<PAGE>
FORM 10-SB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OVERLAND MANAGEMENT, INC.
- --------------------------------------------------------------------------------
(Name of Small Business Issuer in its charter)
TEXAS 74-2840358
- ------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Indentification No.)
incorporation or organization)
16700 US HIGHWAY 281 SOUTH, SAN ANTONIO, TX 78221
- --------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number. (210) 927-6700
--------------
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ---------------------------------- ----------------------------------
- ---------------------------------- ----------------------------------
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK
- --------------------------------------------------------------------------------
(Title of class)
- --------------------------------------------------------------------------------
(Title of class)
<PAGE>
OVERLAND MANAGEMENT, INC.
A TEXAS CORPORATION
16700 US HIGHWAY 281 SOUTH
SAN ANTONIO, TX 78221
(210) 927-6700
FORM 10-SB
1998
FEDERAL TAX IDENTIFICATION NUMBER
74-2840358
ISSUES EQUITY SECURITIES
COMMON STOCK: $.001 PAR VALUE
50,000,000 SHARES AUTHORIZED
37,530,850 ISSUED AND OUTSTANDING
<PAGE>
PART 1
ITEM 1. DESCRIPTION OF BUSINESS.
Overland Management, Inc. (the "Company") was incorporated in Texas on November
20, 1996, no predecessors. The Company had 50,000,000 shares authorized. The
Company has acquired all rights, title and interest in the formula and
manufacturing process of a silicon polymer called Poly-Si and its derivatives
from Corlan Environmental, Inc. ("CEI"), with whom a close business relationship
exists. All company activities will be gathered on The Company's ninety five
(95) acre site located outside San Antonio, Texas. These activities include
Research and Development, purchasing, manufacturing, packaging, and shipping.
BUSINESS OBJECTIVE: The primary objective of The Company is to exclusively
manufacture and market its proprietary product, Poly-Si. Poly-Si is a unique
complex of silicon and hydrogen, with major uses in gas and oil production,
hydrocarbon decontamination, agriculture and biodegradable surfactants. The
Company's primary focus is to raise the necessary capital to build a
manufacturing plant at its acquired facility. This facility, using
state-of-the-art technology, will be used for the production of Poly-Si. The
Company believes that it will benefit from the marketing experience that CEI has
already achieved throughout the marketplace and recognized that CEI has a proven
market position in industries related to enhanced oil and gas production,
hydrocarbon decontamination, agriculture and biodegradable surfactants.
Therefore, CEI has been contracted as the exclusive marketing company.
ITEM 2. MANAGEMENT'S PLAN OF OPERATIONS.
The Company plans to raise the necessary capital to develop its acquired
facility, initiate and complete the construction of its planned manufacturing
plant, build and equip a laboratory and purchase certain raw materials in order
to produce Poly-Si. The Company will expand its existing markets that include
enhanced oil and gas production, soil remediation, agriculture and biodegradable
surfactants. The Company intends to generate profit to finance continued growth
and development in quality products. The Company also will maintain a friendly,
fair and creative work environment, which respects diversity, new ideas, and
hard work. The Company intends to develop additional products using Poly-Si and
create a world market initiated in China, Russia, Australia and other nations.
ITEM 3. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
There are currently 37,530,850 Common Shares outstanding. The following table
sets forth certain information regarding the beneficial ownership of the
Company's Common Stock as of the date of this Document by (i) each person who is
known by the Company to own beneficially more than 5% of the Company's
outstanding Common Stock; and (ii) each of the Company's Officers and Directors.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES
---------------- ----------------
<S> <C>
Charles W. Lindquist 14,750,000
16700 US Highway 281 South
San Antonio, TX 78221
Larry Lancaster 14,750,000
16700 US Highway 281 South
San Antonio, TX 78221
Glen Doggett 1,000,000
16700 US Highway 281 South
San Antonio, TX 78221
</TABLE>
<PAGE>
ITEM 4. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Pursuant to the Articles of Incorporation, each Director shall serve until the
annual meeting of the shareholders, or until his successor is elected and
qualified. It is the intent of the Company to support the election of a majority
of "outside" directors at such meeting. The Company's basic philosophy mandates
the inclusion of directors who will be representative of management, employees
and the minority shareholders of the Company. Directors may only be removed for
"cause". The term of office of each officer of the Company is at the pleasure of
the Company's Board of Directors.
The principal officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME POSITION TERM(s) OF OFFICE
<S> <C> <C>
Charles W. Lindquist Chairman of the Board From November 20, 1996 to
President Present
Glenn Doggett Vice President From June 30, 1997 to Present
Director
Larry Lancaster Secretary/Treasurer From November 20, 1996 to
Director Present
</TABLE>
RESUMES
CHARLES W. LINDQUIST, is one of the Co-founders, Chairman and President of
Overland Management, Inc., which was founded in November 1996. From 1987 through
1997 Mr. Lindquist was the owner of Lindquist & Associates, International
Brokers and Marketers, where he sought and marketed attractive products
throughout the world. His position included work in market analysis,
negotiations and follow-up.
From 1983 through 1987, Mr. Lindquist was President of the Scanstructor
Corporation, San Antonio, Texas. After thorough market research into
geographical areas and products, he successfully negotiated exclusive product
distribution rights for Texas, and founded and directed all aspects of this
organization providing a two-component chemical-resistant jointless acrylic
industrial flooring product.
From 1967 through 1983, he worked for Scandinavian Airlines System, Stockholm,
Sweden. He accomplished the highly successful on-time and within-budget
development of the systems first world-wide, fully-integrated, automated general
and cost accounting system, from the general design through testing,
implementation and run-in. The net financial effect of these management systems
was a reduction of approximately $30 million in aircraft spares warehouse size.
This work was complicated significantly by the data matrix, viz. six different
legally mandated reporting currencies; seven different repair facilities in six
countries; four major signatory carriers plus a number of cooperating carriers
for each signatory; and a variety of widebody and standard aircraft types.
From 1952 through 1967, Mr. Lindquist worked at International Business Machines
("IBM"). He attained the highest score ever in the screening examination and was
hired the same day as a Systems Engineer. He also worked for Metropolitan Life
Insurance Company, major functions were rationalization and preparation of
financial statements and analyses. Prior, he was in the United States Air Force
as the only Cryptoanalyst with the Air Weather Service. He was also involved in
highly classified projects in the United States and abroad.
LARRY LANCASTER, is one of the Co-founders, President, Director and majority
stockholder of Corlan Environmental, Inc. He has been directly involved in the
Research and Development of a new silicon polymer known as Poly-Si. He
coordinated all facets of the pilot production and worked with the test
marketing in Texas, New Mexico, Oklahoma and California for the oil and gas
market. He worked the markets in the cleaning and bio-remediation industries in
Texas and New Mexico. From 1990 to present he has been the Proprietor of a
computer maintenance and sales company specializing in the "personal
<PAGE>
computer" application to small businesses, specializing in on and off site
servicing and custom software design and implementation. He sold the business in
May 1997.
