<PAGE> 1
FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended - December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission file number 000-25515
PACIFIC CART SERVICES LTD.
(Exact name of registrant as specified in its charter)
Nevada 88-0410480
State or other jurisdiction of (IRS Employer
incorporation or organization Identification No.)
2501 Lansdowne Avenue
Saskatoon, Saskatchewan
Canada S7J 1H3
(Address of principal executive offices, including zip code.)
(306) 343-5799
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.
YES [ X ] NO [ ]
Check if no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is contained herein, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year.
December 31, 1999 - $-0-.
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock
was sold, or the average bid and ask prices of such stock, as of a
specified date within the past 60 days. December 31, 1999 -
$1,397,125. There are approximately 2,798,250 shares of common voting
stock of the Registrant held by non-affiliates. Based upon the average
bid/ask price on April 6, 2000, the aggregate market value of the
shares of Common Stock held by non-affiliates is $825,484.
<PAGE> 2
Issuers involved in Bankruptcy Proceedings during the past Five Years.
Not Applicable.
State the number of shares outstanding of each of the Issuer's classes
of common equity, as of the latest practicable date:
March 30, 2000 - 13,058,250 shares of Common Stock.
Documents Incorporated by Reference
1. Form 10-SB Registration Statement and all amendments thereto,
which was filed with the Securities and Exchange Commission on
March 8, 1999 and all exhibits thereto.
2. All reports filed with the Securities and Exchange Commission
subsequent to March 8, 1999.
3. Form S-8 Registration Statement and all amendment thereto, which
was filed with the Securities and Exchange Commission on March 9,
2000 and all exhibits thereto.
Transitional Small Business Issuer Format
YES [ x ] NO [ ]
<PAGE> 3
PART I
ITEM 1. BUSINESS.
THE BUSINESS
PACIFIC CART SERVICES LTD.. (the "Company"), was incorporated
under the laws of the State of Nevada on August 27, 1998 to market
mobile vending cart and certain other equipment relating to hot dog
vending under the brand name Mr. Tube Steak. The mobile vending cart
is available in several styles including a counter top model and an
easy tow trailer cart.
The Company is a development stage corporation that has not yet
commenced operations.
Mr. Tube Steak Canada, Inc.
In January 1999, the Company signed a five year exclusive
distribution agreement with Mr. Tube Steak Canada, Inc. ("MTS") to
market its mobile vending cart in the states of Washington and
California. Originally, the agreement covered the United States of
America, however, on March 1, 1999, by amendment, the parties reduced
the territory to the States of California and Washington.
Under the terms of the agreement with MTS, the Company has an
exclusive five (5) year right to distribute carts and products
manufactured by MTS in California and Washington. The Company will
acquire the carts and products from MTS for a fixed price as set forth
in the agreement. The Company then has the right to determine the
price that the carts and products will be sold in California and
Washington. The Company will be responsible for all costs associated
with the sale and marketing of the carts and products including, but
not limited to advertising, marketing, pricing and distribution of the
carts and products.
MTS will invoice the Company for the purchase price of carts and
products purchased by the Company. Invoices are due and payable within
60 days from the date of invoice and carts and products will be shipped
by MTS within 60 days of submission of the purchase order by the
Company.
Prices to be charged by MTS will remain fixed for one year, but
are subject to adjustment based upon: 1) fluctuation of the value of
the Canadian dollar compared to the U.S. dollar; 2) changes in
governmental regulations; and, 3) industry shortages. Invoices are
due and payable in Canadian dollars.
The agreement also provides that the parties may modify the
agreement and grant the Company manufacturing rights. The foregoing is
subject to mutual agreement of the parties and at the present time no
discussions have been held between the Company and MTS regarding said
manufacturing rights.
The agreement is subject to automatic renewal for successive two
(2) year periods, unless the Company notifies MTS 180 days prior to the
end of the term that it elects not to renew the agreement.
<PAGE> 4
In the event of a default by either party, the non-defaulting
party may terminate the agreement provided that the non-breaching party
notifies the defaulting party of the breach and the breach is not cured
within 90 days. The agreement also provides for liquidated damages
payable to the Company in the event of a breach by MTS.
The agreement also provides for, upon mutual consent of the
parties, the addition of countries, other than the United States of
America, to the exclusive territory of California and Washington.
On the 31st day of August, 1999, the Company signed a Letter of
Intent with Mr. Tube Steak Canada Inc. for the purchase of its assets,
equipment, trademarks, tradenames, intellectual property and inventory.
United Keno Hill Mines Ltd.
On the 18th day of November, 1999, the Company loaned $5,500.00 to
United Keno Hill Mines Ltd. (UKH) of Toronto, Canada. The Company may
expand its dealing with UKH in the future however as of December 31,
1999, no formal arrangements exist with the Company and no formal
documentation exists for the loan.
Mobile Vending Carts and Products.
The Countercart Vending Cart is a counter model designed to be a
self contained hot dog service center. The Countercart includes an
umbrella, a menu board, condiment service stand and a cart shaped hot
dog and bun server, as well as, other necessities of food service
including knives, tongs, operations manual.
