SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 10, 2000
PVAXX CORPORATION
(Exact Name of Registrant as Specified in its Charter)
COLORADO
(State or Other Jurisdiction of Incorporation)
0-25019 05-0499528
(Commission File Number) (I.R.S. Employer Identification Number)
12730 New Brittany Boulevard
Ft. Meyers, Florida 33907
(Address of Principal Executive Offices) (Zip Code)
(941) 274-9355
(Registrant's Telephone Number, Including Area Code)
<PAGE> 1
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FORWARD LOOKING STATEMENTS
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THIS FORM 8-K AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME
BY PVAXX CORPORATION (HEREINAFTER REFERRED TO AS "PVAXX" AND/OR "COMPANY"
AND/OR "REGISTRANT") OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY
CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES
ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
FIFTEEN U.S.C.A. SECTIONS 77Z-2 AND 78U-5 (SUPP. 1996). THOSE STATEMENTS
INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF
PVAXX AND MEMBERS OF ITS MANAGEMENT TEAM AS WELL AS THE ASSUMPTIONS ON
WHICH SUCH STATEMENTS ARE BASED.
PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS
ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES,
AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN
FORWARD-LOOKING STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE
STATEMENT FOR FORWARD-LOOKING STATEMENTS INCLUDED AS EXHIBIT 99.1 TO THIS
FORM 8-K, AND ARE HEREBY INCORPORATED HEREIN BY REFERENCE. THE COMPANY
UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO
REFLECT CHANGED ASSUMPTIONS, THE OCCURRENCE OF UNANTICIPATED EVENTS OR
CHANGES TO FUTURE OPERATING RESULTS OVER TIME.
<PAGE> 2
INFORMATION INCLUDED IN THIS REPORT
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
BACKGROUND INFORMATION
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 12799 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.
AMENDMENT TO ARTICLES OF INCORPORATION
The Board of Directors and shareholders have unanimously approved for the
restatement and amendment of the Company's Articles of Incorporation in order
to change the Company's name to "PVAXX CORPORATION".
Approval of the restatement and amendment will not result in any other material
amendment or change to the Company's Articles of Incorporation. The restatement
and amendment is required to effect the Company's acquisition of PVAXX.
<PAGE> 3
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.
ELECTION OF DIRECTORS
At the Meeting, the successors to the current Board of Directors were
elected for a term of office, such term to commence on the effective date of
the Exchange. The directors who were chosen to fill vacancies on the
Board shall hold office until the next election for which nominee
directors are chosen, and until their successors are duly elected by the
stockholders.
EFFECT OF PVAXX EXCHANGE
In all other respects, the identity, existence, purposes, powers, objects,
franchises, rights, and immunities of OAK BROOK shall continue unaffected and
unimpaired by the PVAXX Exchange, and the corporate identity, existence,
purposes, powers, objects, franchises, rights, and immunities of PVAXX shall
continue unaffected, except that, as a result of the PVAXX Exchange, OAK BROOK
shall own all issued and outstanding shares of PVAXX. Accordingly, on the
Effective Date, PVAXX shall become a wholly-owned subsidiary of OAK BROOK,
who subsequently has changed its name to PVAXX Corporation (the "Parent
Corporation"), a Colorado corporation.
The laws of Colorado shall continue to govern the Parent Corporation. On and
after the Effective Date, the articles of incorporation of PVAXX shall be the
articles of incorporation of the Parent Corporation until further amended in
the manner provided by law and in such articles of incorporation (the
"Articles"). On the Effective Date, the bylaws of PVAXX shall be the bylaws
of the Parent Corporation (the "Restated Bylaws") until altered, amended, or
repealed, or until new bylaws shall be adopted in accordance with the provisions
of law, the Articles, and the Restated Bylaws.
<PAGE> 4
Conversion of PVAXX's Stock and Other Securities
PVAXX shareholders will surrender 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, shall issue and deliver 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 becomes effective,
OAK BROOK shall cause 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.
