UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
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General Form for Registration of Securities
of Small Business Issuers under Section 12(b) or (g)
of the Securities Exchange Act of 1934
ENVIRO VORAXIAL TECHNOLOGY, INC.
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(Name of Small Business Issuer in its Charter)
Idaho 83-0266517
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(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
98 SE 7th Street, Deerfield Beach, FL 33441
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(Address of Principal Executive Offices) (Zip Code)
(954) 421-6141
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(Issuer's Telephone Number)
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of Class)
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<CAPTION>
Table of Contents
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<S> <C> <C>
Part I
Item 1. Description of Business.....................................................................3
Item 2. Management's Discussion and Analysisor Plan of Operation.....................................7
Item 3. Description of Property......................................................................8
Item 4. Security Ownership of Certain Beneficial
Owners and Management........................................................................9
Item 5. Directors, Executive Officers, Promoters
and Control Persons.........................................................................10
Item 6. Executive Compensation......................................................................11
Item 7. Certain Relationships and Related Transactions..............................................11
Item 8. Description of Securities...................................................................12
Part II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters.................................................14
Item 2. Legal Proceedings...........................................................................15
Item 3. Changes in and Disagreements with Accountants...............................................15
Item 4. Recent Sales of Unregistered Securities.....................................................15
Item 5. Indemnification of Directors and Officers...................................................16
Part F/S
Financial Statements................................................................................17
Part III
Item 1. Description of Exhibits....................................................................32
Signatures..........................................................................................33
</TABLE>
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THIS REGISTRATION STATEMENT CONTAINS CERTAIN FORWARD LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES REFORM ACT OF 1995. THE REGISTRANT INTENDS
THAT SUCH FORWARD LOOKING STATEMENTS BE SUBJECT TO THE SAFE HARBORS CREATED
THEREBY. THESE FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS REGARDING (I) THE
REGISTRANT'S RESEARCH AND DEVELOPMENT PLANS, MARKETING PLANS, CAPITAL AND
OPERATIONS EXPENDITURES, AND RESULTS OF OPERATIONS; (II) POTENTIAL FINANCING
ARRANGEMENTS; (III) POTENTIAL UTILITY AND ACCEPTANCE OF THE REGISTRANT'S
EXISTING AND PROPOSED PRODUCTS; AND (IV) THE NEED FOR, AND AVAILABILITY OF,
ADDITIONAL FINANCING.
THE FORWARD LOOKING STATEMENTS INCLUDED HEREIN ARE BASED ON CURRENT EXPECTATIONS
AND INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES. THESE FORWARD LOOKING
STATEMENTS ARE BASED ON ASSUMPTIONS REGARDING THE REGISTRANT'S BUSINESS AND
TECHNOLOGY WHICH INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE
SCIENTIFIC, ECONOMIC, REGULATORY AND COMPETITIVE CONDITIONS, AND FUTURE BUSINESS
DECISIONS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND
MANY OF WHICH ARE BEYOND THE CONTROL OF THE REGISTRANT. ALTHOUGH THE REGISTRANT
BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD LOOKING STATEMENTS ARE
REASONABLE, ANY OF THE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD LOOKING
STATEMENTS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD
LOOKING INFORMATION CONTAINED HEREIN, THE INCLUSION OF SUCH INFORMATION SHOULD
NOT BE REGARDED AS ANY REPRESENTATION BY THE REGISTRANT OR ANY OTHER PERSON THAT
THE OBJECTIVES OR PLANS OF THE REGISTRANT WILL BE ACHIEVED.
PART I
To simplify the language in this Registration Statement, Enviro
Voraxial Technology, Inc. and its subsidiary Florida Precision Aerospace, Inc.
are referred to herein as "the Company" or "We."
Item 1. Description of Business
(a) Business Development.
We were incorporated in Idaho on October 19, 1964, under the name Idaho Silver,
Inc. From our inception through 1994, when we ceased operations, we were engaged
in acquiring mining claims and exploring for silver and lead in Idaho. In May of
1996, we entered into an agreement and plan of reorganization with Florida
Precision Aerospace, Inc., a Florida corporation ("FPA"), and the shareholders
of FPA. FPA was incorporated in the State of Florida on February 26, 1993, under
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the name N.A.P., Inc. On February 4, 1994, N.A.P., Inc. changed its name to
Florida Precision Aerospace, Inc.
Pursuant to this plan of reorganization, we acquired all of the issued and
outstanding stock of FPA in exchange for 10,000,000 newly-issued shares of our
common stock, or approximately 97% of the shares of our stock issued and
outstanding upon the completion of the plan of reorganization. As a result of
this reorganization, FPA became our wholly-owned subsidiary. Also pursuant to
the plan of reorganization, we agreed to change our name to Enviro Voraxial
Technology, Inc., to reverse split our common stock on a one share for ten
shares basis, and to amend our Articles of Incorporation to increase our
authorized shares to 50,000,000 shares of common stock, $.001 par value per
share. At closing of the transaction, our then existing directors and executive
officers resigned and were replaced by designees of FPA.
Once the plan of reorganization was complete, we acquired all of the assets of
Richter Precision Systems, Inc. ("Richter Precision"), a Florida corporation,
which included a patent on a voraxial separator. At the time of this
acquisition, Albert DiBella was the majority shareholder of Richter Precision.
To purchase the remaining shares outstanding in Richter Presicion, shares in the
Company were issued to the remaining shareholder Harvey Richter. As a result,
the assets of Richter became our property and Richter Precision was dissolved.
We have not been involved in any bankruptcy, receivership or similar proceeding.
(b) Business of Issuer.
The following is a description of our business. We operate our business through
FPA, our wholly owned subsidiary. Since our business operates solely through
FPA, references to our business and operations are to that of FPA unless
otherwise specifically indicated.
Principal Products and Services and their Market.
We operate a high-precision engineering machine shop in Deerfield Beach,
Florida, which designs, manufactures and assembles specialized components for
the aerospace, automotive and health care industries through contract
manufacturing. Our principal business is the design and manufacture of precision
parts and components, particularly for the defense and space industries. We
perform contract manufacturing services to both small and large customers. As of
the date of this registration statement, our revenues have depended entirely on
our contract manufacturing services.
We maintain no inventory of finished products not under order by a customer, as
we begin our manufacturing once an order and corresponding specifications have
been obtained from a customer. Typically, an entity seeking the manufacture of
components will provide us with diagrams and specifications on a component. Once
an order is placed with us, a deposit is paid. We complete any remaining design
services needed and begin manufacturing the components for delivery pursuant to
the contract or order terms. The components are delivered or picked up from the
customer pursuant to the terms of their particular agreement with us.
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Among the projects in which we have previously been involved are the production
of specialized space navigational and guidance components for Allied Signal
Aerospace and The Department of Defense, the production of gears for General
Motors Corporation and New Venture Gear in design and assembly of automotive
transmissions for several automobile lines, the production of speciality
components for Baxter Health Care Corporation and Hughes Electronics, and the
provision of engineering services to the General Motors/Volvo Heavy Truck
Division. Through our experience with these projects and others, we have
machined and assembled components such as high precision castings, precision
tools and fixtures, berillium and ceramics, deep brazing, Computer Numerical
Control (CNC) machining and tuning, and precision jig boring and assembly.
Distribution.
We manufacture our products at our Deerfield Beach, Florida facility. We
function solely on a per project contractual basis with our customers, and
therefore, maintain no inventory. We plan to increase our operations through the
development and marketing of our product, the Voraxial Separator, which will
also be manufactured and delivered on a per project contractual basis. To date
we have not sold any voraxial separators and have no customer orders for such
product. We have delivered one unit to a waste facility in South Florida to be
used on a trial basis for thirty days, after which, arrangements will be made
for either payment or return of the product.
New Products.
We obtained the patent to the voraxial separator in our acquisition of the
assets of Richter Precision. Since that time, we have developed the product and
are able to manufacture the voraxial separator for distribution. We currently
maintain an inventory of one-hundred (100) 2" seperators and ten (10) 10"
separators. We plan to develop a sales and marketing plan for this product in
various models, but there can be no assurance that such plan will be developed
or that, once developed, we will be able to effectively market and sell such
product in the future. To date, we have not developed any criteria for the sales
and marketing plan of this product.
The voraxial separator is a mechanical, non-clogging device capable of
separating, at the same time, two or more components having different specific
weights. The separator is designed to transfer any liquids at an average rate of
up to 5,000 gallons per minute using an eight-inch diameter separator, although
the separator can also be manufactured in two and four inch diameters. The
separator can transfer any liquid in either direction by reversing the machine's
rotation.
Management believes that the separator offers a substantial number of
applications on a cost-effective basis. Among these applications are flood
control, farm irrigation, lake and river revitalization, cooling and aeration of
thermally polluted waters, oil and water separation, sewage treatment, sludge
removal, wood pulp removal for paper manufacturers, harbor clean-up,
deballasting of ships, clean up of contaminated beaches and plasma separation.
Our management also believes that the separator can be used to recycle water,
which, as clean water becomes less available to a growing world population, may
become increasingly necessary in the future.
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We do not intend to sell or lease our separator as a stocked item, but instead
intend to provide our customers with an entire separator system tailored to a
specific end-use application.
To date, our separators have been manufactured and assembled at our Deerfield
Beach, Florida, location. In the event that we are successful in marketing and
selling our separator product, we will need to establish additional
manufacturing plants near our existing manufacturing site or in other areas, as
required. We plan to retain ownership of the manufacturing facilities in order
to maintain control over production of critical components. We also plan to
establish and maintain an engineering laboratory for research and development of
existing separator applications and the development of new applications.
Competition.
We are subject to competition from a number of companies who have greater
experience, engineering capability, and financial resources than we have. We
compete with numerous small companies involved in engineering parts for small
and large businesses, including our customers. We believe that our expertise in
engineering precision parts will enable us to continue to compete effectively
with other engineering companies of various sizes. Although we believe our
separator offers applications which accomplish better or similar results on a
more cost-effective basis than existing products, such other products have, in
some instances, attained market and regulatory acceptance. These include oil
contamination baffles, disbursal agents, etc. There can be no assurance that we
will be able to compete effectively in providing engineering products and
services to the defense and space industries or to any other customer in the
future, nor that our voraxial separator product will be able to compete with the
existing product or products which may be developed in the future for like
applications.
Marketing.
We market our products and services through our existing in-house staff. We
obtain most contracts through personal contacts, and particularly through our
President, Mr. DiBella. Management cannot anticipate the nature or extent of
additional marketing support which may be required to market our voraxial
separator, as the nature and cost of such marketing will depend, in part, upon
the initial marketplace acceptance of our voraxial separator. There is no
assurance that we will have sufficient funds available to hire additional
marketing persons, or that, if hired, the efforts of such persons will be
effective in marketing our products.
Sources and Availability of Raw Materials.
The materials for our manufacturing are obtained from various suppliers based on
the specific material needed for each project. We may obtain basic materials
from suppliers, but our customers often provide the raw materials and supplies
necessary or make supplier recommendations for the development of their
components.
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The supplies and materials needed to manufacture our voraxial separators have
been provided in the past by suppliers such as Baldor Electric Co., Hughes
Supply Inc. and SKF USA Inc. We do not anticipate any shortage of raw materials
for our manufacturing.
Dependence on Certain Customers.
We do not believe that we are dependent upon any single customer nor any single
material supplier. Intellectual Property. We currently hold two patents, United
States Patent #5,904,840 and #5,084,189. One patent is for Apparatus for
Accurate Centrifugal Separation of Miscible and Immiscible Media. The other is
for the Method and Apparatus for Separating Fluids having Different Specific
Gravitites. The method and apparatus for each of these is applied in our
voraxial separators.
Government Approvals.
Other than the approvals that may be required of corporations or manufacturers
generally, we do not require any government approval for our business
operations.
Governmental Regulation and Compliance with Environmental Laws. Other than
governmental regulation that may be required of corporations and manufacturers
generally, we are not regulated by any governmental agency. In the future, rules
or regulations may be imposed which may subject us to governmental regulation.
We intend to seek compliance with any and all such rules or regulations which
may be imposed, but there can be no assurance that we will or will be able to
comply with such regulations. Failure to comply with such future rules or
regulations may have a material adverse effect on our business operations.
Research and Development.
In our past two fiscal years, we have spent approximately $165,794 on product
research and development . We do not anticipate that this cost will be borne
directly by the customers.
Employees.
As of the date of this registration statement, we have five (5) total and
full-time employees. One employee, Alberto DiBella, acts as our sole manager,
and the balance of our employees participate in the manufacturing of our
products. None of our employees are members of a union. We believe that our
relationship with our employees is favorable. We do not intend to add additional
employees in the foreseeable future, but additional employees may be added if
our voraxial separator is accepted by the market.
Item 2. Management's Discussion and Analysis or Plan of Operation The following
discussion and analysis should be read in conjunction with the Financial
Statements appearing elsewhere in this Registration Statement.
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Fiscal years ending December 1997 and December 1998.
The fiscal year ending December 31, 1997 showed a net profit of $175,000, the
first and second quarter of 1998 were profitable as well. This profit was
generated through the machining of high precision components for various space
program applications. The operations of fiscal year 1997 and 1998, although
profitable, were not considered by our management as satisfactory for our
future. This is because our resources were being directed almost solely at
meeting customer demand of components rather than focusing some efforts on the
marketing and development of specific industry applications for our patented
voraxial separator. In mid-1998 a opportunity between customer contracts
presented itself for marketing and development of specific industry applications
for the voraxial separator.
We are unaware of any trends, events or uncertainties that may have a material
impact on our short-term or long-term liquidity, net sales or revenues or income
from continuing operations. At the time of this registration statement, we are
unaware of any internal or external sources of liquidity which will materially
effect us, and we have no material commitments for capital expenditures. We are
not aware of any significant elements of income or loss that do not arise from
our continuing operations. We do not believe that there are any seasonal aspects
that have had a material effect on our financial condition or results of
operations.
Six months Ended June 30, 1998 and 1999.
