<PAGE>
DRAFT 8/27/98
1:30 P.M.
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
POWER TECHNOLOGY, INC.
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(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA 88-0395816
------------------------------- ------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1000 WEST BONANZA ROAD
LAS VEGAS, NEVADA 89106
-------------------------------------- ----------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER: (702) 382-3385
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT: NOT APPLICABLE
SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT: COMMON STOCK, $.001
PAR VALUE
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Power Technology, Inc. (the "Company"), a Nevada corporation, was
incorporated on June 3, 1996. However, the Company did not conduct any
significant operations until March 1998 when it acquired all of the issued
and outstanding capital stock and assets of PowerTek Technology Corporation,
Inc. (formerly called Power Technology, Inc.) which is presently a
wholly-owned subsidiary of the Company. The Company changed its corporate
name from "Zepplin Production Corp." to Power Technology, Inc. during March
1998 to reflect the change in the purposes and nature of its business.
The Company is a research and development company. It is presently
engaged in research and development activities regarding (i) batteries for
the automotive and electric car industries, (2) electronic sensors, and (3)
pipeline connection technology.
BATTERIES
GENERAL. The primary business of the Company has been to develop
advanced technology for batteries to be used in the automotive and electric
car industry, and other uses. Its battery technology has recently passed
from the "proof of principle" stage to the "preliminary prototype" stage of
development.
The goal of the Company has been the development of batteries that
(i) are substantially lighter than conventional car batteries, (ii) have a
high charge/quicker recharge rate, (iii) provide greater range, (iv) will be
more cost effective, and (v) will be more environmentally friendly.
Electric cars currently being produced have battery packs that last
between 25,000 and 30,00 miles, weight about 1,100 pounds, require a two to
three hour recharge period using a 220-volt outlet (or six to ten hours using
a 110-volt outlet) and cost about $2,000 to $2,500 to replace. These
operating and recharge statistics only apply to electric cars or batteries
operating at room temperature. At higher temperatures, like those found on
sun-soaked asphalt highways (approximately 50% of North America), battery
life of conventional batteries is drastically diminished. At lower
temperatures (the other half of North America), there is power loss in
conventional batteries. Using today's state-of-the-art technology, the 1998
electric vehicles will run on lead-acid batteries and carry two people about
50 miles on a hot day. In order to meet the demands being placed on auto
makers for electric cars, management expects significant demand for an
advanced battery that: (1) has a quicker recharge rate; (2) is lighter weight
with higher energy density; (3) is more cost effective; and (4) carries a
charge for distances longer than two hundred miles in any temperature.
The strategy of the Company has been to develop automotive battery
products that have technological advantages over available alternatives and
that are capable of being produced commercially on an economically
competitive basis. The Company intends to continue its development efforts to
be funded in part through licensees and industrial joint venture partners in
order to broaden and build upon its products and technological base.
The Company recognizes the need to protect its technology and
has a patent pending covering its battery structure and materials.
The importance of electric vehicles in the Untied States and abroad
has increased because of concerns regarding air pollution, global climatic
changes, ozone layer depletion, noise abatement and dependence on imported
oil. However, because of the costs and limited range of currently available
batteries, the production and sales of electric vehicles has been very
limited (47,000 vehicles estimated to be produced during 1998). There
appears to be substantial demand for a high power, durable, high
charge/discharge rate battery for electric cars and other hybrid electric
vehicles (such as two and three wheeled vehicles that are numerous in Europe
and third world countries) that are more cost effective, lighter and smaller.
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The Company's future business prospects are substantially dependent
upon the ability of the Company, its joint venture partners and licensees to
develop, manufacture and sell products based on the Company's battery
technologies. Additional development efforts will be required before
products based on the Company's technologies can be manufactured and sold
commercially. There can be no assurance that certain products based on the
Company's technologies can be manufactured cost effectively on a commercial
scale, that such products will gain market acceptance or that competing
products and technologies will not render products based on the Company's
technologies obsolete or noncompetitive.
In certain fields, the Company may enter into licensing or joint
venture agreements with established companies. Any revenues or profits
which may be derived by the Company from these arrangements will be
substantially dependent upon the willingness and ability of the Company's
licensees and joint venture partners to devote their financial resources and
manufacturing and marketing capabilities to commercialize products based on
the Company's technologies.
The Company's ability to compete effectively with other companies
will depend, in part, on its ability to protect and maintain the proprietary
nature of its technology. There can be no assurance that the Company's
patents or other proprietary rights will be determined to be valid or
enforceable if challenged in court or administrative proceedings or that the
Company patents or other proprietary rights, even if determined to be valid,
will be broad enough in scope to enable the Company to prevent third parties
from producing products using similar technologies or processes. There can
also be no assurance that the Company will not become involved in disputes
with respect to the patents or proprietary rights of third parties.
BATTERY TECHNOLOGY. The battery being developed by the Company is
an electrochemical battery of the type having a positive plate, a negative
plate, an electrolyte contacting and bridging the plates, and a transducer in
contact with the plate(s) to apply electronic energy to the plate(s). Each
plate is comprised of a rigid metal structure which significantly increases
the exposed surface area of the plates for the electrolyte to be in contact.
The metal structure of the plates are specially coated with an electrically
conductive metal.
Electrochemical batteries typically include a pair of oppositely
charged plates (positive and negative) with electrolyte to convey ions from
one plate to the other when the circuit is completed. This is a well
developed technology, typically utilizing a lead-acid electrolyte which is
more expensive, more volatile, and environmentally unfavorable than the
Company's battery technology.
Because the capability of a battery is directly related to the
surface area of its plates which is in contact with electrolyte, their
capability is usually enhanced by sculpting their surfaces to increase and
open up their surface areas. The technology of the Company further increases
the surface areas of the plates without compromising their strength or
resistence to vibration, erosion and loss of material. Because the Company's
plates can be placed closer together due to their rigidity, the size of the
battery and the amount of required electrolyte is significantly reduced. For
this reason, it also increases the power density for both the weight and size
of the battery.
The physical movement of electrolyte at the interface of the plates
is increased which materially enhances the ion migration and transfer between
the plates. Stagnation of electrolyte at the plates of conventional
batteries is a problem because it inhibits the transfer and migration of ions
between the plates, commonly known as ion depletion.
Based upon these technologies, the batteries of the Company are
smaller and lighter weight and provide increased electrical charge/discharge,
higher power, durability, and environmental acceptability.
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PROTOTYPE BATTERIES. The Company is in the process of producing
preliminary prototype versions of its battery that will be built and tested
in a variety of configurations. Preliminary testing by the Company indicates
that various configurations of the battery meet or exceed some of the
performance goals established by major governmental and industry groups for
electric vehicle batteries. The Company also believes its battery has a
number of applications other than electric vehicles, such as hybrid powered
vehicles, portable power tools, electric power management, uninterruptible
power and for starting, lighting and ignition ("SLI") batteries for
automobiles, aircraft and marine craft. The Company is designing various
prototype batteries for such applications.
GLOSSARY OF TECHNICAL TERMS. Certain technical terms used herein
have the following meanings:
Cycle Life - the number of times a rechargeable battery can be
charged and discharged.
Electrode (battery) - the chemically active portions of a battery.
Energy Density - the amount of energy stored in a specific volume
or weight.
EV (Electric Vehicle) - a vehicle propelled exclusively by an
electric drive system powered by an electrochemical energy storage device,
typically a rechargeable battery.
HEV (Hybrid Electric Vehicle) - a vehicle that is propelled both by
an electrochemical energy storage device coupled to an electric drive and an
auxiliary power unit powered by a conventional fuel such as reformulated
gasoline, direct injection diesel or compressed natural gas.
Hydrides - solid materials that store hydrogen.
Power Density - the amount of power a battery can delivery per unit
volume or weight.
BATTERY COMPETITION. The market for batteries and other proposed
products of the Company is highly competitive, subject to rapid change and
significantly affected by new product introductions and other market
activities of industry participants. The Company's proposed battery products
are targeted at an emerging market of electric powered automobiles and other
vehicles, and the Company's competitors offer a variety of products and
services to address this market. Further, the Company currently faces direct
and indirect competition from traditional batteries.
The battery industry is mature, well-established and highly
competitive. The industry is characterized by a few major domestic and
foreign producers including Exide, Delphi, A.C. Delco, Johnson Controls,
Inc., GNB, Electrosource, Inc., Energy Conversion Devices, Inc., Hawker and
Yuasa, all of which have substantially greater financial resources than the
Company. Accordingly, the Company's ability to succeed in this market
depends upon its ability to demonstrate superior performance and cost
attributes of its technology. The Company has historically concentrated its
activities in the electric vehicle segment of the market with a view to
demonstrating improved energy to weight and longer battery life in comparison
to traditional lead-acid batteries. The principal competitors of the Company
in the electric vehicle market have directed their efforts to other battery
types, such as nickel-cadmium, nickel-metal hydride, nickel-iron and
sodium-sulfur batteries, rather than lead-acid formulations, although at
least one major automobile manufacturer and one major battery company are
known to have research and development projects underway to develop lead-acid
batteries for electric vehicles.
4
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In the future, because there are relatively low barriers to entry
in the battery industry, the Company could experience additional competition
from other established or emerging companies as the market continues to
develop and expand. Many potential competitors may have well-established
relationships with the Company's potential customers, have extensive
knowledge of the industry, better name recognition and significantly greater
financial, technical, sales, marketing and other resources and are capable of
offering batteries which have multiple applications. It is also possible
that new competitors or alliances among competitors may emerge and rapidly
acquire significant market share. The Company also expects that competition
will increase as a result of industry consolidations. The Company's
competitors may be able to respond more quickly to new or emerging
technologies and changes in customer requirements, or to devote greater
resources to the development, promotion and sale of their battery products.
Increased competition may result in price reductions, reduced gross
margins and loss of market share, any of which could adversely affect the
Company's business, financial condition or results of operations. There can
be no assurance that the Company will be able to compete successfully against
current or future competitors or that competitive pressure will not adversely
affect its business, financial condition or results of operations.
The Company believes that the principal competitive factors
affecting its market include features such as functionality, weight,
adaptability, ease of use, product reputation, quality, price, performance,
customer service and support, effectiveness of sales and marketing efforts
and company reputation. Although the Company believes that it will compete
favorably with respect to such factors, there can be no assurance that the
Company can establish a competitive position against current and potential
competitors, especially those with greater financial, marketing, service,
support, technical and other resources than the Company.
PIPELINE CONNECTION TECHNOLOGY
The Company is conducting research and development operations
regarding its patented pipeline connection technology. The Company is
developing equipment designed to join large diameter pipe utilizing magnetic
pulse methods, a cold form method joining a metal sleeve around the ends of
two abutting pipes.
A hinged magnetic work coil developed by the Company is clamped
around the sleeve joining two pipes to produce a ringed shaped crimping force
forcing a uniform joint with uniform stress distributions. The pipes may
have annular grooved ends, grooved to approximately 1/3 of its depth, to be
gripped by the grooves of the sleeve. A pressure sensitive adhesive may be
applied to the pipe ends to improve the performance and seal of the splice.
When the magnetic pulse is applied by the equipment, it instantly crushes the
sleeve onto the pipe and into the shallow grooves milled into the pipe ends,
which improves its pullout resistence.
This pipeline connection technology is particularly useful for
joining oil and gas pipelines, oil and gas well casings, and other large
pipe connections such as those at refineries, chemical plants and other
industrial operations. Because arc welding or other forms of extreme heat
are hazardous which are avoided by the Company's technology, there are
substantial advantages in safety, avoidance of property damage, and avoidance
of microcracks that can form splits and rupture under stress. The cold
magnetic impulse method creates a uniform joint connection between pipes.
The process is significantly faster than arc welding, requires less operator
skill than welding, and avoids costly and complicated post-welding
inspections. The magnetic impulse method also has the advantage that it can
be performed in the field in any weather condition.
The Company's pipeline connection technology is based upon the
principle that whenever a rapidly changing magnetic flux cuts across a
conductive material, such as the grooved sleeve to be used by the Company, a
current is induced in the material. The current is proportional to the
initial intensity and time rate of change of the magnetic flux. The induced
current creates an associated magnetic field of such polarity as to oppose
the magnetic field of such polarity as to oppose the magnetic field producing
the current, creating very significant forces of repulsion. This effect is
commonly called "Lenz's Law of Repulsion". This repulsion force of the
Company's work coil pinches the conductive sleeve around the pipes.