Additionally, on the Effective Date, OAK BROOK shall issue, on
a pro rata basis, an aggregate of ten million (10,000,000) Shares
of OAK BROOK Preferred Stock in exchange for all the existing
shares of PVAXX preferred 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 shall
be issued. In lieu thereof each holder of PVAXX Shares or
PVAXX Options having a fractional interest arising upon
such conversion will be rounded up into one full additional share
of OAK BROOK common stock;
<PAGE> 5
(iii) Status of Common Stock. All Shares of common stock of OAK
BROOK into which PVAXX Shares are converted as herein provided
shall be fully paid and non-assessable and shall be issued in
full satisfaction of all rights pertaining to such Shares;
The PVAXX Exchange is intended to qualify as an I.R.C. 368(b)
tax-free reorganization. At the Closing, (a) PVAXX shall deliver
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.
Investment Representation Letter
At the Closing, each of the PVAXX Shareholders shall execute and
deliver to PVAXX an investment representation letter statement in
such form as may be reasonably requested by counsel.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
BENEFICIAL OWNERSHIP OF PVAXX SECURITIES
The following table sets forth the ages of and positions and offices presently
held by each nominee director of the Company. For information about
ownership of the Company's Voting Securities by each nominee director, see
"BENEFICIAL OWNERSHIP OF VOTING SECURITIES."
<PAGE> 4
<TABLE>
<CAPTION>
Date First
Became Positions and Offices
Name Age Director With the Company
-------------------- ---- ---------- ---------------------
<S> <C> <C> <C>
Henry Stevens 37 June 26, 2000 President
Bryan Wade 53 June 26, 2000 Secretary
------------------------------------------------------
Please see personal biographies below
</TABLE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
BENEFICIAL OWNERSHIP OF PVAXX SECURITIES
The following table sets forth certain information regarding beneficial
ownership of PVAXX Common Stock as of July 10, 2000 by (i) each person
known by PVAXX to own beneficially more than 5% of the outstanding Common
Stock, (ii) each director, and (iii) all executive officers and directors as a
group. Each person has sole voting and sole investment or dispositive power
with respect to the shares shown except as noted.
<PAGE> 6
<TABLE>
<CAPTION>
---------------------------------------------
<S> <C> <C>
COMMON STOCK
------------------------------------
Name and address # of %of
of beneficial owner shares Class Options
------------------------------------------------------------------------
Jumik Investments, Inc. 16,613,815 77.900% -
Henry Stevens,
Majority and
Controlling Shareholder
Henry Stevens 20,000 00.009% -
PREFERRED STOCK
------------------------------------
Jumik Investments, Inc.
Henry Stevens,
Majority and
Controlling Shareholder 10,000,000 100.00% -
</TABLE>
DIVIDENDS
The Company has never paid dividends with respect to the Common Stock and
currently does not have any plans to pay cash dividends in the future.
There are no contractual restrictions on the Company's present or future
ability to pay dividends. Future dividend policy is subject to the discretion
of the Board of Directors and is dependent upon a number of factors,
including future earnings, capital requirements and the financial condition
of the Company. The Colorado Corporation Code provides that a corporation may
not pay dividends if the payment would reduce the remaining net assets of the
corporation below the corporation's stated capital plus amounts constituting a
liquidation preference to other security holders.
DIRECTORS AND EXECUTIVE OFFICERS
In 1998 and 1999, the Board of Directors met informally on a number of
occasions, voting on corporate actions by written consent.
<PAGE> 7
DIRECTORS
The following table sets forth the ages of and positions and offices
presently held by each Director of the Company. For information about
ownership of the Company's Securities by each director, see
"BENEFICIAL OWNERSHIP OF PVAXX SECURITIES."
