U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
------------
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the period ended June 30, 1999.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
Act of 1934 for the transition period from ___ to ____.
Commission file number: 000-23319
AVANI INTERNATIONAL GROUP INC.
--------------------------------
(Name of Small Business Issuer in its charter)
Nevada 88-0367866
- ----------- ------------
(State of (I.R.S. Employer
Incorporation) I.D. Number)
#328-17 Fawcett Road, Coquitlam, B.C. (Canada) V3K6V2
---------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number 604-525-2386.
-------------
Securities registered under Section 12 (b) of the Act:
Title of each class Name of exchange on which
to be registered each class is to be registered
None None
Securities registered under Section 12(g) of the Act:
Common Stock
--------------
(Title of Class)
Check whether issuer (1) filed all reports to be filed by Section 13 or 15(d)
of the Exchange Act during the past 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
(1). Yes: X No:
(2). Yes: X No:
The number of shares issued and outstanding of issuer's common stock, $.001 par
value, as of June 30, 1999 was 15,108,257.
Transitional Small Business Issuer Format (Check One):
Yes: No: X
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements. Page No.
Consolidated Condensed Balance Sheet as of
June 30,1999 (unaudited) and December 31, 1998
(audited). 3
Consolidated Condensed Statement of Operations
for the Three Months and Six Months ended
June 30, 1999 and 1998 (unaudited). 4
Consolidated Condensed Statement of Stockholders
Equity for the Six Months Ended June 30, 1999 and 1998
(unaudited). 5
Consolidated Condensed Statement of Cash Flows for the
Six Months Ended June 30, 1999 and 1998 (unaudited). 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition. 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. 10
Item 2. Change in Securities. 11
Item 3. Defaults Upon Senior securities. 11
Item 4. Submission Of Matters To A Vote of Securityholders. 11
Item 5. Other Information. 11
Item 6. Exhibits and Reports on Form 8-K. 11
Signatures 11
-2-
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AVANI INTERNATIONAL GROUP INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
June 30, December 31,
1999 1998
----------- ------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 843,176 $ 103,428
Accounts receivable 108,739 79,397
Goods and services tax receivable 15,976 44,280
Inventory 86,235 33,123
Prepaid expenses 23,907 38,650
------------ ------------
TOTAL CURRENT ASSETS 1,078,033 298,878
------------ ------------
PROPERTY, PLANT AND EQUIPMENT - NET 1,657,383 1,647,871
------------ ------------
OTHER ASSETS
Security deposits 10,567 10,217
Trademarks and licenses 18,596 18,031
------------ ------------
29,163 28,248
------------ ------------
TOTAL ASSETS $ 2,764,579 $1,974,997
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 7,152 $ 6,869
Accounts payable and accruals 204,714 77,446
Wages and benefits payable 6,285 14,453
Unearned income 14,417 16,127
Bottle and cooler deposits 94,178 85,901
----------- ------------
TOTAL CURRENT LIABILITIES 326,746 200,796
LONG-TERM DEBT - NET OF CURRENT PORTION 485,942 408,361
------------ ------------
TOTAL LIABILITIES 812,688 609,157
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS EQUITY
COMMON STOCK, $.001 par value,
25,000,00 shares authorized;
15,108,257 and 11,608,257 shares
issued and outstanding 15,108 11,608
COMMON STOCK DISCOUNT (55,000) (55,000)
ADDITIONAL PAID-IN CAPITAL 5,461,932 4,765,432
COMMON STOCK SUBSCRIBED 100,000 -
ACCUMULATED DEFICIT (3,400,030) (3,140,336)
ACCUMULATED OTHER COMPREHENSIVE LOSS (170,119) (215,864)
------------ ------------
TOTAL STOCKHOLDERS EQUITY 1,951,891 1,365,840
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY $2,764,579 $1,974,997
============ =============
The accompanying notes are an integral part of these consolidated financial
statements.
- 3 -
AVANI INTERNATIONAL GROUP INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
REVENUE
Bottled water and
supply sales $ 113,214 $ 119,023 $ 279,618 $223,024
Cooler and equipment sales 679 2,673 2,111 9,267
Cooler rentals 3,891 8,975 14,553 19,321
------------ ------------ ----------- -----------
117,784 130,671 296,282 251,612
------------ ------------ ----------- -----------
COST OF GOODS SOLD
Cost of goods sold
(excluding depreciation) 68,056 65,331 152,925 150,760
Depreciation 22,070 22,610 43,605 43,820
------------- ------------ ----------- -----------
90,126 87,941 196,530 194,580
------------- ------------ ----------- -----------
GROSS PROFIT 27,658 42,730 99,752 57,032
------------- ------------ ----------- -----------
OPERATING EXPENSES
General and administrative 175,280 231,559 315,872 485,316
Marketing 9,314 129,898 25,692 299,097
------------- ------------ ----------- -----------
184,594 361,457 341,564 784,413
------------- ------------ ----------- -----------
LOSS FROM OPERATIONS (156,936) (318,727) (241,812) (727,381)
------------- ------------ ----------- -----------
OTHER INCOME (EXPENSE)
Other 835 1,393 1,446 2,790
Interest income - 7,740 - 9,527
Interest expense (11,001) (8,542) (19,328) (19,467)
------------- ------------ ---------- -----------
(10,166) 591 (17,882) (7,150)
------------- ------------ --------- -----------
NET LOSS $ (167,102) $ (318,136) $(259,694) $(734,531)
============= ============ =========== ============
BASIC AND DILUTED LOSS
PER COMMON SHARE $ (0.01) $ (0.03) $ (0.02) $ (0.07)
============= ============ =========== ============
WEIGHTED AVERAGE NUMBER
OF SHARES 12,191,590 11,576,637 11,899,924 11,036,785
============= ============ ============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
- 4 -
AVANI INTERNATIONAL GROUP INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS DEFICIT
SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
Accumulated
Common Stock Common Additional Common Accu- Other
------------------- Stock Paid-In Stock mulated Comprehen-
Shares Amount Discount Capital Subscribed Deficit sive Loss
----------- -------- -------- --------- ---------- ------- ------------
BALANCE,
DECEMBER 31,
1998
(Audited)
11,608,257 $11,608 $(55,000) $4,765,432 $ - $(3,140,336)$(215,864)
ISSUANCE OF COMMON
STOCK 3,500,000 3,500 - 696,500 - - -
COMMON STOCK
SUBSCRIBED - - - - 100,000 - -
NET LOSS - - - - - (259,694) -
OTHER COMPREHENSIVE
INCOME - - - - - - 45,745
BALANCE,
JUNE 30,
1999 15,108,257 $15,108 $(55,000) $5,461,932 $100,000 $(3,400,030)$(170,119)
========== ======= ========= ========== ======== ============ =========
The accompanying notes are an integral part of these consolidated financial
statements.
- 5 -
AVANI INTERNATIONAL GROUP INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
1999 1998
----------- -----------
OPERATING ACTIVITIES
Net loss $(259,694) $(734,531)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization 67,609 43,820
Issuance of common stock for professional
fees - 10,000
(Increase) decrease in assets
Accounts receivable (25,558) (1,056)
Inventory 29,018 41,149
Prepaid expenses (50,726) 14,706
Other assets 15,204 (2,398)
Increase (decrease) in liabilities
Accounts payable and accruals 113,831 31,995
Unearned income and deposits 2,322 (10,175)
---------- ------------
Net cash used in operating activities (107,994) (606,490)
INVESTING ACTIVITIES
Acquisition of property, plant and equipment (11,158) (13,632)
Investment in trademarks and patents - (28,000)
---------- -----------
Net cash used in investing activities (11,158) (41,632)
---------- -----------
FINANCING ACTIVITIES
Proceeds from mortgages payable 64,853 -
Payments of mortgages payable (5,282) (44,271)
Issuance of common shares, net of offering
costs 800,000 1,612,400
Purchase of common shares - (400,000)
---------- -----------
Net cash provided by financing activities 859,571 1,168,129
---------- -----------
EFFECT OF EXCHANGE RATES ON CASH (671) (16,632)
---------- -----------
NET INCREASE IN CASH 739,748 503,375
CASH - BEGINNING OF PERIOD 103,428 120,492
---------- -----------
CASH - END OF PERIOD $ 843,176 $ 623,867
========== ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest $ 19,328 $ 19,467
========== ============
Income taxes $ - $ -
========== ============
The accompanying notes are an integral part of these consolidated financial
statements.
- 6 -
AVANI INTERNATIONAL GROUP INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
NOTE 1 - INTERIM PERIODS
The unaudited information has been prepared on the same basis as the annual
financial statements and, in the opinion of the Company's management,
reflects normal recurring adjustments necessary for a fair presentation of
the information for the periods presented.
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted
accounting principles, have been omitted. These financial statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's Form 10-KSB for the year ended December
31, 1998.
The results of operations for the three month and six month periods ended
June 30, 1999 and 1998 are not necessarily indicative of operating
results for the full year.
NOTE 2 - BASIS OF PRESENTATION
The consolidated condensed financial statements include the accounts of
Avani International Group, Inc. (the 'Company') and its subsidiaries.
All material intercompany balances and intercompany transactions have
been eliminated.
NOTE 3 - COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standards No. 130,
Comprehensive Income for the first quarter of fiscal year 1998.
Comprehensive income is a more inclusive financial reporting methodology
that includes disclosure of certain financial information that
historically has not been recognized in the calculation of net income.
Comprehensive income (loss), representing foreign currency translation
adjustments for the six months ended June 30, 1999 and 1998 was $45,745
and $(34,261).
NOTE 4 - COMMON STOCK
In May 1999, the Company raised $700,000 from a private offering through
the issuance of 3,500,000 shares of common stock. In connection with this
offering, 3,500,000 warrants were issued to purchase common shares at an
exercise price of $.20 on or before July 1, 2000, $.25 on or before
July 1, 2001 and $.30 on or before July 1, 2002. In June, 1999, through
a separate transaction, the Company raised $100,000 from a private offering
through the issuance of 500,000 shares of common stock. In connection with
this offering, 500,000 warrants were issued to purchase common shares at an
exercise price of $0.20 on or before August 12, 2000, $0.25 on or before
August 12, 2001, and $0.30 on or before August 12, 2002.
NOTE 5 - MAJOR CUSTOMER AND SUPPLIER
In each period the Company sold a substantial portion of its products to
one customer. During the six months ended June 30, 1999, sales to an
Australian customer aggregated $57,100 and sales to a Japanese customer
aggregated $32,544, and during the six months ended June 30, 1998, sales
to a Taiwanese customer aggregated $25,560. At June 30, 1999 and 1998,
amounts due from these customers included in trade accounts receivable
were $89,644 and $25,560.
