<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4 TO FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SUMMIT ENVIRONMENTAL CORPORATION, INC.
(Name of small business issuer in its charter)
Commission File No. 333-48675
Texas 42269 73-1537206
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(state of (Primary Standard Industrial (IRS Employer
incorporation) Classification Code Number) I.D. Number)
4334 Northwest Expressway, Suite 202
Oklahoma City, OK 73116
405-840-1585
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(Address and telephone number of registrant's principal
executive offices and principal place of business)
Dave Dischiavo, 7312 Authon Drive,
Dallas, TX 75248 telephone: 972-233-6574
------------------------------------------
(Name, address and telephone number of agent for service)
Copies to:
Thomas J. Kenan, Esq. B. Keith Parker
Suite 3300 Suite 7
100 North Broadway 414 East Loop 281
Oklahoma City, OK 73102-8805 Longview, TX 75605
Approximate date of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE> 2
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a)
may determine.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Title of Proposed Proposed
each class maximum maximum
of securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per unit price fee
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Common Stock 500,000 $0.001 $500 $0.15(1)
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</TABLE>
(1) The 500,000 shares being registered are owned by SuperCorp Inc., the
controlling shareholder of the Registrant, and are to be distributed
by SuperCorp Inc. to its shareholders as a stock dividend. The
registration fee is based upon the book value of the Registrant as of
July 15, 1998. Reg. 230.457(a).
<PAGE> 3
PROSPECTUS
SUMMIT ENVIRONMENTAL CORPORATION, INC.
500,000 Shares of Common Stock
(For the account of a distributing shareholder, SuperCorp Inc.)
Summit Environmental Corporation, Inc. ("the Company") is a recently
formed, development-stage shell company without significant assets or any
business. It was formed by SuperCorp Inc., an Oklahoma corporation
("SuperCorp"), for the purpose of (i) creating a public market for the
Company's securities by distributing to SuperCorp's approximately 650
shareholders ("the Spinoff") 500,000 shares of the Company's Common Stock ("the
Spinoff Shares"), (ii) merging with another Texas corporation, Summit
Technologies, Inc. ("Summit Technologies") ("the Merger"), which other
corporation is a viable company with significant assets and an ongoing
business, and (iii), following the Merger, engaging in the business and
activities now being conducted by Summit Technologies - marketing products
developed by other companies but under license to Summit Technologies. These
products include (i) a fire suppressant certified by the EPA as a replacement
for Halon 1211, (ii) environmentally safe industrial chemicals and cleaners,
(iii) a non-prescription, natural-substances pill designed to increase energy,
alleviate stress, and promote hormonal balances, and (iv) a weight-loss tablet
and a topical application that employ chitosan as their main ingredient.
There is no assurance the Merger will be approved by the shareholders
of Summit Technologies. Should it not be approved, the Company would be what
the Securities and Exchange Commission calls a "blank check company" without
significant assets or a business. Because of this, regulations of the
Commission require that the certificates representing the 500,000 Spinoff
Shares be placed in escrow and be delivered to the SuperCorp shareholders (1)
only in the event the proposed Merger is approved by the Summit Technologies
shareholders or (2), should such Merger not be approved, in the event the
Company acquires significant assets or a business within 18 months of the date
of this Prospectus.
In addition to the 500,000 Spinoff Shares registered herein and to be
distributed pro rata to SuperCorp's shareholders, an additional 125,000 shares
of the Company are held by each of two persons. One of those persons is a
SuperCorp shareholder and a SuperCorp "insider." The other
(continued on next page)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" ON PAGE 4.
--------------------
<TABLE>
<CAPTION>
========================================================================================================================
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND OTHER
RECIPIENT COMMISSIONS PERSONS(1)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Per Share $0.001(2) $0 $0.001
- ------------------------------------------------------------------------------------------------------------------------
500,000 Shares $500(3) $0 $500(4)
========================================================================================================================
</TABLE>
The date of this Prospectus is __________________, 1998.
<PAGE> 4
(1) The estimated expenses of the transaction described herein are
$71,500, all of which are being borne by Summit Technologies, Inc., a
Texas corporation with whom the Company proposes to merge. These
expenses are federal and state registration fees - $100; filing
expenses (EDGAR) - $4,000; stock transfer agent's fee - $4,000; escrow
agent's fee - $500; printing and engraving - $10,000; legal fees -
$20,000; auditor's fee - $2,000; finder's fee - $18,500; mailing cost
- $5,400; and Standard & Poor's Corporation Records publication fee -
$5,000.
(2) Based upon the book value of Summit Environmental Corporation, Inc.
("the Company") on July 17, 1998.
(3) These 500,000 Shares ("the Spinoff Shares") of Common Stock are owned
by SuperCorp Inc. ("SuperCorp"), a shareholder of the Company.
Certificates evidencing these Spinoff Shares will be distributed to an
escrow agent ("the Spinoff") for delivery to the approximately 650
shareholders of SuperCorp at such time as (i) a proposed merger ("the
Merger") between the Company and Summit Technologies shall have been
effected, (ii) this Prospectus is supplemented to indicate the date
the Merger was effected, and (iii) information concerning the
surviving Company shall have been made available to the public and to
National Association of Securities Dealers member firms. See "Plan of
Distribution."
(4) These funds represent the aggregate book value, at $0.001 a Share, of
the Spinoff Shares at the time of the Spinoff (and before the proposed
Merger), which Shares shall be received by the shareholders of
SuperCorp.
is a "finder." Both may be deemed to be "insiders" of the Company. Each
received his 125,000 shares of the Company in connection with the Spinoff and
Merger described herein. Further, the SuperCorp "insider" was allowed to
purchase 23,750 shares of common stock of Summit Technologies at $0.60 a share,
and these shares would be exchanged for 23,750 shares of Common Stock of the
Company should the proposed Merger be approved and effected. Following the
Merger, should it be approved by Summit Technologies' shareholders, the
SuperCorp shareholders receiving the 500,000 Spinoff Shares, the SuperCorp
"insider" and the "finder" would own an aggregate of 773,750 shares of Common
Stock or 11.8 percent of the outstanding 6,560,840 shares of Common Stock of
the Company. Of these 6,560,840 shares, the SuperCorp "insider" would own 2.7
percent, or 176,300 shares - 27,550 shares of which he would have received
through the pro rata spinoff distribution, 125,000 shares he would have
received for services rendered and 23,750 shares he would have purchased for
$0.60 a share . The other SuperCorp shareholders would own 7.2 percent, or
472,450 shares, which they would have received as a dividend through the pro
rata spinoff distribution. See "Transactions with Insiders" and "Other
Financial Considerations - Material Contacts Among the Companies."
Prior to the date of this Prospectus the Company was not a "reporting
company," as such term is employed in the Securities Exchange Act of 1934, and
its Common Stock was neither listed on any exchange nor eligible for quotation
on the Nasdaq Stock Market. There presently is no public market
i
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for the Common Stock of the Company, and there can be no assurance that such a
market will develop or can be sustained should there be a completion of the
proposed Merger. Should the proposed Merger be approved and effected, it is
expected that the Common Stock of the Company will then be eligible for
quotation on the OTC Bulletin Board. Should the proposed Merger not be
effected, there will be no public market for the securities of the Company
because of the above-described escrow arrangement. See "Summary of Proposed
Transaction - Plan of Distribution."
ADDITIONAL INFORMATION
REGISTRATION STATEMENT. The Company has filed with the Securities and
Exchange Commission in Washington, D.C., a Registration Statement under the
Securities Act of 1933, as amended, with respect to the Common Stock offered by
this Prospectus. For further information with respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement
and the exhibits listed in the Registration Statement. The Registration
Statement can be examined at the Public Reference Room of the Securities and
Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies may be obtained upon payment of the prescribed fees. The Company is an
electronic filer, and the Securities and Exchange Commission maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of such site is http://www.sec.gov.
REPORTS TO SHAREHOLDERS. The Company will file reports with the
Securities and Exchange Commission and intends to furnish shareholders with
annual reports containing financial statements audited by independent public or
certified accountants and such other periodic reports as it may deem
appropriate or as required by law.
STOCK CERTIFICATES. It is expected that certificates for the
securities offered hereby will be ready for delivery within one week after the
date of this Prospectus (see "The Escrow Arrangement").
POST-EFFECTIVE AMENDMENT AND PROSPECTUS STICKERS CONCERNING PROPOSED
MERGER. Should the proposed merger described herein be approved by the
requisite shareholder vote and become effective, the Company will file a post-
effective amendment to the Registration Statement described above or a
supplement to the Prospectus, as appropriate, and cause stickers to be placed
on the front cover page of all copies of the Prospectus, which stickers will
describe the results of the vote and the effective date of the merger.
UNTIL _____________________, 1998 (90 DAYS AFTER THE EFFECTIVE DATE OF THE
MERGER), ALL U.S. DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES
MAY BE REQUIRED TO DELIVER A PROSPECTUS.
ii
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
Summary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1. No Assurance the Proposed Merger Will be Approved; Blank Check Company Status Possible . . . . . . . . 4
2. No Assurance of a Public Market and Likelihood
of a Volatile Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Penny Stock Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. No Assurance of Success of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. Company's Contingent Liability for Possible Violation of Registration Requirements
of Securities Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6. Possible Need for Additional Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7. Risk of Loss of Licenses to Sell Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
8. Significant Amount of Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 6
9. Reliance on Key Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
10. Management Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
11. Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
12. Dividends Not Likely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SuperCorp - The Distributing Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SuperCorp May be Deemed to be an Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SuperCorp's Exposure as a Control Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Terms of the Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Terms of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Reasons for the Merger and Spinoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Accounting Treatment of Proposed Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Degree of Management Control of Vote on Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Dissenters' Rights of Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Compliance with Governmental Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Agreement and Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Transactions with Insiders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Services Rendered by Insiders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
The Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Should the Merger Occur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Consequences Should the Merger Not Occur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Dividend Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Liquidation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Registrar and Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Shareholders of Summit Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
iii
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<TABLE>
<S> <C>
The Spinoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Shareholders of SuperCorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Other Financial Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Pro Forma Information and Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Material Contacts Among the Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Penny Stock Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Information About the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Description of Business and Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Course of Business Should the Merger Not Occur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Market for the Company's Common Stock
and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Rule 144 and Rule 145 Restrictions on Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Information About Summit Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Management's Plan of Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Cash Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Product Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Purchases of Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Changes in Number of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Description of Summit Technologies' Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Business Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Principal Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
FirePower 911(TM) and FlameOut(TM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Stressex(TM) and Poder 24(TM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Trim-Away(TM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Industrial Chemicals and Cleaners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Distribution Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Raw Materials and Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Dependence on Major Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Patents, Trademarks and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Government Approval of Principal Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Government Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Office Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Seasonality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Environmental Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Year 2000 Computer Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Number of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Market for Summit Technologies' Capital Stock
and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Management Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
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<TABLE>
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Directors, Executive Officers and Significant
Employees . . . . . . . . . . . . . . . . . . . . . . . . . 41
Summit Technologies . . . . . . . . . . . . . . . . . . . . . . . . 41
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Directors of Summit Technologies . . . . . . . . . . . . . . . . . . 41
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Remuneration of Directors and Officers . . . . . . . . . . . . . . . . . . . 43
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Summit Technologies . . . . . . . . . . . . . . . . . . . . . . . . 43
Employment Contracts . . . . . . . . . . . . . . . . . . . . . . . . 43
Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Certain Relationships and Related Transactions . . . . . . . . . . . . . . . 43
Company's Transactions with Insiders and Promoters . . . . . . . . . 43
Summit Technologies' Transactions with Management . . . . . . . . . 44
Parents of Summit Technologies . . . . . . . . . . . . . . . . . . . . . . . 44
Interests of Named Experts and Counsel . . . . . . . . . . . . . . . . . . . 44
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Financial Statements Index . . . . . . . . . . . . . . . . . . . . . . . . . 46
Appendix A - Agreement of Merger . . . . . . . . . . . . . . . . . . . . . .A-1
</TABLE>
v
<PAGE> 9
SUMMARY INFORMATION
The following summary should be read in conjunction with, and is
qualified in its entirety by, the more detailed information and financial
statements (including the notes thereto) appearing elsewhere in this
Prospectus. All financial statements set forth herein for Summit
Environmental Corporation, Inc. (the "Company") and Summit Technologies, Inc.
have been prepared in accordance with U.S. generally accepted accounting
principles ("GAAP").
<TABLE>
<S> <C>
The transaction - A Spinoff and a proposed Merger.
The proposed Merger - Subject to shareholder approval of both companies, the Company will merge
with Summit Technologies, Inc. ("Summit Technologies"), a Texas corporation.
The survivor of the Merger - The Company, but the historical financial statements of the post-Merger
Company shall be those of Summit Technologies.
Business of the Company - None. A development-stage, shell corporation, organized to merge with
Summit Technologies.
Business of Summit Technologies - Marketing products, under license to it, through television infomercials,
radio spots, and a national industrial distribution company.
Terms of the Merger - Summit Technologies' shareholders would exchange their existing
shareholdings in Summit Technologies for 5,810,840 shares of Common Stock of
the Company.
Management of the Company Summit Technologies'
after the Merger - management.
The Spinoff - A pro rata distribution by SuperCorp Inc. ("SuperCorp") to its approximately
650 shareholders of 500,000 shares of Common Stock of Summit Environmental
Corporation, Inc. ("the Company"), which SuperCorp purchased for $0.001 a
share.
The Spinoff Shares - The 500,000 shares of Common Stock of the Company held by SuperCorp.
</TABLE>
1
<PAGE> 10
<TABLE>
<S> <C>
Terms of the Spinoff - 1 Spinoff Share for each 14 shares of Common Stock of SuperCorp held of
record on the date of this Prospectus.
Other securities of the Company - 250,000 shares of Common Stock held by a "promoter" and by an "insider" of
both the Company and SuperCorp.
Promoter and Insider to
the transaction - George W. Cole may be deemed to be an "insider" to the transaction, and Dave
Dischiavo may be deemed to be a promoter of the transaction. Each of them
may be deemed to own, directly or indirectly through family members, 125,000
shares of Common Stock of the Company. George W. Cole, indirectly through
his spouse and family, may also be deemed to receive 27,550 shares of Common
Stock through the pro rata distribution of the Spinoff Shares and 23,750
shares of Common Stock in the proposed Merger through the ownership of
23,750 shares of common stock of Summit Technologies. See "Transactions
with Insiders" and "Other Financial Considerations - Material Contacts Among
the Companies."
Securities to be outstanding
after the Merger - See table below:
</TABLE>
<TABLE>
<CAPTION>
PROMOTER AND OTHER SUMMIT
TYPE OF SUPERCORP SUPERCORP TECHNOLOGIES
COMPANY'S SECURITY INSIDER SHAREHOLDERS SHAREHOLDERS TOTAL
<S> <C> <C> <C> <C>
Common Stock 301,300(1) 472,450(2) 5,810,840(3) 6,560,840
Percent 4.6% 7.2% 88.6% 100%
</TABLE>
(1) 27,550 of these shares are Spinoff Shares, registered with the
Securities and Exchange Commission ("the Commission"). 250,000 of
these shares are restricted securities and are held 125,000 by Dave
Dischiavo and 125,000 by George W. Cole's spouse, who is a
shareholder of SuperCorp. See, also, footnote (3) with respect to
23,750 additional shares to be received by Mr. Cole's spouse in the
Merger through her ownership of stock of Summit Technologies.
2
<PAGE> 11
(2) Registered with the Commission and unrestricted for transfer in the
stock market.
(3) Includes 23,750 Merger Shares to be received by the SuperCorp
"insider's" spouse. All 5,810,840 shares are registered with the
Commission and unrestricted for transfer in the stock market;
provided, however, that 2,930,545 of these 5,810,840 shares would be
held by affiliates of the post-Merger Company (officers and directors
and controlling shareholders) and would be subject to the limitations
on resale imposed by Rule 145 of the Commission. See "Information
About the Company - Rule 144 and Rule 145 Restrictions on Trading."
<TABLE>
<S> <C>
Plan of Distribution - Certificates representing the
500,000 shares of Common Stock to
be distributed to the SuperCorp
shareholders will be delivered to
Bank One Trust Company, NA,
Oklahoma City, Oklahoma, to be held
in escrow, pursuant to SEC
Regulation 230.419, until the
Merger should be approved by Summit
Technologies. Should it be so
approved, Bank One will then
transmit such certificates to their
owners.
Tax consequences of the Spinoff - Taxable both to SuperCorp and to
the SuperCorp shareholders
receiving the 500,000 Spinoff
Shares. Based upon the opinion of
counsel, SuperCorp believes the
value of the Spinoff Shares for
federal income tax purposes is
negligible - $0.001 a share. See
"Federal Income Tax Consequences."
Tax consequences of the Merger - Not taxable. See "Federal Income
Tax Consequences."
Address of SuperCorp - Suite 202
4334 Northwest Expressway
Oklahoma City, OK 73116
Telephone: 405-840-1585
Address of the Company - Suite 202
4334 Northwest Expressway
Texas City, OK 73116
Telephone: 405-840-1585
Address of Summit Technologies - Suite 7
414 East Loop 281
Longview, TX 75605
Telephone: 800-522-7841
</TABLE>
3
<PAGE> 12
RISK FACTORS.
Ownership of the Common Stock of the Company is speculative and involves
a high degree of risk, whether the Merger with Summit Technologies be effected
or not. See "Risk Factors" below.
RISK FACTORS
Any person acquiring securities of the company in the open market is
making an investment decision that involves a high degree of risk and should
carefully consider the following factors:
1. No Assurance the Proposed Merger Will be Approved; Blank Check
Company Status Possible. There is no assurance the proposed merger (the
"Merger") between the Company and Summit Technologies will occur. It must
be approved by the shareholders of Summit Technologies at a special meeting of
its shareholders, and Summit Technologies' management has agreed to vote its
shares in accordance with the majority vote of non-management shareholders.
Should the proposed Merger not be approved, the Company would be what the
Securities and Exchange Commission calls a "blank check company" - a company
without significant assets or a business whose sole purpose is to acquire
significant assets or a business by merger or otherwise. Because of this,
regulations of the Commission require that the certificates representing the
500,000 Spinoff Shares be placed in escrow and be delivered to the SuperCorp
shareholders (1) only in the event the proposed Merger is approved by the Summit
Technologies shareholders or (2), should such Merger not be approved, in the
event the Company acquires significant assets or a business within 18 months of
the date of this Prospectus. No assurance can be given that such would occur
within eighteen months of the date of this Prospectus, and if it should not
occur, the Company would be dissolved.
2. No Assurance of a Public Market and Likelihood of a Volatile Market.
There is presently no public market for the Spinoff Shares and there is no
assurance that a public market for such securities will develop after the
occurrence of the Merger described in this Prospectus or, if one develops, that
it will be sustained. It is likely that any market that develops for the
Common Stock, should it develop, will be highly volatile and that the trading
volume in such market will be limited.
3. Penny Stock Regulations. The Company anticipates that its Common
Stock will be listed on the OTC Bulletin Board, but no assurance can be given
that this will occur or, if it occurs, that such listing can be maintained.
Further, should the Company's Common Stock trade on the OTC Bulletin Board at
less than $5 a share - and it is expected that this will be the case, the stock
will be a so-called "penny stock," which subjects broker-dealer firms to
certain restrictions and a strict regimen if they recommend the stock to
certain of their customers. Because of these restrictions, trading in the
stock will likely be inhibited and a shareholder's ability to resell the stock
in the stock market could be limited, which itself could tend to further
inhibit the creation of market interest in the stock and act as a depressant on
its price in the stock market. See "Penny Stock Regulations."
4. No Assurance of Success of Business. Should the proposed Merger
occur, the post-Merger Company will be engaged in the business of marketing
products produced by others but under license to sell. This business, only
commenced in the second half of 1997 by Summit Technologies, is not operating
at a profit. There can be, and is, no assurance that this business will be
profitable. See "Information About Summit Technologies."