We had sales of $106,367 for the six months ended June 30, 1999, compared to
$984,020 for the 1998 comparable period. Our gross profit decreased from
$705,535 in 1998 to $93,101 in 1999, primarily as a consequence of completion of
the Allied Signal Aerospace Contract in 1998 and a concentration of efforts on
the development of the voraxial separator in 1999. Research and development
expense increased in 1999 to $93,894 as compared to $30,117 in 1998, which is
also due to the development of the voraxial separator. In 1999 additionally, the
greater part of overhead expenses were allocable to research and development
efforts as compared to 1998, in which the majority of overhead expenses were
allocable to the allied contract and completion of sales contracts.
Next 12 Months.
We anticipate that we will have to raise additional funds to continue our
business operations over the next twelve months. We plan to spend $220,000 on
product research and development over the next twelve months, targeting such
research and development at expanding the usage base for our voraxial separator.
We do not anticipate any purchase or sale of plant or significant equipment in
the next twelve months. However, if our voraxial separator is accepted in the
market, we may need to eventually purchase or lease additional manufacturing
facilities in the future. We do not anticipate any significant changes in the
number of employees in the next twelve months. However, we plan to seek
additional sales and marketing staff or consultants in the future.
Item 3. Description of Property
In May of 1998, the Company acquired an 18,000 square foot building located at
98 Southeast 7th Street, Deerfield Beach, Florida, for a purchase price of
$575,000, of which $431,250 was paid by a mortgage note, which is amortized over
twenty years and balloons at the end of ten years. The note bears interest at an
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annual rate of 8.50%, which is subject to adjustment on June 1, 2003. The
Company believes that its newly acquired facility will adequately serve its
needs in the foreseeable future.
Item 4. Security Ownership of Certain Beneficial Owners and Management The table
below sets forth information with respect to the beneficial ownership of the
Common Stock by (i) each of the directors of the Company, (ii) each person known
by the Company to be the beneficial owner of five percent or more of the
outstanding Common Stock, and (iii) all executive officers and directors as a
group, as of September 1, 1999. Unless otherwise indicated, the Company believes
that the beneficial owner has sole voting and investment power over such shares.
(a) Security Ownership of Certain Beneficial Owners.
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<CAPTION>
Name and Address of Number of Shares Percentage
Title of Class Beneficial Owner Beneficially Owned Ownership of Class
- -------------- ---------------- ------------------ ------------------
<S> <C> <C> <C>
Common Stock Alberto DiBella (1) 2,872,000 24.36%
3500 Bayview Drive
Ft. Lauderdale, FL 33308
Common Stock Howard J. Falcon, III, Ttee 1,860,000 15.78%
For Harvey E. Richter
Irrevocable Trust of 6/26/95
400 A North Flagler Drive #2
West Palm Beach, FL 33401
Preferred Stock Alberto DiBella (2) 6,000,000 100%
3500 Bayview Drive
Ft. Lauderdale, FL 33308
(b) Security Ownership of Management.
Name and Address of Number of Shares Percentage
Title of Class Beneficial Owner Beneficially Owned Ownership of Class
- -------------- ---------------- ------------------ ------------------
Common Stock Alberto DiBella (1) 2,872,000 24.36%
3500 Bayview Drive
Ft. Lauderdale, FL 33308
Preferred Stock Alberto DiBella (2) 6,000,000 100%
3500 Bayview Drive
Ft. Lauderdale, FL 33308
Common Stock All Executive Officers and
Directors as a group (1 person) 2,872,000 24.36%
Preferred Stock All Executive Officers and
Directors as a group (1 person) 6,000,000 100%
</TABLE>
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(1) Alberto DiBella is the sole officer and director of the Company.
His beneficial share ownership includes 10,000 shares of common stock
owned by his wife, 10,000 shares of common stock owned by his daughter,
and 22,000 shares of common stock owned by his son.
(2) On October 20, 1997, Alberto DiBella, the sole officer and director
of the Company, agreed to contribute 5,000,000 shares of his common
stock in the Company to the treasury of the Company. In consideration
for this contribution, the Company issued 5,000,000 shares of voting
convertible non-cumulative, 8% preferred stock, $0.001 par value to Mr.
DiBella. These shares are convertible into one share of common stock of
the Company based on certain incentive formulas. See Item 8.
Description of Securities.
(c) There are no arrangements which may result in a change in control of
the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons
(a) Directors and Executive Officers.
The following sets forth the names and ages of the Company's officers
and directors. The directors of the Company are elected annually by the
shareholders, and the officers are appointed annually by the board of
directors.
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<CAPTION>
Name Age Position Term of Service
- ---- --- -------- ---------------
<S> <C> <C> <C>
Alberto DiBella 69 President, Director June 1996 to present
</TABLE>
Alberto DiBella is a professionally trained mechanical engineer and graduate of
the Florence Technical Institute, Italy. After immigrating to the United States
in 1962, Mr. DiBella worked in New Jersey for a major tool manufacturer. From
1988 to 1993, he was the President of E.T.P., Inc, a machining business. In
1993, he relocated to Florida and opened Florida Precision Systems, Inc. He has
been the Company's President and Chairman since June 1996 and President and
Chairman of the Company's FPA subsidiary since its organization in February
1993. Mr. DiBella holds no directorships in any reporting companies.
(b) Significant Employees. Other than Mr. DiBella, there are no employees
expected to make a significant contribution to the business.
(c) Family Relationships. There are no family relationships among
directors, executive officers, or persons nominated for such positions.
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(d) Involvement in Certain Legal Proceedings. During the past five years,
there have been no bankruptcies, criminal proceedings, or other legal
proceedings which would be material to the evaluation of the ability or
integrity of any director, executive officer, or any person nominated
for such positions in the Company.
Item 6. Executive Compensation
The following tables and notes present, for the two fiscal years ended December
31, 1998, the compensation paid by the Company to the Company's chief executive
officer.
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<CAPTION>
SUMMARY COMPENSATION TABLE(1)
Name & Annual Compensation Long-Term Compensation Other
- ------ ------------------- ---------------------- -----
Position Year Salary Bonus Other Stock SARs LTIP Comp
- -------- ---- ------ ----- ----- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alberto DiBella, 1997 $0 $0 $0 $1,000,000(2) $0 $0 $0
President 1998 $0 $0 $0 $ 0 $0 $0 $0
</TABLE>
(1) As of December 31, 1998, Mr. DiBella, held 2,830,000 restricted shares
of the Company's common stock and 6,000,000 restricted shares of the
Company's preferred stock. The Company valued the preferred stock at
$1.00 per share, or an aggregate of $1,000,000 based upon the offering
price of common stock in the Company at that time.
(2) In lieu of compensation for services rendered during 1997, Mr. DiBella
was issued 1,000,000 voting convertible, non-cumulative 8% preferred
shares, $0.001 par value. These shares are convertible into an equal
number of common shares of the Company based on certain conditions
being met. See Item 8. Description of Securities.
Item 7. Certain Relationships and Related Transactions Pursuant to the Agreement
and Plan of Reorganization in May of 1996, between the Company and FPA, we
issued 10,000,000 shares of common stock, or approximately 97% of the common
stock then to be issued and outstanding, to the shareholders of FPA in exchange
for their FPA common stock shares. Of the shares issued to FPA shareholders,
7,830,000 shares of common stock were issued to Alberto DiBella, 10,000 shares
were issued to Alberto DiBella, Jr. and 2,000,000 shares were issued to Harvey
E. Richter.
From 1994 through 1998, we borrowed approximately $137,000 from the Company's
President, Mr. Alberto DiBella, at an annual rate of eight percent (8%) with
principal payable on demand. No repayment of interest or loan have been made to
date.
On October 20, 1997, the Company's Chairman, Alberto DiBella, agreed to
contribute 5,000,000 shares of common stock to the Company's treasury in
consideration for the issuance to him of 5,000,000 shares of the Company's
preferred stock. The preferred stock issued to Mr. DiBella is convertible into
common stock, on a one share for one share basis, in an amount not greater than
1,200,000 shares per year commencing January 1, 1998, for each revenue increase
of $10,000,000 over the revenues of the prior year. Any shares of preferred
stock which have not been converted by Mr. DiBella before December 31, 2002,
shall then be automatically converted into shares of common stock on a
share-for-share basis.
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On December 31, 1997, Mr. DiBella was issued 1,000,000 shares of preferred stock
in lieu of compensation for his services to the Company during 1997. These
shares are convertible into common stock on the same terms as the other shares
of preferred stock, with the exception that these shares are not subject to
automatic conversion upon any specified date.
Other than the aforementioned, we do not intend to enter into any transactions
with our beneficial owners. We are not a subsidiary of any parent company. Since
inception, we have not entered into any transactions with promoters.
Item 8. Description of Securities
Common Stock.
In General. We are authorized to issue 42,500,000 shares of common stock, par
value $.001 per share, of which 11,786,518 shares were issued and outstanding as
of September 1, 1999. All of the issued and outstanding common stock is fully
paid and non-assessable.
Voting. Each share of our common stock entitles the holder thereof to one vote
per share in the election of directors and in all other matters upon which
stockholders are entitled to vote. The holders of shares of common stock do not
have cumulative voting rights, which means that the holders of more than 50% of
the outstanding shares voting for the election of directors can elect all of the
directors to be elected, if they so choose. In such event, the holders of the
remaining shares will not be able to elect any of our directors. As of the date
of this registration statement, Alberto DiBella is the beneficial owner of
8,872,000 voting shares or approximately 50% of our outstanding voting stock. As
a majority shareholder of the Company, Mr. DiBella may be able to elect all of
the Directors of the Company.
Dividends. Each share of common stock entitles the holder thereof to receive
cash dividends as the Board of Directors may declare from funds legally
available therefor. However, we do not intend to declare any dividend on our
common stock in the foreseeable future.
Rights. There are no preemptive rights with respect to the common stock. Upon
liquidation, dissolution or winding up of the affairs of the Company, and after
payment of creditors, the assets legally available for distribution will be
divided ratably on a share-for-share basis among the holders of the outstanding
shares of common stock, after giving preference to any preferred shares
outstanding.
Preferred Stock.
In General. We have authorized 7,250,000 shares of preferred stock, par value
$.001. As of September 1, 1999, there were 6,000,000 preferred shares issued and
outstanding. All of the issued and outstanding preferred stock is fully paid and
non-assessable.
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Voting. The preferred stock has voting rights equal to that of the shares of
common stock. Holders of the preferred stock are entitled to be paid a
non-cumulative dividend of eight percent (8%) per annum. The Company's Articles
of Incorporation, as amended, provide that the preferred stock is convertible
into common stock upon such conditions as the Board of Directors may determine.
As of the date of this registration statement, Alberto DiBella is the beneficial
owner of 8,872,000 voting shares or approximately 50% of our outstanding voting
stock. As a majority shareholder of the Company, Mr. DiBella may be able to
elect all of the Directors of the Company.
Dividends and Other Rights. The preferred stock outstanding is convertible,
non-cumulative eight percent (8%) preferred stock. These shares are convertible
into common stock on a share for share basis upon the occurrence of certain
events. If our revenues increase by $10,000,000 over the revenues of the prior
year, the holder of these preferred shares will have the right to convert
1,200,000 shares of preferred stock. As of the date of this registration
statement, none of the preferred shares were eligible for conversion under this
formula. In addition, if 5,000,000 shares of the preferred stock is not
converted before December 31, 2002, such amount shall be automatically converted
as of that date. The remaining 1,000,000 shares of preferred may only be
converted pursuant to the revenue formula described above.
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PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
(a) Market Information.
Our common stock is traded on the NASDAQ Over the Counter Bulletin Board
("OTCBB") under the symbol EVTN. There is no active trading market for the
common stock. The following bid quotations have been reported for the period
beginning January 1, 1997 and ended June 30, 1999:
Bid Quotations
--------------
Period High Low
------ ---- ---
Quarter Ended:
March 31, 1997 $1.75 $0.50
June 30, 1997 $1.22 $0.50
September 30, 1997 $6.00 $1.00
December 31, 1997 $6.31 $1.50
Quarter Ended:
March 31, 1998 $4.25 $0.94
June 30, 1998 $1.43 $0.56
September 30, 1998 $0.62 $0.25
December 31, 1998 $0.62 $0.12
Quarter Ended:
March 31, 1999 $0.19 $0.06
June 30, 1999 $0.84 $0.06
Such quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commission. Such quotes are not necessarily representative of actual
transactions or of the value of our securities, and are in all likelihood not
based upon any recognized criteria of securities valuation as used in the
investment banking community.
The Company has been advised that seven member firms of the NASD are currently
acting as market makers for the common stock. There is no assurance that an
active trading market will develop which will provide liquidity for the
Company's existing shareholders or for persons who may acquire common stock
through the exercise of warrants.
(b) Holders.
As of September 1, 1999, there were approximately 771 holders of record of our
11,786,518 shares of common stock outstanding. Of these 11,786,518 shares,
9,953,821 are restricted securities within the meaning of Rule 144(a)(3)
promulgated under the Securities Act of 1933, as amended, because such shares
were issued and sold by the Company in private transactions not involving a
14
<PAGE>
public offering. Certain of the shares of common stock are held in "street" name
and may, therefore, be held by several beneficial owners. Our transfer agent is
Jersey Transfer & Trust Company, Inc., Post Office Box 36, Verona, New Jersey
07044.
No prediction can be made as to the effect, if any, that future sales of shares
of common stock or the availability of common stock for future sale will have on
the market price of the common stock prevailing from time-to-time. Sales of
substantial amounts of common stock on the public market could adversely affect
the prevailing market price of the common stock.
(c) Dividends.
We have not paid a cash dividend on the common stock since current management
joined the Company in 1996. The payment of dividends may be made at the
discretion of our Board of Directors and will depend upon, among other things,
our operations, our capital requirements and our overall financial condition. As
of the date of this registration statement, we have no intention to declare
dividends.
Item 2. Legal Proceedings
We are currently unaware of any pending legal proceeding or any proceeding
contemplated by a governmental authority in which we may be involved.
Item 3. Changes In and Disagreements With Accountants We have not had any
resignation or dismissal of our principal independent accountants. As of the
date of this registration statement, Millward & Co. CPAs in Fort Lauderdale,
Florida serve as our independent accountants and have prepared the audited
statements included as exhibits hereto.