During the six months ended June 30, 1999 and 1998, the Company purchased
approximately 47% and 41% of its materials from one supplier. At June
30, 1999 and 1998 amounts due to those suppliers were $0 and $2,205. If
the supplier ceased doing business with the Company, management believes
that other sources of materials are available.
- 7 -
AVANI INTERNATIONAL GROUP INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS JUNE 30, 1999 AND 1998
NOTE 1 - INTERIM PERIODS
The unaudited information has been prepared on the same basis as the annual
financial statements and, in the opinion of the Company's management,
reflects normal recurring adjustments necessary for a fair presentation of
the information for the periods presented. Certain information and footnote
disclosures, normally included in financial statements prepared in accordance
with generally accepted accounting principles, have been omitted. These
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Form 10-KSB for the year ended
December 31, 1998.
The results of operations for the three month and six month periods ended
June 30, 1999 and 1998 are not necessarily indicative of operating results
for the full year.
NOTE 2 - BASIS OF PRESENTATION
The consolidated condensed financial statements include the accounts of Avani
International Group, Inc. (the 'Company') and its subsidiaries. All material
intercompany balances and intercompany transactions have been eliminated.
NOTE 3 - COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standards No. 130,
Comprehensive Income for the first quarter of fiscal year 1998.
Comprehensive income is a more inclusive financial reporting methodology that
includes disclosure of certain financial information that historically
has not been recognized in the calculation of net income. Comprehensive income
(loss), representing foreign currency translation adjustments for the six months
ended June 30, 1999 and 1998 was $45,745 and $(34,261).
NOTE 4 - COMMON STOCK
In May 1999, the Company raised $700,000 from a private offering through the
issuance of 3,500,000 shares of common stock. In connection with this offering,
3,500,000 warrants were issued to purchase common shares at an exercise price
of $.20 on or before July 1, 2000, $.25 on or before July 1, 2001 and $.30
on or before July 1, 2002. In June, 1999, through a separate transaction, the
Company raised $100,000 from a private offering through the issuance of 500,000
shares of common stock. In connection with this offering, 500,000 warrants were
issued to purchase common shares at an exercise price of $0.20 on or before
August 12, 2000, $0.25 on or before August 12, 2001, and $0.30 on or before
August 12, 2002.
NOTE 5 - MAJOR CUSTOMER AND SUPPLIER
In each period the Company sold a substantial portion of its products to one
customer. During the six months ended June 30, 1999, sales to an Australian
customer aggregated $57,100 and sales to a Japanese customer aggregated
$32,544, and during the six months ended June 30, 1998, sales to a Taiwanese
customer aggregated $25,560. At June 30, 1999 and 1998, amounts due from
these customers included in trade accounts receivable were $89,644 and $25,560.
During the six months ended June 30, 1999 and 1998, the Company purchased
approximately 47% and 41% of its materials from one supplier. At June 30, 1999
and 1998 amounts due to those suppliers were $0 and $2,205. If the supplier
ceased doing business with the Company, management believes that other sources
of materials are available.
- 8 -
Item 2. Management's Discussion and Analysis.
The following discusses the financial results and position of the consolidated
accounts of the Company and its wholly owned subsidiaries for the periods
indicated.
Results of Operations
Revenues for the three and six months periods ended June 30, 1999 were $117,784
and $296,282, respectively, compared with revenues of $130,671 and $251,612 for
the same periods in 1998. The increase of 17.75% for the six month period in
1999 was due to higher pricing of its PET bottles, initiation of sales to
Australian and Japanese distributors, and an increase in local sales of its five
gallon bottles. Revenues for the six month period in 1999 consisted of $279,618
in water and supply sales (an increase of 25.38% from $223,024 for the prior
period), $2,111 in cooler and equipment sales (a decrease of 77.22% from $9,267
for the prior period) and $14,553 in cooler rentals (a decrease of 24.68% from
$19,321 for the prior period). Of the total revenue for the six month period
in 1999, $57,100 (or 20.42% of total water sales) represented sales to an
Australian distributor and $32,544 (or 11.64% of total water sales) represented
sales to a Japanese distributor. Interest income for the period earned on
investment of cash totaled $0 for the six month period in 1999 compared with
$9,527 for the prior period. The decrease is a result of the reduction of
available cash to June 1999.
Cost of sales for the three and six month period in 1999 totaled $90,126 and
$196,530, respectively, compared with $87,941 and $194,580 for the same periods
in 1998. Cost of goods sold for the six month periods as a percentage of sales
decreased by 11% from 77.33% to 66.33% due principally to higher pricing of PET
bottles and a reduction of sample promotions. Cost of sales for the six month
period in 1999 consisted of $152,925 in bottled water, supplies, coolers and
related equipment (an increase of 1.44% from $150,760 for the prior period) and
$43,605 in depreciation (a slight decrease from $43,820 for the prior period).
Gross profit for the three and six month periods in 1999 was $27,658 and
$99,752, respectively, compared with $42,730 and $57,032 for the prior periods.
The decrease for the three month period in 1999 was due to the reduction of
revenue from water sales and cooler sales and rentals together with the sight
increase in cost of goods sold. The increase for the six month period is 1999
was due to the increase in water sales that occurred in the first quarter
partially offset by the reduction in cooler rentals and sales, together with
improved operating efficiencies.
General and administrative expenses which includes administrative salaries and
overhead for the six month period totaled $315,872 which represents a decrease
of 34.9% from $485,316 for the prior period. This decrease is due principally to
cost reduction measures implemented by the Company in late 1998. Marketing
expenses totaled $25,692 for the six month period in 1999 representing a
decrease of 91.4% from $299,097 for the prior period. The decrease in
marketing expenses is due principally to the reduction of advertising and
promotional costs, including one time costs related to the Company's sponsorship
of the Los Angeles Marathon and the Vancouver Marathon. Interest expense in
connection with the Company's real estate totaled $19,328 for the six month
period in 1999 representing a slight decrease from $19,467 for the prior
period. Net loss for the three and six month periods in 1999 fiscal period
was $167,102 and $259,694, respectively, compared with $318,136 and $734,531
for the prior periods.
Year 2000 Compliance
Year 2000 compliance is the ability of computer hardware and software to
respond to problems posed by the fact that computer programs traditionally have
used two digits rather than four digits to define an applicable year. As a
consequence, any of computer programs or equipment using internal programs may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing interruptions of
operations, including temporary inability to send invoices or engage in
normal business activities or to operate equipment such as telephone systems,
facsimile machines and production machinery.
To date, the Company has reviewed its financial accounting software and
system and has determined it is fully Year 2000 compliant. The Company has been
informed by its suppliers of major pieces of office and manufacturing equipment
that such equipment is also Year 2000 compliant. The Company has initiated a
review of its relationships with suppliers and vendors to determine if there
will be an impact to the Company's operations due to a Year 2000 issue. Although
the Company does rely on a sole source supplier, most other items can be
obtained from alternative sources if a preferred supplier or vendor is not able
to meet the Company's needs. Because this review is not yet completed, the
Company has not established a contingency plan for any vendors that may not be
Year 2000 compliant. The Company anticipates that using a contingency plan will
require using alternate vendors which may not be operationally efficient. The
supplier and vendor review is anticipated to be completed by the second half of
1999. Costs to date and future costs of Year 2000 compliance are not significant
or anticipated to be significant.
Liquidity and Capital Resources
Since its inception, the Company has financed its operations principally
through the private placement of its common stock, and to a lesser extent,
through cash flow from operations. During 1998, the Company raised approximately
$1,600,000 net of offering costs from the private placement of its common stock.
In addition during the period, the Company repurchased 400,000 shares of
common stock at $1.00 per share. In the second quarter of 1999, the Company
received $800,000 from the private placement of its common stock. As of
June 30, 1999, the Company has working capital in the amount of $751,287.
the last month of 1998 and continuing to the first quarter of 1999, the
Company has undertaken cost reduction measures in an effort to reduce
operating losses. These measures include personnel reductions and the
elimination of certain promotional charges. However, despite these measures,
the Company is uncertain as to when it will achieve profitable operations.
Property, plant and equipment, net of accumulated depreciation, totaled
$1,657,383 on June 30, 1999. Property, plant and equipment, net of accumulated
depreciation, totaled $1,647,871 on December 31, 1998.
Forward Looking Statements. Certain of the statements contained in this
Quarterly Report on Form 10QSB includes "forward looking statements" within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended
("Exchange Act"). See the Company's Annual Report on Form 10KSB for additional
statements concerning operations and future capital requirements.
Part II OTHER INFORMATION
Item 1. Legal Proceedings.
------------------
None
Item 2. Changes in Securities.
---------------------
None
Item 3. Defaults Upon Senior Securities.
--------------------------------
None
Item 4. Submission Of Matters To A Vote Of Securityholders.
---------------------------------------------------
None
Item 5. Other Information.
------------------
The Company entered into a joint venture agreement dated May 5, 1999 with
Multimega Technologies SDN. BHD, a Malaysian corporation ("Multimega"). The
agreement grants Multimega certain rights to the Company's oxygen enrichment
technology subject to the payment of royalties and net revenue allocations.
The Company entered into a Share Subscription Agreement and Warrant Agreement
with a third party both dated May 12, 1999, pursuant to which the Company
agreed to sell 3,750,000 shares of common stock and 3,750,000 common stock
warrants for the sum of $750,000. The stock purchase warrants are exercisable
at a price per share of $0.20 on or before August 12, 2000, $0.25 on or before
August 12, 2001, and $0.30 on or before August 12, 2002.
The Company received $100,000 pursuant to the agreements. The Company entered
into a Share Subscription Agreement and Warrant Agreement with a third party
both dated May 12, 1999, pursuant to which the Company sold 3,500,000 shares
of common stock and 3,500,000 common stock warrants and received the sum of
$700,000. The stock purchase warrants are exercisable at a price per share
of $0.20 on or before July, 2000, $0.25 on or before July 1, 2001, and $0.30
on or before July 1, 2002.
Item 6. Exhibits.
(a). Furnish the Exhibits required by Item 601 of Regulation SB.
10.(xiii) Joint Venture Agreement dated May 5, 1999 by and between the Avani
International Group, Inc. and Multimega Technologies SDN. BHD.
10.(xiv) Share Subscription Agreement dated and effective May 12, 1999 by and
between Avani International Group, Inc. and Yip, Kam Chong.
10.(xv) Warrant Agreement dated and effective May 12, 1999 by and between
Avani International Group, Inc. and Yip, Kam Chong.
10.(xvi) Share Subscription Agreement dated May 12, 1999 by and between Avani
International Group, Inc. and Ngai Sou Chang.
10.(xvii) Warrant Agreement dated May 12, 1999 by and between Avani
International Group, Inc. and Ngai Sou Chang.
10.(xviii) Finder's Fee Agreement dated June 12, 1999 by and between Avani
International Group, Inc. and Chin Yen Ong.