5. Company's Contingent Liability for Possible Violation of
Registration Requirements of Securities Act. Subsequent to the filing with the
Securities and Exchange Commission of the registration statement of which this
Prospectus is a part, Summit Technologies, Inc., with whom the Company proposes
to merge, sold $1,072,428 worth of its common stock to 42 persons. Summit
Technologies believed that such offering was exempt from registration under
Section 5 of the Securities Act of 1933 (the "Act") by reason of the provisions
of Section 4(2) of the Act and Regulation D, Rule 506 thereunder. It is
possible - but not conceded by either the Company or Summit Technologies - that
such exemptions from registration were not available to Summit Technologies
because of the public nature of the registration statement and also because the
relationships between Summit Technologies and some of the purchasers in such
offering may not have satisfied the requirement of the Commission that such
relationships be of a pre-existing, substantive nature.
Should no exemption from Section 5 registration have been available for
such offering, Summit Technologies - and the Company, should the proposed Merger
be approved and effected - as well as the persons controlling Summit
Technologies at the time of such sales of securities could be held liable under
Section 12(1) of the Act to the 42 purchasers of such common stock for their
purchase price, with interest thereon, less any income received thereon, upon
the tender of their shares of common stock, or for damages if they no longer own
the securities. Such an action would have to be brought in a court within one
year after the purchase of the securities.
To the extent that any such actions should be filed and successfully
litigated, Summit Technologies' and, should the Merger be approved and effected,
the Company's operations, plans and ability to finance business operations would
be adversely affected.
6. Possible Need for Additional Funding. Should the proposed Merger be
approved, it appears that the post-Merger Company will have no need for funding
to achieve its plan of operations for the next twelve months. However, unless
Summit Technologies' operations become profitable and because of Summit
Technologies' contingent liability for possible violations of the registration
requirements of the Securities Act of 1933 (see Risk Factor No. 5 immediately
above), there may be a future requirement for additional funding. If additional
funding is needed, the source for this funding has not been identified or
committed, and no assurance can be given that the needed funds could be
obtained. Failure to obtain the funds could result in a contraction of future
advertising, an inability to fill orders for merchandise, a loss of sales, poor
relations with business customers and possible failure of the business. See
"Information About Summit Technologies - Management's Plan of Operation; - Cash
Requirements."
4
<PAGE> 13
7. Risk of Loss of License to Sell Fire Suppressant Product. Summit
Technologies, with whom the Company proposes to merge, distributes products
owned by other companies. The continuation of its license to distribute one of
these products, a fire suppressant, will depend upon achievement of minimum,
annual sales of the fire suppressants should Summit Technologies not be able to
exercise by November 15, 1998 an option it has to purchase all patent and other
intellectual property rights associated with the fire suppressant. This
product is deemed by Summit Technologies to be important to its future. There
can be no assurance either that Summit Technologies will be able to exercise
its option or that the periodic required levels of sales can be met should the
option not be exercised and a minimum annual sales quota be established.
Factors not under the control of Summit Technologies could affect its ability
to meet these required levels of sales. The loss of the right to distribute
the fire suppressant product could have a materially adverse effect upon the
post-Merger Company.
8. Significant Amount of Transactions with Affiliates. Summit
Technologies is affiliated with Moonlighting Distribution Corporation
("Moonlighting"), a Longview, Texas corporation under the control and 52.5
percent ownership of B. Keith Parker and his spouse, Paula Parker, who are
officers and directors of Summit Technologies. Should the proposed merger
described herein be approved and effected, the management of Summit Technologies
will become the management of the Company, and the Company will then be
affiliated with Moonlighting as Summit Technologies is today.
Summit Technologies acquired its distribution rights to its FirePower
911(TM), FlameOut(TM), Stressex(TM), Poder 24(TM) and Trim-Away(TM) products
from Moonlighting in exchange for $30,000 and 350,000 shares of common stock of
Summit Technologies. Summit Technologies pays - and should the proposed Merger
be approved, the Company will be obligated to pay - to Moonlighting a royalty of
$0.50 for each 16-ounces of FirePower 911(TM) and $0.50 for each gallon of
FlameOut(TM). Summit Technologies buys its Stressex(TM), Poder 24(TM) and
Trim-Away(TM) products from Moonlighting (which does not itself manufacture
these products), which marks up the price of these products to Summit
Technologies approximately 37 percent over its own cost.
Because both Summit Technologies and Moonlighting are under the common
direction and control of B. Keith Parker and his spouse, Paula Parker, there can
be no assurance that negotiations between the two companies concerning the
pricing of the Stressex(TM), Poder 24(TM) and Trim-Away(TM) products bought from
Moonlighting by Summit Technologies or concerning other matters will, or can be,
conducted in an arm's-length manner on behalf of Summit Technologies or that the
result of such negotiations will be as advantageous to Summit Technologies as
they could have been had the two companies not been under common control.
9. Reliance on Key Personnel. Should the Merger occur, the post-Merger
Company will be reliant on the continued services of several key personnel, and
the loss of any of them could have a materially adverse effect on the future
operations of the Company. These persons are B. Keith Parker, chief executive
officer of Summit Technologies; Don Hendon, president and treasurer, and Paula
Parker, corporate secretary. There can be no assurance that the loss of key
personnel will not materially and adversely affect its operations and,
particularly, its expansion. See "Management Information - Directors,
Executive Officers and Significant Employees."
10. Management Control. Should the proposed Merger be approved and
effected, after the Merger the Company's officers and directors and their
affiliates will own approximately 44.7 percent of the Common Stock of the
Company and thereby may be able to determine the outcome of any vote affecting
the control of the Company.
11. Tax Consequences. In the opinion of tax counsel to the Company (see
"Federal Income Tax Consequences"), the proposed Merger will be a tax-free
reorganization and the distribution of the 500,000 Spinoff Shares to the
SuperCorp shareholders will occasion negligible income taxes to the SuperCorp
shareholders and none to the Company. These anticipated favorable tax
consequences are not supported by an advance ruling by the Treasury Department
but are based upon the opinion of tax counsel to the Company and to SuperCorp.
Should the actual tax consequences be different than as represented herein,
SuperCorp's shareholders, to whom would be distributed 500,000 Spinoff Shares,
could recognize taxable dividend income equal to the fair market value of the
Spinoff Shares, which could range from as low as $0.25 a Spinoff Share (the
June 30, 1998, book value) to a higher price possibly set by initial trading
activity in the stock market.
12. Dividends Not Likely. Should the Merger be effected, for the
foreseeable future it is anticipated that any earnings which may be generated
from Operations of the emergent company will be used to finance the growth of
such company, and cash dividends will not be paid to holders of the Common
Stock.
5
<PAGE> 14
SUPERCORP - THE DISTRIBUTING SHAREHOLDER
SuperCorp Inc. ("SuperCorp") was organized under the laws of the State of
Oklahoma on October 21, 1988. SuperCorp has approximately 650 shareholders in
35 states, almost all of whom it acquired in early 1989 when it purchased all
the assets of Naturizer, Inc., through a chapter 11 plan of reorganization, in
exchange for shares of common stock of SuperCorp, which shares were distributed
to the creditors and shareholders of Naturizer, Inc. One of the purposes for
which SuperCorp was organized is to engage in "spinoff" activities such as are
described herein, such spinoffs to involve the distribution, by way of stock
dividends or otherwise, of registered shares of stock of other companies.
SuperCorp has assets consisting of approximately $50,000 in cash. Each of
its five directors, Albert L. Welsh, John E. Adams, Ronald D. Wallace, T.E.
King, and Thomas J. Kenan, either directly or by attribution through ownership
by family members, owns 375,000 shares of common stock of SuperCorp, which
amount is less than six percent of the number of outstanding shares. See
"Management Information - Security Ownership of Certain Beneficial Owners and
Management."
SuperCorp is not subject to the reporting requirements imposed by Section
15(d) of the Securities Act of 1933 or Section 13 of the Securities Exchange
Act of 1934. Its common stock does not trade in the stock market, and it has
never sought a market maker for its stock.
SuperCorp organized the Company in February 1998 as a vehicle specifically
for the proposed Merger. The Company has no business history, $750 in assets,
no liabilities, and three shareholders - SuperCorp; Dave Dischiavo, a "finder";
and Marjorie Cole, a shareholder of SuperCorp who is the spouse of George W.
Cole, an "insider" of the Company and of SuperCorp. See "Information About the
Company." Should the proposed Merger not be effected, see "Plan of
Distribution - The Escrow Arrangement - Consequences Should the Merger Not
Occur" below for an explanation of what disposition would be made of the
Company.
SUPERCORP MAY BE DEEMED TO BE AN UNDERWRITER.
The 500,000 Spinoff Shares described herein are owned by SuperCorp and are
to be redistributed by SuperCorp, who might be deemed to be an underwriter by
reason of its intent to distribute such Shares.
After the distribution by SuperCorp of the Spinoff Shares to its
shareholders, SuperCorp will no longer own any shares of capital stock of the
Company, except to the extent that approximately 232 Spinoff Shares, reserved
for rounding-up purposes, would not be allocated in the rounding-up process
(see "Terms of the Merger").
A consequence to SuperCorp, should it be deemed to be an underwriter of
the Shares to be distributed to its shareholders, is that any person who
purchases the registered Shares within three years after the distribution could
assert a claim against SuperCorp under Section 11 of the Securities Act of
1933. The purchase could be in the open market as long as the shares purchased
can be traced to the registered Shares SuperCorp distributes to its
shareholders. Such a claim, to be successful, must be
6
<PAGE> 15
based upon a showing that statements in the registration statement were false
or misleading with respect to a material fact or that the registration
statement omitted material information required to be included therein.
Open market purchasers may have to prove reliance upon the alleged
misstatement or omission, but reliance may not necessarily require a showing
that the purchaser actually read the registration statement but, instead, that
the misstatements or omissions in the registration statement were a substantial
factor in the purchase of the shares.
SUPERCORP'S EXPOSURE AS A CONTROL PERSON.
SuperCorp organized the Company and, since its organization and until the
proposed Merger should become effective, has been and will be a "control
person" of the Company, as that term is defined in Section 15 of the Securities
Act of 1933 ("the Act").
Section 15 of the Act imposes joint and several liability on persons who
control other persons substantively liable under other sections of the Act:
Section 11, for misrepresentations in a registration statement, Section 12(1) -
the unlawful sale of unregistered securities, and Section 12(2) -
misrepresentations in the sale of securities. A controlling person can avoid
liability by proving "he had no knowledge of or reasonable grounds to believe
in the existence of the facts by reason of which the liability of the
controlled person is alleged to exist."
TERMS OF THE TRANSACTION
The Company, SuperCorp, and Summit Technologies, pursuant to approval by
their respective boards of directors, have entered into an agreement of merger
between the Company and Summit Technologies, a copy of which is included herein
(see "Appendix A - Agreement of Merger"). In order for the merger contemplated
by the Agreement of Merger to become effective, it is necessary that each of
the following occur:
(i) a registration statement covering 500,000 Spinoff Shares (for
distribution pro rata to SuperCorp's securities holders) must be filed
with the Securities and Exchange Commission and with appropriate state
securities regulatory agencies and must become effective;
(ii) the shareholders of each of the Company and of Summit
Technologies must, by a requisite vote of the shares outstanding, approve
the merger contemplated by the Agreement of Merger; and
(iii) certain documents evidencing the approved merger must be
prepared and filed with the Secretary of State of Texas.
TERMS OF THE MERGER.
The terms of the proposed merger ("the Merger") are as follows:
1. Summit Technologies shall merge into the Company.
7
<PAGE> 16
2. Upon the effectiveness of the Merger, the outstanding shares of
common stock of Summit Technologies shall be exchanged for 5,810,840 shares of
Common Stock of the Company ("the Merger Shares"). See "Description of
Securities."
3. The business of Summit Technologies shall be conducted, after the
Merger, by the Company, into which Summit Technologies shall have merged, but
Summit Technologies' management and directors shall become the management and
directors of the Company. See "Management Information."
4. Prior to the Merger, SuperCorp shall have distributed to its
shareholders ("the Spinoff"), on a basis proportionate to their shareholders in
SuperCorp, 500,000 Shares ("the Spinoff Shares") of Common Stock of the Company
now held by SuperCorp. Each SuperCorp shareholder shall receive one share of
the company for each fourteen shares of SuperCorp held of record on the date of
this Prospectus.
5. The historical financial statements of the post-Merger Company shall
be those of Summit Technologies. See "Financial Statements - Summit
Technologies."
6. Should the Merger not be approved by the shareholders of Summit
Technologies, none of Summit Technologies, the Company, or SuperCorp shall be
liable to any of the others, but it shall be the sole obligation of Summit
Technologies to pay all three parties' expenses relating to the registration of
the Shares described herein.
REASONS FOR THE MERGER AND SPINOFF.
The managements of the Company and of Summit Technologies believe that
Summit Technologies' shareholders will benefit from receiving shares of the
Company in exchange for their shares of capital stock of Summit Technologies.
They believe that the distribution of shares to the stockholders of SuperCorp
in the Spinoff will provide the basis for the creation of a public market for
the Common Stock of the post-Merger Company and that the existence of such a
public market will facilitate the raising of expansion funds for the
post-Merger Company. No assurance can be given, however, that a market will
develop for the Common Stock or, if it develops, that it will be sustained.
See "Risk Factors - No Assurance of a Public Market."
SuperCorp, which controls the Company, believes that the SuperCorp
shareholders will benefit by receiving, for no consideration, the 500,000
Spinoff Shares.
This transaction with Summit Technologies, should it be approved by the
shareholders of Summit Technologies, will be the third such "spinoff-merger"
transaction effected by SuperCorp with subsidiaries it creates for such
purposes. The first spinoff-merger transaction concerned Lark Technologies, Inc.
("Lark"), a SuperCorp-created subsidiary that merged with a Houston, Texas
company engaged in DNA sequencing whose major shareholders are affiliates of the
Baylor School of Medicine. The second spinoff-merger transaction concerned
Dransfield China Paper Corporation ("Dransfield"), a SuperCorp-created
subsidiary that merged with a Hong Kong company engaged in distributing hygienic
paper products in Hong Kong and building integrated paper mills in China and
whose major shareholder is a Hong Kong Stock Exchange-listed company. Lark's
common stock trades on the OTC Bulletin Board under the symbol "LDNA," and
Dransfield's common stock trades on the Nasdaq SmallCap Market under the symbol
"DCPCF." Subsequent to the Lark spinoff-merger, Lark raised $1 million in a
rights offering to its shareholder base. Subsequent to the Dransfield
spinoff-merger, Dransfield raised $750,000 in a private placement to investors
in the U.S. and Hong Kong. Both Lark and Dransfield are operating today, their
common stock prices are quoted daily, and both file reports with the Commission
pursuant to the requirements of the Securities Exchange Act of 1934.
Effectively, shareholders of Summit Technologies will suffer an 11.4
percent dilution in their equity in Summit Technologies solely for the
perceived, but not assured, benefits of having a public market created for
their securities and of having created what may be a superior position from
which to raise additional capital for the post-Merger Company.
8
<PAGE> 17
ACCOUNTING TREATMENT OF PROPOSED MERGER.
Because the Company is only a corporate shell and not an operating entity,
the proposed Merger will be accounted for as if Summit Technologies
recapitalized.
DEGREE OF MANAGEMENT CONTROL OF VOTE ON MERGER.
The Merger must be approved by an affirmative vote of the holders of at
least two-thirds of the outstanding shares of Common Stock of each of the
Company and Summit Technologies. With respect to such companies, the
percentage of outstanding shares entitled to vote and held by officers,
directors and their affiliates are as follows: the Company - 83.3%; and Summit
Technologies - 50.4%. Summit Technologies' officers, directors and affiliates,
even though they are recommending approval of the Merger, have agreed to vote
their shares to approve or disapprove the proposed Merger in accordance with
the majority vote of the other voting shareholders.
DISSENTERS' RIGHTS OF APPRAISAL.
Those shareholders of Summit Technologies who vote against the Merger have
the right to dissent and to exercise certain rights of appraisal, which, if
exercised, and if the Merger is effected, would cause Summit Technologies to
pay these dissenters the appraised value of their shareholdings. See "Voting
and Management Information - Dissenters' Rights of Appraisal."
COMPLIANCE WITH GOVERNMENTAL REGULATIONS.
No federal or state regulatory requirements, other than securities laws
and regulations, must be complied with or federal or state approval obtained in
connection with the Spinoff and Merger, other than the filing of articles of
merger with the Secretary of State of Texas after a favorable vote might be
obtained on the proposed merger.
AGREEMENT AND PLAN OF MERGER.
The complete Agreement of Merger among the Company, Summit Technologies,
and SuperCorp is included in this Prospectus. See "Appendix A - Agreement of
Merger."
TRANSACTIONS WITH INSIDERS
The 500,000 Spinoff Shares will be distributed pro rata to all SuperCorp
shareholders of record on the date of this Prospectus. An additional 250,000
shares of Common Stock of the Company are owned by two persons, either directly
or by attribution to their family members.
Both of these persons, by reason of their present ownership of securities
of the Company, may be deemed to be "promoters" or "insiders" of the Company
who will receive benefits from the transaction not received by SuperCorp
shareholders who are not insiders.
9
<PAGE> 18
The identities of the "promoters" or "insiders," their positions with the
Company and with SuperCorp, and the securities of the Company each now owns are
as follows:
<TABLE>
<CAPTION>
Office or
Position with Company Shares of
Insider or SuperCorp Common Stock
------- ------------ ------------
<S> <C> <C>
David Dischiavo None 125,000
George W. Cole None 125,000(1)
</TABLE>
- -------------------------
(1) These shares are held by Marjorie Cole, Mr. Cole's spouse, who together
with Mr. Cole and members of their family will also receive 27,550 shares
of the Company as her pro rata share of the Spinoff Shares and 23,750
shares of the Company through the Merger by reason of her ownership of
23,750 shares of common stock of Summit Technologies.
SERVICES RENDERED BY INSIDERS.
Mr. Dischiavo and Mr. Cole may be deemed to be "insiders" or "promoters"
in connection with the purchase by each of 125,000 shares of Common Stock of
the Registrant for $125, or $0.001 a share. Each also performed services for
the Registrant and SuperCorp Inc. See "Other Financial Considerations -
Material Contacts Among the Companies."
For a comparison of the securities to be received by the promoters and
insiders and to be received by other SuperCorp shareholders, see the table
under "Summary Information - Securities to be Outstanding After the Merger."
For details concerning the direct or attributed ownership of Company securities
by the promoters and insiders, see "Management Information - Security Ownership
of Certain Beneficial Owners and Management."
PLAN OF DISTRIBUTION
THE ESCROW ARRANGEMENT.
A vote to approve the Merger by the shareholders of the Company is
assured. After such vote but before any vote by the shareholders of Summit
Technologies, SuperCorp shall declare a dividend to its shareholders of the
500,000 shares of Common Stock of the Company held by it ("the Spinoff
Shares"). Certificates representing the 500,000 Spinoff Shares shall be
distributed by SuperCorp to Bank One Trust Company, N.A., Oklahoma City,
Oklahoma ("the Escrow Agent") to be held in escrow pursuant to the provisions
of Securities and Exchange Commission Regulation 230.419. Later distribution
by the Escrow Agent would be as follows:
SHOULD THE MERGER OCCUR. Upon the legal effectiveness of the Merger
(should Summit Technologies' shareholders approve the Merger), the Company
shall supplement this Prospectus to indicate the fact and date of the Merger.
At such time as the Company's Common Stock is declared eligible for quotation
on the OTC Bulletin Board, the Company shall provide to the
10
<PAGE> 19
Escrow Agent the Company's representation that the requirements of Securities
and Exchange Commission Regulation Section 230.419(e) have been met, and the
Escrow Agent shall distribute the escrowed certificates representing the
500,000 Spinoff Shares to the owners of such securities.
CONSEQUENCES SHOULD THE MERGER NOT OCCUR. There can be no assurance that
the proposed Merger between the Company and Summit Technologies will occur,
since a favorable shareholder vote of Summit Technologies' shareholders must be
obtained, and no assurance can be given that such will be obtained.