From 1973 through 1990, Mr. Lancaster worked at W-4 Motors as General Manager,
arranging financing and handling all advertising and budgeting. He was General
Manager of Rio Cibolo Ranch, a $2.5 million dollar entertainment facility. He
was President of Continental Outfitters, a sporting goods store and guide
service located in New Mexico. He also was Managing Partner of Lancaster-Frost
Builders, building $100 to $300 thousand dollar custom homes. Mr. Lancaster
traveled the United States as the Technical Specialist for NCR banking systems.
GLENN DOGGETT, Vice-President and Director of Overland Management, Inc. He has
many years of formal education and field experience in the oil and gas industry.
He has gained experience from his consulting work for the U.S. Department of
Energy and other independent operators.
Mr. Doggett has consulted or held executive positions with the following:
Gearhart Owens In., Inc. as Vice President of Marketing; Perforating Guns Atlas
Corp., k/n/a/ Dresser Atlas, Inc. as District Manager; United States Marine
Corp., as a Major, Fighter and Helicopter Pilot in WWII and Korea, Retired; Go
International, Inc., Vice President and Sales Coordinator; Pengo Industries,
Inc., Vice President of Operations; Go Services, Inc., President, CFO, and
Founder; Humble Pipeline Co., Field Operations; GO Oilwell Services, Inc.,
Manager of Sales and Operations; Paine Drilling Co., Sales and Negotiating
Drilling Contracts; Perforating Guns Atlas Corp., District Manager and Sales for
Houston, Texas, Louisiana and Kansas.
Mr. Doggett also has the US Patent on "Traverse Tool to locate Artificially
Induced Fractures and their Direction in Oil & Gas Wells", and the US Patent on
"Downhole Completion Tool". He designed the proposal to Texaco for wireline
completion services of the first quintuple (Multiple string 5" completion) ever
attempted in the oil industry, completion successful. He also was the Author of
"An Introduction to Single Element Differential Temperature Logging" and Author
of a report on downhole completion, later published in "Oil & Gas Journal".
ITEM 5. EXECUTIVE COMPENSATION.
There has been no cash compensation paid by the Company to its present officers
and directors.
EXECUTIVE COMPENSATION. The Company intends to enter into employment agreements
with key personnel which will provide for (i) monthly compensation in the form
of a salary; (ii) group insurance; (iii) other as determined by the Board of
Directors of the Company. It is anticipated that any agreement reached cannot be
terminated by either party except for just and reasonable cause as may be
determined by the parties.
ITEM 6. DESCRIPTION OF SECURITIES.
The Company's Articles of Incorporation authorize it to issue up to 50,000,000
Common Shares, par value $.001 per Common Share, of which 37,530,850 shares are
currently outstanding. The summary description of the Common Stock is qualified
in its entirety by reference to the Company's Certificate and Articles of
Incorporation, a copy of which is an exhibit to the Company's Registration
Statement on Form 10-SB.
COMMON STOCK. Holders of Common Shares of the Company are entitled to cast one
vote for each share held at all shareholders meetings for all purposes,
including the election of directors, and to share equally on a per share basis
in such dividends as may be declared by the Board of Directors out of funds
legally available therefor. Upon liquidation or dissolution, each outstanding
Common Share will be entitled to share equally in the assets of the Company
legally available for distribution to shareholders after the payment of all
debts and other liabilities. Common Shares are not redeemable, have no
conversion rights and carry no preemptive or other rights to subscribe to or
purchase additional Common Shares in the event of a subsequent offering. All
outstanding Common Shares are fully paid and nonassessable.
<PAGE>
NON-CUMULATIVE VOTING. The Common Shares do not have cumulative voting rights
which means that the holders of more than fifty percent of the Common Shares
voting for election of directors can elect one hundred percent of the directors
of the Company if they choose to do so.
DIVIDENDS. There are no limitations or restrictions upon the rights of the Board
of Directors to declare dividends out of any funds legally available therefor.
The Company has not paid dividends to date and it is not anticipated that any
dividends will be paid in the foreseeable future. The Board of Directors
initially may follow a policy of retaining earnings, if any, to finance the
future growth of the Company. Accordingly, future dividends, if any, will depend
upon, among other considerations, the Company's need for working capital and its
financial conditions at the time.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDERS MATTERS.
The market price for the Company's common stock was a low of $3.00 and high of
$5.00 per Comm Share for the period of January 1, 1998 to March 31, 1998 and to
date, no dividends have been paid.
ITEM 2. LEGAL PROCEEDINGS.
There are no pending legal proceedings of any nature against the Company or to
which the Company is subject.
ITEM 3. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS.
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Pursuant to the Company's Initial Offering filed August 12, 1997, the Company
issued 30,500,000 common shares to the 3 shareholders of Overland Management,
Inc., a Texas Corporation. (See Item 3).
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company shall indemnify to the fullest extent permitted by, and in the
manner permissible under the laws of the State of Texas, any person made, or
threatened to be made, a party to an action or proceeding, whether criminal,
civil, administrative or investigative, by reason of the fact that he is or was
a director of officer of the Company, or served any other enterprise as
director, officer or employee at the request of the Company. The Board of
Directors, in its discretion, shall have the power on behalf of the Company to
indemnify any person, other than director or officer, made a party to any
action, suit or proceeding by reason of the fact that he/she is or was an
employee of the Company.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company, the
Company has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer, or controlling person in connection with any
securities being registered, the Company will, unless in the opinion of counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issues.
<PAGE>
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE COMPANY FOR LIABILITIES
ARISING UNDER THE SECURITIES ACT OF 1933 IS HELD TO BE AGAINST PUBLIC POLICY BY
THE SECURITIES AND EXCHANGE COMMISSION AND IS THEREFORE UNENFORCEABLE.
OVERLAND MANAGEMENT, INC.
Date: 06/19/98
By: /s/ Larry Lancaster/Secretary
--------------------------------
Larry Lancaster, Secretary
<PAGE>
OVERLAND MANAGEMENT, INC.
INDEX OF ATTACHMENTS AND EXHIBITS
Exhibit A - Unaudited Financial Statements
Exhibit B - Certificate and Articles of Incorporation
Exhibit C - Original Offering Documents
Exhibit D - Auditors and Counsel
Exhibit E - Description of Products and Services
<PAGE>
EXHIBIT "A"
UNAUDITED FINANCIAL STATEMENTS
<PAGE>
OVERLAND MANAGEMENT, INC.
FINANCIAL STATEMENTS
SEVEN MONTHS ENDED JULY 31, 1997
<PAGE>
OVERLAND MANAGEMENT, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
DESCRIPTION PAGE
- ---------------------------------------------------------------------------------------------------- ------------
<S> <C>
Independent Auditors' Report........................................................................ F-2
Balance Sheet....................................................................................... F-3
Statement of Income (Loss) and Retained Earnings (Deficit).......................................... F-4
Statement of Changes in Common Stock and Additional Paid-in Capital................................. F-5
Statement of Cash Flows............................................................................. F-6
Notes to Financial Statements....................................................................... F-7-F-10
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Overland Management, Inc.