Item 4. Recent Sales of Unregistered Securities. Pursuant to the Agreement and
Plan of Reorganization with FPA, we issued 10,000,000 shares of common stock to
the ten shareholders of FPA in exchange for their shares of FPA common stock.
This transaction was effected pursuant to the exemption provided by Section 4(2)
of the Securities Act of 1933, as amended.
On June 16, 1996, we issued 200,000 shares of common stock to the Chief
Financial Officer of the Company, as consideration for accounting services
rendered. On December 31, 1997, we issued an additional 100,000 shares of common
stock for accounting services rendered. These share issuances were effected in
reliance upon the exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended.
On December 31, 1997, we issued 5,000,000 shares of preferred stock to Alberto
DiBella in exchange for 5,000,000 shares of our common stock then held by Mr.
DiBella. The 5,000,000 common shares exchanged were put into the treasury of the
Company. In addition, we issued 1,000,000 shares to Mr. DiBella in lieu of
compensation for services in 1997. The Company relied upon the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended,
in issuing these preferred shares.
15
<PAGE>
In July 1997, we sold 200,000 shares of our common stock for consideration of
$40,000. Also in July 1997, the Company issued 25,000 shares of common stock as
consideration for legal services rendered on behalf of the Company. These
issuance of these shares was effected in reliance on the exemption from
registration provided in Section 4(2) of the Securities Act of 1933, as amended.
The following issuances were made pursuant to an offering in reliance on
Regulation D, Rule 504, promulgated under Section 3(b) of the Securities Act of
1933, as amended:
<TABLE>
<CAPTION>
Date # of Shares Consideration
- ---- ----------- -------------
<S> <C> <C>
7/23/97 200,000 $ 40,000
11/10/97 25,000 $ 25,000
11/10/97 12,000 $ 12,000
11/14/97 19,000 $ 19,000
11/14/97 50,000 $ 50,000
11/14/97 150,000 $ 150,000
1/30/98 10,000 $ 10,000
2/3/98 25,000 $ 25,000
4/2/98 15,000 $ 15,000
9/18/98 60,000 Legal Services
9/24/98 37,500 Public Relations Services
1/14/99 125,000 Legal Services
1/14/99 50,000 Public Relations Services
TOTAL 778,500
</TABLE>
On September 1, 1999, we issued 55,000 shares in consideration for legal
services rendered. The issuance of these shares was effected in reliance on the
exemption from registration provided in Section 4(2) of the Securities Act of
1933, as amended.
Item 5. Indemnification of Directors and Officers
Our Articles of Incorporation and Bylaws do not make any provision for
indemnification of directors and officers of the Company. Sections 30-1-851 and
30-1-856 of the Idaho Business Corporation Act contain provisions entitling
directors and officers of the Company to indemnification from judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees,
as a result of an action or proceeding in which they may be involved by reason
of being, or having been, a director or officer of the Company, provided said
officers or directors acted in good faith and reasonably believed that their
conduct was in the best interest of the Company or, in case of a criminal
proceeding, that an officer and director had no reasonable cause to believe his
conduct was unlawful. Notwithstanding the foregoing, an officer or director is
not entitled to indemnification in connection with a proceeding by or in the
right of the Company or liability arising out of conduct that constitutes
receipt by such person of financial benefit to which he is not entitled, the
intentional infliction of harm on the Company or the shareholders, or an
intentional violation of criminal law.
16
<PAGE>
PART F/S
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
CONTENTS
Page
<S> <C>
Report of Certified Public Accountants.................................................................18
Consolidated Financial Statements:
Consolidated Balance Sheet..........................................................................19
Consolidated Statement of Operations................................................................20
Consolidated Statement of Stockholders' Equity......................................................21
Consolidated Statement of Cash Flows..............................................................22-23
Notes to Consolidated Financial Statements...........................................................24-31
</TABLE>
17
<PAGE>
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------
To the Board of Directors
Enviro Voraxial Technology, Inc.
and Subsidiary
We have audited the accompanying consolidated balance sheet of Enviro Voraxial
Technology, Inc. and Subsidiary as of December 31, 1998 and 1997 and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the each of the two years in the period ended December 31, 1998. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Enviro Voraxial
Technology, Inc. and Subsidiary as of December 31, 1998 and 1997, and the
consolidated results of its operations and its cash flows for each of the two
years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles.
Millward & Co. CPAs
Fort Lauderdale, Florida
June 14, 1999
18
<PAGE>
<TABLE>
<CAPTION>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
ASSETS
December 31,
-------------------------------------------
1998 1997
------------------ ------------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 68,989 $ 198,964
Accounts receivable 69,339 314,116
Inventory 212,000 229,790
Subscription Receivable - 83,900
---------- ----------
Total Current Assets 350,328 826,770
---------- ----------
PROPERTY AND EQUIPMENT (Net of accumulated depreciation of
$217,913 and $136,904 at December 31, 1998 and 1997, respectively) 1,118,926 564,704
---------- ----------
OTHER ASSETS
Deposits 1,576 500
---------- ----------
Total Assets $1,470,830 $1,391,974
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 41,417 $ 263,416
Current Maturities of Long-Term Debt 8,960 -
Accrued expenses 2,664 3,897
Deferred income taxes 34,100 104,100
---------- ----------
Total Current Liabilities 87,141 371,413
NON-CURRENT LIABILITIES:
Long-Term Debt 418,089 -
Notes Payable - Shareholder 192,401 137,206
---------- ----------
Total Non-Current Liabilities 610,490 137,206
Total Liabilities 697,631 508,619
---------- ----------
COMMITMENTS
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.001, par value,
6,000,000 shares authorized, 6,000,000 shares 6,000 6,000
issued and outstanding at December 31, 1998
and 1997, respectively
Common stock, $.001 par value, 42,500,000 shares authorized;
6,510,418 and 6,397,918 shares issued and outstanding at
December 31, 1998 and 1997, respectively 6,511 6,398
Additional paid-in capital 620,090 593,503
Retained earnings 140,598 277,454
---------- ----------
773,199 883,355
---------- ----------
Total Liabilities and Stockholders' Equity
$1,470,830 $1,391,974
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
19
<PAGE>
<TABLE>
<CAPTION>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended
December 31,
------------------------------------------
1998 1997
------------------ ------------------
<S> <C> <C>
NET SALES $ 1,176,167 $ 1,146,134
COST OF GOODS SOLD 1,037,948 683,325
----------- -----------
GROSS PROFIT 138,219 462,809
----------- -----------
COSTS AND EXPENSES:
General and Administrative 320,726 185,933
Interest Expenses 19,040 8,340
Other 5,309 -
----------- -----------
Total Cost and Expenses 345,075 194,273
----------- -----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES (206,856) 268,536
INCOME TAXES
INCOME TAX PROVISION (BENEFIT) 70,000 (93,100)
----------- -----------
NET INCOME (LOSS) $ (136,856) $ 175,436
=========== ===========
NET INCOME (LOSS) PER COMMON SHARE
Basic $ (0.02) $ 0.03
=========== ===========
Diluted $ (0.02) $ 0.03
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
USED TO COMPUTE NET INCOME PER COMMON SHARE
Basic 6,454,168 6,397,918
=========== ===========
Diluted 6,454,168 6,397,918
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
20
<PAGE>
<TABLE>
<CAPTION>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Year Ended December 31, 1998
Common Stock Preferred Stock
--------------------------- ---------------------------
Issued Amount Issued Amount
-------------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Balance - December 31, 1996 10,883,018 10,883 - -
Issuance of common stock for services rendered 125,000 125 - -
Issuance of common stock from private placement 389,900 390 - -
Conversion of common stock to preferred stock (5,000,000) (5,000) 5,000,000 5,000
Issuance of preferred stock for services rendered - - 1,000,000 1,000
Net income for the year ended December 31, 1997 - - - -
----------- ----------- ----------- -----------
Balance - December 31, 1997 6,397,918 $ 6,398 6,000,000 $ 6,000
Issuance of common stock from private placement 15,000 15 - -
Issuance of common stock for services rendered 97,500 98 - -
Net loss for the year ended December 31, 1998 - - - -
----------- ----------- ----------- -----------
Balance - December 31, 1998 6,510,418 $ 6,511 6,000,000 $ 6,000
=========== =========== =========== ===========
(RESTUBBED TABLE)
Additional
Paid-in Retained Shareholders
Capital Earnings Equity
----------- ------------- ------------
Balance - December 31, 1996 339,118 102,018 452,019
Issuance of common stock for services rendered 24,875 - 25,000
Issuance of common stock from private placement 229,510 - 229,900
Conversion of common stock to preferred stock - - -
Issuance of preferred stock for services rendered - - 1,000
Net income for the year ended December 31, 1997 - 175,436 175,436
----------- ----------- -----------
Balance - December 31, 1997 $ 593,503 $ 277,454 $ 883,355
Issuance of common stock from private placement 14,985 - 15,000
Issuance of common stock for services rendered 11,602 - 11,700
Net loss for the year ended December 31, 1998 - (136,856) (136,856)
----------- ----------- -----------
Balance - December 31, 1998 $ 620,090 $ 140,598 $ 773,199
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
21
<PAGE>
<TABLE>
<CAPTION>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended
December 31,
----------------------------------------------
1998 1997
------------------- -------------------
<S> <C> <C>
Net Income (Loss) $(136,856) $ 175,436
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation 84,376 53,438
Stock issued for services rendered 11,700 26,000
Preferred stock issued for services rendered - 1,000
Loss on Leasehold Improvements 16,616 -
Changes in assets and liabilities:
Accounts receivable 244,777 (252,535)
Inventory 17,790 (95,727)
Other assets (1,077) (1,500)
Subscription receivable 83,900 (83,900)
Accounts payable (221,999) 248,756
Accrued interest - (6,017)
Accrued expenses (1,233) (1,391)
Deferred income taxes (70,000) 93,100
--------- ---------
Net Cash Provided by Operating Activities 27,994 156,660
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (655,213) (242,241)
--------- ---------
Net Cash (Used in) Provided by Investing Activities (655,213) (242,241)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 15,000 229,900
Proceeds from Mortgagee Payable 431,250 -
Principal repayments of Mortgage Payable (4,201) -
Notes payable - shareholder 55,195 43,570
--------- ---------
Net Cash Provided by (Used in) Financing Activities 497,244 273,470
--------- ---------
Net Increase (Decrease) in Cash (129,975) 187,889
Cash - Beginning of Year 198,964 11,075
--------- ---------
Cash - End of Year $ 68,989 $ 198,964
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
22
<PAGE>
<TABLE>
<CAPTION>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
For the Year Ended
December 31,
----------------------------------------------
1998 1997
------------------- -------------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ 18,560 $ -
========= =========
Taxes $ - $ -
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
23
<PAGE>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Enviro Voraxial Technology, Inc. (the Company) was incorporated
in the State of Idaho on October 19, 1964 under the name of Idaho Silver, Inc.
for the primary purpose of acquiring mining claims and exploring for silver and
lead in Idaho.
In 1996, the Company changed its name to Enviro Voraxial Technology, Inc. in
connection with the acquisition in 1995 of its wholly-owned subsidiary, Florida
Precision Aerospace, Inc.
Florida Precision Aerospace was organized under the laws of Florida on February
26, 1993 as N.A.P., Inc. and changed its name to Florida Precision Aerospace,
Inc. on February 4, 1994. Florida Precision Aerospace, Inc. operates a high
precision engineering machine shop located in Deerfield Beach, Florida. In
addition, the Company has developed a new patented technology, the voraxial
separator, which has a number of potential applications. The voraxial separator
is a mechanical, non-clogging devise capable of separating two or more liquids
and/or solids, having different specific weights. Potential commercial
applications include oil/water separation, environmental cleanup and the
separation of industrial chemicals.
In 1995 in connection with the acquisition of Florida Precision Aerospace, Inc.,
the shareholders of Enviro Voraxial Technology, Inc. amended the articles of
incorporation for the name change, revised the authorized capital stock to
50,000,000 shares, and changed the par value of the stock from $.10 to $.001.
The stockholders also approved a 1 for 10 reverse stock split.
In acquiring Florida Precision Aerospace, Inc., 10,000,000 shares of post-split
Company stock were issued for all of the outstanding shares of Florida Precision
Aerospace, Inc.
This acquisition is accounted for as a "reverse acquisition" whereby the owners
of the private company are now in control of the public parent and is reported
similarly to a pooling of interests method of accounting. The history of Florida
Precision Aerospace, Inc. is included from its inception (1993).
The historical deficit balance of ($375,832) of Enviro, prior to the reverse
acquisition, has been charged off to additional paid-in capital. In addition, in
connection with the termination of the S election, the Company made a
distribution to the shareholder in the amount of $112,293 that was charged to
retained earnings.
In 1997 the Company divided the authorized stock of 50,000,000 shares into
42,500,000 shares of common stock with a par value of $.001 per share and
7,250,000 share of preferred stock with a par value of $.001. The preferred
stock shall have voting rights equal to those of the common stock, have a
noncumulative dividend of 8% per annum and be convertible into common stock upon
certain conditions as determined from time to time by the board of directors.
Consolidation - The consolidated financial statements as of December 31, 1998
include the accounts of the parent company (Enviro Voraxial Technology, Inc.)
and its wholly-owned subsidiary (Florida Precision Aerospace, Inc.). All
significant intercompany transactions and accounts have been eliminated.
Property and Equipment - Property and equipment are stated at cost net of
investment grants. Depreciation is computed by the straight-line method over the
estimated useful lives of the assets. Leasehold improvements are amortized over
the term of the lease, including renewal options, or the useful lives of the
assets, whichever is shortest. Management periodically assesses whether there
has been an impairment in the carrying value of its long-lived assets by
comparing current and projected annual and discounted cash flows with related
carrying amounts.
24
<PAGE>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
Net Income (Loss) per Common Share - Effective December 31, 1998, the Company
adopted the provisions of Statement of Financial Accounting Standards No. 128,
Earning Per Share, which establishes the new standard for computation and
presentation of net earnings per share. Under the new requirements, both basic
and diluted net earnings per share are presented. All prior period net earnings
per share information has been restated. Prior to the adoption of Statement 128,
the Company presented primary and, if appropriate, fully diluted earnings per
share. Primary and fully diluted earnings per share were calculated by dividing
net income by the weighted average number of common shares outstanding plus the
additional common shares that would have been outstanding assuming all
potentially dilutive common shares were issued during the reporting period and
the treasury stock method had been applied.