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The Company intends to construct a preliminary prototype of its
pipeline connection equipment during 1998, and intends to seek a joint
venture partner to further develop and market its equipment.
ALLOY SENSOR TECHNOLOGY
The Company is conducting research and development operations
regarding its patented alloy sensor technology.
The Company has been developing its alloy sensor technology as a
permanently installed water detection device to check for the presence of
water in storage tanks, fuel tanks and other systems. The alloy sensor is
mounted on a valve socket that is connected to a meter. A plug inserted into
the value permits periodic inspection and reads the meter. Only a short time
is necessary to check a number of fuel tanks, for example by the use of the
plug and single ammeter without opening a drain valve (unless it is necessary
to drain detected water out of the tank).
The alloy sensors of the Company provides positive detection of
water wherever needed and can be connected to a flow system or moisture
alarms to detect leaks.
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RESEARCH AND DEVELOPMENT
The Company has committed, and expects to continue to commit in the
future, substantial resources for the development of its products. Research
and development efforts are directed at improving the performance and
expanding the capability of its prospective products. Although the Company
expects that certain of its products will be developed internally, the
Company may, based on timing and cost considerations, acquire technology and
products from third parties or retain consultants.
The Company's future success will depend in part upon its ability
to enhance its current products and to develop and introduce new products on
a timely basis that keep pace with technological developments, emerging
industry standards and the increasingly sophisticated needs of its future
customers. There can be no assurance that the Company will be successful in
developing or marketing product enhancements or new products that respond to
technological change or evolving industry standards, that the Company will
not experience difficulties that could delay or prevent the successful
development, introduction and marketing of these products or that its new
products or enhancements will adequately meet the requirements of the
marketplace and achieve market acceptance. If the Company is unable, for
technological or other reasons, to develop and introduce new products or
enhancements, the Company's business, financial condition or results of
operations could be materially adversely affected.
PROPRIETARY RIGHTS AND LICENSING
The Company's success is heavily dependent upon proprietary
technology. The Company will rely primarily on a combination of patents,
trade secrets, confidentiality procedures and contractual provisions with its
employees, consultants and business partners and in its license agreements to
protect its proprietary rights. In addition to its patents, the Company seeks
to protect its products, documentation and other written materials under
trade secret and copyright laws, which afford only limited protection.
Despite the Company's efforts to protect its proprietary rights, unauthorized
parties may attempt to reverse engineer or otherwise copy aspects of the
Company's products or to obtain and use information that the Company regards
as proprietary. While the Company is not aware that any of its products
infringe upon the proprietary rights of third parties, there can be no
assurance that third parties will not claim infringement by the Company with
respect to current or future products.
EMPLOYEES
As of June 30, 1998, the Company had seven (7) employees and
consultants. Of the total, five (5) were engaged in product research and
development, and two (2) were in finance and administration. None of the
Company's employees is represented by a labor union with respect to his or
her employment by the Company. The Company has experienced no organized work
stoppages and believes its relationship with its employees is good. The
Company believes that its future success will also depend to a significant
extent upon its ability to attract, train and retain highly skilled
technical, management, sales, marketing and consulting personnel.
Competition for such personnel in the industry in the United States is
intense. There can be no assurance that the Company will be successful in
attracting or retaining such personnel, and the failure to attract or retain
such personnel could have a material adverse effect on the Company's business
or results of operations.
BANKING ARRANGEMENTS
The Company has no banking arrangements for a line of credit or
other borrowings to finance the Company. The Company intends to rely
primarily upon equity financing and joint ventures to finance its operations.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion is intended to assist in an understanding
of the Company's consolidated financial position for its fiscal years ended
January 31, 1997 and 1998, and for the five months ended June 30, 1998
(unaudited), and the results of its operations for the periods then ended.
GENERAL
Power Technology, Inc. (the "Company"), a Nevada corporation, was
incorporated on June 3, 1996.
The Company is in the development stage of developing its batteries
and other products. The Company is in the process of building its initial
prototypes of its batteries, but has not commenced any commercial production
or sales of batteries, pipeline connection equipment or alloy sensors.
Historically, the Company has used capital contributions from
various stockholders to fund its operations. To this point, the Company has
not had adequate funds to commercially produce and sell its batteries.
There are no assurances that the Company will be able to obtain a
profitable level of operations.
RESULTS OF OPERATIONS
The following table sets forth certain operating information on the
Company:
<TABLE>
<CAPTION>
FIVE MONTHS ENDED YEAR ENDED YEAR ENDED INCEPTION (1/19/96)
JUNE 30, 1998 JANUARY 31, 1998(1) JANUARY 31, 1997 TO JUNE 30, 1998
----------------- ------------------- ---------------- -------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues. . . . . . . . . . . . . . . $ 1,663 $ 0 $ 0 $ 1,663
General and administrative expense. . $ 348,002 $ 51,374 $ 139,907 $ 539,283
Net Loss. . . . . . . . . . . . . . . $ (346,339) $ (51,374) $ (139,907) $ (537,620)
Net Loss Per Share. . . . . . . . . . $ ( .06) $ (.02) $ (.06) $ (.17)
</TABLE>
CAPITAL EXPENDITURES, CAPITAL RESOURCES AND LIQUIDITY
The following summary table presents comparative cash flows of the
Company for the five months ended June 30, 1998 (unaudited), and the years
ended January 31, 1997 and 1998.
<TABLE>
<CAPTION>
FIVE MONTHS ENDED YEAR ENDED YEAR ENDED
JUNE 30, 1998 JANUARY 31, 1998 JANUARY 31, 1997
----------------- ---------------- ----------------
(unaudited)
<S> <C> <C> <C>
Net cash used in operating activities . . . . . . . $ (319,486) $ 0 $ 0
Net cash used in investing activities . . . . . . . . $ (100,161) $ 0 $ 0
Net cash provided by financing activities . . . . . . $ 600,000 $ 0 $ 0
</TABLE>
At June 30, 1998, the Company had cash balances totaling $180,353.
The working capital deficit at January 31, 1998 was $(51,374). The increase
in the working capital deficit was due primarily to its operating deficit
during the five months ended June 30, 1998.
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CAPITAL EXPENDITURES. The Company has incurred capital
expenditures for equipment and office furniture used in its operations.
Capital expenditures during the five months ended June 30, 1998 totaled
$6,265. Capital expenditures during the year ended January 31, 1998,
totaled $0.
CAPITAL RESOURCES. The Company's capital resources have been
provided primarily by capital contributions and loans from its stockholders.
The Company intends to raise capital in the future through a limited offering
of its Common Stock and warrants which will be used to purchase additional
equipment, to further develop its products, to establish its marketing
activities, and to provide additional working capital to fund future
operations.
LIQUIDITY. The ability of the Company to satisfy its obligations
will depend in part upon its ability to successfully complete a limited
offering of additional shares of its Common Stock and in part upon its
ability to reach a profitable level of operations. The Company recently
conducted a limited offering of its Common Stock under Rule 504 of Regulation
D under the Securities Act of 1933 and realized $600,000 in subscriptions
from such offering as of June 30, 1998.
PLAN OF OPERATIONS
Because of the costs of development of its battery systems and
other products, and the start-up costs of its battery prototype production,
the Company expects that it will incur a loss during its fiscal year ending
January 31, 1999.
The Company believes that additional equity capital will be
required to accomplish its plan of operations during the next 12 months. As
a result, the Company intends to offer and sell its Common Stock in an exempt
offering under federal and state securities laws to further capitalize the
Company, and may also borrow from banks and other financial institutions to
the extent necessary to provide liquidity for its operations, although no
arrangements for any borrowings have been made.
The Company has increased its research and development activities
and the associated costs consistent with its plan of operations in order to
develop its batteries for proposed commercial production. However, the
Company expects to continue the development of its batteries and other
products to incorporate technical changes and improvements. In addition, as
the Company establishes its marketing activities, the Company will incur
additional operating and equipments costs. The Company believes that the
net proceeds of its securities offering during fiscal 1999 will be sufficient
to meet its liquidity requirements during 1998-1999.
The Company's plan of operations provides for an expansion of its
battery business, and research and development regarding its other products.
The scope of this expansion is dependent upon the amount of additional
capitalization to be realized by the Company in its future securities
offerings, the amount of credit lines that may become available to finance
such activities, and its ability to enter into agreements with licensees,
joint venture partners, and others. To the extent that the operations of the
Company substantially increase, it will be necessary to make significant
changes in the number of additional employees of the Company.
UNCERTAINTIES
DEVELOPMENT STAGE COMPANY. The Company is in the development
stage. There is no assurance that the Company's activities will be
profitable. The likelihood of the success of the Company must also be
considered in light of the problems, expenses, difficulties, complications,
delays and all of the inherent risks frequently encountered in the formation
and operation of a relatively new business.
COSTS OF CONDUCTING BUSINESS. The Company will be required to
incur substantial costs for research and development and equipment,
establishing production and marketing operations, and related costs. A
substantial portion of those costs must be paid whether or not any of its
batteries or other products prove to be commercially successful on a broad
scale. The ability to generate a profit depends, among other factors, on the
amount of equipment
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acquisition costs incurred, the amount of revenues from the sale of batteries
and other products by the Company, and its operating costs.
COMPETITION. The battery business is highly competitive.
Companies in the industry have substantially greater financial, marketing,
and technical resources than the Company. Further, the entry into this
industry does not necessarily require a large capital expenditure and,
accordingly, it can be expected that additional competitors may enter the
industry in the future. It may be particularly difficult for a relatively
small independent company to compete with larger companies which have
significantly greater resources. There can be no assurance that the Company
will be able to successfully compete if such an environment develops.
TECHNOLOGICAL CHANGE. The Company expects that many new
technologies and products will be introduced in the battery industry over the
next several years. The Company's success will depend, among other things,
on its ability to maintain a competitive position technologically. There can
be no assurance that the Company will have access to subsequently developed
technology by other persons. Technological advances by a competitor may
result in the Company's present or future products becoming noncompetitive or
obsolete. The Company cannot be assured that competitors will not develop
functionally similar or superior batteries, which event could have an adverse
effect on the Company's business.
CONTRACTS. The Company has no current contracts for the
manufacture or sale of its batteries or other products, and has no back-log.
There can be no assurance that the Company will be able to obtain sufficient
and suitable contracts for its business plan.
FLUCTUATIONS IN OPERATING RESULTS. The Company's revenues and
results of operations may vary significantly in the future. The Company's
revenues and results of operations are difficult to forecast and could be
materially adversely affected by many factors, some of which are outside the
control of the Company, including, among others, the expected relatively long
sales and implementation cycles for the Company's products; the size and
timing of individual license transactions and joint venture arrangements;
seasonality of revenues; changes in the Company's operating expenses; changes
in the mix of products sold; timing of introduction or enhancement of
products by the Company or its competitors; market acceptance of new
products; technological changes in technology; personnel changes and
difficulties in attracting and retaining qualified sales, marketing,
technical and consulting personnel; changes in customers' budgeting cycles;
quality control of products sold; and economic conditions generally and in
specific industry segments, particularly the automotive industry.
There can be no assurance that the Company's products will achieve
broad market acceptance or that the Company will be successful in marketing
its products or enhancements thereto. In the event that the Company's
current or future competitors release new products that have more advanced
features, offer better performance or are more price competitive than the
Company's products, demand for the Company's products would decline. A
decline in demand for, or market acceptance of, the Company's batteries or
other products as a result of competition, technological change, or other
factors would have a material adverse effect on the Company's business,
financial condition or results of operations.
MANAGEMENT OF EXPANDING OPERATIONS. The Company's business may
grow rapidly. In addition, the Company may experience significant growth in
the number of its employees, the scope of its operating and financial systems
and the geographic area of its operations, which will place a significant
strain on the Company's management. The Company's future results of
operations will depend in part on the ability of its officers and other key
employees to continue to implement and expand its operational, customer
support and financial control systems and to expand, train and manage its
employee base. In order to successfully manage its future growth, if any,
the Company will be required to hire additional general and administrative
personnel and to augment its existing financial and management systems or to
implement new such systems. There can be no assurance that the existing and
new management will be able to augment or to implement such systems
efficiently or on a timely basis, and the failure to do so could have a
material adverse effect on the Company's business, financial condition or
results of operations. There can be no assurance that the Company will be
able to manage any future expansion successfully, and any inability to do so
would have a material adverse effect on the Company's business, financial
condition or results of operations. In addition, the
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Company believes that its future success will also depend to a significant
extent upon its ability to attract, train and retain highly skilled
technical, management, sales, marketing and consulting personnel.