I have audited the accompanying balance sheet of Overland Management, Inc.
as of July 31, 1997 and the related statements of income (loss) and retained
earnings (deficit), changes in common stock and additional paid-in capital, and
cash flows for the seven months then ended. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Overland Management, Inc. as of
July 31, 1997, and the results of its operations and its cash flows for the
seven months then ended in conformity with generally accepted accounting
principles.
Subsequent to the issuance of the company's financial statements for the
seven months ended July 31, 1997, and my report dated September 16, 1997, an
intangible asset was revalued and an adjustment was made for a deferred tax
benefit, these adjustments decreased total assets by $452,361. In my original
report I expressed an unqualified opinion on the financial statements for the
seven months ended July 31, 1997 and my opinion on the revised statements, as
expressed herein remains unqualified.
/s/ ROBERT WILLIAMS
SAN ANTONIO, TEXAS
SEPTEMBER 16, 1997
F-2
<PAGE>
OVERLAND MANAGEMENT, INC.
BALANCE SHEET
JULY 31, 1997
<TABLE>
<S> <C> <C>
ASSETS
Current Assets
Cash.................................................................. $ 1,533
Earnest money deposit--land (Note 2).................................. 2,000
Prepaid expenses...................................................... 175
Security deposit...................................................... 488
---------
Total current assets................................................ $ 4,196
Property, plant, and equipment, net (Note 3)............................ 9,241
Intangible assets, net (Note 4)......................................... 577,603
---------
Total Assets...................................................... $ 591,040
---------
---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accrued interest expense.............................................. $ 4,909
Loans payable to stockholders (Note 5)................................ 35,268
---------
Total current liabilities........................................... $ 40,177
Long-Term Debt (Note 6)................................................. 495,000
---------
Total Liabilities................................................. 535,177
---------
Stockholders' Equity....................................................
Common stock, .001 par value, 50,000,000 shares authorized,
31,530,650 shares issued and outstanding............................ 31,531
Additional paid-in capital............................................ 52,554
Retained earnings (deficit)........................................... (28,222)
---------
Total Stockholders' Equity........................................ 55,863
---------
Total Liabilities and Stockholders' Equity........................ $ 591,040
---------
---------
</TABLE>
F-3
<PAGE>
OVERLAND MANGEMENT, INC.
STATEMENT OF INCOME (LOSS) AND RETAINED EARNINGS (DEFICIT)
FOR THE SEVEN MONTHS ENDED JULY 31, 1997
<TABLE>
<CAPTION>
Revenue
<S> <C>
Sales........................................................................... $ 0
---------
Expenses
Operating expenses.............................................................. 25,017
Net Loss from Operations.......................................................... (25,017)
Provision for Income Tax.......................................................... --
---------
Net Loss.......................................................................... (25,017)
Retained Earnings (deficit), beginning of year.................................... (3,205)
---------
Retained Earnings (deficit), at July 31, 1997..................................... $ (28,222)
---------
---------
</TABLE>
The accompanying notes and independent auditor's report should be read with the
financial statements
F-4
<PAGE>
OVERLAND MANAGEMENT, INC.
STATEMENT OF CHANGES IN COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL
FOR THE SEVEN MONTHS ENDED JULY 31, 1997
<TABLE>
<CAPTION>
COMMON STOCK ADDITONAL
------------------------ PAID-IN
SHARES AMOUNT CAPITAL
------------- --------- -----------
<S> <C> <C> <C>
Balance December 31, 1996................................................... $ 1,000,000 $ 1,000 $ 0
Par value of common stock issued at $0.001................................ 30,530,850 30,531 52,554
------------- --------- -----------
Balance July 31, 1997....................................................... $ 31,630,550 $ 31,531 $ 52,554
------------- --------- -----------
------------- --------- -----------
</TABLE>
F-5
<PAGE>
OVERLAND MANAGEMENT, INC.
STATEMENT OF CASH FLOWS
FOR THE SEVEN MONTHS ENDED JULY 31, 1997
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash paid to suppliers and vendors........................................... $ (17,508)
---------
Net cash provided by (used in) operating activities........................ (17,508)
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment.................................... (9,555)
Intangible assets............................................................ (35,554)
Earnest money deposit-land................................................... (2,000)
---------
Net cash (used in) investing activities.................................... (47,109)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock.................................................. 33,085
Proceeds from stockholder loans.............................................. 33,063
---------
Net cash provided by financing activities.................................. 66,148
---------
NET INCREASE IN CASH 1,533
Cash at beginning of year........................................................ 0
---------
CASH AT JULY 31, 1997............................................................ $ 1,533
---------
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid................................................................ $ 0
Taxes paid................................................................... 0
---------
$ 0
---------
Non-cash investing and financing activities
Acquired copyrights and trade secrets........................................ $(545,000)
Issued 500,000 shares of common stock for copyrights and trade secrets....... 50,000
Issued long-term debt for copyrights and proprietary trade secrets........... 495,000
---------
$ 0
---------
</TABLE>
The accompanying notes and independent auditor's report should be read with the
financial statements.
F-6
<PAGE>
OVERLAND MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SEVEN MONTHS ENDED JULY 31, 1997
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Overland Management, Inc. (OMI) is a Texas Corporation with its corporate
offices and facilities located south of San Antonio in Boxer County, Texas. The
Company was incorporated in Texas on November 20, 1996. Initially, the Company
was organized for the purpose of acquiring, developing and managing a
recreational ranch in San Antonio, Texas. This changed in February, 1997, when
the principals of the Company were introduced to a product known as Poly-Si
manufactured by Corlan Environmental, Inc. (CEI). After extensive research, OMI
acquired all rights to Poly-Si and its copyrighted names for its trademark
products on June 11, 1997.
BASIS OF PRESENTATION
Overland Management, Inc. (OMI) is a single, non-consolidated entity. The
financial statements are presented in accordance with generally accepted
accounting principles.
REVENUE RECOGNITION
Effective October 1, 1997, Poly-Si and its trademark products will be
marketed by CEI under an exclusive marketing agreement. Revenue recognition for
OMI will occur when the manufactured product is delivered to CEL. As of July 31,
1997, operations had generated no revenue.
INVENTORIES
Currently the Company has no inventories; however, the accounting policy is
to record inventories at the lower of cost (first-in, first-out method) or
market.
DEPRECIATION
The cost of property, plant, and equipment is depreciated using the
straight-line method for financial reporting and the accelerated method for
income tax purposes.
USE OF ESTIMATION
The preparation of financial statements in conformity with generally
accepted accounting principles management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
ORGANIZATION COSTS
Organization costs consist primarily of costs incurred in the issuance of
securities. These costs are amortized over 5 years. Amortization costs for
organization costs charged to operations for the seven months ended July 31,
1997, were $255.
