AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON DECEMBER 19, 2000
Sec File No. 333-43512
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 2
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PVAXX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COLORADO 2821 05-0499528
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
INCORPORATION OR CODE NUMBER)
ORGANIZATION
PVAXX CORPORATION
12730 New Brittany Boulevard
Ft. Myers, Florida 33907
941-274-9355
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
<PAGE>
NADEAU & SIMMONS, P.C.
1250 TURKS HEAD BUILDING
PROVIDENCE, RHODE ISLAND 02903
401-272-5800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH COPIES TO:
DENNIS W. BERSCH, CPA
633 W. WISCONSIN AVENUE
SUITE 610
MILWAUKEE, WI 53203
414-272-8800
APPROXIMATE DATE OF COMMENCEMENT OF
PROPOSED SALE TO THE PUBLIC:
As soon as practicable after approval.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [X]
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement number for the same offering. [ ] _______
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________________
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
of the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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CALCULATION OF REGISTRATION FEE
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Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
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Common Stock, 2,400,000(1) $ 10.00 $ 24,000,000 $ 8,275.86
No Par Value
Common Stock, 4,708,985(2) $ .01 $ 47,090 $ 1,623.79
No Par Value
(1) Estimated solely for purposes of calculating registration fee. It is
anticipated that the public offering price of the common stock will be
approximately $10.00.
(2) Common stock owned by stockholders of the Company. The fee with respect
to these shares has been calculated pursuant to Rules 457(f) and 457(c) under
the Securities Act of 1933, as amended, and based upon the book value of our
common stock on a date within five (5) days prior to the date of filing of
this registration statement (since no quote is now published, it was assumed
at $0.01 for purposes only of calculating the filing fee).
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INVESTING IN OUR COMMON STOCK
INVOLVES CERTAIN RISKS. SEE RISK FACTORS ON PAGE 8.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY
STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF
THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS PROSPECTUS.
<PAGE>
The information contained in this prospectus is subject to completion or
amendment. The shares described in this prospectus may not be sold, nor may
offers to buy be accepted, prior to the time this registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy, nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful, prior to registration under the securities laws of any such state.
We will amend this registration statement on such date or dates as may be
necessary to delay its effective date until we shall file a further amendment
which specifically states that this registration statement shall become
effective in accordance with Section 8(A) of the Securities Act of 1933 or
until the registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
Subject to Completion Dated ______________, 2000
PVAXX CORPORATION
2,400,000 Shares
Common Stock
This prospectus relates to the offer and sale, on a best efforts no minimum
basis, of up to 2,400,000 shares of common stock, no par value of PVAXX
Corporation ("PVAXX" or "Company"). We are selling the Shares on a
best-efforts, no minimum basis for a period of 360 days. We will not use an
underwriter or securities dealer. The Company cannot provide assurances that
it will raise significant proceeds from this offering and may receive no or
nominal proceeds, significantly restricting the Company's activities and plan
of operations.
Our officers, directors, current stockholders and any of their affiliates or
associates may purchase shares in the offering. Prior to the offering, no
public market has existed in our securities. We cannot guarantee that a
trading market in the shares of common stock will ever develop.
We are subject to the reporting requirements of Section 13 and 15(d) of the
Exchange Act and are presently current in filing reports with the Securities
and Exchange Commission.
Our corporate address is 12730 New Brittany Boulevard, Ft. Myers, Florida
33907. We estimate that total expenses will be approximately $75,000 in
connection with this offering of our shares.
The registration statement of which this prospectus forms a part also relates
to the potential resale of 4,708,985 shares of Common Stock that were issued
to certain Selling Shareholders in connection with the Company's completed
business combination on July 11, 2000. The Company will not receive any of
the proceeds derived from the resale of the securities by the Selling
Shareholders.
<PAGE>
The resale of the securities of the Selling Shareholders are subject to
Prospectus delivery and other requirements of the Securities Act of 1933, as
amended. Sales of such securities or the potential of such sales at any time
may have an adverse effect on the market prices of the securities offered
hereby. The securities offered may be sold from time to time directly by the
Selling Shareholders. Alternatively, the Selling Shareholders may from time
to time offer such securities through underwriters, dealers or agents. The
distribution of securities by the Selling Shareholders may be effected in
one or more transactions that may take place on the over-the-counter market,
including ordinary broker's transactions, privately-negotiated transactions
or through sales to one or more broker-dealers for resale of such shares as
principals, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Usual and
customary or specifically negotiated brokerage fees or commissions may be
paid by the Selling Shareholders in connection with such sales of securities.
The securities offered by the Selling Shareholders may be sold by one or more
of the following methods, without limitations:
(a) a block trade in which a broker or dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this Prospectus;
(c) ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
(d) face-to-face transactions between sellers and 46 purchasers without a
broker-dealer. In effecting sales, brokers or dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. The
Selling Shareholders and intermediaries through whom such securities are sold
may be deemed "underwriters" within the meaning of the Act with respect to the
securities offered, and any profits realized or commissions received may be
deemed underwriting compensation.
At the time a particular offer of securities is made by or on behalf of a
Selling Shareholder, to the extent required, a Prospectus will be distributed
which will set forth the number of shares being offered and the terms of the
Offering, including the name or names of any underwriters, dealers or agents,
if any, the purchase price paid by any underwriter for sales purchased from
the Selling Shareholders and any discounts, commissions or concessions allowed
or reallowed or paid to dealers and the proposed selling price to the public.
Sales of securities by the Selling Shareholders or even the potential of such
sales would likely have an adverse effect on the market prices of the
securities offered hereby.
Investments in our shares involve a high degree of risk. The shares have not
been approved or disapproved by the Securities and Exchange Commission nor has
the Commission passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary
Risk Factors
Competition
Potential Fluctuations in Quarterly Operating Results
Limited Operating History
Dependence on Third-Party Suppliers
Patents, Trademarks and Proprietary Information
Rapid Technological Changes
Expansion
Government Regulation
Dependence on Key Personnel
Control by Principal Shareholders, Officers and Directors
Issuance of Preferred Stock
Trading Market; Volatility of Stock Price
Possible Need for Additional Financing
Indemnification of Officers and Directors
Dependence Upon Outside Advisors
Rule 144 Sales
Use of Proceeds
Dilution
Dividend Policy
Business
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management
Certain Transactions
Principal Shareholders
Description of Capital Stock
Plan of Distribution
Legal Matters
Experts
Additional Information
Financial Statements F-1
</TABLE>
<PAGE> 2
PART I
Narrative Information Required in Prospectus
Inside Front and Outside Back Cover Pages
See front and back cover pages of this prospectus.
PROSPECTUS SUMMARY
The following summary should be read in conjunction with the more detailed
information and the financial statements.
THE COMPANY
PVAXX Corporation ("PVAXX") is a development stage company whose primary
business is the development of a biodegradable polymer, which is distinguished
by its relative environmental neutrality compared to competing products in a
variety of commercial, industrial and consumer applications.
Our corporate headquarters are located at 12730 New Brittany Boulevard, Ft.
Myers, Florida 33907, (941) 274-9355. Our transfer agent is Computershare
Trust Company, 12039 West Alameda Parkway, Suite Z-2, Lakewood CO 80228,
telephone: (303) 986-5400.
We are selling the Shares on a best-efforts, no minimum basis for a period of
360 days. We will not use an underwriter or securities dealer. The Company
cannot provide assurances that it will raise significant proceeds from this
offering and may receive no or nominal proceeds, significantly restricting
the Company's activities and plan of operations.
We plan to register the Shares, if necessary, to be sold in the offering in
Florida, Washington, D.C., Colorado and New York. We will not sell Shares to
any investor in a state unless the Shares are registered or qualified in such
state or the sale of our Shares is exempt from registration or qualification.
Purchasers in any subsequent trading market must be residents of states in
which our securities are registered or qualified.
<PAGE> 3
The Offering
Securities Offered by the Company (1).............2,400,000 shares of common
stock.
Securities Outstanding Prior to the
Offering........................................21,322,800 shares
Securities Outstanding Subsequent to the
Offering........................................23,722,800 shares
Use of Proceeds...................................Production and manufacture of
specialized polymers and for
working capital purposes.
Risk Factors......................................The common stock offered
hereby involves a high degree
of risk and immediate and
substantial dilution. See
"Risk Factors"".
Proposed OTC Bulletin Board Symbol................Shares--"PVXX"
-------------------
(1) Concurrently with this Offering, the Company is registering the potential
resale of the 4,708,985 shares of Common Stock previously issued to the
Selling Shareholders.
RISK FACTORS
The shares offered hereby are speculative and involve a high degree of risk
and should not be purchased by investors who cannot afford the loss of their
entire investment.
We provide the following risk factor disclosure in connection with our
continuing effort to qualify our written and oral forward looking statements
for the safe harbor protection of the Reform Act and any other similar safe
harbor provisions. Important factors currently known to us that could cause
actual results to differ materially from those in forward looking statements
include the following disclosures:
<PAGE> 4
1. The highly competitive biodegradable plastics market may negatively impact
our business, prospects, financial condition and results.
The biodegradable plastics industry in which we operate is highly
competitive. Some of our principal competitors in certain business lines are
substantially larger and better capitalized. Because of these resources,
these companies may be better able to obtain new customers and to pursue new
business opportunities or to survive periods of industry consolidation. There
can be no assurance that these threats of competition will not negatively
impact our operations and results.
2. Our early development stage may lead to potential fluctuations in quarterly
operating results that could have a material adverse effect on business,
prospects, financial condition and results of operations.
Our business and prospects must be considered along with the risks, expenses
and difficulties frequently encountered by companies in their early stages of
development. The risks we face include, but are not limited to,
(a) general economic conditions and economic conditions specific to the
biodegradable plastics industry;
(b) our ability to manage rapid growth;
(c) our ability to anticipate and adapt to a developing market and unforeseen
changes;
(d) developments in our strategic partners' activities and direction;
(e) our ability to retain and attract customers;
(f) the level of competition in the biodegradable plastics industry;
(g) our ability to upgrade and develop its products and infrastructure and
attract new personnel in a timely and effective manner;
(h) the amount and timing of operating costs and capital expenditures relating
to expansion of our business, operations and infrastructure; and
(i) governmental regulation.
To address these risks, we must, among other things:
(a) implement and successfully execute our business strategy;
(b) continue to develop and upgrade our products and technology;
(c) provide superior customer service;
(d) respond to competitive developments;
(e) attract, retain and motivate qualified personnel; and
(f) meet the expectations of our strategic partners.
<PAGE> 5
There can be no assurance that we will be successful in addressing such
risks, and the failure to do so could have a material adverse effect on
our business, prospects, financial condition and results of operations.
3. There can be no assurance that we will secure, or be able to protect any
patents, trademarks or intellectual property.
On November 24, 2000, the Company received an International Preliminary
Examination Report regarding International application No. PCT/GB99/02822,
originally filed August 26, 1999. Reasoned statements under Article 35(2) with
regard to novelty, inventive step and industrial applicability were confirmed
favorably by the International Preliminary Examining Authority on all claims
asserted (1-30) in connection with the application as follows:
Novelty Yes: Claims 1-30
No: Claims -
Inventive step (IS) Yes: Claims 1-30
No: Claims -
Industrial applicability Yes: Claims 1-30
No: Claims -
The Company is also the holder of the rights to patents published under
International Publication Numbers WO 98/26911 on June 25, 1998 and WO
00/12615 on March 9, 2000.
The Company has applied for trademark protection in the United States and all
other major-developed countries for the name PVAXX CORPORATION. There can be
no assurance that existing or future patents or trademarks, if any, will
adequately protect the Company. Also, there can be no assurances that any
patent or trademark applications will result in issued patents or trademarks.
In addition, there can be no assurances that the Company's patents or
trademarks will be upheld, if challenged. The Company also faces the risk that
competitors will develop similar or superior methods or products outside the
protection of any patent issued to the Company. Although the Company believes
that its current European patents and trademarks, potential United States
patent and trademarks, as well as the Company's products, do not and will not
infringe patents or trademarks or violate the proprietary rights of others, it
is possible that the Company's existing patent or trademark rights may not be
valid or that infringement of existing or future patents, trademarks or
proprietary rights may occur. Failure to do any of the foregoing could have a
material adverse effect upon the Company.
In addition, there can be no assurance that the Company will have the
financial or other resources necessary to enforce or defend a patent or
trademark infringement or proprietary rights violation action that may be
brought against it. Moreover, if the Company's products infringe patents,
trademarks or proprietary rights of others, the Company could, under certain
circumstances, become liable for damages, which also could have a material
adverse effect on the Company.
<PAGE> 6
4. Our dependence on key personnel could negatively impact our financial
condition and results of operations.
Our future success depends in large on part of the continued service of our
key marketing, engineering and management personnel. We must also be able to
continue to attract and retain qualified employees. The competition for such
personnel is intense, and the loss of key employees could have a material
effect on our financial condition and results of operations.
5. The control of the Company by principal shareholders, officers and directors
could impede its shareholders from having any ability to direct affairs and
business.
Our principal shareholders, officers and directors will beneficially own
approximately eighty percent (80%) of our company's common stock. As a
result, such persons will have the ability to control our company and direct
its affairs and business. Such concentration of ownership may also have the
effect of delaying, deferring or preventing change in control of our company.
6. Management's potential issuance of preferred stock may adversely affect
holders of common stock or delay or prevent corporate take-over.
Our Articles of Incorporation provide that we may, from time to time, issue
preferred stock in one or more series. The Articles of Incorporation authorize
our Board of Directors to determine the rights, preferences, privileges and
restrictions granted to and imposed upon any wholly unissued series of preferred
stock and the designation of any such shares, without any vote or action by
our shareholders. The Board of Directors may authorize and issue Preferred
stock with voting power or other rights that could adversely affect the voting
power or other rights of the holders of common stock. In addition, the
issuance of preferred stock could delay, defer or prevent a change in control
of the Company, because the terms of preferred stock that might be issued
could potentially prohibit the Company's consummation of any merger,
reorganization, sale of substantially all of its assets, liquidation or other
extraordinary corporate transaction without the approval of the holders of
the outstanding shares of the preferred stock.
7. Our stock price will be potentially volatile and may impede our ability to
secure equity financing or complete business combination transactions on
favorable terms to the Company.
There has been no public market for the Company's common stock. There can be
no assurance that an active trading market will develop or be sustained. At a
future date, provided a public market for the stock does develop, the market
price of the shares of common stock is likely to be highly volatile and may be
significantly affected by factors such as fluctuations in the Company's
operating results, announcements of technological innovations or new products
and/or services by the Company or its competitors, governmental regulatory
action, developments with respect to
<PAGE> 7
patents or proprietary rights and general market conditions. In addition, the
stock market has, from time to time, experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies. Significant fluctuations may impede our ability to secure equity
financing or complete business combination transactions on favorable terms
to the Company.
8. The possible need for additional financing may impeded our ability to
manage operations at an optimal level.
Our ultimate success may depend upon the ability to raise additional capital.
We have not investigated the availability, source, or terms that might govern
the acquisition of additional capital. We will not investigate these issues
until it determines a need for additional financing. If additional capital is
needed, there is no assurance that funds will be available from any source.
Also, if additional capital is available, there can be no assurance that
additional capital can be obtained on terms acceptable to the Company. If
additional capital is not available, our operations will be limited to those
that can be financed with our modest capital.
9. Our Company's indemnification of officers and directors may result in
substantial expenditures by the Company.
Our Articles of Incorporation provide for the indemnification of directors,
officers, employees, and agents, under certain circumstances, against
attorney's fees and other expenses incurred by them in any litigation to which
they become a party arising from their association with or activities on
behalf of the Company. We will also bear the expenses of such litigation for
any directors, officers, employees, or agents, upon such person's promise to
repay the Company therefor if it is ultimately determined that any such person
shall not have been entitled to indemnification. This indemnification policy
could result in substantial expenditures by the Company that it will be
unable to recoup.
10. Rule 144 sales may have a depressive impact on the Company's stock.
Certain of the outstanding shares of common stock held by present stockholders
are "restricted securities" within the meaning of Rule 144 under the
Securities Act of 1933, as amended.
As restricted shares, these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other applicable
exemptions from registration under the Act and as required under applicable
state securities laws. Rule 144 provides in essence that a person who has held
restricted securities for a prescribed period may, under certain conditions,
sell every three months, in brokerage transactions, a number of shares that
does not exceed the greater of 1.0% of a company's outstanding common stock or
the average weekly trading volume during the four calendar weeks prior to the
sale. As a result of revisions to Rule 144 which became effective on or about
April 29, 1997, there will be no limit on the amount of
<PAGE> 8
restricted securities that may be sold by a nonaffiliate after the restricted
securities have been held by the owner for a period of two years. A sale
under Rule 144 or under any other exemption from the Act, if available, or
pursuant to subsequent registrations of shares of common stock of present
stockholders, may have a depressive effect upon the price of the common stock
in any market that may develop.
11. Required regulatory disclosure relating to low-priced stocks may
negatively impact liquidity in our common stock.
As long as the trading price of the common stock is less than US$5.00 per
share, trading in the common stock in the US secondary market is subject to
certain rules promulgated under the Securities Exchange Act of 1934, which
rules require additional disclosure by broker-dealers in connection with any
trades involving a stock defined as a "penny stock" (generally, any non-NASDAQ
equity security that has a market price of less than US$5.00 per share,
subject to certain exceptions). Such rules require the delivery, prior to any
penny stock transaction, of a disclosure schedule explaining the penny stock
market and the risks associated therewith, and impose various sales practice
requirements on broker-dealers who sell penny stocks to persons other than
established customers and accredited investors. For these types of
transactions, the broker-dealer must make a special suitability determination
for the purchaser and have received the purchaser's written consent to the
transactions prior to sale.
The additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in our common stock,
which could severely limit the market liquidity and the ability of
stockholders to sell the common stock in the US secondary market.
12. Current prospectus and state blue sky requirements may impede our ability
to offer common stock in certain jurisdictions
We will be able to issue shares of its common stock only if there is then a
current prospectus relating to such common stock and only if such common stock
is qualified for sale or exempt from qualification under applicable state
securities laws of the jurisdictions in which the various holders of the
common stock reside. We have undertaken and intend to file and keep current a
prospectus that will permit the purchase and sale of the common stock, but
there can be no assurance that we will be able to do so. Although we intend to
seek to qualify for sale the shares of common stock in those states in which
the securities are to be offered, no assurance can be given that such
qualification will occur. The common stock may be deprived of any value and
the market for such shares may be limited if a current prospectus covering the
common stock is not kept effective or if such common stock is not qualified or
exempt from qualification in the jurisdictions in which the holders then
reside.
<PAGE> 9
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,400,000 shares of
common stock offered hereby, are estimated to be approximately $24,000,000.
We are selling the Shares on a best-efforts, no minimum basis for a period of
360 days. The Company cannot provide assurances that it will raise significant
proceeds from this offering and may receive no or nominal proceeds,
significantly restricting the Company's activities and plan of operations.
This offering will be sold on a first come, first serve basis.
Provided subscriptions exceed 2,400,000 shares, all excess subscriptions will
be promptly returned to such subscriber, without interest, and without
deduction for commissions or expenses. We will not use an underwriter or
securities dealer.
There can be no assurances that any amount of the offering will be sold. In
that event, there is a substantial risk to us that failure to receive
proceeds from this offering may significantly restrict our business
operations.
The Company will not receive any proceeds from the sale of securities by the
Selling Shareholders.
<TABLE>
<CAPTION>
The Company intends to utilize any proceeds approximately as follows:
$1,000,000 $5,000,000 $10,000,000 $15,000,000 $24,000,000
Amount of Amount of Amount of Amount of Amount of
Proceeds Proceeds Proceeds Proceeds Proceeds
Raised Raised Raised Raised Raised
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Production and 10,000 tons 50,000 tons 100,000 tons 150,000 tons 240,000 tons
Shipping of PVAXX of product of product of product of product of product
special polymers(1)
-------------------------------
(1) Represents all expenditures required to manufacture and ship PVAXX
specialized polymers to customers throughout the world.
</TABLE>
The foregoing represents the Company's best estimate of its allocation of the
net proceeds of this offering based upon the current state of its business,
operations and plans, current business conditions and the Company's evaluation
of its industry. Future events, including problems, delays, expenses and
complications which may be encountered, changes in economic or competitive
conditions and the results of the Company's sales and marketing activities may
make shifts in the allocation of funds necessary or desirable. Management will
have broad discretion to determine the use of proceeds.
<PAGE> 10
The Company believes that obtaining net proceeds of at least $1,000,000,
together with the cash generated from operations, will be sufficient to
support the Company's anticipated growth, expansion and marketing efforts for
at least 18 months following the completion of this Offering. There can be no
assurances that the Company will be able to obtain at least $1,000,000 of net
proceeds on a timely basis, or at all. In such event, the Company may be
unable to complete its current plans for expansion. If the Company requires
additional financing and is unable to obtain it, the Company's operations
will be materially adversely effected.
We have wide discretion in the use of our proceeds. We reserve the right to
use the funds obtained from this offering for other purposes not presently
contemplated which we deem to be in our best interest and the best interest of
our shareholders. As a result, our success will be substantially dependent
upon the discretion and judgment of our management. The application and
allocation of the net proceeds of the offering are determined by discretion
and judgment of our management.
Reports to Stockholders
We plan to furnish our stockholders with an annual report for each fiscal year
containing financial statements audited by our independent certified public
accountants. Additionally, we may, in our sole discretion, issue unaudited
quarterly or other interim reports to our stockholders when it deems
appropriate, issue Company newsletters and update our website at www.pvaxx.com.
We intend to comply with the periodic reporting requirements of the Securities
Exchange Act of 1934 for so long as the Company is subject to those
requirements.
DETERMINATION OF OFFERING PRICE
Prior to this Offering, there has been no public market for the Securities.
The initial public offering price for the common stock has been determined by
the Company. Among the factors considered were the market price of the
Company's common stock, an analysis of the areas of activity in which the
Company is engaged, the present state of the Company's business, the Company's
financial condition, the Company's prospects, an assessment of management, and
the general condition of the securities market at the time of this Offering.
The public offering price of the common stock does not necessarily bear any
relationship to assets, earnings, book value or other criteria of value
applicable to the Company.
The Company anticipates that the common stock will be submitted for quotation
on the Over-the-Counter Bulletin Board ("OTC:BB") under the symbol "PVXX", but
there can be no assurances that an active trading market will develop, even if
the securities are accepted for quotation.