Competition for such personnel is intense, and the Company expects that such
competition will continue for the foreseeable future. There can be no
assurance that the Company will be successful in attracting or retaining such
personnel, and the failure to attract or retain such personnel could have a
material adverse effect on the Company's business, financial condition or
results of operations.
RAW MATERIALS
The basic raw materials and components for the batteries and other
products being developed by the Company are readily available. The Company
does not expect to experience any material delays in obtaining timely
delivery of its materials and components.
SEASONALITY
The Company does not expect to experience material seasonal
variations in revenues or operating costs, except that sales activity for its
batteries may increase in the summer and winter seasons which is expected to
cause the operations of the Company to increase during such periods.
ITEM 3. DESCRIPTION OF PROPERTY.
EXECUTIVE OFFICES. The Company currently leases its executive and
research and development facilities located at 1000 West Bonanza Road, Las
Vegas, Nevada 89106 on a month-to-month basis. The lease covers
approximately 5,000 square feet at a monthly rental of approximately $2,000
per month. The Company believes that its current facilities are adequate for
its needs through 1999, and that, should it be needed, suitable additional or
alternative space is expected to be available in the future on commercially
reasonable terms.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The total number of shares of Common Stock of the Company
beneficially owned by each of the officers and directors, and all of such
directors and officers as a group, and their percentage ownership of the
outstanding Common Stock of the Company as of August 26, 1998, are as follows:
<TABLE>
<CAPTION>
SHARES PERCENT OF
MANAGEMENT BENEFICIALLY COMMON
SHAREHOLDERS(1) OWNED(1) STOCK
--------------- ------------ ----------
<S> <C> <C>
Lee A. Balak . . . . . . . . . . . . . . . . . . . . 3,500,000 30.4%
2450 Palmerston Avenue
West Vancouver, B.C. V7V 2W3
Canada
Alvin A. Snaper . . . . . . . . . . . . . . . . . . . 1,004,155 8.7%
2800 Cameo Circle
Las Vegas, NV 89107
William E. McNerney . . . . . . . . . . . . . . . . . 71,416 0.6%
953 E. Sahara, #9B
Las Vegas, NV 89104
Hugo P. Pomrehn, Ph.D. . . . . . . . . . . . . . . . 50,000 0.4%
1017 South Mountain
Monrovia, California 91016
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENT OF
MANAGEMENT BENEFICIALLY COMMON
SHAREHOLDERS(1) OWNED(1) STOCK
--------------- ------------ ----------
<S> <C> <C>
Directors and officers as a group
(4 persons, including the above) . . . . . . . . . 4,625,571 40.2%
</TABLE>
- -------------------
(1) Except as otherwise noted, it is believed by the Company that all persons
have full voting and investment power with respect to the shares indicated.
Under the rules of the Securities and Exchange Commission, a person (or
group of persons) is deemed to be a "beneficial owner" of a security if he
or she, directly or indirectly, has or shares the power to vote or to
direct the voting of such security, or the power to dispose of or to direct
the disposition of such security. Accordingly, more than one person may be
deemed to be a beneficial owner of the same security. A person is also
deemed to be a beneficial owner of any security which that person has the
right to acquire within 60 days, such as options or warrants to purchase
the Common Stock of the Company.
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to the
beneficial ownership of the Company's Common Stock by each shareholder who
beneficially owns more than five percent (5%) of the Company's Common Stock, the
number of shares beneficially owned by each and the percent of outstanding
Common Stock so owned of record as of August 26, 1998. It is believed by the
Company that all persons listed have sole voting and investment power with
respect to their shares, except as otherwise indicated.
<TABLE>
<CAPTION>
SHARES PERCENT OF
NAME AND ADDRESS BENEFICIALLY OUTSTANDING
OF BENEFICIAL OWNER TITLE OF CLASS OWNED COMMON STOCK
------------------- -------------- ------------ ------------
<S> <C> <C> <C>
Lee A. Balak Common Stock 3,500,000 30.4%
2450 Palmerston Avenue
West Vancouver, B.C. V7V 2W3
Canada
Alvin A. Snaper(1) Common Stock 1,004,155 8.7%
2800 Cameo Circle
Las Vegas, NV 89107
Cede & Co. Common Stock 2,646,800 23%
P.O. Box 222
Bowling Green Station
New York, New York 10274
</TABLE>
12
<PAGE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
DIRECTORS AND OFFICERS
The directors and officers of the Company are as follows:
<TABLE>
<CAPTION>
Name(1)(2) Age Position
- ---------- --- --------
<S> <C> <C>
Lee A. Balak 44 Director and President
Alvin A. Snaper 69 Director, Vice President-
Development, Secretary and Treasurer
William E. McNerney 65 Director and Executive Vice
President
Hugo P. Pomrehn, Ph.D. 60 Director
</TABLE>
- ---------------
(1) The Company presently has no executive committee, nominating committee or
audit committee of the Board of Directors.
(2) The officers of the Company hold office until their successors are elected
and qualified, or until their death, resignation or removal.
The background and principal occupations of each director and officer
of the Company are as follows:
Mr. Balak became a director and the President of the Company during
February 1996. From 1993 to the present, Mr. Balak has been the owner and
President of No. 90 Corporate Ventures, a Canadian corporation located in
Vancouver, B.C. From 1983 to 1993, he was a corporate finance consultant.
From 1977 to 1982, he was a registered representative of Canarim Investment
Corporation (currently named Canacord Investment Corporation). While employed
by Canarim Investment Corporation, Mr. Balak was the subject of an
administrative proceeding by the British Columbia Securities Commission
regarding various alleged violations of the Securities Act, S.B.C. 1985, c.83
of British Columbia (the "Act"); and in 1990, he undertook and agreed that
certain trading exemptions under the Act would not apply or be available for
a period of three years and that he would not be a director or officer of any
reporting issuer for a period of three years. In 1991, he was discharged in
bankruptcy by the Supreme Court of British Columbia. Mr. Balak attended the
University of Winnipeg.
Mr. Snaper became a director, Vice President-Development, Secretary
and Treasurer of the Company in March 1998; and has been a director and
President of PowerTek Technologies Corporation, Inc., a subsidiary of the
Company, since its incorporation in 1996. From 1979 to 1983, he was a
director of American Methyland Homogenized Fuels Corporation. From 1980 to
the present, he has been the Vice President of Neo-Dyne Research, Inc., a
research and development company. From 1985 to the present, he has also been
the Vice President of Inventrex Corp. Mr. Snapper was a founder of Advanced
Patent Technology, Inc., a public company now known as Alliance Gaming, and
was its Vice President and Director of Research and Development from 1968 to
1980. From 1952 to 1955, he was the chief Chemist for McGraw Colorgraph
Company, a division of the Carnation Company. From 1949 to 1951, he was
employed by the Bakelite Division of Union Carbide, where he assisted in its
development of the pilot plant for plastics manufacture. During his 30 years
of scientific research and development, Mr. Snapper's interdisciplinary
technology activities have resulted in over 600 patents, products, processes
and innovations. He has been awarded the Design News Best Patent of the year
award on three separate occasions. Mr. Snaper graduated from McGill
University with a bachelor of science degree in 1950. He is a registered
professional engineer in the State of California.
Mr. McNerney became a director and Executive Vice President of the
Company in March 1998. From 1993 to the present, he has been the owner and
Chief Executive Officer of Revolutionary Technology Industries, Inc. From
1984 to 1993, he was retired. From 1974 to 1984, Mr. McNerney owned an
operating company, Golden Exploration, Inc. From 1954 to 1976, Mr. McNerney
was a pilot employed by Northwest Airlines.
Dr. Pomrehn became a director of the Company during July 1998. He
is currently Executive Vice President of Special Projects of American
Technologies Group, Inc. ("ATG"), a public company engaged in research and
development activities. Dr. Pomrehn served as President, Chief Operating
Officer, Vice Chairman and a director
13
<PAGE>
of ATG from April 1995 to November 1997. He was appointed as Under Secretary
of Energy by President George Bush in 1992. He was employed by Bechtel
Corporation from 1967 to 1992, and was a Vice President and Manager of its
Los Angeles regional office from 1990 to 1992. Dr. Pomrehn graduated from
the University of Southern California with a bachelor of science degree in
mechanical engineering in 1960; received a masters degree in mechanical
engineering from George Washington University in 1965; received a masters
degree in industrial engineering from the University of Southern California
in 1969; and received a doctorate in engineering from the University of
Southern California in 1975. Dr. Pomrehn is a member of the American Nuclear
Society and American Society of Mechanical Engineers, and is a registered
professional mechanical and nuclear engineer in the State of California.
ITEM 6. EXECUTIVE COMPENSATION.
COMPENSATION OF EXECUTIVE OFFICERS
No executive officer or director of the Company received
compensation in excess of $100,000 during its fiscal year ended January 31,
1998 Mr. Lee A. Balak, the President of the Company, receives a salary of
$5,000 per month ($60,000 per annum).
BENEFIT PLANS
The Company does not have any pension plan, profit sharing plan,
stock option plan or similar plans for the benefit of its officers, directors
or employees. However, the Company reserves the right to establish any such
plans in the future.
BOARD COMPENSATION
Directors of the Company who do not serve as officers thereof are
not currently compensated by the Company for meeting attendance or otherwise,
but are entitled to reimbursement for their travel expenses. From time to
time, directors who are not employees of the Company may receive grants of
options to purchase the Company's Common Stock. The Company does not pay
additional amounts for committee participation or special assignments of the
Board of Directors.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In June 1998, the Company leased approximately 5,000 square feet of
offices and research facilities on a month-to-month basis for $2,000 per
month from Mr. Alvin A. Snaper, a director, Vice President, Secretary and
Treasurer of the Company and his partner.
In June 1998, the Company acquired its patent rights to its alloy
sensor technology from Mr. Alvin A. Snaper, a director, Vice President,
Secretary and Treasurer of the Company, in exchange for 100,000 restricted
shares of the Common Stock of the Company.
In June 1998, the Company acquired its patent rights to its
pipeline connection technology from Advanced Transmission Line ("ATL"), a
Nevada limited partnership, in exchange for 100,000 restricted shares of the
Common Stock of the Company. Mr. William E. McNerney, a director and
Executive Vice President of the Company, is a general partner of ATL; and Mr.
Alvin A. Snaper, a director, Vice President, Secretary and Treasurer of the
Company, is a special limited partner of ATL.
Mr. Lee A. Balak, the President and a director of the Company, has
loaned and advanced $181,281 to the Company as of June 30, 1998, for research
and development fees. These advances are non-interest bearing demand loans.
The research and development fees were paid by the Company to Neo-Dyne
Research, Inc., a research and development company owned by Alvin A. Snaper,
a director and a Vice President, Secretary and Treasurer of the Company.
14
<PAGE>
ITEM 8. DESCRIPTION OF SECURITIES.
GENERAL
The Company is authorized to issue 25,000,000 shares of Common
Stock, $.001 par value per share. At August 26, 1998, there were 11,500,000
shares of Common Stock issued and outstanding.
There were thirty-two (32) stockholders of record as of August 26,
1998, excluding holders represented by Cede & Co. that held approximately 23%
of the issued and outstanding shares of Common Stock of the Company.
COMMON STOCK
Holders of Common Stock are entitled to receive ratably such
dividends as may be declared by the Board of Directors, out of funds legally
available, without any preference. Holders of Common Stock are entitled to
one vote per share. Cumulative voting is not allowed for purposes of the
election of directors. Thus, the holders of more than 50% of the shares
voting for directors can elect all directors. The holders of the Common
Stock of the Company have no preemptive rights to purchase new issues of the
securities of the Company. There are no redemption or conversion rights
attached to the Common Stock.
At the present time, the Company does not intend to pay any
dividends on its Common Stock.
Upon liquidation or dissolution of the Company, holders of Common
Stock are entitled to receive pro rata, either in cash or in kind, all of the
assets of the Company after payment of debts.
WARRANTS AND OPTIONS
There presently are no outstanding warrants to purchase shares of
the Common Stock of the Company.
As of August 26, 1998, no director, officer, or employee of the
Company held any stock options or other rights to acquire the Common Stock of
the Company. The Company has no stock option plan for the benefit of such
persons, however, the Company may adopt a stock option plan and other benefit
plans in the future for such persons.