10.(xix) Warrant Agreement dated June 12, 1999 by and between Avani
International Group, Inc. and Chin Yen Ong.
10.(xx) Finder's Fee Agreement dated August 3, 1999 by and between Avani
International Group, Inc. and Chin Yen Ong.
10.(xxi) Warrant Agreement dated August 12, 1999 by and between Avani
International Group, Inc. and Chin Yen Ong.
Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AVANI INTERNATIONAL GROUP, INC.
Date: August 20, 1999 /s/ Dennis Robinson
------------------------
Dennis Robinson
President and Chief Accounting Officer
- 11 -
EXHIBIT xiii
- -------------
JOINT VENTURE AGREEMENT
THIS AGREEMENT is made and entered into this 5th day of May, 1999.
BETWEEN: MULTIMEGA TECHNOLOGIES SDN. BHD., a company incorporated under the
laws of Malaysia and having its principal place of business at D12,
Tingkat 1., Plaza Tun Razak 50400, Kuala Lumpur, Malaysia
(hereinafter called "MTS")
AND: AVANI INTERNATIONAL GROUP INC., a corporation organized under the laws
of the State of Nevada and having its business office at Suite 328,
17 Fawcett Road, Coquitlam, British Columbia V3K 6V2 Canada
(hereinafter called "AIG")
WHEREAS:
a) AIG has certain exclusive technology which dissolves large amounts of
oxygen in purified water for application in the bottled water
industry;
b) AIG has agreed to grant to MTS the exclusive right and license to
produce and sell AIG's proprietary oxygen enriched water products; and
AIG has agreed to supply the equipment necessary for MTS to establish
a new water bottling production facility in Malaysia, all on the
terms and conditions herein set forth,
NOW THEREFORE in consideration of the mutual terms and conditions contained
herein, the parties do hereby agree as follows:
1. DEFINITIONS
a) "Equipment" means the proprietary equipment referred to in Exhibit "A"
hereto, which Equipment incorporates the Technology; as well as the
filtering and bottling equipment referred to in Exhibit "B" hereto; which
equipment is necessary to complete a full bottling line to produce the
Products;
b) "Names and Marks" means the names, insignias, labels, slogans and other
identification, trade marks, service marks and trade names and/or
applications that have been used by AIG and that may be used from time to
time by AIG in connection with the Technology and the sale and
distribution of the Products, including the name "Avani";
c) "Products" means all oxygen enriched water products developed by AIG to
date, including all of its bottled water products, and includes all
enhancements, derivatives, modifications and replacements thereof, and the
Proprietary Rights associated therewith;
d) "Proprietary Rights" means copyrights, rights in and to trade secrets,
patents, patent applications and patents pending, trademarks and trade
names, proprietary and confidential information and data, and all
equivalent rights throughout the world; and
e) "Technology" means all information, data, processes, know-how and concepts
now owned or which may in the future be developed and owned by AIG
associated with the development, use and manufacture of the Products and
the Proprietary Rights.
All references herein to dollar amounts are to United States dollars, unless
otherwise stated.
2. GRANT OF LICENSE
2.1 Subject to the terms and conditions set forth in this Agreement, AIG
hereby grants to MTS and MTS hereby accepts from AIG the exclusive world
wide rights and licenses (the "Licences") to:
a) to have access to and to use for all purposes herein set forth, AIG's
documents, records, trade secrets, engineering reports, formulae, studies,
data and information comprising or otherwise relating to the Technology,
Proprietary Rights and the Products;
b) to undertake manufacturing of the Products;
c) to undertake research, development and modification of the Products;
d) to sell, market, promote and exploit and the Technology and Products;
e) to use the Proprietary Rights in connection with carrying out the above;
f) to use the Names and Marks in connection with carrying out the above;
g) to use and exploit the Technology and Products for all uses, purposes and
applications, whether known or unknown as of the date of this Agreement;
and
h) to grant or enter into sub-licenses or similar agreements with third parties
whereby such third parties may undertake any of the above rights of MTS.
2.2 MTS has the first right of refusal of the exclusive world wide rights
and licenses except Canada;
2.3 AIG shall refer all inquiries, pertaining to the licenses to MTS.
2.4 In consideration of the grant of the Licences, MTS hereby agrees to pay to
AIG a 2% gross revenue royalty in the manner as set forth in paragraph 6.1
hereof.
2.5 AIG & its subsidiaries have the right to appoint representatives &
distributors to market and promote the products worldwide from the existing
manufacturing facilities only at Suite 328, 17 Fawcett Road, Coquitlam, B.C.
V3K 6V2 Canada.
3. PROVISION OF EQUIPMENT
3.1 AIG agrees to provide to MTS the following goods and services, at or to
MTS's designated Malaysian bottling facility:
a) the design and layout of the MTS bottling plant;
b) other Equipment related to the bottling facility to be manufactured in
Malaysia;
c) construction of the "clean room";
d) installation and commissioning of the Equipment, including installing an
electric power substation and cabling; and
d) Assistance in gaining all necessary government licences and permits
pertaining to operation of the Equipment and production of the Product, all
at AIG's own cost, to an aggregate out-of-pocket maximum cost to AIG of
$700,000.
3.2 The obligation of AIG to provide the Equipment and other services described
above is conditional upon AIG raising $700,000 on or before June 30, 1999.
3.2 In consideration of AIG providing the Equipment and other goods and
services, MTS hereby agrees to pay to AIG an amount equal to 20% MTS's net
profits in the manner as set forth in paragraph 7.1 hereof.
3.3 The Equipment shall be and remain the sole property of AIG, and AIG hereby
agrees MTS shall have the exclusive right to use the Equipment, for its
intended purpose of producing Product. The parties will be free to
determine between themselves how to account for the Equipment on their
respective financial statements, in accordance with applicable accounting
principles.
4. OBLIGATIONS OF AIG
4.01 AIG hereby represents, warrants and covenants in favour of MTS that:
a) AIG is the inventor and sole owner of the Products, the Technology and the
Proprietary Rights;
b) The Technology is proprietary to AIG, and to the knowledge of AIG, no
other person has a similar technology;
c) AIG owns or where deemed appropriate has undertaken steps to obtain patents
or otherwise protect its interest in the Products, Technology and Proprietary
Rights;
d) AIG will continue to undertake research and development to enhance and
improve the Products, Technology and Proprietary Rights;
e) AIG will advise and forthwith make available to MTS all enhancements,
modifications, derivatives, improvements and replacements to the Products,
Technology and Proprietary Rights;
f) AIG will replace all defective Equipment, or parts thereof, in a timely
manner and at its own cost, during the term of this Agreement; all with a
view of ensuing MTS's production line is allowed to operate on an
uninterrupted basis. Normal wear and tear is excluded from his warranty,
and MTS will be responsible for the cost of ordinary maintenance of the
Equipment; and
g) Subject to the non-disclosure provisions contained herein, AIG will provide
to MTS all information pertaining to the Technology and the Proprietary
Rights, to be kept in a secured safe accessible only by both parties acting
jointly. In the event AIG goes into bankruptcy or receivership such
confidential information will be and become the property of MTS for its
own use.
5. OBLIGATIONS OF MTS
5.1 MTS will source and secure factory space in Malaysia, be it leased or
purchased outright. If purchased outright, MTS will pay for it. If leased,
it is the responsibility of MTS to service the lease.
5.2 MTS will be responsible entirely for the marketing costs, overheads,
payroll, and all other operating costs associated with the factory. AIG
will not be responsible for contributing any further funds or Equipment
other than as stated above. MTS will be responsible for financing all
loses incurred and costs associated therewith. All of the above capital
and operating costs will be absorbed by MTS until such time as the
production line utilizing the Equipment is operating on a profitable basis.
5.3 MTS will designate December 31 as its fiscal year end to assist AIG in
its year end consolidation.
5.4 MTS will prepare and maintain adequate books, records and accounts of its
operations, which shall be audited yearly in accordance with United States
Generally Accepted Accounting Standards (U.S. GAAP) by an independent firm
of auditors. Such annual audited financial statements converted to U.S.
dollars, will be completed and sent to AIG on or before the end of February
of each year.
5.5 MTS will provide AIG with quarterly financial statements for quarters
ending the last day of March, June and September in a prompt manner.
5.6 MTS will conduct its business in compliance with all applicable laws and
regulations in the region and country it is located, and it will obtain all
licences necessary to conduct its business.
5.7 MTS will not, at any time, reveal or otherwise disclosed to any person,
firm, corporation, association or other entity any of the confidential
information or data which MTS may have acquired in connection with
receiving, operating, and inspecting the Technology and/or Equipment.
This covenant shall survive the termination of this Agreement for any
reason other than as contemplated by paragraph 4.1 (g).
5.8 MTS will commence operation of the manufacturing facility on or before
June of year 2000.
5.9 MTS agrees to the appointment of two directorships by AIG to the board of
MTS.
6. ROYALTY
6.1 The 2% gross revenue royalty will initially be calculated annually,
based on MTS's annual audited financial statements. For purposes hereof,
"gross revenues" mean the aggregate cash or kind received by MTS from the
sale of its Product. Unless otherwise challenged, the financial statements
prepared by the independent auditing firm will be considered definitive.
Initially the royalty will be payable within 60 days of preparation of
the annual audited financial statements; however, once MTS has completed
one profitable year, the royalty will be calculated quarterly on the last
day of each of March, June and September of each year, and payable within
60 days of the end of each year. In each year, the determination of annual
gross revenues will be calculated by the independent auditors, and any
difference in payment of the royalty will be either paid by MTS or offset
against the next annual payment made by MTS.
7. PROFIT SHARING
7.1 In consideration of AIG contributing and incurring the costs of contributing
the Equipment and ancillary installation services, MTS agrees to pay to
AIG an ongoing amount equal to 20% of the net profits realized by MTS from
time to time, payable within 90 days of the end of each financial year.
For purposes hereof "net profits" will be net profits after tax calculated
in accordance with U.S. GAAP, as determined by an independent firm of
auditors acceptable to both parties.
7.2 It is understood and agreed that AIG shall not be responsible for
contributing any amount toward Equipment costs or any other costs of
operations of MTS other than the maximum $700,000 referred to in
paragraph 3.1 above. The responsibility for all other costs and for
covering all loses will be that of MTS alone.
7.3 The sharing is limited to the net profits derived by MTS from the one
bottling line established by MTS and AIG using the Equipment contributed by
AIG hereunder. In contrast, and for certainty, the 2% gross revenue
royalty applies to all revenues generated by MTS from the sale of all
Products.
7.4 In the event MTS wishes to establish additional bottling lines or
facilities, AIG will have the first right to participate therein, either
through reinvestment of its 20% net profit share, or the contribution (at
its cost) of additional Equipment; on such terms and conditions as the
parties may agree.
8. TERM
8.1 The term of the Licences granted herein shall be for an initial period of
30 years from the date hereof, and shall automatically renew for another 30
years provided that MTS is not otherwise in default hereunder.