Should the Merger not become effective, (i) Summit Technologies will
continue as a separate corporation with its existing assets and business, and
(ii) the Company will have no significant assets or business, and there will be
no trading market for its securities, which will still be held in escrow by the
Escrow Agent. As long as this escrow continues, no transfer or other
disposition of the securities held in escrow shall be permitted other than by
will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986, as
amended, or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder. The Company's management has no specific plans for an alternative
to a rejection of the proposed Merger but would seek to acquire a business or
assets that would constitute a business, using funds contributed by management
to pay the costs of such search. Upon execution of any agreement for the
acquisition of a business or assets that would constitute a business, the
Company shall file with the Securities and Exchange Commission (the
"Commission") a post-effective amendment to the Registration Statement that
discloses information required by the Commission's applicable registration form
(such as Form S-1 or Form SB-2) and Industry Guides, which would include
information about the alternative business or assets acquisition, including
financial statements of the Company and of the company to be acquired as well
as pro forma financial information. Upon the legal effectiveness of the
acquisition described in the amended registration statement, the Escrow Agent
would distribute the certificates held in escrow together with the Prospectus
contained in the amended Registration Statement. No later than 90 days after
the end of the first full fiscal year of operations following consummation of
an acquisition, as described above, the Company shall furnish its shareholders
audited financial statements for such year as well as the Company's plan of
operation for the next year and file such information with the Commission on a
Form 10-K or 10-KSB. See "Penny Stock Regulations."
Should no alternative to the Merger be effected within eighteen
months after the effective date of the initial Registration Statement of which
this Prospectus is a part, Rule 419 of the Securities and Exchange Commission
requires that the acquisition effort be abandoned. In such event, the
certificates held in escrow would not be delivered to the record owners
thereof. The holders of a majority of the Company's Common Stock will have
voting rights to cause a dissolution of the Company, and persons who will
constitute such a majority have indicated their intentions to so exercise these
voting rights to that effect at that time. Such persons are Albert L. Welsh,
president and a director of SuperCorp; Nita Kaye Adams, Renee Adams, Chris
Adams, and Meridyne Corp., all of whom are related to or affiliated with John
E. Adams, a director of SuperCorp; the Marilyn C.
11
<PAGE> 20
Kenan Trust, which is under the control of the spouse of Thomas J. Kenan, a
director of SuperCorp, and Mary M. Kenan and Joseph N. Kenan, the adult
daughter and son of Thomas J. Kenan; Patrick D. and Julia V. Kenan; Ronald D.
Wallace, a director of SuperCorp and the beneficial owner of SuperCorp shares
held by Sackville Advisors, Ltd., which is under his control; T.E. King, a
director of SuperCorp; George W. Cole; Marjorie Cole; George B. Cole; Judith
Rader, Gary E. Bryant, Mary N. Jackson; Suzanne Kerr; Marshall A. Pierson; and
Susanne Peterson, shareholders of SuperCorp. See "The Escrow Arrangement."
DESCRIPTION OF SECURITIES
COMMON STOCK. Each of the Company and Summit Technologies is a Texas
corporation. The Company is authorized to issue 40 million shares of Common
Stock, $0.001 par value and has 750,000 shares of Common Stock issued and
outstanding. Summit Technologies is authorized to issue 10 million shares of
common stock, no par value, and has 5,810,840 shares of its Common Stock issued
and outstanding.
VOTING RIGHTS. Holders of the shares of Common Stock are entitled to
one vote per share on all matters submitted to a vote of the shareholders.
Shares of Common Stock do not have cumulative voting rights, which means that
the holders of a majority of the shares voting for the election of the board of
directors can elect all members of the board of directors.
DIVIDEND RIGHTS. Holders of record of shares of Common Stock are
entitled to receive dividends when and if declared by the board of directors
out of funds of the Company legally available therefor.
LIQUIDATION RIGHTS. Upon any liquidation, dissolution or winding up,
holders of shares of Common Stock are entitled to receive pro rata all of the
assets of the Company available for distribution to shareholders, subject to
the prior satisfaction of the liquidation rights of the holders of outstanding
shares of Preferred Stock.
PREEMPTIVE RIGHTS. Holders of Common Stock do not have any
preemptive rights to subscribe for or to purchase any stock, obligations or
other securities of the Company.
REGISTRAR AND TRANSFER AGENT. Bank One Trust Company, NA, Oklahoma
City, Oklahoma, serves as the transfer agent and registrar of the Common Stock
of the Company. Summit Technologies serves as its own registrar and transfer
agent.
DISSENTERS' RIGHTS. Under current Texas law, a shareholder is
afforded dissenters' rights which, if properly exercised, may require the
corporation to repurchase its shares. Dissenters' rights commonly arise in
extraordinary transactions such as mergers, consolidations, reorganizations,
substantial asset sales, liquidating distributions, and certain amendments to
the company's memorandum and articles of association.
PREFERRED STOCK. The Company is authorized to issue 10 million shares of
Preferred Stock, $0.001 par value. The Preferred Stock may be issued from time
to time by the directors as shares of one or more series. The
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<PAGE> 21
description of shares of each series of Preferred Stock, including any
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption shall be set forth in resolutions adopted by the directors.
There are no shares of Preferred Stock of the Company issued and
outstanding.
FEDERAL INCOME TAX CONSEQUENCES
THE MERGER. In the opinion of Thomas J. Kenan, counsel to the Company and
to SuperCorp, the Merger should qualify as a type "A" reorganization under
Section 368(a)(1) of the Internal Revenue Code. However, when consideration is
given to the fact that the Company is newly organized, the "step transaction
doctrine" might be applied and, accordingly, the Company might be considered a
continuation of Summit Technologies with only a change of name or place of
incorporation, a type "F" reorganization under Section 368(a)(1).
SHAREHOLDERS OF SUMMIT TECHNOLOGIES. Whether the Merger be
characterized as a type "A" or "F" reorganization, the Company believes that
there should be no recognition of taxable gain or loss to the shareholders of
Summit Technologies by reason of the Merger. Each shareholder of Summit
Technologies would have a carryover tax basis and a tacked holding period for
the Company's securities received in the Merger. Further, Summit Technologies
itself would not recognize any taxable gain or loss, since its liabilities are
not in excess of the tax basis of its assets.
It is anticipated that the distribution by SuperCorp to its
shareholders of the 500,000 Spinoff Shares will not adversely affect the
non-recognition of gain or loss to Summit Technologies or its shareholders in
the merger.
The above discussion is not based upon an advance ruling by the
Treasury Department but upon an opinion of Thomas J. Kenan, esquire, in his
capacity as tax counsel to the Company (which tax opinion is one of the
exhibits to the registration statement of which this Prospectus-Proxy Statement
is a part). See "Risk Factors - Tax Consequences."
THE SPINOFF. In the opinion of Thomas J. Kenan, counsel to SuperCorp and
to the Company, the distribution by SuperCorp to its shareholders of the
500,000 Spinoff Shares will be a taxable event to SuperCorp and to each of its
shareholders receiving any of the Spinoff Shares. Gain (but not loss) would be
recognized by SuperCorp under Section 311 of the Internal Revenue Code for any
excess of the fair market value of the Company's stock on the date of actual
distribution over the tax basis to SuperCorp of such stock.
SHAREHOLDERS OF SUPERCORP. As for SuperCorp's shareholders who receive
Spinoff Shares of the Company, the spinoff shall occur prior to the vote by
Summit Technologies' shareholders to accept or reject the Merger. Since the
result of the vote by Summit Technologies' shareholders cannot be forecast, and
since the Merger cannot and shall not become effective until after a favorable
vote is obtained on the Merger, it is Mr. Kenan's
13
<PAGE> 22
opinion that it is more likely than not that the fair market value of the
Spinoff Shares on the date of the Spinoff should not have increased over the
$0.001 price paid by SuperCorp for the 500,000 Spinoff Shares.
SuperCorp has no current or accumulated earnings, and the distribution is
being made from excess capital. Each shareholder of SuperCorp should reduce
the adjusted basis of his SuperCorp stock by the fair market value of the
distribution to him, and any remaining portion will be treated as capital gain
in the same manner as a sale or exchange of the stock. This fair market value
is assumed to be $0.001 per share. SuperCorp undertakes to advise its
shareholders in early 1999 should it deem the fair market value of the
distributed Spinoff Shares on the date of distribution to have been different
than $0.001 per share or should it have had earnings in 1998 which would cause
the distribution, to the extent of such earnings, to be taxed as a dividend and
as ordinary income.
The above discussion as to U.S. income tax consequences is not based upon
an advance ruling by the Treasury Department but upon the opinion of tax
counsel to the Company (which tax opinion is an exhibit to the registration
statement of which this Prospectus is a part). See "Risk Factors - Tax
Consequences."
OTHER FINANCIAL CONSIDERATIONS
PRO FORMA FINANCIAL INFORMATION AND DILUTION.
The following sets forth certain pro forma financial information giving
effect to the Merger:
14
<PAGE> 23
PRO FORMA STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SUMMIT SUMMIT
ENV. CORP. TECH. PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets $ -- $ 92,388 $1,473,178 $1,565,566
Property and equipment -- -- -- --
Other assets, net -- 9,500 -- 9,500
---------- ---------- ---------- ----------
TOTAL ASSETS $ -- $ 101,888 $1,473,178 $1,575,066
========== ========== ========== ==========
LIABILITIES, COMMON STOCK SUBJECT TO A CONTINGENCY,
AND STOCKHOLDERS' EQUITY
Current liabilities $ -- $ 15,126 $ -- $ 15,126
Long term liabilities -- -- -- --
---------- ---------- ---------- ----------
Total liabilities -- 15,126 -- 15,126
---------- ---------- ---------- ----------
Common stock subject to a contingency:
Common stock (810,840 shares) -- -- 811 811
Additional paid in capital -- -- 1,071,617 1,071,617
---------- ---------- ---------- ----------
Total common stock subject to a contingency -- -- 1,072,428 1,072,428
---------- ---------- ---------- ----------
Stockholders' equity:
Common stock -- 1,000 4,750 5,750
Additional paid in capital -- 45,000 396,000 441,000
Retained earnings -- 40,762 -- 40,762
---------- ---------- ---------- ----------
Total stockholders' equity -- 86,762 400,750 487,512
---------- ---------- ---------- ----------
TOTAL LIABILITIES, COMMON STOCK
SUBJECT TO A CONTINGENCY, AND
STOCKHOLDERS' EQUITY $ -- $ 101,888 $1,473,178 $1,575,066
========== ========== ========== ==========
PRO FORMA BOOK VALUE PER SHARE $ 0.0743
==========
</TABLE>
NOTE:
Pro forma book value per share is calculated by dividing Total Stockholders'
Equity ($487,512) by the total number of shares outstanding (6,560,840).
15
<PAGE> 24
PRO FORMA STATEMENT OF FINANCIAL CONDITION
JUNE 30, 1998
<TABLE>
<CAPTION>
SUMMIT SUMMIT
ENV. CORP. TECH. PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets $ 750 $ 1,345,611 $ -- $ 1,346,361
Property and equipment -- 15,401 -- 15,401
Other assets, net -- 253,697 -- 253,697
------------ ------------ ------------ ------------
TOTAL ASSETS $ 750 $ 1,614,709 $ -- $ 1,615,459
============ ============ ============ ============
LIABILITIES, COMMON STOCK SUBJECT TO A CONTINGENCY,
AND STOCKHOLDERS' EQUITY
Current liabilities $ -- $ 98,375 $ -- $ 98,375
Long term liabilities -- -- -- --
------------ ------------ ------------ ------------
Total liabilities -- 98,375 -- 98,375
------------ ------------ ------------ ------------
Common stock subject to a contingency:
Common stock (810,840 shares) -- 811 -- 811
Additional paid in capital -- 1,071,617 -- 1,071,617
------------ ------------ ------------ ------------
Total common stock subject to a contingency -- 1,072,428 -- 1,072,428
------------ ------------ ------------ ------------
Stockholders' equity:
Common stock (5,750,000 shares combined) 750 5,000 -- 5,750
Additional paid in capital -- 441,000 -- 441,000
Retained earnings -- (2,094) -- (2,094)
------------ ------------ ------------ ------------
Total stockholders' equity 750 443,906 -- 444,656
------------ ------------ ------------ ------------
TOTAL LIABILITIES, COMMON STOCK
SUBJECT TO A CONTINGENCY, AND
STOCKHOLDERS' EQUITY $ 750 $ 1,614,709 $ -- $ 1,615,459
============ ============ ============ ============
PRO FORMA BOOK VALUE PER SHARE $ 0.0678
============
</TABLE>
NOTE:
Pro forma book value per share is calculated by dividing Total Stockholders'
Equity ($444,656) by the total number of shares outstanding (6,560,840).
16
<PAGE> 25
PRO FORMA STATEMENT OF INCOME
FOR THE PERIOD AUGUST 14, 1997 TO DECEMBER 31, 1997
SUMMIT SUMMIT
<TABLE>
<CAPTION>
ENV. CORP. TECH. PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ----------- ----------
<S> <C> <C> <C> <C>
Sales $ -- $ 74,349 $ -- $ 74,349
Cost of sales -- 9,465 -- 9,465
---------- ---------- ---------- ----------
Gross profit -- 64,884 -- 64,884
Operating expenses -- 16,870 -- 16,870
---------- ---------- ---------- ----------
Net income from operations -- 48,014 -- 48,014
Income tax -- 7,252 -- 7,252
---------- ---------- ---------- ----------
NET INCOME $ -- $ 40,762 $ -- $ 40,762
========== ========== ========== ==========
EARNINGS PER SHARE
Net income $ -- $ 40,762 $ -- $ 40,762
Weighted-average number of shares outstanding -- 87,435 6,473,405 6,560,840
Earnings per share $ -- $ 0.47 $ -- $ 0.01
</TABLE>
NOTES:
(1) Earnings per share data shown above are applicable for both primary and
fully-diluted; there were no common stock equivalents outstanding as of
December 31, 1997.
(2) Weighted-average number of shares outstanding for the combined entity
includes all shares issued as of July 6, 1998 as if outstanding as of the
beginning of the period.
17
<PAGE> 26
PRO FORMA STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
SUMMIT SUMMIT
ENV. CORP. TECH. PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ -- $ 59,187 $ -- $ 59,187
Cost of sales -- 38,149 -- 38,149
------------ ------------ ------------ ------------
Gross profit -- 21,038 -- 21,038
Operating expenses -- 170,449 -- 170,449
------------ ------------ ------------ ------------
Net loss from operations -- (149,411) -- (149,411)
Other income -- 100,000 -- 100,000
------------ ------------ ------------ ------------
Net loss before income tax -- (49,411) -- (49,411)
Income tax benefit -- 6,555 -- 6,555
------------ ------------ ------------ ------------
NET LOSS $ -- $ (42,856) $ -- $ (42,856)
============ ============ ============ ============
EARNINGS PER SHARE
Net loss $ -- $ (42,856) $ -- $ (42,856)
Weighted-average number of shares outstanding -- 4,495,089 2,065,751 6,560,840
Earnings (loss) per share $ -- $ (0.01) $ -- $ (0.01)
</TABLE>
NOTES:
(1) Earnings per share data shown above are applicable for both basic and
fully-diluted; there are no common stock equivalents outstanding as of June
30, 1998.
(2) Weighted-average number of shares outstanding for the combined entity
includes all shares issued as of June 30, 1998 as if outstanding as of the
beginning of the period.
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<PAGE> 27
Essentially, the immediate effect of the Merger is to dilute by 11.4
percent the equity of the shareholders of Summit Technologies by transferring
this equity to the present shareholders of the Company and of SuperCorp. See
"Summary Information - Securities to be Outstanding After the Merger."
MATERIAL CONTACTS AMONG THE COMPANIES.
In December 1997 Summit Technologies was engaged in raising capital for
its marketing business through a private placement of Common Stock being sold
through the efforts of its president, Keith Parker. Mr. Parker was introduced
to Mr. Dave Dischiavo by Marshall Southerland of Canton, Texas, a retired
banker. Mr. Dischiavo was described as a person who could introduce Mr. Parker
to persons who could help capitalize Summit Technologies. Mr. Dischiavo
arranged a meeting in Dallas, Texas on December 17, 1997 at which Mr.
Dischiavo, Mr. Parker, Mr. Parker's attorney, Jay Lucas, and George W. Cole
were present. Mr. Cole is a stockbroker and the spouse of Marjorie Cole who is
a significant shareholder of SuperCorp.
Mr. Cole advised Mr. Parker that Mr. Cole's brokerage firm and most
brokerage firms would not authorize their representatives to act as brokers in
the sale of stock of Summit Technologies unless extensive "due diligence"
efforts were first conducted - at Summit Technologies' expense. He then
advised Mr. Parker of a method of obtaining a public market for its shares
through a spinoff-merger transaction such as the transaction described in this
Prospectus-Proxy Statement. Mr. Parker became convinced that such a
transaction could benefit his company as could, for instance, a rights offering
to its expanded shareholder base at some indefinite time in the future after
the conclusion of the spinoff-merger transaction.
An agreement was reached that day to pursue, with SuperCorp, the
spinoff-merger transaction described herein. Part of the agreement provided
that each of Mr. Dischiavo and Mr. Cole, as compensation for their services in
advising Summit Technologies with respect to the spinoff-merger transaction and
with respect to introducing Summit Technologies to SuperCorp, would receive
125,000 shares of the Company and $18,500 cash. Later, Mr. Cole exchanged
$14,250 of his cash fee for 23,750 shares of Common Stock of Summit
Technologies at $0.60 a share. These 23,750 shares were transferred by Mr.
Cole to his spouse, Marjorie Cole.
Other than the proposed Spinoff and Merger described herein, there have
been no material contracts, arrangements, understandings, relationships,
negotiations or transactions among Summit Technologies, the Company, and
SuperCorp during the periods for which financial statements appear herein.
PENNY STOCK REGULATIONS
There is no way to predict a price range within which the Company's Common
Stock will trade. The Company expects trading to commence on the OTC Bulletin
Board at a price less than $5 a share. Accordingly, the Company's Common Stock
initially, at least, would be subject to the rules governing "penny stocks."
19
<PAGE> 28
A "penny stock" is any stock that sells for less than $5 a share, is not
listed on an exchange or authorized for quotation on The Nasdaq Stock Market,
and is not a stock of a "substantial issuer." The Company is not now a
"substantial issuer" and cannot become one until it has been in continuous
operation for three years - August 14, 2000 at the earliest - unless it has net
tangible assets of at least $5 million, which it does not now have.
The Congress has enacted statutes and the Commission has adopted
regulations that impose a strict regimen to be complied with by brokers in
recommending penny stocks.
The Penny Stock Suitability Rule
Prior to the sale of a penny stock recommended by a broker-dealer to a new
customer who is not an institutional accredited investor, the broker-dealer
must approve the customer's account for transactions in penny stocks in
accordance with procedures set forth in the Commission's Penny Stock
Suitability Rule. The broker-dealer must obtain from the customer information
concerning the person's financial situation, investment experience and
investment objectives. Then, the broker-dealer must "reasonably determine"
that transactions in penny stocks are suitable for the person and that the
person, or his advisor, is capable of evaluating the risks in penny stocks.
After making this determination, the broker-dealer must furnish the
customer with a written statement setting forth the basis for this suitability
determination. The customer must sign and date a copy of the written statement
and return it to the broker-dealer.
Finally the broker-dealer must also obtain from the customer a written
agreement to purchase the penny stock, identifying the stock and the number of
shares to be purchased.
The above exercise, if applied to a transaction, not only delays a
proposed transaction but has caused many broker-dealer firms to adopt a policy
of not allowing their representatives to recommend penny stocks to their
customers.
The Penny Stock Suitability Rule, described above, and the Penny Stock
Disclosure Rule, described below, do not apply, however, to transactions not
recommended by the broker-dealer, to sales to institutional accredited
investors, or to sales to "established customers" of the broker-dealer -
persons either who have had an account with the broker-dealer for at least a
year or who have effected three purchases of penny stocks with the
broker-dealer on three different days involving three different issuers. Also
exempt from this rule are transactions in penny stocks by broker-dealers whose
income from penny stock activities does not exceed five percent of their total
income during certain defined periods.