Basic net earnings (loss) per common share is calculated by dividing net income
(loss), less dividends on preferred shares, if any, by the weighted average
common shares outstanding during the period.
The calculation of diluted net earnings (loss) per share is similar to that of
basic net earnings (loss) per share, except that the denominator is increased to
include the number of additional common shares that would have been outstanding
if all potentially dilutive common shares, principally those issuable upon
exercise of stock options and warrants under the treasury stock method, were
issued at the beginning of the reporting period.
Cash and Cash Equivalents - The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents.
As of December 31, 1998, the Company had no such equivalents.
Inventory - Inventory includes work-in-process at December 31, 1998 from job
orders for specialized projects from third parties. These projects range from
less than one week to six months in duration and are charged at time plus
materials. All of the Company's revenue is generated from these projects.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities 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. Actual results could differ from those estimates.
Income Taxes - The Company utilizes the asset and liability method of accounting
for deferred income taxes. Under this method, deferred tax assets and
liabilities are established based on the differences between financial statement
and income tax bases of assets and liabilities using enacted tax rates in effect
for the year in which the differences are expected to reverse.
Deferred income taxes reflecting the tax effect of temporary differences between
tax bases of certain assets and liabilities are reflected on the consolidated
balance sheet with a corresponding non-recurring expense in the consolidated
statement of income.
The Company provides a valuation allowance against deferred tax assets if, based
on the weight of available evidence, it is likely that some or all of the
deferred tax assets will not be realized.
Research and Development Costs - Research and development costs are expensed as
incurred. Materials, equipment and intangibles purchased from others that have
alternative future benefit in research and development activities are
capitalized. Technologically feasible working models or products are inventoried
at the lower of cost or net realizable value.
Comprehensive Income - In June 1997, the Financial Accounting Standards Board
(the "FASB") issued Statement No. 130, Reporting Comprehensive Income. Statement
130 establishes standards for the reporting and display of comprehensive income
and its components in a full set of general purpose financial statements.
Statement 130 requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be
25
<PAGE>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
reported in a financial statement that is displayed with the same prominence as
other financial statements. The Company did not have transactions impacted by
the adoption of Statement 130.
Financial Instruments and Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations of
credit risk are primarily cash and temporary investments and accounts
receivable. The Company invests its excess cash in bank accounts with major
financial institutions and the carrying value approximates market value. The
Company has significant trade receivables.
Major Customer - In the year ended December 31, 1998, one customer comprised
over 78% of total revenue. In the year ended December 31, 1997, one customer
comprised over 90% of total revenue.
NOTE 2 - INVENTORY
The major classes of inventory at December 31, 1998 are as follows:
Raw Materials $ 5,000
Work-in-Process 207,000
------------
$ 212,000
============
Work-in-process includes $50,000 (net of allowances) of costs to build voraxial
separators.
NOTE 3 PROPERTY AND EQUIPMENT
Machinery and equipment includes molds and dies to produce voraxial separators.
Depreciation expense for the year ended December 31, 1998 and December 31, 1997
was $84,376 and $53,438, respectively.
Property and equipment at December 31, 1998 are as follows:
Machinery and Equipment $ 663,096
Furniture and Fixtures 9,005
Leasehold Improvements 43,158
Auto and Truck 11,630
Land and Building (See Note 4) 609,950
------------
Less: Accumulated Depreciation (217,913)
Net Property and Equipment $ 1,118,926
============
NOTE 4 - LONG-TERM DEBT
The Company entered into an agreement with a bank for $431,250 on May 29,1998.
The agreement provides for monthly payments of principal and interest at an
initial interest rate of eight and one half (8.50%). The note is collateralized
by the property. Interest shall be adjusted annually by adding one percent
(1.00%) to the prime rate index as available four (4) days prior to the change
Date, with the first such change date being June 1, 2003.
26
<PAGE>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
Principle and interest payments are due monthly, the first payment commencing on
July 1, 1998 and continuing monthly thereafter until June 2008, at which time
the entire Principal balance ($303,653) plus accrued interest is due.
Following are maturities of long-term debt for each of the next 5 years:
1999 $ 8,960
2000 9,752
2001 10,614
2002 11,553
2003 12,574
Thereafter 373,596
-------------
Total $ 427,049
=============
NOTE 5 RELATED PARTY TRANSACTIONS
Sublease of Office and Shop:
The Company subleased space from a company owned by the president and major
shareholder. Total rent expense was $21,750 and $38,568 for the year ended
December 31, 1998 and December 31, 1997, respectively.
NOTE 6 - STOCKHOLDERS' EQUITY
In 1998, the Company issued 97,500 shares of common stock for services with a
fair value of $11,700.
The Company completed a private placement of 15,000 shares of common stock for
net proceeds of $15,000.
In 1997, the Company issued 125,000 shares of common stock for services with a
fair value of $25,000.
The Company completed a private placement of 389,900 shares of common stock for
net proceeds of $229,900.
On October 20, 1997, the Company's president and chief operating officer agreed
to contribute to the Company's treasury 5,000,000 common shares in consideration
for the issuance to him of 5,000,000 shares of convertible non-cumulative,
voting 8% preferred stock, $.001 par value (which is the stated and liquidating
value). These shares are convertible into one of the common shares based on
certain incentive formulas based on increases in gross revenues beginning in
1998. Revenue increases of $10,000,000 would allow conversion of 1,200,000
common shares.
Other incentive preferred shares (1,000,000) with the same provisions and
incentives have been issued. These shares may result in additional compensation
if the incentives are met.
In addition, the Company's president may convert enough preferred shares to
maintain ownership of 51% of the outstanding shares.
27
<PAGE>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
NOTE 7 - INCOME TAXES
<TABLE>
<CAPTION>
The provision for income taxes of the Company consists of the following:
December 31,
----------------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
Current:
Federal $ - $ -
State - -
---------------- --------------
Total Current - -
---------------- --------------
Deferred:
Federal (63,910) 85,000
State (6,090) 8,100
---------------- --------------
Total Deferred (70,000) 93,100
---------------- --------------
Provision for income taxes $ (70,000) $ 93,100
================ ==============
</TABLE>
<TABLE>
<CAPTION>
The significant components of the net deferred tax liability were as follows:
December 31,
----------------------------------------
1998 1997
--------------- ---------------
<S> <C> <C>
Deferred tax liability:
Depreciation $ 11,000 $ 11,000
Federal taxation 23,100 93,100
---------------- --------------
Total deferred tax liabilities 34,100 104,100
Deferred tax assets:
Total deferred tax assets - -
---------------- --------------
Net deferred tax liability $ 34,100 $ 104,100
================ ==============
</TABLE>
The Company provides a valuation allowance against deferred tax assets if, based
on the weight of available evidence, it is more likely than not that some or all
of the deferred tax assets will not be realized. The Company and its Subsidiary
have not established a valuation allowance against deferred tax assets. The
Company has had profitable operation and believes it will have profitable
operations in the future.
NOTE 8 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimated the fair value of
each class of financial instruments for which it is practicable to estimate that
value:
28
<PAGE>
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
Cash, trade accounts receivable, other receivables, accounts payable: The
carrying amounts approximate fair value because of the short maturity of those
instruments.
Notes payable: The carrying amounts approximate fair value due to the length of
the maturities and the interest rates not being significantly different from the
current market rates available to the Company.
The estimated fair values of the Company's financial instruments as of December
31, 1998 are as follows:
<TABLE>
<CAPTION>
Carrying Fair
Amount Amount
------------------ ----------------
<S> <C> <C>
Cash and cash equivalents $ 68,989 $ 68,989
Trade accounts receivable $ 69,339 $ 69,339
Other receivables $ 1,577 $ 1,577
Note payable $ 192,401 $ 192,401
Accounts payable $ 41,417 $ 41,417
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
ENVIRO VORAXIAL TECHNOLOGY, INC.
Unaudited Statement of Financial Position
For the Six Month period Ended June 30, 1999
<S> <C> <C> <C>
ASSETS
Current Assets
Bank Balance $ 51,849.79
Cash In Savings 40,786.95
Cash in Escrow 3,233.99
Accounts Receivable 44,202.55
Payroll Advances 4,750.00
Total Current Assets $ 356,823.28
Fixed Assets
Land & Buildings $609,949.83
Machinery & Equipment 751,096.15
Furniture & Fixtures 9,005.03
Leasehold Improvements 43,158.02
Autos & Trucks 11,630.00
Accumulated Depreciation 257,913.00
Total Fixed Assets $ 1,166,926.03
Other Assets - Deposits $ 1,577.02
TOTAL ASSETS $ 1,525,326.33
LIABILITIES
Current Liabilities
Accounts Payable $ 27,549.18
Payables - Equipment 186,000.00
Deferred Income Tax 31,000.00
FICA Payable 518.82
Withholding Payable 780.00
Total Current Liabilities $ 245,848.00
Fixed Liabilities
Notes Payable - Stockholders $ 192,401.24
Mortgage Payable 422,663.00
Total Fixed Liabilities $ 615,064.24
Capital Accounts
Net Profit (Loss) (144,697.58)
Retained Earnings $ 143,698.17
Capital Stock 12,685.50
Additional Paid in Capital 652,728.00
Total Capital Equity $ 664,414.09
TOTAL LIABILITIES & NET WORTH $ 1,525,326.33
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
ENVIRO VORAXIAL TECHNOLOGY, INC.
Unaudited Earnings Statement
For the Six Month period Ended June 30, 1999
<S> <C>
Sales
Sales-Taxable $ 106,367.18
Interest Income 1,057.41
Gross Income $ 107,424.59
Cost of Sales
Purchases 5,006.27
Freight 989.77
Small Tools & Expense 1,599.69
Subcontract 6,727.80
Total Cost of Sales $ 14,323.53
Gross Margin $ 93,101.06
Overhead Expenses
Depreciation 40,000.00
Insurance 11,603.62
Interest 25,378.63
Research & Development 93,894.00
Legal & Professional 44,295.89
Bank Service Charges 5.20
Office Supplies 2,508.61
Payroll Taxes 3,210.83
Salaries 8,057.43
Telephone 3,247.09
Utilities 5,597.34
Total Overhead Expenses $ 237,798.64
Net Operating Profit (144,697.58)
Net Profit (144,697.58)
</TABLE>
31
<PAGE>
PART III
--------
Item 1. Index to Exhibits
See the index at "Item 2. Description of Exhibits."
Item 2. Description of Exhibits
EXHBIT # ITEM
- -------- ----
Ex. 2 Plan of Merger
Ex. 3(i) Articles of Incorporation
Ex. 3(ii) Bylaws
Ex. 4 Share Certificate
Ex. 10 Material Contracts - Mortgage Note
Ex. 21 Subsidiaries of the Registrant
Ex. 27 Financial Data Schedule
32
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
ENVIRO VORAXIAL TECHNOLOGY, INC.
Dated: _______________ By:/s/ Alberto DiBella
-------------------------------------------
Alberto DiBella, President and Director
33
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT (the "Plan") is made this_______day of may, 1996,
between Idaho Silver, Inc., an Idaho corporation ("ISI"), Florida Precision
Aerospace, Inc., a Florida corporation ("FPAI"), and the persons listed in
Exhibit A hereof (the "Stockholders"), being the owners of record of all of the
issued and outstanding stock of FPAI.
ISI wishes to acquire all of the issued and outstanding stock of FPAI
in exchange for stock of ISI in a transaction qualifying as a tax-free exchange
pursuant to Section 368(a)(I)(B) of the Internal Revenue Code of 1986, as
amended.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, IT IS AGREED.
Section 1
Exchange of Stock
1.1 Number of Shares. The Stockholders agree to transfer to ISI at the
Closing 100% of the outstanding shares of FPAI listed in Exhibit A attached
hereto and incorporated herein by reference (the "FPAI Shares") in exchange for
an aggregate total of 10,000,000 post-split shares of $0.001 par value
"unregistered" and "restricted" common voting stock of ISI (to represent
approximately 97% of the outstanding voting securities of ISI at the time of
Closing), all of such shares of common voting stock to be issued as follows,
to-wit:
(a) At the Closing, ISI shall deliver to the Stockholders'
representative designated in Section 10 hereof one stock certificate
representing 5,631,584 "unregistered" and "restricted" pre-split shares
of ISI common stock, in trust for the Stockholders, pending the reverse
split of ISI's common stock and the increase in the authorized capital
of ISI in accordance with Section 1.4 herein.
(b) Promptly following the above-referenced reverse split and increase
in the authorized capital of ISI, the Stockholders' Representative
shall tender the certificate issued to him in accordance with Section
1.1(a) to ISI's transfer agent for reissuance and ISI shall direct its
transfer agent to transfer such stock certificate and issue an
additional 9,436,841 "unregistered" and "restricted" post-split shares
of common stock of ISI, all to be transferred or issued to the
Stockholders on a pro rata basis in accordance with the numbers shown
opposite their respective names in Exhibit A;
Provided, however, the Closing of the Plan may take place if less than 100% of
the Stockholders adopt, ratify and approve the Plan, so long as Stockholders
owning not less than 80% of the FPAI Shares adopt, ratify and approve the Plan.
<PAGE>
1.2 Delivery of Certificates by Stockholders. The transfer of the FPAI
Shares by the Stockholders shall be effected by the delivery to ISI at the
Closing of stock certificates representing the transferred shares endorsed in
blank or accompanied by stock powers executed in blank, with all signatures
witnessed or guaranteed to the satisfaction of ISI and FPAI and with all
necessary transfer taxes and other revenue stamps affixed and acquired at the
Stockholders' expense.
1.3 Further assurances. At the Closing and from time to time
thereafter, the Stockholders shall execute such additional instruments and take
such other action as ISI may request in order to exchange and transfer clear
title and ownership in the FPAI Shares to ISI.