<PAGE> 11
CAPITALIZATION
The following is the capitalization of our company as of June 30, 2000.
<TABLE>
<CAPTION>
AMOUNT TO BE
AMOUNT AMOUNT OUTSTAND. UPON
TITLE OF CLASS AUTHORIZ. OUTSTAND. ISSUANCE OF ALL SHARES
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock,
No par value 40,000,000 21,322,800 23,722,800
Preferred Stock 10,000,000 10,000,000 10,000,000
</TABLE>
The following table sets forth the capitalization of the Company as of
September 30, 2000. This table should be read in conjunction with the
financial statements and notes thereto included
elsewhere in this Prospectus.
Actual
-------------
Long-term Debt $ -0-
Stockholders' equity:
Common stock (no par value) 204,200
40,000,000 shares authorized; 21,322,800
shares issued and outstanding (actual) and
23,722,800 (as adjusted)
Preferred Stock, 10,000,000 shares
authorized;
Series A Convertible 100,000
Additional paid-in capital 217,914
Retained earnings (469,494)
Currency Conversion 88.82
Total stockholders' equity $ 61,502
Total capitalization $ 61,502
-------------------------------------------------
<PAGE> 12
PLAN OF DISTRIBUTION
Conduct of the offering
We hereby offer the right to subscribe for 2,400,000 shares at $10.00 per
share on a best-efforts, no minimum basis for a period of 360 days. We will
not use an underwriter or securities dealer. The Company cannot provide
assurances that it will raise significant proceeds from this offering and may
receive no or nominal proceeds, significantly restricting the Company's
activities and plan of operations. We will not compensate any person in
connection with the offer and sale of the shares.
Our board members, Henry Stevens and Bryan Wade, or additional officers as
they are appointed, shall distribute prospectuses related to the offering.
We estimate that they will distribute approximately 50 to 100 prospectuses,
limited to acquaintances, friends and business associates, most of whom will
not be citizens of the United States.
Henry Stevens and Bryan Wade shall conduct the offering of the shares.
Although Mr. Stevens and Mr. Wade are an "associated person" as that term is
defined in Rule 3a4-1 under the Securities Exchange Act, they will not be
deemed to be a broker because:
- they will not be subject to a statutory disqualification as that term is
defined in Section 3(a)(39) of the Securities Exchange Act at the time of the
sale of our securities;
- they will not be compensated in connection with the sale of our shares;
- they will not be an associated person of a broker or dealer at the time of
their participation in the sale of our securities; and
- they shall restrict their participation to the following activities:
(i) preparing written communications or delivering them through the mails
or other means that does not involve their oral solicitation of a
potential purchaser;
(ii) responding to inquiries of potential purchasers in communications
initiated by potential purchasers, provided however, that the content
of each response is limited to information contained in the
registration statement; or
(iii) performing ministerial and clerical work involved in effecting any
transaction.
As of the date of the prospectus, we have not retained a broker in connection
with the sale of the shares. In the event we retain a broker who may be
deemed an underwriter, we will file an amendment to the registration statement
with the Commission. However, we have no present intention of using a broker.
<PAGE> 13
No member of our management, no promoter or anyone acting at their direction
will recommend, encourage or advise investors to open brokerage accounts with
any broker-dealer which makes a market in the shares. Our investors shall
make their own decisions regarding whether to hold or sell their securities.
We shall not exercise any influence over investors' decisions.
Method of subscribing
Persons may subscribe for shares by filling in and signing the subscription
agreement and delivering it to us prior to the expiration date. Subscribers
must pay $10.00 per share in cash or by check, bank draft or postal express
money order payable in United States dollars to "PVAXX Corporation".
Provided subscriptions exceed 2,400,000 shares, all excess subscriptions will
be promptly returned to such subscriber, without interest, and without
deduction for commissions or expenses. We will not use an underwriter or
securities dealer.
Our officers, directors, current stockholders and any of their affiliates or
associates may purchase up to 5% of the shares. Such purchases may be made in
order to obtain at least $1,200,000 of net proceeds in this offering. Shares
purchased by our officers, directors and principal stockholders will be
acquired for investment purposes and not with a view toward distribution.
Expiration date
The offering will end the earlier of the receipt of subscriptions for
2,400,000 shares or 360 days from the date of the prospectus.
Limited State Jurisdictions Where Securities Are to be Offered
The common stock offered hereby may be eligible for sale only in certain
states, and, in some of those states, may be offered or sold only to
"institutional investors", as defined under applicable state securities law.
No sales or distributions, other than as described herein, may be effected
after this Prospectus shall have been appropriately amended or supplemented.
Under the securities laws of certain states, the shares may be sold in those
states only through registered or licensed broker-dealers or pursuant to
available exemptions from such requirements. In addition, in certain states
the shares may not be sold therein unless the shares have been registered or
qualified for sale in such state or an exemption from such requirement is
available and is complied with.
Upon approval, the securities will be offered in at least the following
jurisdictions by salespersons of the issuer:
Florida Washington, D.C.
Colorado New York
<PAGE> 14
Only residents of those states in which the shares have been approved for sale
under applicable securities or Blue Sky laws may purchase shares in this
Offering. Each potential investor will be required to execute an investment
representation and subscription agreement that, among other things, requires
the potential investor to certify his or her state of residence. A potential
investor who is a resident of a state other than a state in which the shares
have been qualified for sale may request that the Company register the shares
in the state in which such investor resides. However, the Company is under no
obligation to do so, and may refuse any such request.
Special Standards for Securities Sold in California
Each California investor must have an annual gross income of at least $65,000
and a net worth, exclusive of home, furnishings and automobiles, of at least
$250,000, or in the alternative, a net worth, exclusive of home, furnishings
and automobiles, of at least $500,000. In addition, an investor's total
purchase may not exceed 10% of such investor's net worth.
Investor Relations Arrangements
Our company may enter into an investor relations agreement. Under the
agreement, an investor relations firm is engaged to provide investor
relations, corporate communications and related support services to our
company, specifically including, among other duties, the development of a
comprehensive plan for the dissemination of our information to shareholders as
well as brokers, analysts and potential investors; advising our company
regarding trends and changes in the Over-the-Counter Bulletin Board brokerage
and investment community, as well as changes in share ownership of our shares,
all in the context of providing appropriate investor relations communications;
coordinating investor and shareholder contacts with our counsel to ensure
compliance with applicable securities laws and exchange listing requirements;
and assisting us with on-site investor relations meetings and with the design,
preparation and dissemination of investor relations materials. No specific
firm has been targeted by the Company and there can be no assurance that one
will ever be engaged, or will be willing to be engaged by the Company on
favorable terms.
LEGAL PROCEEDINGS
Neither our company nor any of our affiliates are a party, nor is any of
their property subject, to material pending legal proceedings or material
proceedings known to be contemplated by governmental authorities.
<PAGE> 15
DIRECTORS, EXECUTIVE OFFICERS AND SENIOR MANAGEMENT
Management
Members of Management will devote their full time and attention to the
operations of the Company.
The following table sets forth the ages of and positions and offices
presently held by each Director of the Company.
<TABLE>
<CAPTION>
Date First
Became Positions and Offices
Name Age Director With the Company
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Henry Stevens(1) 37 June 26, 2000 President and Director
Bryan Wade(1) 53 June 26, 2000 Vice President, Secretary and
Director
--------------------------------------------------------------------------------
</TABLE>
(1) The persons listed are the sole officers and directors of the Company.
The board plans to adopt stock option plans and incentive-based restricted
stock plans for officers, directors and employees of the Company although
terms and conditions have not been established or agreed upon. Otherwise,
management has no plans to issue any additional securities to management,
promoters or their affiliates or associates and will do so only if such
issuance is in the best interests of shareholders of the Company and complies
with all applicable federal and state securities rules and regulations.
Although the Company has a very large amount of authorized but unissued common
and preferred stock that may be issued without further shareholder approval or
notice, it is the intention of the Company to avoid inhibiting certain
transactions with prospective acquisition or merger candidates, based upon the
perception by such candidate that the biodegradable plastics industry is
rapidly expanding and may not afford the opportunity to proxy shareholders
each time our management needs to authorize additional shares.
<PAGE> 16
Personal Biographies and Summary of Experience
HENRY STEVENS, President and Director
From 1979 to 1986, Mr. Stevens was the Agricultural Manager in Bisley, UK.
From there, Mr. Stevens was a design consultant in packaging development at
Deranged Design from 1987 to 1993. It was here that Mr. Stevens first became
involved with PVA polymers. He was Managing Director at Churchill Technology
(IOM) Ltd., which is a PVA technology company. He then served as Managing
Director of FIP Holdings, Ltd., which is a PVA development company until
1997. In 1998, Mr. Stevens began serving as Managing Director of PVAXX
Group. His experience with PVA materials, particularly in young companies,
will certainly be a valuable tool in PVAXX's development.
Mr. Stevens is a director and shareholder of Jumik Investments, Inc., and
investment holding company that he controls and manages.
BRYAN WADE, Vice President and Director
Mr. Wade has extensive sales and marketing experience, beginning in 1985, when
he served as Director of Multi-National Sales and Marketing at CFS. Mr. Wade
held similar positions in Weststar Marketing and SAS Marketing Ltd. In 1995
Mr. Wade was sent to America to establish the US arm of SAS Ltd. SAS Inc.
started trading in February of 1996, selling a US made product into the motor
industry in Florida, By the following year, SAS Inc. had achieved the position
as the number one distributor for this product throughout the United States.
Early in 2000, Mr. Wade joined PVAXX as a Vice President, overseeing all sales
and marketing for the company. Still acting as the President of SAS Inc.,
his role in the Company is more on an advisory basis with regard to sales and
administration.
LAURENCE CALLOW, Chief Executive Officer
Mr. Callow is a successful General Manager with a marketing and business
development background in OTC healthcare, fmcg and food technology where he
has helped to establish a new high-technology sweetener production plant from
scratch in Dubai, U.A.E. He also helped launch a new sweetener business for
Tate & Lyle in Jeddah, Saudi Arabia, developed the European Marketing Strategy
for a sweetener product for Tate & Lyle in a joint venture with Johnson &
Johnson, and has introduced a new pace and focus to the Category Development
Trade Marketing Team at Pepsico Food International by reorganizing the
function to significantly reduce cost.
Mr. Callow was Managing Director and Vice President -Group Business
Development for Concept Foods International from 1998-Present. He was also
the General Manager, Sales and Marketing-USC Middle East/Africa/Asia and
European Marketing Manager for Tate & Lyle
<PAGE> 17
International from 1994-1998, was Business Development Director for Holmes &
Marchant Healthcare from 1992-1994, was Senior Trade Marketing Manager for
Pepsico Foods International from 1990-1992, was the Group Brand Manager for
GD Searle Pharmaceuticals from 1984-1989 and was Brand Manager for Warner
Lambert Healthcare from 1980-1884.
Mr. Callow received a BSc (Hons) in Business Administration from Aston
University, U.K. He is a Member of the Chartered Institute of Marketing
(MCIM) and completed the Senior Executive Development Programme while
employed at Tate & Lyle.
JAMES Q. MATHIAS, ESQ., Vice President, Marketing
Mr. Mathias served as Director of Penchant Foods (London W3) from 1992-2000,
where he directed expertise in all aspects of business management, buying,
marketing, logistics, branding, packaging and new product development and
sales. He was also Product Marketing Manager for Sony (VE) London from
1989-1991, and was Brand Manager for Times Corporation (London W7) from
1987-1989.
Mr. Mathias received a Post-graduate Diploma in Marketing from Bristol
Polytechnic in 1987 and a Business Studies-HND from Brighton Polytechnic in
1985.
---------------------------------------------------------
Management Loans and Borrowing
The Company's executive officers and directors do not plan to negotiate loan
agreements, nor do they have understandings between the Company and third
parties. Certain of the Company's officers and shareholders have verbally
agreed that they will advance to the Company some additional funds that the
Company needs for operating capital. The Company will not borrow any funds
from anyone other than its current shareholders for the purpose of repaying
advances made by the shareholders, and the Company will not borrow any funds
to make any payments to the Company's promoters, management or their
affiliates or associates.
Consultants
The Company is a development stage company and currently has limited
employees. Management of the Company expects to use attorneys and accountants
as necessary. The need for additional employees and their availability will
be addressed in connection with the decision whether or not to commence
certain business objectives.
Since Company management has no current plans to use any outside consultants
or advisors, no policies have been adopted regarding use of such consultants
or advisors, the criteria to be used in selecting such consultants or
advisors, the services to be provided, the term of service, or regarding the
total amount of fees that may be paid.
<PAGE> 18
Board of Directors
Colorado provides that a corporation's board of directors may be divided into
various classes with staggered terms of office. Our directors are elected for
a term of three years and until their successors are elected and qualified.
Number of Directors
Our board of directors currently consists of two directors. The number of
directors on our board may only be changed by a vote of a majority of our
directors, subject to the rights of the holders of any outstanding series of
our Company's preferred stock to elect additional directors.
Removal of Directors
Our directors, or the entire board, may be removed for cause by the
affirmative vote of the holders of at least 50% of the outstanding shares of
common stock entitled to vote in the election of directors, voting as a single
class and subject to the rights of the holders of any outstanding series of
our Company's preferred stock.
Filling Vacancies on the Board of Directors
Any newly created directorships in our board of directors, resulting from any
increase in the number of authorized directors or any vacancies, may be filled
by a majority of the remaining members of such board of directors, even though
less than a quorum, or in the case of our company, by a sole remaining
director, subject to the rights of holders of any outstanding series of
preferred stock. Newly created directorships or decreases in directorships in
our board of directors are to be apportioned among the classes of directors so
as to make all classes as nearly equal in number as practicable, provided that
no decreases in the number of directors in our board of directors may shorten
the term of any director then in office.
To the extent reasonably possible, any newly created directorship will be
added to the class of directors whose term of office is to expire at the
latest date following the creation of that directorship, unless otherwise
provided for by resolution of the majority of the directors then in office.
Any newly eliminated directorship will be subtracted from the class whose
office is to expire at the earliest date following the elimination of the
directorship, unless otherwise provided for by resolution of the majority of
the directors then in office.
<PAGE> 19
Ability to Call Special Meetings
Special meetings of our Company's stockholders may be called by our board of
directors, by affirmative vote of a majority of the total number of authorized
directors at that time, regardless of any vacancies, or by the chief
executive officer.
Advance Notice Provisions for Stockholder Nominations and Proposals
Our bylaws allow stockholders to nominate candidates for election to the board
of directors at any annual or any special stockholder meeting at which the
board of directors has determined that directors will be elected. In
addition, the bylaws allow stockholders to propose business to be brought
before any annual stockholder meeting. However, nominations and proposals may
only be made by a stockholder who has given timely written notice to the
Secretary of our Company before the annual or special stockholder meeting.
Under our Company's bylaws, to be timely, notice of stockholder nominations or
proposals to be made at an annual stockholder meeting must be received by the
Secretary of our Company no less than 60 days nor more than 90 days before the
first anniversary of the preceding year's annual stockholder meeting. If the
date of the annual meeting is more than 30 days before or more than 60 days
after the anniversary of the preceding year's annual stockholder meeting,
notice will also be timely if delivered within 10 days of the date on which
public announcement of the meeting was first made by our Company.
In addition, if the number of directors to be elected is increased and no
public announcement is made by us naming all of the nominees or specifying the
size of the increased board of directors at least 70 days before the first
anniversary of the preceding year's annual meeting, or, if the date of the
annual meeting is more than 30 days before or 60 days after the anniversary
of the preceding year's annual meeting, at least 70 days before the annual
meeting, a stockholder's notice will be considered timely, with respect to the
nominees for any new positions created by the increase, if it is delivered to
the Secretary of our company within 10 days of the date on which public
announcement of the meeting was first made by us.
Under our bylaws, to be timely, notice of a stockholder nomination to be made
at a special stockholder meeting must be received no less than 60 days nor
more than 90 days before a special meeting at which directors are to be
elected or within 10 days of the date on which public announcement of the
special meeting was first made by our Company.
<PAGE> 20
A stockholder's notice to us must set forth all of the following:
-all information required to be disclosed in solicitations of proxies for
election of directors, or information otherwise required by applicable law,
relating to any person that the stockholder proposes to nominate for election
or reelection as a director, including that person's written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected
-a brief description of the business the stockholder proposes to bring before
the meeting, the reasons for conducting that business at that meeting and any
material interest of the stockholder in the business proposed
-the stockholder's name and address as they appear on our books and the class
and number of shares which are beneficially owned by the stockholder
-The chairman of our stockholder meeting will have the power to determine
whether the nomination or proposal was made by the stockholder in accordance
with the advance notice procedures set forth in our bylaws.
-If the chairman determines that the nomination or proposal is not in
compliance with advance notice procedures, the chairman may declare that the
defective proposal or nomination will be disregarded.
Director Compensation
The directors of our Company, who are all executive officers as well, are not
compensated for serving.
Limitation of Liability and Indemnification
Our Articles of Incorporation provide that a director of our Company shall not
be personally liable to the Company or any of its shareholders for monetary
damages for breach of fiduciary duty as a director, except for liability:
(i) for any breach of the director's duty of loyalty to the Company or its
shareholders,
(ii) for acts or omissions not in good faith or which involve gross
negligence, intentional misconduct or a knowing violation of law,
(iii) for any unlawful distribution as set forth in the Colorado Model Business
Corporation Act of Colorado; or
<PAGE> 21
(iv) for any transaction from which the director derived an improper personal
benefit. These provisions may have the effect in certain circumstances of
reducing the likelihood of derivative litigation against directors. While
these provisions may eliminate the right to recover monetary damages from
directors in various circumstances, rights to seek injunctive or other
non-monetary relief is not eliminated.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our outstanding
common stock on September 30, 2000 by (i) each director and executive officer
of our company, (ii) all directors and executive officers of our company as a
group, and (iii) each shareholder who was known by us to be the beneficial
owner of more than five percent (5%) of our outstanding shares:
<TABLE>
<CAPTION>
----------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK
----------------------------------------------------
Name and address # of % of
of beneficial owner shares Class Options
--------------------------------------------------------------------------------
Jumik Investments, Inc. 16,613,815 77.9000% -
Henry Stevens, Majority
and Controlling Shareholder
Henry Stevens 10,000 00.0005% -
All Officers and
Directors as a Group 16,623,815 77.9600% -
PREFERRED STOCK
----------------------------------------------------
Jumik Investments, Inc 10,000,000 100.000% -
Henry Stevens, Majority
and Controlling Shareholder
</TABLE>
<PAGE> 22
The beneficial owners have sole voting and investment power with respect to
the ownership and potential disposition of their securities.
Our management has advised that we may acquire additional shares of our common
stock from time to time in the open market at prices prevailing at the time
of such purchases.
Our company's key personnel bring a broad range of private and public
management, corporate finance and technical skills to the Company.
DESCRIPTION OF CAPITAL STOCK
As of the date hereof, the authorized share capital of our company consists of
forty million (40,000,000) common shares of which 21,322,800 common shares are
issued and outstanding, and ten million (10,000,000) preferred shares
10,000,000 of which is designated as series A preferred stock of which
10,000,000 series A convertible shares are issued and outstanding. The
following is a summary of the principal attributes of the share capital of
our company.
Common Shares
The rights, privileges, restrictions and conditions attached to the common
shares are as follows:
Voting
Holders of our common shares shall be entitled to receive notice of and to
attend and vote at all meetings of shareholders of our company, except
meetings of holders of another class of shares. Each common share shall
entitle the holder thereof to one vote.
Dividends
Subject to the preferences accorded to holders of series A shares and any
other shares of the Company ranking senior to the common shares from time to
time with respect to the payment of dividends, holders of common shares shall
be entitled to receive, if, as and when declared by the board of directors,
such dividends as may be declared thereon by the board of directors from time
to time.
Liquidation, Dissolution or Winding-Up
In the event of the voluntary or involuntary liquidation, dissolution or
winding-up of our company, or any other distribution of its assets among its
shareholders for the purpose of winding-up its affairs, such event referred
to herein as a "Distribution", holders of common shares shall be entitled,
subject to the preferences accorded to holders of the series A shares and
<PAGE> 23
any other shares of the Company ranking senior to the common shares from time
to time with respect to payment on a Distribution, to share equally, share
for share, in the remaining property of the Company.
Preferred Shares
Our articles of incorporation provide that the board of directors is
authorized to provide for the issuance of shares of undesignated preferred
stock in one or more series, and to fix the designations, powers, preferences
and rights of the shares of each series and any qualifications, limitations
or restrictions thereof.
The number of authorized shares of our company undesignated preferred stock
may be increased by the affirmative vote of the holders of a majority of our
company's common stock, without a vote of the holders of preferred stock,
unless their vote is required pursuant to the terms of any preferred stock
then outstanding. The number of authorized shares of undesignated preferred
stock of our company may be reduced or eliminated by the affirmative vote of
the holders of 80% of the outstanding capital stock entitled to vote in the
election of directors, voting together as a single class.
Attributes
Subject to the filing of Articles of Amendment in accordance with the Act, the
board of directors may from time to time fix, before issuance, the
designation, rights, privileges, restrictions and conditions attached to each
series of preferred shares including, without limiting the generality of the
foregoing, the amount, if any, specified as being payable preferentially to
such series on a Distribution; the extent, if any, of further participation on
a Distribution; voting rights, if any; and dividend rights (including whether
such dividends be preferential, cumulative or non-cumulative), if any.
Liquidation
In the event of a Distribution, holders of each series of preferred shares
shall be entitled, in priority to holders of common shares and any other
shares of our company ranking junior to the preferred shares from time to time
with respect to payment on a Distribution, to be paid ratably with holders of
each other series of preferred shares the amount, if any, specified as being
payable preferentially to the holders of such series on a Distribution.
Dividends
The holders of each series of preferred shares shall not be entitled to
dividends.
<PAGE> 24
Our Company has never paid any dividends on its common shares and intends to
retain its earnings to finance the growth and development of our business and
does not expect to pay dividends in the near future. The board of directors
of our company will review this policy from time to time having regard to our
financing requirements, financial condition and other factors considered
relevant.
Restrictions on Transfer
Affiliates of our Company under the Securities Act of 1933, as amended are
persons who generally include individuals or entities that control, are
controlled by, or are under common control with the Company and may include
certain officers and directors of the company as well as principal
stockholders of the company. Persons who are affiliates of the Company will
be permitted to sell their shares of the company only pursuant to an effective
registration statement under the Securities Act or an exemption from the
registration requirements of the Securities Act, such exemptions afforded by
Section 4(1) or 4(2) of the Securities Act or Rule 144 thereunder.