Under the terms of four consulting agreements, the Company has
granted options to purchase its Common Stock, and/or to pay compensation to
consultants payable in shares of its Common Stock, as follows: (1) a
consulting agreement dated April 1, 1998, requires monthly compensation in
the amount of $5,000 payable in Common Stock of the Company, plus bonuses to
be determined, and granted a stock option to purchase 200,000 shares of
Common Stock at $4.00 per share during a term of two years; (2) a consulting
agreement effective April 30, 1998, requires monthly compensation of $5,000,
payable in shares of its Common Stock for a term of one year and cash fees
equal to a percentage (ranging from 1% to 6% of the value of certain merger
transactions and other acquisitions); (3) a consulting agreement dated April
6, 1998, required the Company to grant a stock option to purchase 100,000
shares of Common Stock at prices ranging from $2.00 to $4.00 per share for a
term of five years; and (4) an agreement dated June 1, 1998, requires
compensation of 6,000 shares of Common Stock.
NEVADA CORPORATE LAW AND CERTAIN CHARTER PROVISIONS
The Company is a Nevada corporation, and may become subject to
Sections 78.37 et seq. of the Nevada General Corporation Law (the "Nevada
Law"), an anti-takeover law. In general, Nevada Law prevents take-over
offers to acquire equity securities of a Nevada corporation if the offeror
would become a beneficial owner of more than 20% of any class of outstanding
equity securities, and other similar provisions, subject to certain
exceptions such as the written approval of the board of directors. The
existence of these provisions would be expected to have an anti-takeover
effect, including attempts that might result in a premium over the market
price for the shares of Common Stock held by stockholders.
Article II, Section 5 of the Company's By-Laws provides that only
the Company's President, Secretary, a majority of the members of the
Company's Board of Directors or at the written request of the holders of at
least 50% of the outstanding voting power may call a special meeting of
stockholders. These provisions of the By-
15
<PAGE>
Laws could discourage potential acquisition proposals and could delay or
prevent a change in control of the Company. Such provisions also may have
the effect of preventing changes in the management of the Company.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock of the
Company is Pacific Stock Transfer Company, P.O. Box 93385, Las Vegas, Nevada
89193. Telephone: (702) 361-3033.
REPORTS TO STOCKHOLDERS
The Company will furnish its shareholders with annual reports
containing the financial statements of the Company examined by independent
certified public accountants. The Company presently intends to issue
unaudited quarterly reports and may distribute other reports to the
stockholders as it deems appropriate.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
GENERAL
The Common Stock of the Company is traded on the Electronic
Bulletin Board over-the-counter market, and is quoted under the symbol PWTC.
MARKET PRICE
When the trading price of the Company's Common Stock is below $5.00
per share, the Common Stock is considered to be "penny stocks" that are
subject to rules promulgated by the Securities and Exchange Commission (Rule
15g-1 through 15g-9) under the Securities Exchange Act of 1934. These rules
impose significant requirements on brokers under these circumstances,
including: (a) delivering to customers the Commission's standardized risk
disclosure document; (b) providing to customers current bid and offers; (c)
disclosing to customers the brokers-dealer and sales representatives
compensation; and (d) providing to customers monthly account statements.
The following table sets forth the range of high and low sale
prices per share of the Common Stock of the Company as reported by National
Quotation Bureau, L.L.C. for the periods indicated. Prior to September 1997,
there was no public market for the trading of the Common Stock of the
Company.
<TABLE>
<CAPTION>
Year Ended December 31, 1997 High Bid(2) Low Bid(2)
---------------------------- -------- -------
<S> <C> <C>
4th Quarter . . . . . . . . . $3.125 $.50
Year Ending December 31, 1998
-----------------------------
1st Quarter (1) . . . . . . . $3.4375 $3.025
2nd Quarter . . . . . . . . . $5.25 $1.625
</TABLE>
- -----------------
(1) During March 1998, the Company effectuated a one for five (1:5) reverse
stock split. The above prices have been revised to reflect this split.
(2) The Company is unaware of the factors which resulted in the significant
fluctuations in the prices per share during the periods being presented,
although it is aware that there is a thin market for the Common Stock, that
there are frequently few shares being traded and that any sales activity
significantly impacts the market.
The closing bid prices of the Common Stock of the Company on August
26, 1998, was $1.25 per share.
16
<PAGE>
DIVIDENDS
The Company has not paid any dividends on its Common Stock and does
not expect to do so in the foreseeable future. The Company intends to apply
its earnings, if any, in expanding its operations and related activities.
The payment of cash dividends in the future will be at the
discretion of the Board of Directors and will depend upon such factors as
earnings levels, capital requirements, the Company's financial condition and
other factors deemed relevant by the Board of Directors. In addition, the
Company's ability to pay dividends may become limited under future loan
agreements of the Company which may restrict or prohibit the payment of
dividends.
ITEM 2. LEGAL PROCEEDINGS.
There are no known pending or threatened legal proceedings to which
the Company is, or is likely to be, a party or of which any of its assets are
or are likely to be subject.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
None
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
In connection with the organization of the Company in 1996, the
Company issued 300,000 shares of its Common Stock for $6,000 in reliance upon
Section 4(2) of the Securities Act of 1933.
In 1997, the Company issued 700,000 shares of its Common Stock for
$35,000 in a limited offering made in reliance upon Rule 504 of Regulation D
under the Securities Act of 1933.
In January 1998, in connection with the reorganization of the
Company, the Company issued 3,500,00 shares to Lee Balak, 900,000 shares to
Alvin Snaper, and 600,000 shares to William McNerney in reliance upon Section
4(2) under the Securities Act of 1933.
In April 1998, the Company entered an investor relations consulting
agreement which provided for monthly compensation of $3,000 per month, and
granted stock options for 100,000 shares of common stock at prices ranging
from $2.00 to $4.00 per share for a term of five years in reliance upon
Section 4(2) of the Securities Act of 1933.
In April 1998, the Company entered into a marketing consulting
agreement and agreed to issue $5,000 of its Common Stock monthly for a period
of one year, to be registered under a Form S-8 registration statement.
In May 1998, the Company issued 5,000,000 shares of its Common
Stock to the stockholders of PowerTek Technology Corporation, Inc. in
exchange for all of its issued and outstanding stock and its assets in
reliance upon Section 4(2) of the Securities Act of 1933.
In June 1998, the Company acquired the patent to its alloy sensor
technology from Alvin A. Snaper in exchange for 100,000 shares of its Common
Stock in reliance upon Section 4(2) of the Securities Act of 1933.
In June 1998, the Company acquired the patent to its pipeline
connection technology from Advanced Transmission Line in exchange for 100,000
shares of its Common Stock in reliance upon Section 4(2) of the Securities
Act of 1933.
17
<PAGE>
In June 1998, the Company issued 12,000 shares of Common Stock as a
referral fee made in reliance upon Section 4(2) of the Securities Act of 1933.
In June 1998, the Company entered into a financial consulting
agreement and agreed to issue $5,000 of its Common Stock monthly, and an
option to acquire 200,000 shares exercisable at $4.00 per share for a period
of two years in reliance upon Section 4(2) of the Securities Act of 1933.
During 1998, the Company has offered and sold 6,000,000 shares of
its Common Stock for $600,000 in a limited offering made in reliance upon
Rule 504 of Regulation D under the Securities Act of 1933. This offering is
continuing.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The provisions of the General Corporation Law of Nevada provide for
the indemnification of the directors and officers of the Company. These
provisions generally permit indemnification of directors and officers against
certain costs, liabilities and expenses of any threatened, pending or
completed action, suit or proceeding that any such person may incur by reason
of serving in such positions unless (i) finally adjudication establishes that
the act or omission of the director or officer was material to the cause of
action adjudicated in the action, suit or proceeding and involved intentional
misconduct, fraud or a knowing violation of the law, or (ii) the director or
officer did not act in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best interests of the
Company, and in the case of criminal proceedings, the director or officer had
no reasonable cause to believe such act or omission was unlawful. Any
determination that indemnification of a director or an officer is, unless
ordered by a court, must be made (i) by the Company's stockholders, (ii) by
the Company's Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding, (iii) if a
majority vote of a quorum consisting of directors who were not parties to the
act, suit or proceeding so orders, by independent legal counsel in a written
opinion, or (iv) if a quorum consisting of directors who where not parties to
the act, suit or proceeding cannot be obtained, by independent legal counsel
in a written opinion.
The Twelfth Article of the Articles of Incorporation of the Company
provides that no director or officer of the Company shall be personally
liable to the Company or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer, provided, however, that the foregoing provision
shall not eliminate or limit the liability of a director or officer (i) for
acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) the payment of dividends in violation of Section
78.300 of the Nevada General Corporation Law. Any repeal or modification of
this Articles by the stockholders of the Company shall be prospective only
and shall not adversely affect any limitation on the personal liability of a
director or officer of the Company for acts or omissions to such repeal or
modification.
Article VI of the Bylaws of the Company provides that the Company
shall indemnify all of its officers and directors, past, present and future,
against any and all expenses incurred by them, including but not limited to
legal fees, judgments and penalties which may be incurred, rendered or levied
in any legal action brought against any or all of them for or on account of
any act or omission alleged to have been committed while acting within the
scope of their duties as officers or directors of the Company.
18
<PAGE>
POWER TECHNOLOGY, INC.
Consolidated Financial Statements
February 28, 1998 and January 31, 1998 and 1997
and
June 30, 1998 (unaudited)
F-1
<PAGE>
C O N T E N T S
<TABLE>
<S> <C>
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Stockholders' Equity. . . . . . . . . . . . . . 6
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . 7
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . 8
</TABLE>
F-2
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Power Technology, Inc.
We have audited the accompanying consolidated balance sheets of Power
Technology, Inc. (a development stage company) as of February 28, 1998 and
January 31, 1998 and 1997 and the related statements of operations,
stockholders' equity and cash flows for the period ended February 28, 1998 and
the years ended January 31, 1998 and 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statement 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 included assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Power Technology,
Inc. (a development stage company) as of February 28, 1998 and January 31, 1998
and 1997 and the results of its operations and cash flows for the period ended
February 28, 1998 and the years ended January 31, 1998 and 1997 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has had recurring operating losses for the
past several years. These factors raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in the Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Crouch, Bierwolf & Chisholm
- -------------------------------
Salt Lake City, Utah
June 5, 1998
F-3
<PAGE>
POWER TECHNOLOGY, INC.
(A Development Stage Company)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS
January 31,
June 30, February 28, -------------------------
1998 1998 1998 1997
----------- ------------ ----------- ----------
(unaudited)
<S> <C> <C> <C> <C>
Current Assets
Cash $ 180,353 $ - $ - $ -
---------- --------- --------- ---------
Total Current Assets 180,353 - - -
---------- --------- --------- ---------
Property & Equipment 5,161 - - -
Other Assets
Patent costs 95,000 - - -
Organizational Costs (Note 1) 12,920 14,810 15,000 20,000
---------- --------- --------- ---------
Total Other Assets 107,920 14,810 15,000 20,000
---------- --------- --------- ---------
TOTAL ASSETS $ 293,434 $ 14,810 $ 15,000 $ 20,000
---------- --------- --------- ---------
---------- --------- --------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 24,546 $ - $ - $ -
Accounts payable - related party (Note 5) 181,281 181,281 181,281 134,907
---------- --------- --------- ---------
Total Liabilities 205,827 181,281 181,281 134,907
---------- --------- --------- ---------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 25,000,000
shares authorized; 11,300,000, 5,300,000 and
2,500,000 shares issued and outstanding,
respectively 11,300 5,300 2,500 2,500
Additional paid-in capital 613,927 19,927 22,500 22,500
Deficit Accumulated during the development stage (537,620) (191,698) (191,281) (139,907)
---------- --------- --------- ---------
Total Stockholders' Equity 87,607 (166,471) (166,281) (114,907)
---------- --------- --------- ---------
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $ 293,434 $ 14,810 $ 15,000 $ 20,000
---------- --------- --------- ---------
---------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
POWER TECHNOLOGY, INC.
(A Development Stage Company)
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the The From
Five months month For the Years Ended Inception on
ended ended January 31, January 19, 1996
June 30, February 28, -------------------------- to June 30,
1998 1998 1998 1997 1998
----------- ---------- ---------- ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
REVENUES $ 1,663 $ - $ - $ - $ 1,663
----------- ---------- ---------- ----------- -----------
EXPENSES
General & Administrative 348,002 417 51,374 139,907 539,283
----------- ---------- ---------- ----------- -----------
TOTAL EXPENSES 348,002 417 51,374 139,907 539,283
----------- ---------- ---------- ----------- -----------
NET LOSS $ (346,339) $ (417) $ (51,374) $ (139,907) $ (537,620)
----------- ---------- ---------- ----------- -----------
----------- ---------- ---------- ----------- -----------
LOSS PER SHARE $ (.06) $ (.00) $ (.02) $ (.06) $ (.17)
----------- ---------- ---------- ----------- -----------
----------- ---------- ---------- ----------- -----------
WEIGHTED AVERAGE SHARES
OUTSTANDING 5,650,000 3,900,000 2,500,000 2,500,000 3,174,800
----------- ---------- ---------- ----------- -----------
----------- ---------- ---------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE>
POWER TECHNOLOGY, INC.