1.4 Changes in Capitalization and name. As soon after the Closing as is
practicable, the stockholders of ISI shall have adopted all resolutions required
or necessary to effect a reverse split of the pre-Plan outstanding shares of
common stock of ISI so that the post-split pre-Plan outstanding shares of common
stock of ISI shall amount to 436,842 shares, more or less, depending upon
rounding resulting from the reverse split, and increasing the authorized capital
of ISI to 50,000,000 shares and reducing the par value of the ISI common voting
stock from $0.10 to $0.001 per share, with appropriate adjustments in the stated
capital and additional paid in capital accounts of ISI; and to change the name
of ISI to "Enviro Voraxial Technology, Inc." The prompt adoption of such
resolutions shall be a condition subsequent to the obligations of FPAI and the
Stockholders under this Plan, and a special meeting of the stockholders of ISI
shall be called and held for these purposes on or before May 24, 1996, at such
time and place as the newly designated directors of ISI shall agree.
1.5 Resignations of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. On Closing, the present
directors and executive officers of ISI shall resign, in seriatim, and designate
the directors and executive officers of FPAI to serve in their place and stead,
until the next respective annual meetings of the stockholders and the Board of
Directors of ISI, and until their respective successors shall be elected and
qualified or until their respective prior resignations or terminations.
1.6 Assets and Liabilities of ISI at Closing. ISI shall have no
liabilities at Closing, and all costs incurred by ISI incident to the plan shall
have been paid or satisfied.
Section 2
The Closing contemplated by Section 1.1 shall be held at the Deerfield
Beach Hilton, 100 Fairway Drive, Deerfield Beach, Florida, on May 7, 1996,
unless another place or time is agreed upon in writing by the parties. The
Closing may be accomplished by wire, express mail or other courier service,
conference telephone communications or as otherwise agreed by the respective
parties or their duly authorized representatives.
2
<PAGE>
Section 3
ISI represents and warrants to, and covenants with, the Stockholders
and FPAI as follows:
3.1 Corporate Status. ISI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Idaho and is
licensed or qualified as a foreign corporation in all states in which the nature
of its business or the character or ownership of its properties makes such
licensing or qualification necessary (Idaho only). ISI is a publicly company,
having lawfully offered and sold a portion of its securities in accordance with
applicable federal and state securities laws, rules and regulations (Idaho and
Washington), through an Offering Circular dated October 15, 1966, and revised on
July 25, 1967. There is presently no "established trading market" for these or
any other securities of ISI; however, ISI has obtained a listing on the OTC
Bulleting Board of the National Association of Securities Dealers, Inc., under
the symbol "IHOS".
3.2 Capitalization. The authorized capital stock of ISI consists of
10,000,000 shares of common voting stock, having a par value of $0.10 per share,
of which 4,368,416 shares are issued and outstanding, all fully paid and
non-assessable; there are no outstanding options, warrants or calls pursuant to
which any person has the right to purchase any authorized and unissued capital
stock of ISI.
3.3 Financial Statements. The financial statements of ISI furnished to
the Stockholders and FPAI, consisting of a balance sheet dated December 31,
1995, and 1994 and 1993, and a related statement of income for the periods then
ended, attached hereto as Exhibit B and incorporated herein by reference, are
correct and fairly present the financial condition of ISI at such dates and for
the periods involved; such statements were prepared in accordance with generally
accepted accounting principles consistently applied, and no material change has
occurred in the matters disclosed therein, except as indicated in Exhibit C,
which is attached hereto and incorporated herein by reference.
3.4 Undisclosed Liabilities. ISI has no liabilities of any nature
except to the extent reflected or reserved against in its balance sheet, whether
accrued, absolute, contingent or otherwise, including without limitation, tax
liabilities and interest due or to become due, except as set forth in Exhibit C.
3.5 Interim Changes. Since the date of its balance sheet, except as set
forth in Exhibit C, there have been no (1) changes in financial condition,
assets, liabilities or business or ISI which, in the aggregate, have been
materially adverse; (2) damages, destruction or losses of or to property of ISI,
payments of any dividend or other distribution in respect of any class of stock
of ISI, or any direct or indirect redemption, purchase or other
3
<PAGE>
acquisition of any class of any such stock; or (3) increases paid or agreed to
in the compensation, retirement benefits or other commitments to employees.
3.6 Title to Property. ISI has good and marketable title to all
properties and assets, real and personal, reflected in its balance sheet, and
the properties and assets of ISI are subject to no mortgage, pledge, lien, or
encumbrance, except for liens shown therein or in Exhibit C, with respect to
which no default exists.
3.7 Litigation. There is no limitation or proceeding pending, or to the
knowledge of ISI, threatened, against or relating to ISI, its properties or
business, except as set forth in Exhibit C. Further, no officer, director or
person who may be deemed to be an affiliate of ISI is party to any material
legal proceeding which could have an adverse effect on ISI (financial or
otherwise), and none is party to any action or proceeding wherein and has an
interest adverse to ISI.
3.8 Books and Records. From the date of this Plan to the Closing, ISI
will (1) give to the Stockholders and FPAI or their respective representatives
full access during normal business hours to all of its offices, books, records
contracts and other corporate documents and properties so that Stockholders and
FPAI or their representatives may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of ISI as the Stockholders and
FPAI or their respective representatives may reasonably request.
3.9 Tax Returns. ISI has filed all federal and state income or
franchise tax returns required to be filed or has received currently effective
extentions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter if there is no
closing), ISI and its representatives will keep confidential any information
which they obtain from the Stockholders or from FPAI concerning the properties,
assets and business of FPAI. if the transactions contemplated by this Plan are
not consummated by May 7, 1996, ISI will return to FPAI all written matter with
respect to FPAI obtained by ISI in connection with the negotiation or
consummation of this Plan.
3.11 Investment intent. ISI is acquiring the FPAI Shares to be
transferred to it under this Plan for investment and not with a view to the sale
of distribution thereof, and ISI has no commitment or present intention to
liquidate FPAI or to sell or otherwise dispose of the FPAI Shares.
3.12 Corporate Authority. ISI has full corporate power and authority to
enter into this Plan and to carry out its obligations hereunder and will deliver
to the Stockholders and FPAI or their representatives at the Closing a certified
copy of resolutions of its Board of Directors authorizing execution of this Plan
by its officers and performance.
4
<PAGE>
thereunder, and the directors adopting and delivering such resolutions are the
duly elected and incumbent directors of ISI.
3.13 Due Authorization. Execution of this Plan and performance by ISI
hereunder has been duly authorized by all requisite corporate action on the part
of ISI, and this Plan constitutes a valid and binding obligation of ISI and
performance hereunder will not violate any provision of the Articles of
Incorporation, Bylaws, agreements, mortgages or other commitments of ISI.
3.14 Environmental Matters. ISI has no knowledge of any assertion by
any governmental agency of other regulatory authority of any environmental lien
or action, or of any cause for any such lien or action.
Section 4
Representations, warranties and Covenants of FPAI and Stockholders
FPAI and Stockholders represent and warrant to, and covenant with ISI
as follows:
4.1 FPAI Shares. The Stockholders are the record and beneficial owners
of the FPAI Shares, free and clear of adverse claims of third parties; and
Exhibit A correctly sets forth the names, addresses and number of shares of FPAI
owned by each of the Stockholders.
4.2 Corporate Status. FPAI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and is
licensed or qualified as a foreign corporation in all states in which the nature
of its business or the character or ownership of its properties makes such
licensing or qualification necessary.
4.3 Capitalization. The authorized capital stock of FPAI consists of
10,000,000 shares of common voting stock, having no par value, of which all
10,000,000 shares are issued and outstanding, all fully paid and non-assessable;
there are no outstanding options, warrants or calls pursuant to which any person
has the right to purchase any authorized and unissued capital stock of FPAI.
4.4 Financial Statements. The financial statements of FPAI furnished to
ISI, consisting of balance sheets for the calendar years ended December 31, 1994
and 1995, and related statements operations, stockholders' equity and cash flows
for the periods then ended, attached hereto as Exhibit D and incorporated herein
by reference, are correct and fairly present the financial condition of FPAI as
of that date and for the periods involved, and such statements were prepared in
accordance with generally accepted accounting principles consistently applied.
5
<PAGE>
4.5 Undisclosed Liabilities. FPAI has no material liabilities of any
nature except to the extent reflected or reserved against in the balance sheet,
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit E attached hereto and incorporated herein by reference.
4.6 Interim Changes. Since the date of its balance sheet, except as set
forth in Exhibit E, there have been no (1) changes in the financial condition,
assets, liabilities or business of FPAI which, in the aggregate, have been
materially adverse; (2) damages, destruction or loss of or to the property of
FPAI, payment of any dividend or other distribution in respect of the capital
stock of FPAI, or any direct or indirect redemption, purchase or other
acquisition of any such stock; or (3) increases paid or agreed to in the
compensation, retirement benefits or other commitments to employees.
4.7 Title to property. FPAI has good and marketable title to all
properties and assets, real and personal, proprietary or otherwise, reflected in
its balance sheet, and the properties and assets of FPAI are subject to no
mortgage, pledge, lien or encumbrance, except for liens shown therein or in
Exhibit E, with respect to which no default exists.
4.8 Litigation. There is no litigation or proceeding pending, or to the
knowledge of FPAI, threatened, against or relating to FPAI, its properties or
business, except as set forth in Exhibit E. Further, no officer, director or
person who may deemed to be an affiliate of FPAI is party to any material legal
proceeding which could have an adverse affect on FPAI (financial or otherwise),
and none is party to any action or proceeding wherein any has an interest
adverse to FPAI.
4.9 Books and Records. From the date of this Plan to the Closing, the
Stockholders will cause FPAI to (1) give to ISI and its representatives full
access during normal business hours to all of its offices, books records,
contracts and other corporate documents and properties so that ISI may inspect
and audit them; and (2) furnish such information concerning the properties and
affairs of FPAI as ISI may reasonably request.
4.10 Tax returns. FPAI has filed all federal and state income or
franchise tax returns required to be filed or has received currently effective
extentions of the required filing dates.
4.11 Confidentiality. Until the Closing (and continuously if there is
no Closing), the Stockholders and their representatives will keep confidential
any information which they obtain from ISI concerning its properties, assets and
business. If the transactions contemplated by this Plan are not consummated by
may 7, 1996, the Stockholders will return to ISI all written matter with respect
to ISI obtained by them in connection with the negotiation or consummation of
this Plan.
6
<PAGE>
4.12 Investment Intent. The stockholders are acquiring the shares to be
delivered to them under this Plan for investment and not with a view to the sale
or distribution thereof, and the Stockholders have no commitment or present
intention to liquidate the Company or to sell or otherwise dispose of the ISI
stock. The Stockholders shall execute and deliver to ISI on the Closing an
Investment Letter attached hereto as Exhibit F and incorporated herein by
reference, acknowledging the "unregistered" and "restricted" nature of the
securities of the ISI being received under the Plan in exchange for the FPAI
Shares, and receipt of certain material information regarding ISI.
4.13 Corporate Authority. FPAI has full corporate power and authority
to enter into this Plan and to carry out its obligations hereunder and will
deliver to ISI or its representative at the Closing a certified copy of
resolutions of its Board of Directors authorizing execution of this Plan by its
officers and performance thereunder.
4.14 Due Authorization. Execution of this plan and performance by FPAI
hereunder has been duly authorized by all requisite corporate action on the part
of FPAI, and this Plan constitutes a valid and binding obligation of FPAI and
performance hereunder will not violate any provision of the Articles of
Incorporation, Bylaws, agreements, mortgages or other commitments of FPAI.
4.15 Environmental Matters. FPAI has no knowledge of any assertion by
any governmental agency of other regulatory authority of any environmental lien
or action, or of any cause for any such lien or action.
Section 5
Conditions Precedent to Obligations of Stockholders and FPAI
All obligations of the Stockholders and FPAI under this Plan are
subject, at their opinion, to the fullfillment, before or a the Closing, of each
of the following conditions:
5.1 Representations and warranties true at Closing. The representations
and warranties of ISI contained in this plan shall be deemed to have been made
again at and as of the Closing and shall then be true in all material respects
and shall service the Closing.
5.2 Due performance. ISI shall have performed and complied with all the
terms and conditions required by this Plan to be performed or complied with by
it before the Closing.
5.3 Officers' Certificate. The Stockholders shall have been furnished
with a certificate signed by the president of ISI, in his capacity as President
and personally, attached hereto as Exhibit G attached hereto and incorporated
herein by reference, dated as of the Closing, certifying (1) that all
representations and warranties of ISI contained herein are true and correct; and
(2) that since the date of the financial statements (Exhibit B hereto) there has
7
<PAGE>
been no material adverse change in the financial condition, business or
properties of ISI taken as a whole.
5.4 Opinion of Counsel of ISI. The Stockholders shall have received an
opinion of counsel for ISI, dated as of the Closing, to the effect that (1) the
representations of Section 3.1, 3.2 and 3.12 are correct; (2) except as
specified in the opinion, counsel knows of no inaccuracy in the representations
in 3.5, 3.6 or 3.7; and (3) the shares of ISI to be issued to the Stockholders
under this Plan will, when so issued, validly issued, fully paid and
non-assessable.
5.5. Changes in Capitalization. As soon after the Closing as is
practicable, the stockholders of ISI shall adopt all resolutions required or
necessary to (1) effect a reverse split of the pre-Plan outstanding shares of
common stock of ISI so that the post-split pre-Plan outstanding shares of common
stock of ISI shall amount to 436,842 shares, more or less, depending upon
rounding resulting from the reverse split; (2) increase the authorized capital
of ISI from 10,000,000 shares to 50,000,000 shares; (3) decrease the par value
of the ISI commons stock from $0.10 per share to $0.001 per share, with
appropriate adjustments in the stated capital and additional capital accounts of
ISI; and (4) change the name of ISI to "Enviro Voraxial Technology." The prompt
adoption of such resolutions shall be a condition. Subsequent to the obliagtions
of FPAI and the Stockholders under this Plan.
5.6 Assets and Liabilities of ISI. ISI shall have no assets and
liabilities at Closing, and all costs, expenses and fees incident to the Plan
shall have been paid.