9. DEFAULT
9.1 An event of default shall occur if:
a) MTS fails to pay AIG any amount when due, and such failure continues for a
period of 30 days following receipt of written notice of such failure by
AIG;
b) MTS files for relief or liquidation under the bankruptcy, insolvency or
similar laws of its jurisdiction;
c) MTS consents to the appointment of a trustee, custodian, receiver or an
officer of similar powers,
d) MTS is subject to the execution of a judgment; and any such event is not
cured within 30 days following the occurrence of such event;
e) MTS breaches any term, covenant or condition of this Agreement and such
breach is not cured within 30 days following receipt of written notice
of such breach by AIG;
f) MTS fails to receive or maintain the necessary permits or licences from
any governmental authority within the territory necessary for it to conduct
its business within such jurisdiction and such failure continues for 30
consecutive days.
g) In the event of an occurrence of default, AIG, without prejudicing its
other rights and remedies, may declare this Agreement terminated and of no
force and effect;
9.2 Upon the termination of this Agreement for any reason set forth in
paragraph 9.1:
a) all rights of MTS under this Agreement shall cease forthwith and MTS shall
cease conducting its business of manufacturing and sale of the Products,
shall cease using the Technology and Equipment; and shall return the
Equipment to AIG.
b) MTS, within 30 days from the date of termination, will provide AIG with a
final accounting statement and shall remit all royalties due and owing to
AIG. The accounting statement shall identify the gross sales of the
Product from the last statement provided by MTS.
9.3 An event of default shall occur if AIG breaches any term, covenant or
condition of this Agreement and such breach is not cured within 30 days
following receipt of written notice of such breach by MTS. In the event
AIG should default under this Agreement, MTS's obligations to pay royalties
and shares of profit will cease until the default is remedied.
10. MODIFICATION AND ENHANCEMENTS
10.1 It is a fundamental term of this Agreement that AIG will not create or
design a product and compete, directly or indirectly, with MTS. MTS will
be entitled to the rights and licences referred to herein pertaining to all
Products now or at any time during the term of this Agreement available to
AIG. AIG agrees that all future enhancements, improvements, derivatives,
modifications and replacements of the Products, whether based on existing
Products, or derived independently which may in any way compete with an
existing or future Product, shall be made available to MTS under this
Agreement.
10.2 AIG reserves the unfetted right to modify and improve the Products and the
Technology, and in the event the Products or the Technology are replaced by
a modified or improved product or technology, this Agreement shall be read
to include the modified or improved product or technology.
10.3 MTS may also undertake research and development toward modifying and
improving the Products and Technology, and in the event the Products of
Technology are replaced by a modified or improved product or technology,
This Agreement shall be read to include the modified or improved product or
technology.
10.4 MTS may request that AIG undertake research and development toward the
modification, enhancement or improvement of the Products or Technology in
certain manners or to obtain certain end results. MTS will pay AIG's costs
in undertaking the same on the basis of previously agreed to budgets.
10.5 All derivations, revisions, enhancements, modifications or improvements
made to the Products and Technology, by both AIG and Licensee, shall be
and remain the property of AIG, but shall form "Products" or "Technology"
hereunder and be subject to the terms of this Agreement.
11. NAMES AND MARKS
11.1 MTS may designate, develop, commission and use various Names and Marks in
selling and promoting the Products; and AIG acknowledges that MTS shall
retain ownership of all Names and Marks used by it. Any goodwill
associated with the Names and Marks shall enure exclusively to the benefit
of MTS.
12. NON-DISCLOSURE OF INFORMATION
12.1 MTS hereby acknowledges that the information contained herein and all
other information, whether oral or written, otherwise disclosed to MTS by
AIG pursuant to this Agreement has been disclosed to MTS in the strictest
confidence and accordingly, MTS hereby covenants and agrees that MTS will
not otherwise than in accordance with the terms of this Agreement, either
during the term of this Agreement, or at any time thereafter anywhere in
the world, make use of, for its own use or otherwise, or disclose any
information with respect to the Products, the Proprietary Rights, or the
business or affairs of AIG that it may obtain from AIG pursuant to this
Agreement.
13. WARRANTY
13.1 AIG represents and warrants to MTS that the Products are and will continue
to be fit for the purposes of which they are intended, including human
consumption; and AIG agrees to indemnify and hold MTS harmless from and
against any and all liability which may arise from any breach of this
warranty.
14. INDEMNIFICATION
14.1 MTS, its successors, transferees and assigns, jointly and severally, do
hereby forever indemnify, covenant to defend and hold harmless AIG, its
affiliates, officers, directors, contractors, sub-contractors and
successors in interest from any and all claims, losses (consequential or
otherwise), demands, causes of action, lawsuits, administrative
actions, losses and expenses, including reasonable attorneys' fees, of
any kind, character of nature, arising from or in any way connected,
directly or indirectly, with the business of MTS, including operation of
the Equipment, the use of the Technology, or the sale of the Product.
15. INDEPENDENCE
15.1 Neither party shall have the authority to act on behalf or bind the other
party.
16. NOTICES
16.1 Any notice or other communication required or permitted hereunder shall be
made in writing, and shall be deemed to have been given if placed in the
mail, registered and certified, postage prepaid, or if personally
delivered, to the addresses stated above.
17. LAW AND ARBITRATION
17.1 This Agreement shall be governed in accordance with the laws of the
Province of British Columbia and the laws of Canada then in force and
effect.
17.2 In the event of any dispute arising between the parties concerning this
Agreement or its enforceability, the same shall be settled by a single,
arbitrator pursuant to the provisions of the Commercial Arbitration Act
(British Columbia), or any successor legislation then in force.
18. AGREEMENT, MODIFICATION, WAIVER AND HEADINGS
18.1 This Agreement constitutes the entire agreement between the parties hereto
pertaining to the subject matter herein and supercedes all prior and
contemporaneous agreements, understandings, negotiations and discussions
among the parties, written or otherwise. No supplement, modification or
waive or termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby.
18.2 All exhibits, schedules and documents referred to in this Agreement are
incorporated herein for all purposes. Moreover, the recitals set forth
above are likewise incorporated herein for all purposes.
18.3 The terms and provisions herein shall be binding on and inure to the
benefit of the parties hereto, and their respective transferees, successors
and assigns.
IN WITNESS WHEREOF the parties have caused this Agreement to be effective all as
of the date set forth above.
Signed, Sealed and Delivered MULTIMEGA TECHNOLOGIES SDN. BHD
By MTS in the presence of: By Its Authorized Signatory:
__________________________ _______________________________
Witness
__________________________
Address
__________________________
Address
_________________________
Occupation
Signed, Sealed and Delivered AVANI INTERNATIONAL GROUP INC.
By AIG in the presence of: By Its Authorized Signatory:
__________________________ _______________________________
Witness
__________________________
Address
__________________________
Address
_________________________
Occupation
EXHIBIT "A"
AIG OXYGEN ENRICHMENT EQUIPMENT
AVANI ADVANCED OXYGEN ENRICHEMENT EQUIPMENT
Avani Oxygen Enrichment Equipment is to stimulate the atmospheric conditions of
rain water. Ozone and ozone lattices allow the oxidation potential to be
multiplied tremendously. The equipment is composed of three processes including
electron bond angle shifter, oxygen infusion process and the vortex cyclonic
shifter. AVIG will continuously work on R & D to improve the preceding
mentioned processes. Their functions and methods of improvement are shown as
follows:
1. ELECTRON BOND ANGLE SHIFTER
This device is an electro magnetic process which neutralizes the water in nano
seconds, thereby allowing ozone and ozone lattices to be multiplied
tremendously. This in turn, will subsequently create tremendous infusion of
oxygen molecules. It is located in the first cabinet.
The functions will be improved by the following:
a. by varying the impact of long chain ozone and the pressure;
b. by varying and alternating the degree of conductivity of the electromagnetic
device;
c. by varying the degree of electrical charge to the device;
d. by changing the mathematical formula and by altering the size and
shape of the device;
e. by testing combinations of the above.
2. OXYGEN INFUSION PROCESS
The neutralized highly oxygen enriched water is sucked through the oxygen
infusion process. This device works through a vaccum system at varying
precise pressure and force throughout the process which located in the
first cabinet. This process allows the oxygen molecules to be compacted and
ready to be introduced to the next Avani process - the Vortex Cyclonic Shifter.
The process can be enhanced by
a. lengthening and expanding the surface area of contact throughout the
device;
b. altering the precise pressure and force of the device
through mathematical calculations;
c. altering the suction pressure of the water when going through the device;
d. testing combination of the above.
2. THE VORTEX CYCLONIC SHIFTER
Oxygenated water is puched through this device at 80PSI or more. It is through
this device in the second cabinet that intense cyclonic actions are created to
enable the systematic freeing of the oxygen molecules, and causing them to bond
with the water molecules at precise moments, to achieve the final stablized
oxygen enrichment of the water.
The improvement can be done by
a. varying the input pressure;
b. altering the intensity of the cyclonic actions;
c. altering the mathematical calculations of the cyclonic pulses;
d. testing combination of the above.
The equipment consists of the following components and accessories:
The First Cabinet
1 unit of Stainless Steel Cabinet 8' x 4' x 4'contains:
(1) Polarizing Array 8" x 24 1/2"
(2) Air Modules
(1) 50' 1/4" Tubing
(1) Pressure Regulator
(1) Flow Meter
(1) 30' x 2'' pvc Spiral Tubing
1 unit of Stainless Steel Cabinet 8' x 4' x 4'contains:
(1) Massic Injection (Kynar)
(2) 2" PVC Ball Valves
(2) Air Flow meter
(1) Water Flow Meter
The Second Cabinet
1 unit of Stainless Steel Control Platform 6' x 8' x 2' contains:
(1) Long chain ozone machine consist of 4
glass tubes, 4 Electrodes, high voltage
transformer (60,000 volts)
(6) Push/pull mushroom buttons
(6) Contactors
(6) Transformers
(6) Relays;
Equipment For Research and Development
The following is the equipment use to monitor and enhance the functions.
- high purity air compressor;
- medical grade air dryer;
- sub micron filtration equipment for air compressor;
- medical grade oxygen connectrator;
- oxygen chiller equipment;
- ozone generation system;
- oxygen diagnostic equipment;
- computer control lathe;
- tungsten inert gas welder;
- high pressure hydraulic press;
- hydraulic water pressure testing equipment;
- high oxygen saturation digital meter;
- TDS meter;
- PH meter;
- high pressure metal forming machinery.
EXHIBIT "B"
LIST OF OTHER EQUIPMENT CONTRIBUTED BY AIG
30,000 GPD Purified Water Station with Bottling Plant TECHNICAL SPECIFICATIONS
Item 1 Accessories of Raw Water Storage Tank
Quantity: One (1)
Material: High Density Polyethylene
Accessories: (1) 16" manway
(1) Outlet nozzle 2" dia.