<TABLE>
<CAPTION>
Date First
Became Positions and Offices
Name Age Director With the Company
---------------------------------------------------------------------------
<S> <C> <C> <C>
Henry Stevens 37 June 26, 2000 President
Bryan Wade 53 June 26, 2000 Secretary
----------------------------------------------------------------
</TABLE>
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
<PAGE> 8
experience with PVA materials, particularly in young companies, will
certainly be a valuable tool in PVAXX's development.
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 early 2000, Mr. Wade joined PVAXX as a Vice President, overseeing all
sales and marketing for the company.
ITEMS 2 THROUGH 4, 6 THROUGH 9 NOT APPLICABLE.
ITEM 5. OTHER EVENTS.
PVAXX CORPORATION--
DESCRIPTION OF THE BUSINESS
Nature of Activities - PVAXX CORPORATION ("PVAXX" or the "Company")
was incorporated as a Florida corporation on March 16, 2000.
Pvaxx Corporation, is the parent company of the Pvaxx group of
companies.
The Pvaxx group consists of Pvaxx Technologies Ltd, which holds the
the patents and intellectual property. Pvaxx Research & Development
Ltd, the company undertaking all ongoing trials and developments.
And also does business as Pvaxx Engineering, which manufactures all
our pelleting machines and Pvaxx Pharmaceutical which manufactures
and supplies capsule making machinery. Pvaxx Europe) Ltd is the
European sales company of the group.
Pvaxx has just taken possession of a newly built European HQ near
Malmesbury in Wiltshire, which includes 3000sqft sales offices,
2000sqft engineering, 2000sqft development labs, 4000sqft
manufacturing areas.
<PAGE> 9
Pvaxx is a completely biodegradable polymer. We believe PVAXX
represents a genuine advance in polymer technology. Management
feels that Pvaxx will be a major contributor to the reduction in
the environmental and ecological impact 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.
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 polymer grades are available from $1,200 per metric
tonne. This makes it comparable with PP, PVC, PE, PET etc. PVAXX
is far less expensive than other biodegradable polymers currently
in the market.
Pvaxx pharmaceutical grades are available from $6,000 per
metric ton.
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. The above 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.
<PAGE> 10
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.
Pvaxx process eliminates the problems usually associated pva
production; such as thermal degradation and the need to generate
high temperatures. It can be processed using current extrusion
lines, blow-moulders and injection moulders etc., without
modifications usually required with pva products.
Pvaxx is particularly well-suited to filament and fibre formation,
for use in spunbond, non-woven and melt-blowing applications.
Pvaxx can be processed on Pvaxx Pharmaceutical Capsule machines to
produce and fill with powder or liquid medicines to make medical
capsules or food supplements.
The Pvaxx manufacturing process enables highly accurate compounding
and pelleting with consistent quality.
Pvaxx is a competitively priced material thus it can be used in the
manufacture of 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.
Leisure Film canisters, Golf tees, Shotgun cartridges Medical
Bedpans, Bowls, Cotton buds, Hospital curtains, 'One-use'
sterile products, capsules.
Pvaxx has test marketed using a UK chemical/polymer distributor,
enabling Pvaxx to refine such things as packaging, grades and
pricing before a international launch.
<PAGE> 11
The manufacturing division is currently capable of producing up to
10,000 tons per annum of Pvaxx. Pvaxx's management believes the
Company has the ability to manufacture further production capacity
to increase production by a further 20,000 tons every 14 weeks
when required.
The raw materials used are all sourced from the major manufacturers
such as, Nippon Gohsei, Omya, ECC, Chang Cheung, Unichema ,
Jordan Carbonate, etc.
The selling of Pvaxx via the internet supported by our technical
centre provides 24hr access to sales and technical information.
Pvaxx has already started to appoint polymer and chemical
distribution agents, therefore increasing active promotion of
Pvaxx worldwide.
MARKETS
Plastic has become essential to the functioning of modern life
around the world. The plastics market has recently been valued at
more than $200 billion per year and continues to rise.
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 tonnes of plastic packaging
waste which are produced each year...