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
From Inception on January 19, 1996 through June 30, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
----------------------- Paid-in Development
Shares Amount Capital Stage
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Balance January 19, 1996 2,500,000 $ 2,500 $ 22,500 $ -
Net (loss) from inception to January 31, 1997 - - - (139,907)
---------- ---------- ---------- ----------
Balance -January 31, 1997 2,500,000 2,500 22,500 (139,907)
Net (loss) for the year ended January 31, 1998 - - - (51,374)
---------- ---------- ---------- ----------
Balance -January 31, 1998 2,500,000 2,500 22,500 (191,281)
Reorganization of Company, Reverse
acquisition of Zepplin, Inc. 2,800,000 2,800 (2,573) -
Net (loss) for the month ended February 28, 1998 - - - (417)
---------- ---------- ---------- ----------
Balance -February 28, 1998 5,300,000 5,300 19,927 (191,698)
Shares issued for cash 6,000,000 6,000 594,000 -
Net (loss) for the four months ended June 30, 1998 - - - (345,922)
---------- ---------- ---------- ----------
Balance -June 30, 1998 (unaudited) 11,300,000 $ 11,300 $ 613,927 $(537,620)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
F-6
<PAGE>
POWER TECHNOLOGY, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
For the For the For the years ended January 19, 1996
five months month ended January 31, Through
ended June 30, February 28, ------------------- June 30,
1998 1998 1998 1997 1998
------------ ------------ ------------ ------------ ------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net loss $(346,359) $ (417) $ (51,374) $(139,907) $(537,620)
Less non-cash items:
Amortization Expense 2,307 417 5,000 5,000 12,307
Increase (decrease) in accounts payable 24,546 - 46,374 134,907 205,827
------------ ------------ ------------ ------------ ------------
Net Cash Provided (Used) by
Operating Activities (319,486) - - - (319,486)
------------ ------------ ------------ ------------ ------------
Cash Flows from Investing Activities:
Purchase of equipment (5,161) - - - (5,161)
Cash paid for patent costs (95,000) - - - (95,000)
------------ ------------ ------------ ------------ ------------
Net cash used by Investing Activities (100,161) - - - (100,161)
------------ ------------ ------------ ------------ ------------
Cash Flows from Financing Activities:
Cash from proceed of stock issuance 600,000 - - - 600,000
------------ ------------ ------------ ------------ ------------
Net cash received by Financing Activities 600,000 - - - 600,000
------------ ------------ ------------ ------------ ------------
Increase in Cash 180,353 - - - 180,353
Cash and Cash Equivalents at
Beginning of Period - - - - -
------------ ------------ ------------ ------------ ------------
Cash and Cash Equivalents at
End of Period $ 180,353 $ - $ - $ - $ 180,353
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Supplemental Non-Cash Financing Transactions:
Cash paid for:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
</TABLE>
The accompanying notes are an integral part of these financial statements
F-7
<PAGE>
POWER TECHNOLOGY, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
February 28, 1998 and January 31, 1998 and 1997
NOTE 1 - Summary Of Significant Accounting Policies
a. Organization
The Company was incorporated under the name of Zeppelin Production
Corporation on June 3, 1996 under the laws of the State of Nevada. The
Company was originally organized to provide aerial photography and
advertising promotion through the use of helium filled remote control
blimp, however operations were never secured.
Pursuant to a plan of reorganization and acquisition agreement,
dated February 15, 1998, the Company acquired Powertek Technology, Inc.
(Powertek) and changed its name to Power Technology, Inc. (the Company)
Because the management and operations of Powertek became the management and
operations of the Company, this business combination has been recorded as a
reverse acquisition, thus Powertek is the surviving accounting entity
presented on the financial statements. The historical information provided
in these financial statements prior to the acquisition are those of
Powertek.
Powertek was incorporated under the laws of the State of Nevada on
January 19, 1996. PowerTek was organized primarily for the purpose of
developing an advanced battery technology for use in the growing electric
car industry. As of the date of these statements, the Company has been
able to advance the battery technology to a "proof of principle" stage and
is currently seeking additional capital to finance the development of the
technology to a preliminary prototype stage.
b. Recognition of Revenue
The Company recognizes income and expense on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of Common Stock is based on
the weighted average number of shares outstanding at the date of the
financial statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities
of three months or less to be cash equivalents.
F-8
<PAGE>
POWER TECHNOLOGY, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
February 28, 1998 and January 31, 1998 and 1997
NOTE 1 - Summary Of Significant Accounting Policies (continued)
e. Provision for Income Taxes
No provision for income taxes have been recorded due to net
operating loss carryforwards totalling approximately $191,698 that will be
offset against future taxable income. These NOL carryforwards will begin
to expire in the year 2012. No tax benefit has been reported in the
financial statements because the Company believes there is a 50% or greater
chance the carryforward will expire unused.
Deferred tax asset and the valuation account is as follows:
<TABLE>
<CAPTION>
February 28, January 31,
1998 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Deferred tax asset:
NOL carryforward $ 65,177 $ 65,036 $ 47,568
Valuation allowance (65,177) (65,036) (47,568)
------------ ------------ ------------
$ - $ - $ -
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
f. Organization Costs
Organization expenses are recorded at cost and are being amortized
on a straight-line basis over five years. The expenses represent
pre-incorporation cost to establish the entity and develop various sales
venues.
g. Principles of Consolidation
These financial statements include the books of the Company and its
wholly owned subsidiary Powertek Technologies, Inc. All intercompany
transactions and balances have been eliminated in the consolidation.
h. Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of
the financial statements and expenses during the reporting period. In
these financial statements, assets, liabilities and expenses involve
extensive reliance on management's estimates. Actual results could differ
from those estimates.
F-9
<PAGE>
POWER TECHNOLOGY, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
February 28, 1998 and January 31, 1998 and 1997
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has limited
assets and has had recurring operating losses for the past several years
and is dependent upon financing to continue operations. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
NOTE 3 - Capitalization
Prior to the reverse acquisition of the Company and Powertek
Technology, Inc. (Powertek), the Company had authorized 2,500,000 shares at
a par value of $.01 and had 2,500,000 issued and outstanding. The par
value in these financial statements have been retroactively restated to
show the new par value of $.001.
In the reverse acquisition the 2,500,000 shares of Powertek were
exchanged for 5,000,000 shares of the Company. The total number of
post-acquisition shares authorized are 25,000,000 at a par value of $.001.
Total number of post-acquisition shares issued and outstanding are
5,300,000 shares.
NOTE 4 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating
substantially all of its efforts in raising capital and searching for a
business operation with which to merge, or assets to acquire, in order to
generate significant operations.
NOTE 5 - Accounts Payable - Related Party
The Company had $181,281 of research and development fees paid for
by a majority shareholder. The balance is non-interest bearing and the
Company intends to repay the balance within one year.
NOTE 6 - Unaudited Presentation Information
The financial information for the five month period ended June 30,
1998, was taken from the books and records of the Company without audit.
However, such information reflects all adjustments which are, in the
opinion of management, necessary to properly reflect the results of the
interim period presented. The Company has elected to omit substantially
all footnotes to the financial statements for the period ended June 30,
1998.
F-10
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
POWER TECHNOLOGY, INC.
Date: August 31, 1998
<TABLE>
By: /s/ Lee A. Balak /s/ Alvin A. Snaper
-------------------------------------------- ------------------------------------------
<S> <C>
Lee A. Balak Alvin A. Snaper
Director, President, Chief Financial Officer Director and Vice President-Development,
and Principal Accounting Officer Treasurer and Secretary
/s/ Hugo P. Pomrehn /s/ William E. McNerney
-------------------------------------------- ------------------------------------------
Hugo P. Pomrehn William E. McNerney
Director Director and Executive Vice President
</TABLE>
<PAGE>
PART III
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequentially Numbered Page
- ------- --------------------------
<S> <C>
3(i) Articles of Incorporation of the Registrant . . . . . . . .
3(ii) Amendment to Articles of Incorporation . . . . . . . . . .
3(iii) By-Laws of the Registrant . . . . . . . . . . . . . . .
6 Material Contracts
6(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan of Reorganization and Acquisition
dated 2/15/98
11 Statement re: computation of per share earnings . . . . . . Reference is made to the Statements of
Operations of the Registrant for its
fiscal year ended January 31, 1998,
and for its five month period
(unaudited) ended June 30, 1998, which
are incorporated by reference herein.
21 A description of the subsidiary of the Registrant . . . . .
27 Financial Data Schedule . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE>
[Stamp of the Secretary of State EXHIBIT 3(i)
of the State of Nevada filing on
June 03, 1996 -- No. 12127-96]
ARTICLES OF INCORPORATION
OF
ZEPPELIN PRODUCTION CORPORATION
FIRST. The name of the corporation is:
ZEPPELIN PRODUCTION CORPORATION
SECOND. It's registered office in the State of Nevada is located at 601
S. Rancho, Suite D-32, Las Vegas, Nevada 89106, that this Corporation may
maintain an office, or offices, in such other place within or without the State
of Nevada as may be from time to time designated by the By-Laws or said
Corporation, and that this Corporation may conduct all Corporation business of
every kind and nature, including the holding of at meetings of Directors an
Stockholders, outside the State of Nevada as well as within the State of Nevada.
THIRD. The objects for which this Corporation is formed are: to engage
in any lawful activity, including but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred
upon corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers, when
not inconsistent with the purposes and objects for which this corporation is
organized.
(C) Shall have power to have succession by, it's corporate name for
the period limited in its certificate or articles of incorporation, and when no
period is limited, perpetually, or until dissolved and it's affairs wound up
according to law.
(D) Shall have the power to effect litigation in it's own behalf and
interest in any court of law.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal
estate and mortgage or leased any such real and personal estate with its
franchises. The power to hold real and legality of the document.
(G) Shall have power to appoint such officers an agents as the
affairs of the corporation shall require, and to allow them suitable
compensation.
(H) Shalt have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of it's affairs and property, the transfer
of it's stock, the transaction of it's business, and the calling and holding of
meetings of it's stockholders.
(I) Shall have power to dissolve itself.
<PAGE>
(J) Shall have power to adopt and use a common seal or stamp, and
alter the same. The use of a seal or stamp by the corporation on any corporate
documents is not necessary. The corporation may use a seal or stamp, if it
desires, but such use or nonuse shall not in any way affect the legality of the
document.
(K) Shall have power to borrow money and contract debts when
necessary for the transaction of its business, or for the exercise of it's
corporate rights, privileges or franchises, or for any other lawful purpose of
it's incorporation; to issue bonds, promissory notes, bills of exchange,
debentures, and other obligations and evidences of indebtedness, payable at a
specified event or events, whether secured by mortgage, pledge or otherwise, or
unsecured, or for money borrowed, or in payment for property purchased or
acquired, or for any other lawful object
(L) Shall have power to guarantee, purchase, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the capital
stock of or any bonds, securities or evidences of the indebtedness created by
any other corporation or corporations of the State of Nevada, or any other state
or government, and, while owners of such stock, bonds, securities or evidences
of indebtedness, to exercise all the rights, powers and privileges of ownership,
including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of
it's own capital stock and use therefor its capital, capital surplus, surplus,
or other property or fund.
(N) Shall have power to conduct business, have one or more offices,
and hold, purchase, mortgage and convey real and personal property in the State
of Nevada, and in any of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and foreign
countries.
(O) Shall have power to do all and everything necessary and proper
for the accomplishment of the objects enumerated in it's certificate or articles
of incorporation, or any amendment thereof, or necessary or incidental to the
protection and benefit of the corporation, and, in general to carry on any
lawful business necessary or incidental to the attainment of the objects of the
corporation, whether or not such business is similar in nature to the objects
set forth in the certificate or articles of incorporation of the corporation, or
any amendment thereof.
(P) Shall have power to make donations for the public welfare or for
educational purposes.
(Q) Shall have power to enter into partnerships, general or limited,
or joint ventures in connection with any lawful activities.