(1) Inlet nozzle 2" dia.
(1) Ozonated water return 2" dia.
(1) Low and high level switches
(1) Set ozone diffusers
Item 2 Twenty Micron Cartridge Filter Housing
Quantity: Two (2)
Material: -316SS const. housing
Cartridges: Qty: 8 nos. 2 1/2"x 10" long
Material: -polypropylene construction cartridge
Rating: -20 microns
Accessories: -(1) 1 1/2" inlet isolation valve
-(1) 1 1/2" outlet isolation valve
-(1) 1/4" vent valve
-(2) Inlet and outlet pressure gauges
Item 3 Ozonator Equipment, totally enclosed self contained ozone generator
and oxygen generator in a single epoxy coated aluminum structure.
Quantity: One (1)
Manufacturer: Pacific Ozone or equal.
Model No.: G-21
Capacity: 0.84 Lbs./day
Dimensions: 45 cm height x 40 m. width x 22.5 cm depth
Weight: 22 Kgs.
Accessories: -(3) 1 1/2" isolation valves.
-(1) Ozone venturi type eductor
-(1) Lot PVC piping
-(1) Ten micron cartridge filter
Ozone Recirculation Pump
Quantity: One (1)
Manufacturer Ebara or equal
Type: Stainless steel, close coupled centrifugal pump
Model No.: CDU series
Capacity: 20 gpm at 45 psi
Size: 1" x 1 1/4" x 6-3/16"
Motor: 2 HP, 415V, 3Ph, 50Hz motor
Accessories: (1) 1 1/2" suction valve
(1) 1" discharge valve
(1) Discharge pressure gauge 0-100 psi
(1) Discharge check valve
Item 4 Filter Feed Pumps assembled and mounted on a skid:
Quantity: Two (2)
Manufacturer: Ebara or equal
Type: Stainless steel, close coupled centrifugal pump
Model No.: CDU series
Capacity: 30 gpm at 45 psi
Size: 1" x 1 1/4" x 6-3/16"
Motor: 3 HP, 415V, 3Ph, 50Hz motor
Accessories: (2) 1 1/2" suction valve, PVC const.
(2) 1" discharge valve, PVC const.
(2) Discharge pressure gauge 0-100 psi, 1/4" lower mounting
(2) Discharge check valves
Item 5 Duty-Standby Multimedia Filters
Quantity : Two (2)
Manufacturer: Aquamatch, Inc.
Model: 31F1855MM
Vessels size: 18" x 65"
Media: 5.5 ft3 of anthracite and silica sand
Power Supply: 220V, 1Ph, 50Hz
Pipe size: 2"
Dimensions: 18" x 18" x 75" (LxWxH)
Weight: 577 Lbs.
Accessories: (1) time controller valve
(1) filter lateral
Item 6 Duty-Standby Activated Carbon
Media Filters Quantity : Two (2)
Manufacturer: Aquamatch, Inc.
Model: 31F24100AC
Vessels size: 24" x 72"
Media: 10 ft3 of activated carbon media
12 x 40 mesh
PowerSupply: 220V, 1Ph, 50Hz
Pipe size: 2"
Dimensions: 24" x 24" x 81" (LxWxH)
Weight: 480 Lbs.
Accessories: (1) time controller valve
(1) filter lateral
Item 7 Duty-Standby by Softener Units
Quantity : Two (2)
Manufacturer: Aquamatch, Inc.
Model: 28F18150
Exchange cap.: 150,000 grains at 15 Lbs./ Ft3
Vessels Sizes:
Softener tank: 18" x 65"
Brine tank: 24" dia. X 48" high, polyethylene const.
Resin volume: 5 ft3
Salt storage: 525 Lbs.
Power supply: 220V, 1Ph, 50Hz
Pipe size: 1 1/2"
Accessories: (2) Softener control valve
(2) Softener laterals
(2) Brine valve assembly
Item 8 Ultraviolet Sterilizer Lights
Quantity : One (1)
Manufacturer: Aquamatch, Inc.
Model: UVS-24A
Flow rate: 24-30 gpm
Inlet/outlet size: 1" MNPT
Lamps: 170 watts
Chamber material 316SS
Control panel: Aluminum
Dimensions: 37" high x 7" dia. X 9.5"
Power supply: 220V, 1Ph, 50Hz
Shipping weight: 23 lbs. each.
Item 9 Skid Mounted Reverse Osmosis Unit with second-pass RO, 30,000 GPD
second-pass product capacity, Aquamatch model TFZ-33-AG, piped, wired
and tubed. Factory assembled on the skid, consisting of the following
components:
Technical Parameters:
----------------------
Quantity: One (1)
Model: TFZ-33-AK with second pass RO design
Apprx. size: 240" x 52" x 55"
Shipping wt. 1,800 Lbs.
Product water output: 37,296 gpd and 30,000 gpd
Feedwater type: Less than 1,500 ppm 1st pass
and 30 ppm 2nd pass
Recovery: Up to 75% recovery 1st pass and 85% 2nd pass
Motor Electrical: 415Volts, 3Ph, 50Hz
Membrane mftr.: Osmonics Desal or equal
Min. inlet pressure: 30 psi
Max. inlet pressure: 70 psi
Max. temp.: 40 degrees C
Max. conc. PH 8.0
Feedwater flow rate: 34.5 gpm 1st pass/25.9 gpm 2nd pass
Reject flow rate: 8.6 gpm 1st pass/ 3.9 gpm 2nd pass
Product flow rate: 25.9 gpm 1st pass/ 22 gpm 2nd pass Connections
Inlet: 1 1/2"
Concentrate: 1/2"
Product: 1"
Technical Specification of Each Component
- -----------------------------------------
Prefilter: Two (2) duty-standby 5 micron sediment polypropylene
- ---------- construction (multiple cartridges), shell constructed in 304
Stainless Steel, top loading housing.
Frame: This system is fully skid mounted on heavy duty carbon steel frame,
- ------ completely sand blasted, primed, and enameled fuse coated for
maximum corrosion resistance and durability.
High Pressure Pump: High pressure multistage centrifugal pump Two (2) in
- -------------------- series, internal Stainless Steel moving parts. Manufactured
by Grundfos Pumps. Heavy duty and corrosion resistant.
Reverse Osmosis Pressure Vessel: Heavy duty Reverse Osmosis pressure vessel
- -------------------------------- housings are constructed in fiberglass. End
cap retainers are constructed of Stainless Steel. The exterior of the pressure
vessel is enameled coated white and wrapping with stainless steel materials.
Easy membrane removal, inspection, and installation.
TOTAL QUANTITY: 9
Reverse Osmosis Membrane Elements: The Reverse Osmosis membranes used in this
- ---------------------------------- application will be manufactured by Osmonics
Desal. Membranes shall be thin film composite (TFC) spiral wound type and
shall be 4" x 40" long and approved by FDA.
TOTAL QUANTITY: 45
Sample Permeate Ports: Sample ports will be installed in each Reverse Osmosis
- ----------------------- pressure vessel to allow evaluation of the product water
quality.
Main Electrical Enclosure: Totally enclosed NEMA 4, corrosion resistant control
- ------------------------- box.
Flow Meters: Panel mounted product water flow meter. Rotary meter type.
- -------------
Flow Meters: Panel mounted reject water flow meter. Rotary meter type.
- -------------
Pressure Gauges: Stainless Steel liquid filled pressure gauges mounted on
- ----------------- main control panel for maximum visibility. A total of 8
pressure gauges will be provided:
- - Inlet low pressure
- - Delta low pressure between the two prefilter
- - Post low pressure gauge
- - Inlet high pressure to RO membranes
- - Post high pressure after RO membrane
- - High Pressure Regulator Valve: Heavy duty Stainless Steel pressure regulator,
- ------------------------------- constructed in 316 Stainless Steel. This
regulator will allow the operator to adjust the back pressure in the Reverse
Osmosis membranes.
Product Water Conductivity Monitor: Analogue readout of the total dissolved
- ----------------------------------- solids for the final product water quality
of the Reverse Osmosis system. The sensor used is a compensated probe. A set
point can be set so that the Reverse Osmosis plant will shutdown at any desired
quality readout. The Reverse Osmosis unit has a 5 minute time delay before
shutdown. The monitor is completely panel mounted in the front of the electrical
control box.
Inlet Automatic Shut off Valve: This valve will close the inlet feedwater flow
- -------------------------------- rate to the Reverse Osmosis when shutdown.
Programmable Logic Control (PLC): The equipment features state of the art PLC
- ---------------------------------- system to accurately monitor and control
all the different functions of the Reverse Osmosis plant.
Magnetic Starter: All of the motor in the Reverse Osmosis plant are equipped
- ------------------ with magnetic motor starters.
Breakers and Relays: All of the breakers and relays in the Reverse Osmosis
- -------------------- plant feature state of the art Allen Bradley.
Visual Indicator Lights: The following indicator lights are featured standard on
- ------------------------ our equipment:
- Tank filling (yellow)
- Tank full (green)
- Low water pressure (yellow)
- High water pressure (yellow)
- High pressure pump overload (yellow)
- Alarm on (red)
- System in manual operation (green)
- System in automation mode (green)
- High pressure pump on (green)
- Main control switch (MANUAL-OFF-AUTOMATIC)
- Emergency shutdown switch
Main Disconnect Switch: This feature will allow the disconnection of the
- ---------------------- electricity to the complete Reverse Osmosis plant.
Product Water Float Switch: This feature will allow the Reverse Osmosis to stop
- -------------------------- and start automatically in conjunction with the
product water storage tanks.
Low Pressure Piping and Valves: All low pressure piping and valves will be
- ------------------------------ supplied in rigid PVC schedule 80 and flexible
reinforced plastic polyethylene tubing.
High Pressure Piping and Valves: All high pressure piping and valves will be
- ------------------------------- supplied in Stainless Steel.
Item 10 RO Membrane Cleaning System
----------------------------
Technical Parameters: This feature will allow the operator to conduct a
-------------------- complete cleaning of the Reverse Osmosis membranes
when the product quality drops of 15% and the output decreases of 15%.
The following is a list of what the integrated cleaning system includes:
Skid mounted
- Pre-plumbed for easy operation
- Electrical control functions on main control electrical panel
- 5-micron polypropylene cartridges. Housing is constructed of 304
Stainless Steel
- Polyethylene cleaning tank
- Stainless steel recirculating pump
- Built-in filling valve to fill tank with pure water
- Drain valve to be connected directly to drain system
Item 11 Ozonator Equipment: totally enclosed self contained ozone generator and
------------------ oxygen generator in a single epoxy coated aluminum
structure.