Certain Protective Provisions
General
The articles and bylaws of our Company and the Colorado revised statutes
contain certain provisions designed to enhance the ability of the board of
directors to deal with attempts to acquire control of our Company. These
provisions may be deemed to have an anti-takeover effect and may discourage
takeover attempts that have not been approved by the board of directors
(including potential takeovers which certain shareholders may deem to be in
their best interest) and may adversely effect the price that a potential
purchaser would be willing to pay for our stock. These provisions also could
discourage or make more difficult a merger, tender offer or proxy contest,
even though such transaction may be favorable to the interests of
shareholders, and could potentially adversely effect the price of our common
stock.
The following briefly summarizes protective provisions contained in the
articles, the bylaws and the Colorado revised statutes. This summary is
necessarily general and is not intended to be a complete description of all
the features and consequences of these provisions, and is qualified in its
entirety by reference to our articles, bylaws and the provisions of the
Colorado revised statutes.
Our Company has one class of common stock issued and outstanding. Holders of
our Company's common stock are each entitled to one vote for each share held.
<PAGE> 25
Amendment of Articles of Incorporation
Under Colorado law, articles of incorporation of a Colorado corporation may
be amended by approval of the board of directors of the corporation and the
affirmative vote of the holders of a majority of the outstanding shares
entitled to vote for the amendment, unless a higher vote is required by the
corporation's articles of incorporation.
Our articles of incorporation provides that the affirmative vote of the
holders of at least 50% of the outstanding shares of capital stock of our
Company entitled to vote in the election of directors, voting together as a
single class, will be required to reduce or eliminate the number of authorized
shares of common stock or preferred stock, or to amend, repeal or adopt any
provision inconsistent with the provisions of the articles of incorporation
which deal with the following:
- undesignated preferred stock
- matters relating to the board of directors, including the number of
members, board classification, vacancies and removal
- the powers and authority expressly conferred upon the board of directors
- the manner in which stockholder action may be effected
- amendments to bylaws
- business combinations with interested stockholders of our Company
- indemnification of officers and directors of our Company
- the personal liability of directors to our Company or its stockholders for
breaches of fiduciary duty
- the amendment of our Company's articles of incorporation
Amendment of Bylaws
Under Colorado law, stockholders entitled to vote have the power to adopt,
amend or repeal bylaws. In addition, a corporation may, in its articles of
incorporation, confer such power upon the board of directors. The stockholders
always have the power to adopt, amend or repeal bylaws, even though the board
may also be delegated such power.
Our board of directors is expressly authorized to adopt, amend and repeal the
bylaws by an affirmative vote of a majority of the total number of authorized
directors at that time, regardless of any vacancies.
Our bylaws may also be adopted, amended and repealed by the affirmative vote
of the holders of at least 50% of the outstanding shares of capital stock
entitled to vote in the election of directors, voting together as a single
class.
<PAGE> 26
Limitation of Liability of Directors
The Colorado revised statutes permits a corporation to include a provision in
its articles of incorporation eliminating or limiting the personal liability
of a director or officer to the corporation or its stockholders for damages
for a breach of the director's fiduciary duty, subject to certain
limitations.
Our articles of incorporation include such a provision to the maximum extent
permitted by law.
While these provisions provide directors with protection from awards for
monetary damages for breaches of their duty of care, they do not eliminate
that duty. Accordingly, these provisions will have no effect on the
availability of equitable remedies such as an injunction or rescission based
on a director's breach of his duty of care.
Indemnification of Directors and Officers
The Colorado revised statutes permit a corporation to indemnify officers and
directors for actions taken in good faith and in a manner they reasonably
believed to be in, or not opposed to, the best interests of the corporation,
and with respect to any criminal action, which they had no reasonable cause to
believe was unlawful. Our articles of incorporation and bylaws provide that
any person who was or is a party or is threatened to be a party to or is
involved in any action, suit, or proceeding, whether civil, criminal,
administrative or investigative, because that person is or was a director or
officer, or is or was serving at the request of either of us as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, will be indemnified against expenses,
including attorney's fees, and held harmless by each of us to the fullest
extent permitted by the Colorado revised statutes. The indemnification rights
conferred by each of us are not exclusive of any other right to which persons
seeking indemnification may be entitled under any statute, our articles of
incorporation or bylaws, any agreement, vote of stockholders or disinterested
directors or otherwise. In addition, each of us is authorized to purchase and
maintain insurance on behalf of its directors and officers.
Additionally, each of us may pay expenses incurred by our directors or
officers in defending a civil or criminal action, suit or proceeding because
that person is a director or officer, in advance of the final disposition of
that action, suit or proceeding. However, such payment will be made only if we
receive an undertaking by or on behalf of that director or officer to repay
all amounts advanced if it is ultimately determined that he or she is not
entitled to be indemnified by us, as authorized by our articles of
incorporation and bylaws.
<PAGE> 27
REGISTRAR AND TRANSFER AGENT
Our transfer agent is Computershare Trust Company, 12039 West Alameda
Parkway, Suite Z-2, Lakewood CO 80228, telephone: (303) 986-5400.
INTEREST OF NAMED EXPERTS AND COUNSEL
IN REGISTRATION STATEMENT
No expert named in this prospectus was paid on a contingent basis or had a
material interest in our Company or any of its subsidiaries or was connected
with our company or any of its subsidiaries as a promoter, underwriter,
voting trustee, director, officer or employee.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation provide that a director shall not be personally
liable to any of its shareholders for monetary damages for breach of
fiduciary duty as a director, except liability for the following:
(a)any breach of the director's duty of loyalty to our Company or its
shareholders;
(b)acts or omissions not in good faith or which involve gross negligence
intentional misconduct or a knowing violation of law;
(c)any unlawful distribution as set forth in the General Corporation Law of
the State of Colorado; or
(d)any transaction from which the director derived an improper personal
benefit.
These provisions may have the effect in certain circumstances of reducing the
likelihood of derivative litigation against directors. While these provisions
may eliminate the right to recover monetary damages from directors in various
circumstances, rights to seek injunctive or other non-monetary relief are not
eliminated.
Our By-laws provide for indemnification of our company's directors to the
fullest extent permitted by law. The bylaws also permit our company, through
action of the board of directors, to indemnify the officers or employees to
the fullest extent permitted by law.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of our company
pursuant to the foregoing provisions, or otherwise, we have been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by our company of expenses incurred or
paid by a director, officer or controlling
<PAGE> 28
person in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, our company will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
Rule 144 and Shares Eligible for Future Sale
Upon the consummation of this Offering, the Company will have 23,722,800
shares of common stock outstanding. Only those sold in this Offering
(2,400,000 shares of common stock) and shares registered for the accounts of
certain Selling Shareholders (4,708,985) will be freely tradeable without
restriction or further registration under the Securities Act, as amended,
except for any shares purchased by an affiliate of the Company (in general, a
person who has a control relationship with the Company) which will be subject
to the limitations of Rule 144 adopted under the Securities Act, as amended.
All of the remaining 16,633,815 shares are deemed to be restricted securities,
as that term is defined under Rule 144 promulgated under the Securities Act,
as amended, in that such shares were issued and sold by the Company in private
transactions not involving a public offering, all of which are subject to
lock-up restrictions described below.
One million two hundred thousand (1,200,000) shares of common stock are held
by certain shareholders of the Company, issued pursuant to Rule 701. However,
recent correspondence directed from the Commission to the NASD suggests that
Rule 144 sales by founding affiliates or their successors/assigns will
generally not be afforded an opportunity to rely on Rule 144 for "safe harbor"
re-selling under such rule and will most likely only be able to transfer such
securities pursuant to an effective registration statement filed under the
Securities Act of 1933.
In general, under Rule 144 as currently in effect, subject to the satisfaction
of certain other conditions, a person, including an affiliate of the Company
(or other persons whose shares are aggregated), who has owned restricted
shares of Common Stock beneficially for at least two years is entitled to
sell, within any three month period, a number of shares that does not exceed
the greater of one percent of the total number of outstanding shares of the
same class or the average weekly trading volume during the four calendar weeks
preceding the sale. A person who has not been an affiliate of the Company for
at least the three months immediately preceding the sale and who has
beneficially owned shares of Common Stock for at least three years is
entitled to sell such shares under Rule 144 without regard to any of the
limitations described above.
Prior to this Offering, there has been no market for the common stock and no
prediction can be made as to the effect, if any, that market sales of shares
of common stock or the availability of such shares for sale will have on the
market prices prevailing from time to time. Nevertheless, the possibility that
substantial amounts of common stock may be sold in the public market may
adversely affect prevailing market prices for the common stock and could
impair the Company's ability to raise capital through the sale of its equity
securities.
<PAGE> 29
Redistributions-Rule 144
Rule 144 of the Securities Act lists criteria under which restricted
securities and securities held by affiliates or control persons may be resold
without registration. The rule prevents the creation of public markets in
securities when the issuers have not made adequate current information
available to the public. Preliminary Note to Securities Act Rule 144. The
requirements of Rule 144(b) through (i) include provisions that:
1)current public information be available regarding the issuer of the
securities;
2)at least one year elapse between the time the securities are acquired from
an issuer or affiliate and the date the securities are resold under the rule;
3)the amount of securities able to be sold is limited, depending on whether
the sale is by an affiliate or not;
4)the securities be sold in brokers' transactions or with a market maker;
5)Commission Form 144 be filed depending on the size of the transaction; and
6)the person filing the form has a bona fide intention to sell the securities
within a reasonable time.
Secondary Trading Exemptions:
The National Securities Markets Improvement Act of 1996 provides for exemptive
provisions applicable to the status of secondary trading in the securities
following subsequent distributions to additional shareholders as follows:
Section 18(b) of the Securities Act of 1933, i.e., Subsection 18(b)(1),
18(b)(2), 18(b)(3) and 18(b)4 defines a covered security or federal covered
security. Exempt from state regulation are (1) investment companies
registered under the Investment Company Act of 1940; (2) certain securities
listed on nationally-recognized stock exchanges; (3) offers or sales made to
qualified purchasers; (4) certain transactions exempt from registration under
the Securities Act of 1933; (5) investment advisers with assets over
$25,000,000; and (6) Rule 506 offerings. States are still allowed to regulate
smaller offerings, penny stocks, intrastate offerings, and certain limited
offerings. Except for certain exchange-listed securities, the states may
still require notice filings and have the power to require registration or
suspend offerings for which notices have not been filed.
In particular, Section 18(b)(4)(A) provides that a security is a covered
security with respect to a transaction that is exempt from registration
pursuant to paragraph (1) or (3) of Section 4, and the issuer of such security
files reports with the Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
<PAGE> 30
Section 4(1) of the Act exempts transactions by any person other than an
issuer, underwriter, or dealer.
Section 4(3) of the Act exempts transactions by a dealer (including an
underwriter no longer acting as an underwriter in respect of the security
involved in such transaction), except--
(A) transactions taking place prior to the expiration of 40 days after the
first date upon which the security was bona fide offered to the public by
the issuer or by or through an underwriter;
(B) transactions in a security as to which a registration statement has been
filed taking place prior to the expiration of 40 days.
Based upon the foregoing, we believe that secondary trading opportunities may
exist pursuant to Sections 18(b)(4)(A), 4(1), 4(3) or 4(4) of the Act, in the
states referenced above, provided that the Company continues to timely files
reports required under Section 13 or 15(d) of the Exchange Act and effectuate
any filings that may be required in each respective state listed above, if
any.
Although the above information may provide secondary trading exemptions for
shareholders, provided they sell in full compliance with Rule 144 of the Act,
nonetheless, the Company must still timely file the reports required to be
filed as prescribed by Section 13 or 15(d) of the Exchange Act and must file
any required material with each respective state authority:
Unregistered Securities Issued or Sold Within One Year--
Recent Sales of Unregistered Securities.
The following transactions reflect the issuance during the previous year of
securities not registered under the Securities Act.
On July 10, 2000, the Company completed a business combination with its
predecessor as follows:
A Plan and Agreement of Share Exchange was executed on May 19, 1999, by and
among Oak Brook Capital IV, Inc. and the Company, who joined in the execution
of the Agreement for the purpose of making certain covenants regarding the
transactions contemplated therein. Oak Brook was a shell corporation duly
organized and validly existing under the laws of the state of Colorado.
At the Closing, each of the shareholders of the Company who were United States
citizens executed and delivered to Oak Brook an investment representation
letter statement in such form as reasonably requested by counsel. Oak Brook
subsequently issued, on a share-for-share basis, shares of its common stock to
each and every shareholder of the Company. Effectively, a change of control
occurred with the Company assuming control of Oak Brook.
<PAGE> 31
All such securities were issued to the shareholders of the Company with no
broker-dealer or underwriter involved and no commissions paid to any person
in respect thereto.
All such sales were made in reliance on Section 4(2), 4(6) and/or Regulation
D the Securities Act as transactions not involving a public offering. With
regard to the reliance by the Company upon the exemption from registration
provided under Section 4(2), 4(6) or Regulation D-Rule 506 of the Securities
Act for the sales of securities disclosed above, inquiries were made by the
Company to establish that such sales were qualified for exemption from the
registration requirements.
Section 4(2) Sales
In particular, the Company confirmed that with respect to any exemption
claimed under section 4(2) of the Securities Act:
(i) Each purchaser referred to gave written assurance of investment intent
and certificates for the shares sold to each purchaser bear a legend
consistent with such investment intent and restricting transfer;
(ii) Sales within any offering were made to a limited number of United States
citizens. No general solicitation to the public was made in connection
with such sales;
(iii) Each purchaser represented in writing that they (or in the case of
corporate investors) that their management are sophisticated investors;
(iv) Neither the Company nor any person acting on our behalf offered or sold
the shares by means of any form of general solicitation or general
advertising;
(v) No services were performed by any purchaser as consideration for the
shares issued; and
(vii) The purchasers represented in writing that they acquired the shares for
their own accounts.
The Company will continue to take the following action to ensure that a
public re-distribution of the shares does not take place:
(i) a restrictive legend will be placed on each stock certificate issued in
connection with the founder transactions;
(ii) stop transfer order instructions will be placed on each stock certificate
issued in connection with the founder transactions; and
(iii) shareholders have been placed on notice that their securities will need
to be sold in compliance with Rule 144 of the Act, and may not be
transferred otherwise.
<PAGE> 32
BUSINESS
--------------------------------------------------------------------------------
IMPORTANT FACTORS RELATED TO
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
--------------------------------------------------------------------------------
The statements contained in this registration statement that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including statements regarding the Company's
expectations, hopes, intentions or strategies regarding the future. All
forward-looking statements included in this document are based on information
available to the Company on this date, and the Company assumes no obligation
to update any such forward-looking statements. It is important to note that
the Company's actual results could differ materially from those in such
forward-looking statements. Among the factors that could cause actual results
to differ materially are the risk factors that may be listed from time to time
in the Company's reports on Form 10-QSB, 10-KSB and registration statements
filed under the Securities Act.
Forward-looking statements encompass the following:
-expectation that the Company can secure additional capital;
-continued expansion of the Company's operations through joint ventures and
acquisitions;
-success of existing and new marketing initiatives undertaken by the Company;
and
-success in controlling the cost of services provided and general
administrative expenses as a percentage of revenues.
The forward-looking statements included in this document are based on current
expectations that involve a number of risks and uncertainties. These
forward-looking statements were based on assumptions that:
-the Company would continue to expand;
-capital will be available to fund the Company's growth at a reasonable cost;
-competitive conditions within the industry would not change materially or
adversely;
-demand for the Company's services would remain strong;
-there would be no material adverse change in the Company's operations or
business; and
-changes in laws and regulations or court decisions will not adversely or
significantly alter the operations of the Company.
<PAGE> 33
Assumptions relating to the above statements involve judgments with respect to
future economic, competitive, regulatory and market conditions, and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although
the Company believes that the assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate and,
therefore, there can be no assurance that the forward-looking information will
prove to be accurate.
In light of the significant uncertainties inherent in the forward-looking
information included in this document, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives or plans of the Company will be achieved.
BUSINESS DESCRIPTION
Nature of Activities
PVAXX CORPORATION is the parent company of the PVAXX group of companies. The
PVAXX CORPORATION group consists of:
-PVAXX Technologies Ltd, which holds patents and intellectual property;
-PVAXX Research & Development Ltd, the company undertaking all ongoing trials
and developments, which also does business as PVAXX Engineering, which
designs and manufactures all of our machinery;
-PVAXX Soft Cap Systems which manufactures and supplies capsule making
machinery; and
-PVAXX Europe, Ltd which is a dormant company with no operations.
The Company recently took possession of a newly built European HQ in England
near Malmesbury in Wiltshire, which includes:
-3000 square feet sales offices;
-2000 square feet engineering departments;
-2000 square feet development labs; and
-4000 square feet manufacturing areas.
The Product
PVAXX is a completely biodegradable polymer. We believe PVAXX represents a
genuine advance in polymer technology. Management feels that PVAXX will be a
significant contributor to the reduction of negative environmental and
ecological impacts of plastics. PVAXX offers the potential of practical
solutions to worldwide waste disposal problems, as all products manufactured
from PVAXX biodegrade into non-toxic elements when disposed of through water
immersion or in landfill.
<PAGE> 34
PVAXX is a newly formulated polymer, created by a patented process and
manufactured from the chemical raw material Polyvinyl Alcohol 'pva' and other
food-grade additives, which have been used in consumer markets for over 25
years. Thus its properties, both physical and toxicological, as well as its
environmental impact from its bio-degradation on disposal, have been studied
in depth.
PVAXX, is a stable, flexible polymer similar to other everyday polymers. It is
available in various grades suitable for most product areas. PVAXX production
consumes a very low level of energy as no external heat is introduced,
creating potentially greater environmental advantages. PVAXX is significantly
less expensive than other biodegradable polymers currently in the market.
Production
PVAXX specialized polymers are already in production. Product is currently
being shipped in 50 Kilo drums to various potential customers at a price of
$1,200 per ton. Although the Company provides samples of potential
applications accompanying the PVAXX polymer shipment, prospective customers
are responsible to complete their own trials and tests to determine whether
PVAXX will be suitable for production of their products. If suitable, PVAXX
may be used to enable the customer to produce products such as film, sheet,
wrapping and packaging materials, fibers and mouldings with no toxic effects
on the environment at an affordable cost.
The various technologies that make up PVAXX were either acquired by or
developed within PVAXX Group. Development was undertaken within the Irish
Government Research and Development Department, PERA, Leeds University and
University of North London and within our own facilities both in England and
in the Isle of Man. These entities have a wide range of experience in the
development of laboratory led research and testing of polymers and plastic
processes and products. More than a decade of associated research and over
five years of laboratory and industrial assessment has gone into the
development of PVAXX. This includes full industrial, scientific and technical
assessment throughout its development.
PVAXX offers biodegradability at a cost that is competitive when compared with
other plastics. Alternative products based on starch additives, fragment, but
may not decompose. Those polymers that do biodegrade are generally expensive
and can be difficult to process.
Target Market
PVAXX is a competitively priced material thus it can be used by the customer
to manufacture basic and premium products. These include, but are not limited
to, the following areas listed together with some consumption examples.
-Agricultural Agro-chem sachets, Mulch films, Plant pots Household Bags,
Diapers, Drinking straws, Femcare products, Hangers, Incontinence pads,
Sachets, Six pack rings Industrial Chemical sachets, Disposable clothing,
Expanded foams, Gloves.
<PAGE> 35
-Leisure Film canisters, Golf tees, Shotgun cartridges Medical Bedpans, Bowls,
Cotton buds, Hospital curtains, 'One-use' sterile products, capsules.
PVAXX has been test marketed using a UK chemical/polymer distributor, enabling
the Company to refine such things as packaging, grades and pricing. The
manufacturing division is currently capable of producing up to 10,000 tons per
annum of PVAXX. Management believes the Company has the ability to
manufacture further production capacity to increase production by a further
20,000 tons per annum every 14 weeks when required. The raw materials used to
produce PVAXX are all sourced from the major manufacturers such as, Nippon
Gohsei, Omya, ECC, Chang Cheung, Unichema , Jordan Carbonate, etc.
Sales and Marketing
Markets
Eight percent of US household waste, over 13 million tons per year, is made up
of plastics and is consigned to landfill. This is repeated throughout the
developed world.
"....studies now confirm only 20 per cent of plastic waste could be
recycled.." said Mr. Reg. McCabe director of the Plastics Industries
Association of Ireland......in the light of growing public concern about
additional landfill sites.....business called on Government to help out with
136,000 tons of plastic packaging waste which are produced each year... PERA
has completed a detailed market study for the Company showing an immediate
market of 30 million tons in areas where PVAXX is cheaper or has other
attributes that make it immediately superior to current polymers being used
on the market today.
Marketing Plan
Management believes the Company offers a solution to customers and policy
makers by offering the option of an environmentally friendly polymer such as
PVAXX.
Press, Public Relations and Lobbying
Given the range of applications in all kinds of sectors in many parts of the
world, Management feels the public relations potential for PVAXX is
significant. The Company is beginning to create a multi language media
relations program embracing both trade and technical media, together with
national newspapers and magazines in appropriate sectors, such as food,
fashion, pharmaceuticals etc.
Recent production of PVAXX has presented the opportunity for a media event in
which we can effectively demonstrate the biodegradability of PVAXX. We can
also supply all media and key people we target with a small case of samples
that enables them to carry out their own experiments.
<PAGE> 36
Environmental attributes such as complete biodegradability are regularly
sought after by industry and policy makers especially due to plastic related
issues such as:
-Low environmental rating from cradle to grave;
-Endocrine mimicry; and
-Waste and packaging problems including landfill over capacity, incineration
and dioxin issue, take back requirements, recycling requirements, agricultural
leaching etc.
Due to new research on phthalates and similar plastics that can cause
endocrine mimicry, policy makers are looking at substitutes for such plastics
to justify a ban. In addition, governments are also looking to find solutions
to the high volumes of plastic waste accumulating in their landfills, the
toxicity problems of plastic residue in soil, groundwater or via leaching
directly into foodstuffs, and to the dioxin emissions when plastics are
burned. These issues have led to interim solutions such as recycling, take
back policies etc., but policy makers believe that the ultimate solution
remains the complete biodegradability of plastics.