FOURTH. The aggregate number of shares the corporation shall have
authority to issue shall be TWENTY-FIVE MILLION (25,000,000) shares of common
stock, par value one mil ($.001) per share, each share of common stock having
equal rights and preferences, voting privileges and preferences.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be
2
<PAGE>
provided by the By-Laws of this Corporation, providing that the number of
directors shall not be reduced to fewer than one (1).
The name and post office address of the first Board of Directors shall be
one (1) in number and listed as follows:
Name Address
---- -------
Stanley K. Stilwell 601 S. Rancho, Suite D-32
Las Vegas, Nevada 89106
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in shall not be subject to assessment to pay the debts
of the corporation.
SEVENTH. The name and post office address of the Incorporator signing
the Articles of Incorporation is as follows:
Stanley K. Stilwell 601 S. Rancho, Suite D-32
Las Vegas, Nevada 89106
EIGHTH. The resident agent for this corporation shall be:
STANLEY K. STILWELL
The address of said agent, and the registered or statutory address of this
corporation in the state of Nevada shall be:
601 5. Rancho, Suite D-32
Las Vegas, Nevada 89106
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the stockholders, to make, alter
or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above it's
capital stock paid in, to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one (1)
or more committees, each committee to consist of one (1) or more of the
Directors of the Corporation, which, to the extent provided in the resolution,
or in the By-Laws of the Corporation, shall have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
3
<PAGE>
Corporation. Such committee, or committees shall have such name, or names as
may be stated in the By-Laws of the Corporation, or as may be determined from
time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote or the stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a stockholders meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock issued
and outstanding, the Board of Directors shall have power and authority at any
meeting to sell, lease or exchange all of the property and assets of the
Corporation, including it's goodwill and it's franchises, upon such terms and
conditions as it's Board of Directors deems expedient and for the best interests
of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, of any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for breach
of fiduciary duty as a director or officer involving any act or omission of
any such director or officer, provided, however, that the foregoing provision
shall not eliminate or limit the liability of a director or officer (i) for
acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) the payment of dividends in violation of Section
78.300 of the Nevada Revised Statutes. Any repeal or modification of this
Articles by the stockholders of the Corporation shall be prospective only and
shall not adversely affect any limitation on the personal liability of a
director or officer of the Corporation for acts or omissions to such repeal
or modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change
or repeal any provision contained in the Articles of Incorporation, in the
manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon stockholders herein are granted
subject to this reservation.
I, THE UNDERSIGNED, being the Incorporator herein before named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State or Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 31st day of May, 1996.
/s/ Stanley K. Stilwell
---------------------------------
Stanley K. Stilwell
4
<PAGE>
STATE OF NEVADA )
: ss.
COUNTY OF CLARK )
On this the 31st day of May, 1996, in Las Vegas, Nevada, before me, the
undersigned, a Notary Public in and for Las Vegas, State or Nevada, personally
appeared Stanley K. Stilwell, known to me to be the person whose name is
subscribed to the foregoing document and acknowledged to me that he executed the
same.
[SEAL PLACED HERE]
[My appt. Exp. 8/14/99] /s/ Dion Cowan
---------------------------------
Notary Public
I, Stanley K. Stilwell, hereby accept as Resident Agent for the previously named
Corporation
[5/31/96] /s/ Stanley K. Stilwell
- --------------- ---------------------------------
Date Stanley K. Stilwell
5
<PAGE>
EXHIBIT 3(ii)
AMENDMENT TO ARTICLES OF INCORPORATION
OF
ZEPPELIN PRODUCTION CORP.
(after payment of capital and issuance of stock)
WE THE UNDERSIGNED, Officers of ZEPPELIN PRODUCTION CORP., ("the
Corporation") hereby certify:
1. The Board of Directors of the Corporation at a meeting of duly
convened and held on February 21, 1998 adopted a resolution to amend the
Articles of Incorporation as Originally filed and/or amended, which was duly
approved by shareholders as follows:
The former Article read:
ARTICLE ONE. The name of the corporation is ZEPPELIN PRODUCTION CORP.
Article One is superseded and replaced as follows:
ARTICLE ONE. The name of the corporation is POWER TECHNOLOGY, INC.
2. The number of shares of the Corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation is 1,500,000 of which
800,000, voted in favor; and the foregoing changes and amendment have been
consented to and approved by a majority vote of the stockholders holding at
least a majority of each class of stock outstanding and entitled to vote
thereon.
/s/ J. Dan Sifford, Jr. /s/ William Stocker
J. DAN SIFFORD JR. WILLIAM STOCKER
VICE PRESIDENT ASSISTANT SECRETARY
1
<PAGE>
BYLAWS EXHIBIT 3(iii)
OF
ZEPPELIN PRODUCTION CORPORATION
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be located in the City of Las Vegas, Nevada, Clark County, State or
Nevada.
SECTION 2. OTHER OFFICES. In addition to the principal office at 601
S. Rancho Drive Suite D-32, Las Vegas, Nevada 89106, other offices may also
be maintained at such other place or places either within or without the
State of Nevada, as may be designated from time to time by the Board of
Directors, where any and all business of the Corporation may be transacted,
and where meetings or the stockholders and of the Directors may be held with
the same effect as though done or held at said principal office.
ARTICLE II
MEETING OF THE STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. The annual meeting of the shareholder,
commencing with the year 1996, shall be held at the registered office or the
corporation, or at such other place as may be specified or fixed in the
notice of said meetings in the month of or the month preceding the due date
of the annual list of the officers and directors of the corporation at such
time as the shareholders shall decide, for the election of directors and for
the transaction of such other business as may properly come before said
meeting.
SECTION 2. NOTICE OF ANNUAL MEETING. The Secretary shall mail, in the
manner provided in Section 5 of Article II of these Bylaws, or deliver a
written or printed notice of each annual meeting to each stockholder of
record, entitled to vote thereat, or may notify by telegram, at least ten and
not more than sixty (60) days before the date of such meeting.
SECTION 3. PLACE OF MEETINGS. The Board of Directors may designate any
place either within or without the State of Nevada as the place of meeting
for annual meeting or for any special meeting called by the Board of
Directors. A waiver of notice signed by all stockholders may designate any
place either within or without the State of Nevada, as the place for holding
of such meeting. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal office of
Corporation in the State of Nevada, except as otherwise provided in Section
6, Article II of these Bylaws, entitled "Meeting of All Stockholders".
SECTION 4. SPECIAL MEETINGS. Special meetings of the stockholders
shall be hold at the principal office of the Corporation or at such other
place as shall be specified or fixed in a
<PAGE>
notice hereof such meetings of the stockholders may he called at any time by
the President or Secretary, or by a majority of the Board of Directors then
in office, and shall be called by the President with or without Board
approval on the written request of the holders of record of at least fifty
percent (50%) of the number of shares of the Corporation then outstanding and
entitled to vote, which written request shall stale the object of such
meeting.
SECTION 5. NOTICE OF MEETING. Written or printed notice stating the
place, day and hour of the meeting and, in case of special meeting, the
purpose for which the meeting is called, shall be delivered not less than ten
(10) nor more than sixty (60) days before the date of the meeting, either
personally or by mail, by, or at the direction of the President or the
Secretary to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the stockholder at his/her address as it
appears on the records of the Corporation, with postage prepaid.
Any stockholder may at any time, by duly signed statement in writing to
that effect, waive any statutory or other notice of any meeting, whether such
statement by signed before or after such meeting.
SECTION 6. MEETING OF ALL STOCKHOLDERS. If all the stockholders shall
meet at any time and place, either within or without the State of Nevada, and
consent to the holding of the meeting at such time and place, such meeting
shall be valid without call or notice and at such meeting any corporate
action may be taken.
SECTION 7. QUORUM. At all stockholder's meetings, the presence in
person or by proxy, of the holders of a majority of the outstanding stock
entitled to vote shall be necessary to constitute a quorum for the
transaction of business, but a lesser number may adjourn to some future time
not less than seven (7) nor more than twenty-one (21) days later, and the
Secretary shall thereupon give at least three (3) days' notice by mail to
each stockholders entitled to vote who is absent from such meeting.
SECTION 8. MODE OF VOTING. At all meetings of the stockholders the
voting may be voice vote, but any qualified voter may demand a stock vote
whereupon such stock vote shall be taken by ballot, each or which shall state
the name or the stockholder voting and the number of shares voted by him/her
and, if such ballot be cast by proxy, it shall also state the name of such
proxy; provided, however, that the mode of voting prescribed by statute for
any particular case shall be in such case followed.
SECTION 9. PROXIES. At any meeting of the stockholders, any
stockholder may be represented and vote by a proxy or proxies appointed by an
instrument in writing. In the event any such instrument in writing shall
designate two or more persons to act as proxies a majority of such persons
present at the meeting, or if only one shall be present then that one shall
have and may exercise all of the powers conferred by such written instrument
upon all of the persons so designated unless the instrument shall otherwise
provide no such proxy shall be valid after the expiration of six (6) months
from the date of its execution, unless coupled with an interest, or unless
the person executing it specified therein the length of time for which it is
to continue in force, which in no case shall exceed seven (7) years from the
date of its execution. Subject to the above, any proxy duly executed is not
revoked and continues in full force and effect until any instrument revoking
it or duly
2
<PAGE>
executed proxy bearing a later date is filed with the Secretary of the
Corporation. At no time shall any proxy be valid which shall be filed less
than ten (10) hours before the commencement of the meeting.
SECTION 10. VOTING LISTS. The officer or agent in charge of the
transfer books for shares of the corporation shall make, at least three (3)
days before cacti meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, arranged in alphabetical order
with the number of shares held by each, which list for a period of two (2)
days prior to such meeting shall be kept on file at the registered office of
the corporation and shall be subject to inspection by any stockholder at any
time during the whole time of the meeting. The original share ledger or
transfer book. or duplicate thereof, kept in this state, shall be prima facie
evidence as to who are the stockholders entitled to examine such list or
share ledger or transfer book or to vote at any meeting of stockholders.
SECTION 11. CLOSING TRANSFER BOOKS OR FIXING OR RECORD DATE. For the
purpose of determining stockholders entitled to notice or to vote for any
meeting or stockholders, the Board of Directors of the Corporation may
provide that the stock transfer books be closed for a stated period but not
to exceed in any case sixty (60) days before such determination. If the stock
transfer books be closed for the purpose of determining stockholders entitled
to notice of a meeting of stockholders, such books shall be closed for at
least fifteen (15) days immediately preceding such meeting. In lieu or
closing the stock transfer books, the Board or Directors may fix in advance a
date in any case to he not more than sixty (60) days, not less than ten (10)
days prior to the date on which the particular action, requiring such
determination of stockholders, is to be taken. If the stock transfer books
are not closed and no record date is fixed for determination of stockholders
entitled to notice of meeting of stockholders, or stockholders entitled to
receive payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record
of date for such determinations of shareholders.
SECTION 12. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in
the name or another corporation, domestic or foreign, may be voted by, such
officer, agent or proxy as the Bylaws of such corporation by prescribe, on in
the absence of such provisions, the Hoard of Directors or such corporation
may determine.
Shares standing in the name of deceased person may be voted by his/her
administrator or executor, either in person or by proxy. Shares standing in
the name of the guardian, conservator or trustee may be voted by such
fiduciary either in person or by proxy, but no guardian, conservator, or
trustee shall be entitled, as such fiduciary, to vote shares held by him
without a transfer of such shares into his/her name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court at which such receiver was
appointed.
3
<PAGE>
A stockholder whose shares are pledged shall be entitled to vote such
shares until shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its' own stock belonging to this corporation shall not voted,
directly or indirectly, at any meeting and shall hot be counted in
determining the total number of outstanding shares at any time, but shares or
its own stock held by it in a fiduciary capacity may be voted and shall be
counted in determining the total number of outstanding shares at any given
time.
SECTION 13. INFORMAL ACTION BY STOCKHOLDERS. Any action is required to
be taken at a meeting of the stockholders or any other action which may be
taken at a meeting of the stockholders except the election or directors maybe
taken without a meeting if a consent in writing setting forth the action so
taken shall be signed by all of the stockholders entitled to vote with
respect to the subject matter thereof.
SECTION 14. VOTING OF SHARES. Each outstanding share entitled to vote
shall be entitled to one (1) vote upon each matter submitted to vote at a
meeting of stockholders.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The Board of Directors shall have the
control and general management of the affairs and business of the
Corporation. Such directors shall in all cases act as Board, regularly
conveyed, by a majority, and they may adopt such rules and regulations for
the conduct of their meetings and the management of the Corporation, as they
may deem proper, not inconsistent with these Bylaws, Articles of
Incorporation and the laws of the State of Nevada. The Board of Directors
shall further have the right to delegate certain other powers to the
Executive Committee as provided in these Bylaws.