The Penny Stock Disclosure Rule
Another Commission rule - the Penny Stock Disclosure Rule - requires a
broker-dealer, who recommends the sale of a penny stock to a customer in a
transaction not exempt from the suitability rule described above, to
20
<PAGE> 29
furnish the customer with a "risk disclosure document" including, among other
things, a description of the penny stock market and how it functions, its
inadequacies and shortcomings, and the risks associated with investments in the
penny stock market. The broker-dealer must also disclose the stock's bid and
ask price information and the dealer's and salesperson's compensation related
to the proposed transaction. Finally, the customer must be furnished with a
monthly statement including prescribed information relating to market and price
information concerning the penny stocks held in the customer's account.
Effects of the Rule
The above penny stock regulatory scheme is a response by the Congress and
the Commission to known abuses in the telemarketing of low-priced securities by
"boiler shop" operators. The scheme imposes market impediments on the sale and
trading of penny stocks and has a limiting effect on a stockholder's ability to
resell a penny stock.
The Company's Spinoff Shares and Merger Shares likely will trade below $5
a share on the OTC Bulletin Board and be, for some time at least, shares of a
"penny stock" subject to the trading market impediments described above.
INFORMATION ABOUT THE COMPANY
The Company was incorporated under the laws of the State of Texas on
February 24, 1998. It is a development-stage company, has no business or
significant assets, and was organized for the purpose of entering into the
Merger proposed herein (see "Terms of the Transaction - Terms of the Merger").
It has no employees; its management will serve without pay until the Merger
should become effective.
DESCRIPTION OF BUSINESS AND PROPERTIES.
Should the Merger be approved and effected, the Company shall be the
surviving company, but the Company's management shall not remain as the
management of the Company. Control of the Company, through the voting power to
elect the entire board of directors and thereby to replace management, shall
pass to the present shareholders of Summit Technologies, and Summit
Technologies' present management shall become the management of the Company.
See "Management Information - Directors, Executive Officers, and Significant
Employees."
It is the intention of Summit Technologies' present management to continue
the business of Summit Technologies as the business of the Company (see
"Information about Summit Technologies - Description of Business and
Properties") after the Merger.
The Company's present management consists of one person, Albert L. Welsh.
Mr. Welsh is a registered representative of Birchtree Financial Services, Inc.,
a broker-dealer firm with principal offices in Kansas City, Missouri, and
branch offices in several cities, including Texas City, Texas, where Mr. Welsh
is employed. Mr. Welsh is a director of SuperCorp.
21
<PAGE> 30
COURSE OF BUSINESS SHOULD THE MERGER NOT OCCUR.
Should the Merger not be approved and effected, the Company will be
without any property or business. The Company's management would seek to
acquire, in exchange for stock of the Company, a business or assets that would
constitute a business. Should no acquisition that would cause the Company to
become a going concern be made within 18 months after the effective date of the
Registration Statement of which this Prospectus is a part, Rule 419 of the
Securities and Exchange Commission requires that the acquisition effort be
abandoned. In such event, the certificates held in escrow would not be
delivered to the record owners thereof. The holders of the majority of the
issued and outstanding shares of Common Stock will have the voting power to
cause a dissolution of the Company, and persons who are today the holders of a
majority of these shares have agreed to do so. See "Plan of Distribution - The
Escrow Arrangements - Consequences Should the Merger Not Occur." It is
contemplated that such a dissolution would have insignificant consequences for
the persons receiving the Spinoff Shares. The assets of the Company today
consist of $750. Assuming the proposed Merger is not approved by the
shareholders of Summit Technologies and that the expenses of future efforts to
acquire a business are advanced by the Company's management (as is proposed) or
are borrowed from other sources, the Company would have no assets to distribute
to its shareholders upon such a dissolution. Each shareholder would receive
nothing in the dissolution and would have a capital loss equal to $0.001 a
share for each share of the Company received in the Spinoff.
LEGAL PROCEEDINGS.
Neither the Company nor its property is a party to or the subject of
pending legal proceedings.
MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.
As of the date of this Prospectus there is no public trading market in the
U.S. or elsewhere for the Company's Common Stock. After the Spinoff and before
any vote on the Merger by the shareholders of Summit Technologies, all
certificates representing the 500,000 Spinoff Shares shall be held in escrow by
the Escrow Agent.
Should the Merger be approved and effected, (i) the Escrow Agent will
release from escrow the certificates representing the ownership of the escrowed
securities, which certificates would be delivered to the approximately 650
persons owning the securities represented by the certificates, and (ii) the
shareholders of Summit Technologies will receive 5,810,840 Shares of Common
Stock of the Company in exchange for all the issued and outstanding shares of
capital stock of Summit Technologies.
Should the Merger be effected, the Common Stock is expected to be eligible
for quotation on the OTC Bulletin Board. There can be, and is, no assurance
that market makers will make or maintain a market in the stock or that, even if
a market is made and maintained in the stock, that the stock will trade at
prices deemed attractive or reasonable to the present shareholders of Summit
Technologies or the Company.
22
<PAGE> 31
The Company's stock will not be eligible for quotation on the Nasdaq
SmallCap Market ("Nasdaq") (i) until it trades at a bid price of $4 a share or
higher and (ii) unless it meets other Nasdaq requirements regarding assets and
shareholders' equity, which it will not yet meet even if the Merger is approved
and effected. No assurance can be made that the Common Stock will ever become
eligible for quotation on Nasdaq.
The Company's stock is expected to be quoted on an NASD inter-dealer
system called "the Bulletin Board." While some Bulletin Board stocks are
actively traded, they do not draw the interest of the Nasdaq brokerage
community held by Nasdaq stocks or exchange-listed stocks. The eligibility
requirements for listing the Company's stock on exchanges are generally as high
or higher than the requirements for eligibility for quotation on Nasdaq, and
the Company has no present plans to list its stock on an exchange.
Further, holders of the Shares offered herein face the prospect, should
the Merger be approved and effected, of an indefinite period during which the
Shares will be subject to trading severities imposed on Bulletin Board,
so-called "penny stocks" (stocks that trade at less than $5 per share) by
regulations of the Securities and Exchange Commission. The effect of these
trading severities is to reduce broker-dealer and investor interest in trading
or owning "penny stocks" and, hence, could inhibit the ability of the Company's
stock to reach a trading level of $3 per share or higher and thereby become
eligible for quotation on Nasdaq even if the Company meets Nasdaq's assets and
shareholders' equity requirements in the future.
RULE 144 AND RULE 145 RESTRICTIONS ON TRADING.
Should the Merger and Spinoff transaction described herein be approved and
effected, all outstanding shares of Common Stock of the Company, except the
250,000 shares held by the insider and the promoter, shall have been issued or
distributed pursuant to registration with the Commission. Nevertheless, some
of the Shares, even though deemed not to be "restricted securities," as such
term is used by the Commission, will be subject to certain restrictions on
their transfer for value.
Holders of the Shares who are deemed to be affiliates of Summit
Technologies at the time of the vote on the Merger, in order to sell their
Shares, must either register them for sale or comply with the resale provisions
set forth in paragraph (d) of the Commission's Rule 145, unless some other
exemption-from-registration provision is available. The resale provisions of
paragraph (d) of Rule 145 refer to certain provisions of the Commission's Rule
144 which require that:
o The Company must have been subject to the reporting requirements
of Section 15(d) of the Securities Exchange Act for at least 90
days and must have filed all reports with the Commission
required by such rule during the twelve months preceding such
sale (or shorter period that the Company was required to file
such reports), and
23
<PAGE> 32
o Transfers for value by such affiliates can occur only either
through broker transactions not involving the solicitation of
buyers or directly to market-makers, and
o Each such affiliate can transfer for value, during a 90-day
period, no more Shares than the greater of one percent of all
issued and outstanding shares of Common Stock of the Company
(65,608 shares immediately after the Merger) or the average
weekly volume of trading in such Common Stock reported through
the automated quotation system of Nasdaq or the Bulletin Board
during the four calendar weeks prior to placing the sell order
with a broker-dealer.
The above described resale provisions of Rule 145 shall continue, for
persons who are affiliates of Summit Technologies at the time of the vote on
the Merger, for one year after the Merger, at which time only the current
public information requirement shall continue. At such time as any such
affiliate has ceased to be an affiliate of the post-merger company for at least
three months, and provided at least two years have elapsed since the date of
the Merger, then even the current public information requirement will no longer
be required for such a former affiliate to sell any of the Shares acquired in
the Merger.
The Company believes that none of the 500,000 Spinoff Shares will be
subject to any restrictions on trading or transfers for value, by reason of
these Shares' being registered for the Spinoff. Further, none of the 5,810,840
Shares of the Company to be distributed in the Merger to Summit Technologies
shareholders other than 2,930,545 shares to Summit Technologies officers and
directors and to affiliates of Summit Technologies prior to the Merger will be
subject to any restrictions on transfer. Accordingly, after the effective date
of the Merger and the redistribution of the Spinoff Shares, there shall be
3,380,295 shares in the "public float," i.e., subject to no Rule 144, Rule 145
or other applicable securities law restrictions on their being traded or
transferred for value. It is estimated that approximately 775 persons will own
these shares of record, the offering of which for sale could have a materially
adverse effect on the market price of the Company's stock. Further, an
additional 2,930,545 shares will be held by affiliates of Summit Technologies
who will be able to sell these shares pursuant to Rule 144 and Rule 145 of the
Securities Act.
There is no equity of the Company subject to outstanding options or
warrants to purchase, or securities convertible into, equity of the Company.
DIVIDENDS.
The Company has had no operations or earnings and has declared no
dividends on its capital stock. Should the Merger be approved and effected,
there are no restrictions that would, or are likely to, limit the ability of
the Company to pay dividends on its Common Stock, but the Company has no plans
to pay dividends in the foreseeable future and intends to use earnings for
business expansion purposes (see "Information about the Company - Description
of Business and Properties").
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FINANCIAL STATEMENTS.
See "Financial Statements - Summit Environmental Corporation, Inc." for
the independent auditor's report dated March 17, 1998, with respect to the
Company's balance sheet as of March 17, 1998, such balance sheet, and the notes
to the balance sheet.
INFORMATION ABOUT SUMMIT TECHNOLOGIES
OVERVIEW.
Summit Technologies, Inc. ("Summit Technologies") was incorporated in
Texas on August 14, 1997. Its fiscal year ends December 31.
Summit Technologies is affiliated with another Texas corporation,
Moonlighting Distribution Corporation, through B. Keith Parker and his spouse,
Paula Parker, who control both corporations through their positions as officers
and directors and major shareholders of both corporations.
<TABLE>
<S> <C> <C>
Officers, directors and ------------------- Officers, directors and
major shareholders Mr. and Mrs. Parker major shareholders
----------------------------------------------------
--------------------------------- ------------------------------------
Summit Technologies, Inc. Moonlighting Distribution
--------------------------------- Corporation
------------------------------------
</TABLE>
MANAGEMENT'S PLAN OF OPERATION.
The following plan of operation should be read in conjunction with the
financial statements and the accompanying notes thereto and is qualified in its
entirety by the foregoing and by more detailed financial information appearing
elsewhere. See "Financial Statements."
For the next twelve months, Summit Technologies plans to accomplish the
following:
o Commence sales of FirePower 911(TM) and FlameOut(TM) in the U.S. and
Canada through the use of infomercials and through placing the
products in retail chain stores.
o Introduce FirePower 911(TM) and FlameOut(TM) in Mexico through
infomercials.
o Introduce FirePower 911(TM) and FlameOut(TM) in China, South America
and South Africa and other Asian countries through joint ventures with
companies who have established a presence in the region.
o Introduce one of its fire suppressant products - FlameOut(TM) - in ten
pound and twenty pound fire extinguishers in the Philippines through
a joint venture there with an unaffiliated company, Moonlighting
International (Philippines).
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o Expand sales of its Stressex(TM) product - marketed under the "Poder
24(TM)" brand name in Spanish-speaking areas - in the U.S., Mexico and
Central American countries, primarily through infomercials.
o Develop marketing alliances with other companies for the distribution
of a chitosan-based weight management pill and topical application.
o Develop marketing alliances for bio-degradable and non-toxic
industrial chemicals and cleaning agents developed by BioGenesis
Enterprises, Inc. of Springfield, Virginia.
CASH REQUIREMENTS.
Summit Technologies raised $1,072,428 through the sale of shares of its
common stock during May and June 1998. The circumstances of the sale of these
shares were such that there may not have been an exemption from registration
available for the sales. See "Risk Factors - Company's Contingent Liability for
Possible Violation of Registration Requirements of Securities Act." Summit
Technologies does not concede that no exemption from registration was available,
but the contingency exists that the purchasers of these shares could seek - and
might prevail in seeking - rescissions of their purchases of stock and a return
of their purchase amounts plus interest and attorney fees.
Unless such a demand for rescission is made, Summit Technologies estimates
it will not have to raise additional funds in the next twelve months to satisfy
the cash requirements to fulfill all the above-outlined business objectives.
Its current cash funds - $543,801 as of September 1, 1998 - are sufficient to
sustain its present operations and modest growth indefinitely. Should a demand
for rescission be made by the purchasers of the stock sold for $1,072,428,
Summit Technologies would simultaneously oppose such a demand for rescission,
seek to raise additional capital to cover the contingency that rescissions might
have to be made, but continue to use its cash assets to pursue its business
objectives, as outlined above (see "Management's Plan of Operation"). Summit
Technologies has made no effort to identify a possible source of such additional
capital and can give no assurance that it could be raised should rescission
demands be made and successfully litigated.
PRODUCT RESEARCH AND DEVELOPMENT.
Summit Technologies has an option to acquire, by November 15, 1998, all
patent and other intellectual property rights to the FirePower 911(TM) and
FlameOut(TM) products. Should it do so, it plans to spend approximately
$175,000 in certifying these products for sale in Canada, to the U.S. Coast
Guard and to the U.S. Air Force.
PURCHASES OF PLANT AND EQUIPMENT.
Summit Technologies does not expect to purchase or sell any plant or
significant equipment during the next twelve months.
CHANGES IN NUMBER OF EMPLOYEES.
Summit Technologies does not expect to increase significantly the number
of its employees in the next twelve months. On May 1, 1998, it added a
full-time president and chief financial officer (Don Hendon), an office manager
and a fulfillment manager.
The annual addition to salaries and wages to fill these positions is
estimated to be $159,000.
Summit Technologies' future results of operations and the other
forward-looking statements contained in this Outlook and Offering Circular, in
particular the statements regarding projected operations for the next twelve
months, involve a number of risks and uncertainties. In addition to the
factors discussed above, among the other factors that could cause actual
results to differ materially are the following: the inability of Summit
Technologies to obtain its necessary capital; the loss of any of several key
personnel; the emergence of competition not now detected; and a general
economic turndown.
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DESCRIPTION OF SUMMIT TECHNOLOGIES' BUSINESS.
BUSINESS DEVELOPMENT.
Summit Technologies is affiliated with Moonlighting Distribution
Corporation, a closely held Texas corporation ("Moonlighting"). Moonlighting
is under the 52.5 percent ownership and control of B. Keith Parker and his
spouse, Paula Parker, who are directors and, respectively, the chief executive
officer and secretary of Summit Technologies. Moonlighting develops and
markets health and well-being products designed to improve the quality of an
individual's life and also markets other products.
In 1993, before Summit Technologies was organized, the Parkers and
Moonlighting began to assess several products developed by BioGenesis
Enterprises, Inc. of Springfield, Virginia ("BioGenesis"). BioGenesis develops
and manufactures industrial products that are environmentally safe - generally,
products that are biodegradable and nontoxic. By middle 1997, the Parkers and
Moonlighting concluded that BioGenesis' products merited commercial
exploitation. A trip to the Philippines was planned to determine if a fire
suppressant product of BioGenesis could be marketed there through personal
contacts the Parkers had there. A license was obtained from BioGenesis to
market the fire suppressant. The named licensee was "B. Keith Parker and
Moonlighting Distribution Corporation dba Moonlighting International."
Moonlighting International was a trade name to be used by Moonlighting for any
overseas marketing business.
The trip to the Philippines resulted in the organization by local
businessmen there of Moonlighting International Philippines, a company not
affiliated with the Parkers' company, Moonlighting Distribution Corporation
("Moonlighting"). Moonlighting determined that the scope of activities that
should be undertaken for the fire suppressant product exceeded the capabilities
or business plan of Moonlighting, and Summit Technologies was incorporated in
August 1997 to organize, finance, and direct the marketing of BioGenesis' fire
suppressant product and other products for which marketing licenses could be
obtained and for which marketing expenses could be raised.
After the organization of Summit Technologies, Moonlighting licensed to
Summit Technologies the exclusive right to market a product newly developed by
Moonlighting and tested for marketing - Stressex(TM) and Poder 24(TM) - and the
non-exclusive right to market BioGenesis' fire suppressant product - FirePower
911(TM) and FlameOut(TM) - for which Moonlighting had earlier obtained certain
distribution rights. Later, in April 1998 Summit Technologies entered into an
agreement with BioGenesis which will enable Summit Technologies to obtain
ownership of all patent and other intellectual property rights associated with
the fire suppressant upon the payment by November 15, 1998 of $1 million cash
(of which amount $200,000 has been paid) and 750,000 shares of Common Stock of
Summit Technologies. See "- Principal Products" and "- Patents, Trademarks and
Licenses" below.
PRINCIPAL PRODUCTS. Summit Technologies distributes and markets or has
initiated activities to distribute and market the following licensed products.
All of the products are manufactured by the licensors of the products.
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FirePower 911(TM) and FlameOut(TM). These products are fire
suppressants developed and manufactured by BioGenesis. They were developed by
BioGenesis to be a replacement for Halon 1211. Halon 1211 was a widely used
fire suppression and explosion protection agent. It is applied primarily as a
wetting agent and was the fire extinguishing agent of choice for many uses, such
as most fire extinguishers. Its production was halted in 1994 by the
Environmental Protection Agency ("EPA") primarily because Halon 1211 has one of
the higher ozone depletion potentials of any compound. Halon 1211 is still
approved for certain, limited mission-critical uses (such as ship- and
shore-based crash, fire and rescue), but existing installations of Halon 1211
that are not mission critical must switch to an approved, acceptable
alternative.
In March 1994 the first alternative to Halon 1211 was approved by the
EPA - BioGenesis's Surfactant Blend A. This product is marketed under several
trade names by companies licensed by BioGenesis. Two of these trade names are
FirePower 911(TM) and FlameOut(TM).
The EPA has now approved at least eleven other accepted substitutes
to Halon 1211. Three of these are water, foam and carbon dioxide. Other than
these three, BioGenesis's Surfactant Blend A is approved for all wetting agent
uses and is the only substitute approved for residential use. Some of the
substitutes were approved only for a limited time and then must be phased out.
Flameout(TM) was certified in May 1997 by Underwriter Laboratories (listing
number 7P21).
FirePower 911(TM) and FlameOut(TM) contain the same Surfactant Blend A
formula. FlameOut(TM) is marketed at three percent strength for use in fire
extinguishers to fight, generally, Class A fires (wood, cloth, paper, rubber
and plastics) and is marketed at six percent strength for suppression of Class
B fires (combustible liquids, gases and greases). Surfactant Blend A is also
effective at ten percent strength in suppressing Class D fires (metals) but has
not yet been submitted to Underwriters Laboratory for certification for Class D
fire suppression.
FirePower 911(TM) and FlameOut(TM) suppress and extinguish fire
quickly. They reduce toxic smoke by encapsulating poisonous hydrocarbons, reduce
heat approximately 70 percent faster than water does, prevent reflash, are safe
to store and handle, leave virtually no residue, are biodegradable and otherwise
are environmentally safe. They are nontoxic but may irritate the eyes. They
store at between 25 degrees and 120 degrees Fahrenheit for prolonged periods.
From August 1997 through April 1998, Summit Technologies sold 1,558
units of FirePower 911(TM) for $10,285 and 1,183 units of FlameOut(TM) for
$64,752. All sales were to parties unrelated to Summit Technologies.
Stressex(TM) and Poder 24(TM).