F-7
<PAGE>
OVERLAND MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SEVEN MONTHS ENDED JULY 31, 1997 (CONTINUED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company has available, at July 31, 1997, net operating loss
carryforwards in the amounts of approximately $3,204.85 and $25,017.21 for
federal income tax purposes, expiring in 2011 and 2012, respectively.
COPYRIGHTED PRODUCT NAMES AND PROPRIETARY PROGRAM
Copyrighted product names and proprietary process are stated on the basis of
cost and are amortized principally on a straight-line basis, over the estimated
future periods to be benefitted of 17 years. Amortization costs charged to
operations for the seven months ended July 31, 1997 were $2,696 for copyrighted
product names and proprietary process. Intangible assets are periodically
reviewed for impairment based on an assessment of future operations to ensure
that they are appropriately valued.
NOTE 2. EARNEST DEPOSIT-LAND
During June, 1997, OMI entered into a contract to purchase real estate and a
$2,000.00 earnest money deposit was made. The real estate purchase was completed
in August, 1997, for $263,500.
NOTE 3. PROPERTY AND EQUIPMENT
The following is a summary of property, plant, and equipment--at cost,
less accumulated depreciation:
<TABLE>
<S> <C>
Equipment......................................... $ 9,555
Less: accumulated depreciation.................... (314)
---------
$ 9,241
---------
---------
</TABLE>
Depreciation charged to operations was $314 for the seven months ended
July 31, 1997.
NOTE 4. INTANGIBLE ASSETS
<TABLE>
<S> <C>
Copyrighted product names and proprietary trade
secrets......................................... $ 550,000
Organizational costs.............................. 30,554
---------
$ 580,554
Less: accumulated amortization.................... (2,951)
$ 577,603
---------
---------
</TABLE>
Amortization costs charged to operations for the seven months ended July
31, 1997, were $2,951.
NOTE 5. LOANS PAYABLE TO STOCKHOLDERS
Stockholders made various amounts of non-interest bearing loans to the
Company for interim financing. These loans totaled $35,268.08 at July 31,
1997.
F-8
<PAGE>
OVERLAND MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SEVEN MONTHS ENDED JULY 31, 1997 (CONTINUED)
NOTE 6. LONG-TERM DEBT
Long-term debt at July 31, 1997, follows:
<TABLE>
<S> <C>
Notes payable, accrued interest at 7% payable annually
starting June 10, 1998, with the principal due and
payable on or before July 1, 2000. Secured by
substantially all assets of the Company............... $ 495,000
Less: amount due within one year......................... --
---------
$ 495,000
---------
---------
</TABLE>
Maturities of Long-term debt are as follows:
<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31, AMOUNT
- ---------------- ----------
<S> <C>
1997............ --
1998............ --
1999............ --
2000............ 495,000
----------
$ 495,000
----------
----------
</TABLE>
NOTE 7. NONCASH TRANSACTION
On June 11, 1997, after several months of arm's-length negotiation, OMI
purchased from CEI all rights and interest in and to the secret manufacturing
process and formula of FORMULAS for the creation of the silicon-based material
known as Poly-Si and its copyrighted names for trade products. Under the terms
of the agreement OMI issued CEI 500,000 shares of common stock and a note in the
amount of $495,000 with accrued interest at 7 percent to be paid annually,
starting June 10, 1998, and the principal due and payable on or before July 1,
2000 to OMI. Also, as part of the agreement, OMI accepted the royalty obligation
that had existed between CEI and the inventor of the product. This agreement was
negotiated and concluded at arm's-length; concurrently or at about the time the
agreement was signed the President of CEI became an officer of OMI.
NOTE 8. RELATED PARTY
On June 12, 1997, OMI, recognizing the benefits that could be obtained from
CEI proven market position, entered into an exclusive marketing agreement with
CEI. Under this agreement CEI has the exclusive rights to market and sell
Poly-Si and related products for OMI. The terms of this agreement are effective
October 1, 1997 through October 1, 2000, and renewable upon the mutual consent
of the parties for another three years. For this exclusive marketing right CEI
agrees to pay $250,000 to OMI. CHI is a principal shareholder of OMI.
NOTE 9. STOCK ACTIVITY
During June, 1997, the Company issued 30,000,000 shares (for $30,000) to
officers, directors, and founders of the Company. Also, during June, 1997,
500,000 shares (for $50,000) were issued in a noncash
F-9
<PAGE>
OVERLAND MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SEVEN MONTHS ENDED JULY 31, 1997 (CONTINUED)
NOTE 9. STOCK ACTIVITY (CONTINUED)
transaction to acquire copyrighted product names and proprietary process. All of
the above shares are restricted under SEC Rule 144.
In July, 1997, the company did a private placement offering of 30,850 shares
(for $3,085) under SEC Regulation D, Rule 504.
NOTE 10. RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
The following reconciles net loss to net cash used by operating activities:
<TABLE>
<S> <C>
NET LOSS.......................................................... $ (25,017)
Adjustments to reconcile net loss to net cash used by operating
activities
Depreciation and amortization................................. 3,265
(Increase) decrease in:
Deposits................................................ (488)
Prepaid expenses........................................ (175)
Increase (decrease) in:
Accrued interest payable 4,909
---------
7,511
---------
NET CASH USED IN OPERATING ACTIVITIES $ (17,596)
---------
---------
</TABLE>
F-10
<PAGE>
OVERLAND MANAGEMENT, INC.
BALANCE SHEET
AS OF MAY 13, 1998
<TABLE>
<CAPTION>
MAY 13, '98
--------------
<S> <C>
ASSETS
Current Assets
Checking/Savings
1002 - Frost National Bank.................................................................. 31,340.67
--------------
Total Checking/Savings........................................................................ 31,340.67
Accounts Receivable
1024 - A/R - Chuck Morse.................................................................... 1,165.79
1026 - A/R - Larry Lancaster................................................................ 440.23
--------------
Total Accounts Receivable..................................................................... 1,606.02
Other Current Assets
1010 - Note Receivable...................................................................... 250,000.00
1030 - Deferred Tax Credit.................................................................. 51,611.53
--------------
Total Other Current Assets.................................................................... 301,611.53
--------------
Total Current Assets............................................................................ 334,558.22
Fixed Assets
1040 - Buildings.............................................................................. 81,379.42
1041 - Vehicles............................................................................... 34,777.97
1043 - Improvements Building.................................................................. 1,884.13
1048 - Plant Facilities....................................................................... 37,503.68
1050 - Office Equipment....................................................................... 3,058.44
1056 - Office Furniture....................................................................... 2,959.77
1057 - Fence & Gate........................................................................... 12,075.00
1059 - Land................................................................................... 183,287.67
1060 - Less Accumulated Depreciation.......................................................... (8,991.54)
--------------
Total Fixed Assets.............................................................................. 347,892.44
Other Assets
1066 - Intangible Asset....................................................................... 580,000.00
1078 - Amort. of proprietary process.......................................................... (20,900.79)
1080 - Organization Costs..................................................................... 31,046.00
1082 - Amort orgaztl costs.................................................................... (8,433.00)
1086 - Security Deposit....................................................................... 842.50
--------------
Total Other Assets.............................................................................. 549,194.71
--------------
TOTAL ASSETS...................................................................................... 1,231,645.37
--------------
--------------
</TABLE>
F-11
<PAGE>
OVERLAND MANAGEMENT, INC.