5.7 Resignations of Present Directors and Executive Officers and
Designation of new Directors and Executive Officers. The present directors and
executive officers of ISI shall have resigned, in seriatim, and shall have
designated the directors and executive officers of FPAI to serve in their place
and stead, and until their respective successors shall be elected and qualified
or until their respective prior resignations or terminations.
Section 6
Conditions Precedent to Obligations of ISI
All obligations of ISI under this Plan are subject, at its option, to
the fulfillment, before or at the Closing, of each of the following conditions:
6.1 Representations and warranties True at Closing. The Stockholders'
and FPAI's representations and warranties contained in this Plan shall be deemed
to have been made again at and as of the Closing and shall then be true in all
material respects and shall service the Closing.
8
<PAGE>
6.2 Due Performance. The Stockholders and FPAI shall have performed and
complied with all the terms and conditions required by this Plan to be performed
or complied with by them before the Closing.
6.3 Officer's and Stockholders' Certificate. ISI shall have been
furnished with a certificate signed by the President of FPAI, in his capacity as
President and Personally, attached hereto as Exhibit H and incorporated herein
by reference, dated as of the Closing, certifying (1) that all representations
and warranties of FPAI contained herein are true and correct; and (2) that since
the date of the financial statements (Exhibit G) there has been no material
adverse change in the financial condition, business or properties of FPAI taken
as a whole.
6.4 Opinion of Counsel of FPAI. ISI shall have received an opinion of
counsel for FPAI, dated as of the Closing, to the effect that (1) the
representations of Sections 4.2 and 4.13 are correct; (2) except as specified in
the opinion, counsel knows of no inaccuracy in the representations in 4.6, 4.7
or 4.8; and (3) the FPAI Shares to be delivered to ISI under this Plan will,
when so delivered, have been validly issued, fully paid and non-assessable, and
will be free and clear of any liens or encumbrances.
6.5 Books and Records. The Stockholders or the Board of Directors of
FPAI shall have caused FPAI to make available all books and records of FPAI,
including minute books and stock transfer records; provided, however, only to
the extent requested in writing by ISI at Closing.
6.6 Acceptance by Stockholders. The terms of this Plan shall have been
accepted by the Stockholders of FPAI who own not less than 80% of the
outstanding voting securities of FPAI as evidenced by their signatures on
Exhibit F and each such Stockholder specifically waives any preemptive right
each or any may have with respect to any FPAI Shares ever authorized or issued
by FPAI, past, present, future or for any reason whatsoever. Any Stockholder
accepting the terms of this Plan within 30 days of the date hereof shall be
included herein.
Section 7
Termination
Prior to Closing, this Plan may be terminated (1) by mutual consent in
writing; (2) by either the Directors of ISI or the Stockholders and FPAI if
there has been a material misrepresentation or material breach of any warranty
or covenant by the other party; or (3) by either the Directors of ISI or the
Stockholders and FPAI if the Closing shall not have taken place, unless
adjourned to a later date by mutual consent in writing, by the date fixed in
Section 2.
9
<PAGE>
Section 8
Stockholders' Representative
The Stockholders hereby irrevocably designate and appoint Alberto Di
Bella as their agent and attorney in fact ("Stockholders' Representative") with
full power and authority until the Closing to execute, deliver and receive on
their behalf all notices, requests and other communications hereunder; to fix
and alter on their behalf the date, time and place of the Closing; to waive,
amend or modify any provisions of this Plan and to take such other action on
their behalf in connection with this Plan, the Closing and the transactions
contemplated hereby as such agent deems appropriate; provided, however, that no
such waiver, amendment or modification may be made if it would decrease the
number of shares to be issued to the Stockholders under Section 1.1 hereof or
increase the extent of their obligation to ISI hereunder, unless agreed in
writing by the Stockholders of FPAI.
Section 9
General Provisions
9.1 Further Assurances. At any time, and from time to time, after the
Closing, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Plan.
9.2 Waiver. Any failure on the part of any party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
9.3 Brokers. Each party represents to the other parties hereunder that
no broker or finder has acted for it in connection with this Plan, and agrees to
indemnify and hold harmless the other parties against any fee, loss or expense
arising out of claims by brokers or finders employed or alleged to have been
employed by it.
9.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first-class registered or certified mail, return receipt requested, as
follows:
10
<PAGE>
If to ISI: Idaho Silver, Inc.
106 Cedar Street
Wallace, Idaho 83873
With a copy to: James E. Scott, Esq. (Consultant)
315 East Leland Road
Pittsburg, California 94565-4981
If to FPAI: Florida Precision Aerospace, Inc.
720 South Deerfield Ave.; Suite 4-5
Deerfield Beach, Florida 33441
With a copy to: Leonard W. Burningham, Esq.
455 East 500 South, Suite 205
Salt Lake City, Utah 84111
If to the Stockholders: To the addresses listed on Exhibit A
9.5 Entire Agreement. This Plan constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
9.6 Headings. The section and subsection headings in this Plan are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Plan.
9.7 Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Idaho, except to the extent
pre-empted by federal law, in which event (and to that extent only), federal law
shall govern.
9.8 Assignment. This Plan shall inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns; provided however,
that any assignment by any party of its rights under this Plan without the prior
written consent of the other parties shall be void.
9.9 Counterparts. This Plan may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement and Plan
of Reorganization effective the day and year first above written.
IDAHO SILVER, INC.
By /s/ Robert E. Anderson
------------------------
Its President
------------------------
FLORIDA PRECISION AEROSPACE, INC.
By /s/ Alberto Di Bella
------------------------
Its President
------------------------
12
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Number of Shares of
Number of Shares Stock of ISI
Owned of to be
Name and Address FPAI Received in Exchange
- ---------------- ---- --------------------
<S> <C> <C>
Alberto Di Bella 7,830,000 7,830,000
3500 Bayview Drive
Ft. Lauderdale, Florida 33308
Harvey E. Richter 2,000,000 2,000,000
720 S. Deerfield Ave.
Deerfield Beach, Florida 33441
Agostino Di Bella 100,000 100,000
703 North Ave.
Westfield, New Jersey 07090
John A. Di Bella 10,000 10,000
703 North Ave.
Westfield, New Jersey 07090
Joseph R. Di Bella 10,000 10,000
10 Sandy Hill Rd.
Westfield, New Jersey 07090
Christopher J. Rotante 10,000 10,000
22 Ladik Place
Montvale, New Jersey 07645
Albert M. Di Bella, Jr. 10,000 10,000
3500 Bayview Drive
Ft. Lauderdale, Florida 33308
Laura M. Di Bella 10,000 10,000
3500 Bayview Drive
Ft. Lauderdale, Florida 33308
Adele Di Bella 10,000 10,000
3500 Bayview Drive
Ft. Lauderdale, Florida 33308
Nancy Van Winkle 10,000 10,000
1619 Lake Lorine Drive ------ ------
Orlando, Florida 32808
TOTALS 10,000,000 10,000,000
</TABLE>
ARTICLES OF INCORPORATION
OF
IDAHO SILVER, INC.
KNOW ALL MEN BY THESE PRESENTS That we, the undersigned, citizens of
the United States of America, each over the age of twenty-one years, do hereby
voluntarily associate ourselves together for the purpose of forming a domestic
corporation under and by virtue of the laws of the State of Idaho, and we do
hereby make, sign, acknowledge and file these Articles of Incorporation, as
follows:
ARTICLE I.
----------
The name of this corporation is, and shall be IDAHO SILVER, INC.
ARTICLE II.
-----------
The objects and purposes for which this Corporation is formed are as
principals, agents, or otherwise, to do in any part of the world any and every
of the things therein set forth or permitted by law to the same extent as
natural persons might and could do. In furtherance and not in limitation of the
general powers conferred by the laws of the State of Idaho, we do expressly
provide that the Corporation shall have power;
(a) To purchase, sell, option, own, locate, lease, or otherwise
acquire, mortgage and dispose of lands, mines, mining claims and mineral rights;
to own, handle and control letters patent and inventions; to use and to own,
enter, apply for patents for mines, millsites, mills, water-rights, tunnels,
and rights of way; to work, prospect, explore, exploit and develop mines and
mineral lands of every kind and nature and wherever the same may be situated,
<PAGE>
and to carry on every operation of the business of mining, milling and producing
zinc, lead, gold, silver and any and all other metals and minerals of every kind
and character and to sell and dispose of the same and the by-products thereof,
and to do everything that may be necessary or proper in the conduct of the
business of working such mines and mineral lands and the production of ores and
to buy, sell, contract for, own, erect, and operate all mills, smelting and
other ore reduction works, sawmills, machinery, roads, tramways, ditches,
flumes, water rights, power plants of any and all kinds whatsoever, and to
develop and use electicity for power and light purposes, and to file upon water
rights for any and all purposes.
(b) To take, hold, lease, mortgage, own, purchase, or acquire by
operation of the law or otherwise, real property or any interest therein or
appurtenant thereto, including storerooms, sawmills, store buildings and any
part thereof, or any interest therein, or to sell, lease, exchange, mortgage or
hypothecate real estate or any interest therein and to engage in any and all
undertakings and business necessary and proper to the improvement and betterment
of any of the land or real property or interest therein, owned or otherwise
acquired, or to be owned or otherwise acquired by said corporation, or in any
other lands in which the said corporation may have any interest, and to handle
and deal in any land, interest in land, or other property or interest therein,
of said corporation in any manner it may desire.
(c) To enter into, make, perform and carry out any and all contracts or
agreements of every kind, amount and character with any person, firm,
association, corporation, Federal or State government or any political
subdivision, or corporation or agency thereof.
2
<PAGE>
(d) To purchase, own, sell, convey, mortgage, pledge, exchange, acquire
by operation of law or otherwise, personal property of every kind and character,
debts, dues and demands or causes of action, and each and every kind of personal
property, evidence of debts, bonds, stocks of this and other corporations, both
public and private, which the Corporation may deem necessary and convenient for
its business or otherwise.
(e) To borrow and lend money from and to any person, firm, corporation,
association, or federal or state government or any political subdivision, or
corporation or agency thereof, and to make, take and execute notes, mortgages,
bonds, deeds of trust, or other evidence of indebtedness to secure payment
thereof, or by any other lawful manner or means, and to take and receive notes,
bonds, mortgages, deeds of trust, or any evidence of indebtedness for the use
and benefit of said corporation, or otherwise.
(f) To own, hold, lease, or sublet, or to conduct on its own account,
or for any person, firm association, corporation, or federal or state government
of any political subdivision, or corporation or agency thereof, all and every
kind of merchandise, business or property necessary or proper to carry on an
account of the business of said corporation.
(g) To build any and all necessary shops, buildings, storerooms,
boarding houses, sleeping quarters, sawmills and structures at any place proper
and convenient to carry on any or all of the business of said Corporation.
(h) To do and perform every act and thing necessary to carry out the
above enumerated purposes, or calculated directly or indirectly to the
advancement of the interest of the Corporation, or to the enhancement of the
value of its stock, holdings and property of any kind or character.
3
<PAGE>
ARTICLE III.
------------
The corporate existence of this corporation shall be perpetual.
ARTICLE IV.
-----------
The location and post office address of the corporation's registered
office in the State of Idaho shall be Wallace, Idaho.
ARTICLE V.
----------
This company shall be capitalized for $1,000,000.00. The total
authorized stock of this corporation shall be divided into 10,000,000 shares,
all of which shall be common stock with a par value of 10 cents per share. Said
shares shall be non-assessable and shall all be of the same class and every
share of said stock shall be equal in all respects to every other of said
shares.
The said shares may be issued and sold from time to time by the
corporation for such consideration and upon such terms as may, from time to
time, be fixed by the Board of Directors without action by the stockholders.
Notwithstanding the provisions of Section 30-120, Idaho Code, the Board
of Directors of this corporation shall have power and authority from time to
time to authorize the sale of, and to sell for cash or otherwise, all or any
portion of the unissued and/or of the treasury stock of this corporation without
said stock, or any thereof, being first offered to the shareholders of this
corporation.
ARTICLE VI.
-----------
The corporate powers of the corporation shall be vested in a Board of
Directors of not less than three, and no more than seven members, who shall be
elected annually by the shareholders, and who shall serve until the election and
qualification of their successors. No person shall serve as a director or this
corporation who is not a shareholder therein. Directors who are to serve
4
<PAGE>
for the first corporate year shall be selected by the incorporators. Unless
otherwise determined by the shareholders, the Board of Directors, by resolution,
shall from time to time fix the number of directors within the limit herein
provided.
ARTICLE VII.
------------
The names, post office addresses, and number of shares subscribed by
each of the incorporators, are as follows:
Name Address No. of Shares
- ---- ------- ------------
Jack Scott Box 1088
Wallace, Idaho 1
F. E. Scott Box 1088
Wallace, Idaho 1
Alden Hull Box 709
Wallace, Idaho 1
ARTICLE VIII.
-------------
In addition to the power conferred upon the shareholders by law, to
make, amend or repeal By-Laws and adopt new By-Laws, but such powers may be
executed only by a majority of the whole Board of Directors.
ARTICLE IX.
-----------
A director or officer of the corporation shall not, in the absence of
actual fraud, be disqualified by his office from dealing or contracting with the
corporation, either as vendor, purchaser, or otherwise; and in the absence of
actual fraud no transaction or contract of the corporation shall be void or
voidable by reason of the fact that any director or officer, or firm of which
any director or officer is a member, or any other corporation of which any
director or officer is a shareholder, officer or director, is in any way
interested in such transaction or contract; provided, that such transaction or
5
<PAGE>
contract is, or shall be, authorized, ratified or approved (1) by a vote of a
majority of a quorum of the Board of Directors, or of the Executive Committee,
if any, counting for the purpose of determining the existence of such majority
or quorum, any Director, when present, who is so interested, or who is a member
of a firm so interested; or (2) at a stockholders' meeting by a vote of a
majority of the outstanding shares of stock of the corporation represented at
such meeting and then entitled to vote, or by writing or writings signed by a
majority of such holders of stock which shall have the same force and effect as
though such authorization, ratification or approval were made by the
stockholders; and no director or officer shall be liable to account to the
corporation for any profits realized by him through any such transaction or
contract of the corporation authorized, ratified, or approved, as aforesaid, by
reason of the fact that he may be, or any firm of which he is a member, or any
corporation of which he is a shareholder, officer or director, was interested in
such transaction. Nothing in this paragraph contained shall create any liability
in the events above mentioned, or prevent the authorization, ratification or
approval of such contracts or transactions in any other manner than permitted by
law, or invalidate of made voidable any contract or transaction which would be
valid without reference to the provisions of this paragraph.