These are the same products. Stressex(TM) is the English-language
brand name and Poder 24(TM) is the Spanish-speaking brand name. The product
combines six herbs - saw palmetto, sarsaparilla, nettle leaf, damiana,
buckthorn and avena sativa - in tablets marketed to women and substitutes
Yohimbe for damiana in the capsules marketed to men. Summit Technologies
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markets the product as one that increases energy, alleviates stress and
promotes hormonal balance and libido.
From August 1997 through April 1998, Summit Technologies sold
thirteen units of Poder 24(TM) for $150. Of these units, twelve were sold to an
affiliated company, Moonlighting Distribution Corporation, for its resale, and
one unit was sold to a party unrelated to Summit Technologies.
Trim-Away(TM).
This product was recently developed by Moonlighting Distribution
Corporation, an affiliate of Summit Technologies. Its main ingredient is
Chitosan, which is mixed with aloe vera, aminophylline, and other botanical
ingredients to make a topical product. Chitosan is a fat absorbent agent. It
is non-caloric and indigestible. After absorbing fat - up to ten times its
weight - it passes through the body. Aloe vera is a transportation agent,
enabling the topically applied Trim-Away(TM) ointment to penetrate the fat
reserve beneath the skin. Aminophylline signals the body to release fat
reserves for the Chitosan to absorb.
Chitosan is made from chitin. The most abundant source of chitin is
the shells of shellfish such as crab and shrimp. Chitosan is made by cooking
chitin in alkali. Chitosan binds fat to itself and acts like a "fat sponge."
Being indigestible and non-absorbable by the human body, it passes through the
body carrying with it any fat it has absorbed.
Summit Technologies will market Trim-Away(TM) on the basis both of
testimonials of persons who have used it and of scientific literature that
supports the proposition that chitosan binds fat to itself.
Moonlighting is developing a Chitosan-based chewable tablet to be
marketed as a dietary supplement for weight loss. When developed, Summit
Technologies will market it.
Industrial Chemicals and Cleaners.
Summit Technologies distributes BioGenesis's industrial chemicals and
cleaners. BioGenesis concentrates its activities on developing and then
manufacturing, for marketing by other companies, industrial-use products that
are environmentally safe. BioGenesis has developed several industrial
chemicals and cleaners that Summit Technologies proposes to market as soon as
funds are available to launch marketing efforts.
DISTRIBUTION METHODS.
Summit Technologies markets products primarily through the efforts of
Keith Parker, its chief executive officer, and of five regional sales
directors. A sales director for its sixth region has not yet been selected.
It also is preparing to launch sales efforts through infomercials and radio
"spots" and through direct advertising. Internationally, it markets products
through a network of persons and companies who contract with Summit
Technologies for distribution rights.
Summit Technologies markets FlameOut(TM) in the Philippines through a joint
venture with Moonlighting International Philippines ("Moonlighting
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Philippines"). Neither Summit Technologies nor the Texas-based Moonlighting
Distribution Corporation ("Moonlighting") has any ownership interest in
Moonlighting Philippines, but Summit Technologies has a 40 percent net revenue
interest in the joint venture.
Moonlighting Philippines is under the direction, ownership, and control of
experienced Philippine marketers. It has obtained the approval and endorsement
of the Philippine National Bureau of Fire Protection for FlameOut(TM).
Surfactant Blend A is shipped, f.o.b. point of U.S. origin, to the Philippines
in concentrated form. It is there mixed with water and placed in fire
extinguishers.
Summit Technologies is preparing to launch an infomercial campaign to sell
FirePower 911(TM) in the U.S. Summit Technologies recently purchased twelve
months of five commercials a day (30- and 60-second commercials) in infomercial
advertising from American Independent Network of Fort Worth, Texas ("AIN") in
exchange for 100,000 shares of Summit Technologies common stock and twenty
percent of the gross selling price of each sale made in response to the
infomercials. AIN is a television broadcaster that has created a network of
150 television stations in 48 states for whom AIN provides all their
programming needs.
Prior to the organization of Summit Technologies, Moonlighting commenced
marketing Poder 24(TM) through K-MEX, a Spanish-speaking radio station in the
Los Angeles area and in Mexico. Summit Technologies is preparing a prime-time
infomercial campaign through Hispanic Television Network to be aired in 450
markets.
Sales of FirePower 911(TM) have been made to Home Depot for it to test
market this product in its Northeast U.S. Region.
FirePower 911(TM) has been accepted by Wal-Mart Corporation as a product
for sale in Wal-Mart stores. Initial orders have been received by Summit
Technologies to deliver the product to Wal-Mart stores in Florida, Georgia and
Mississippi.
COMPETITION.
BioGenesis has granted to other companies distribution rights of its
Surfactant Blend A fire suppressant for various parts of the world and under
two other trade names. Summit Technologies will potentially be in competition
with many of these companies. To the extent that any of these companies fails
to meet periodic sales requirements, Summit Technologies will acquire from
BioGenesis the expired licenses. However, Summit Technologies has an option to
acquire from BioGenesis all patent and other intellectual property rights
associated with the fire suppressant upon the payment by November 15, 1998 of
$1 million cash (of which amount $200,000 has been paid) and 750,000 shares of
Common Stock of Summit Technologies. Should Summit Technologies exercise this
option, the other companies which
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have licenses to market the fire suppressant will then be distributors for
Summit Technologies. See "- Patents, Trademarks and Licenses."
The demise of the former fire suppressant of choice, Halon 1211, is a
consequence of the 1992 Geneva Peace Conference, which mandated the phaseout of
Halon 1211 in all United Nations states participating in the Conference.
Summit Technologies believes that FirePower 911(TM) and FlameOut(TM) are
the finest fire suppressants in existence today and proposes to expand its
licensing agreement with BioGenesis to be exclusive in as many countries as it
can serve.
In the Spanish-speaking countries in the Western Hemisphere, Summit
Technologies is in direct competition with Unispan with respect to Summit
Technologies' Poder 24(TM) product. Unispan is a large and well-capitalized
marketing company based in Mexico. Moonlighting contracted with Unispan in
1996 to test market Poder 24(TM) in Mexico through infomercials. Following a
successful test (33,000 bottles sold in a seven-week market test), Unispan
attempted to duplicate Poder 24(TM) and sells it under a similar brand name.
Summit Technologies and Moonlighting have served notice on Unispan that Summit
Technologies will sue Unispan for these activities when Summit Technologies can
afford such litigation.
Competition is intense throughout the world in the markets for diet
programs and industrial chemicals and cleaners. Summit Technologies'
Trim-Away(TM) topical fat reducer and BioGenesis's industrial chemicals and
cleaners will be in competition with products marketed by large companies with
established products with well-known brands. Summit Technologies is unable at
this time to predict the degree of market acceptance of these products or its
ability to successfully compete with the companies already established in these
markets.
RAW MATERIALS AND SUPPLIERS.
Summit Technologies buys from BioGenesis its FirePower 911(TM) and
FlameOut(TM) products.
Summit Technologies buys its Stressex(TM), Poder 24(TM) and Trim-Away(TM)
products from its affiliate, Moonlighting, which developed the products. The
products are manufactured for Moonlighting by an unaffiliated company, Summa
Laboratories, Inc., of Mineral Wells, Texas, from readily available herbs and
natural substances. For infomercial sales, scheduled to commence in August
1998, an inventory of 5,000 bottles is on hand to fill orders. Approximately
17 days lead time is required to replenish inventory stock.
BioGenesis manufactures and supplies its industrial chemicals and
cleaners. These products are shipped in concentrated form to Houston, Texas,
for bottling by Bishop's Original Products. Summit Technologies' arrangement
with this bottler allows bottling in any amounts - small or large - for tests
in each new market.
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DEPENDENCE ON MAJOR CUSTOMERS.
Summit Technologies' markets are insufficiently developed to determine if
it will be dependent on one or a few major customers.
PATENTS, TRADEMARKS AND LICENSES.
In mid-1997 Moonlighting and B. Keith Parker obtained a nearly worldwide
license from BioGenesis for its fire suppressant products and improvements.
See "Description of Summit Technologies' Business - Business Development." The
excepted countries were most Arabic countries and the Scandinavian countries.
On May 1, 1998, both of these areas, then under exclusive license to other
companies, became available due to the existing licensees' failure to meet
periodic sales quotas, and Parker and Moonlighting acquired licenses in these
areas pursuant to the terms of their agreement with BioGenesis.
In October 1997 this license from BioGenesis was assigned to Summit
Technologies in exchange for the payment of $10,000. The license is for a
four-year initial term, renewable annually for twenty years. The licensing fee
is $500,000, (of which amount $200,000 has been paid) and $100,000 on June 1 of
each of the next three years. Annual sales quotas are to be set on November
15, 1998 should Summit Technologies not exercise an option it has to acquire
all patents and intellectual property rights associated with the fire
suppressant.
In April 1998 Summit Technologies entered into an agreement with
BioGenesis which will enable Summit Technologies to obtain ownership of all
patent and other intellectual property rights associated with the fire
suppressant upon the payment to BioGenesis by November 15, 1998 of $1 million
cash (of which amount $200,000 has been paid) and 750,000 shares of Common
Stock of Summit Technologies.
Summit Technologies paid $20,000 for a perpetual license from its
affiliated company, Moonlighting, for its Stressex(TM), Poder 24(TM) and
Trim-Away(TM) products. The license has no sales quota. Product prices are set
at the prices Moonlighting was charging unrelated persons when the license was
given to Summit Technologies, subject to adjustment only to the extent
Moonlighting's manufacturing costs for the products should increase due to
increased product ingredient prices.
Summit Technologies has no written license from BioGenesis for its
industrial chemical and cleaner products.
GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS.
BioGenesis obtained EPA approval in 1994 and Underwriter Laboratories
certification in 1997 for FlameOut(TM) (Listing No. 7P21). Moonlighting
Philippines has obtained the approval of these products from the Philippine
National Bureau of Fire Protection.
No governmental approval is required in the U.S. or Mexico for the
manufacture for sale of Stressex(TM), Poder 24(TM) or Trim-Away(TM). These
products are made from herbs and other dietary ingredients that enable the
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products to be marketed as "dietary supplements" that contain no drugs,
antibiotics or biologics that require prior governmental approval.
BioGenesis has obtained the necessary U.S. Government approvals for its
industrial chemical and cleaning products.
GOVERNMENT REGULATIONS.
The fire suppressant products Summit Technologies distributes are subject
to government regulation in most countries of the world. The existence of this
regulation is of benefit to Summit Technologies, because the BioGenesis fire
suppressants are the favored substitute for Halon 1211, the fire suppressant of
choice in most of the world before most countries agreed at the 1992 Geneva
Peace Conference to phase out its use.
Summit Technologies' Stressex(TM), Poder 24(TM) and Trim-Away(TM) products
also are subject to government regulations. Until 1997 the Food, Drug and
Cosmetic Act prohibited the use of a health claim or a nutrient content claim in
the labeling of dietary supplements unless the Food and Drug Administration (the
"FDA") published a regulation authorizing such a claim. The Food and Drug
Administration Modernization Act of 1997 ("FDAMA") now allows distributors and
manufacturers to use nutrient content claims in the labeling of dietary
supplements if such claims are based on current, published, authoritative
statements from certain federal scientific bodies, as well as from the National
Academy of Sciences. A process is now administered by the FDA by which the
scientific basis for such nutrient claims is established. Summit Technologies
makes no nutrient claims in its labeling of Stressex(TM), Poder 24(TM) or
Trim-Away(TM) and, thus, is not subject to obtaining prior government approval
in its labeling of these products. It is required to label these products as
"dietary supplements" if they are sold as such.
The FDAMA does not provide a similar regimen for health claims in the
labeling of dietary supplements but defers such to a procedure and standard to
be established by regulation by the FDA. The FDA has not proposed any such
regulations but has announced that it does propose that health claims based on
authoritative statements be permitted for dietary supplements. Summit
Technologies makes no health claims in its labeling of Stressex(TM), Poder
24(TM) or Trim-Away(TM) and, thus, should not be subject to such regulation when
the FDA regulations in this regard are adopted.
The Dietary Supplement Health and Education Act of 1994 ("DSHEA") provides
that dietary supplements, without FDA authorization, may carry truthful and not
misleading claims about the effect of a dietary supplement on the structure or
function of the body for the maintenance of good health and nutrition. Dietary
supplements may not carry claims that they can treat, diagnose, cure or prevent
a disease. Recently proposed FDA regulations define the criteria for structure
or function claims that DSHEA permits and the disease claims that it prohibits.
Summit Technologies believes that its claims for its dietary supplements clearly
fall within permissible limits as well as the proposed regulations and that the
adoption of the proposed regulations will have no effect on its sale of
Stressex(TM), Poder 24(TM) or Trim-Away(TM) products.
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PROPERTIES.
Summit Technologies owns no plants or real property. It leases space for
its offices and for storing inventory.
OFFICE FACILITIES.
Summit Technologies leases 1,815 square feet of space in Longview, Texas
for its offices and for inventory storage at $1,159 a month and 300 square feet
of space for additional inventory at $138 a month. Additional space is
available for leasing should more storage space be required for inventory.
Summit Technologies believes all space requirements can be met at its present
location for at least the next year.
SEASONALITY.
There is no known seasonal aspect to Summit Technologies' business.
RESEARCH AND DEVELOPMENT.
Summit Technologies conducts no research and development.
ENVIRONMENTAL CONTROLS.
Summit Technologies is subject to no environmental controls or
restrictions that require the outlay of capital or the obtaining of a permit in
order to engage in business operations.
YEAR 2000 COMPUTER PROBLEM.
Summit Technologies has determined that it does not face material costs,
problems or uncertainties about the year 2000 computer problem. This problem
affects many companies and organizations and stems from the fact that many
existing computer programs use only two digits to identify a year in the date
field and do not consider the impact of the year 2000. Summit Technologies is
newly organized, presently uses off- the-shelf and easily replaceable software
programs, and has yet to devise its own software programs.
NUMBER OF EMPLOYEES.
On July 15, 1998, Summit Technologies employed six persons full time and
no persons part time.
LEGAL PROCEEDINGS.
Neither Summit Technologies nor any of its property is a party to, or the
subject of, any material pending legal proceedings other than ordinary, routine
litigation incidental to its business.
MARKET FOR SUMMIT TECHNOLOGIES' CAPITAL STOCK AND RELATED STOCKHOLDER
MATTERS.
There is no public trading market for Summit Technologies' capital stock.
There are 126 holders of record of Summit Technologies' issued and
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outstanding capital stock. Should the Merger not be approved and effected, no
public trading market is expected to develop. Summit Technologies has declared
no dividends on its common stock. There are no restrictions that would or are
likely to limit the ability of Summit Technologies to pay dividends on its
common stock, but Summit Technologies has no plans to pay dividends in the
foreseeable future and intends to use earnings for the expansion of its present
business.
There are no shares of Common Stock subject to outstanding options or
warrants to purchase, or securities convertible into, Common Stock of Summit
Technologies.
Should the proposed Merger be approved, the "public float" would consist
of the 500,000 Spinoff Shares and 2,826,615 of the Merger Shares (those
distributed to persons not in control of Summit Technologies), or a total of
3,326,615 shares. However, 2,984,225 Merger Shares will be distributed to the
persons in control of Summit Technologies, who will be able to sell these
shares pursuant to Rule 144 and Rule 145 under the Securities Act. See
"Information About the Company - Rule 144 and Rule 145 Restrictions on
Trading."
FINANCIAL STATEMENTS.
See "Financial Statements - Summit Technologies" for the financial
statements of Summit Technologies containing (i) a balance sheet at December
31, 1997, and statements of income, cash flows, and changes in shareholders'
equity for the period August 14, 1997 to December 31, 1997, and (ii) a
statement of financial condition at April 30, 1998, and statements of income,
changes in stockholders' equity and cash flows for the four months ended April
30, 1998, which have been prepared in accordance with generally accepted
accounting principles.
The financial statements of Summit Technologies appear later in this
Prospectus-Proxy Statement on pages F-4 through F-11.
MANAGEMENT INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table shows information as of July 15, 1998 with respect to
each beneficial owner of more than 5% of each class of voting stock of the
Company and of Summit Technologies, and to each of the officers and directors
of the Company and of Summit Technologies individually and as a group, and as
of the same date with respect to the same persons as adjusted to give effect to
the Spinoff and to the proposed Merger between the Company and Summit
Technologies (6,560,840 shares):
35
<PAGE> 44
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
-------------------------------
BEFORE COMPANY COMMON
SPINOFF-MERGER AFTER MERGER
-------------- ------------
NO. OF % OF NO. OF % OF
THE COMPANY SHARES CLASS SHARES CLASS
----------- ------ ----- ------ -----
<S> <C> <C> <C> <C>
SuperCorp Inc.
100 North Broadway, Suite 3300
Oklahoma City, OK 73102 500,000 67 0 0(1)
Albert L. Welsh
3832 Northwest 69th
Oklahoma City, OK 73116 500,000(2) 67 26,786 0.4
John Adams
1205 Tedford
Oklahoma City, OK 73116 500,000(2) 67 26,786(3) 0.4
Thomas J. Kenan
212 Northwest 18th Street
Oklahoma City, OK 73103 500,000(2) 67 55,119(4) 0.8
T.E. King
49 Strawberry Lane, Suite 200
Palos Verdes Peninsula, CA 90274 500,000(2) 67 26,786 0.4
Ronald D. Wallace
One Buckhead Plaza, 19th Floor
3060 Peachtree Street, NW
Atlanta, GA 30305 500,000(2) 67 26,786(5) 0.4
George W. Cole
3535 Northwest 58th, Suite 770
Oklahoma City, OK 73112 125,000(6) 17 176,300(7) 2.7
David Dischiavo
7312 Authon Drive
Dallas, TX 75248 125,000 17 125,000 1.9
Officers and Directors as a
Group (1 person before Merger, 500,000 67 0 0
0 persons after Merger)
</TABLE>
- -------------------------
(1) After allocating one share of Common Stock of the Company for each
fourteen shares of common stock of SuperCorp, SuperCorp will have 232
shares available for rounding fractional shares.
(2) These shares are attributed to this person through his position as a
director of SuperCorp, which owns 500,000 shares of Common Stock of the
Company, and accordingly represents voting and investment power shared
with the other directors of SuperCorp.
(3) These shares are attributed to Mr. Adams by reason of his being a
controlling person of Meridyne, Inc., which owns 375,000 shares of
Common Stock of SuperCorp and will receive 26,786 Spinoff Shares.
36
<PAGE> 45
(4) These shares would be owned by the Marilyn C. Kenan Trust, which trust
is under the control of Marilyn C. Kenan, its sole trustee and sole
beneficiary for her life. Mrs. Kenan is the spouse of Thomas J. Kenan,
an officer and director of SuperCorp. Mr. Kenan disclaims any
beneficial interest in shares of capital stock of the Company owned by
this trust, which is a testamentary trust established in the 1980s by
the estates of her deceased parents. The Marilyn C. Kenan Trust owns
375,000 shares of common stock of SuperCorp and 28,333 shares of common
stock of Summit Technologies and would receive 26,786 shares of Common
Stock of the Company in the Spinoff and 28,333 shares of Common Stock
of the Company in the Merger. Mr. Kenan provides legal services to the
Company and to SuperCorp.
(5) These shares are attributed to Mr. Wallace through his controlling
interest in Sackville Advisors, Ltd., which owns 375,000 shares of
Common Stock of SuperCorp and will receive 26,786 Spinoff Shares.
(6) These shares are owned of record by Marjorie Cole, Mr. Cole's spouse.
Mr. Cole disclaims any beneficial ownership in shares of capital stock
of the Company owned by his spouse. These 125,000 shares were received
for Mr. Cole's services as a "promoter" of the Company. See
"Transactions with Insiders."