PERA have completed a detailed market study for Pvaxx showing an
immediate market of 30 million tonnes in areas where Pvaxx is
cheaper or has other attributes that make it immediately superior
to current the polymers being used.
<PAGE> 12
MARKETING PLAN
The marketing strategy for Pvaxx is very important and we are not
just selling a product by purely following a product marketing
strategy. Management believes PVAXX offers a solution to policy
makers by offering the option of a "green"(or 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 PR potential for Pvaxx
is huge.
PVAXX is beginning to create a multi language media relations
program embracing both trade and technical media, together with
"heavy" national newspapers and magazines in appropriate sectors,
such as food, fashion, pharmaceuticals etc.
Pvaxx also presents the opportunity for a media event in which we
could 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 experiment.
In this era of over consumption and plastic use, Management
believes policy makers are looking to promote new plastics which
are environmentally friendlier than existing plastics and in
particular biodegradable.
Environmental attributes such as complete biodegradability are highly
sought after by industry and policy makers especially due to plastic
related issues such as:
- Low environmental rating from cradle to grave
- Endocrine mimicry
- 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 which can cause
endocrine mimicry, policy makers are looking at substitutes for such
plastics to justify a ban.
<PAGE> 13
In addition governments are also looking to find solutions to the
mountains of plastic waste accumulating in their landfills and to the
toxicity problems of plastic residue in soil, groundwater or via leaching
directly into foodstuffs. Not to mention 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.
In order to properly "inform" policy makers of the existence and benefits
of Pvaxx, Management intends to employ a two tiered approach:
First, all relevant actors at the Senior Government level must be
personally informed of the environmental attributes of Pvaxx. This
informing process is a delicate balancing act based on knowledge of
institutional and political interplay.
As the debate on plastic products and waste develops Pvaxx must be seen
as a pro-active industry producing a new green product.
If the company has won the hearts of officials through sound R&D and
environmental proof, new legislation in its favor will most likely be
forthcoming, as long as the "informing" process has been conducted in a
professional/diplomatic manner.
Second, local and state governments and local authorities must also be
approached.
Of course throughout the entire "informing 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.
Interactive Website
A "live" website, initially in 5 languages with an active inquiry office and
updateable news section is at the heart of the marketing.
<PAGE> 14
Profile Document
We have produced a publication about Pvaxx and the environment. It too is
reflective of the website; but is presented specifically for serious people who
influence the purchase of plastics.
Advertising
Here we have an opportunity to gain exposure both to people who buy and people
who influence. The media coverage of the Company will provide useful additional
advertising for the product and vise versa. We intend to place announcements
of the share exchange 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.
Expenditure
We have budgeted about $160,000 with a possible growth from earnings to
$800,000. The former will give us good exposure, the second would enable us to
put Pvaxx forward as a highly visible global brand
ENVIRONMENTAL ISSUES
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 fade from
either the public or the legislators minds.
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 (EU) to outline
quality standards for products, production standards and pollution levels
which will enable countries within the EU to tighten their legislation
<PAGE> 15
DISPOSAL AND POLLUTION
Biodegradation of PVA
PVA biodegrades with the aid of micro-organisms commonly found in waste water.
Due to the extensive usage of PVAs in a variety of industries, a considerable
number of studies have been under taken confirming that Polyvinyl alcohol is
biodegradable under both aerobic conditions (sewage treatment with air) and
anaerobic conditions (precipitation onto unstirred sludge).
1. Aerobic Conditions
Activated sludge, mineral nutrients and the test material as the sole carbon
source in an aqueous solution are placed together in a 4 litre glass vessel
equipped with an agitator and aerated at 22C under diffuseillumination for up to
28 days. The degradation process is monitored by determination of the dissolved
organic carbon content (DOC) level in filtered samples of the mix. The reduction
in DOC is plotted against time. A loss of greater than 70% of DOC is considered
as evidence of ultimate biodegradability.In general it is found that the rate of
DOC loss will depend on whether the sewage sludge has adapted to the compound
under consideration. It is seen that the PVA is degraded virtually completely in
about 14 days with the non-adapted sludge and in about 5-6 days for the adapted
sludge.