IN WITNESS WHEREOF, we have hereunto set our hands and seals in
quadruplicate this 13th day of October, 1964.
/s/ R. E. Scott
---------------
/s/ Jack E. Scott
-----------------
/s/ Alden Hull
--------------
6
<PAGE>
STATE OF IDAHO )
) ss.
County of Shoshone )
On this 13th day of October, 1963, before me, the undersigned, a Notary
Public in and for the State of Idaho, personally appeared JACK SCOTT, F. E.
SCOTT and ALDEN HULL, know to me to be the persons whose names are subscribed to
the within instrument and acknowledged to me that they executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year in
this certificate first above written.
/s/ W. J. Hull
--------------------------------------------
Notary Public in and for the State of Idaho,
Residing at Wallace, Idaho.
7
<PAGE>
[stamp]
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
IDAHO SILVER, INC.
Pursuant to the provisions of Section 30-61 of the Idaho Business
Corporation Act, the undersigned corporation hereby adopts the following
Articles of Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is "Idaho Silver, Inc."
SECOND: The following amendments to the Articles of Incorporation of
Idaho Silver, Inc. were duly adopted by the stockholders of the corporation at a
meeting held May 28, 1996, in the manner prescribed by the Idaho Business
Corporation Act.
(i) Article I of the corporation's Articles of Incorporation shall be
amended to read:
ARTICLE I
---------
The name of this corporation is "Enviro Voraxial Technology, Inc."
(ii) The second sentence of Article V of the corporation's Articles of
Incorporation shall be amended to read:
The total authorized stock of this corporation shall be divided into
50,000,000 shares, all of which shall be common stock with a par value of one
mill ($0.001) per share.
THIRD; (a) The designation and number of shares outstanding and
entitled to vote on the above-referenced amendments were as follows:
CLASS NUMBER OF SHARES
----- ----------------
Common 10,000,000
(b) The number of shares voted for such amendments was 5,631,584, with
none opposing and none abstaining.
FOURTH: Such amendments do not provide for any exchange,
reclassification or cancellation of issued shares.
FIFTH: The amendment designating a par value of one mill ($0.001) per
share for the corporation's common stock effects a reduction in the amount of
stated capital from $1,000,000 to $10,000.
[stamp]
<PAGE>
IN WITNESS WHEREOF, the undersigned executive officers of the
corporation, having been thereunto duly authorized, have executed the foregoing
Articles of Amendment for the corporation under the penalties of perjury this
4th day of June, 1996.
IDAHO SILVER, INC.
By /s/ Alberto Di Bella
-----------------------
Alberto Di Bella, President
By /s/ Harvey E. Richter
------------------------
Harvey E. Richter, Executive Vice
President
By /s/ Thomas J. Barone
-----------------------
Thomas J. Barone, Secretary/Treasurer
<PAGE>
[stamp]
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
ENVIRO VORAXIAL TECHNOLOGY, INC.
To the Secretary of State of the State of Idaho:
Pursuant to Title 30, Chapter 1, Idaho Code, the undersigned
corporation amends its Articles of Incorporation as follows:
FIRST: The name of the corporation is "Enviro Voraxial Technology, Inc."
SECOND: The following amendment to the Articles of Incorporation of Enviro
Voraxial Technology, Inc. were adopted by the stockholders of the corporation at
a meeting held October 20, 1997.
(i) The second sentence of Article V of the corporation's Articles of
Incorporation shall be amended to read:
The total authorized stock of this corporation shall be divided into
50,000,000 shares, 42,4000,000 of which shall be common stock with a par value
of one mill ($0.001) per share, and 7,250,000 of which shall be preferred stock
with a par value of one mill ($0.001). The preferred stock shall have voting
rights equal to those of the common stock, have a noncumulative dividend of 8%
per annum and be convertible into common stock upon certain conditions as
determined from time to time by the board of directors.
THIRD: (a) The designation and number of shares outstanding and entitled to
vote on the above referenced amendment were as follows:
CLASS NUMBER OF SHARES
----- ----------------
Common 11,083,018
(b) The number of shares voted for such amendment was 8,010,000,
with none opposing and none abstaining.
FOURTH: Such amendment does not provide for any exchange reclassification
or cancellation of issued shares.
[stamp]
<PAGE>
IN WITNESS WHEREOF, the undersigned executive officers of the
corporation, having been thereunto authorized, have executed penalty of perjury
this 20th day of October, 1997.
ENVIRO VORAXIAL TECHNOLOGY, INC.
By: /s/ Alberto DiBella
-----------------------------
Alberto DiBella, President
By: /s/ Thomas J. Barone
-----------------------------
Thomas J. Barone, Sec./Treas.
<PAGE>
ARTICLES OF AMENDMENT
To the Secretary of State of the State of Idaho [seal]
Pursuant to Title 30, Chapter 1, Idaho Code, the undersigned corporation
amends its articles of incorporation as follows:
1. The name of the corporation is Enviro Voraxial Technology, Inc.
---------------------------------
2. The text of each amendment is as follows:
Article VI.
The corporate powers of the corporation shall be vested in a Board of
Directors of not less than one, and no more than seven members, who shall
be elected annually by the shareholders, and who shall serve until the
election and qualification of the successors. No person shall serves as a
director of the corporation who is not a shareholder therein. Directors
who are to serve for the first corporate year shall be elected by the
incorporators. Unless otherwise determined by the shareholders, the Board
of Directors, by resolution, shall from time to time fix the number of
directors within the limit herein provided.
3. The date of adoption of the amendment(s) was: August 30, 1999
---------------
4. Manner of adoption (check one):
[ ] The amendment consists exclusively of matters which do not require
shareholder action pursuant to section 30-1-1002, Idaho Code, and
was, therefore, adopted by the board of directors.
[X ] The number of shares outstanding and entitled to vote was: 12,510,418
----------
The number of shares cast for and against each amendment was:
Amended article Shares for Shares against
--------------- ---------- --------------
Article VI 8,820,000
Dated: August 30, 1999
Signed by:_____________________
Its Albert Dibella, Majority Shareholder
BY-LAWS
OF
IDAHO SILVER, INC.
ARTICLE I. NAME, SEAL AND OFFICES, ETC.
Section 1. Name: The name of the Corporation is IDAHO SILVER, INC.
Section 2. Seal: The seal of the corporation shall be in such form as
the Board of Directors shall from time to time prescribe.
Section 3. Offices: The registered office of the corporation shall be
in the city of Wallace, State of Idaho. The corporation may also have offices at
such other places within or without the State of Idaho as the Board of Directors
may from time to time establish.
Section 4. Book of By-Laws: These By-Laws shall be recorded in a book
kept in the registered office of the corporation, to be known as the Book of
By-Laws, and no By-Laws, or repeal or amendment thereof, shall take effect until
so recorded. Said book may be inspected at said office by the public during
office hours of each day except holidays.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meetings of Shareholders: The annual meeting of the
Shareholders for the election of Directors and for such other business as may be
laid before such meeting shall be held in the registered office of the
corporation, or at such other place within or without the State of Idaho as the
Board of Directors may from time to time appoint, at 2:00 P.M. (Mountain
Standard Time) on the Third Tuesday of April, unless that day shall be a legal
holiday, in which event it shall be held on the next following day which shall
not be a legal holiday whether or not mentioned in the notice. Any corporate
<PAGE>
business may be transacted at such meeting.
Section 2. Special Meetings of Shareholders: Special meetings of the
Shareholders may be called at any time by the Board of Directors, and the
Shareholders may meet at any convenient place, within or without the State of
Idaho, designated in the call for such meeting. If more than eighteen months are
allowed to elapse without the annual Shareholders' meeting being held, any
Shareholder may call such meeting to be held at the registered office of the
corporation. At any time, upon written request of any Director or any
Shareholder or Shareholders holding in the aggregate one-fifth of the voting
power of all Shareholders, it shall be the duty of the Secretary to call a
special meeting of Shareholders to be held at the registered office at such time
as the Secretary may fix, not less than fifteen nor more than thirty-five days
after the receipt of said request, and if the Secretary shall neglect or refuse
to issue such call, the Director or Shareholder or Shareholders making the
request may do so.
Section 3. Adjourned Meetings: An adjournment or adjournments of any
annual or special meeting may be taken without a new notice being given.
Section 4. Notice of meetings: A written notice of the time, place and
purpose of meetings, including annual meetings, shall be given by the Secretary
or other person authorized to do so, to all stockholders entitled to vote at
such meeting, at least ten days prior to the day named for the meeting. If such
written notice is placed in the United States mail, postage prepaid, addressed
to a Shareholder at his last known post office address, notice shall be deemed
to have been given him.
Section 5. Waiver of Notice: Notice of time, place and purpose of any
meeting of Shareholders may be waived by the written assent of a Shareholder
-2-
<PAGE>
entitled to notice, filed with or entered upon the records of the meeting before
or after the holding thereof.
Section 6. Action Without Formal Meeting. Any action which, under any
provision of the laws of Idaho, or the Articles or By-Laws, may be taken at a
writing signed by all of the holders of shares who would be entitled to notice
of a meeting for such purpose. Whenever a certificate in respect to any such
action is required by the laws of Idaho to be filed in the office of the County
Recorder or in the office of the Secretary of State, the officers signing the
same shall therein state that the action was authorized in the manner aforesaid.
Section 7. Waiver of Invalid Call or Notice: When all the Shareholders
of this corporation are present at nay meeting, however called or notified, and
sign a written consent thereto on the record of such meeting, the doings of such
meeting are as valid as if had a meeting legally called and notified.
Section 8. Voting: Every Shareholder shall have the right at every
Shareholders' meeting to one vote for every share of stock standing in his or
her name on the books of the Corporation on the record date fixed as hereinafter
provided, or, if no such date has been fixed, ten days prior to the time of the
meeting, and in voting for Directors, but not otherwise, he may cumulate his
votes in the manner and to the extent permitted by the laws of the State of
Idaho.
The Board of Directors may fix a time not more than forty days prior to
the date of any meeting of the stockholders as the record date as of which
stockholders entitled to notice of and to vote at such meeting shall be
determined.
At each meeting of the stockholders a full, true and complete list, in
alphabetical order, of all the stockholders entitled to vote at such meeting and
indicating the number of shares held by each, certified by the Secretary or
-3-
<PAGE>
transfer agent, shall be furnished, which list shall be open to the inspection
of the stockholders.
Shareholders may vote at all meetings, either in person or by proxy
appointed by instrument in writing, subscribed by the Shareholder or his duly
authorized attorney in fact, executed and filed with the Secretary not less than
one day before the meeting which shall be named therein. Shareholders may also
be represented at all meetings by persons holding general powers of attorney.
At least twenty-four hours prior to any meeting, powers of attorney or
proxies shall be submitted to the Secretary for examination. The certificate of
the Secretary as to the regularity of such powers of attorney or proxies and as
to the number of shares held by the persons who severally and respectively
executed such powers of attorney or proxies shall be received as prima facie
evidence of the number of shares held by the holder of such powers of attorney
or proxies for the purpose of establishing the presence of a quorum at such
meeting or for organizing the same, and for all other purposes.
Section 9. Quorum: Except as otherwise provided in the Articles of
Incorporation at any meeting of the Shareholders, the presence, in person or by
proxy, of the holders of a majority of the voting power of all Shareholders
shall constitute a quorum. The Shareholders present at a duly organized meeting
can continue to do business until adjournment, notwithstanding the withdrawal of
enough Shareholders to leave less than a quorum. If a Shareholders' meeting
cannot be organized because a quorum has not attended, those Shareholders
present may adjourn the meeting to such time and place as they may determine,
but in case of any meeting called for the election of Directors,
-4-
<PAGE>
those who attend the second of such adjourned meetings, although less than a
majority of the voting power of all shareholders, shall nevertheless, constitute
a quorum for the purpose of electing Directors.
Whenever all Shareholders entitled to vote at any meeting consent,
either by writing on the records of the meeting or filed with the Secretary of
the Corporation, or by presence at such meeting, an oral consent entered on the
minutes, or by taking part in the deliberations at such meeting without
objection, the doings of such meeting shall be as valid as if had at a meeting
regularly called and noticed and at such meeting any business may be transacted
which is not expected from the written consent or to the consideration of which
no objection from want of notice is made at the time, and if any meeting be
irregular for want of notice or of such consent provided a quorum was present at
such meeting, the proceedings of said meeting may be ratified and approved and
rendered likewise valid and the irregularity or defect therein waived by a
writing signed by all the Shareholders having the right to vote at such meeting
and such consent or approval of Shareholders may be by proxy or power of
attorney in writing.
ARTICLE III. DIRECTORS
Section 1. Number and election: The business of the corporation shall
be managed by a Board of at least three Directors or of such other number (which
shall not be less than three nor more than seven) as may be determined from time
to time by the Board of Directors. A Director shall hold office for the term for
which he was named or elected and until his successor is elected and qualified,
except as hereinafter otherwise provided. Directors shall be chosen by ballot.
-5-
<PAGE>
Section 2. Annual Meeting: The Board of Directors may hold its first
annual meeting and all subsequent annual meetings after its election by the
Shareholders, without notice and at such place within or without the State of
Idaho as the Board of Directors may from time to time appoint, for the purpose
of organization, the election of officers, and the transaction of other
business. At such meetings the Board shall elect a President, a Secretary and a
Treasurer, and may elect one or more Vice-Presidents, an Assistant Secretary and
an Assistant Treasurer.
Section3. Special Meetings: Special meeting of the Board of Directors
may be called by the President or any Vice-president or by any two members of
the Board of Directors.