(7) 27,550 of these shares would be received in the Spinoff, 23,750 shares
would be received in the Merger, and 125,000 shares are owned now. See
footnote (6). The 27,550 Spinoff Shares are attributed to Mr. Cole
through the holdings of 385,700 shares of Common Stock of SuperCorp
held by his spouse, Marjorie J. Cole - 375,000 shares, the Cole Family
Limited Partnership - 1,500 shares, Mr. Cole - 1,600 shares, Marjorie
J. Cole and George W. Cole - 1,600 shares, George W. Cole and a son,
George B. Cole - 1,500 shares, George W. Cole and a daughter, Margaret
A. Cole - 1,500 shares, Marjorie J. Cole and a son, George B. Cole -
1,500 shares, and Marjorie J. Cole and a daughter, Margaret A. Cole -
1,500 shares. The 23,750 Merger shares are attributed to Mr. Cole
through the holdings of 23,750 shares of Common Stock of Summit
Technologies held by his spouse, Marjorie J. Cole.
37
<PAGE> 46
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
-------------------------------
BEFORE COMPANY COMMON
SPINOFF-MERGER AFTER MERGER
-------------- ------------
NO. OF % OF NO. OF % OF
SUMMIT TECHNOLOGIES SHARES CLASS SHARES CLASS
------------------- ------ ----- ------ -----
<S> <C> <C> <C> <C>
B. Keith Parker 2,360,805(1) 40.6 2,360,805(1) 36.0
414 East Loop 281, Suite 7
Longview, TX 75605
Don Hendon 111,240 1.9 111,240 1.7
414 East Loop 281, Suite 7
Longview, TX 75605
Paula Parker 510,000(2) 8.8 510,000(2) 7.8
414 East Loop 281, Suite 7
Longview, TX 75605
Dean Haws 247,100 4.3 247,100 3.8
P. O. Box 1071
Gilmer, TX 75644
Ty Bishop 211,400 3.6 211,400 3.2
Suite 194
660 Preston Forest Center
Dallas, TX 75230
James J. Roach 0 0 0 0
1255 Middlebury Road
Middlebury, CT 06762
Moonlighting Distribution 350,000 6.0 350,000 5.3
Corporation(3)
414 East Loop 281, Suite 7
Longview, TX 75605
Officers and Directors 2,930,545 50.4 2,930,545 44.7
as a group (5 persons)
</TABLE>
- -------------------------
(1) Mr. Parker directly owns 1,850,805 shares of common stock of Summit
Technologies. He is attributed the beneficial ownership of 80,000
shares owned by a minor son, Casey Joe Parker, and 80,000 shares owned
by a minor daughter, Leslie Nicole Parker, who share his residence. He
beneficially owns an additional 350,000 shares through his controlling
stock ownership and position as a director of Moonlighting Distribution
Corporation, which directly owns such 350,000 shares. These same
510,000 shares are attributed to Paula Parker. See footnote (2).
(2) Mrs. Parker, who is the spouse of B. Keith Parker, is attributed
350,000 shares through her controlling stock ownership and position as
a director of Moonlighting Distribution Corporation, the record owner
of the shares. She is attributed the beneficial ownership of 80,000
shares owned by a minor son, Casey Joe Parker, and 80,000
38
<PAGE> 47
shares owned by a minor daughter, Leslie Nicole Parker, who share her
residence. These same 510,000 shares are attributed to Mr. Parker.
(3) Some 52.5 percent of the stock of Moonlighting Distribution Corporation
is owned by B. Keith Parker and Paula Parker, husband and wife, who
also are directors of such company. These 350,000 shares are also
attributed to Mr. and Mrs. Parker by reason of their controlling stock
ownership of such company and their positions as directors of it.
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES.
Set forth below are the names, and terms of office of each of the directors,
executive officers and significant employees of both the Company and Summit
Technologies and a description of the business experience of each.
SUMMIT TECHNOLOGIES:
<TABLE>
<CAPTION>
OFFICE HELD TERM OF
PERSON OFFICE SINCE OFFICE
------ ------ ----------- ------
<S> <C> <C> <C>
B. Keith Parker, 49 Chief Executive 1997 4-99
Officer and Director
Don Hendon, 55 President, Chief 1997 4-99
Financial Officer
and Director
Paula Parker, 44 Secretary, Treasurer 1997 4-99
and Director
Dean Haws, 28 Director 1997 4-99
Ty Bishop, 27 Director 1997 4-99
James J. Roach, 51 Director 1998 4-99
</TABLE>
THE COMPANY.
<TABLE>
<CAPTION>
OFFICE HELD TERM OF
PERSON OFFICE SINCE OFFICE
------ ------ ----------- ------
<S> <C> <C> <C>
Albert L. Welsh, 66 President, Secretary 1998 2-99
and Director
</TABLE>
DIRECTORS OF SUMMIT TECHNOLOGIES.
B. KEITH PARKER. Mr. Parker graduated from Texas A & M University and
pursued graduate studies in tax law, estate planning and philosophy at Southern
Methodist University and Southwest Texas State University. He began a career
in financial and tax planning in 1973, is a licensed financial planner and has
earned numerous industry awards for production. In 1995 he and Paula Parker,
his spouse, organized Moonlighting Distribution Corporation and began the
distribution of more than 30 products, many of which products they developed
themselves. In July 1997 they organized Summit Technologies, Inc.
39
<PAGE> 48
DON HENDON. Mr. Hendon received a B.B.A. degree in 1965 from Sam Houston
State University and began a career in accounting. From July 1966 until
September 1973 he was a field agent for the Internal Revenue Service. From
1973 until 1978 he was a partner in the Longview, Texas accounting firm of
Langston, Delouche, Hayes & Hendon. From 1978 until the present he has been a
partner in the Longview accounting firm of Hendon and Russell.
PAULA PARKER. Mrs. Parker received a bachelor of arts degree in 1975 and
a master's degree in education, marketing and finance in 1977 from Stephen F.
Austin University and a master's of finance degree in 1980 from the University
of Colorado. While a runway model for seventeen years, she worked also on
numerous contract jobs, primarily in banking in the promotion of automatic
teller machines, and as an instructor for the American Banking Association.
She developed a franchise program for a restaurant and increased the restaurant
business from three units to 46 units in five states in two years. She served
as the liaison between then Arkansas Governor William J. Clinton and the
catfish industry in Arkansas. In 1995 she and Keith Parker, her spouse,
organized Moonlighting Distribution Corporation and began the distribution of
more than 30 products, many of which products they developed themselves. In
July 1997 they organized Summit Technologies, Inc.
DEAN HAWS. Mr. Haws has been the owner and operator of a satellite dish
sales and installation company, Gilmer Satellites of Gilmer, Texas, for the
last nine years. He has also been active in the oil field service business and
the ostrich business.
TY BISHOP. Mr. Bishop graduated from Texas Tech University in 1993 and
majored in marketing and public relations. After graduation he organized Ty
Bishop Management, which managed an alternative musical band. In 1995 he
became a partner in Bishop Cellular Plus, an authorized agent for Southwestern
Bell Mobile Systems. In 1996 he organized and owned Global Cartridge Sales, a
reseller for new jumbo toner cartridges for laser printers and for
re-manufactured toner cartridges. In 1997 he became a partner in WorldWide
Link, an international trade company that represents inventors, manufacturers
and exclusive distributors of products and services that save lives and help
the world's environment.
JAMES J. ROACH. Mr. Roach is the regional director of Summit
Technologies' Northeast Marketing Region. He is currently the President of
Electrical Generation Technologies, which specializes in the development and
installation of network communications. He is a retired Connecticut State
police sergeant and owns a private detective and security company. His clients
include many insurance companies in the state of Connecticut.
THE COMPANY.
ALBERT L. WELSH. Mr. Welsh received a bachelor of arts degree in 1953
from the University of Oklahoma and a master of business administration degree
in 1958 from Stanford University. From 1958 until 1963 he was a financial
analyst for Ford Motor Company in Dearborn, Michigan. From 1963 until 1970 he
was a partner and principal of Parker Bishop & Welsh, an NASD-member
broker-dealer and underwriter. From 1970 to 1974 he was a private investor.
From 1974 through 1985 he was a real estate developer.
40
<PAGE> 49
From 1986 to 1989 he was a registered investment adviser. From 1989 to 1991 he
was an investor in SuperCorp Inc. From 1991 until the present he has been the
Oklahoma City, Oklahoma branch manager of Birchtree Financial Services, Inc.,
a Kansas City, Missouri-based broker-dealer firm with approximately 75 offices.
In 1997 he also began to serve as president of SuperCorp Inc.
REMUNERATION OF DIRECTORS AND OFFICERS.
THE COMPANY.
Mr. Welsh, the sole officer and director of the Company, has received and
is receiving no compensation for his services for the Company. No compensation
is proposed to be paid to any officer or director of the Company prior to the
proposed Merger with Summit Technologies.
SUMMIT TECHNOLOGIES.
The directors of Summit Technologies receive no compensation for their
services as directors. The officers of Summit Technologies received from it an
aggregate of $9,000 of compensation in the last fiscal year for their services
in all capacities. Should the Merger be effected, they shall become the
officers of the post-merger Company.
Mr. Parker, the chief executive officer of Summit Technologies, receives a
salary of $5,000 a month. Mr. Hendon, the president, receives a salary of
$3,000 a month.
EMPLOYMENT CONTRACTS.
Summit Technologies has no employment contracts with any of its officers
or other employees.
STOCK OPTIONS.
The Company has adopted a stock option plan ("the Plan") which shall
survive the Merger, the major provisions of which Plan are as follows:
The directors of the Company have adopted a "1998 Stock Option Plan"
pursuant to which options granted under the plan may be incentive stock options
as defined under Section 422 of the Internal Revenue Code or non-qualified
stock options, as determined by the Option Committee of the board of directors
at the time of grant of an option and subject to the applicable provisions of
Section 422 of the Internal Revenue Code and regulations promulgated
thereunder. The Plan enables the Option Committee of the board of directors to
grant up to 500,000 stock options to employees and consultants from time to
time. As of the date of this Offering Circular, the Option Committee has
granted no options.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
COMPANY'S TRANSACTIONS WITH INSIDERS AND PROMOTERS.
The following persons may be deemed to be a "promoter" or an "insider" of
the Company: Dave Dischiavo and George W. Cole. Each of such persons
41
<PAGE> 50
or his spouse has purchased, at $0.001 a share, 125,000 shares of Common Stock
of the Company. George W. Cole's spouse and family shall receive 27,550 of the
Spinoff Shares, such Spinoff Shares to be received pro rata with all other
shareholders of SuperCorp. See "Transactions with Insiders" and "Management
Information - Security Ownership of Certain Beneficial Owners and Management."
Each of Mr. Dischiavo and Mr. Cole received $18,500 from Summit Technologies by
May 1, 1998, for finder's fees and consulting services rendered in connection
with the Spinoff and Merger. Mr. Cole exchanged $14,250 of such $18,500 fee
for 23,750 shares of Common Stock of Summit Technologies at $0.60 a share and
transferred the shares to his spouse, Marjorie Cole. See "Terms of the
Transaction - Material Contacts Among the Companies."
SUMMIT TECHNOLOGIES' TRANSACTIONS WITH MANAGEMENT.
Summit Technologies paid $20,000 to Moonlighting Distribution Corporation
for the exclusive license to distribute products manufactured by Moonlighting
Distribution Corporation - Stressex(TM), Poder 24(TM) and Trim-Away(TM). B.
Keith Parker and his spouse, Paula Parker, who are officers and directors of
Summit Technologies, own 52.5 percent of the capital stock of Moonlighting.
Summit Technologies will pay prices for these products earlier established in
arms' length transactions with non-affiliated third parties.
Summit Technologies' distribution rights to BioGenesis's fire suppression
products were acquired not from BioGenesis but, rather, from Moonlighting
Distribution Corporation, which had acquired these rights before Summit
Technologies was formed. In exchange for the transfer of these rights to Summit
Technologies, it issued 350,000 shares of its common stock to Moonlighting
Distribution Corporation, paid $10,000 to Moonlighting, and will pay to
Moonlighting a royalty of $0.50 for each 16-ounce can of FirePower 911(TM) and
$0.50 for each gallon of FlameOut(TM).
PARENTS OF SUMMIT TECHNOLOGIES.
Summit Technologies and Moonlighting Distribution Corporation
("Moonlighting") are affiliated through the common control of them by B. Keith
Parker and Paula Parker, husband and wife, who are directors of each
corporation, own 52.5% of the capital stock of Moonlighting (which itself owns
seven percent of the capital stock of Summit Technologies) and own of record
37.5 percent of the capital stock of Summit Technologies.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Thomas J. Kenan, Esquire, counsel to the Company and a director of
SuperCorp, is named in this Prospectus as having given an opinion on legal
matters concerning the registration or offering of the securities described
herein. Mr. Kenan's spouse, Marilyn C. Kenan, is the trustee and sole
beneficiary of the Marilyn C. Kenan Trust, a testamentary trust which is the
beneficial owner (i) of 28,333 shares of Common Stock of Summit Technologies
and (ii) of 375,000 of the issued and outstanding shares of Common Stock of
SuperCorp and, by reason of these ownerships, shall become the beneficial owner
of 26,786 Shares of the Company by way of the Spinoff and 28,333 shares of
Common Stock of the Company by way of the Merger,
42
<PAGE> 51
should it be approved. Mr. Kenan disclaims any beneficial ownership in the
securities beneficially owned by his spouse's trust.
INDEMNIFICATION
Under Texas corporation law, a corporation is authorized to indemnify
officers, directors, employees and agents who are made or threatened to be made
parties to any civil, criminal, administrative or investigative suit or
proceeding by reason of the fact that they are or were a director, officer,
employee or agent of the corporation or are or were acting in the same capacity
for another entity at the request of the corporation. Such indemnification
includes expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such persons if they
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the corporation or, with respect to any criminal
action or proceeding, if they had no reasonable cause to believe their conduct
was unlawful. In the case of any action or suit by or in the right of the
corporation against such persons, the corporation is authorized to provide
similar indemnification, provided that, should any such persons be adjudged to
be liable for negligence or misconduct in the performance of duties to the
corporation, the court conducting the proceeding must determine that such
persons are nevertheless fairly and reasonably entitled to indemnification. To
the extent any such persons are successful on the merits in defense of any such
action, suit or proceeding, Texas law provides that they shall be indemnified
against reasonable expenses, including attorney fees. A corporation is
authorized to advance anticipated expenses for such suits or proceedings upon
an undertaking by the person to whom such advance is made to repay such
advances if it is ultimately determined that such person is not entitled to be
indemnified by the corporation. Indemnification and payment of expenses
provided by Texas law are not deemed exclusive of any other rights by which an
officer, director, employee or agent may seek indemnification or payment of
expenses or may be entitled to under any by-law, agreement, or vote of
shareholders or disinterested directors. In such regard, an Texas corporation
is empowered to, and may, purchase and maintain liability insurance on behalf
of any person who is or was a director, officer, employee or agent of the
corporation. As a result of such corporation law, Summit Technologies or,
should the proposed merger become effective, the Company may, at some future
time, be legally obligated to pay judgments (including amounts paid in
settlement) and expenses in regard to civil or criminal suits or proceedings
brought against one or more of its officers, directors, employees or agents, as
such, with respect to matters involving the proposed Merger or, should the
Merger be effected, matters that occurred prior to the Merger with respect to
Summit Technologies.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable.
43
<PAGE> 52
FINANCIAL STATEMENTS INDEX
The financial statements of the Company and of Summit Technologies appear
as follows:
<TABLE>
<S> <C>
SUMMIT ENVIRONMENTAL CORPORATION, INC.
Independent Auditors' Report . . . . . . . . . . . . . . . F-1
Balance Sheet July 17, 1998 . . . . . . . . . . . . . . . F-2
Notes to Balance Sheet July 17, 1998 . . . . . . . . . . . F-3
SUMMIT TECHNOLOGIES, INC.
Independent Auditors' Report . . . . . . . . . . . . . . F-5
Statement of Financial Condition December 31, 1997 . . . F-6
Statement of Income December 31, 1997 . . . . . . . . . . F-7
Statement of Changes in Stockholders' Equity for the
Period August 14, 1997 to December 31, 1997 . . . . F-8
Statement of Cash Flows for the Period August 14, 1997
to December 31, 1997 . . . . . . . . . . . . . . . . F-9
Notes to Financial Statements . . . . . . . . . . . . . . F-10
Independent Auditors' Report . . . . . . . . . . . . . . F-12
Statement of Financial Condition June 30, 1998 . . . . . . F-13
Statement of Income June 30, 1998 . . . . . . . . . . . . F-14
Statement of Changes in Stockholders' Equity for the
for the Six Months Ended June 30, 1998 . . . . . . . F-15
Statement of Cash Flows for the Six Months
Ended June 30, 1998 . . . . . . . . . . . . . . . . F-16
Notes to Financial Statements . . . . . . . . . . . . . . F-17
</TABLE>
44
<PAGE> 53
INDEPENDENT AUDITORS' REPORT
To the Director and Stockholders
Summit Environmental Corporation, Inc.
We have audited the balance sheet of Summit Environmental Corporation,
Inc. (a Texas corporation), a majority-owned subsidiary of Supercorp, Inc. and
a development stage company, as of July 17, 1998. This balance sheet is the
responsibility of the Company's management. Our responsibility is to express
an opinion on this balance sheet based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosure in the balance sheet. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall balance sheet
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the balance sheet referred to above presents fairly, in
all material respects, the financial position of Summit Environmental
Corporation, Inc. as of July 17, 1998, in conformity with generally accepted
accounting principles.
/S/ HOGAN & SLOVACEK
Oklahoma City, Oklahoma
July 17, 1998
F-1
<PAGE> 54
SUMMIT ENVIRONMENTAL CORPORATION, INC.
(A Development Stage Company)
BALANCE SHEET
JULY 17, 1998
<TABLE>
<S> <C>
ASSETS
Cash - on deposit in trust account $ 750
=====
STOCKHOLDER'S EQUITY
Preferred Stock - Authorized 10,000,000 shares,
$0.001 par value - none issued
Common Stock - 40,000,000 shares authorized,
$0.001 par value, 750,000 shares issued 750
-----
$ 750
=====
</TABLE>
The accompanying notes are an integral part
of this balance sheet.
F-2
<PAGE> 55
SUMMIT ENVIRONMENTAL CORPORATION, INC.
(A Development Stage Company)
NOTES TO BALANCE SHEET
JULY 17, 1998
(1) ORGANIZATION
Summit Environmental Corporation, Inc. (the Company) was organized in
accordance with the Business Corporation Act of the State of Texas on February
24, 1998, for the purpose of merging (the "Merger") with Summit Technologies,
Inc. (Summit Technologies), a Texas corporation. The Company has no business
operations or significant capital and has no intention of engaging in any
active business until it merges with Summit Technologies. Should the Merger
not occur, the Company would seek other business opportunities, and if none
were found, could be dissolved within 18 months by a vote of the majority of
its common stockholders. The Company is a development-stage company organized
for the merger described below.
The sole officer and director of the Company is a shareholder, president
and director of SuperCorp Inc., the Company's parent.
Stock of the Company is owned by SuperCorp Inc. and will be distributed to
its shareholders upon the effectiveness of the registration statements to be
filed with the Securities and Exchange Commission and a favorable vote of
SuperCorp Inc.'s shareholders on the proposed merger. The distributed stock
will initially be held in escrow according to an Escrow Agreement dated March
16, 1998, among SuperCorp Inc., the Company, and Bank One Trust Company, NA,
Oklahoma City, Oklahoma.
(2) MERGER AGREEMENT
The Company agreed on July 14, 1998, to merge with Summit Technologies.
Summit Technologies is an operating company in the business of marketing
products, under license to it, through television infomercials, radio spots,
and a national industrial distribution company. The Company will be the
surviving corporation (Survivor), but Summit Technologies will elect all
directors and officers of the Survivor. All currently outstanding stock of
Summit Technologies in the hands of its shareholders will be cancelled and
converted into 5,810,840 shares of common stock of the Company, all authorized
but unissued, to be owned by the shareholders of Summit Technologies, when the
Merger is effective. The Merger of Summit Technologies and the Company should
qualify as a nontaxable reorganization under the tax laws of the United States.