2. Anaerobic Conditions
The method used was one developed by the Water Research Association and
subsequently published by the UK Standing Committee of Analysts
The principle of the method is that under anaerobic conditions a chemical may be
broken down through certain types of bacteria to give methane and carbon
dioxide. Determining the difference in total gas produced (CH4 + C02) by
anaerobic digesting sludge alone (blank) and by the sludge supplemented with the
test chemical gives an assessment of biodegradability.
The test chemical is incubated with digesting sludge in bottles sealed with
septa through which a determination of pressure increase can be measured which
in turn can be converted to the quantity of gas produced. This is compared to
the total theoretical gas production to give a percentage degradation figure.
Using a non adapted sewage sludge it is seen that degradation is not so rapid as
that found under aerobic conditions but again it is expected that an adapted
sludge would cause faster degradation
<PAGE> 16
Biodegradation, Organisms and Effluent Disposal of Polyvinyl Alcohol
The biodegradability of polyvinyl alcohol has been principally studied in
relation to the use of the polymer in textile manufacturing and finishing
processes. The polymer has a negligible biological oxygen demand (BOD)
for periods up to 30 days when exposed to non-acclimated domestic sludge
micro-organisms. In these conditions, the polyvinyl alcohol present in an
effluent does not inhibit the metabolism of existing activated sludge
micro-organisms. Activated sludge micro-organisms can be acclimated to
polyvinyl alcohol under the conditions of conventional waste water
treatment processes. Studies of the long-term biodegradability of
polyvinyl alcohol and other textile chemicals compared 30 day BOD
results with the COD of samples, and indicated that activated sludge
treatment removed 94 of polyvinyl alcohol: long-term aeration is
recommended for biological treatment.
Controlled experimentation with polyvinyl alcohol indicate that the polymer may
be completely degraded.
A range of organisms able to degrade and assimilate polyvinyl alcohol completely
has been identified and studied in detail. The polymer is attacked by
Pseudomonas 0-3 (isolated from soil by growing cultures on nutrient agar for 12
days at 27C) which produces and secretes a polyvinyl alcohol-degrading enzyme
into the medium. Isolation and purification of this enzyme indicated that it was
an oxidase, since it degraded polyvinyl alcohol oxidatively, producing hydrogen
peroxide, with degradation products including terminal carboxyl groups and
methyl ketones.
The degradation of polyvinyl alcohol therefore consists of two types of
reaction:- oxidation of hydroxyl groups and cleavage of C-C linkages, with
production of hydrogen peroxide in addition.
In more recent studies, mixed continuous cultures of polyvinyl alcohol-utilizing
symbionts have been developed. These are stable mixed cultures of Pseudomonas
VM15C and Pseudomonas putida VMl5A. The former produced a polyvinyl
alcohol-degrading enzyme and the latter produced an essential growth factor for
polyvinyl alcohol utilization by strain VMl5C. The predominant metabolzing
strain was VM15C, with the growth supporter VMl5A as a minor component. The
growth-limiting substrate for strain VMl5C in the mixed continuous culture is
the growth culture produced by strain VMl5A.
<PAGE> 17
A micro-organism for polyvinyl alcohol degradation similar to Pseudomonas
vesicularis has been isolated, which requires thiamin as a growth factor with
glucose present, and also requires three amino acids (tyrosine or phenylalanine,
isoleucine, and cystine) and has been named P. vesicularis var. povalolyticus
PH. Another organism believed to be a different variety of P. vesicularis, able
to grow on polyvinyl alcohol medium without additional nutrient, has been
isolated.
CONCLUSION
Polyvinyl alcohol can be bio-degraded under both aerobic and anaerobic
conditions. Degradation is faster with adapted sewage sludges and probably
faster under aerobic rather than anaerobic conditions.