BALANCE SHEET (CONTINUED)
AS OF MAY 13, 1998
<TABLE>
<CAPTION>
MAY 13, '98
--------------
LIABILITIES & EQUITY
<S> <C>
Liabilities
Current Liabilities
Accounts Payable
2000 - Accounts Payable................................................................... 30,051.88
--------------
Total Accounts Payable...................................................................... 30,051.88
Other Current Liabilities
2004 - Loan Pyable - Charles Lindquist.................................................... 70,475.66
2006 - Loan Pyable - Chuck Morse.......................................................... 10,254.10
2007 - Short Term Debt Vehicle............................................................ 5,879.13
2009 - Short Term Debt-Land............................................................... 100,438.87
2011 - Accrued Property Taxes............................................................. 309.45
2015 - Accrued Interest payable........................................................... 33,880.00
2100 - Payroll Tax Liability FUTA......................................................... 10.00
2103 - Payroll Tax Liability FICA & FIT................................................... 1,582.00
2110 - Accrued Officers Comp.............................................................. 21,000.00
--------------
Total Other Current Liabilities............................................................. 338,635.20
--------------
Total Current Liabilities..................................................................... 308,687.08
Long Term Liabilities
2040 - Long-Term Debt - Promissory N/P...................................................... 295,000.00
2060 - Long-Term Debt-Formula............................................................... 495,000.00
2065 - Long-Term Debt-Vehicles.............................................................. 19,250.00
--------------
Total Long Term Liabilities................................................................... 809,250.02
--------------
Total Liabilities............................................................................. 1,177,937.10
Equity
3000 - Common Stock......................................................................... 37,500.00
3010 - Additional Paid in Capital........................................................... 308,581.01
3300 - Retained Earnings.................................................................... (145,915.71)
Net Income.................................................................................. (144,461.02)
--------------
Total Equity.................................................................................. 53,708.27
--------------
TOTAL LIABILITIES & EQUITY........................................................................ 1,231,846.37
--------------
--------------
</TABLE>
F-12
<PAGE>
EXHIBIT "B"
CERTIFICATE AND ARTICLES OF INCORPORATION
<PAGE>
[LOGO]
The State of Texas
Secretary of State
CERTIFICATE OF INCORPORATION
OF
OVERLAND MANAGEMENT, INC.
CHARTER NUMBER 01422224
THE UNDERSIGNED, AS SECRETARY OF STATE OF THE STATE OF TEXAS, HEREBY
CERTIFIES THAT THE ATTACHED ARTICLES OF INCORPORATION FOR THE ABOVE NAMED
CORPORATION HAVE BEEN RECEIVED IN THIS OFFICE AND ARE FOUND TO CONFORM TO LAW.
ACCORDINGLY, THE UNDERSIGNED, AS SECRETARY OF STATE, AND BY VIRTUE OF THE
AUTHORITY VESTED IN THE SECRETARY BY LAW, HEREBY ISSUES THIS CERTIFICATE OF
INCORPORATION.
ISSUANCE OF THIS CERTIFICATE OF INCORPORATION DOES NOT AUTHORIZE THE USE OF
A CORPORATE NAME IN THIS STATE IN VIOLATION OF THE RIGHTS OF ANOTHER UNDER THE
FEDERAL TRADEMARK ACT OF 1946, THE TEXAS TRADEMARK LAW, THE ASSUMED BUSINESS OR
PROFESSIONAL NAME ACT OR THE COMMON LAW.
DATED NOV. 20, 1996
EFFECTIVE NOV. 20, 1996
/s/ Antonio O. Garza, Jr.
-------------------------------------------------------
[SEAL] Antonio O. Garza, Jr., Secretary of State
<PAGE>
[LOGO]
The State of Texas
SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
OF
OVERLAND MANAGEMENT, INC.
The undersigned, as Secretary of State of Texas, hereby certifies that the
attached Articles of Amendment for the above named entity have been received in
this office and are found to conform to law.
ACCORDINGLY the undersigned, as Secretary of State, and by virtue of the
authority vested in the Secretary by law, hereby issues this Certificate of
Amendment.
Dated: June 11, 1997
Effective: June 11, 1997
/s/ Antonio O. Garza, Jr.
----------------------------------------
Antonio O. Garza, Jr.
<PAGE>
[STAMP]
======================================================================
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
======================================================================
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation:
ARTICLE ONE
The name of the corporation is OVERLAND MANAGEMENT, INC.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by the
shareholders of the corporation on the 10th day of June, 1997.
The amendment alters Article Four of the Articles of Incorporation, and the
full text of each provision added is as follows:
"Article Four
"The aggregate number of shares which the Corporation shall have authority
to issue is Fifty Million (50,000,000). The shares shall have a par value of
one tenth of one cent ($.001)."
ARTICLE THREE
The number of shares of the corporation outstanding at the time of such
adoption was One Million (1,000,000).
The number of such shares entitled to vote thereon was One Million
(1,000,000).
----------------------------------------------------------------------
ARTICLES OF AMENDMENT, PAGE 1
<PAGE>
ARTICLE FOUR
This number of shares voting for such amendment was One Million
(1,000,000). The number of shares voting against such amendment was Zero (0).
ARTICLE FIVE
The present holder of one (1) share of no par value stock may exchange the
share for one (1) share of stock with a par value of one tenth of one cent
($.001).
ARTICLE SIX
The amendment does not effect a change in the amount of stated capital.
Dated this 11th day of June, 1997.
by /s/ Marilyn S. Hershman
------------------------------
Marilyn S. Hershman
Acting Assistant Secretary
----------------------------------------------------------------------
ARTICLES OF AMENDMENT, PAGE 2
<PAGE>
EXHIBIT "C"
ORIGINAL OFFERING DOCUMENTS
<PAGE>
OVERLAND MANAGEMENT, INC.
(A Texas Corporation)
D.b.a. OMI
2,000,000 SHARES
OFFERING PRICE - $0.10 PER SHARE
Prior to this offering there has been no public market for the Shares of
Overland Management, Inc. d.b.a. OMI (the "Company"). There can be no assurance
that any trading market in these securities will develop hereafter, or that such
market, if developed, will continue. The public offering price has been
arbitrarily determined and bears no relationship to the assets or book value of
the Company or any other recognized criteria of value.