The Merger is contingent upon the effectiveness of the registration
statements, and upon the shareholders of the Company and Summit Technologies
approving the proposed Merger. Because the Company is only a corporate shell
and not an operating entity, the proposed Merger will be accounted for as if
Summit Technologies recapitalized. Additionally, the historical financial
statements for the Company prior to the Merger will be those of Summit
Technologies. Upon completion of the proposed Merger, the shareholders of
Summit Technologies will own 5,810,840 shares of Common
F-3
<PAGE> 56
Stock of the Company or 88.6% of its voting shares. The fiscal year of the
Company will be December 31.
(3) COMMON STOCK OPTIONS
The sole director and stockholders approved the 1998 Stock Option Plan of
the Company whereby, at the discretion of the directors or of a Stock Option
Committee appointed by the board of directors, invited employees of the Company
or directors of the Company or consultants to the Company will have the option
of subscribing to common shares of the Company based on a price determined by
the directors or Stock Option Committee. The number of shares subject to the
Plan are 500,000. No options have been granted in accordance with this Plan.
F-4
<PAGE> 57
[GARNER & LAWRENCE, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Mr. Keith Parker
Summit Technologies, Inc.
Longview, Texas
We have audited the accompanying statement of financial condition of Summit
Technologies, Inc. as of December 31, 1997, and the related statements of
income, retained earnings, and cash flows for the period August 14, 1997 to
December 31, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Summit Technologies, Inc. as of
December 31, 1997, and the results of its operations and its cash flows for the
period August 14, 1997 to December 31, 1997, in conformity with generally
accepted accounting principles.
/s/ GARNER & LAWRENCE, LLP
---------------------------------------
Garner & Lawrence, LLP
January 5, 1998
F-5
<PAGE> 58
SUMMIT TECHNOLOGIES, INC.
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1997
ASSETS
<TABLE>
<S> <C> <C>
CURRENT ASSETS
Cash in banks $ 5,001
Accounts receivable 72,811
Inventory 14,576
-----------
Total current assets $ 92,388
PROPERTY AND EQUIPMENT -
OTHER ASSETS
Licenses (Note 2) 10,000
Less: Accumulated amortization (500)
-----------
Total other assets 9,500
=============
TOTAL ASSETS $ 101,888
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,874
Accrued income tax (Note 5) 7,252
-----------
Total current liabilities $ 15,126
LONG TERM LIABILITIES -
-------------
Total liabilities 15,126
STOCKHOLDERS' EQUITY
Capital stock (no par; 100,000 common shares authorized,
issued and outstanding; stated value $.01 per share) 1,000
Additional paid in capital 45,000
Retained earnings 40,762
-----------
Total stockholders' equity 86,762
=============
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 101,888
=============
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE> 59
SUMMIT TECHNOLOGIES, INC.
STATEMENT OF INCOME
FOR THE PERIOD AUGUST 14, 1997 TO DECEMBER 31, 1997
<TABLE>
<S> <C> <C>
SALES $ 74,349
COST OF SALES 9,465
------------
Gross profit $ 64,884
OPERATING EXPENSES
Advertising 600
Amortization 500
Automobile expense 600
Office expenses 1,730
Officer compensation 9,000
Marketing 900
Miscellaneous 995
Postage and delivery 1,361
Printing and reproduction 884
Professional fees 300
------------
Total operating expenses 16,870
------------
Net income from operations 48,014
Income tax expense (Note 5) 7,252
------------
NET INCOME $ 40,762
============
</TABLE>
See accompanying notes to financial statements.
F-7
<PAGE> 60
SUMMIT TECHNOLOGIES, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD AUGUST 14, 1997 TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
CAPITAL RETAINED
STOCK EARNINGS TOTAL
------------ ------------ -----------
<S> <C> <C> <C>
BALANCES - AUGUST 14, 1997 $ - $ - $ -
Stock issued (100,000 shares) 46,000 - 46,000
Net income for the period - 40,762 40,762
============ ============ ============
BALANCES - DECEMBER 31, 1997 $ 46,000 $ 40,762 $ 86,762
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
F-8
<PAGE> 61
SUMMIT TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIOD AUGUST 14, 1997 TO DECEMBER 31, 1997
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 40,812
Adjustments to reconcile net income to cash used in
operating activities:
Amortization 500
Increase in accounts receivable (72,811)
Increase in inventory (14,576)
Increase in accounts payable 7,874
Increase in accrued income taxes 7,202
------------
Net cash used in operating activities (30,999)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of license (10,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of stock issue 46,000
------------
Net increase in cash and cash equivalents 5,001
Cash and cash equivalents - August 14, 1997 -
============
CASH AND CASH EQUIVALENTS - DECEMBER 31, 1997 $ 5,001
============
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest -
Income tax -
</TABLE>
See accompanying notes to financial statements.
F-9
<PAGE> 62
SUMMIT TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - Summit Technologies, Inc. ("the Company") is a Texas
corporation formed on August 14, 1997, which is engaged in the business of
marketing technologically advanced products, including fire prevention and
extinguishment materials, various herbal health products, and others. The
products are proprietary or are under licensing contracts. Marketing efforts
include "infomercials" and other television promotion, videotapes, and personal
demonstrations. Products are marketed domestically and internationally.
Inventory - Inventory is reported at the lower of cost or market using the
first-in, first-out method.
Intangible Assets - Licenses are recorded at cost. Amortization is computed on
the straight-line method over sixty months.
Income Taxes - For federal income tax purposes, the Company uses the accrual
method of accounting. The tax year end is December 31. The only difference
between tax and financial reporting involves the length of the amortization
period for intangible assets. If the difference becomes material, deferred taxes
will be reported.
Cash and Cash Equivalents - For purposes of the statement of cash flows, cash
and cash equivalents include cash on hand and in banks and any short-term debt
securities purchased with a maturity of three months or less.
Advertising - Advertising costs are expensed as incurred.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
NOTE 2 - LICENSES
A license for limited exclusive marketing rights to various fire prevention and
extinguishment products has been acquired for a fee of $10,000. An annual
production quota, which is still being negotiated as of December 31, 1997, must
also be complied with to maintain the license.
NOTE 3 - RELATED PARTY TRANSACTIONS
The following transactions occurred between the Company and related parties
during the period :
- Sales totaling $65,610 were made to Flameout International, with special
90-day payment terms not available to other customers. The Company and Flameout
International have common members of management.
- Sales totaling $2,336 were made to various Company shareholders or their
related businesses.
- Purchases of inventory items totaling $13,645 were made from the related
parties mentioned above.
- The Company and another business with common shareholders share office space
and the related expenses.
At year end, receivables from related parties totaled $67,947, and payables to
related parties totaled $1,742.
NOTE 4 - CONCENTRATIONS
Approximately 88% of sales during the period were made to Flameout
International. As of the year end, approximately 90% of accounts receivable were
due from Flameout International.
F-10
<PAGE> 63
SUMMIT TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
NOTE 5 - FEDERAL INCOME TAX
Significant components involved in the calculation of income tax for the period
August 14, 1997 through December 31, 1997 are shown below:
<TABLE>
<S> <C>
Net financial income before income tax $48,014
Adjustments to arrive at regular taxable income:
Amortization adjustment 333
-------
Regular taxable income $48,347
=======
Regular tax at statutory rates $ 7,252
Alternative minimum tax -
-------
Net current income tax expense 7,252
Less tax deposits -
-------
Net tax liability $ 7,252
=======
</TABLE>
F-11
<PAGE> 64
[GARNER & LAWRENCE, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Mr. Keith Parker
Summit Technologies, Inc.
Longview, Texas
We have audited the accompanying statement of financial condition of Summit
Technologies, Inc. as of June 30, 1998, and the related statements of income,
retained earnings, and cash flows for the six month period then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Summit Technologies, Inc. as of
June 30, 1998, and the results of its operations and its cash flows for the six
month period then ended in conformity with generally accepted accounting
principles.
/s/ GARNER & LAWRENCE, LLP
----------------------------------------------
September 25, 1998
F-12
<PAGE> 65
SUMMIT TECHNOLOGIES, INC.
STATEMENT OF FINANCIAL CONDITION
JUNE 30, 1998
ASSETS
<TABLE>
<S> <C> <C>
CURRENT ASSETS
Cash in banks $ 289,412
Accounts receivable 119,116
Due from stockholders (Note 3) 804,350
License fee receivable (Note 4) 80,000
Inventory 46,178
Accrued income tax refund (Note 10) 6,555
------------
Total current assets $ 1,345,611
PROPERTY AND EQUIPMENT
Office furniture and equipment 14,446
Leasehold improvements 2,856
Accumulated depreciation (1,901)
------------
Net property and equipment 15,401
OTHER ASSETS
Due from officers 1,500
Merger costs (Note 2) 94,719
Licenses (Note 4) 165,000
Accumulated amortization (7,522)
------------
Total other assets 253,697
-----------
TOTAL ASSETS $ 1,614,709
===========
LIABILITIES, COMMON STOCK SUBJECT TO A CONTINGENCY,
AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 35,271
Accrued liabilities 58,871
Note payable (Note 11) 4,233
------------
Total current liabilities $ 98,375
LONG TERM LIABILITIES --
------------
Total liabilities 98,375
COMMON STOCK SUBJECT TO A CONTINGENCY (Note 9)
810,840 shares issued and outstanding 811
Additional paid in capital 1,071,617
------------
Total common stock subject to a contingency 1,072,428
STOCKHOLDERS' EQUITY
Capital stock (no par; 10,000,000 common shares authorized,
5,000,000 shares issued and outstanding) 5,000
Additional paid in capital 441,000
Retained earnings (2,094)
------------
Total stockholders' equity 443,906
-----------
TOTAL LIABILITIES, COMMON STOCK SUBJECT TO A
CONTINGENCY, AND STOCKHOLDERS' EQUITY $ 1,614,709
===========
</TABLE>
See accompanying notes to financial statements.
F-13
<PAGE> 66
SUMMIT TECHNOLOGIES, INC.
STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<S> <C> <C>
SALES $ 59,187
COST OF SALES 38,149
--------
Gross profit $ 21,038
OPERATING EXPENSES
Advertising 850
Amortization 7,022
Automobile expense 8,228
Consulting fees 1,950
Contract services 1,310
Depreciation 1,901
Insurance 5,992
Marketing 19,731
Miscellaneous 1,202
Office expenses 5,328
Officer compensation 38,197
Postage and delivery 5,413
Printing and reproduction 1,549
Professional fees 12,100
Rent 7,731
Repairs 1,337
Salaries - office 15,744
Taxes 3,876
Telephone and utilities 6,351
Travel and entertainment 24,637
--------
Total operating expenses 170,449
---------
Net loss from operations (149,411)
OTHER INCOME
Sale of license 100,000
---------
Net loss before income tax (49,411)
Income tax benefit (Note 10) 6,555
---------
NET LOSS $ (42,856)
=========
</TABLE>
See accompanying notes to financial statements.
F-14
<PAGE> 67
SUMMIT TECHNOLOGIES, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
CAPITAL ADDITIONAL RETAINED
STOCK PAID IN EARNINGS TOTAL
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
BALANCES - DECEMBER 31, 1997
(100,000 shares outstanding) $ 1,000 $ 45,000 $ 40,762 $ 86,762
Adjustment for 35-for-1 stock split - January 23, 1998
(3,500,000 shares outstanding) 2,500 (2,500) -- --
Sale of 1,500,000 shares - January 24, 1998 through
March 26, 1998 1,500 398,500 -- 400,000
Net loss for the period -- -- (42,856) (42,856)
--------- --------- --------- ---------
BALANCES - JUNE 30, 1998 $ 5,000 $ 441,000 $ (2,094) $ 443,906
========= ========= ========= =========
</TABLE>
COMMON STOCK SUBJECT TO A CONTINGENCY (NOTE 9)
<TABLE>
<CAPTION>
CAPITAL ADDITIONAL RETAINED
STOCK PAID IN EARNINGS TOTAL
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sale of 250,000 shares - April 1998 $ 250 $ 149,750 $ -- $ 150,000
Sale of 384,840 shares - June 1998 385 917,043 -- 917,428
Sale of 176,000 shares for services rendered 176 4,824 -- 5,000
---------- ---------- ---------- ----------
TOTALS $ 811 $1,071,617 $ -- $1,072,428
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-15
<PAGE> 68
SUMMIT TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (42,856)
Adjustments to reconcile net income to cash used in operating activities:
Amortization 7,022
Depreciation 1,901
Increase in accounts receivable (46,305)
Increase in license fee receivable (80,000)
Increase in inventory (31,602)
Increase in accrued income tax refund (6,555)
Increase in accounts payable 27,397
Increase in accrued expenses 6,946
Increase in commission payable 44,673
-----------
Net cash used in operating activities $ (119,379)
CASH FLOWS FROM INVESTING ACTIVITIES
Due from stockholders (804,350)
Acquisitions of property and equipment (17,302)
Advances to officers (1,500)
Merger costs (94,719)
Licenses acquired (155,000)
-----------
Net cash used in investing activities (1,072,871)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan proceeds 6,554
Loan principal repayments (2,321)
Proceeds from sale of stock 1,472,428
-----------
Net cash provided by financing activities 1,476,661
------------
Net increase in cash and cash equivalents 284,411
Cash and cash equivalents - December 31, 1997 5,001
------------
CASH AND CASH EQUIVALENTS - JUNE 30, 1998 $ 289,412
============
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 351
Income tax 7,252
</TABLE>
See accompanying notes to financial statements.
F-16
<PAGE> 69
SUMMIT TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - Summit Technologies, Inc. ("the Company") is a Texas
corporation formed on August 14, 1997, which is engaged in the business of
marketing technologically advanced products, including fire suppression
materials, various herbal health products, and others. The products are
proprietary or are under licensing contracts. Marketing efforts include
"infomercials" and other television promotion, videotapes, and personal
demonstrations. Products are marketed domestically and internationally.
Inventory - Inventory is reported at the lower of cost or market using the
first-in, first-out method.
Intangible Assets - Licenses are recorded at cost. Amortization is computed on
the straight-line method over sixty months.
Merger Costs - The Company capitalizes all costs incurred in connection with a
proposed merger transaction. Upon consummation of the merger, the costs will be
treated in accordance with the accounting policies of the new entity. If the
merger is not accomplished under the current proposal, the costs will be
expensed by the Company.
Income Taxes - For federal income tax purposes, the Company uses the accrual
method of accounting. The tax year end is December 31. Differences between tax
and financial reporting include the length of the amortization period for
intangible assets and depreciation methods and lives for property and equipment.
If the differences become material, deferred taxes will be reported.
Cash and Cash Equivalents - For purposes of the statement of cash flows, cash
and cash equivalents include cash on hand and in banks and any short-term debt
securities purchased with a maturity of three months or less.
Advertising and Promotion - Advertising and promotion costs are expensed as
incurred.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
NOTE 2 - MERGER COSTS
The Company is involved in a proposed merger transaction with Summit
Environmental Corporation, Inc. ("SECI"). SECI is currently a majority-owned
subsidiary of SuperCorp Inc., a publicly traded company, which would "spin off"
its shares of SECI prior to the vote by the Company's shareholders on the
proposed merger. The purpose of the proposed transaction is to create an active
public market for the common stock of the new corporation. As of June 30, 1998,
the Company has incurred related costs of $94,719.
NOTE 3 - DUE FROM STOCKHOLDERS
The Company issued 384,840 shares of its stock during June 1998 for net proceeds
of $922,428. Of this amount, $804,350 was not collected and deposited until July
1998. This amount due from stockholders is presented in the Statement of
Financial Condition as a current asset.
F-17
<PAGE> 70
SUMMIT TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1998
NOTE 4 - LICENSES
A license for limited exclusive marketing rights to various fire suppression
products was acquired by the Company. As of June 30, 1998, the Company had paid
fees totaling $135,000 for the license. The license agreement requires
additional payments of $75,000 during 1998 and $100,000 during each of the three
years 1999 - 2001. However, the Company has signed a letter of intent with the
licensor to purchase the patent rights. If this purchase is consummated, the
license for marketing rights will be rendered obsolete and all payments
remaining under that agreement will be canceled.
The aforementioned license agreement authorizes the Company to sell marketing
rights to third parties for international distribution of the products. As of
June 30, 1998, one license covering the China/Hong Kong area had been sold for
$100,000, with $20,000 collected.
Licenses for limited exclusive marketing rights to various herbal health
products have been acquired for fees totaling $30,000. Under the agreements, the
Company must meet annual production quotas. The grantor of the licenses is the
manufacturer/supplier of the products.
NOTE 5 - LEASES
The Company has a lease agreement for the office space it occupies; the lease is
month-to-month, under which the Company pays $1,185 per month, with a 30-day
notice required for termination. The Company leases office equipment on a
month-to-month basis; the amount of the required monthly payment is determined
by actual usage; monthly payments during the six months ended June 30, 1998
averaged $171. The Company signed a lease agreement on May 20, 1998 for storage
space for a monthly payment of $1,100 for two years plus an optional two year
extension.
Minimum required rentals for the twelve months ended June 30, 1999 total
$13,200. Minimum required rentals for the twelve months ended June 30, 2000
total $12,100.
NOTE 6 - STOCK RESTRICTIONS
As of June 30, 1998, all shares of stock of the Company are "restricted stock,"
as such term is employed by the Securities and Exchange Commission ("the
Commission"). As such, these shares may not be transferred for value unless
registered with the Commission or an exemption from registration is available.
Each shareholder of these restricted securities, however, may transfer for value
pursuant to the SEC's Rule 144 after holding the stock for a one-year period.
F-18
<PAGE> 71
SUMMIT TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1998
NOTE 7 - RELATED PARTY TRANSACTIONS
The following transactions occurred between the Company and related parties
during the six months ended June 30, 1998:
- - The Company purchased the licenses for herbal health products mentioned in
Note 4 from an entity with common shareholders and management members with the
Company.
- - The Company and another business with common shareholders share office space
and the related expenses.
NOTE 8 - CONCENTRATIONS
As of June 30, 1998, approximately 55% of accounts receivable was due from
Flameout International resulting from sales made in 1997, and 39% was due from
Proformance Marketing resulting from 1998 sales.
NOTE 9 - CONTINGENCIES
As mentioned in Note 2, the Company is involved in a proposed merger transaction
with Summit Environmental Corporation, Inc.("SECI"). SECI filed a registration
statement with the Securities and Exchange Commission ("the Commission") on
March 26, 1998 related to the proposed merger, naming the Company as the entity
proposed to be merged into SECI. The Company subsequently sold 810,840 shares of
its common stock in an offering intended to be exempt from registration pursuant
to the provisions of Section 4 (2) of the Securities Act of 1933 and of
Regulation D, Rule 506 of the Commission. It is possible, but not certain, that
the filing of the registration statement by SECI and the manner in which the
Company conducted the sale of the 810,840 shares of common stock constituted
"general advertising or general solicitation" by the Company. General
advertising and general solicitation are activities that are prohibited when
conducted in connection with an offering intended to be exempt from registration
pursuant to the provisions of Regulation D, Rule 506 of the Commission. The
Company does not concede that there was no exemption from registration available
for this offering. Nevertheless, should the aforementioned circumstances have
constituted general advertising or general solicitation, the Company would be
denied the availability of Regulation D, Rule 506 as an exemption from the
registration requirements of the Securities Act of 1933 when it sold the 810,840
shares of common stock after March 26, 1998. Should no exemption from
registration have been available with respect to the sale of these shares, the
persons who bought them would be entitled, under the Securities Act of 1933, to
the return of their subscription amounts if actions to recover such monies
should be filed within one year after the sales in question. Accordingly, the
amounts received by the Company from the sale of these shares are set apart from
Stockholders' Equity to indicate this contingency.
As mentioned in Note 4,the Company has signed a letter of intent to purchase the
patent rights to the fire prevention and extinguishment products for which it
currently holds the limited marketing license. If the purchase is consummated,
the Company would be required to pay cash of $925,000 plus 750,000 shares of
Company stock; the limited marketing license would become obsolete and the
Company's remaining obligations related to it would be canceled.