Other than biodegradation there are currently three methods by which the visual
impact of plastic pollution can be reduced. The problem common to each
alternative is the vast amount of time and energy required to separate,
collect, transport and segregate astronomical numbers of pieces of waste.
Incineration
Apart from requiring considerable amounts of energy, incineration will also
produce vast quantities of gases, contributing to the 'greenhouse effect', with
all its publicly negative aspects. 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.
Land Fill
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
This requires the physical separation on each waste site of all plastic from non
plastic material. This 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.
<PAGE> 18
A daunting time consuming and expensive task, which 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.
TOXICOLOGY APPRAISAL
Extensive work has been done testing PVA and derivatives for toxic
properties. Work has also been done to evaluate the tolerability of both
skin and mucous membranes; from which the conclusion was that no untoward
effects were revealed in animal tests. The following conclusions have
been reached by evaluation of test results:-
1.
PVA is virtually non-toxic in acute tests (LD50 for rats after oral
administration). Also 90 day feeding tests on rats with selected film grades
did not reveal any harmful effect in relation to behaviour, body weight
development, or food acceptance by them, even in the case of the largest amounts
administered (5% in the food). No harmful effects or changes were observed in
haematological, clinico-chemical or urine examinations or in the microscopic
evaluation and histological examination of the internal organs.
2.
Tests with dilute solutions have revealed that sensitive fish suffer no
ill-effects even in water with concentration of 500 mg film per litre.
3.
PVA is not a skin irritant as determined in the Patch Test in accordance with
the FDA (Food and Drug Administration) specifications current at the time of the
experiment.
4.
PVA does not irritate the mucous membrane in the eye (irritation test in
accordance with FDA specification).
5.
PVA has no toxic effect due to absorption following repeated application to
the skin. The material has also been certified for use in cosmetics.
<PAGE> 19
6.
Standard precautions should be taken to avoid inhalation of any dust formed
during processing, for general reasons of industrial hygiene, by use of a dust
mask.
7.
PVA can be employed in the manufacture of consumer goods as defined in
paragraph 5 of the German Federal Foodstuffs and Consumer Goods Law of
August 15, 1974 in accordance with various recommendations of the Plastics
Committee of the German Federal Ministry of Health. Thus, in accordance with
Recommendation XXXVI, "Paper cartons and cardboard for foodstuffs packaging",
PVA can be employed as a surface decoration and coating material. The FDA allows
its use as adhesives and as a resin for coatings for food packaging.
OTHER DEGRADABLE POLYMERS
Many plastics are now being marketed, at least partially, on their environmental
merits. This may be for very different reasons e.g. The following list of some
degradable polymers manufacturers and is divided into: Synthetic polymers,
Starch-based polymers, Biopolymers and Biocompostibles;
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 eg 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.
<PAGE> 20
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.
EXISTING LEGISLATION
Generally speaking, governments have been wary of legislating against particular
plastics as this would lead to distortions in the market. The following list is
a sample of legislation and is not necessarily up to date.
EC Legislation Community Waste Management Strategy suggests a five point
strategy for dealing with waste (not only plastics);
1) prevention;
2) recycling and re-use;
3) optimisation of final disposal;
4) regulation of transport;
5) remedial action.
Waste Framework Directive (75/442), amended, requires member States to
establish waste authorities and encourage waste prevention, recycling and
processing. The definitions of waste and disposal were tightened up under the
amendment.
Denmark
Statutory Order 397 states that beer and soft drinks may only be sold in
refillable packaging, ruling out PET and PVC bottles. There is a tax on all
landfill or incinerated waste in order to encourage waste minimisation and
recycling.
France
Established a number of voluntary agreements between industry and government to
set targets for recycling plastics.
Germany
Waste Avoidance and Management Act increasingly requires manufacturers to be
responsible for the waste they produce.