Marketing Strategy
In order to properly inform policy makers of the existence and benefits of
PVAXX, Management intends to employ a two-tiered approach as follows:
(i) First, all relevant actors at the senior government level will be
personally informed of the environmental attributes of PVAXX. As the debate
on plastic products and waste develops, PVAXX must be seen developing in a
pro-active industry producing a new, environmentally safe product;
Provided the Company convinces officials through sound research, development
and environmental proof, new legislation adopted in its favor will likely be
forthcoming, so long as the informing process has been conducted in a
professional and diplomatic manner; and
(ii)Second, local and state governments and local authorities must also be
approached.
Throughout the entire informational process, new elements or developments must
be integrated into the strategy and used to influence each actor. In addition,
we hope to forge alliances with parties also interested in changing national
legislation to benefit cleaner plastics. These parties could be industry
federations or representatives as well as respected non-governmental
organizations.
<PAGE> 37
Interactive Website
A live website, initially cast in 5 languages, with an active inquiry office
and updateable news section, is available as part of our marketing strategy.
The selling of PVAXX via the Internet, supported by our technical centre at
www.pvaxx.com, provides 24-hour access to sales and technical information.
PVAXX has already started to appoint polymer and chemical distribution agents,
therefore increasing active promotion of PVAXX worldwide.
There is no advertising on our web site, nor are we entertaining potential
advertising at this time. Accordingly, the Company has not been involved in
the negotiation of preliminary agreements or understandings with any
advertisers.
Profile Document
We plan to produce a publication about PVAXX and the environment. It is
reflective of the website; but will be presented specifically for individuals
who influence the purchase of plastics.
Advertising
Through advertising, the Company has an opportunity to gain exposure both to
potential purchasers and those who can influence purchases. Media coverage of
the Company will provide useful additional advertising for the product. We
intend to place announcements of our product development in the FT, the Wall
Street Journal, Paris Match etc. together with product advertisements in
magazines in sectors such as food and drink, pharmaceuticals, etc.
Advertising Expenditure
We have budgeted approximately $160,000 for advertising with a possible growth
from earnings to $800,000. We hope to have good exposure that will enable us
to put PVAXX forward as a visible global brand. Of course, there can be no
assurances that such advertising budget can be generated through the offering,
internal operations or growth from earnings.
Competitive and Environmental Issues
General
The biodegradable plastics industry in which the Company operates is highly
competitive. Some of the company's principal competitors in certain business
lines are substantially larger and better capitalized than the Company.
Because of these resources, these companies may be better able than the
Company to obtain new customers and to pursue new business opportunities or
to survive periods of industry consolidation.
<PAGE> 38
Plastics have considerable utility but also result in significant amounts of
waste--both during manufacture and following their use as products.
Unfortunately this waste has a highly visible profile which, combined with its
indefinite lifespan, does not allow the problem to diminish. As environmental
issues become increasingly voiced, the use and disposal of traditional plastic
materials (which currently are non biodegradable,) are becoming a cause for
concern. Public opinion, i.e. regarding the threat to the environment, has
caused the European Union to outline quality standards for products,
production standards and pollution levels which will enable countries within
the EU to tighten their legislation.
Incineration
Apart from requiring considerable amounts of energy, incineration will also
produce vast quantities of gases, contributing to the 'greenhouse effect'.
PVC, one of the commonest pollutants, when combusted produces hydrogen
chloride, requiring expensive materials in the construction of incinerators
along with downstream acid gas scrubbing equipment. Overall, incineration is
expensive and creates further pollution.
Landfill
Land fill sites are expensive in terms of construction and management and tie
up valuable land for indefinite periods. They are filling up and closing at a
high rate so reducing the number of available sites.
Recycling
Recycling requires the physical separation on each waste site of all plastic
from non plastic material. This process then has to be followed by the
attempted sorting and segregation of different types of plastic from each
other, without the benefit of chemical analysis. Next, the waste is
transported to the recycling site for treating and re-analyzing before
re-inclusion into a manufacturing process.
Recycling is a time consuming and expensive task that is open to accidental
miss-sorting and subsequent abortive processing. To quote the British Plastics
Federation Statistics Handbook:-"the problem for industry is that reprocess
feedstocks are often of inconsistent quality and there remain concerns about
incorporating reclaimed material into food or technical applications."
The problem is not confined to Western Europe. In the USA, where household
waste stands at 190 million tons per annum, thirteen million of this
represents plastic products which are delivered to landfill. Because of such
pollution issues Japan now exports its waste and countries like Canada,
Australia and France are in a similar position.
<PAGE> 39
Other Degradable Polymers
Many plastics are now being marketed, at least partially, on their
environmental merits. This may be for very different reasons based upon the
following list of some degradable polymer manufacturers being divided into
Synthetic polymers, Starch-based polymers, Biopolymers and Biocompostibles as
follows:
Synthetic Polymers
-Carbonnages de France - have developed a polyurethane material used for
mortuary shrouds.
-Union Carbide - have developed Caprolactone polyester for tree seedling
containers.
Starch-based Polymers
-Warner-Lambert, USA. - 'Novon' product claimed to be suitable as a
replacement for PS and PE in disposable product applications e.g. injection
moulding of pharmaceutical capsules.
Biopolymers
(Plastic materials produced by micro-organisms)
-Monsanto, England - 'Biopol' (predominately polyhydroybutyrate)--promoted as
'Nature's Plastic'. Basically a thermoplastic linear polyester used for
bottles and mouldings. This relatively stiff material produced by biological
fermentation of sugars to produce carbohydrates from which 'Biopol' is
manufactured. Fully biodegradable.
Biocompostibles
(standard plastics with a starch additive)
-There are many companies in this category, but as only the starch additive
biodegrades and the starch loaded derivatives do not fully biodegrade, they
leave small particles of undegraded polyethylene, or other polymer and cause
ecological dangers which have been under investigation.
<PAGE> 40
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
=====================================
YEAR ENDING JUNE 30, 2000
=====================================
Except for historical information, the discussion in this Form SB-2 contains
forward-looking statements that involve risks and uncertainties. These
statements may refer to the Company's future plans, objectives, expectations
and intentions. These statements may be identified by the use of words such as
"expect", "anticipate", "believe", "intend", "plan" and similar expressions.
The Company's actual results could differ materially from those anticipated in
such forward-looking statements. Factors that could contribute to these
differences include, but are not limited to, the risks discussed in the
section titled "Market Risks and other Business Factors" later in this Form
SB-2.
Plan of Operation
The Company is producing a range of biodegradable polymers that may assist
various customers produce agricultural, pharmaceutical, adhesives and food
market products. The Company has spent the past several years developing its
technology and is now delivering polymer for various customers operating in
the following industries:
-Pharmaceutical;
-Industrial;
-Retail;
-Household;
-Agricultural;
-Leisure and Distributors.
Next 12 Months of Operations
(i) We intend to appoint a global distributor and ship significant production
quantities to customers late in the first quarter of 2001. Average selling
prices will be $1,200 per ton for non-pharmaceutical grade and $9,000 per ton
for pharmaceutical grade. Should the company need additional financing prior
to achieving greater levels of sales, the President and majority shareholder
may contribute additional capital to the company, or the company may decide to
raise capital through the sale of equity. The Company will have the ability
to increase its production capacity 10,000 tons with every $1,000,000 raised
in connection with this offering. Presently, the Company has the ability to
produce 10,000 tons at its facility located at Kemble Business Park, Nr
Malmesbury, Wiltshire, UK.
<PAGE> 41
(ii) We have completed all necessary product research and development needed
to perform during the next 12 months. PVAXX specialized polymers are already
in production. Product is being shipped in 50 Kilo drums to various
potential customers. Although the Company provides samples of potential
applications accompanying the PVAXX polymer shipment, prospective customers
are responsible to complete their own trials and tests to determine whether
PVAXX will be suitable for production of their products. If suitable, PVAXX
may be used to enable the customer to produce products such as film, sheet,
wrapping and packaging materials, fibers and mouldings with no toxic effects
on the environment at an affordable cost;
(iii) We anticipate establishing an additional production facility in Dubai,
UAE that will have the ability to produce 10,000 tons of PVAXX with every
$1,000,000 raised in connection with this offering. The purchase and/or lease
of significant equipment in connection with this facility is fully factored
into the production of 10,000 tons for every $1,000,000 raised; and
(iv) We do not expect significant changes in the number of employees.
All PVAXX components have received EU and FDA approval for human consumption,
via pharmaceuticals or food, allowing e.g. gelatine replacement in drug
capsules and fertilizer and seed coatings.
We anticipate initial sales will be to the Italian market, where new
legislation to ban a number of plastic applications is currently in the
implementation phase. A development partner in each market sector has been
identified and these customers will receive first deliveries. The pharma
sector is being developed over the mid-term, and offers higher-margin
opportunities. A PVAXX consumer awareness program will be also be implemented
during this period, and a trade marketing program will support the
distributor sales effort.
Liquidity and Capital Resources
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholder's equity. The Company's balance sheet as of June 30, 2000,
reflects a current asset value of $441,589, and a total asset value of
$1,225,804 in the form of cash and capitalized organizational costs.
The Company is hereby registering for the sale of equity in connection with
the sale of 2,400,000 shares at approximately $10.00/share. The Company does
not have any underwriting commitments for such sale of equity and cannot
provide assurances that it will raise significant proceeds from this offering
and may receive no or nominal proceeds, significantly restricting the
Company's activities and plan of operations.
<PAGE> 42
Notwithstanding the steps taken by us to raise additional capital, our
immediate cash requirements are significant. We cannot assure you that we will
be able to successfully realize cash flow from operations or that such cash
flow will be sufficient. We believe that our existing and anticipated capital
resources will enable us to fund our planned operations through Fiscal 2001.
In addition, our annual and quarterly operating results may be affected by a
number of factors, including the following:
- our ability to manage inventories, shortages of components or labor;
- the degree of automation used in the assembly process;
- fluctuations in material costs and the mix of material costs versus labor;
- manufacturing and overhead costs;
- price competition;
- the inability to pass on excess costs to customers;
- the timing of expenditures in anticipation of increased sales; and
- customer product delivery requirements.
Any one of these factors, or a combination thereof, could adversely affect us.
The Company believes that obtaining $1,000,000 of net proceeds from this
offering will permit it to continue meeting its working capital obligations
and fund the further development of its business for at least the next 12
months that will allow for an increase in production of not less than 10,000
tons of PVAXX. There can be no assurance that any additional financing will be
available to the Company on acceptable terms, or at all. If adequate funds are
not available, the Company may be required to delay, scale back or eliminate
its research, engineering and development or manufacturing programs or obtain
funds through arrangements with partners or others that may require the
Company to relinquish rights to certain of its technologies or potential
products or other assets. Accordingly, the inability to obtain such financing
could have a material adverse effect on the Company's business, financial
condition and results of operations.
Evolving Industry Standards; Rapid Technological Changes
The Company's success in its business will depend in part upon its continued
ability to enhance its existing products, to introduce new products quickly
and cost effectively to meet evolving customer needs, to achieve market
acceptance for new product offerings and to respond to emerging industry
standards and other technological changes. There can be no assurance that the
Company will be able to respond effectively to technological changes or new
industry standards. Moreover, there can be no assurance that competitors of
the Company will not develop competitive products, or that any such
competitive products will not have an adverse effect upon the Company's
operating results. There can also be no assurance that the Company will be
successful in refining, enhancing and developing its operating strategies and
products going forward, that the costs associated with refining, enhancing and
developing such strategies and products will not increase significantly in
future periods or that the Company's existing technology will not become
obsolete as a result of ongoing technological developments in the marketplace.
<PAGE> 43
Volatility of Stock Price
The Company believes factors such as the Company's liquidity and financial
resources, quarter to quarter and year-to-year variations in financial results
could cause the market price of the Company's common stock to fluctuate
substantially. Any adverse announcement with respect to such matters or any
shortfall in revenue or earnings from levels expected by management could
have an immediate and material adverse effect on the trading price of the
Company's common stock in any given period. As a result, the market for the
Company's common stock may experience material adverse price and volume
fluctuations and an investment in the Company's common stock is not suitable
for any investor who is unwilling to assume the risk associated with any such
price and volume fluctuations.
Sufficiency of Cash Flows
The Company believes that current cash balances and any cash generated from
operations and from available debt or equity financing will be sufficient to
meet its cash needs for working capital and capital expenditures for at least
the next twelve months. Thereafter, if cash generated from operations is
insufficient to satisfy the Company's liquidity requirements, management may
seek to sell additional equity or obtain credit facilities. The sale of
additional equity could result in additional dilution to the Company's
shareholders. A portion of the Company's cash may be used to acquire or invest
in complementary businesses or products or to obtain the right to use
complementary technologies. From time to time, in the ordinary course of
business, the Company evaluates potential acquisitions of such businesses,
products or technologies.
Results of Operations
No revenues were received by the Company through June 30.
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" issued
by the Financial Accounting Standards Board, under which deferred tax assets
and liabilities are provided on differences between the carrying amounts for
financial reporting and the tax basis of assets and liabilities for income tax
purposes using the enacted tax rates. Under SFAS 109, deferred tax assets may
be recognized for temporary differences that will result in deductible amounts
in future periods. A valuation allowance is recognized if on the weight of
available evidence it is more likely than not that some portion or the entire
deferred tax asset will not be realized.
<PAGE> 44
DESCRIPTION OF PROPERTY
Our corporate headquarters are located at 12730 New Brittany Boulevard, Ft.
Myers, Florida 33907, (941) 274-9355. Our transfer agent is Our transfer
agent is Computershare Trust Company, 12039 West Alameda Parkway, Suite Z-2,
Lakewood CO 80228, telephone: (303) 986-5400.
.
The Company executed a 3-Year Lease Agreement on May 23, 2000 with S.W.
Enterprise Associates, Inc. to cover the 2,491 square foot corporate
headquarter location. The Lease Agreement expires on May 31, 2003 and
contains the following payment terms:
Year 1
Quarter Base Rent CAM Tax Monthly
1st Qtr. $ 6,000.00 $ 4,387.50 $ 623.25 $ 3,670.25
2nd Qtr. $ 6,000.00 $ 3,887.50 $ 623.25 $ 3,670.25
3rd Qtr. $ 7,150.00 $ 4,390.00 $ 695.50 $ 4,095.13
4th Qtr. $ 8,100.00 $ 4,390.00 $ 749.50 $ 4,163.33
Year 2 $ 33,695.00 $ 18,262.40 $ 3,118 $ 4,589.55
Year 3 $ 35,043.84 $ 18,992.90 $ 3,242 $ 4,773.25
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than their employment agreements with the Company, no material
transactions involving the directors, senior officers or principal holders of
the Company's securities have occurred since the Company was incorporated
except for several loans previously made to the Company by the Company's
principals.
The Company intends to indemnify its officers and directors to the full extent
permitted by Colorado law. Under Colorado law, a corporation may indemnify its
agents for expenses and amounts paid in third party actions and, upon court
approval in derivative actions, if the agents acted in good faith and with
reasonable care. A majority vote of the Board of Directors, approval of the
stockholder or court approval is required to effectuate indemnification.
Insofar as indemnification for liabilities arising under the Securities Act,
as amended, may be permitted to officers, directors or persons controlling the
Company, the Company has been advised that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by an officer, director or
controlling person of the Company in the
<PAGE> 45
successful defense of any action, suit or proceeding) is asserted by such
officer, director or controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in such Act and will be governed by the
final adjudication of such issue.
Transactions between the Company and its officers, directors, employees and
affiliates will be on terms no less favorable to the Company than can be
obtained from unaffiliated parties. Any such transactions will be subject to
the approval of a majority of the disinterested members of the Board of
Directors.
EXECUTIVE COMPENSATION
The following executive compensation was paid for the year ended June 30,
2000, to our company's directors, officers or affiliates or other persons who
were executive officers of the company as at June 30, 2000.
<TABLE>
<CAPTION>
Long Term Compensation
-----------------------------------
Annual Compensation
Compensation Awards
-----------------------------------
Securities
Name and Principal Other Annual Underlying All Other
Position Salary Compensation Options/(1)/ Compensation
($) ($) (#)( $)
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Henry Stevens -0-
12730
New Brittany Blvd.
Ft. Myers, Florida
33907
President and
Director
<PAGE> 46
---------------------------------------------------------------------------
Bryan Wade -0-
12799
New Brittany Blvd.
Ft. Myers, Florida
33907
Vice President and
Secretary
</TABLE>
____________________________
Employment Agreements
Mr. Stevens has executed a five-year employment agreement whereby he will paid
$600,000 per annum. Mr. Wade has also executed a three-year employment
agreement whereby he will paid 120,000 the first year and $180,000 per annum
thereafter.
Additional Compensation
The Company currently has no retirement, pension or profit sharing program for
the benefit of its directors, officers or other employees. The Board of
Directors may recommend one or more such programs for adoption in the future.
Director Compensation
Our Company does not reimburse directors for expenses incurred, if any, in
attending meetings of the board of directors and does not pay director fees
to directors for their service on the board.
<PAGE> 47
Stock Option Plans and Compensatory Plans
Under the terms of our present consulting and advisory services plan, our
Company is authorized to issue a maximum of 2,000,000 common shares from time
to time, for the benefit of directors, officers, full time employees,
consultants and advisors of our Company or its subsidiaries and companies
wholly owned by these individuals.
We are contemplating the implementation of a new stock option and award-based
plan designed to provide incentives to directors, executive officers and
employees of our Company or its subsidiaries and companies wholly owned by
these individuals in order to permit those persons to participate in the
growth and success of our Company.
Any options so granted will be exercisable at the exercise price and for such
period of time as may be determined by the board of directors and approved
pursuant to the requirements of the applicable stock exchange, or if our
securities are not listed on a stock exchange, then in accordance with the
conditions established by the board of directors.
Any stock options will be non-transferable and terminate on the earlier of the
expiration date or the 30th day following the day on which the director,
officer or employee, as the case may be, ceases to be either a director,
officer or employee of our company or any of its subsidiaries.
Indebtedness of Directors and Senior Officers and Promoters
No director, senior officer, promoter or other member of management or their
respective associates or affiliates have been indebted to our Company at any
time during the period ended June 30, 2000 or since that date.
<PAGE>
PVAXX CORPORATION (FORMERLY OAKBROOK CAPITAL IV) & SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
June 30, 2000
The following financial statements include a balance sheet as of June 30,
2000, statements of operations and deficit accumulated during development
stage, statements of changes in stockholders' equity and statements of
cash flows for the years ended June 30, 2000 and 1999 respectively, and
for the period from May 1, 1998 (inception) through June 30, 2000.