Section 4. Notice of Meetings: Notice of all Directors' meetings,
except has herein otherwise provided, shall be given either by mail, telephone,
telegraph, or personal service of notice, oral or written, at such time or times
as the person or persons calling the meeting may deem reasonable, but in no
event upon less than 3 day's notice. Special meetings of the Board may be held
at such place within or without the State of Idaho as the Board of Directors may
from time to time appoint. Notice of any meeting may be waived by any Director
entitled to notice before or after the holding thereof by his written or oral
assent and the presence of any Director at any meeting, even though without any
notice, shall constitute a waiver of notice. Unless otherwise indicated in the
notice thereof any and all business may be transacted at any Director's meeting.
Section 5. Quorum: At all meetings of the Board a majority of the
Directors shall be necessary and sufficient to constitute a quorum for the
transaction of business, and the acts of a majority of the Directors present at
-6-
<PAGE>
any meeting at which a quorum is present shall be the acts of the Board of
Directors, except as may be otherwise specifically provided for herein or by
law.
If at any meeting there is less than a quorum present, a majority of
those present may adjourn the meeting from time to time without further notice
to any absent Director.
Section 6. Removal: A Director may be removed either with or without
cause, by two-thirds of the vote of the Shareholders at a special meeting called
for that purpose.
Section 7. Vacancies: Any vacancy in the Board of Directors occurring
during the year may be filled for the unexpired portion of the term and until a
successor is elected and qualified either
(a) at the next annual meeting of Shareholders or at any special
meeting of Shareholders duly called for that purpose and held prior
thereto, or
(b) by a majority of the remaining members of the Board
Section 8. Powers: All the corporate powers, except such as are
otherwise provided for in the Articles of Incorporation, in these By-Laws and by
the laws of the State of Idaho, shall be, and are, hereby vested in and shall be
exercised by the Board of Directors.
Section 9. Executive Committee: The Board of Directors may, by
resolution passed by a majority of the whole Board, designate two or more of
their number to constitute an Executive Committee to serve during the pleasure
of the Board, which Committee shall have and exercise the authority of the Board
in the management of the business of the corporation to the extent authorized by
said resolution. All action taken by the Executive Committee shall be reported
to the Board of Directors at its meeting next succeeding such
-7-
<PAGE>
action, and shall be subject to revision or alteration by the Board; providing,
however, that no rights or acts of third parties shall be affected by any such
revision or alteration.
A majority of the Executive Committee present at a meeting thereof
shall constitute a quorum. Vacancies in the Executive Committee shall be filled
by the Board of Directors. The Executive Committee shall fix its own rules of
procedure including the time and place of and method or manner of calling
meetings thereof.
ARTICLE IV. OFFICERS
Section 1. Officers: The officers of the Corporation shall be a
President, Secretary and Treasurer, and, in the discretion of the Board of
Directors, one or more Vice-President, and an Assistant Secretary, and an
Assistant Treasurer, each of whom shall be elected at a meeting of and by the
Board of Directors.
Any officer may resign by mailing a notice of resignation to the
registered office of the Corporation or such other office as may be designated
by the Board of Directors. To the extent permitted by law, the resignation shall
become effective at the time designated in the notice of resignation, but in no
event earlier than its receipt by the Secretary or Assistant Secretary of the
corporation.
In case of a vacancy of any of said officers for any reason, the Board
of Directors shall at any regular or special meeting elect a successor who shall
hold office for the unexpired term of his predecessor. Any two of the offices of
Vice -President, Secretary, Treasurer, Assistant Secretary and Assistant
Treasurer may be combined in one person.
The Board of Directors may appoint such other officers and agents as a
-8-
<PAGE>
may be necessary for the business of the corporation.
Any officer or agent may be removed by the Board of Directors whenever,
in their judgment the interest of the corporation may be reserved thereby; such
removal, however, shall be without prejudice to the contract rights of the
person so removed.
Section 2. President: The president shall preside at all meetings of
the Shareholders and Directors. He shall see that all orders and resolutions of
the Board are carried into effect; shall execute all deeds, mortgages, bonds or
documents authorized by the Board of Directors, and shall sign as President all
certificates of stock, all contracts, and other instruments, in writing,
excepting only those which are specifically provided to be signed by others. He
shall from time to time as requested report to the Board all the matters within
his knowledge of interest to the corporation, and shall also perform such duties
as may be required by the State of Idaho, these By-Laws and by order of the
Board of Directors.
Section 3. Vice-President: The Vice-President shall be vested with all
the powers and shall perform all the duties of the President in the absence or
disability of the latter.
Section 4. Treasurer: The Treasurer: The Treasurer shall be custodian
of the corporation's moneys and securities, and shall deposit and withdraw the
same in the corporation's name as directed by the Board of Directors; he shall
keep a record of his accounts and report to the Board of Directors as requested.
Section 5. Secretary: The Secretary shall keep a record of the meetings
of the Shareholders and Board of Directors. He shall keep the books of
certificates of stock, fill out and sign all certificates of stock issued, and
-9-
<PAGE>
make corresponding entries on the margin or stub of such book. He shall keep a
debit and credit form, showing the number of shares issued to and transferred by
the Shareholders, and the dates thereof. He shall keep the corporate seal and
shall affix the same to certificates of stock and other corporate instruments,
and shall make such acknowledgements as may be required on behalf of the
corporation. He shall perform duties as may be prescribed by the Board of
Directors. The Secretary shall give or cause to be given, notice of all meetings
of Shareholders and Board of Directors, and all other notices required by the
laws of the State of Idaho, or by these By-Laws.
Section 6. Assistant Treasurer and Assistant Secretary: The Assistant
Treasurer and Assistant Secretary shall be vested with all the powers and shall
perform all the duties of the Treasurer and Secretary, respectively, in the
absence or disability of the Treasurer or Secretary as the case may be.
Section 7. Salary: The salaries of all officers shall be fixed by the
Board of Directors and the fact that any officer is a Director shall not
preclude him from receiving a salary or from voting on the resolution providing
for the same.
ARTICLE V. STOCK
Section 1. Certificates of Stock: Each Shareholder shall be entitled to
a certificate of stock signed by the President and the Secretary, or by such
other officers as are authorized by these By-Laws or by the Board of Directors.
when any certificate of stock is signed by a transfer agent or registrar, the
signature of any such corporate officer and the corporate seal upon such
certification may be facsimiles, engraved or printed.
Certificates of stock shall be numbered in the order of issuance
thereof,
-10-
<PAGE>
and, except as prescribed by law, shall be in such form as the Board of
Directors may determine.
Section 2. Transfer of Shares: Transfer of shares of stock shall be
made on the books of the corporation only by the holder in person or by written
power of attorney duly executed and witnessed and upon surrender of the
certificate or certificates of such shares.
Section 3. Transfer Agent and Registrar: The Board of Directors may
appoint either a transfer agent or registrar, or both of them.
Section 4. Stock transfer Books: Stock transfer books may be closed for
not exceeding forty days next preceding the meeting of shareholders and for the
payment of dividends during such periods as may be fixed from time to time by
the Board of Directors. During such periods no stock shall be transferable.
Section 5. Lost or Destroyed Certificates: In case of loss or
destruction of a certificate of stock of this Corporation, another certificate
may be issued in its place upon proof of such loss or destruction and the giving
of a bond of indemnity or other security satisfactory to the Board of Directors.
ARTICLE VI. REPEAL OR AMENDMENT OF BY-LAWS
Section 1. By the Shareholders: The power to make, amend or repeal
By-laws shall be in the Shareholders, and By-laws may be repealed or amended or
new By-Laws may be adopted at any annual Shareholders' meeting, or at any
special meeting of the Shareholders called for that purpose, by a vote
representing a majority of the allotted shares, or by the written consent duly
acknowledged in the same manner as conveyances of real estate required by law to
be acknowledged of the holders of a majority of the allotted shares, which
written consent may be in one or more instruments.
-11-
<PAGE>
Section 2. By the Directors: Subject to the power of the Shareholders
to make, amend or repeal any By-Laws made by the Board of Directors, a majority
of the whole Board of Directors at any meeting thereof shall have the power to
repeal and amend these By-Laws and to adopt new By-Laws.
The foregoing By-Laws were regularly adopted at the first meeting of
the Shareholders of the corporation held on the ______ day of ______ 19___, at
Wallace, Idaho, by a majority of the allotted capital stock.
_______________________________________
Chairman of Meeting of Shareholders
_______________________________________
Secretary of Meeting of Shareholders
We, the Shareholders of the above named corporation, representing
holding more than a majority of the allotted shares thereof, do hereby adopt
foregoing code of By-Laws.
_______________________________________
_______________________________________
_______________________________________
-12-
<PAGE>
We, the undersigned, constituting (a) a majority of the Board of
Directors, and (b) the Secretary of the above named corporation, certify that
the foregoing is a true and exact copy of the By-Laws of the Corporation, duly
adopted at a meeting of the Shareholders of the Corporation held on the _____
day of ________________________, 19___.
_______________________________________
_______________________________________
_______________________________________
_______________________________________
Secretary of the Corporation
-13-
INCORPORATED UNDER THE LAWS OF THE STATE OF IDAHO
"The shares represented by this certificate have not been registered under the
Securities Act of 1933 (the "Act") and are "restricted securities" as that term
is defined in Rule 144 under the act. The shares may not be offered for sale,
sold or otherwise transferred except pursuant to an effective registration
statement under the Act, or pursuant to an exemption from registration under the
Act, the availability of which is to be established to the satisfaction of the
Company."
NUMBER SHARES
________ _______
CUSIP NO. 29403v10 3
ENVIRO VORAXIAL TECHNOLOGY, INC.
50,000,000 AUTHORIZED SHARES $.001 PAR VALUE NON-ASSESSABLE
This Certifies that ____________________
is the record holder of *ONE HUNDRED THOUSAND*
shares of ENVIRO VORAXIAL TECHNOLOGY, INC. Common Stock
transferable on the books of the Corporation in person or by duly authorized
attorney upon surrender of this Certificate properly endorsed. This Certificate
is not valid until countersigned by the Transfer Agent and registered by the
Registrar.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
dated 6/13/96
/s/ illegible Alberto Di. Bella
- ------------- -----------------
SECRETARY PRESIDENT
CORPORATE
SEAL
ENVIRO VORAXIAL TECHNOLOGY, INC.
IDAHO
COUNTERSIGNED AND REGISTERED
TRANSECURITIES INTERNATIONAL, INC.
SPOKANE, WA
By: /s/ illegible
- ---------------------
AUTHORIZED SIGNATURE
MORTGAGE NOTE
$431,250.00 May 29, 1998
Boca Raton, Florida
FOR VALUE RECEIVED, the undersigned promises to pay TRANSFLORIDA BANK, a Florida
banking corporation, or order, the principal sum of FOUR HUNDRED THIRTY ONE
THOUSAND TWO HUNDRED FIFTY AND NO/100 ($431,250.00) DOLLARS, with interest on
the unpaid principal balance from the date of this Note, until paid, at the
initial rate of EIGHT AND ONE HALF PERCENT (8.50%) per annum according to the
terms of this note. The interest rate shall be adjusted annually by adding ONE
PERCENT (1.00%) to the prime rate index as available four (4) days prior to the
Change Date, with the first such change date being June 1, 2003, provided that
the bank shall not charge interest on this obligation in excess of that allowed
by law. The index is Suntrust Banks of Florida, Inc. Prime Rate. The Principal
and interest shall be payable at 1489 W. Palmetto Park Road, Boca Raton, Florida
33486 or such other place as the holder hereof may designate in writing, and
shall be payable as follows:
Principal and Interest payments on the outstanding Principal Balance shall be
due and payable monthly, with the first such payment commencing on the 1st day
of July, 1998, and continuing monthly thereafter until the 1st day of June,
2008, at which time the entire Principal balance plus accrued interest, if any,
shall be due and payable in full. THIS NOTE IS AMORTIZED OVER TWENTY (20) YEARS
AND BALLOONS AT THE END OF TEN (10) YEARS.
If any installment under this Note is not paid when due, the entire principal
amount outstanding hereunder and accrued interest thereon shall at once become
due and payable at the option of the holder thereof. Failure to exercise such
option shall not constitute a waiver of the right to exercise such option of the
undersigned if in default hereunder. In the event of any default in the payment
of this Note and if suit is brought hereon, the holder hereof shall be entitled
to collect in such proceedings all reasonable costs and expenses of suit,
including but not limited to reasonable attorneys' fees.
AFTER ACCELERATION AND/OR MATURITY, INTEREST SHALL ACCRUE ON THE OUTSTANDING
PRINCIPAL BALANCE AT THE HIGHEST LAWFUL RATE OF INTEREST ALLOWED.
The undersigned shall pay to the holder hereof a late charge of five percent
(5%) of any monthly installment not received by the holder hereof within fifteen
(15) days after the installment is due.
Presentment, notice of dishonor and protest are hereby waived by all makers,
sureties, guarantors and endorsers hereof. This Note shall be the joint and
several obligations of all makers, sureties, guarantors and endorsers, and shall
be binding upon them and their heirs, personal representatives, successors and
assigns.
This Note may be prepaid, in whole or in part, at any time without penalty.
The indebtedness evidenced by this Note is secured by a Mortgage, dated of even
date herewith, and reference is made thereof for rights as to acceleration of
the indebtedness evidenced by this Note.
THIS IS A BALLOON MORTGAGE SECURING A VARIABLE/ADJUSTABLE RATE OBLIGATION.
ASSUMING THAT THE INITIAL RATE OF INTEREST WERE TO APPLY FOR THE ENTIRE TERM OF
THE MORTGAGE, THE FINAL PRINCIPAL PAYMENT OR THE PRINCIPAL BALANCE DUE UPON
MATURITY WOULD BE APPROXIMATELY $308,223.31, TOGETHER WITH ACCRUED INTEREST, IF
ANY, AND ALL ADVANCEMENTS MADE BY THE MORTGAGEE UNDER THE TERMS OF THE MORTGAGE.
THE ACTUAL BALANCE DUE UPON MATURITY MAY VARY DEPENDING ON CHANGES IN THE RATE
OF INTEREST.
FLORIDA PRECISION AEROSPACE, INC., a Florida Corporation
By: /s/ Alberto DiBella
ALBERTO DIBELLA, President
Tax ID#: 65-0398210
SUBSIDIARIES OF THE REGISTRANT
Florida Precision Aerospace, a Florida Corporation
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-9-1998
<PERIOD-END> DEC-31-1998
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