<PAGE> 21
Italy
Legislation on the control of non-degradable products. Required all packaging
materials to be biodegradable and banned plastic bags - other than for waste
collection. Law was revised following industry pressure to require 'fast
biodegradability or easy recovery for recycling'. An ecology tax of 100 lire
per plastic bag which was less than 90% degradable. This was supported by
the European Court of Justice.
USA
Many states have laws requiring that 'six pack' rings and fast food packaging
should be manufactured from degradable materials and banning non degradable
garbage sacks from landfill.
General
Eco-taxes are on the horizon and may be expected to be used to reflect
the environmental costs of products. The UK government, is seriously examining
the use of economic instruments to bring about environmental improvements.
COMPETITION
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.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
---------------------------------
As of the date of the filing of this Current Report on Form 8 K, the
Registrant's Independent Auditor, Bersch Accounting, sc, is completing the
consolidated audit of the historical financial statements of PVAXX that will
provide for financial statement requirements prescribed by this Item 7(a).
In accordance with Item 7(a)(4) of Form 8 K, such financial statements will be
provided as soon as practicably possible, but in any event no later than
September 10, 2000.
<PAGE> 22
(b) Pro Forma Financial Information.
The pro forma financial statement required by this Item 7(b) will be filed no
later than September 10, 2000.
PVAXX MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and related notes thereto to be filed subsequently.
PLAN OF OPERATION
PVAXX does not currently have any external sources of working capital. PVAXX's
Management has not entered into any commitments for significant capital
expenditures. Furthermore, there are no plans to hire additional employees
unless Management is successful in securing a substantial capital infusion.
On May 19, 2000 PVAXX entered into an Agreement to effectively become a
wholly-owned subsidiary of OAK BROOK. This transaction will be structured as
a share exchange whereby the existing shareholders of PVAXX will obtain
control of OAK BROOK. Upon completion of this transaction, there can be no
assurance that the combined companies will have sufficient funds to
undertake any significant development, marketing and manufacturing
activities. Accordingly, the combined companies will be required to either
seek additional debt or equity financing or obtain funding from third
parties, in exchange for which the combined companies might be required to
issue a substantial equity position. There is no assurance that the
combined companies will be able to obtain additional financing on terms
acceptable to the combined companies. If Management is successful in
obtaining additional funding, these funds will be used primarily to
provide working capital needed for repayment of outstanding notes payable,
software development, sales and marketing expense and to finance research,
development and advancement of intellectual property concerns. A
description of the PVAXX business is provided in ITEM 14.
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 March 31, 2000,
reflects a current asset value of $0.00, and a total asset value of $0.00
in the form of cash and capitalized organizational costs.
<PAGE> 23
The Company will carry out its plan of business as discussed below.
RESULTS OF OPERATIONS
During the period from May 16, 2000 (inception) through May 15, 2000,
the Company has engaged in no significant operations other than
organizational activities, acquisition of capital and preparation for
reporting as a registrant under Section 12 of the Securities Exchange Act of
1934, as amended. No revenues were received by the Company during
this period.
Need for Additional Financing
The Company believes that its existing capital will be sufficient to
meet the Company's cash needs, including the costs of compliance with
the continuing reporting requirements of the Securities Exchange Act
of 1934, as amended, for a period of approximately two years.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("SFAS 109") issued by the Financial Accounting Standards Board ("FASB"),
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.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
("SFAS 121") issued by the FASB, is effective for financial statements for
fiscal years beginning after December 15, 1995.The standard establishes new
guidelines regarding when impairment losses on long-lived assets, which
include plant and equipment, certain identifiable intangible assets, and
goodwill, should be recognized and how impairment losses should be measured.