THE SHARES MAY BE OFFERED AND SOLD ONLY IN THE STATES OF NEW YORK OR TEXAS AND
MAY ONLY BE TRADED IN SUCH STATES AT THIS TIME. PURCHASERS OF SUCH SECURITIES
EITHER IN THIS OFFERING OR IN ANY SUBSEQUENT TRADING MARKET WHICH MAY DEVELOP
MUST BE RESIDENTS OF THE STATES OF NEW YORK OR TEXAS. THE COMPANY WILL AMEND
THIS OFFERING DOCUMENT FOR THE PURPOSE OF DISCLOSING ADDITIONAL STATES, IF ANY,
IN WHICH THE COMPANY'S SECURITIES MAY BE OFFERED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS OFFERING DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE, INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE DILUTION, AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE "HIGH RISK FACTORS" FOR SPECIAL
RISKS CONCERNING THE COMPANY AND "DILUTION" FOR INFORMATION CONCERNING DILUTION
OF THE BOOK VALUE OF THE INVESTORS' SHARES FROM THE PUBLIC OFFERING PRICE.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
Price to Public Proceeds to Company (1)
-------------------------------------------------------------------------
<S> <C> <C>
Price Per Unit $0.10 $0.10
-------------------------------------------------------------------------
Minimum (20,000 Shares) 2,000.00 $2,000.00
-------------------------------------------------------------------------
Maximum 200,000.00 $200,000.00
-------------------------------------------------------------------------
</TABLE>
OMI
Overland Management, Inc.
One Castle Hills, Building
1100 NW Loop 410, Suite 700
San Antonio, Texas 78213
(210) 366-8854
<PAGE>
July 14, 1997
The Company has agreed to offer the Shares on a "best efforts, all or none"
basis with respect to the first 20,000 Shares, and a "best efforts" basis with
respect to the remaining 1,980,000 Shares. Pending the sale of at least 20,000
Shares, all proceeds of the offering will be held in a segregated account.
Unless at least 20,000 Shares are sold within 90 days of the date of the
Offering Document, or 150 days if extended at the sole discretion by the
company, this offering will terminate and all funds will be promptly returned to
subscriptions without interest thereon or deduction therefrom (see "Subscription
Offer'). Closing of the offering could take place as late as two weeks after the
maximum 150 day offering period. Once subscriptions for 20,000 Shares ($2,000)
have been deposited, there will be an initial closing after which the offering
will continue for the remaining 1 ,980,000 Shares on a "best efforts" basis
subject to subsequent closings. There can be no assurance that any or all of the
Shares being offered will be sold.
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN EXEMPTION CONTAINED IN
REGULATION D, RULE 504 PROMULGATED PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED.
PAYMENT FOR THE SHARES SHOULD BE MADE BY CHECK OR MONEY ORDER PAYABLE TO
"Overland Management, Inc."
----------------------------------------------------------------------
(See Footnotes from cover page)
(1) The proceeds to the Company set forth in the table on the cover page of the
Offering Document have been computed before deduction of expenses that will
be incurred in connection with this offering, including filing, printing,
legal, accounting, transfer agent and other fees estimated at $385. The net
proceeds to the Company, after deducting all expenses in connection with
the offering, are estimated to be $1,615 if the minimum offering is sold
and $199,615 if the maximum offering is sold.
----------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS DOCUMENT, AND
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY.
----------------------------------------------------------------------
<PAGE>
THE SHARES ARE OFFERED BY THE COMPANY, SUBJECT TO PRIOR SALE, ACCEPTANCE OF AN
OFFER TO PURCHASE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFERING
WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION TO REJECT
ANY SUBSCRIPTION, IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE SHARES
OFFERED HEREBY.
THE COMPANY INTENDS TO RECOMMEND PURCHASE OF THE SHARES OFFERED HEREBY TO
FRIENDS OF THE COMPANY.
The Company intends to furnish its stockholders with annual reports containing
financial statements as soon as practicable after the end of each fiscal year.
In addition, the Company may from time to time, issue unaudited interim reports
and financial statements.
This offering involves: (a) high risks (see "High Risk Factors"); and (b)
immediate substantial dilution in that the net tangible book value of the Common
Stock upon completion of this offering will be substantially less than the
public offering price (see "Dilution").
NOTICE TO NEW YORK RESIDENTS
THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN FILED WITH OR
REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW YORK PRIOR TO ITS ISSUANCE
AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATIONS TO THE CONTRARY ARE
UNLAWFUL.
NOTICE TO TEXAS RESIDENTS
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
Section 5.1 WITH THE TEXAS SECURITIES BOARD, PURSUANT TO AN EXEMPTION OF THE ACT
Section 109.13 LIMITED OFFERING EXEMPTIONS.
<PAGE>
OFFERING SUMMARY
The following is a summary of certain information contained in this offering and
is qualified in its entirety by the more detailed information appearing
elsewhere in the Offering Document.
THE COMPANY
Overland Management, Inc. ("OMI") is a start-up venture with its corporate
office at 1100 N.W. Loop 410, San Antonio, Texas 78213. OMI is in the process of
building a manufacturing plant at its newly acquired 95-acre facility near San
Antonio. This facility, using state-of-the-art technology, will be used for the
production of the proprietary product known as Poly-Si.
The Company acquired all rights, title and interest to Poly-Si and it related
products from Corlan Environmental, Inc. ("CEI"). The Company's primary focus is
to manufacture and distribute its products throughout the world market. CEl is
the exclusive marketing agent for OMI. OMI believes that it will benefit from
the marketing experience that CEI has already achieved throughout the
marketplace and feels that CEI has a proven market position in industries
related to enhanced oil and gas production, hydrocarbon decontamination,
agriculture and biodegradable surfactants.
THE OFFERING
Securities Offered. . . . . . . A minimum of 20,000 Shares and a maximum of
2,000,000 Shares at a price of $0.10 per
Share.
Common Stock Outstanding. . . . 31,000,000 Shares currently and 33,000,000
Shares upon completion of the offering
(31,020,000 if only the minimum number of
Shares are sold).
Net proceeds to the Company from the offering:
If the minimum . . . . . . $1,615
If the maximum . . . . . . $199,615
Use of Proceeds . . . . . . . . Upon successful completion of this offering
the Company intends to initiate development
of its marketing and communications plan, and
continue its' market research programs. The
company will also continue its attempts to
secure the $2,868,550 in capital funding
needed to commence full operations.
<PAGE>
USE OF PROCEEDS
<TABLE>
<CAPTION>
MINIMUM NET PROCEEDS MAXIMUM NET PROCEEDS
<S> <C> <C>
Professional Services $0.00 $ 5,000.00
Lab Equipment & Research $0.00 $ 25,000.00
Property Development for Plant $0.00 $100,000.00
Marketing Materials & Packaging $0.00 $ 20,000.00
Working Capital $1,615.00 $ 49,615.00
--------- -----------
Total $1,615.00 $199,615.00
</TABLE>
THE KEYS TO SUCCESS IN OMI'S BUSINESS
Proper capitalization.
Proven markets that have used the product and re-ordered.
A management team experienced in manufacturing, marketing and start-up
operations.
OMI desires to raise the necessary capital to develop its newly acquired land,
initiate and complete the construction of its planned manufacturing plant, build
and equip a laboratory and purchase certain raw materials in order to produce
Poly-Si.