PVAXX CORPORATION & SUBSIDIARIES
Index to Financial Statements ...........................1
Report of Independent Auditor ...........................2
Balance Sheet ...........................................3
Statements of Operations & Deficit Accumulated
During Development Stage.................................4
Statements of Changes in Stockholders' Equity ...........5
Statements of Cash Flows ................................6
Notes to Financial Statements ...........................7
<PAGE> F-1
September 20, 2000
Shareholders and Board of Directors
PVAXX CORPORATION
Fort Myers, Florida
REPORT OF INDEPENDENT AUDITOR
We have audited the accompanying balance sheet of PVAXX Corporation
(formerly Oakbrook Capital IV) & Subsidiaries (a development stage
company) as of June 30, 2000, and the related statements of operations
and deficit accumulated during the development stage, changes in
shareholders' equity, and cash flows for the years ended June 30, 2000
and 1999, respectively and for the period from May 1, 1998 (inception)
through June 30, 2000. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of PVAXX
Corporation & Subsidiaries as of June 30, 2000, the results of operations
during the development stage, and its cash flows for the years ended June
30, 2000 and 1999 respectively, 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 #1 to
the financial statements, the Company and all of its subsidiaries are in
a development stage, and have yet to realize any revenue. This raises
substantial doubt about the company's ability to continue as a going
concern. Management's plan in regard to these matters are discussed in
Note #9 The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ Dennis W. Bersch, CPA
DENNIS W. BERSCH, CPA
Milwaukee, WI
<PAGE> F-2
PVAXX CORPORATION (Formerly Oakbrook IV) & SUBSIDIARIES
(Development Stage Companies)
(With Auditor's Report of September 20, 2000)
BALANCE SHEET
June 30, 2000
ASSETS
------
<TABLE>
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 118,631
Restricted cash and cash equivalents (Note 6) 299,970
VAT tax refund receivable 22,989
----------
Total current assets $ 441,589
FIXED ASSETS:
Machinery & equipment $ 596,851
Office equipment 9,698
Furniture & fixtures 45,496
Motor vehicles 51,648
Less accumulated depreciation (20,000)
----------
Net fixed assets 683,694
OTHER ASSETS:
Prepaid expenses $ 31,469
Deposits 4,349
Patent rights (Note 1) 64,703
----------
Total other assets $ 100,521
----------
Total assets $1,225,804
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 125,667
Current portion of long-term
liabilities (Note 10) 132,446
Accrued wages-officers 180,000
Other accrued liabilities 109,565
----------
Total current liabilities $ 547,678
LONG TERM LIABILITIES:
Notes payable (Note 10) $ 4,427
Capital lease to related parties (Note 10) 516,226
Loans payable to officers/directors (Note 3) 95,971
----------
Total long term liabilities $ 616,624
----------
Total liabilities $1,164,302
(SHAREHOLDERS' EQUITY) (Exhibit 3)
Preferred stock-no par value,
10,000,000 shares authorized, issued
and outstanding $ 100,000
Common stock-no par value, 40,000,000
shares authorized, 21,322,800 issued and
outstanding of which 90,000 shares are in
escrow (Note #6) 204,200
Paid in Capital 217,914
Accumulated other comprehensive income 8,882
Deficit accumulated during the
development stage (469,494)
----------
Total equity 61,502
----------
Total liabilities and equity $1,225,804
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> F-3
PVAXX CORPORATION (formerly Oak Brook Capital IV) and Subsidiaries
(Development Stage Companies)
(With Auditor's Report of September 20, 2000)
STATEMENT OF OPERATIONS AND DEFICIT ACCUMULATED DURING
DEVELOPMENT STAGE
For the years ended June 30, 2000 and 1999 and
from May 1, 1998 (Inception) thru June 30, 2000
<TABLE>
<CAPTION>
September 30, September 30, Since
2000 1999 Inception
<S> <C> <C> <C>
REVENUE $ - $ - $ -
Direct costs - - -
------------ ------------ -----------
Gross Profit $ - $ - $ -
OPERATING EXPENSES
Development costs $ 40,222 - $ 40,222
Finance costs 22,647 22,647
Administrative costs 384,192 - 384,192
------------ ------------ -----------
Total operating expenses 447,061 - $ 457,286
------------ ------------ -----------
Operating income (loss) $ (447,061) - $ (457,286)
OTHER INCOME AND (EXPENSES) (12,208) - (12,208)
------------ ------------ -----------
Net Operating Income (loss) $ (459,269) - $ (469,494)
INCOME TAXES - - -
------------ ------------ -----------
Deficit accumulated during the
development stage $ (459,269) - $ (469,494)
------------ ------------ -----------
PER SHARE INFORMATION
Weighted average number of
common shares outstanding 11,249,356 1,228,000 11,249,356
Profit (loss) per share $ (0.04) - (0.04)
------------ ------------ -----------
Fully diluted shares 21,249,356 - 21,249,356
Profit (loss) per fully diluted
share $ (0.02) - $ (0.02)
------------ ------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE> F-4
PVAXX CORPORATION (formerly Oak Brook Capital IV) and Subsidiaries
(Development Stage Companies)
(With Auditor's Report of September 20, 2000)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From inception through June 30, 2000
<TABLE>
<CAPTION>
Shares Issued
---------------------
Accumulated
Common Preferred Common Preferred Paid-in Comprehensive Retained
Stock Stock Stock Stock Capital Income Earnings Equity
---------- --------- -------- --------- -------- ------------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Equity at Inception-
Oakbrook IV - - $ - $ - $ - $ - $ - $ -
Issuance of common stock
for services 5/5/98 1,228,000 - $ 4,200 - - - - 4,200
Net loss for the period - - - - - - (10,225) (10,225)
---------- --------- -------- --------- -------- ------------- ---------- -----------
Balance at 6/30/99 1,228,000 - $ 4,200 $ - $ - $ - $ (10,225) (6,025)
Net loss for the period - - - - - - - -
---------- --------- -------- --------- -------- ------------- ---------- -----------
Balance at 6/30/99 1,228,000 - $ 4,200 $ - - - (10,225) (6,025)
Acquisition of subsidiary
corporation by PVAXX
Issuance of common
stock 3/31/00 20,000,000 - $200,000 $ - $(217,914) - - 417,914
Issuance of preferred
stock 3/31/00 - 10,000,000 - $ 100,000 - - - 100,000
Shares issued by
Oakbrook IV 5/19/00 94,800 - - - - - - -
Reverse merger with
Oak Brook IV
Shares issued by
Oakbrook 5/19/00 20,000,000 10,000,000 200,000 100,000 217,914 - - 517,914
Oakbrook shares acquired
by PVAXX
PVAXX common stock
acquired 5/19/00 (20,000,000) - (200,000) - (217,914) - - (417,914)
PVAXX preferred stock
acquired 5/19/00 - (10,000,000) - (100,000) - - - (100,000)
Foreign currency
translation adjustment - - - - - 8,882 - 8,882
Net loss for the period - - - - - - (469,269) (469,269)
----------- ----------- --------- -------- -------- --------- --------- -----------
Balance at 6/30/2000 21,322,800 10,000,000 204,200 100,000 217,914 8,882 (469,269) 61,502
----------- ----------- --------- -------- -------- --------- --------- -----------
(Exhibit 1) (Exhibits (Exhibit 1)
1 & 2)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> F-5
PVAXX CORPORATION (formerly Oak Brook Capital IV) and Subsidiaries
(Development Stage Companies)
(With Auditor's Report of September 20, 2000)
STATEMENT OF CASH FLOWS
For the years ended June 30, 2000 and 1999 and
from May 1, 1998 (Inception) thru June 30, 1999
<TABLE>
<CAPTION>
Since
2000 1999 Inception
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (459,269) $ - $ (469,464)
Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities:
Depreciation & amortization $ 20,000 $ - $ 20,000
(Increase) in VAT taxes receivable (22,900) - (22,990)
(Increase) in other assets (35,817) - (35,817)
(Increase) in accounts payable 115,443 - 125,667
Increase in accrued liabilities 109,565 - 109,565
Increase in accrued officer wages 180,000 - 180,000
-------------- ------------ ------------
Net cash provided by (used in) operating
activities $ (92,978) $ - $ (93,068)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase/investment of intangible patent (64,703) - (64,703)
Purchase of equipment and improvements - - -
-------------- ------------ ------------
Net cash provided by (used in) investing
activities $ (64,703) $ - $ (64,703)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes & loans payable $ - - 7,097
Increase in loans to Officers/Directors 95,971 - 95,971
Proceeds from notes & loans payable-
related parties
Repayments of notes & loans payable (57,692) - (57,692)
Proceeds from sale of common stock - - 417,914
Proceeds from sale of preferred stock - - 100,000
Sale of common stock for services 4,200 - 4,200
Cash restricted by investor - - (299,970)
-------------- ------------- ------------
Net cash provided by (used in) financing
activities 42,479 - 267,520
-------------- ------------- ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 8,882 - 8,882
-------------- ------------- ------------
Increase in Cash and Cash Equivalents (106,320) - 118,631
Cash at beginning of period - - -
-------------- ------------- ------------
Cash at end of period $ (106,320) - 118,631
-------------- ------------- ------------
Supplemental information:
Interest expense $ 12,208 - 12,208
Income tax expense - - -
Noncash investing and financing
transactions:
Acquisition of equipment $ (703,693) (703,693)
Capital equipment lease 703,693 703,693
-------------- ------------- ------------
Total $ - - -
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> F-6
PVAXX CORPORATION (FORMERLY OAKBROOK CAPITAL IV) & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2000
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
HISTORY OF THE REPORTING ENTITY
Originally named Oakbrook Capital IV, (Oakbrook IV) the original company
reporting herein was formed in May 1998 in Colorado, with 40,000,000
shares of common and 10,000,000 shares of preferred stock authorized. It
was registered with the SEC as one of a series of blank check companies
seeking a business combination with an operating company. On May 19,
2000, Oakbrook IV entered into a share exchange agreement accounted for
as a pooling of interests, with PVAXX Corporation, a development stage
company.
PVAXX Corporation, formed in Florida in 2000, is the parent corporation
of PVAXX Research & Development LTD, PVAXX, (Europe) LTD, and PVAXX
Technologies LTD. PVAXX Corporation purchased net business assets at
fair value of PVAXX Research & Development LTD and PVAXX Technologies LTD
in exchange for 10,000,000 shares of its Preferred and 20,000,000 shares
of its Common stock. The net business assets consisted of two patent
applications described below, current liabilities, and a vehicle. This
transaction was accounted for as a combination of entities under common
control. The PVAXX companies were owned and controlled by the acquiring
Company's President and Chairman of the Board of Directors, Henry
Stevens. The only activities of any of these companies to date have been
development stage activities.
The role of each of the subsidiary companies is as follows:
* PVAXX Technologies, Ltd. is the holder of unlimited rights to
manufacture, process, and sell poly vinyl alcohol products governed
by patents issued under International Publication Numbers WO
98/26911 on June 25, 1998 and WO 00/12615 on March 9, 2000
* PVAXX Research and Development Ltd. performs research into product
improvements and applications. Doing business as PVAXX Engineering,
it produces machines forming the product into pellets, which are
then sold to converters. Under the trade style PVAXX SoftCap
Systems it manufactures and sells capsule making machinery
* PVAXX Europe Ltd. is a dormant company.
In conjunction with the share exchange agreement, consummating a reverse
merger, Oakbrook IV, changed its name to PVAXX Corporation, and the newly
named PVAXX and all of the subsidiaries have changed their respective
fiscal year-ends to June 30.
<PAGE> F-7
PRINCIPLES OF CONSOLIDATION
These financial statements include the combined accounts of the Colorado
corporation, Oak Brook Capital IV, and the former Florida corporation,
PVAXX Corporation They are consolidated with the three 100% owned UK
subsidiary corporations (PVAXX Technologies, Ltd., PVAXX Research &
Development, Ltd. and PVAXX Europe, Ltd.). After conversion of UK
currency to US dollars, all significant inter-company accounts and
transactions have been eliminated.
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS
The financial position and results of operations of the company's foreign
subsidiaries are determined using the local currency as the functional
currency. Assets and liabilities of these subsidiaries are translated at
the exchange rate in effect as of the balance sheet date. Income
statement accounts are translated at the average rate of exchange
prevailing during the period. Translation adjustments arising from the
use of differing exchange rates from period to period are included in the
accumulated other comprehensive income account in shareholder's equity
section.
USE OF ESTIMATES
The process of preparing financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reporting of amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period.
CASH AND CASH EQUIVALENTS
Highly liquid assets with a maturity date of three (3) months or less
from the date of acquisition are treated as cash or cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated depreciation.
Depreciation is computed using straight-line and accelerated methods over
estimated useful lives of the property. Estimated useful lives of
property & equipment are as follows:
Machinery & equipment 3 to 15 years
Office equipment 5 years
Furniture & fixtures 5 to 7 years
Motor vehicles 5 years
The amortization of leasehold improvements is based on the shorter of the
lease term or the life of the improvement.
Betterments and large renewals, which extend the life of an asset, are
capitalized whereas maintenance and repairs and small renewals are
expensed as incurred.
<PAGE> F-8
VAT TAXES RECEIVABLE
The United Kingdom subsidiaries are required to pay a Value Added Tax
(VAT) on purchases made from certain vendors. The company receives a tax
refund for the VAT paid to various vendors.
OTHER ACCRUED LIABILITIES
Other accrued consist of accrued employee wages, and payroll taxes, due
as the balance sheet date.
INTANGIBLES
The patents were acquired from a related party in exchange for stock in
the PVAXX group of companies. The patents were valued at their
historical cost at the date of acquisition and the stock was valued at
the historical cost of the patent. Intangible assets such as patents on
other intellectual property are recorded at cost if it is determinable at
the date of acquisition. Such intangible assets are amortized over
estimated useful lives based on the nature of the item. The Company will
begin amortizing its patent when it emerges from the development stage.
In accordance with SFAS 121, "Accounting for Impairment of Long-Lived
Assets and Long-Lives Assets to be Disposed of", intangibles are
evaluated for impairment when events or changes in circumstances indicate
that the carrying amounts of the assets may not be recoverable through
the estimated undiscounted future cash flows resulting from the use of
these assets. When any such impairment exists, the related assets are
written down to fair value.
The company has not generated any revenue relating to its patents due to
the fact that its operations are in the development stage. Although
there is substantial doubt about the company's ability to continue as a
going concern as described in Note #9, the company has just acquired the
patents and it is actively engaged in promoting and developing this
technology. At this time there are no events and conditions that exist
to indicate that the asset maybe impaired. However, should the company's
efforts to negotiate successful long-term revenue contracts for its
products, the company will realize an impairment loss on the write-down
of the patent to its fair value.
INCOME TAXES
The Company uses the asset and liability method as identified in SFAS
109, Accounting for Income Taxes.
The consolidated Company has a net operating loss carryforward (NOL) of
$469,494 available to future periods due to losses generated since its
inception through June 30, 2000. The net operating losses and credits
expire at various dates beginning in 2018 and continuing through 2020.
This NOL would result in a tax debit based on application of appropriate
UK and US tax rates if offsetting profits were anticipated. Because the
Company and its subsidiaries are in the development stages, there is no
assurance that future operations will generate a profit or income,
therefore the company recognizes a valuation adjustment which completely
offsets the deferred tax asset related to the net operating loss
carryforward.
<PAGE> F-9
STOCK EXCHANGED FOR SERVICES
The issuance of equity instruments in exchange for goods or services are
accounted for based upon the fair value of the goods or services
received. The services exchanged for equity shown on the statements of
changes of stockholder's equity were valued at $.003/share because it was
determined that $4,200 worth of legal services had been provided to set
up the Oak Brook IV shell.
CONVERTIBLE PREFERRED STOCK
The Company issued convertible preferred stock relating to the
transaction discussed above and in Note 3. The preferred stock does not
have voting rights, and is noncumulative, nonparticipating and has
preference up to its par value upon liquidation. The stock maybe
converted 1 for 1 for common stock at the discretion of holder.
NOTE 2 - ACCOUNTS RECEIVABLE
Management believes all receivables are due and collectible and no
reserve for un-collectable amounts is necessary.
NOTE 3 - RELATED PARTY TRANSACTIONS
As discussed in Note #1, the Company effectively acquired PVAXX Research
& Development LTD and PVAXX Technology, from a company owned and
controlled by Henry Stevens, the present majority shareholder of PVAXX
Corporation. The ultimate consideration for the transaction is the
10,000,000 shares of Preferred stock and 20,000,000 shares of Common
stock held by Henry Stevens and others whose PVAXX Florida corporation
shares were exchanged.
The President, and another officer, advanced $95,971 to the Company on a
short-term basis with no interest. These amounts have not accrued any
imputed interest and are expected to be repaid shortly after the balance
sheet date.
The patent rights owned by PVAXX Technologies, Ltd., were developed by
and acquired from a company owned by the President, Henry Stevens, and
are carried at their actual cost of $68,018.
The Company entered into an Employment Agreement dated March 20, 2000
with Henry Stevens, the Company's President and Chairman of the Board of
Directors. The Agreement is for a term of five years and renewable by the
Company.
Under the Agreement, the Company agrees to pay the following amounts:
a) $50,000 per month net of all taxes;
b) Use of a motor vehicle at the choice of the
employee;
c) Use of residential facilities in the Fort
Myers area at a rental not to exceed
$36,000 per annum; and
d) The Company will establish a performance
related share option program, under which
the company's board of directors will
determine participation commensurate with
the employee's position. However, as of
balance sheet date, the Company has not
officially established a share option plan.
<PAGE> F-10
No payments have been made under the Agreement as of the date of the
financial statements.
NOTE 4 - RISKS AND UNCERTAINTIES
The Company's future operating results may be affected by a number of
factors. The ability of the Company to raise the capital necessary to
continue to develop and bring its products to market is not assured. The
product being developed by PVAXX will be sold in a highly competitive
global market in which it will need to demonstrate performance
characteristics sought by customers, at a competitive price which will
yield a profit after production and distribution costs. Estimates of the
size of the market, and the company's eventual market share may not be
realized, and the effect of competition cannot be determined.
NOTE 5 - COMMITMENTS AND CONTINGENT LIABILITIES
LEASED FACILITIES - OPERATING LEASE
The Company has entered into a three (3) year operating lease for office
space in the Fort Myers area with an unrelated party. Under the terms of
this lease, effective June 1, 2000 the Company is obligated for monthly
base rental amounts plus sales tax and Common Area Maintenance (CAM)
charges. Under the terms of the lease, the Company is obligated to keep
and maintain the leased premises, including fixtures and improvements, in
good condition.
The Company is obligated for the following rent payments over the lease
term:
<TABLE>
<CAPTION>
Total Monthly Sales
Rent Base Rent CAM Tax
<S> <C> <C> <C> <C>
Year 1
1st quarter $11,013 $2,000 $1,463 $208
2nd quarter 11,013 2,000 1,463 208
3rd quarter 12,285 2,400 1,463 232
4th quarter 13,239 2,700 1,463 250
Year 2 55,080 2,808 1,522 260
Year 3 57,276 2,920 1,583 270
</TABLE>
EMPLOYEE COMPENSATION
In addition to the employment contract with the President disclosed in
Note 3, an arrangement with the Vice-president provides for a salary of
$10,000 monthly for one year, and $15,000 thereafter.
<PAGE> F-11
NOTE 6 - RESTRICTED CASH
On March 3, 2000, the former PVAXX executed an agreement with an
unrelated individual who transferred $299,970 to an escrow agent in
exchange for 90,000 share block of the 20,000,000 shares of common stock
issued as discussed in Notes 1 and 3. Under the terms of the escrow
agreement, updated and signed on August 4, 2000, the funds will be
released to the company when the exchanged shares of the new PVAXX
Corporation are tradable on a U.S. national exchange at not less than
$5.00 per share. If this is not achieved, the funds may be released to
the investor six (6) months after the effective date (August 4, 2000) of
the agreement, upon return of the 90,000 shares
Which would be held as treasury stock. As of balance sheet date the
90,000 shares of stock as well as the $299,970 remain in the custody of
the escrow agent.
NOTE 7 - FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying amounts reported in the consolidated balance sheet for cash
and cash equivalents, restricted cash, receivables, accounts payable,
accrued expenses and other liabilities, approximate fair value because of
immediate or short-term maturity of these financial instruments. The
underlying carrying amount reported for long-term debt and capital leases
approximates fair value because, in general, the interest on the
underlying instruments fluctuates with market rates.
NOTE 8 - EARNINGS PER SHARE
Basic earnings per share are computed by dividing earnings available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted earnings per share reflect per
share amounts that would have resulted if all preferred stock had been
converted to common stock. The following reflects amounts reported in
the financial statements:
<TABLE>
<CAPTION>
For the period ended June 30, 2000
----------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Income available to common
stockholders
-basic earnings per share $(459,269) 11,249,356 $ (0.04)
Effect of dilutive securities
-convertible preferred
stock 10,000,000
----------------------------------------
Income available to common
stockholders
-fully diluted earnings
per share $(459,269) 21,249,356 $ (0.02)
----------------------------------------
----------------------------------------
For the period ended June 30, 2000
----------------------------------
Income available to common
stockholders
-basic earnings per share $ - 1,228,000 $ -
From inception
----------------------------------
Income available to common
stockholders
-basic earnings per share $(469,494) 11,249,356 $ (0.04)
Effect of dilutive securities
-convertible preferred
stock 10,000,000
-----------------------------------------
Income available to common
stockholders
-fully diluted earnings
per share $(469,494) 21,249,356 $ (0.02)
-----------------------------------------
</TABLE>
<PAGE> F-12
NOTE 9 - GOING CONCERN CONSIDERATIONS
The ability of the Company to emerge from the development stage and to
develop into a going concern is dependent on the success of the Company
in negotiating long-term revenue contracts and acquiring additional
equity capital. However, there can be no assurance that the Company will
be successful in accomplishing its objectives. The financial statements
do not include any adjustments that might be necessary should the
company, be unable to continue as a going concern.
The company is addressing the substantial doubt about its ability to
continue as a going concern through the deferral of cash payments to the
principal shareholders, through the negotiation of anticipated private
placements with additional investors, and by taking steps to register
shares for sale on the public market in order to generate additional
working capital, in order for the company to expand its operations and to
bring it's product to the market. In addition, certain of the company's
officers and shareholders have agreed that they will advance to the
company some additional funds that the company needs for operating
capital. Although, as of the balance sheet date of June 30, 2000, the
Company had not entered into any revenue-producing contracts, several
successful field tests of various products have been conducted, and
management expects to have successfully negotiated several contracts
before the end of this fiscal year.
NOTE 10 - LONG TERM LIABILITIES
Long-term liabilities include a three-year capital lease dated May 1, 2000 with
a related party, for equipment, office furniture and vehicles, and an automobile
note with an unrelated party. Depreciation expense for leased assets is
included in depreciation expense for owned assets.
The gross amounts of assets recorded under capital leases are listed in the
table below:
Machinery & equipment $ 596,851
Furniture & fixtures 45,496
Motor vehicles 59,293
-----------
Total Assets acquired 701,640
Less accumulated depreciation (18,322)
-----------
Net leased assets $ 683,318
-----------
-----------
The future minimum lease payments and the obligations owed on the
automobile note are listed in the table below.
<TABLE>
<CAPTION>
Capital Lease Auto note
<S> <C> <C>
2001 $ 129,776 $ 2,670
2002 134,405 3,170
2003 381,821 1,491
--------- -------
CURRENT 129,776 2,670
LONG TERM 516,226 4,427
--------- -------
TOTAL $ 646,002 $ 7,097
</TABLE>
PVAXX CORPORATION IS THE GUARANTOR OF THESE LEASES.
