Section 2.1 Effective Date
This Agreement shall be effective as and from 11:59 p.m. (Vancouver time) on
April 30, 1999 (the "Effective Date").
ARTICLE 3
CANCELLATION OF EMPLOYMENT AGREEMENT
Section 3.1 Cancellation of Employment Agreement
Prime Air and the Employee each acknowledge and agree that, subject to the
terms and conditions set out herein, the Employment Agreement shall, on the
Effective Date, be cancelled and terminated, the intention being that as of
the Effective Date the Employment Agreement shall be of no further force or
effect and the rights and obligations of the parties in respect thereof shall
be entirely as set out herein.
ARTICLE 4
COMPENSATION OF EMPLOYEE
Section 4.1 Compensation of Employee
The Employee hereby acknowledges and agrees that he has received all
Compensation and other amounts to which he is entitled pursuant to the
provisions of Article 3 of the Employment Agreement and hereby waives any
rights or claims he may now or in the future have in respect of additional
Compensation or any other rights, interest, property or amounts he may claim
as being payable to him pursuant to the terms of the Employment Agreement.
ARTICLE 5
WAIVER OF TERMINATION NOTICE
AND ADDITIONAL COMPENSATION
Section 5.1 Waiver of Termination Notice and Additional Compensation
In consideration of the mutual covenants set out herein and the payment of $10
now made by each party to the other, the receipt and sufficiency of which is
hereby acknowledged, each party hereby waives its right to any notice of
termination of the Employment Agreement from the other and the right to any
Compensation in connection therewith, including any claim the Employee may
have for additional or other remuneration pursuant to the provisions of
Articles 3 and 4 of the Employment Agreement.
ARTICLE 6
INDEMNITIES AND RELEASES
Section 6.1 Indemnity by Prime Air
Prime Air hereby indemnifies and holds the employee harmless from and against
any actions, debts, liabilities or obligations properly incurred pursuant to
the Employment Agreement or arising in the reasonable and ordinary course of
business of Prime Air prior to the Effective Date, and from and against any
claims arising against the Employee, including costs and expenses incidental
thereto, relating to the Employee's employment prior to the Effective Date and
by reason of any action taken by the Employee pursuant to the Employment
Agreement.
Section 6.2 Indemnity by Employee
The Employee hereby indemnifies and holds Prime Air harmless from and against
actions, debts, costs, liabilities or obligations whatsoever, at law or in
equity, arising by way of any breach of the Employment Agreement prior to the
Effective Date by Prime Air, its employees, servants, agents or persons for
which it is responsible or at law, or by reason of any negligence or wrongful
act of Prime Air, its employees, servants, agents or persons for whom it is
responsible.
ARTICLE 7
GENERAL
Section 7.1 Waivers
The failure of either party to insist upon the strict performance of any of
the terms or provisions of this Agreement or to exercise any option, right or
remedy herein contained, shall not be construed as a waiver or as a
relinquishment for the future of such term, provision, option, right or
remedy, or the same shall continue and remain in full force and effect.
Section 7.2 Amendments
This Agreement may not be modified or amended except with the written consent
of the parties hereto.
Section 7.3 Further Assurances
The parties hereto shall execute and deliver from time to time all other
appropriate supplemental agreements and other instruments, and take any other
actions necessary to make this Agreement effective, binding and enforceable as
between them.
Section 7.4 Binding Agreement
This Agreement shall be binding upon and enure to the benefit of each of the
parties including their respective successors and permitted assigns.
ARTICLE 8
EXECUTION
Section 8.1 Execution
In witness whereof the parties have executed this Agreement as of the day
first above written.
PRIME AIR INC.
/s Blaine Haug
/s Richard T. Shrieves
SIGNED, SEALED AND DELIVERED by Blaine Haug in the presence of:
__/s_________________________
Richard T. Shrieves
Witness
__/s________________________
BLAINE HAUG
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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