SECTION 2. NUMBER OF DIRECTORS. The affairs and business of this
Corporation shall be managed by a Board of Directors. consisting of not less
than one (1) or more than seven (7) until changed by amendment to these
Bylaws adopted by the shareholders amending this Section 2, Article III, and
except as authorized by the Nevada Revised Statutes, there shall in no event
be less than one (1) Director.
SECTION 3. ELECTION. The Directors or the Corporation shall be elected
at the annual meeting of the stockholders except as hereinafter otherwise
provided for the filling of vacancies. Each Director shall hold office for
a term of one (l) year and until his successor shall have been duly chosen
and shall have qualified, or until his death, or until he shall resign or
shall be been removed in the manner hereinafter provided.
SECTION 4. VACANCIES IN THE BOARD. Any vacancy in the Board of
Directors occurring during the year through death, resignation, removal or
other cause, including vacancies caused by an increase in the number or
directors, shall be filled for the unexpired portion they constitute a
quorum, at any special meeting of the Board called for dial purpose, or at
any regular
4
<PAGE>
meeting thereof; provided, however, that in the event the remaining directors
do not represent a quorum of the number set forth in Section 2 hereof a
majority of such remaining directors may elect directors to fill any
vacancies.
SECTION 5. DIRECTORS MEETINGS. Annual meeting of the Board of
Directors shall be held each year immediately following the annual meeting of
the stockholders. Other regular meetings of the Board of Directors shall from
time to time by resolution be prescribed. No further notice of such annual or
regular meeting of the Board of Directors need be given.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the President or any
Director. The person or persons authorized to call meetings of the Board of
Directors may fix any place, either within or without the State of Nevada, as
the place for holding any special meeting of the Board of Directors called by
them.
SECTION 7. NOTICE. Notice of any special meeting shall be given at
least twenty-four (24) hours previous thereto by written notice if personally
delivered, or five (5) days previous thereto if mailed to each Director at
his business address, or by telegram if mailed, such notice shall be deemed
to have been delivered when deposited with the United States mail so
addressed with postage thereon prepaid. If notice is given by telegram,
such notice shall be deemed to be delivered when the telegram is delivered to
the telegraph company. Any Director may waive notice of any meeting. The
attendance of a Director at any meeting shall constitute a waive of notice of
such meeting, except where a Director attends a meeting for the express
purpose of objecting to the transaction of any business because the meeting
is not lawfully called or convened.
SECTION 8. CHAIRMAN At all meetings of the Board or Directors, the
President shall serve as Chairman, or in the absence of the President, the
Directors present shall choose by majority vote a Director to preside as
Chairman.
SECTION 9. QUORUM AND MANNER OF ACTING. A majority of Directors, whose
number is designated in Section 2 herein, shall constitute a quorum for the
transaction of business at any meeting and the act of a majority of the
Directors present at any meeting at which a quorum is present shall be the
act of the Board of Directors. In the absence of a quorum, the majority of
the Directors present may adjourn any meeting from time to time until a
quorum be had. Notice of any adjourned meeting need not be given. The
Directors shall act only as a Board and the individual Directors shall have
no power as such.
SECTION 10. REMOVAL OF DIRECTORS. Any one or more of the Directors may
be removed either with or without cause at any time by the vote or written
consent of the stockholders representing not less than two-thirds (2/3) of
the issued and outstanding capital stock entitled to voting power.
SECTION 11. VOTING. At all meetings of the Board of Directors, each
Director is to have one (1) vote, irrespective of the number of shares of
stock that he may hold.
SECTION 12. COMPENSATION. By resolution of the Board of Directors, the
Directors may be paid their expenses, if any, of attendance of each meeting
of the Board. and may be paid a fixed sum for attendance at meetings or a
stated salary of Directors. No such payment shall
5
<PAGE>
preclude any Director from serving the Corporation in any other capacity and
receiving compensation therefor.
SECTION 13. PRESUMPTION OF ASSENT. A Director or the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken, shall be conclusively presumed to have assented to
the action unless his/her dissent shall be entered in the minutes of the
meeting or unless he/she shall file his/her written dissent to such action
with the person acting as the Secretary of the meeting before the adjournment
thereof or shall file forward such dissent by certified or registered mail to
the Secretary of the Corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a Director who voted in
favor of such action.
ARTICLE IV
EXECUTIVE COMMITTEE
SECTION 1. NUMBER AND ELECTION. The Board of Directors may, in its
discretion. appoint from its membership an Executive Committee of one (1) or
more Directors each to serve at the pleasure of the Board of Directors.
SECTION 2. AUTHORITY. The Executive Committee is authorized to take any
action which the Board or Directors could take, except that the Executive
Committee shall not have the power either to issue or authorize the issuance
of shares of capital stock, to amend the Bylaws, or a resolution or the Board
of Directors. Any authorized action taken by the Executive Committee shall
be as effective as if it had been taken by the full Board of Directors.
SECTION 3. REGULAR MEETINGS. Regular meetings of the Executive
Committee may be held within or without the State of Nevada at such time and
place as the Executive Committee may provide from time to time.
SECTION 4. SPECIAL MEETINGS. Special meetings or the Executive
Committee may be called by or at the request of the President or any member
of the Executive Committee.
SECTION 5. NOTICE. Notice of any special meeting shall be given at
least one (1) day previous thereto by written notice, telephone, telegram or
in person. Neither the business to be transacted, nor the purpose or a
regular or special meeting of the Executive Committee need be specified in
the notice of waiver of notice of such meeting. A member may waive notice of
any meeting of the Executive Committee. The attendance of a member at any
meeting shall constitute a waiver of notice of such meeting, except where a
member attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 6. QUORUM. A majority of the members of the Executive
Committee shall constitute a quorum for the transaction of business at any
meeting of the Executive Committee; provided that if fewer than a majority of
the members are present at said meeting, a majority of the members present
may adjourn the meeting from time to time without further notice.
6
<PAGE>
SECTION 7. MANNER OF ACTING. The act or the majority of the members
present at a meeting at which a quorum is present shall be the act of the
Executive Committee, and said Committee shall keep regular minutes or its
proceedings which shall it all times be open for inspection by the Board of
Directors.
SECTION 8. PRESUMPTION OF ASSENT. A member of the Executive Committee
who is present at a meeting of the Executive Committee at which action on any
corporate matter is taken, shall be conclusively presumed to have assented to
the action taken unless his/her dissent shall be entered in the minutes of
the meeting or unless he/she shall file his written dissent to such action
with the person acting as Secretary of the meeting before the adjournment
thereof, or shall forward such dissent by certified or registered mail to the
Secretary of the Corporation immediately after the adjournment or the
meeting. Such right to dissent shall not apply to a member of the Executive
Committee who voted in favor of such action.
ARTICLE V
OFFICERS
SECTION 1. NUMBER. The officers of the Corporation shall be a
President, Vice President, a Treasurer and a Secretary and such other or
subordinate officers as the Board of Directors may from time to time elect.
One (1) person may hold the office and perform the duties of one or more of
said officers. No officer need to a member of the Board or Directors.
SECTION 2. ELECTION, TERM OF OFFICE, QUALIFICATIONS. The officers of
the Corporation shall be chosen by the Board of Directors and they shall be
elected annually at the meeting of the Board of Directors held immediately
after each annual meeting of the stockholders except as hereinafter otherwise
provided for filling vacancies. Each officer shall hold his/her office until
his/her successor has been duly chosen and has qualified, or until his/her
death, or until he/she resigns or has been removed in the manner hereinafter
provided.
SECTION 3. REMOVALS. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board or Directors at any time
whenever in its' judgment the best interests of the Corporation would be
served thereby, and such removal shall be without prejudice to the contract
rights, if any, or the person so removed.
SECTION 4. VACANCIES. All vacancies in any of office shall be filled
by the Board of Directors without undue delay, at any regular meeting, or at
a meeting specially called for that purpose.
SECTION 5. PRESIDENT. The President shall be the Chief Executive
Officer of the Corporation and shall have general supervision over the
business of the Corporation and over its' several officers, subject, however,
to the control or the Board of Directors. He/she may sign, with the
Treasurer or with the Secretary or any other proper officer of the
Corporation thereunto authorized by the Board of Directors, certificates for
shares of the capital stock of the Corporation: may sign and execute in the
name of the Corporation deeds, mortgages, bonds, contracts or other
instruments authorized by the Board of Directors, except in eases where
signing and execution thereof shall be expressly delegated by the Board of
Directors or by these Bylaws to some other
7
<PAGE>
officer or agent of the Corporation: and in general shall perform all duties
incident to the duties of the President and such other duties as from time to
time may be assigned to him/her by the Board of Directors.
SECTION 6. VICE PRESIDENT. The Vice President shall in the absence or
incapacity of the President, or as ordered by the Board of Directors, perform
the duties of the President, or such other duties or functions as may be
given to him by the Board or Directors from time to time.
SECTION 7. TREASURER. The Treasurer shall have the care and custody of
all the funds and securities of the Corporation and deposit the same in the
name of the Corporation in such bank or trust company as the Board of
Directors may designate: he may sign or countersign all checks, drafts and
orders for the payment or money and may pay out and dispose of same under the
direction of the Board or Directors, and may sign or countersign all notes or
other obligations of indebtedness of the Corporation: he/she: may sign with
the President or Vice President, certificates for shares of stock or the
Corporation. He/she shall at all reasonable times exhibit the books and
accounts to any director or stockholder or the Corporation under application
at the office of the Company during business hours: and he/she shall, in
general, perform all duties as from time to time may be assigned to him/her
by the President or by the Board of Directors. The Board or Directors may at
its discretion require that each officer authorized to disburse the funds of
the Corporation be bonded in such amount as it may deem adequate.
SECTION 8. SECRETARY. The Secretary shall keep the minutes of the
meetings of the Board of Directors and also the minutes of the meetings of
the stockholders: he/she shall attend to the giving and serving of all
notices of the Corporation and shall affix the seal of Corporation to all
certificates or stock, when signed and countersign by the duly authorized
officers: he/she may sign certificates for shares of stock of the
Corporation: he/she may sign or countersign all checks, drafts and orders for
the payment of money: he/she shall have charge of the certificate book and
such other books and papers as the Board may direct: he/she shall keep a
stock book containing the names alphabetically arrange, of all persons who
are stockholders of the Corporation. showing their places of residence, the
number of shares held by them respectively, the time when they respectively
became the owners thereof, and the amount paid thereof: and he/she shall in
general, perform all duties incident to the office of Secretary and such
other duties as from time to time may be assigned to him/her by the President
or by the Board of Directors.
SECTION 9. OTHER OFFICERS. The Board of Directors may authorize and
empower other persons or other officers appointed by it to perform the duties
and functions or the officers specifically designated above by special
resolution in each case.
SECTION 10. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
Assistant Treasurers shall respectively, as may be required by the Board of
Directors, give bonds for the faithful discharge of their duties in such sums
and with such sureties as the Board of Directors shall determine. The
Assistant Secretaries as thereunto authorized by the Board of Directors may
sign with the President or Vice President certificates for shares of the
capital stock of the Corporation, issued of which shall have been authorized
by resolution of the Board of Directors. The Assistant Treasurers and
Assistant Secretaries shall, in general, perform such duties as may be
assigned to them by the Treasurer or the Secretary respectively, or by the
President or by the Board or Directors.
8
<PAGE>
ARTICLE VI
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Except as hereinafter stated otherwise, the Corporation shall indemnify
all of its' officers and directors, past, present and future, against any and
all expenses incurred by them, and each of them including but not limited to
legal fees, judgments and penalties which may be incurred, rendered or levied
in any legal action brought against any or all or them for or on account of
any act or omission alleged to have been committed while acting within the
scope of their duties as officers or directors of this Corporation.
ARTICLE VII
CONTRACTS, LOANS ,CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Board of Directors may authorize any officer
or agent or agents to enter into any contract or execute and deliver any
instrument in the name of behalf of the Corporation, and such authority may
be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name
unless authorized by the Board of Directors or approved by loan committee
appointed by the Board of Directors and charged with the duty of supervising
investments. Such authority may be general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. A check, draft or other orders for
payment of money, notes or other evidences of indebtedness issued in the name
of the Corporation shall be signed by such officer or officers, agent or
agents of the Corporation and in such manner as shall from time to time be
determined by resolutions of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as the Board
or Directors may select.