<PAGE> F-1
PVAXX CORPORATION
FINANCIAL STATEMENTS
PVAXX CORPORATION (formerly Oak Brook Capital IV) and Subsidiaries
(Development Stage Companies)
(With Accountant's Review Report of November 6, 2000)
CONSOLIDATED BALANCE SHEET
ASSETS
------
<TABLE>
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 26,347
Restricted cash and cash equivalents (Note 6) 299,970
VAT tax refund receivable 37,037
----------
Total current assets $ 363,354
FIXED ASSETS:
Machinery & equipment $ 580,965
Office equipment 9,698
Furniture & fixtures 51,639
Motor vehicles 50,273
Less accumulated depreciation (105,608)
----------
Net fixed assets 586,967
OTHER ASSETS:
Prepaid expenses $ 31,030
Deposits 4,349
Patent rights (Note 1) 62,981
----------
Total other assets $ 98,360
----------
Total assets $1,048,681
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 109,004
Current portion of long-term
liabilities (Note 10) 160,659
Accrued wages-officers 330,000
Accrued interest-loans to
officers/directors (Note 3) 5,332
Other accrued liabilities 119,556
----------
Total current liabilities $ 724,551
LONG TERM LIABILITIES:
Notes payable (Note 10) $ 3,812
Capital lease to related parties (Note 10) 471,244
Loans payable to officers/directors (Note 3) 266,609
----------
Total long term liabilities $ 741,665
----------
Total liabilities $1,466,216
(SHAREHOLDERS' EQUITY) (Exhibit 3)
Preferred stock-no par value,
10,000,000 shares authorized, issued
and outstanding $ 100,000
Common stock-no par value, 40,000,000
shares authorized, 21,322,800 issued and
outstanding of which 90,000 shares are in
escrow (Note #6) 204,200
Paid in Capital 217,914
Accumulated other comprehensive income 8,998
Deficit accumulated during the
development stage (948,647)
----------
Total equity (417,535)
----------
Total liabilities and equity $1,048,681
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
PVAXX CORPORATION (formerly Oak Brook Capital IV) and Subsidiaries
(Development Stage Companies)
(With Accountant's Review Report of November 6, 2000)
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT ACCUMULATED DURING
DEVELOPMENT STAGE
For the three months ended September 30, 2000
<TABLE>
<CAPTION>
September 30, September 30,
Since
1999 2000
Inception
<S> <C> <C> <C>
REVENUE $ - $ - $ -
Direct costs - - -
------------ ------------ -----------
Gross Profit $ - $ - $ -
OPERATING EXPENSES
Development costs $ 52,787 - $ 91,161
Finance costs 22,137
Administrative costs 425,864 - 817,849
------------ ------------ -----------
Total operating expenses 478,651 - $ 931,147
------------ ------------ -----------
Operating income (loss) $ (478,651) - $ (931,147)
OTHER INCOME AND (EXPENSES) (502) - (17,500)
------------ ------------ -----------
Net Operating Income (loss) $ (479,153) - $ (948,647)
INCOME TAXES - - -
------------ ------------ -----------
Deficit accumulated during the
development stage $ (479,153) - $ (948,647)
------------ ------------ -----------
PER SHARE INFORMATION
Weighted average number of
common shares outstanding 20,943,716 1,228,000 20,943,716
Profit (loss) per share $ (0.02) - (0.05)
------------ ------------ -----------
Fully diluted shares 30,943,716 - 30,943,716
Profit (loss) per fully diluted
share $ (0.02) - $ (0.03)
------------ ------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
PVAXX CORPORATION (formerly Oak Brook Capital IV) and Subsidiaries
(Development Stage Companies)
(With Accountant's Review Report of November 6, 2000)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From inception through September 30, 2000
<TABLE>
<CAPTION>
Shares Issued
---------------------
Accumulated
Common Preferred Common Preferred Paid-in Comprehensive Retained
Stock Stock Stock Stock Capital Income Earnings Equity
---------- --------- -------- --------- -------- ------------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Equity at Inception-
Oakbrook IV - - $ - $ - $ - $ - $ - $ -
Issuance of common stock
for services 5/5/98 1,228,000 - $ 4,200 - - - - 4,200
Net loss for the period - - - - - - (10,225) (10,225)
---------- --------- -------- --------- -------- ------------- ---------- ---------
Balance at 6/30/99 1,228,000 - $ 4,200 $ - $ - $ - $ (10,225) (6,025)
Net loss for the period - - - - - - - -
---------- --------- -------- --------- -------- ------------- ---------- ---------
Balance at 6/30/99 1,228,000 - $ 4,200 $ - - - (10,225) (6,025)
Acquisition of subsidiary
corporation by PVAXX
Issuance of common
stock 3/31/00 20,000,000 - $200,000 $ - $(217,914) - - 417,914
Issuance of preferred
stock 3/31/00 - 10,000,000 - $ 100,000 - - - 100,000
Shares issued by
Oakbrook IV 5/19/00 94,800 - - - - - - -
Reverse merger with
Oak Brook IV
Shares issued by
Oakbrook 5/19/00 20,000,000 10,000,000 200,000 100,000 217,914 - - 517,914
Oakbrook shares acquired
by PVAXX
PVAXX common stock acquired
5/19/00 (20,000,000) - (200,000) - (217,914) - - (417,914)
PVAXX preferred stock
acquired 5/19/00 - (10,000,000) - (100,000) - - - (100,000)
Foreign currency translation
adjustment - - - - - 8,882 - 8,882
Net loss for the period - - - - - - (469,269) (469,269)
----------- ----------- --------- -------- -------- --------- --------- ---------
Balance at 6/30/2000 21,322,800 10,000,000 204,200 100,000 217,914 8,882 (469,269) 61,502
Foreign currency translation
adjustment - - - - - 116 - 116
Net loss for the period - - - - - - (479,153) (479,153)
----------- ----------- --------- -------- -------- --------- --------- --------
Balance 6/30/2000 21,322,800 10,000,000 204,200 100,000 217,914 8,998 (948,647) (417,535)
----------- ----------- --------- -------- -------- --------- --------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
PVAXX CORPORATION (formerly Oak Brook Capital IV) and Subsidiaries
(Development Stage Companies)
(With Accountant's Review Report of November 6, 2000)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended September 30, 2000 and 1999
from May 1, 1998 (Inception) thru September 30, 1999
<TABLE>
<CAPTION>
September 30, September 30, 1999 Since
2000 1999 Inception
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (479,153) $ - $ (948,647)
Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities
Depreciation & amortization $ 85,608 $ - $ 105,608
(Increase) in VAT taxes receivable (14,048) - (37,037)
(Increase) in prepaid expenses 439 - (31,030)
(Increase) in security deposits - - (4,349)
Foreign currency adjustments 1,722 - 1,722
Increase in accounts payable (16,663) - 109,004
Increase in accrued interest 5,332 - 5,332
Increase in accrued liabilities 9,990 - 119,555
Increase in accrued officer wages 150,000 - 330,000
-------------- ------------ ------------
Net cash provided by (used in) operating
activities $ (256,773) $ - $ (349,842)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase/investment of intangible patent - - (64,703)
Purchase of equipment and improvements 11,118 - (692,575)
-------------- ------------ ------------
Net cash provided by (used in investing
activities $ 11,118 $ - $ (757,278)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes & loans payable $ 2,481 - 11,829
Increase in loans to Officers/Directors 170,638 - 266,609
Proceeds from notes & loans payable-
related parties (19,864) - 628,808
Repayments of notes & loans payable - - (4,921)
Proceeds from sale of common stock - - 417,914
Proceeds from sale of preferred stock - - 100,000
Sale of common stock for services - - 4,200
Cash restricted by investor - - (299,970)
-------------- ------------- ------------
Net cash provided by (used in) financing
activities 153,255 - 1,124,469
-------------- ------------- ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 116 - 8,998
-------------- ------------- ------------
(Decrease) Increase in Cash and Cash
Equivalents (92,284) - 26,347
Cash at beginning of period 118,631 - -
-------------- ------------- ------------
Cash at end of period $ 26,347 - 26,347
-------------- ------------- ------------
Supplemental information:
Interest paid $ 34 - 12,208
Income tax expense - - -
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
PVAXX CORPORATION (FORMERLY OAKBROOK CAPITAL IV) & SUBSIDIARIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
The following financial statements include a consolidated balance sheet
as of September 30, 2000, consolidated statements of operations and
deficit accumulated during development stage, consolidated statements of
changes in stockholders' equity and consolidated statements of cash flows
for the three months ended September 30, 2000 and 1999 respectively, and
for the period from May 1, 1998 (inception) through September 30, 2000.
PVAXX CORPORATION & SUBSIDIARIES
Index to Financial Statements.............................. 1
Accountant's Review Report ................................ 2
Consolidated Balance Sheet ................................ 3
Consolidated Statements of Operations & Deficit
Accumulated During Development Stage ...................... 4
Consolidated Statements of Changes in Stockholders'
Equity .................................................... 5
Consolidated Statements of Cash Flows ..................... 6
Notes to Financial Statements ............................. 7
<PAGE>
November 6, 2000
Shareholders and Board of Directors
PVAXX CORPORATION
Fort Myers, Florida
ACCOUNTANT'S REVIEW REPORT
I have reviewed the accompanying consolidated balance sheet of PVAXX
Corporation and Subsidiaries as of September 30, 2000 and the related
consolidated statements of operations & deficit accumulated during the
development stage, changes in stockholders' equity and cash flows for the
three months then ended and from May 1, 1998 (inception) through
September 30, 2000, in accordance with Statements of Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these
financial statements is the representation of the management of PVAXX
Corporation and Subsidiaries.
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially
less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole.
Accordingly, I do not express such an opinion.
On the basis of my review, I am not aware of any material modifications
that should be made to the accompanying consolidated financial statements
in order for them to be in conformity with generally accepted accounting
principles.
Dennis W. Bersch, CPA
Milwaukee, WI
<PAGE>
PVAXX CORPORATION (Formerly Oakbrook Capital IV) & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2000
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
HISTORY OF THE REPORTING ENTITY
Originally named Oakbrook Capital IV, (Oakbrook IV) the original company
reporting herein was formed in May 1998 in Colorado, with 40,000,000
shares of common and 10,000,000 shares of preferred stock authorized. It
was registered with the SEC as one of a series of blank check companies
seeking a business combination with an operating company. On May 19,
2000, Oakbrook IV entered into a share exchange agreement accounted for
as a pooling of interests, with PVAXX Corporation, a development stage
company.
PVAXX Corporation, formed in Florida in 2000, is the parent corporation
of PVAXX Research & Development LTD, PVAXX, (Europe) LTD, and PVAXX
Technologies LTD. PVAXX Corporation purchased net business assets at
fair value of PVAXX Research & Development LTD and PVAXX Technologies LTD
in exchange for 10,000,000 shares of its Preferred and 20,000,000 shares
of its Common stock. The net business assets consisted of two patent
applications described below, current liabilities, and a vehicle. This
transaction was accounted for as a combination of entities under common
control. The PVAXX companies were owned and controlled by the acquiring
Company's President and Chairman of the Board of Directors, Henry
Stevens. The only activities of any of these companies to date have been
development stage activities.
The role of each of the subsidiary companies is as follows:
* PVAXX Technologies, Ltd. is the holder of unlimited rights to
manufacture, process, and sell poly vinyl alcohol products governed
by patents issued under International Publication Numbers WO
98/26911 on June 25, 1998 and WO 00/12615 on March 9, 2000
* PVAXX Research and Development Ltd. performs research into product
improvements and applications. Doing business as PVAXX Engineering,
it produces machines forming the product into pellets, which are
then sold to converters. Under the trade style PVAXX SoftCap
Systems it manufactures and sells capsule making machinery
* PVAXX Europe Ltd. is a dormant company.
In conjunction with the share exchange agreement, consummating a reverse
merger, Oakbrook IV, changed its name to PVAXX Corporation, and the newly
named PVAXX and all of the subsidiaries have changed their respective
fiscal year-ends to June 30.
PRINCIPLES OF CONSOLIDATION
These financial statements include the combined accounts of the Colorado
corporation, Oak Brook Capital IV, and the former Florida corporation,
PVAXX Corporation. They are consolidated with the three 100% owned UK
subsidiary corporations (PVAXX Technologies, Ltd., PVAXX Research &
Development, Ltd. and PVAXX Europe, Ltd.). After conversion of UK
currency to US dollars, all significant inter-company accounts and
transactions have been eliminated.
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS
The financial position and results of operations of the company's foreign
subsidiaries are determined using the local currency as the functional
currency. Assets and liabilities of these subsidiaries are translated at
the exchange rate in effect as of the balance sheet date. Income
statement accounts are translated at the average rate of exchange
prevailing during the period. Translation adjustments arising from the
use of differing exchange rates from period to period are included in the
accumulated other comprehensive income account in shareholder's equity
section.
USE OF ESTIMATES
The process of preparing financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reporting of amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period.
CASH AND CASH EQUIVALENTS
Highly liquid assets with a maturity date of three (3) months or less
from the date of acquisition are treated as cash or cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated depreciation.
Depreciation is computed using straight-line and accelerated methods over
estimated useful lives of the property. Estimated useful lives of
property & equipment are as follows:
Machinery & equipment 3 to 15 years
Office equipment 5 years
Furniture & fixtures 5 to 7 years
Motor vehicles 5 years
The amortization of leasehold improvements is based on the shorter of the
lease term or the life of the improvement.
Betterments and large renewals, which extend the life of an asset, are
capitalized whereas maintenance and repairs and small renewals are
expensed as incurred.
VAT TAXES RECEIVABLE
The United Kingdom subsidiaries are required to pay a Value Added Tax
(VAT) on purchases made from certain vendors. The company receives a tax
refund for the VAT paid to various vendors.
OTHER ACCRUED LIABILITIES
Other accrued consist of accrued employee wages, and payroll taxes, due
as the balance sheet date.
INTANGIBLES
The patents were acquired from a related party in exchange for stock in
the PVAXX group of companies. The patents were valued at their
historical cost at the date of acquisition and the stock was valued at
the historical cost of the patent. Intangible assets such as patents on
other intellectual property are recorded at cost if it is determinable at
the date of acquisition. Such intangible assets are amortized over
estimated useful lives based on the nature of the item. The Company will
begin amortizing its patent when it emerges from the development stage.
In accordance with SFAS 121, "Accounting for Impairment of Long-Lived
Assets and Long-Lives Assets to be Disposed of", intangibles are
evaluated for impairment when events or changes in circumstances indicate
that the carrying amounts of the assets may not be recoverable through
the estimated undiscounted future cash flows resulting from the use of
these assets. When any such impairment exists, the related assets are
written down to fair value.
The company has not generated any revenue relating to its patents due to
the fact that its operations are in the development stage. Although
there is substantial doubt about the company's ability to continue as a
going concern as described in Note #9, the company has just acquired the
patents and it is actively engaged in promoting and developing this
technology. At this time there are no events and conditions that exist
to indicate that the asset maybe impaired. However, should the company's
efforts to negotiate successful long-term revenue contracts for its
products, the company will realize an impairment loss on the write-down
of the patent to its fair value.
INCOME TAXES
The Company uses the asset and liability method as identified in SFAS
109, Accounting for Income Taxes.
The consolidated Company has a net operating loss carryforward (NOL) of
$943,315 available to future periods due to losses generated since its
inception through June 30, 2000. The net operating losses and credits
expire at various dates beginning in 2018 and continuing through 2020.
This NOL would result in a tax debit based on application of appropriate
UK and US tax rates if offsetting profits were anticipated. Because the
Company and its subsidiaries are in the development stages, there is no
assurance that future operations will generate a profit or income,
therefore the company recognizes a valuation adjustment which completely
offsets the deferred tax asset related to the net operating loss
carryforward.
STOCK EXCHANGED FOR SERVICES
The issuance of equity instruments in exchange for goods or services are
accounted for based upon the fair value of the goods or services
received. The services exchanged for equity shown on the statements of
changes of stockholder's equity were valued at $.003/share because it was
determined that $4,200 worth of legal services had been provided to set
up the Oak Brook IV shell.
CONVERTIBLE PREFERRED STOCK
The Company issued convertible preferred stock relating to the
transaction discussed above and in Note 3. The preferred stock does not
have voting rights, and is noncumulative, nonparticipating and has
preference up to its par value upon liquidation. The stock maybe
converted 1 for 1 for common stock. at the discretion of holder.
NOTE 2 - ACCOUNTS RECEIVABLE
Management believes all receivables are due and collectible and no
reserve for un-collectable amounts is necessary.
NOTE 3 - RELATED PARTY TRANSACTIONS
Through a series of transactions, the Company effectively acquired the
PVAXX Business Group from a company owned and controlled by Henry
Stevens, the present majority owner of PVAXX Corporation. The ultimate
consideration for the transaction is the 10,000,000 shares of Preferred
stock and 20,000,000 shares of Common stock held by Henry Stevens and
others whose PVAXX Florida corporation shares were exchanged. The PVAXX
Business Group consists of the subsidiary companies described in Note 1.
The President, and another officer, advanced $266,609 to the Company.
The amounts advanced are due upon demand and the effective interest rate
assumed is 8%. The company has accrued $5,332 of interest for the period
relating to these advances.
The patent rights owned by PVAXX Technologies, Ltd., were developed by
and acquired from a company owned by the President, Henry Stevens, and
are carried at their actual cost of $62,981 after adjustment for foreign
currency.
The Company entered into an Employment Agreement dated March 20, 2000
with Henry Stevens, the Company's President and Chairman of the Board of
Directors. The Agreement is for a term of five years and renewable by the
Company.
Under the Agreement, the Company agrees to pay the following amounts:
a) $50,000 per month net of all taxes;
b) Use of a motor vehicle at the choice of the
employee;
c) Use of residential facilities in the Fort
Myers area at a rental not to exceed
$36,000 per annum; and
d) The Company will establish a performance
related share option program, under which
the company's board of directors will
determine participation commensurate with
the employee's position. However, as of
balance sheet date, the Company has not
officially established a share option plan.
No payments have been made under the Agreement as of the date of the
financial statements.
NOTE 4 - RISKS AND UNCERTAINTIES
The Company's future operating results may be affected by a number of
factors. The ability of the Company to raise the capital necessary to
continue to develop and bring its products to market is not assured. The
product being developed by PVAXX will be sold in a highly competitive
global market in which it will need to demonstrate performance
characteristics sought by customers, at a competitive price which will
yield a profit after production and distribution costs. Estimates of the
size of the market, and the company's eventual market share may not be
realized, and the effect of competition cannot be determined.
NOTE 5 - COMMITMENTS AND CONTINGENT LIABILITIES
LEASED FACILITIES - OPERATING LEASE
The Company has entered into a three (3) year operating lease for office
space in the Fort Myers area with an unrelated party. Under the terms of
this lease, effective June 1, 2000 the Company is obligated for monthly
base rental amounts plus sales tax and Common Area Maintenance (CAM)
charges. Under the terms of the lease, the Company is obligated to keep
and maintain the leased premises, including fixtures and improvements, in
good condition.
The Company is obligated for the following rent payments over the lease
term:
<TABLE>
<CAPTION>
Total Monthly Sales
Rent Base Rent CAM Tax
<S> <C> <C> <C> <C>
Year 1
1st quarter $11,013 $2,000 $1,463 $208
2nd quarter 11,013 2,000 1,463 208
3rd quarter 12,285 2,400 1,463 232
4th quarter 13,239 2,700 1,463 250
Year 2 55,080 2,808 1,522 260
Year 3 57,276 2,920 1,583 270
</TABLE>
EMPLOYEE COMPENSATION
In addition to the employment contract with the President disclosed in
Note 3, an arrangement with the Vice-president provides for a salary of
$10,000 monthly for one year, and $15,000 thereafter.
NOTE 6 - RESTRICTED CASH
On March 3, 2000, the former PVAXX executed an agreement with an
unrelated individual who transferred $299,970 to an escrow agent in
exchange for a 90,000 share block of the 20,000,000 shares of common
stock issued as discussed in Notes 1 and 3. Under the terms of the
escrow agreement, updated and signed on August 4, 2000, the funds will be
released to the company when the exchanged shares of the new PVAXX
Corporation are tradable on a U.S. national exchange at not less than
$5.00 per share. If this is not achieved, the funds may be released to
the investor six (6) months after the effective date (August 4, 2000) of
the agreement, upon return of the 90,000 shares which would then be held
in the treasury for resale. As of balance sheet date the 90,000 shares of
stock as well as the $299,970 remain in the custody of the escrow agent.
NOTE 7 - FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying amounts reported in the consolidated balance sheet for cash
and cash equivalents, restricted cash, receivables, accounts payable,
accrued expenses and other liabilities, approximate fair value because of
immediate or short-term maturity of these financial instruments. The
underlying carrying amount reported for long-term debt and capital leases
approximates fair value because, in general, the interest on the
underlying instruments fluctuates with market rates.
NOTE 8 - EARNINGS PER SHARE
Basic earnings per share are computed by dividing earnings available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted earnings per share reflect per
share amounts that would have resulted if all preferred stock had been
converted to common stock. The following reflects amounts reported in
the financial statements:
<TABLE>
<CAPTION>
For the period ended September 30, 2000
------------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Income available to common
shareholders
-basic earnings per share $(479,153) 20,943,716 $ (0.02)
Effect of dilutive securities 10,000,000
-------------------------------------------
Income available to common
shareholders
-fully diluted earnings
per share $(179,153) 30,943,716 $ (0.02)
-------------------------------------------
-------------------------------------------
For the period ended September 30, 1999
-------------------------------------------
Income available to common
stockholders
-basic earnings per share $ - 1,228,000 $ -
-------------------------------------------
-------------------------------------------
From inception
-------------------------------------------
Income available to common
stockholders
-basic earnings per share $(948,647 20,943,716 $ (0.05)
Effect of dilutive securities
-convertible preferred
stock 10,000,000
-------------------------------------------
Income available to common
stockholders
-fully diluted earnings
per share $(948,647) 30,943,716 $ (0.03)
</TABLE>
NOTE 9 - GOING CONCERN CONSIDERATIONS
The ability of the Company to emerge from the development stage and to
develop into a going concern is dependent on the success of the Company
in negotiating long-term revenue contracts and acquiring additional
equity capital. However, there can be no assurance that the Company will
be successful in accomplishing its objectives. The financial statements
do not include any adjustments that might be necessary should the
company, be unable to continue as a going concern.
The company is addressing the substantial doubt about its ability to
continue as a going concern through the deferral of cash payments to the
principal shareholders, through the negotiation of anticipated private
placements with additional investors, and by taking steps to register
shares for sale on the public market in order to generate additional
working capital, in order for the company to expand its operations and to
bring it's product to the market. In addition, certain of the company's
officers and shareholders have agreed that they will advance to the
company some additional funds that the company needs for operating
capital. Although, as of the balance sheet date of June 30, 2000, the
Company had not entered into any revenue-producing contracts, several
successful field tests of various products have been conducted, and
management expects to have successfully negotiated several contracts
before the end of this fiscal year.
<PAGE>
NOTE 10 - LONG TERM LIABILITIES
Long-term liabilities include a three-year capital lease dated May 1, 2000 with
a related party, for equipment, office furniture and vehicles, and an automobile
note with an unrelated party. Depreciation expense for leased assets is
included in depreciation expense for owned assets.
The gross amounts of assets recorded at the foreign conversion rate in effect
at the time of the lease are listed in the table below:
Machinery & equipment $ 596,851
Furniture & fixtures 45,596
Motor vehicles 59,293
---------
Total Assets acquired 701,640
Less accumulated
depreciation (18,322)
---------
Net leased assets $683,318
The future minimum lease payments and the obligations owed on the
automobile note are listed in the table below.
Capital Lease Auto Note
2001 $ 157,563 $ 3,096
2002 131,928 3,219
2003 339,316 593
---------- --------
Current $ 157,563 $ 3,096
Long-term 471,244 3,812
---------- --------
Total $ 628,807 $ 6,908
PVAXX CORPORATION IS THE GUARANTOR OF THESE LEASES.
<PAGE> 51
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not applicable.
LEGAL MATTERS
The validity of our common stock offered hereby has been passed upon for us by
Nadeau & Simmons, P.C., 1250 Turks Head Building, Providence, Rhode Island.
EXPERTS
Dennis W. Bersch, CPA, our independent auditor, has audited the financial
statements of our Company included for the year ended June 30, 2000, which are
included in this prospectus and registration statement. These financial
statements are given on their authority as experts in accounting and auditing.
ADDITIONAL INFORMATION
We have filed with the Commission a registration statement on Form SB-2 under
the Securities Act, with respect to the shares of common stock offered hereby.
This prospectus constitutes a part of the Registration Statement and does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted from this prospectus as permitted by the
rules and regulations of the Commission. Statements contained in this
prospectus as to the contents of any contract, agreement or other document
referred to herein are not necessarily complete and, where such agreement or
other document is an exhibit to the registration statement, each such
statement is qualified in all respects by the provisions of such exhibit, to
which reference is hereby made for a full statement of the provisions thereof.
For further information with respect to our company and its common stock,
reference is hereby made to the registration statement and to the exhibits
thereto.