The Company does not expect adoption to have a material effect on its
financial position or results of operations. Statement of Financial
<PAGE> 24
Accounting Standards No. 123, "Accounting for Stock-Based Compensation"
("SFAS 123") issued by the FASB, is effective for specific transactions
entered into after December 15, 1995. The disclosure requirements of SFAS
123 are effective for financial statements for fiscal years beginning no
later than December 15, 1995. The new standard established a fair value
method of accounting for stock-based compensation plans and for
transactions in which an entity acquires goods or services from
non-employees in exchange for equity instruments. The Company does not expect
adoption to have a material effect on its financial position or results of
operations.
FEDERAL INCOME TAX ASPECTS OF INVESTMENT IN THE COMPANY
The discussion contained herein has been prepared by the Company and is based
on existing law as contained in the Code, amended United States Treasury
Regulations ("Treasury Regulations"), administrative rulings and court
decisions as of the date of this Registration Statement. No assurance can be
given that future legislative enactments, administrative rulings or court
decisions will not modify the legal basis for statements contained in this
discussion. Any such development may be applied retroactively to transactions
completed prior to the date thereof, and could contain provisions having an
adverse affect upon the Company and the holders of the Common Stock. In
addition, several of the issues dealt with in this summary are the subjects of
proposed and temporary Treasury Regulations. No assurance can be given that
these regulations will be finally adopted in their present form.
Y2K COMPLIANCE
PVAXX has conducted an assessment of issues related to the Year 2000 and
determined that all its computer driven systems and software in use are
able to recognize, calculate, and display data-related dates correctly
after the year 1999. PVAXX can not determine the impact the Year 2000 will
have on its key suppliers. However, if PVAXX's key suppliers do not
convert their systems to become Year 2000 compliant, PVAXX may be adversely
impacted.
FORWARD LOOKING STATEMENT
This Management's Discussion and Analysis of Financial Condition and Results
of Operations includes a number of forward-looking statements that reflect
Management's current views with respect to future events and financial
performance. Those statements include statements regarding the intent,
belief or current expectations of PVAXX and members of its management team
<PAGE> 25
as well as the assumptions on which such statements are based. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risk and uncertainties, and
that actual results may differ materially from those contemplated by such
forward-looking statements. The Company undertakes no obligation to update
or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes in the future operating results
over time. The Company believes that its assumptions are based upon reasonable
data derived from and known about its business and operations and the business
and operations of PVAXX. No assurances are made that actual results of
operations or the results of the Company's future activities will not differ
materially from its assumptions.
EXHIBIT INDEX
Exhibit No. Exhibit
x 2.10 Agreement and Plan of Share Exchange
x 2.11 Articles of Share Exchange
# 3(a) Articles of Incorporation
# 3(b) Bylaws
# 4(a) Agreements Defining Certain Rights of Shareholders
# 4(b) Specimen Stock Certificate
x 5.10 Legal Opinion (Nadeau & Simmons, P.C.) -
Investment Representation Letter
7 Not applicable
9 Not applicable
11 Not applicable
14 Not applicable
<PAGE> 26
16 Not applicable
21 Not applicable
x 23.1 Consent of Counsel
(contained in Exhibit 5.1)
## 24.1 Consent of CPA.
27 Financial Data Schedule
28 Not applicable
## 99.1 Safe Harbor Compliance Statement
____________________________
x filed herewith
# previously filed
## incorporated herein by reference from Registrant's Definitive Information
Statement, filed on Schedule 14C on June 12, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form 8-K and has duly caused this Current
Report to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Ft. Myers, Florida, on the 10th day of July, 2000.
PVAXX CORPORATION
By: /s/ Henry Stevens
________________________________
HENRY STEVENS,
President
Date: July 10, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Current Report on Form 8-K has been signed below by the following persons
in the capacities and on the dates indicated.
Signature Title Date
/s/Henry Stevens President July 10, 2000
& Director
<PAGE> 27
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 this current report 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.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
current report has been signed by the following persons in the capacities
and on the dates indicated.
<PAGE> 28
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
---------------- --------------- --------------
<S> <C> <C>
/s/ Bryan Wade
BRYAN WADE Secretary July 10, 2000
</TABLE>