ARTICLE VIII
CAPITAL STOCK
SECTION 1. CERTIFICATE FOR SHARES. Certificates for shares of stocks
of the Corporation shall be in such form as shall be approved by the
incorporators or by the Board of Directors. The certificates shall be
numbered in the order of their issue, shalt be signed by the President or
Vice President and by the Secretary or the Treasurer, or by such other person
or officer as may be designed by the Board of Directors; and the seal of the
Corporation shall be affixed thereto, which said signatures of the duly
designated officers and of the seal of the Corporation. Every certificate
authenticated by a facsimile of such signatures and seal must be
countersigned by a Transfer Agent to be appointed by the Board of Directors,
before issuance.
9
<PAGE>
SECTION 2. TRANSFER OF STOCK. Shares of the stock of the Corporation
may be transferred by the delivery of the certificate accompanied either by
an assignment in writing on the back or the certificate or by written power
of attorney to sell, assign, and transfer the same on the books of the
Corporation, signed by the person appearing by the certificate to the owner
of the shares represented thereby, together with all necessary federal and
state transfer tax stamps affixed and shall be transferable on the books of
the Corporation upon surrender thereof so signed or endorsed. The person
registered on the books of the Corporation as the owner of any shares of
stock shall be entitled to all rights or ownership with respect to such
shares.
SECTION 3. REGULATIONS. The Board of Directors may make such rules and
regulations as it may deem expedient not inconsistent with the Bylaws or with
the Articles of Incorporation concerning the issue, transfer and
registration of the certificates for shares of stock of the Corporation. If
may appoint a transfer agent or registrar of transfers, or both, and it may
require all certificates to bear the signature of either or both.
SECTION 4. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost
or destroyed upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of Directors may,
in its discretion and as a condition precedent to the issue thereof, require
the owner of such lost or destroyed certificate or certificates, or his/her
legal representative, to advertise the same in such manner as it shall
require and/or give the Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost or destroyed.
ARTICLE IX
DIVIDENDS
SECTION 1. The Corporation shall be entitled to treat the holder of any
share or shares of stock as the holder in fact thereof and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest
in such shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as expressly provided by the laws of
Nevada.
SECTION 2. Dividends on the capital stock of the Corporation, subject
to the provisions of the Articles of Incorporation, if any, may be declared
by the Board of Directors at any regular or special meeting, pursuant to law.
SECTION 3. The Board of Directors may close the transfer books in its
discretion for a period not exceeding fifteen (15) days preceding the date
fixed for holding any meeting, annual or special of the stockholders, or the
day appointed for the payment of a dividend.
SECTION 4. Before payment or any dividend or making any distribution of
profits, there may be set aside out of funds of the Corporation available for
dividends, such sum or sums as the Directors may from time to time, in their
absolute discretion think proper as a reserve fund to meet contingencies, or
for equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for any such other purpose as the Directors shall think
conducive to the interest of
10
<PAGE>
the Corporation, and the Directors may modify or abolish any such reserve in
the manner in which it was created.
ARTICLE X
SEAL
The Board of Directors shall provide a Corporate Seal which shall be in
the form of a circle and shall bear the full name of the Corporation, the
year of its' incorporation and the words "Corporate Seal, State of Nevada".
ARTICLE XI
FISCAL YEAR
The fiscal year of the Corporation shall end on the 31st day of December
of each year.
ARTICLE XII
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of these Bylaws, or under the laws of the State of Nevada, or
under the provisions of the Articles of Incorporation a waiver in writing
signed by the person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent to the giving or
such notice.
ARTICLE XIII
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted at any regular or special meeting of the stockholders by a vote of
the stockholders owning a majority of the shares and entitled to vote
thereat. These Bylaws may also be altered, amended or repealed and new Bylaws
may be adopted at any regular or special meeting of the Board of Directors of
the Corporation (if notice of such alteration or repeal be contained in the
notice of such special meeting) by a majority vote of the Directors present
at the meeting at which a quorum is present, but any such amendment shall not
be inconsistent with or contrary to the provision of any amendment adopted by
the stockholders.
KNOW ALL MEN BY THESE PRESENTS that the undersigned, being the Secretary
of ZEPPELIN PRODUCTION CORPORATION, a Nevada corporation hereby acknowledges
that the above and foregoing Bylaws were duly adopted as the Bylaws of said
Corporation on June 4th, 1996.
11
<PAGE>
IN WITNESS WHEREOF, I hereunto subscribe my name this 4th day of June,
1996.
/s/ Stanley K. Stilwell
- --------------------------------------------------
STANLEY K. STILWELL, PRES/SEC/TREASURER & DIRECTOR
12
<PAGE>
EXHIBIT 6(a)
PLAN OF REORGANIZATION AND ACQUISITION
BY WHICH
ZEPPELIN PRODUCTION CORP.
(A NEVADA CORPORATION)
SHALL ACQUIRE
POWER TECHNOLOGIES, INC.
(A NEVADA CORPORATION)
This Plan of Reorganization and Acquisition is made and dated this day of
February 15, 1998, by and between the above referenced corporations and shall
become effective on "the Effective Date" as defined herein.
I. INTERESTED PARTIES
A. THE PARTIES TO THIS PLAN
1. Zeppelin Production Corp. ("Zeppelin") is a public Nevada
Corporation, incorporated on or about June 7, 1996.
2. Power Technologies, Inc. ("PowerTech") is a private Nevada
Corporation, incorporated on or about January 19, 1996.
II. RECITALS
A. THE CAPITAL OF THE PARTIES:
1. The Capital of Zeppelin consisted of 1,500,000 (pre-reverse) shares of
common voting stock of $.0001 par value authorized, of which 300,000
(post-reverse) shares are issued and outstanding.
2. The Capital of PowerTech consists of 2,500,000 shares of common voting
stock of $.0001 par value authorized, of which 5,000,000 shares are
purported to be issued and outstanding, more than the amount
authorized, but issued among only a small closely holding group of
shareholders, believed to be three in number. Accordingly, the
Reorganization effectuated herein shall consist, first of a reverse
split of PowerTech shares 2 to 1 to conform its Articles of
Incorporation, with the result that PowerTech shall have 2,500,000
(post-reverse) shares issued and outstanding immediately before the
exchange and conversion of shares described hereinafter.
B. THE BACKGROUND FOR THE ACQUISITION: Zeppelin desires to acquire
PowerTech and the shareholders of PowerTech wish to be acquired by a public
company.
<PAGE>
PLAN OF REORGANIZATION AND ACQUISITION
ZEPPELIN/POWERTECH
February 15, 1998 Page 2
C. THE BOARDS OF DIRECTORS of both Corporations respectively have
determined that it is advisable and in the best interests at each of them and
both of them to proceed with the acquisition by the Delaware Corporation, in
accordance with IRS Section 368 (B) and (C).
D. THE SHAREHOLDERS OF ZEPPELIN, having approved the acquisition, this
agreement was approved and adopted by the Board of Directors of Zeppelin in a
manner consistent with the laws of its Jurisdiction its constituent documents.
E. THE SHAREHOLDERS OF POWERTECH, having approved the acquisition, this
agreement was approved and adopted by the Board of Directors of PowerTech in a
manner consistent with the laws of its Jurisdiction its constituent documents.
III. PLAN OF ACQUISITION
A. REORGANIZATION AND ACQUISITION: Zeppelin Production Corp. and the
Power Technologies, Inc. are hereby reorganized, as follows:
1. POWERTECH REVERSE SPLIT: Each and every two shares of the 5,000,000
(pre-reverse) shares previously issued by PowerTech shall first be
reduced to one such share, to conform to the Articles or incorporation
of PowerTech, with the result that PowerTech shall have 2,500,000
(post-reverse) shares issued and outstanding immediately before it
shall exchange described hereinafter;
2. ACQUISITION OF POWERTECH BY ZEPPELIN: Zeppelin Production Corp. shall
acquire all assets, businesses and capital stock of the Power
Technologies, Inc., and Power Technologies, Inc. corporation shall
become a wholly-owned subsidiary of Zeppelin Production Corp.
3. SHARE EXCHANGE AND CONVERSION OF OUTSTANDING STOCK: Forthwith upon
the effective date hereof, Zeppelin Production Corp. shall issue
5,000,000 new investment shares of its common stock to or for the
shareholders of the former Power Technologies, Inc.; and each and
every post-reverse share of Power Technologies, Inc. shall be
converted into two shares at Zeppelin Production Corp.
4. NAME CHANGES: In order to prevent the Parent and Subsidiary from
purporting to enjoy the same corporate name, both companies being
Nevada corporations, the names of each shall be changed immediately
following the reorganization, as follows:
(a) First Power Technologies, Inc., the Subsidiary, shall change its
name to PowerTek Technologies Corporation, if available in
Nevada, or Power Technologies Corporation, if not Consent to the
use of Similar name is hereby given to whatever extent is
required by the laws of Nevada.
(b) Second, Zeppelin Production Corp., the Parent shall change its
name to, and assume the corporate name of, Power Technologies,
Inc.
B. EFFECTIVE DATE: This PLAN OF REORGANIZATION AND ACQUISITION shall
become effective immediately upon approval and adoption by the parties hereto,
in the manner provided by the law of the places of incorporation and constituent
corporate documents, and the time of such effectiveness shall be called the
effective date hereof.
<PAGE>
PLAN OF REORGANIZATION AND ACQUISITION
ZEPPELIN/POWERTECH
February 15, 1998 Page 3
C. SURVIVING CORPORATIONS: The both corporations shall survive the
Reorganization herein contemplated and shall continue to be governed by the laws
of its respective State of Incorporation.
1. RIGHTS OF DISSENTING SHAREHOLDERS: Zeppelin Production Corp., the
surviving parent to be renamed Power Technologies, Inc. is the entity
responsible for the rights of dissenting shareholders.
2. SERVICE OF PROCESS: Zeppelin Production Corp., the surviving parent
to be renamed Power Technologies, Inc. may be served with process in
Nevada in any proceeding for the enforcement of the rights of a
dissenting shareholder, if any, pursuant to any extent required by the
laws thereof.
3. SURVIVING ARTICLES OF INCORPORATION: the Articles of Incorporation of
each Corporation shall remain in full force and effect, unchanged.
4. SURVIVING BY-LAWS: the By-Laws of each Corporation shall remain in
full force and effect, unchanged.
D. FURTHER ASSURANCE, GOOD FAITH AND FAIR DEALING: the Directors of each
Company shall and will execute and deliver any and all necessary documents,
acknowledgments and assurances and to do all things proper to confirm or
acknowledge any and all rights, titles and interests created or confirmed
herein; and both companies covenant hereby to deal fairly in good faith with
each other and each others shareholders.
<PAGE>
PLAN OF REORGANIZATION AND ACQUISITION
ZEPPELIN/POWERTECH
February 15, 1998 Page 4
This PLAN OF REORGANIZATION AND MERGER is executed on behalf of each
Company by its duly authorized representatives, and attested to, pursuant to the
laws of its respective place of incorporation and in accordance with its
constituent documents.
ZEPPELIN PRODUCTION CORP. POWER TECHNOLOGIES, INC.
(A NEVADA CORPORATION) (A NEVADA CORPORATION)
- ------------------------------------- ----------------------------------
David Lehmberg Lee Balak
President President
----------------------------------
Alvin A. Snaper
Vice President
<PAGE>
EXHIBIT 21
The Registrant has one wholly-owned subsidiary, PowerTek Technology
Corporation, Inc. which is a Nevada corporation incorporated on
January 19, 1996.
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<OTHER-SE> 77,307 (171,771) (168,781) (117,407)
<TOTAL-LIABILITY-AND-EQUITY> 293,434 14,810 15,000 20,000
<SALES> 1,663 0 0 0
<TOTAL-REVENUES> 1,663 0 0 0
<CGS> 0 0 0 0
<TOTAL-COSTS> 348,002 417 51,374 139,907
<OTHER-EXPENSES> 0 0 0 0
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 0 0 0 0
<INCOME-PRETAX> 0 0 0 0
<INCOME-TAX> 0 0 0 0
<INCOME-CONTINUING> (346,339) (717) (51,374) (139,907)
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> (346,339) (417) (51,374) (139,907)
<EPS-PRIMARY> (.06) (.00) (.02) (.06)
<EPS-DILUTED> (.06) (.00) (.02) (.01)
</TABLE>