<PAGE> 52
The registration statement and the exhibits may be inspected, without charge,
and copies may be obtained, at prescribed rates, at the public reference
facilities of the Commission maintained at Judiciary Plaza, 450 Fifth Street,
NW, room 1024, Washington, DC 20549, or on the Internet at http://www.sec.gov.
Copies of the Registration Statement and the exhibits may also be inspected,
without charge, at the Commission's regional offices at 7 World Trade Center,
Suite 1300, New York, New York 10048, and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. In addition, copies of the Registration Statement and
the exhibits may be obtained by mail, at prescribed rates, from the Public
Reference Branch of the Commission at 450 Fifth Street, NW, Washington, DC
20549.
In connection with this offering, our company continues to be subject to the
information and periodic reporting requirements of the Exchange Act, and, in
accordance therewith, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the public
reference facilities and regional offices referred to above. We intend to
furnish our shareholders with annual reports containing audited financial
statements certified by independent public accountants and with quarterly
reports containing unaudited financial statements for the first three quarters
of each fiscal year.
The information contained in this prospectus is subject to completion or
amendment. The shares described in this prospectus may not be sold, nor may
offers to buy be accepted, prior to the time this registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy, nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful, prior to registration under the securities laws of any such state.
<PAGE> 53
We will amend this registration statement on such date or dates as may be
necessary to delay its effective date until we shall file a further amendment
which specifically states that this registration statement shall become
effective in accordance with Section 8(A) of the Securities Act of 1933 or
until the registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
Subject to Completion Dated ______________, 2000
PVAXX CORPORATION
2,400,000 shares
Common Stock
This prospectus relates to the offer and sale, on a best efforts no minimum
basis, of up to 2,400,000 shares of common stock, no par value of PVAXX
Corporation ("PVAXX" or "Company"). We are selling the Shares on a
best-efforts, no minimum basis for a period of 360 days. We will not use an
underwriter or securities dealer. The Company cannot provide assurances that
it will raise significant proceeds from this offering and may receive no or
nominal proceeds, significantly restricting the Company's activities and plan
of operations.
Our officers, directors, current stockholders and any of their affiliates or
associates may purchase shares in the offering. Prior to the offering, no
public market has existed in our securities. We cannot guarantee that a
trading market in the shares of common stock will ever develop.
We are subject to the reporting requirements of Section 13 and 15(d) of the
Exchange Act and are presently current in filing reports with the Securities
and Exchange Commission.
Our corporate address is 12730 New Brittany Boulevard, Ft. Myers, Florida
33907. We estimate that total expenses will be approximately $75,000 in
connection with this offering of our shares.
The registration statement of which this prospectus forms a part also relates
to the potential resale of 4,708,985 shares of Common Stock that were issued
to certain Selling Shareholders in connection with the Company's completed
business combination on July 11, 2000. The Company will not receive any of
the proceeds derived from the resale of the securities by the Selling
Shareholders.
<PAGE> 54
The resale of the securities of the Selling Shareholders are subject to
Prospectus delivery and other requirements of the Securities Act of 1933, as
amended. Sales of such securities or the potential of such sales at any time
may have an adverse effect on the market prices of the securities offered
hereby. The securities offered may be sold from time to time directly by the
Selling Shareholders. Alternatively, the Selling Shareholders may from time
to time offer such securities through underwriters, dealers or agents. The
distribution of securities by the Selling Shareholders may be effected in one
or more transactions that may take place on the over-the-counter market,
including ordinary broker's transactions, privately-negotiated transactions
or through sales to one or more broker-dealers for resale of such shares as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Usual and customary
or specifically negotiated brokerage fees or commissions may be paid by the
Selling Shareholders in connection with such sales of securities.
The securities offered by the Selling Shareholders may be sold by one or more
of the following methods, without limitations:
(a) a block trade in which a broker or dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this Prospectus;
(c) ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
(d) face-to-face transactions between sellers and 46 purchasers without a
broker-dealer. In effecting sales, brokers or dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. The
Selling Shareholders and intermediaries through whom such securities are sold
may be deemed "underwriters" within the meaning of the Act with respect to the
securities offered, and any profits realized or commissions received may be
deemed underwriting compensation.
At the time a particular offer of securities is made by or on behalf of a
Selling Shareholder, to the extent required, a Prospectus will be distributed
which will set forth the number of shares being offered and the terms of the
Offering, including the name or names of any underwriters, dealers or agents,
if any, the purchase price paid by any underwriter for sales purchased from
the Selling Shareholders and any discounts, commissions or concessions allowed
or reallowed or paid to dealers and the proposed selling price to the public.
Sales of securities by the Selling Shareholders or even the potential of such
sales would likely have an adverse effect on the market prices of the
securities offered hereby.
<PAGE> 55
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary
Risk Factors
Competition
Potential Fluctuations in Quarterly Operating Results
Limited Operating History
Dependence on Third-Party Suppliers
Patents, Trademarks and Proprietary Information
Rapid Technological Changes
Expansion
Government Regulation
Dependence on Key Personnel
Control by Principal Shareholders, Officers and Directors
Issuance of Preferred Stock
Trading Market; Volatility of Stock Price
Possible Need for Additional Financing
Indemnification of Officers and Directors
Dependence Upon Outside Advisors
Rule 144 Sales
Use of Proceeds
Dilution
Dividend Policy
Business
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management
Certain Transactions
Principal Shareholders
Description of Capital Stock
Plan of Distribution
Legal Matters
Experts
Additional Information
Financial Statements F-1
</TABLE>
-------------------------------
<PAGE> 56
UNTIL ____________________, 2000 (45 DAYS AFTER THE DATE OF THIS
PROSPECTUS) ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES OF
COMMON STOCK OFFERED HEREUNDER MAY BE REQUIRED TO DELIVER A
PROSPECTUS.
==============================================================================
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
SUCH STATE.
=============================================================================
PVAXX CORPORATION
---------------------------------
4,708,985 Shares
---------------------------------
Common Stock
---------------------------------
PROSPECTUS
---------------------------------
______________, 2000
<PAGE> 57
This Prospectus relates to the potential sale of 4,708,985 shares of common
stock, no par value per share of PVAXX Corporation (the "Company" or "PVAXX"),
hereinafter collectively referred to as the "Selling Shareholders." The
Company will not receive any of the proceeds on the sale of the securities by
the Selling Shareholders. The resale of the securities of the Selling
Shareholders are subject to Prospectus delivery and other requirements of the
Securities Act of 1933, as amended. Sales of such securities or the potential
of such sales at any time may have an adverse effect on the market prices of
the securities offered hereby.
The Company has applied for quotation of its Common Stock on the Over-the-
Counter Bulletin Board ("OTC:BB"), although there can be no assurances that an
active trading market will develop even if the securities are accepted for
quotation or that the Company will maintain certain minimum criteria
established by the NASD for continued quotation.
The securities offered by this Prospectus may be sold from time to time by the
Selling Shareholders, or by their transferees. No underwriting arrangements
have been entered into by the Selling Shareholders. The distribution of the
securities by the Selling Shareholders may be effected in one or more
transactions that may take place on the over-the-counter market including
ordinary broker's transactions, privately-negotiated transactions or through
sales to one or more dealers for resale of such shares as principals at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the
Selling Shareholders in connection with sales of such securities.
The Selling Shareholders and intermediaries through whom such securities may
be sold may be deemed 'underwriters' within the meaning of the Act, with
respect to the securities offered and any profits realized or commissions
received may be deemed underwriting compensation. The Company has agreed to
indemnify the Selling Shareholders against certain liabilities, including
liabilities under the Act.
All costs incurred in the registration of the securities of the Selling
Shareholders are being borne by the Company.
------------------------
<PAGE> 58
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 2000
THE OFFERING
<TABLE>
<S> <C>
Securities Offered(1) 4,708,985 shares of Common
Stock, no par value.
Securities Outstanding Prior to
Company Offering 21,322,800 Shares
Securities Outstanding Subsequent to
all Contemplated Company Offerings 23,722,800 Shares
Use of Proceeds The Company will not receive
any of the proceeds of the
offering of the securities
offered hereby by the Selling
Shareholders.
Risk Factors The securities are subject
to a high degree of risk and
substantial dilution. See
"Risk Factors" and
"Dilution".
Proposed OTC:BB Symbols Common Stock--PVXX
</TABLE>
-------------------
<PAGE> 59
1. Concurrently with this Offering, the Company is offering 2,400,000 shares
of Common Stock.
2. On the date of this Prospectus, a Registration Statement under the Act with
respect to a self-underwritten public offering of 2,400,000 shares of Common
Stock by the Company was declared effective by the Securities and Exchange
Commission, and the Company commenced the sale of Shares offered thereby.
Sales of securities under this Prospectus by the Selling Shareholders or even
the potential of such sales may have an adverse effect on the market price of
the Company's securities.
SELLING SHAREHOLDERS
The registration statement of which this prospectus forms a part relates to
the potential resale of 4,708,985 shares of Common Stock that were issued to
certain Selling Shareholders in connection with the Company's completed
business combination on July 11, 2000. The Company will not receive any of
the proceeds derived from the resale of the securities by the Selling
Shareholders.
The resale of the securities of the Selling Shareholders are subject to
Prospectus delivery and other requirements of the Securities Act of 1933, as
amended. Sales of such securities or the potential of such sales at any time
may have an adverse effect on the market prices of the
securities offered hereby. The securities offered may be sold from time to
time directly by the Selling Shareholders. Alternatively, the Selling
Shareholders may from time to time offer such securities through underwriters,
dealers or agents. The distribution of securities by the Selling Shareholders
may be effected in one or more transactions that may take place on the
over-the-counter market, including ordinary broker's transactions,
privately-negotiated transactions or through sales to one or more
broker-dealers for resale of such shares as principals, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. Usual and customary or specifically negotiated
brokerage fees or commissions may be paid by the Selling Shareholders in
connection with such sales of securities.
The securities offered by the Selling Shareholders may be sold by one or more
of the following methods, without limitations:
(a) a block trade in which a broker or dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this Prospectus;
(c) ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
<PAGE> 60
(d) face-to-face transactions between sellers and 46 purchasers without a
broker-dealer. In effecting sales, brokers or dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. The
Selling Shareholders and intermediaries through whom such securities are sold
may be deemed "underwriters" within the meaning of the Act with respect to the
securities offered, and any profits realized or commissions received may be
deemed underwriting compensation.
At the time a particular offer of securities is made by or on behalf of a
Selling Shareholder, to the extent required, a Prospectus will be distributed
which will set forth the number of shares being offered and the terms of the
Offering, including the name or names of any underwriters, dealers or agents,
if any, the purchase price paid by any underwriter for sales purchased from
the Selling Shareholders and any discounts, commissions or concessions allowed
or reallowed or paid to dealers and the proposed selling price to the public.
Sales of securities by the Selling Shareholders or even the potential of such
sales would likely have an adverse effect on the market prices of the
securities offered hereby.
Investments in our shares involve a high degree of risk. The shares have not
been approved or disapproved by the Securities and Exchange Commission nor has
the Commission passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
Registration of Previously Issued Shares
Sales of securities by the Selling Shareholders or even the potential of such
sales would likely have an adverse effect on the market prices of the
securities offered hereby.
The following table sets forth certain information with respect to our selling
shareholders, persons or entities for whom our company is registering for
resale to the public, either the shares of our company's common stock which
such persons or entities own.
The following table reflects such person's or entities' ownership as of June
30, 2000.
<PAGE> 61
<TABLE>
<CAPTION>
MAXIMUM
CERT NO. NUMBER TO
NAME OF OWNER & CLASS BE SOLD
------------------------ -------------- -----------------
<S> <C> <C>
Gregory Abraham C79 1,429
Anthony & Denise Amodio C96 2,000
Gary L Baxley & Karen B Baxley C99 500
Lewis Boltic & Karen Baxley C101 286
Daphne Beddis 150
Christopher Bence 63 7,687
Christopher Bence 1,450
Bryan Billau 725
British Traders and Shippers Ltd 10*restricted 20,000
David Bromige 35 4,000
Gillian Bromige 2,000
James Bruen 9,000
Roy & Sharon Buchanan C10A 1,000
Brian & Jo Ann Carr C102 100
Joseph Cassata C109 200
Joy Chapman 29 2,000
Grahame Chapman 43 4,000
<PAGE> 62
Robin Mary Coe C112 500
Ian Crowe 957
Frank & Kathy D'Ascoli C114 300
John Dickie Dawson 14 5,752
John Dawson 60 1,738
Kerry & Jutta Drew 5 115,200
Michael Edgeworth 74 4,000
Michael Edgeworth 54 2,000
Thomas Edgeworth 36 6,000
Thomas Edgeworth 73 2,000
Thomas Edgeworth 2,300
Mr & Mrs. AP Evans 32 6,000
Mr AP Evans 71 2,400
Robert F. & Lynette W. Fox C106 100
WJ & SI Freebury 3 387,650
Kate Freebury 25 5,000
William & Sandra Freebury 66 60,000
Jill Gardner 1,920
Gayle & Sheliea Gave C120 100
Louis & Patricia Gouy C91 300
Elli & Monty Grim C82 750
<PAGE> 63
Barbara Hale 38 2,000
Matthew Hall 11 4,400
Matthew Hall 57 25,600
John Hardacre 23 1,880
Alan & Linda Harris C119 429
James Hart 15 6,000
H.F. Hart 44 2,000
O.F. Hart 1,334
R.V.R. Har 1,333
C.J Hart 1,333
Malcom Heaven 19 3,760
Philip Herbert 58 26,478
Philip Herbert 16 40,000
Geoffrey Hester 52 2,000
Geoffrey Hester 1,450
Nelson Jerram 28 10,000
Scott T. Johnson C87 150
Laurilyn Johnson C88 150
A. Jones 7,250
Alan Jones 62 12,000
Bernard Jones 39 8,000
ME Jones (Pension Fund) 7,250
<PAGE> 64
Jerry & Joanie Jordan C107 300
Jumik Investments, Inc. 123 16,613,815
*restricted
Nancee Kane C89 100
Ilya Kazi 76 4,000
Bryan & Rhonda Keane C86 460
David Kear 20 2,820
C.K. Koehler & S.J. Koehler C98 4,000
Jerry Krecicki, Jr. C118 400
Richard Lacey 33 2,000
Richard Lacey 72 2,000
Diane Lacey 34 2,000
Raymond Lagden 37 2,000
Larry Lipman 6 90,000
The Lotz Trust, John V. Lotz C92 6,000
Paul & Margaret Lotz C94 4,000
Raymond Malone C97 300
Allen McClain C111 1,000
Terry W.. McGee &
Peggy H. McGee C93 3,000
Jeffrey Meaton 46 2,000
Melvyn Miles 49 8,000
Melvyn Miles 1,450
<PAGE> 65
Pat Mills 55 2,000
Thomas L. Morgan &
Jacqualine P. Morgan C105 1,000
Peter Morris 7 20,000
Glenn A Morton &
Francis Morton C95 2,000
Michael & Wendy Moulder 68 20,000
David & Peggy Newlan C83 300
Nidicus Foundation 9 2,000,000
William Nigel-Jone 41 4,000
John Nixon 13 20,000
Ethel & Michael Onge C85 1,000
John CM O'Doherty 65 24,000
Oilve Overthrow 30 2,000
Pension Systems Ltd Pension Fund 64 24,000
Howard Ramsden 21 2,820
Martin Reeves 67 14,000
Martin Reeves 40 14,000
Brian & Stacey Reis C115 2,000
Kevin & Catherine Reynolds C117 2,858
Raymond Reynolds C81 1,000
Richard Reynolds C80 1,000
Jacquelin Risley & Gerald Stream C110 30
<PAGE> 66
David Roffe 24 20,000
Carmie L Scarfone &
Claudia Scarfone C103 500
James Schneider C90 30
Karl Sinnott 17* 40,000
restricted
Adam Smith 75 2,000
Darrell Smith 42 8,000
Diane R. Smith C84 160
Stephanie Sowden 122 8,570
Spencer Trust 14,500
John W. Stambaugh in Trust for
Jacqueline M. Canova C100 100
Jane Stevens 48 4,000
Clare Stevens 47 2,000
Henry Stevens 1 10,000
Yolanda Stevens 2 10,000
K.G. & M.L. Stevens 4 50,000
Michael Stevens 50 4,000
H. Stevens 27 10,000
A. Stevens 16 10,000
Rob & Sandra Thomson 8 36,000
Wendy Thomson 69 2,000
Joseph Tunna 77 2,000
<PAGE> 67
Ashley Walters 31 4,000
Kevin Watkins 70 4,000
Danny Wilcox 121 5,800
Danny Wilcox 5,438
Graham Wilden 22 1,128
Tommy & Janie Wiley C108 1,000
Paul & Camille Wittke 1,500
Peter G. Wittke C113 1,500
John Young 51 2,000
Daniel Young & Sarah Garrath 56 2,000
Daniel Young & Sarah Garrath 580
Gerard Werner
C/O Zenith Holdings
P.O. Box 216
Kohler, WI 53044 200,000
Christopher O. Werner 200,000
2620 North 40th Street
Sheboygan, WI 53083
Zenith Holdings Ltd. 200,000
P.O. Box 216
Kohler, WI 53044
Mark T. Thatcher
125 Gideon Lawton Lane
Portsmouth, RI 02871 200,000
Richard Nadeau, Jr.
1250 Turks Head Building
Providence, RI 02903 200,000
<PAGE> 68
James R. Simmons
1250 Turks Head Building
Providence, RI 02903 200,000
Elisabeth Alofsin
C/O Peter J. Alofsin
275 Promenade Street,
Ste. 300
Providence RI 02908 500
Peter J. Alofsin
275 Promenade Street,
Ste. 300
Providence RI 02908 500
Timothy Alsheimer
Four Winds Bellevue Ave
Newport RI 02840 100
Vince Arcello
651 W. Main Rd.
Middletown RI 02842 100
Terry Badger
85 Summer Street
Oakland ME 04963 500
Mark Beall
12790 Atlantic Avenue
Lakewood, CO 80228 500
David Donner
51 Marland Road
Colorado Springs, CO 80906 1,000
Meredith Donner
51 Marland Road
Colorado Springs, CO 80906 1,000
<PAGE> 69
Robert J. Beuchler
The Principal Group
102 S. Tejon Street,Ste. 300
Colorado Springs CO 80903 500
David J. Binkowski
Bink, Inc.
3808 South Sherman Street
Englewood CO 80110 500
Thomas H. Blaney II
201 Line Road
Bellemead NJ 08502 100
Robert Borday
4 Wolcott Avenue
Jamestown RI 02835 100
Thomas Darrell Carico
C/O Ricky D. Wolfe
322 Savannah Ave.
Statesboro GA 30458 2,000
John H. Cox
The Provident
5613 DTC Parkway, Ste. 150
Englewood CO 80111 500
Michael L. Ebert
Ebert & Rehorn
4455 E. Camelback, Ste. E-180
Phoenix AZ 85018 500
Charles Ellsworth
1158 Eudora Street
Denver CO 80209 500
Jack W. Eversull
The Eversull Group
5728 LBJ Freeway,
Ste. 200
Dallas TX 75240 100
<PAGE> 70
Arthur Frank
30 Mongenais St.
Providence RI 02909 100
Amy Hand
2965 S. Williams
Denver CO 80210 500
David Hand
2965 S. Williams
Denver CO 80210 500
Craig Hart
7014 E. Camelback Rd. No. 580
Scottsdale AZ 85251 100
Margaret Heath
357 Harris Hill Rd.
Poland ME 04274 500
Don Hejmanowski
2013 Torwood Circle
Plainfield IL 60544 100
Constance Holland
P.O. Box 250
Mystic, CT 3,000
Chuck Holland
245 Taragona Way
Daytona Beach, FL 3,000
Roger Huglion
255 W. 84th St. Apt. 3B
New York NY 10024 100
James W. Johnson
1225 E. Commodore Place
Tempe AZ 85283 500
<PAGE> 71
Robert B. Johnson
California Federal
1225 E. Commodore Place
Tempe AZ 85283 500
Ning Luh
12925 Creamery Hill Drive
Germantown MD 20874 100
Pasquale Maiorino
c/o Platz Associates
Two Great Falls Plaza
Auburn ME 04210 2,000
Steven Merrell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
Amanda Merrell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
Matthew Merrell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
Lewis F. Merrell
3313 Riley
Plano TX 75025 4,400
Joyce Merrell
3313 Riley
Plano TX 75025 4,400
Lane G. Neville
3300 N. Central, Ste. 750
Phoenix AZ 85012 500
<PAGE> 72
Hunter Pell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
Jessica Pell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
Peter Pescosolido
374 Commonwealth Rd.
Wayland MA 01778 1,000
John Petruney
66 Haskell St.
Beverly Farms MA 01915 100
Michael G. Pfalmer
Rampart Distribution
Colorado Springs CO 80909 500
Thomas Platz
c/o Platz Associates
Two Great Falls Plaza
Auburn ME 04210 2,000
Dyer Powell
R.J. Steichen Securities
10 Division Arcade
Buffalo MN 55313 500
Paul Raducha
Exercycle Corporation
667 Providence Street
Woonsocket RI 02895 100
Richard Reavis
651 W. Main Rd.
Middletown RI 02842 100
<PAGE> 73
Jeff Revious
761 Garfield
Denver CO 80206 500
Romeo Rubitaille
53 Slade St.
Pawtucket RI 02688 100
Jack Santos
466 Great Rd.
Lincoln RI 02865 100
James R. Simmons
Nadeau & Simmons
1250 Turks Head Building
Providence RI 02903 1,000
Amy Simmons
C/O Jim Simmons
1250 Turks Head Building
Providence RI 02903 1,000
Andy Small
39 School St.
Newport RI 02840 100
David Smith
3 Restmere Terrace
Middletown RI 02842 100
Glen Smith
1 Sunset Hill RD.
Middletown RI 02842 100
Sean Sullivan
7 Colonial Dr.
Middletown RI 02840 100
Stephanie Thatcher
C/O Thomas S. Thatcher
2321 Juniper Lane
Amarillo TX 79109 500
<PAGE> 74
Steven B. Thatcher
85 Newbury Street
Boston MA 02116 500
Michael T. Thatcher
C/O John J. Wallace, Jr.