Model: G-21
Manufacturer: Pacific Ozone or equal
Capacity: 0.84 Lbs./day
Dimensions: 45 cm height x 40 m. width x 22.5 cm depth
Weight: 22 Kgs.
Accessories: (3) 1 1/2" isolation valves
(1) Ozone venturi type eductor
(1) Lot PVC piping
Item 12 Accessories of R.O. Water Storage Tank
Quantity: Four (4)
Material: High Density Polyethylene
Accessories: (4) 16" manway
(4) Outlet nozzle 2" dia.
(4) Inlet nozzle 2" dia.
(4) Ozonated water return 2" dia.
(4) Low and high level switches
(4) Set ozone diffusers
Item 13 Product Water Transfer Pumps:
Quantity : Two (2)
Manufacturer: Ebara or equal
Type: Stainless steel, close coupled centrifugal pump
Model No.: CDU series
Capacity: 30 gpm at 50 psi
Size: 1" x 1 1/4" x 6-3/16"
Motor: 3 HP, 415V, 3Ph, 50Hz motor
Accessories: (2) 1 1/2" suction valve, PVC const.
(2) 1" discharge valve, PVC const.
(2) Discharge pressure gauge 0-100 psi, 1/4" lower mounting
(2) Discharge check valves
Item 14 One Micron Cartridge Filter Housing
Quantity: Two (2)
Material: -316SS const. housing
Model: SST-20
Rated capacity: 30gpm
Cartridges: Qty: 2 nos. 2 1/2"x 10" long
Material: -polypropylene construction cartridge
Rating: -1 microns
Inlet/outlet size: 2"
Dimension: 49" high x 10" dia.
Shipping weight: 51" each
Item 15 Ultraviolet Sterilizer Light
Quantity : One (1)
Manufacturer: Aquamatch, Inc.
Model: UVS-24A
Flow rate: 24-30 gpm
Inlet/outlet size: 1" MNPT
Lamps: 170 watts
Chamber material: 316SS
Control panel: Aluminum
Dimensions: 37" high x 7" dia. X 9.5"
Power supply: 220V, 1Ph, 50Hz
Shipping weight: 23 lbs. each.
Item 16 Oxygen Enrichment Process
The equipment is to stimulate the atmospheric conditions of rain
water. Ozone and ozone lattices allow the oxidation potential
to be multiplied tremendously. The equipment is composed of
three processes including electron bond angle shifter, oxygen
infusion process and the vortex cyclonic shifter. AVIG will
continuously work on R & D to improve the preceding mentioned
process. Their functions and components are as follows:
1. Electron Bond Angle Shifter
This device is an electro magnetic process which neutralizes
the water in nano seconds, thereby allowing ozone and ozone
lattices to be multipled tremendously. This in turn, will
subsequently create tremendous infusion of oxygen molecules.
It is located in the first cabinet.
2. Oxygen Infusion Process
The naturalized highly oxygen enriched water is sucked
through the oxygen infusion process. This device works
through a vaccum system at varying precise pressure and force
throughout the process which located in the first cabinet.
This process allows the oxygen molecules to be compacted and
ready to be introduced to the next process the Vortex
Cyclonic shifter
3. The Vortex Cyclonic Shifter
Oxygenated water is puched through this device at 80 PSI or
more. It is through this device in the second cabinet that
intense cyclonic actions are created to enable the systematic
freeing of the oxygen molecules, and causing them to bond
with the water molecules at precise moments, to achieve the
final stablized oxygen enrichment of the water.
Equipment:
The First Cabinet
1 unit of Stainless Steel Cabinet 8' x 4' x 4' contains:
(1) Polarizing Array 8" x 24 1/2"
(2) Air Modules
(1) 50'1/4" Tubing
(1) Pressure Regulator
(1) Flow Meter
(1) 30' x 2" PVC Spiral Tubing
1 unit of Stainless Steel Cabinet 8' x 4' x 4' contains:
(1) Massic Injection (Kynar)
(2) 2" PVC Ball Vales
(2) Air Flow Meter
(1) Water Flow Meter
The Second Cabinet
1 unit of Stainless Steel Control Platform 6' x 8' x 2' contains:
(1) Long chain ozone machine consist of 4 glass tubes,
4 Electrodes, high voltage transformer (60,000
volts)
(6) push/pull mushroom buttons
(6) Contractors
(6) Transformers
(6) Relays;
PET BOTTLING PLANT:
The line is capable of washing, filling, capping, labeling and coding
bottles with a total water volume of 3600 liters/hour:
0.5 L bottles at a rate of 7200 bottles per hour
1.5 L bottles at a rate of 2880 bottles per hour
Item 17 Rinser: Bottle Rinser- (0.5-2 liter bottles). 304 stainless steel
-------- construction, 12 pressure rinse sprayers, fully adjustable to
operate with the Fill Table.
Item 18 Filler: Gravity Filler Assembly Table- (0.5-2 liter bottles).
------- 304 Stainless steel construction, with ozone and UV
resistant poly hoses, connections, microprocessor controlled 12 fill
heads, 220 V.
Item 19 Automatic Capper: Fully automatic capper,complete with vibratory
----------------- bowl, adjustable cap chute, three cubic foot hopper,
fully adjustable, variable speed controllers, clutch (set of two),
double gripper belts, stainless steel gripper belt assembly, NEMA 4
controls and switches, stainless steel frame, and wooden shipping
crates 220 V.
Item 20 Automatic Labeler: Labeler- Automatic labeling system. Includes
------------------- stand spooler and conveyor adjustable connections.
Labels round bottles up to 2 liter. Quick change over from on size to
another, adjustable head, photoelectric products sensor for accurate
label placement, easy access control panel 220V.
Item 21 Packaging System:
-----------------
Quantity : One (1)
Type: Adjustable case sealer
Box Style regular slotted container
Bursting test: 125 to 275 lbs. per square inch, single or double
Tape: 1.5" to 2" tape leg length and upper mast stops
relocated
Machine:
Power: 220V, 1ph, 50Hz
Weight: 321 lbs. (created)
Operating rate: Upto 30 cases per minute
Box drive-belt speed: 75 ft per minute
Operating condition: Dry clean environment
Item 22 System Air Compressor: Air Compressor, 5 HP Ingersoll Rand 2340-L5
--------------------- (220 volt, 1 ph, 50 HZ), 60 gallon tank, 15.2
CFM, 100 PSI. Air pressure regulator regulator/moisture filter Air
hose, heavy-duty industrial hose w/ QC fitting 25'.
Item 23 Ozonation System to Ozonate "Rinse" Water: Frame Mount, Ozone generator,
----------------------------------------- oxygen generator, interlock
box, 220V/50 Hz with stainless steel repressurization pump skid complete
with contractor, motor protector, low tank safety control circuit, SS
pump, 220 VAC, 1 ph, 50 Hz.
SYSTEM ACCESSORIES OF PET LINE SYSTEM:
--------------------------------------
Coding System-Hot Stamp: Automatic jet ink coder system onto the bottle
------------------------ for up to 120 labels/minute, codes vertically
or horizontally, 37-1/8" high characters for date code, mounts on
Automatic Labeler 220V. Codes and dates are placed on bottle itself.
Accumulator Turntable: 60" Dia Turntable to collect the capped and
----------------------- labeled bottles. Adjustable Height. 304
stainless steel construction powered with a variable speed drive.
High Efficiency Clean Room Air Cleaner: (Clean Room to be built by
--------------------------------------- customer) Non electronic
extended surface mechanical-type unit. Utilizes a unique filter media
where the level of airborne particles must be kept low, emits no ozone,
3 speed blower will handle up to 15,000 ft3 of space, 8 foot cord, 6.5
amps, 120 volts, 50 Hz., 1 phase.
Unscramble Turntable: 60" Dia Turntable with special half moon plate to
--------------------- arrange the empty bottles and feed them to the
conveyor. Adjustable Height. 304 Stainless steel construction powered
with a variable speed drive.
Converyor (s): A total of 85 feet Straight Conveyor length and two 90
-------------- degree Turn Conveyors, to transfer the bottles across the
entire bottling process, starting with unscramble turntable and ending
with the accumulator turntable. Conveyors are driven by built-in
electric motors and pass inside/ under all the bottling equipment. The
body of the conveyors will be constructed of 304 stainless steel. The
conveyor belt itself will be constructed of CETAL plastic material.
Unlike steel, the rotating CETAL conveyor plates will not produce any
noise. They are also more resistant to bending and twisting and much
less expensive.
Item 24 Motor Starter Main Control Panel: In NEMA 12 Enclosure, motor starter
--------------------------------- panel shall consist of magnetic motor
starters, relays and accessories required to run each motor.
Item 25 Main Instrumentation & Control Panel: with panel view manmachine-
------------------------------------ interface and Programmable Logic
Controller (PLC).
Item 26 Laboratory Equipment: to include the following:
---------------------
-Dissolved oxygen meter, model 870
-PH/conductivity meter
-Auto-vac release unit (bacteria detect)
-Isotemp incubator
-Yeast mold test kit, Chloroform P/A test kit, Test tubes
EXHIBIT xiv
- ------------
SHARE SUBSCRIPTION AGREEMENT
THIS SHARE PURCHASE AGREEMENT is dated and is effective the 12th day of
May, 1999.
BETWEEN: AVANI INTERNATIONAL GROUP INC., a Neveda corporation
with its business address at Suite 328 - 17 Fawcett Road, Coquitlam,
British Columbia, Canada V3K 6V2
(hereinafter called the "Company")
AND : YIP, KAM CHONG , whose address is No. 26G Jalan Pasar Baru 1,
Off Jalan Meru, 41050 Klang Selangor Darul Ehsan, Malaysia.
(hereinafter called "PURCHASER")
WHEREAS the Company is desirous of issuing 3,750,000 Common Shares from the
capital stock of the Company, with the attachment of a Warrant for each Share.
AND WHEREAS PURCHASER has agreed to purchase and the Company has agreed to sell
the Company's shares (the Shares) on the terms and conditions herein set forth:
NOW THEREFORE IT IS AGREED:
1. The Company hereby sells and PURCHASER on behalf of his nominees, hereby
buys 3,750,000 of the Shares at a price of US$0.20 per share, for a total
sum of US$750,000.
2. - Upon receipt of the total purchase price, the Company will obtain
the necessary approval and advise its Transfer Agent to issue the said
Shares to PURCHASER and/or his nominees. Total proceeds will be refunded
if the approvals are not forthcoming within two weeks of receipt of funds.
- PURCHASER will remit and deposit the US$750,000 into the designated bank
account of the Company, on or before August 12, 1999.
3. The parties hereto agree that any and all taxes which may hereafter be
payable on money realized by PURCHASER and/or his nominees, on the sale of
any of the Shares, which is in excess of the amount paid by PURCHASER to
the Company pursuant to this Agreement, will be the sole responsibility
of PURCHASER and/or his nominees, and the Company or its representatives
will not be liable for any such taxes.