CEI will expand its existing markets that include enhanced oil and gas
production, soil remediation, agriculture and biodegradable surfactants
The OMI management team has experience in start-up operations, construction,
manufacturing and marketing. (See "DIRECTORS AND EXECUTIVE OFFICERS")
THE COMPANY
OMI was incorporated in Texas on November 20, 1996. The Company was organized
for the purpose of acquiring, developing and managing a recreational ranch in
San Antonio, Texas. In February 1997, a product known as Poly-Si was introduced
to the principals of OMI. This opportunity caused OMI to alter its plans and
negotiate with CEI for the exclusive rights to the Poly-Si formula, process and
product names. Through this acquisition, OMI has become dedicated to developing
and producing the Poly-Si product. However, there are no assurances that OMI
will be able to build its manufacturing plant or develop any of its Poly-Si
products.
The Company intends to generate enough profit to finance continued growth and
development in quality products. The Company also will maintain a friendly, fair
and creative work environment, which respects diversity, new ideas, and hard
work.
During the next full year, the Company intends to develop additional products
using Poly-Si and create a world market (already initiated in China, Russia,
Australia and other nations in the Far
<PAGE>
East) resulting in annual revenues of over five million dollars. However, here
are no assurances that these goals will be reached.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of the date
of this Offering Document and as adjusted to reflect the sale of the Shares
offered hereby.
<TABLE>
<CAPTION>
To Be Outstanding
-----------------
Presently Outstanding Minimum Maximum
- --------------------- ------- -------
<S> <C> <C>
31,000,000 31,020,000 33,000,000
</TABLE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the date of this Document, and as
adjusted to reflect the sale of the minimum and maximum offering, by (i) each
person who is known by the company to own beneficially more than 5% of the
Company's outstanding Common Stock; and (ii) each of the Company's officers and
directors.
PERCENTAGE OF OUTSTANDING
SHARES OWNED BY OFFICERS & DIRECTORS
OWNING MORE THAN 5% OF THE COMPANY
----------------------------------
<TABLE>
<CAPTION>
AMOUNT &
NATURE OF AFTER AFTER
NAME AND ADDRESS BENEFICIAL BEFORE MINIMUM MAXIMUM
OF BENEFICIAL OWNER OWNERSHIP OFFERING OFFERING OFFERING
- ------------------- ---------- -------- -------- --------
<S> <C> <C> <C> <C>
Charles W. Lindquist 14,750,000 47.58% 47.54% 44.69%
Larry Lancaster 14,750,000 47.58% 47.54% 44.69%
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors shall consist of three to seven members. Currently, the
Board consists of Charles Lindquist, Glenn Doggett and Larry Lancaster.
The directors and executive officers of the Company are as follows:
Name Age Position
---- --- --------
Charles W. Lindquist 64 President and Chairman of the Board of
Directors
Glenn Doggett 72 Director and Vice President,
Larry Lancaster 46 Director, Secretary and Vice President
<PAGE>
EXHIBIT "D"
AUDITORS AND COUNSEL
<PAGE>
AUDITORS AND COUNSEL
The independent accountants engaged to report on the Issuer's financial
statements as of March 31, 1998 is:
Robert J. Williams
Certified Public Accountant
P.O. Box 34058
San Antonio, Texas 78265
(210) 366-8733
The Issuer's General Counsel is: Heler Harowitz & Feit
292 Madison Ave
New York, NY 10014
c/o Louis Brillman
212 685 7600
(Fax) 212 696 9459
<PAGE>
EXHIBIT "E"
DESCRIPTION OF PRODUCTS AND SERVICES
<PAGE>
PRODUCT and SERVICES
3.1 PRODUCT DESCRIPTION
A recent chemical discovery, Poly-Si is a complex of silicon and hydrogen. The
many useful properties of this chemical composition give it wide commercial use
with exciting results. Though completely inorganic1, Poly-Si exhibits properties
associated with organic "wetting agents" and "surfactants"2. These are important
properties in steam and high-pressure cleaning applications. Poly-Si contains an
abundance of free hydrogen (as characterized by the extremely high pH), a
property which makes Poly-Si an oxygen scavenger, or "oxygen insufficient". When
Poly-Si steals oxygen from other materials, it can produce dramatic results in
applications such as in the removal of scale and corrosion. Poly-Si is a
non-flammable3, non-toxic4 inorganic material incorporating no known
carcinogens5. It is stable, with an indefinite shelf life- a property that is
rare in other silicon-based materials.
Poly-Si is not a mixture of different base materials, but the product of an
exothermic reaction between NaOH (Sodium Hydroxide) and Silicon6, in a
combination of unique proportions and process that in turn yields various unique
properties. This product is similar to sodium silicate and other related
silicates, yet very different. The pH of Poly-Si is 13.5 to 14 yet the product,
in most instances, will exhibit the properties of a material with approximately
10 pH7. The product also exhibits amphoteric8 properties that allow it to be
used as a medium for electro-deposition (metal plating).
The Company believes the material to be a tetrahedral (4 sided) polymer9, acting
as a complex of silicon and hydrogen. From a "pure material data" standpoint,
the product is described as a water soluble, very stable intermediate chemical
that is oxygen insufficient and rich in free hydrogen radicals with a specific
gravity of 1.3. It is, in the unbuffered or undenatured state, colorless and
odorless10. It is stable with an indefinite11 shelf life. The indefinite shelf
life is a property that is difficult to find in other high - pH silicon-based
materials. Because Poly-Si is water soluble, it is considered environmentally
safe and biodegradable12. Poly-Si is a nonflammable, non-toxic inorganic
material with no known carcinogens.
Future research and development will show us how Poly-Si may be exploited to its
fullest extent. Since this new chemical is unique, Poly-Si may lend itself to
yet-to-be tested uses such as: fire fighting agents, hydraulic fluid
replacement, bonding agents, plastics, fireproof foams, etc.
Poly-Si is a trade secret, and thus not patented. Since the real secret is in
thc formula as well as the process of manufacture, and not the ingredients,
filing patents would only disclose to the competition the manufacturing process.
Therefore, the manufacture of Poly-Si will be performed under tight security,
and remain a closely-held trade secret between OMI and the inventor.
3.2 PRODUCT BACKGROUND
In 1993, Corlan Environmental, Inc. became very interested in a product similar
to Poly-Si. This product had some amazing properties, yet had no stability.
Every time the product was used it would yield different results. The principal
stock holder of Corlan set out to find a better product. After many experiments
with different formulas and different processes, a new stable material called
Poly-Si was developed. A pilot production of 200 fifty-five gallon drums was
done at leased facilities, and the market testing began. After nearly two years,
Corlan has accumulated a following of loyal customers who have paid up to
$1,400.00 per fifty-five gallon drum, and have re-ordered Poly-Si consistently.
(reference paid invoices for customers noted below)
<PAGE>
3.3 SALES LITERATURE
See Exhibits
3.4 TECHNOLOGY
The Company believes that several characteristics, combined in Poly-Si, will
generate a worldwide range of demand for Poly-Si. In continuing research, the
company has identified six (6) unique properties that Poly-Si brings to the
marketplace.