17 W. Cheyenne Mtn. Blvd.
Colorado Springs CO 80906 500
Seth T. Thatcher
C/O Thomas S. Thatcher
2321 Juniper Lane
Amarillo TX 79109 500
JoAnn Thatcher
2321 Juniper Lane
Amarillo TX 79109 1,000
Thomas S. Thatcher
2321 Juniper Lane
Amarillo TX 79109 1,000
Mills T. Thatcher
125 Gideon Lawton Lane
Portsmouth RI 02871 5,000
Grayson S. Thatcher
125 Gideon Lawton Lane
Portsmouth RI 02871 5,350
Jennifer M. Thatcher
125 Gideon Lawton Lane
Portsmouth RI 02871 6,000
Meredith Wallace
17 W. Cheyenne Mtn. Blvd.
Colorado Springs CO 80906 4,400
John J. Wallace, Jr.
17 W. Cheyenne Mtn. Blvd.
Colorado Springs CO 80906 4,400
<PAGE> 75
Jay Weibel
29 Bowens Wharf
Newport RI 02840 600
Johanna Werner
2123 Stanford Avenue
St. Paul MN 55105 3,000
Patrick J. Werner
903 St. Clair
St. Paul MN 53105 3,000
Anthony M. Werner
3701 E. Cactus Creek Court
Highlands Ranch CO 80126 3,000
Kevin Werner
3175 Limerick Lane
Sheboygan WI 53080 5,000
Mary Belle Werner
2620 N. 40th Street
Sheboygan, WI 53083 6,300
Christopher Anthony Werner
P.O. Box 216
Kohler, WI 53083 10,500
Mary Elizabeth Werner
P.O. Box 216
Kohler, WI 53083 10,850
Paula Werner-Kletzein
2026 N. 6th Street
Sheboygan WI 53083 3,000
Gretchen Werner-Schuttey
9704 Old Barn Rd.
Meqoun WI 53072 3,000
<PAGE> 76
Adeline Wolfe
322 Savannah Avenue
Statesboro GA 30458 1,000
Grant Wolfe
322 Savannah Avenue
Statesboro GA 30458 1,000
Ricky D. Wolfe
322 Savannah Avenue
Statesboro GA 30458 2,000
Camille Wolfe
322 Savannah Avenue
Statesboro GA 30458 2,000
TOTALS 21,322,800
</TABLE>
PLAN OF DISTRIBUTION
The shares of our common stock registered hereunder may be sold, if desired,
by our selling shareholders, subsequent to a registered broker/dealer
establishing an automated quotation on the Over-the-Counter Bulletin Board.
The Selling Shareholders' shares must be offered:
(i) through dealers or in ordinary brokers' transactions, in the
over-the-counter market or otherwise;
(ii) at the market or through market makers or into an existing market for the
securities;
(iii)in other ways not involving market makers or established trading
markets, including direct sales to purchasers or effective through agents;
or
(iv) in combinations of any of such methods of sale. The shares will be sold
at market prices prevailing at the time of sale or at negotiated prices.
If a dealer is utilized in the sale of the shares in respect of which our
prospectus is delivered, the selling shareholder will sell such shares to the
dealer, as principal. The dealer may then resell such shares to the public at
varying prices to be determined by such dealer at the time of resale.
<PAGE> 77
Sales of our shares at the market and not at a final price, which are made
into an existing market for the shares, will be made by our selling
shareholders to or through a market maker, acting as principal or as agent.
Other sales may be made, directly or through an agent, to purchasers outside
existing trading markets. A selling broker may act as agent or may acquire the
shares or interests therein as principal or pledgee and may, from time to
time, effect distributions of such shares and interests.
The shares offered hereby are eligible for sale only in certain states, and,
in some of those states, may be offered or sold only to institutional
investors, as defined under applicable state securities law. No sales or
distributions, other than as described herein, may be effected after our
prospectus shall have been appropriately amended or supplemented.
The Selling Shareholders may also pledge their shares pursuant to the margin
provisions of their customer agreements with their brokers. If there is a
default by the Selling Shareholders, the brokers may offer and sell the
pledged shares.
Brokers or dealers may receive commissions or discounts from the Selling
Shareholders (or, if the broker-dealer acts as agent for the purchaser of the
shares, from such purchaser) in amounts to be negotiated which are not
expected to exceed those customary in the types of transactions involved.
We cannot estimate at the present time the amount of commissions or discounts,
if any, that will be paid by the Selling Shareholders in connection with
sales of the shares.
The Selling Shareholders and any broker-dealers or agents that participate
with the Selling Shareholders in sales of the shares may be deemed to be
underwriters within the meaning of the Securities Act in connection with such
sales. In that event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
We have agreed to pay all fees and expenses incident to the registration of
the shares, including certain fees and disbursements of counsel to the Selling
Shareholders. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under
the Securities Act.
The Selling Shareholders have also agreed to indemnify us, our directors,
officers, agents and representatives against certain liabilities, including
certain liabilities under the Securities Act.
The Selling Shareholders and other persons participating in the distribution
of the shares offered hereby are subject to the applicable requirements of
Regulation M promulgated under the Securities Exchange Act of 1934 in
connection with the sales of the shares.
<PAGE> 78
Limited State Jurisdictions Where Securities Are to be Offered
The common stock offered hereby may be eligible for sale only in certain
states, and, in some of those states, may be offered or sold only to
institutional investors, as defined under applicable state securities law. No
sales or distributions, other than as described herein, may be effected after
this Prospectus shall have been appropriately amended or supplemented. Under
the securities laws of certain states, the shares may be sold in those states
only through registered or licensed broker-dealers or pursuant to available
exemptions from such requirements. In addition, in certain states the shares
may not be sold therein unless the shares have been registered or qualified
for sale in such state or an exemption from such requirement is available and
is complied with.
Upon approval, the securities will be offered in at least the following
jurisdictions by salespersons of the issuer:
Florida
Washington, D.C.
Colorado
New York
Only residents of those states in which the shares have been approved for sale
under applicable securities or Blue Sky laws may purchase shares in this
Offering. Each potential investor will be required to execute an investment
representation and subscription agreement that, among other things, requires
the potential investor to certify his or her state of residence. A potential
investor who is a resident of a state other than a state in which the shares
have been qualified for sale may request that the Company register the shares
in the state in which such investor resides. However, the Company is under no
obligation to do so, and may refuse any such request.
Special Standards for Securities Sold in California
Each California investor must have an annual gross income of at least $65,000
and a net worth, exclusive of home, furnishings and automobiles, of at least
$250,000, or in the alternative, a net worth, exclusive of home, furnishings
and automobiles, of at least $500,000. In addition, an investor's total
purchase may not exceed 10% of such investor's net worth.
Investor Relations Arrangements
Our company may enter into an investor relations agreement. Under the
agreement, an investor relations firm is engaged to provide investor
relations, corporate communications and related support services to our
company, specifically including, among other duties, the development of a
comprehensive plan for the dissemination of our information to shareholders as
well as brokers, analysts and potential investors; advising our company
regarding trends and changes in the Over-the-Counter Bulletin Board brokerage
and investment community, as well as changes in
<PAGE> 79
share ownership of our shares, all in the context of providing appropriate
investor relations communications; coordinating investor and shareholder
contacts with our counsel to ensure compliance with applicable securities
laws and exchange listing requirements; and assisting us with on-site investor
relations meetings and with the design, preparation and dissemination of
investor relations materials. No specific firm has been targeted by the
Company and there can be no assurance that one will ever be engaged, or will
be willing to be engaged by the Company on favorable terms.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT
RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER
WOULD BE UNLAWFUL.
UNTIL ____________________, 2000 (45 DAYS AFTER THE DATE OF THIS
PROSPECTUS) ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES OF
COMMON STOCK OFFERED HEREUNDER MAY BE REQUIRED TO DELIVER A
PROSPECTUS.
====================================================================
====================================================================
------------------------
Subject to Completion Dated ______________, 2000
PVAXX CORPORATION
4,708,985 Shares
Common Stock
<PAGE> 80
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary
Risk Factors
Competition
Potential Fluctuations in Quarterly Operating Results
Limited Operating History
Dependence on Third-Party Suppliers
Patents, Trademarks and Proprietary Information
Rapid Technological Changes
Expansion
Government Regulation
Dependence on Key Personnel
Control by Principal Shareholders, Officers and Directors
Issuance of Preferred Stock
Trading Market; Volatility of Stock Price
Possible Need for Additional Financing
Indemnification of Officers and Directors
Dependence Upon Outside Advisors
Rule 144 Sales
Use of Proceeds
Dilution
Dividend Policy
Business
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management
Certain Transactions
Principal Shareholders
Description of Capital Stock
Plan of Distribution
Legal Matters
Experts
Additional Information
Financial Statements F-1
</TABLE>
-------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Model Business Corporation Act of the State of Colorado ("CMBCA")
provides, in general, that a corporation shall have the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation), because the person is or was a director or officer
of the corporation. Such indemnity may be against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with such action, suit or
proceeding, if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation and if, with respect to any criminal action or proceeding, the
person did not have reasonable cause to believe the person's conduct was
unlawful.
The CMBCA provides, in general, that a corporation shall have the power to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of
the corporation to procure a judgment in its favor because the person is or
was a director or officer of the corporation, against any expenses (including
attorneys' fees) actually and reasonably incurred by the person in connection
with the defense or settlement of such action or suit if the person acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation.
The CMBCA provides, in general, that a corporation shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director or officer of the corporation against any liability asserted against
the person in any such capacity, or arising out of the person's status as
such, whether or not the corporation would have the power to indemnify the
person against such liability under the provisions of the law.
The Company's Articles of Incorporation (incorporated by reference herein)
provides for indemnification of directors, officers and other persons as
follows:
To the fullest extent permitted by the CMBCA as the same now exists or may
hereafter be amended, the Corporation shall indemnify, and advance expenses
to, its directors and officers and any person who is or was serving at the
request of the Corporation as a director or officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
The Corporation, by action of its board of directors, may provide
indemnification or advance expenses to employees and agents of the Corporation
or other persons only on such terms and conditions and to the extent
<PAGE> 82
determined by the board of directors in its sole and absolute discretion.
The indemnification and advancement of expenses shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any By-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
The Corporation shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to
indemnify him against such liability.
The indemnification and advancement of expenses, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors and
administrators of such officer or director. The indemnification and
advancement of expenses that may have been provided to an employee or agent of
the Corporation by action of the board of directors, shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased
to be an employee or agent of the Corporation and shall inure to the benefit
of the heirs, executors and administrators of such a person, after the time
such person has ceased to be an employee or agent of the Corporation, only on
such terms and conditions and to the extent determined by the board of
directors in its sole discretion.
THE COMPANY'S BY-LAWS (INCORPORATED BY REFERENCE HEREIN) PROVIDES THAT:
Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative,
because he is or was a director or an officer of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to an employee benefit plan
(hereinafter an "Indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the CMBCA, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than such law permitted the Corporation to provide before such amendment),
against all expense, liability and loss (including attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such Indemnitee in connection therewith;
provided, however, that, except as provided in the section "Right of
Indemnitees to Bring Suit" with respect to proceedings to enforce rights to
indemnification, the Corporation
<PAGE> 83
shall indemnify any such Indemnitee in connection with a proceeding (or part
thereof) initiated by such Indemnitee only if such proceeding (or part
thereof) was authorized by the board of directors of the Corporation.
RIGHT TO ADVANCEMENT OF EXPENSES.
The right to indemnification conferred in the section "Right to
Indemnification" of this Article shall include the right to be paid by the
Corporation the expenses (including attorney's fees) incurred in defending any
such proceeding in advance of its final disposition; provided, however,
that, if the CMBCA requires, an advancement of expenses incurred by an
Indemnitee in his capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such Indemnitee, including,
without limitation, service to an employee benefit plan) shall be made only
upon delivery to the Corporation of an undertaking, by or on behalf of such
Indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal that such Indemnitee is not entitled to be indemnified for such
expenses under this section or otherwise.
The rights to indemnification and to the advancement of expenses conferred in
this section and the section "Right to Indemnification" of this Article shall
be contract rights and such rights shall continue as to an Indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the Indemnitee's heirs, executors and administrators. Any repeal or
modification of any of the provisions of this Article shall not adversely
affect any right or protection of an Indemnitee existing at the time of such
repeal or modification.
RIGHT OF INDEMNITEES TO BRING SUIT.
If a claim under the section "Right to Indemnification" or "Right to
Advancement of Expenses" of this Article is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the Corporation, except in the case of a claim for an advancement of expenses,
in which case the applicable period shall be twenty (20) days, the Indemnitee
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim. If successful in whole or in part in any such
suit, or in a suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the Indemnitee shall also
be entitled to be paid the expenses of prosecuting or defending such suit. In
(1) any suit brought by the Indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the Indemnitee to enforce a right to
an advancement of expenses) it shall be a defense that, and (2) in any suit
brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the Corporation shall be entitled to recover
such expenses upon a final adjudication that, the Indemnitee has not met any
applicable standard for indemnification set forth in the CMBCA.
<PAGE> 84
Neither the failure of the Corporation (including its board of directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the Indemnitee
is proper in the circumstances because the Indemnitee has met the applicable
standard of conduct set forth in the CMBCA, nor an actual determination by
the Corporation (including its board of directors, independent legal counsel,
or its stockholders) that the Indemnitee has not met such applicable standard
of conduct, shall create a presumption that the Indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee
to enforce a right to indemnification or to an advancement of expenses
hereunder, or brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the burden of proving that
the Indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Article or otherwise shall be on the Corporation.
NON-EXCLUSIVITY OF RIGHTS.
The rights to indemnification and to the advancement of expenses conferred in
this Article shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, the Corporation's Articles of
Incorporation as amended from time to time, these By-Laws, any agreement, any
vote of stockholders or disinterested directors or otherwise.
INSURANCE.
The Corporation may maintain insurance, at its expense, to protect itself and
any director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss under
the CMBCA.
INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION.
The Corporation may, to the extent authorized from time to time by the board
of directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent of
the provisions of this Article with respect to the indemnification and
advancement of expenses of directors and officers of the Corporation. The
directors and officers of our company are covered by a policy of liability
insurance.
<PAGE> 85
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the sale of the Shares are estimated as
follows:
Securities and Exchange Commission registration fee* $ 9,900
Legal Fees and expenses* 25,870
Accounting fees and expenses* 33,000
Printing and Engraving* 10,000
Miscellaneous* 4,880
----------
TOTAL $ 75,000
----------------------
*estimated
ITEM 26. UNREGISTERED SECURITIES ISSUED OR SOLD WITHIN ONE YEAR.
Oak Brook Capital IV, Inc. was incorporated under the laws of the State of
Colorado on May 15, 1998. It was incorporated as a "blind pool" or "blank
check" company for the purpose of seeking to acquire one or more properties or
businesses. Oak Brook elected to voluntarily file a registration statement in
order to become a reporting company under the Securities Exchange Act of 1934,
as amended.
A Plan and Agreement of Share Exchange was executed on May 19, by and among
Oak Brook PVAXX, Mark T. Thatcher and Gerard M. Werner, who joined in the
execution of the Agreement for the purpose of making certain covenants
regarding the transaction contemplated therein. Oak Brook is a corporation
duly organized and validly existing under the laws of the state of Colorado,
with its registered office at 17 West Cheyenne Mountain Blvd., Colorado
Springs, Colorado 80906, its principal executive office at 1250 Turks Head
Building, and its phone number is (401) 272-5800; PVAXX is a corporation duly
organized and validly existing under the laws of the state of Florida, with
its registered office located in the city of Ft. Myers, State of Florida, its
principal executive office at 12730 New Brittany Boulevard, Ft. Myers, FL
33907, and its phone number is (941)274-9355; and Mark T. Thatcher is the
Chairman and Secretary and Gerard M. Werner is the President and a Director
of Oak Brook.
The respective boards of directors of Oak Brook and PVAXX deemed it desirable
and in the best interests of their respective corporations, for Oak Brook to
acquire the outstanding capital stock of PVAXX in exchange for the issuance of
shares of the common and preferred stock of Oak Brook and proposed, declared
advisable and approved such share exchange (the "PVAXX EXCHANGE") pursuant to
this Agreement, which Agreement has been duly approved by resolutions of the
respective boards of directors and a vote by the shareholders of Oak Brook
and PVAXX.
<PAGE> 86
APPROVAL OF PLAN AND AGREEMENT OF SHARE EXCHANGE
The Board of Directors and shareholders have unanimously approved a Plan and
Agreement of Share Exchange (the "Exchange"), whereby Oak Brook acquired all
of the issued and outstanding capital stock of PVAXX in exchange for
20,000,000 shares of the Common stock of Oak Brook and 10,000,000 shares of
the Preferred Stock of Oak Brook.
CONVERSION OF PVAXX'S STOCK AND OTHER SECURITIES:
PVAXX shareholders surrendered one hundred percent (100%) of their issued and
outstanding common and preferred shares to Oak Brook in exchange for receipt
of one hundred percent (100%) of PVAXX shares, Oak Brook, on the terms and
subject to the conditions herein set forth, issued and delivered to PVAXX
shareholders:
(i) Issuance of Shares and Options in connection with the PVAXX
Exchange. The aggregate number of Oak Brook Shares of common
stock to be issued or reserved for issuance in connection with
the PVAXX Exchange shall be twenty million (20,000,000) As
soon as practicable after the PVAXX Exchange became effective,
Oak Brook caused its transfer agent (the "Transfer Agent")
to issue to the shareholders of oak Brook, on a pro rata basis,
an aggregate of twenty million (20,000,000) Shares of Oak Brook
common stock in exchange for all the existing shares of PVAXX
common stock.
The calculation of pro rata distributions for the purposes of
this section shall be made by dividing the aggregate number of
Oak Brook Shares of common stock to be issued or reserved for
issuance in connection with the PVAXX Exchange by the aggregate
number of PVAXX Shares of common stock issued or reserved as
a result of options, warrants, convertible securities or other
commitments. No other issuance of securities is required to
effect the PVAXX Exchange.
(ii) Fractional Interests. No fractional shares of common stock
of Oak Brook or certificate or script representing the same was
Issued. In lieu thereof each holder of PVAXX Shares or PVAXX
Options having a fractional interest arising upon such conversion
was rounded up into one full additional share of Oak Brook common
stock;
<PAGE> 87
(iii) Status of Common Stock. All Shares of common stock of Oak
Brook into which PVAXX Shares were converted as herein provided
were fully paid and non-assessable and issued in full satisfaction
of all rights pertaining to such Shares;
The PVAXX Exchange was intended to qualify as an I.R.C. 368(b)
tax-free reorganization. At the Closing, (a) PVAXX delivered
to Oak Brook a statement (in such form as may be reasonably
requested by counsel to Oak Brook) conforming to the requirements
of Section 1.897-2(h)(1)(i) of the United States Treasury
Regulations, and (b) PVAXX shall deliver to the IRS the notification
required under Section 1.897 - 2(h)(2) of the United States Treasury
Regulations.
The following information sets forth all securities of the Company sold by it
since inception, which securities were not registered under the Securities Act
of 1933, as amended. There were no underwriting discounts and commissions paid
in connection with the issuance of any shares of common stock prior to the
date of this Registration Statement.
All of the sales of securities prior to the date hereof were made in reliance
upon Section 4(2), 4(6) and Rule 505 and 506 of Regulation D of the
Securities Act, which provides exemption for transactions not involving a
public offering. All certificates are "restricted securities" and bear a
restrictive legend. See "Description of Securities--Shares Eligible for
Future Sale."
Certain of these shares were issued without registration under the Securities
Act, by reason of the exemption from registration afforded by the provisions
of Section 4(2) thereof, as transactions by an issuer not involving a public
offering. Each recipient of shares delivered appropriate investment
representations to the Company with respect thereto and consented to the
imposition of restrictive legends upon the certificates evidencing the shares.
<PAGE> 88
ITEM 27. EXHIBITS.
INDEX TO EXHIBITS
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EXHIBIT NO. DESCRIPTION
<S> <C> <C>
## 2.10 Plan of Share Exchange dated May 19, 2000;
## 2.11 Articles of Share Exchange between Oak Brook Capital IV,
Inc. and PVAXX Corporation, dated June 26, 2000;
# 3(a) Articles of Incorporation
# 3(b) Bylaws
# 4(a) Agreements Defining Certain Rights of Shareholders
# 4(b) Specimen Stock Certificate
x 4(c) Subscription Agreement
x 4(d) Investor Representation Letter
x 5.1 Opinion of Nadeau & Simmons, P.C. regarding the legality
of the securities being offered hereby.
7 Not applicable
9 Not applicable
## 10.1 Issuance of Restricted Shares from Authorized Shares
## 10.2 Opinion to Transfer Agent Authorizing Issuance of
Restricted Shares from Authorized Shares
x 10.3 Employment Agreements (Stevens and Wade)
x 10.4 Lease
<PAGE> 89
11 Not applicable
14 Not applicable
16 Not applicable
## 20.1 Board of Director's Resolution's authorizing merger and
name change from Oak Brook Capital IV, Inc. to PVAXX
Corporation;
21 Not applicable
x 23.1 Consent of Counsel (contained in Exhibit 5.1)
x 24.1 Consent of Dennis W. Bersch, CPA.
x 27 Financial Data Schedule
28 Not applicable
# 99.1 Safe Harbor Compliance Statement
____________________________
## incorporated herein by reference from Registrant's Amendment
to Form 8-K, filed July 10, 2000
# incorporated herein by reference from Registrant's Third
Amendment to Form 10SB12G, filed August 5, 1999.
x filed herewith
<PAGE> 90
ITEM 28. UNDERTAKINGS.
The undersigned hereby undertakes:
(1) that, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(2) that before any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration statement, by
any person or party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other items of the applicable form;
(3) that every prospectus (i) that is filed pursuant to paragraph (2)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(4) to respond to requests for information that is incorporated by reference
into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form SB-2
under the Securities Act of 1933, within one business day of receipt of any
such request, and to send the incorporated documents by first class mail or
other equally prompt means, including information contained in documents filed
after the effective date of the registration statement through the date of
responding to such request; and
(5) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
Insofar as indemnification for liabilities under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 20 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. If
<PAGE> 91
a claim of indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in a successful defense of any action,
suit or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned hereunto duly authorized.
PVAXX CORPORATION
By: /s/ Henry Stevens
________________________________
HENRY STEVENS
Chairman
Date: December 18, 2000
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Henry Stevens, his true and lawful
attorneys-in-fact and agents with full power of substitution and
re-substitution, for then and in their name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement and to file the same with all
exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all
intents and purposes as they might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
This power of attorney may be executed in counterparts.
<PAGE> 92
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on
the dates indicated.
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SIGNATURE TITLE DATE
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<S> <C> <C>
/s/ Bryan Wade Secretary December 18, 2000
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