4. All payments by PURCHASER are irrevocable and are not subject to
termination by PURCHASER and/or his nominees.
5. PURCHASER and/or his nominees understand that he/they is/are purchasing
the Shares without being furnished any offering literature or prospectus.
6. PURCHASER and/or his nominees agree to indemnify and hold harmless the
Company and its directors and officers from any and against any and all
loss, damage or liability due to or arising out of any breach of any
representation or warranty of the undersigned contained in this Share
Subscription Agreement.
7. PURCHASER and/or his nominees agree that he/they will not cancel,
terminate, or revoke this Share Subscription Agreement, and that this
Share Subscription Agreement shall survive the death or disability of the
undersigned.
8. A Warrant will be attached to each Share purchased; details and conditions
of the issuance of such Warrants are contained in the Warrant Agreement
dated May 12, 1999.
9. As a condition of the purchase of such Shares from the Company, PURCHASER,
has the right to appoint a representative to the board of directors of the
Company.
10. This Agreement constitutes the entire agreement between the parties hereto
relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understanding, negotiations and discussions,
whether oral or written, of the parties and their representatives, and
there are no general or specific warranties, representations, or other
agreements by or among the parties in connection with the entering into of
this Agreement or the subject matter hereof except as specifically set
forth herein.
11. This Agreement has been translated in its entirely to PURCHASER, and
PURCHASER by signing this Agreement, acknowledges that this to be so.
IN WITNESS WHEREOF this Agreement has been executed as of the day, month and
year first above written.
Signed, Sealed and Delivered
By PURCHASER in the presence of:
_____________________________ _____________________________
Witness YIP, KAM CHONG
_____________________________
Address
Signed, Sealed and Delivered
By AVANI INTERNATIONAL GROUP INC. AVANI INTERNATIONAL GROUP INC.
in the presence of:
_____________________________ _____________________________
Witness Authorized Signatory
_____________________________
Address
EXHIBIT xv
- -----------
WARRANT AGREEMENT
THIS WARRANT AGREEMENT is dated and is effective the 12th day of May, 1999.
BETWEEN : AVANI INTERNATIONAL GROUP INC., a Neveda corporation with its business
address at Suite 328 - 17 Fawcett Road, Coquitlam,
British Columbia, Canada V3K 6V2
(hereinafter called the "Company")
AND : YIP, KAM CHONG, whose address is No. 26G Jalan Pasar Baru 1,
Off Jalan Meru, 41050 Klang Selangor Darul Ehsan, Malaysia.
(hereinafter called "PURCHASER")
WHEREAS PURCHASER and/or his nominees, will purchase 3,750,000 common shares of
the Company, on or before August 12, 1999.
AND WHEREAS the Company is desirous of issuing 3,750,000 Warrants to Purchaser
and/or her nominees, to be attached to such common shares, on the terms and
conditions herein set forth:
NOW THEREFORE IT IS AGREED:
11. The Company grants to Purchaser and/or his nominees, the irrevocable right
to purchase from time to time up a total of 3,750,000 Warrants; such
Warrants to be converted to 3,750,000 fully paid and non assessable common
shares of the Company.
12. The warrants shall be exercisable by Purchaser in whole or in part at any
time on or before three years from the date hereof at an exercise price of
$0.20 on or before August 12, 2000, $0.25 on or before August 12, 2001, and
$0.30 on or before August 12, 2002.
13. Purchaser shall, no later than the close of business on the third business
day before the expiry date of August 12, 2002, give written notice to the
Company of his intention to exercise the Warrants in whole or in part, such
notice to be accompanied by payment. When such payment is received, the
Company covenants and agrees to issue and deliver to Purchaser and/or his
nominees, share certificates registered in the name of Purchaser and/or his
nominees. This Warrant Agreement is assignable in part or in whole.
14. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and upon the successors or assigns of the Company and the
executors, administrators, and legal representatives of Purchaser.
15. This Agreement shall be governed, construed and enforced according to the
laws of the State of Nevada.
IN WITNESS WHEREOF this Agreement has been executed as of the day, month and
year first above written.
Signed, Sealed and Delivered By PURCHASER in the presence of:
_____________________________ _____________________________
Witness YIP, KAM CHONG
_____________________________
Address
Signed, Sealed and Delivered
By AVANI INTERNATIONAL GROUP INC. AVANI INTERNATIONAL GROUP INC.
in the presence of:
_____________________________ _____________________________
Witness Authorized Signatory
_____________________________
Address
EXHIBIT xvi
- ------------
WARRANT AGREEMENT
THIS WARRANT AGREEMENT is dated and is effective the 12th day of May, 1999.
BETWEEN : AVANI INTERNATIONAL GROUP INC., a Nevada corporation with its
business address at Suite 328 - 17 Fawcett Road,
Coquitlam, British Columbia, Canada V3K 6V2
(hereinafter called the "Company")
AND : NGAI SOU CHANG, whose address is 12/28 Claude Street,
Chatswood, New South Wales 2067, Australia.
(hereinafter called "PURCHASER")
WHEREAS PURCHASER and/or her nominees, will purchase 3,500,000 common shares
of the Company, on or before June 20, 1999.
AND
WHEREAS the Company is desirous of issuing 3,500,000 Warrants to Purchaser
and/or her nominees, to be attached to such common shares, on the terms and
conditions herein set forth:
NOW THEREFORE IT IS AGREED:
1. The Company grants to Purchaser and/or her nominees, the irrevocable right
to purchase from time to time up a total of 3,500,000 Warrants; such
Warrants to be converted to 3,500,000 fully paid and non assessable common
shares of the Company.
2. The warrants shall be exercisable by Purchaser in whole or in part at any
time on or before three years from the date hereof at an exercise price of
$0.20 on or before July 1, 2000, $0.25 on or before July 1, 2001, and $0.30
on or before July 1, 2002.
3. Purchaser shall, no later than the close of business on the third business
day before the expiry date of July 1, 2002, give written notice to the
Company of her intention to exercise the Warrants in whole or in part, such
notice to be accompanied by payment. When such payment is received, the
Company covenants and agrees to issue and deliver to Purchaser and/or her
nominees, share certificates registered in the name of Purchaser and/or her
nominees. This Warrant Agreement is assignable in part or in whole.
4. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and upon the successors or assigns of the Company and the
executors, administrators, and legal representatives of Purchaser.
5. This Agreement shall be governed, construed and enforced according to the
laws of the State of Nevada.
IN WITNESS WHEREOF this Agreement has been executed as of the day, month and
year first above written.
Signed, Sealed and Delivered
By PURCHASER in the presence of:
_____________________________ _____________________________
Witness NGAI SOU CHANG
_____________________________
Address
Signed, Sealed and Delivered
By AVANI INTERNATIONAL GROUP INC. AVANI INTERNATIONAL GROUP INC.
in the presence of:
_____________________________ _____________________________
Witness Authorized Signatory
_____________________________
Address
Exhibit xvii
- ----------------
WARRANT AGREEMENT
THIS WARRANT AGREEMENT is dated and is effective the 12th day of May, 1999.
BETWEEN: AVANI INTERNATIONAL GROUP INC., a Nevada corporation with its business
address at Suite 328 - 17 Fawcett Road, Coquitlam, British Columbia,
Canada V3K 6V2
(hereinafter called the "Company")
AND: NGAI SOU CHANG, whose address is 12/28 Claude Street, Chatswood,
New South Wales 2067, Australia.
(hereinafter called "PURCHASER")
WHEREAS PURCHASER and/or her nominees, will purchase
3,500,000 common shares of the Company, on or before June 20, 1999.
AND WHEREAS the Company is desirous of issuing 3,500,000 Warrants to
Purchaser and/or her nominees, to be attached to such common shares, on the
terms and conditions herein set forth:
NOW THEREFORE IT IS AGREED:
1. The Company grants to Purchaser and/or her nominees, the irrevocable
right to purchase from time to time up a total of 3,500,000 Warrants; such
Warrants to be converted to 3,500,000 fully paid and non assessable common
shares of the Company.
2. The warrants shall be exercisable by Purchaser in whole or in part at
any time on or before three years from the date hereof at an exercise price
of $0.20 on or before July 1, 2000, $0.25 on or before July 1, 2001, and
$0.30 on or before July 1, 2002.
3. Purchaser shall, no later than the close of business on the third business
day before the expiry date of July 1, 2002, give written notice to the
Company of her intention to exercise the Warrants in whole or in part, such
notice to be accompanied by payment. When such payment is received, the
Company covenants and agrees to issue and deliver to Purchaser and/or her
nominees, share certificates registered in the name of Purchaser and/or her
nominees. This Warrant Agreement is assignable in part or in whole.
4. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and upon the successors or assigns of the Company and the
executors, administrators, and legal representatives of Purchaser.
5. This Agreement shall be governed, construed and enforced according to the
laws of the State of Nevada.
IN WITNESS WHEREOF this Agreement has been executed as of the day, month and
year first above written.
Signed, Sealed and Delivered
By PURCHASER in the presence of:
_____________________________ _____________________________
Witness NGAI SOU CHANG
_____________________________
Address
Signed, Sealed and Delivered
By AVANI INTERNATIONAL GROUP INC. AVANI INTERNATIONAL GROUP INC.
in the presence of:
_____________________________ _____________________________
Witness Authorized Signatory
_____________________________
Address
Exhibit xviii
- -------------
FINDER'S FEE AGREEMENT
This Finder's Fee Agreement is entered into this 12th day of June, 1999.
BETWEEN: AVANI INTERNATIONAL GROUP, INC. with its business address at
Suite 328 - 17 Fawcett Road, Coquitlam, B.C. Canada V3K 6V2
(the "Company")
OF THE FIRST PART
AND: CHIN YEN ONG, with his address at 106 Taman Sri Selayang, 68100
Batu Caves, Selangor, Malaysia.
(the "Finder")
OF THE SECOND PART
WHEREAS:
A. Company has entered into a Share Subscription Agreement dated May 12, 1999,
with NGAI SOU CHANG of Malaysia for the purchase of 3,500,000 private placement
shares (one year hold) of Company, at a price of US$0.2 per share.
B. Finder was instrumental in arranging the private placement and as
consideration therefore, Company desires to pay Finder a finder's fee as
hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises
and mutual covenants and agreements herein contained the parties hereto agree as
follows:
1. Finder shall be paid a finder's fee equal to 10% of the capital received by
Company, payable in common shares of Company with a one year hold period, valued
at US$0.20 per share.
For purposes of this agreement, 350,000 common shares will be issued to
Finder. In addition, for each common share received by Finder as a finder's
fee, Finder will be entitled to receive a share purchase warrant for a like
amount of shares (i.e., 350,000 share warrants).
The terms of this warrant will be three years from the date of funding
received.
The exercise per share will be $0.20 for the first year, $0.25 for
the second year, and $0.30 for the third year.