1. "Water-Wetting Agent" Within the description of a water-wetting agent or
surfactant, and at temperatures near the 100 degree centigrade range, the
diluted material will liberate many free hydrogen radicals that makes it a
great additive for use in the multitude of steam cleaning applications. The
water-wetting and steam use properties of this material make the chemical
Poly-Si identifiably different and unique as a surfactant. The fact that
Poly-Si is oxygen insufficient may explain why there are so many dramatic
results from this chemical's use for removal of scale and corrosion.
2. "Oil-Wetting Agent" While it is a strong water-wetting agent, it will also
wet the substrate of an oil formation and will wet the interface where
water, oil, and sand meet, which will reduce the interstitial surface
tensions between oil and water. This property is what makes the product
useful in applications as diverse as separating coal fines from clays in
coal slurry ponds, to slop oil and tank-bottom sludge recovery and cleanup,
and, in a related area, the reclamation and cleaning of oil-based drilling
mud.
3. "Shelf Life" From a "pure material" data standpoint, the material is
described as a water soluble, very stable intermediate chemical that is
oxygen insufficient and rich in free radicals, with a specific gravity of
1.3. It is, in its virgin or concentrated state, colorless and odorless. It
is stable, with an indefinite shelf life, a property that is almost
non-existent in other silicon based materials.
4. "Safe" Because the product is water soluble, it is considered
bio-degradable. In the aspect of bio-degradability, it retains its
efficiency in dilutions of approximately four thousand (4,000) parts water
to one part of the product. Poly-Si is a nonflammable, non-toxic inorganic
material with no known carcinogens.
5. "Oxygen Insufficient" Poly-Si has a unique characteristic in that it is
oxygen insufficient, which therefore enables it to consume oxygen molecules
from various materials. This unique characteristic has been utilized in
applications as diverse as fire fighting, corrosion control,
electroplating, insulation products, and hydraulic-fluid replacement.
6. "Electrolyte" The amphoteric nature of the material allows for the hydrogen
end of the bond to facilitate transmission of electric current. The
material therefore cant be used as an electrolyte for the deposition of
metals, as used in superior electro-deposition of various metals to
metallic surfaces. This "electrolyte" property alone separates this
chemical from all other general groups of silicon-based materials.
<PAGE>
3.5 PRODUCT ATTRIBUTES
The Company has compiled the following information for use in its "Material
Safety Data Sheet" (MSDS):
Trade Name: Poly-Si Solution
HAZARDOUS INGREDIENTS. Material is a stable oxygen insufficient silicon polymer,
inorganic, biodegradable in water. A non-toxic base with no known carcinogenic
properties. Non-flammable, pH is 13.8 and stable to +350 Deg. F. and -25 Deg. F.
PHYSICAL DATA: Specific Gravity. 1.3; Solubility in water: Complete; Melting
Point: NA; Appearance: Clear to translucent; Odor: Odorless; Liquid Boiling
Point: 225 Deg F.; Vapor Pressure (mm hg): ND.; Vapor Density: (air=1): ND.
FIRE & EXPLOSION HAZARD DATA: Material is non-flammable can be used directly as
a fire suppressant. Unusual fire & explosion hazard: None.
HEALTH HAZARD DATA: Material is described as type D: non-toxic base. Topical
exposure indicates no risk to the skin or clothing. Indigestion: Base material
may react with stomach acid causing discomfort. If swallowed, dilute with
quantities of water, call physician for additional medical advice. Eye Contact:
Flush eye with running water for 15 minutes. If irritation occurs, obtain
medical advice.
SPILL OR LEAK PROCEDURE: Spills can be handled routinely. Material is
water-soluble and will disperse with washing with water.
SPECIAL PROTECTION INFORMATION: Material requires no special care in handling.
However, standard safety measures should be used as a precaution. Regular cotton
or leather gloves may be worn; however, rubber or chemical resistant apparel is
recommended. Regular eye protection is suitable. No respiratory equipment is
necessary, as no fumes or gases are present.
REGULATORY INFORMATION: DOT proper labeling and shipping name: Orthosilicate13.
This material has not been listed as a suspect agent for cancer.
MARKET ANALYSIS
4.1 PROVEN MARKETABILITY
POLY-SI INDUSTRY USES INCLUDE:
OIL & GAS INDUSTRY. Enhances oil recovery; is an injection well cleaner;
effective paraffin treatment; drilling mud additive; frac fluid; flow line
treatment. (reference; Great Plains Petroleum, Glenn Doggett, WRT Energy
Corporation; Don Hillin, Oil Well Technologies & Enhancements Corporation,
Flat Creek Operating Company, Clay Garrison Investments)
HYDROCARBON CONTAMINATION REMEDIATION. Effective in oil spill remediation;
storage tank cleaner; used oil filter cleaner. (reference; Organic
Technology, Synergistic Environmental Systems)
<PAGE>
AGRICULTURE. Increases microbial plate counts; breaks down oxide-bound
minerals; increases water retention; breaks down clay and gumbo soils; increases
organic activity. (reference; Organic Technology)
BIODEGRADABLE SURFACTANT. Environmentally safe radiator cleaner; steam or
high-pressure cleaning additive; soap and detergent additive; mineral and
metal mining; commercial cleaner. (reference; Glenn Doggett, Steamatic
Carpet Cleaning.)
The Company estimates that the potential market for oil recovery and enhanced
production applications is in excess of $10,000,000 per year within 3 years. The
total agricultural application we estimate at the same level, and the cleaning
and solvent market in excess of $20,000,000 per year within the next 5 years.
The major market for the Company's oilfield applications is the independent oil
producers and "stripper well" operators. The Company has developed a strategy
whereby OMI and the independent oil producer will split the increase in
production created by OMI's Poly-Si products, therefore creating additional
profit to the company.
4.2 TOTAL MARKETS FOR POLY-SI
The Company believes that Poly-Si will be successful in the following markets.
An asterisk indicates a proven use.
1. Oil recovery from bitumen and tar sands*
2. Hydrocarbon contaminated soil cleaner*
3. Oil and oil storage tank cleaner*
4. Environmentally safe radiator cleaner*
5. Used oil filter cleaner*
6. Steam or high pressure cleaning additive*
7. Used motor oil cleaner*
8. Soap/detergent additive
9. Coal slurry pond cleaner
10. Production enhancement of oil & gas wells*
11. Injection well cleaner*
12. Oil well paraffin cleaner*
13. Drilling mud cleaner*
14. Placer metal mining process
15. Household cleaner*
16. Parts washing cabinet "solvent" replacement
4.3 COMPETITION
The Company believes that there is no known product comparable to Poly-Si; with
its long shelf life. While there are other products on the market, such as acids
used in the oil industry, organic surfactants and microbial accelerators,
Poly-Si however performs much better than the competitors' products, and in
addition has a superior shelf life.
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