F-19
<PAGE> 72
SUMMIT TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1998
NOTE 10 - FEDERAL INCOME TAX
The Company files federal income tax returns on a calendar year basis. The
accrued income tax calculation is based on the six month period ended June 30,
1998. Significant components involved in this calculation are shown below:
<TABLE>
<S> <C>
Net financial income before income tax $(49,411)
Adjustments to arrive at regular taxable income:
Amortization adjustment 4,681
Meals and entertainment limitation 1,032
--------
(43,698)
Annualize x 2
--------
Annualized net operating loss (87,396)
========
Accrued income tax at statutory rates $ --
========
Accrued refund from carryback of $43,698 net operating loss to 1997 $ 6,555
========
</TABLE>
NOTE 11 - NOTE PAYABLE
As of June 30, 1998, the Company was obligated under one note payable, described
as follows:
<TABLE>
<CAPTION>
INTEREST MONTHLY CURRENT LONG TERM
CREDITOR COLLATERAL RATE PAYMENT PORTION PORTION TOTAL
-------- ---------- -------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
The Mortgage Center Computer equipment 12% $ 445 $ 4,233 $ -- $ 4,233
========= ========= ========= ========
</TABLE>
F-20
<PAGE> 73
APPENDIX A
AGREEMENT OF MERGER
This Agreement of Merger ("the Agreement") is made and entered into as
of July 14, 1998, by and among Summit Environmental Corporation, Inc., a Texas
corporation ("the Company"); Summit Technologies, Inc., a Texas corporation
("Summit Technologies"); and SuperCorp Inc., an Oklahoma corporation
("SuperCorp").
WHEREAS, the Directors of the Company and the Directors of Summit
Technologies have each agreed to submit to their respective shareholders, for
such shareholders' approval or rejection, the merger of Summit Technologies into
the Company ("the Merger") in accordance with the provisions of the Texas
General Corporation Act, other applicable law and the provisions of this
Agreement; and
WHEREAS, SuperCorp is the controlling shareholder of the Company;
NOW, THEREFORE, in consideration of the promises, undertakings and
mutual covenants set forth herein, the Company, Summit Technologies, and
SuperCorp agree as follows:
1. Merger; Effective Date. Pursuant to the terms and provisions of
this Agreement and of the Texas Business Corporation Act, and subject to the
prior approval by the shareholders of each of the Company and Summit
Technologies, Summit Technologies shall be merged with and into the Company, as
confirmed by the filing of articles of merger with the Secretary of State of the
State of Texas ("the Effective Date"). The Company shall be the surviving
corporation ("the Surviving Corporation"). The Company and Summit Technologies
shall be referred to hereinafter collectively as the "Constituent Corporations."
On the Effective Date, the separate existence and corporate organization of
Summit Technologies, except insofar as it may be continued by statute, shall
cease and the Company shall continue as the Surviving Corporation, which shall
succeed, without other transfer or further act or deed whatsoever, to all the
rights, property and assets of the Constituent Corporations and shall be subject
to and liable for all the debts and liabilities of each, including, without
limitation, (i) the obligation to make payment for the fair value of any shares
held by a shareholder of either of the Constituent Corporations who has complied
with the requirements of Article 5.12 of the Texas Business Corporation Act for
the recovery of the fair value of his shares, and (ii) the obligation to make
payment for all fees and franchise taxes as required by law; otherwise, the
Company's identity, existence, purposes, rights, immunities, properties,
liabilities and obligations shall be unaffected and unimpaired by the Merger
except as expressly provided herein. This Agreement supersedes all previous
agreements among the parties hereto relating to the Merger.
2. Articles of Incorporation and Bylaws. The Articles of Incorporation
and Bylaws of the Surviving Corporation shall be the Articles of Incorporation
and Bylaws of the Company as in effect on the Effective Date.
A-1
<PAGE> 74
3. Directors. The directors of Summit Technologies on the Effective
Date shall become the directors of the Surviving Corporation from and after the
Effective Date, who shall hold office subject to the provisions of the Articles
of Incorporation and Bylaws of the Surviving Corporation, until their successors
are duly elected and qualified.
4. Officers. The officers of Summit Technologies on the Effective Date
shall become the officers of the Surviving Corporation from and after the
Effective Date, subject to such powers with respect to the designation of
officers as the directors of the Surviving Corporation may have under its
Articles of Incorporation and Bylaws.
5. Manner of Conversion. The manner of converting the shares of
capital stock of the Constituent Corporations into shares of the Surviving
Corporation shall be as follows:
5.1. The shares of capital stock of Summit Technologies which shall
be issued and outstanding on the Effective Date shall, on the Effective Date, be
cancelled and exchanged for 5,810,840 shares of Common Stock ("the Merger
Shares") of the Company.
5.2. There shall be 500,000 shares of Common Stock, $0.001 par
value, of the Company issued and outstanding prior to the Effective Date ("the
Spinoff Shares") and held of record by SuperCorp, which shares shall, on the
Effective Date, continue to be outstanding and which shall have been distributed
by the record holder thereof, SuperCorp, to its shareholders ("the Spinoff").
5.3 There shall be 250,000 shares of Common Stock of the Company
issued and outstanding prior to the Effective Date and held by Dave Dischiavo
and George W. Cole or their designees or assignees ("the Consultants' Shares"),
which shares, on the Effective Date, shall continue to be issued and
outstanding.
5.4 There shall be no options or warrants to purchase shares of
Common Stock of the Company or Summit Technologies outstanding on the Effective
Date.
6. Representations and Warranties. SuperCorp and the Company
jointly represent and warrant to, and agree with, Summit Technologies
that:
6.1 The Company has been duly organized and is validly existing
under the Texas Business Corporation Act. The Company has no subsidiary and does
not own an equity interest in any entity.
6.2 The authorized capital of the Company is 50,000,000 shares of
capital stock, which is of two classes as follows:
<TABLE>
<CAPTION>
Number of Par value
Class Series Shares of shares
----- ------ --------- ---------
<S> <C> <C> <C>
Common None 40,000,000 $0.001
Preferred To be designated 10,000,000 $0.001
by the directors
</TABLE>
A-2
<PAGE> 75
6.3 As of the Effective Date but immediately before giving
effect to the Merger, the Company has outstanding capital as follows: 750,000
shares of Common Stock, $0.001 par value. No other shares, options, warrants or
any rights to acquire the Company's capital stock will be issued and outstanding
as of the Effective Date but immediately before giving effect to the Merger. The
shares of Common Stock to be issued in connection with the Merger, when issued,
delivered and sold, will be duly and validly issued and outstanding, fully paid
and non-assessable, will not have been issued in violation of or subject to any
preemptive or similar rights and will be free from any lien, charge, encumbrance
or other security interest or third party right or interest.
6.4 The Company has no liabilities or obligations, whether
absolute, contingent or otherwise.
6.5 As of the Effective Date, the financial statements of the
Company shall not vary in any particular from the Company's financial statements
that appear in the registration statement described in paragraph 7 below.
6.6 As of the Effective Date, the Merger and the Agreement
will have been duly authorized and approved by the Company's directors and
shareholders.
6.7 The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the United
States Investment Company Act of 1940, as amended.
7. Conditions of Summit Technologies' obligations. The obligations of
Summit Technologies to complete the Merger as provided herein shall be subject
to the accuracy of the representations and warranties of SuperCorp and the
Company herein contained as of the Effective Date, to the performance by the
Company and SuperCorp of their obligations hereunder and to the following
additional conditions:
7.1 The Merger Shares and the Spinoff Shares of Common Stock of the
Company to be distributed pursuant to the provisions of paragraph 5.1 and 5.2
above shall, prior to the distribution thereof, be registered pursuant to the
provisions of the Securities Act of 1933, as amended, by virtue of the filing of
the appropriate registration statements with the U.S. Securities and Exchange
Commission.
7.2 SuperCorp shall have distributed the Spinoff Shares to an escrow
agent, as described in the registration statements filed with the SEC.
7.3 The directors and the shareholders of Summit Technologies are
free to approve or disapprove the Merger in their full discretion.
8. Tax Treatment. The merger of the Company and Summit Technologies
shall be accomplished as a tax-free reorganization.
9. Certificate of Merger. Upon the approval of the merger by the
shareholders of the Company and of Summit Technologies, the officers of the
Company shall file with the Secretary of State, State of Texas either a
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<PAGE> 76
certified copy of this Agreement, Articles of Merger, or other required filing
containing terms and provisions consistent with this Agreement of Merger;
provided, however, that at any time prior to the filing of this Agreement (or a
certificate in lieu thereof) with the Secretary of State, State of Texas, the
Agreement may be terminated by the board of directors of Summit Technologies
notwithstanding approval of this Agreement by the shareholders of Summit
Technologies or of the Company.
Summit Environmental Corporation,
a Texas corporation
By: /s/ Albert L. Welsh
-------------------------------
Albert L. Welsh, President
Summit Technologies, Inc.,
a Texas corporation
By: /s/ B. Keith Parker
-------------------------------
B. Keith Parker, Chief Executive
Officer
SuperCorp Inc.
By: /s/ Albert L. Welsh
-------------------------------
Albert L. Welsh, President
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<PAGE> 77
PART II
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are all expenses of this issuance and distribution.
There are no underwriting discounts or commissions. None of the expenses are
being paid by the distributing security holder, SuperCorp Inc. All expenses are
being paid by Summit Technologies, Inc., the company with which the Registrant
proposes to merge.
<TABLE>
<CAPTION>
Item Amount
---- ------
<S> <C>
Registration fees $ 100
Escrow agent's fee 500
Filing expenses (EDGAR) 4,000
Stock transfer agent's fee 4,000
Printing and engraving 10,000
Postage 5,400
Legal 20,000
Accounting and auditors 4,000
Finder's fee 18,500
Standard & Poor's Corporation Records
publication fee 5,000
----------
Total Expenses $ 71,500
</TABLE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
There is set forth in the Prospectus under "Terms of the Transaction
- -Indemnification for Securities Act Liabilities" a description of the laws of
the State of Texas with respect to the indemnification of officers, directors,
and agents of corporations
incorporated in the State of Texas.
Both the Company and Summit Technologies, Inc. have articles of
incorporation and bylaws provisions that insure or indemnify, to the full extent
allowed by the laws of the State of Texas, directors, officers, employees,
agents or persons serving in similar capacities in other enterprises at the
request either of the Company or Summit Technologies, Inc., as the case may be.
To the extent of the indemnification rights provided by the State of
Texas statutes and provided by the Company's and Summit Technologies, Inc.'s
articles of incorporation and bylaws, and to the extent of Summit Technologies,
Inc.'s and the Company's abilities to meet such indemnification obligations, the
officers, directors and agents of Summit Technologies, Inc. or the Company would
be beneficially affected.
RECENT SALES OF UNREGISTERED SECURITIES.
On March 12, 1998, the Registrant issued 500,000 shares of its Common
Stock to its corporate parent, SuperCorp, Inc., a Texas corporation, for a cash
consideration of $500, or $0.001 a share, and on March 12, 1998, issued 125,000
shares of its Common Stock to Dave Dischiavo and 125,000 shares of its Common
Stock to Marjorie Cole, the spouse of George W. Cole for a cash consideration in
each instance of $125, or $0.001 a share.
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<PAGE> 78
SERVICES RENDERED BY INSIDERS.
Mr. Dischiavo and Mr. Cole may be deemed to be "insiders" or
"promoters" in connection with the purchase by each of 125,000 shares of Common
Stock of the Registrant for $125, or $0.001 a share. Each also performed
services for the Registrant and SuperCorp Inc.
Mr. Dischiavo's and Mr. Cole's services consisted of introducing
Summit Technologies to SuperCorp in early 1998 and in advising Summit
Technologies of the advantages to it of entering into the Agreement of Merger
with the Company (see "Appendix A - Agreement of Merger").
There was no underwriter, and none of the above-described securities
were offered to any persons other than the present holders of these securities.
The securities were not registered under the Securities Act of 1933 in
reliance upon the exemption from registration provided by Section 4(2) of the
Securities Act and by Regulation D, Rule 506.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Separately bound but filed as part of this Registration Statement are
the following exhibits:
<TABLE>
<CAPTION>
Exhibit Item
<S> <C> <C>
2 - Agreement of Merger of March 16, 1998, between
Summit Environmental Corporation, Inc. and
Summit Technologies, Inc. (Superseded by Exhibit
2.1).
2.1 - Agreement of Merger of July 14, 1998, between
Summit Environmental Corporation, Inc. and
Summit Technologies, Inc.**
3.1 - Articles of Incorporation of Summit
Environmental Corporation, Inc.*
3.1.1 - Amendment to Articles of Incorporation of
Summit Environmental Corporation, Inc.**
3.2 - Bylaws of Summit Environmental Corporation,
Inc.*
3.3 - Amended Articles of Incorporation of Summit
Technologies, Inc.*
3.4 - Bylaws of Summit Technologies, Inc.*
5 - Opinion of Thomas J. Kenan, Esq., as to the
legality of the securities covered by the
Registration Statement.*
8 - Opinion of Thomas J. Kenan, Esq., as to tax
matters and tax consequences. (Superseded by
Exhibit 8.1.)
</TABLE>
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<PAGE> 79
<TABLE>
<S> <C> <C>
8.1 - Opinion of Thomas J. Kenan, Esq., as to tax
matters and tax consequences.**
10 - Escrow Agreement among Summit Environmental
Corporation, Inc.; SuperCorp Inc.; and
Bank One Trust Company, NA, Oklahoma City,
Oklahoma.*
10.1 - 1998 Stock Option Plan adopted by Summit
Environmental Corporation, Inc.*
10.2 - Representative agreement among certain
shareholders of SuperCorp relating to
compliance with SEC Rule 419.*
10.3 - Limited Exclusive Marketing Bilateral
Agreement between Moonlighting Distribution
Corporation-USA and Summit Technologies, Inc.
(Poder Sexual, Ultimate Stressex and/or Poder
24)*
10.4 - Limited Exclusive Marketing Bilateral
Agreement among B. Keith Parker, individually
and as Chairman of the Board and CEO of
Moonlighting Distribution Corporation-USA,
d/b/a Moonlighting International, and Summit
Technologies, Inc. (FireKare, FirePower 911,
Super Cold Fire, and Flame Out)*
10.5 - Television Commercial Agreement between
American Independent Network ("AIN") and
Summit Technologies, Inc.**
10.6 - Exclusive Marketing Bilateral Agreement between
Moonlighting Distribution Corporation-USA and
Summit Technologies, Inc. (Trim-Away).**
23 - Consent of Thomas J. Kenan, Esq. to the
reference to him as an attorney who has passed
upon certain information contained in the
Registration Statement. (Superseded by
Exhibit 23.8.)
23.1 - Consent of Garner & Lawrence, LLP, independent
auditors of Summit Technologies, Inc.
(Superseded by Exhibit 23.9.)
23.2 - Consent of Hogan & Slovacek, independent
auditors of Summit Environmental Corporation,
Inc. (Superseded by Exhibit 23.10.)
23.3 - Consent of B. Keith Parker to serve as a
director of Summit Environmental Corporation,
Inc. should the proposed Merger with Summit
Technologies, Inc. become effective.*
23.4 - Consent of Don Hendon to serve as a director
of Summit Environmental Corporation, Inc.
should the proposed Merger with Summit
Technologies, Inc. become effective.*
</TABLE>
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<PAGE> 80
23.5 - Consent of Paula Parker to serve as a director
of Summit Environmental Corporation, Inc.
should the proposed Merger with Summit
Technologies, Inc. become effective.*
23.6 - Consent of Dean Haws to serve as a director of
Summit Environmental Corporation, Inc. should
the proposed Merger with Summit Technologies,
Inc. become effective.*
23.7 - Consent of Ty Bishop to serve as a director of
Summit Environmental Corporation, Inc. should
the proposed Merger with Summit Technologies,
Inc. become effective.*
23.8 - Consent of Thomas J. Kenan, Esq. to the
reference to him as an attorney who has passed
upon certain information contained in the
Registration Statement.**
23.9 - Consent of Garner & Lawrence, LLP, independent
auditors of Summit Technologies, Inc.(Superseded
by Exhibit 23.12).
23.10 - Consent of Hogan & Slovacek, independent
auditors of Summit Environmental Corporation,
Inc. (Superseded by Exhibit 23.13).
23.11 - Consent of James J. Roach to serve as a
director of Summit Environmental Corporation,
Inc. should the proposed Merger with Summit
Technologies, Inc. become effective. **
23.12 - Consent of Garner & Lawrence, LLP, independent
auditors of Summit Technologies, Inc.
(Superseded by Exhibit 23.14).
23.13 - Consent of Hogan & Slovacek, independent
auditors of Summit Environmental Corporation,
Inc. (Superseded by Exhibit 23.15).
23.14 - Consent of Garner & Lawrence, LLP, independent
auditors of Summit Technologies, Inc.
23.15 - Consent of Hogan & Slovacek, independent
auditors of Summit Environmental Corporation,
Inc. Technologies, Inc.
27 - Financial Data Schedule (Superseded by
Exhibit 27.1).
27.1 - Financial Data Schedule.**
* Previously filed with Form SB-2; incorporated herein.
** Previously filed with Amendment No. 1 to Form SB-2;
incorporated herein.
UNDERTAKINGS.
Summit Environmental Corporation, Inc. will:
1. File, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement to:
(a) include any prospectus required by Section 10(a)(3) of
the Securities Act;
(b) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental
change in the information in the Registration
Statement; and
(c) include any additional or changed material information
on the plan of distribution.
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<PAGE> 81
2. For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
3. File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
4. File a post-effective amendment to the registration
statement to include any financial statements required by Regulation 210.3-19
under the Securities Act of 1933 at the start of a delayed offering or
throughout a continuous offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("the Act") may be permitted to directors, officers and
controlling persons of Summit Environmental Corporation, Inc. pursuant to the
foregoing provisions, or otherwise, Summit Environmental Corporation, Inc. has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Summit Environmental Corporation,
Inc. of expenses incurred or paid by a director, officer or controlling person
of Summit Environmental Corporation, Inc. in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, Summit Environmental
Corporation, Inc. will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of jurisdiction the question
whether such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Summit Environmental Corporation, Inc. hereby undertakes to supply by
means of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the subject to and
included in the Registration Statement when it became effective.
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<PAGE> 82
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Oklahoma City,
Oklahoma.
Date: October 9, 1998 Summit Environmental Corporation, Inc.
By /s/ Albert L. Welsh
--------------------------------
Albert L. Welsh, president
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Date: October 9, 1998 /s/ Albert L. Welsh
--------------------------------
Albert L. Welsh, president, sole
director, principal financial
officer, and authorized
representative of the Registrant
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<PAGE> 83
SUMMIT ENVIRONMENTAL CORPORATION, INC.
COMBINED EXHIBIT INDEX (AMENDMENT NO. 4 TO SB-2 AND S-4)
Exhibit Item
- ------- ----
23.14 - Consent of Garner & Lawrence, LLP, independent auditors of
Summit Technologies, Inc.
23.15 - Consent of Hogan & Slovacek, independent auditors of Summit
Environmental Corporation, Inc.
<PAGE> 1
[GARNER & LAWRENCE, LLP LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our reports dated September 25, 1998, and
January 5, 1998, with respect to the financial statements of Summit
Technologies, Inc. included in two Registration Statements (Amendment No. 4 to
Form SB-2 and Amendment No. 4 to Form S-4) and related Prospectus of Summit
Environmental Corporation, Inc. for the registration of 500,000 common shares
(Form SB-2) and 5,810,840 common shares (Form S-4).
/s/ Garner & Lawrence, LLP
------------------------------
Garner & Lawrence, LLP
October 8, 1998
Exhibit 23.14
Page 1 of 1 Page
<PAGE> 1
[HOGAN & SLOVACEK LETTERHEAD]
INDEPENDENT AUDITOR'S CONSENT
We consent to the use of our report dated July 17, 1998, with respect
to the financial statements of Summit Environmental Corporation, Inc. included
in two Registration Statements (Amendment No. 4 to Form SB-2 and Amendment No. 4
to Form S-4) of Summit Environmental Corporation, Inc.
/S/ HOGAN & SLOVACEK
Oklahoma City, Oklahoma
October 9, 1998
Exhibit 23.15
Page 1 of 1 Page