2. Payment of finder's fee and the warrant will be made not later than
thirty (30) days from Company's receipt of the funds.
3. Finder covenants and agrees that at all times from and after the date
of this Agreement, he/she will not reveal or otherwise disclose, at
anytime,to any competitor of Company or any other person, firm,
corporation, association or other entity, any of the confidential
information or data regarding Company which Finder may have acquired in
connection with the services rendered herein. In addition, Finder covenants
and agrees that, he/she will not use any confidential information and
material for his/her own benefit.
4. Any notice to be given under this Agreement shall be in writing and
shall be delivered personally or mailed by registered mail and addressed
to the parties at their addresses as given on the first page of this
Agreement or at such other address as may from time to time be notified
in writing by any of the parties. Any such notice shall be deemed to
have been given of delivered by hand on the day delivered, and if mailed,
ten (10) business days following the day of posting.
5. This Agreement may not be assigned by either party hereto except with
the prior written consent of the other party hereto.
6. This Agreement will be construed under and governed by the laws of the
State of Nevada.
7. This Agreement represents the entire agreement between the parties and
supersedes any and all prior agreements and understandings, whether written
or oral, between the parties.
8. This Agreement shall be binding upon and shall enure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as of
the day and year first above written.
Signed, Sealed and Delivered
by Company in the presence of: AVANI INTERNATIONAL GROUP, INC.
_________________________ ___________________________________
Witness Authorized Signatory
_________________________
Address
_________________________
Address
Signed, Sealed and Delivered by Finder in the presence of:
_________________________ ___________________________________
Witness Finder: CHIN YEN ONG
_________________________
Address
_________________________
Address
EXHIBIT xix
- ------------
WARRANT AGREEMENT
THIS WARRANT AGREEMENT is dated and is effective the 12th day of June, 1999.
BETWEEN : AVANI INTERNATIONAL GROUP INC., a Nevada corporation
with its business address at Suite 328 - 17 Fawcett Road, Coquitlam,
British Columbia, Canada V3K 6V2
(hereinafter called the "Company")
AND : CHIN YEN ONG, whose address is 106 Taman Sri Selayang, 68100 Batu
Caves, Selangor, Malaysia.
(hereinafter called "PURCHASER")
WHEREAS PURCHASER and/or his nominees, will receive 350,000 common shares of
the Company as Finder's Fee.
AND WHEREAS the Company is desirous of issuing 350,000 Warrants to Purchaser
and/or his nominees, to be attached to such common shares, on the terms and
conditions herein set forth:
NOW THEREFORE IT IS AGREED:
6. The Company grants to Purchaser and/or his nominees, the irrevocable right to
purchase from time to time up a total of 350,000 Warrants; such Warrants to be
converted to 350,000 fully paid and non assessable common shares of the Company.
7. The warrants shall be exercisable by Purchaser in whole or in part at any
time on or before three years from the date hereof at an exercise price of
$0.20 on or before June 12, 2000, $0.25 on or before June 12, 2001, and $0.30
on or before June 12, 2002.
8. Purchaser shall, no later than the close of business on the third business
day before the expiry date of June 12, 2002, give written notice to the Company
of his intention to exercise the Warrants in whole or in part, such notice to
be accompanied by payment. When such payment is received, the Company covenants
and agrees to issue and deliver to Purchaser and/or his nominees, share
certificates registered in the name of Purchaser and/or his nominees. This
Warrant Agreement is assignable in part or in whole.
9. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and upon the successors or assigns of the Company and the
executors, administrators, and legal representatives of Purchaser.
10. This Agreement shall be governed, construed and enforced according to the
laws of the State of Nevada.
IN WITNESS WHEREOF this Agreement has been executed as of the day, month and
year first above written.
Signed, Sealed and Delivered
By PURCHASER in the presence of:
_____________________________ _____________________________
Witness CHIN YEN ONG
_____________________________
Address
Signed, Sealed and Delivered
By AVANI INTERNATIONAL GROUP INC. AVANI INTERNATIONAL GROUP INC.
in the presence of:
_____________________________ _____________________________
Witness Authorized Signatory
_____________________________
Address
EXHIBIT xx
- -----------
FINDER'S FEE AGREEMENT
This Finder's Fee Agreement is entered into this 3rd day of August, 1999.
BETWEEN: AVANI INTERNATIONAL GROUP, INC.
with its business address at Suite 328 - 17 Fawcett Road,
Coquitlam, B.C. Canada V3K 6V2
(the "Company")
OF THE FIRST PART
AND: CHIN YEN ONG, with his address at 106 Taman Sri Selayang, 68100
Batu Caves, Selangor, Malaysia.
(the "Finder")
OF THE SECOND PART
WHEREAS:
A. Company has entered into a Share Subscription Agreement dated May 12, 1999,
with YIP KAM CHONG of Malaysia for the purchase of 3,750,000 private
placement shares (one year hold) of Company, at a price of US$0.2 per share.
B. Finder was instrumental in arranging the private placement and as
consideration therefore, Company desires to pay Finder a finder's fee as
hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
mutual covenants and agreements herein contained the parties hereto agree as
follows:
1. Finder shall be paid a finder's fee equal to 10% of the capital received by
Company, payable in common shares of Company with a one year hold period,
valued at US$0.20 per share.
For purposes of this agreement, 375,000 common shares will be issued to Finder.
In addition, for each common share received by Finder as a finder's fee, Finder
will be entitled to receive a share purchase warrant for a like amount of
shares (i.e., 375,000 share warrants). The terms of this warrant will be three
years from the date of funding received.
The exercise per share will be $0.20 for the first year, $0.25 for the
second year, and $0.30 for the third year.
2. Payment of finder's fee and the warrant will be made not later than thirty
(30) days from Company's receipt of the funds.
3. Finder covenants and agrees that at all times from and after the date of
this Agreement, he/she will not reveal or otherwise disclose, at anytime, to any
competitor of Company or any other person, firm, corporation, association or
other entity, any of the confidential information or data regarding Company
which Finder may have acquired in connection with the services rendered herein.
In addition, Finder covenants and agrees that, he/she will not use any
confidential information and material for his/her own benefit.
4. Any notice to be given under this Agreement shall be in writing and shall
be delivered personally or mailed by registered mail and addressed to the
parties at their addresses as given on the first page of this Agreement or at
such other address as may from time to time be notified in writing by any of
the parties. Any such notice shall be deemed to have been given of delivered by
hand on the day delivered, and if mailed, ten (10) business days following the
day of posting.
5. This Agreement may not be assigned by either party hereto except with
the prior written consent of the other party hereto.
6. This Agreement will be construed under and governed by the laws of the
State of Nevada.
7. This Agreement represents the entire agreement between the parties and
supersedes any and all prior agreements and understandings, whether written
or oral, between the parties.
8. This Agreement shall be binding upon and shall enure to the benefit of the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as of
the day and year first above written.
Signed, Sealed and Delivered
by Company in the presence of: AVANI INTERNATIONAL GROUP, INC.
_________________________ ___________________________________
Witness Authorized Signatory
_________________________
Address
_________________________
Address
Signed, Sealed and Delivered
by Finder in the presence of:
_________________________ ___________________________________
Witness Finder: CHIN YEN ONG
_________________________
Address
_________________________
Address
Exhibit xxi
- -----------
WARRANT AGREEMENT
THIS WARRANT AGREEMENT is dated and is effective the 12th day of August, 1999.
BETWEEN : AVANI INTERNATIONAL GROUP INC., a Nevada corporation with its business
address at Suite 328 - 17 Fawcett Road,
Coquitlam, British Columbia, Canada V3K 6V2
(hereinafter called the "Company")
AND : CHIN YEN ONG, whose address is 106 Taman Sri Selayang, 68100
Batu Caves, Selangor, Malaysia.
(hereinafter called "PURCHASER")
WHEREAS PURCHASER and/or his nominees, will receive 375,000 common shares
of the Company as Finder's Fee.
AND WHEREAS the Company is desirous of issuing 375,000 Warrants to Purchaser
and/or his nominees, to be attached to such common shares, on the terms and
conditions herein set forth:
NOW THEREFORE IT IS AGREED:
1. The Company grants to Purchaser and/or his nominees, the irrevocable right
to purchase from time to time up a total of 375,000 Warrants; such Warrants to
be converted to 375,000 fully paid and non assessable common shares of the
Company.
2. The warrants shall be exercisable by Purchaser in whole or in part at any
time on or before three years from the date hereof at an exercise price of
$0.20 on or before August 12, 2000, $0.25 on or before August 12, 2001, and
$0.30 on or before August 12, 2002.
3. Purchaser shall, no later than the close of business on the third business
day before the expiry date of August 12, 2002, give written notice to the
Company of his intention to exercise the Warrants in whole or in part, such
notice to be accompanied by payment. When such payment is received, the
Company covenants and agrees to issue and deliver to Purchaser and/or his
nominees, share certificates registered in the name of Purchaser and/or his
nominees. This Warrant Agreement is assignable in part or in whole.
4. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and upon the successors or assigns of the Company and the
executors, administrators, and legal representatives of Purchaser.
5. This Agreement shall be governed, construed and enforced according
to the laws of the State of Nevada.
IN WITNESS WHEREOF this Agreement has been executed as of the day, month and
year first above written.
Signed, Sealed and Delivered
By PURCHASER in the presence of:
_____________________________ _____________________________
Witness CHIN YEN ONG
_____________________________
Address
Signed, Sealed and Delivered
By AVANI INTERNATIONAL GROUP INC. AVANI INTERNATIONAL GROUP INC.
in the presence of:
_____________________________ _____________________________
Witness Authorized Signatory
_____________________________
Address
SCHEDULE 27.1
FINANCIAL DATA SCHEDULE
ART.5 FDS FOR 2nd QUARTER 10-Q
Multiplier 1,000
PERIOD TYPE 6 MONTHS
FISCAL YEAR END DEC-31-1999
PERIOD END JUN-30-1999
CASH 843
SECURITIES 0
RECEIVABLES 109
ALLOWANCES 0
INVENTORY 86
CURRENT-ASSETS 1,078
PP&E 2,056
DEPRECIATION 399
TOTAL ASSETS 2,765
CURRENT-LIABILITIES 327
BONDS 0
COMMON 15
PREFERRED-MANDATORY 0
PREFERRED 0
OTHER-SE 1,937
TOTAL-LIABILITIES-AND-EQUITY 2,765
SALES 296
TOTAL-REVENUES 296
CGS 197
TOTAL-COST 538
OTHER-EXPENSES (1)
LOSS-PROVISON 0
INTEREST-EXPENSE 19
INCOME-PRETAX (260)
INCOME-TAX 0
INCOME-CONTINUING (260)
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET-INCOME (260)
EPS-PRIMARY (.02)
EPS-DILUTED (.02)