The Easy Tow Trailer Cart is a trailer model designed to be towed
to the location of use. The Easy Tow Cart is waterproofed and has a
sink, fresh water tank, pump, hot and cold running water, and a ice
box, as well as an umbrella, propane tanks, condiment service stand,
barbeque and hot plate, thermos cooler.
The Mobile Vending Carts are designed to be completely self-
sufficient. The Countercart will be marketed to convenience stores,
sports complexes, and other counter available locations. The Easy Tow
Cart will be marketed to individual entrepreneurs and businesses
interested in hot dog sales.
The Company may also distribute a full range of Mr. Tube Steak
products including meats, buns and condiments. The Company will
purchase these products from MTS. MTS purchases these products from
Fletcher Fine Foods ("Fletcher"). Fletcher manufactures and packages
meats, buns and condiments for MTS under the Mr. Tube Steak brand.
Fletcher has offices in Vancouver, Seattle and Los Angeles. The
Company will provide these products to the purchasers of its Mobile
Vending Carts and other retail venues.
Distribution.
The Company's operations will consists of selling Mobile Vending
Carts, meats and related products to retailers. The Company does not
manufacture any of the products. The Mobile Vending Carts are
manufactured by MTS and the hot dogs and related products are
manufactured by Fletcher. Management believes that if MTS is unable to
provide Mobile Vending Carts or products to the Company, the Company
may be unable to replace its supply of Mobile Vending Carts, meats and
related products. MTS manufactures the Mobile Vending Carts and
operates primarily as an assembly plant. Outside manufacturers in the
area produce most of the components that make up the carts.
<PAGE> 5
Marketing.
The Exclusive Distribution Agreement gives the Company the right
to sell to individuals and businesses within the states of California
and Washington. The Exclusive Distribution Agreement will begin by
establishing a central commissary or distribution center. Central
commissary or distribution centers will be added on an as needed basis.
These commissaries distribute the MTS's products and all other supplies
necessary for the operation of the carts. Individuals and businesses
are required to utilize only the MTS's approved products and supplies
on the carts.
The Company intends to enforce this right through a contractual
provision in the Company's contract with an injunctive provision set
forth therein which may be enforced in any court of competent
jurisdiction.
Trademarks and Patents.
MTS owns certain rights, names, recipes and trademarks, which the
Company shall have the right to use for the duration of the Exclusive
Distribution Agreement. The Company will acknowledge all MTS
trademarks and copyrights on promotional materials and product
literature.
Competition
The Company in involved in highly competitive business. There are
several other entities which manufacture and distribute vending carts,
many of which are much larger companies possessing substantially
greater financial resources and facilities than the Company.
Company's Office
The Company's headquarters are located 2501 Lansdowne Avenue,
Saskatoon, Saskatchewan, Canada S7J 1H3 and the telephone number is
(306) 343-5799. The Company uses 100 square feet of space at the home
of Robert Kinloch, the Company's Secretary. There is no monthly.
Employees
The Company is a development stage company and currently has no
employees other than its Officers and Directors. The Company intends
to hire additional employees as needed.
RISK FACTORS
1. Start-up Company with No History of Earnings. The Company has
no current operating history and is subject to all of the risks
inherent in a developing business enterprise including lack of cash
flow and product acceptance. Further, the Company is subject to
additional risk factors relating to the food service industry such as
unpredictable and changing public taste, spending, and eating habits.
The likelihood of success of the Company must be considered in light of
the problems, expenses, difficulties, complications and delays
frequently encountered in connection with a new business in general and
those specific to the food service industry and the competitive and
regulatory environment in which the Company will operate.
<PAGE> 6
2. Development and Market Acceptance of Products. The Company's
success and growth will depend upon the Company's ability to market its
existing products. The Company's success will depend in part upon the
market's acceptance of, and the Company's ability to deliver and
support its products. See "Business - Products."
3. Dependence on Suppliers; No Manufacturing Facilities or
Personnel. The Company is dependent upon an outside supplier for all
of its Mobile Vending Carts, hot dogs and hot dog related supplies.
While the Company has not encountered difficulty in obtaining Mobile
Vending Carts, hot dogs or hot dog related supplies during the
development phase, there can be no assurance its current sources will
be able to meet all of the Company's future demands on a timely basis.
The unavailability of Mobile Vending Carts, hot dogs or hot dog related
supplies will result in the Company ceasing operations.
4. Liquidity; Need for Additional Financing. The Company
believes that it has the cash it needs for at least the next twelve
months based upon its internally prepared budget. The Company's cash
requirements, however, are not easily predictable and there is a
possibility that its budget estimates will prove to be inaccurate. If
the Company is unable to generate a positive cash flow before its cash
is depleted, it will be required to curtail operations substantially,
seek additional capital. There is no assurance that the Company will
be able to obtain additional capital if required, or if capital is
available, to obtain it on terms favorable to the Company. The Company
may suffer from a lack of liquidity in the future which could impair
its short-term marketing and sales efforts and adversely affect its
results of operations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
5. Competition. Most of the Company's competitors have
substantially greater financial, technical and marketing resources than
the Company. In addition, the Company's products compete indirectly
with numerous other products. As the market for the Company's products
expand, the Company expects that additional competition will emerge and
that existing competitors may commit more resources to those markets.
See "Business - Competition."
6. Local Governmental Regulation. The Mobile Vending Carts to be
sold by the Company's will be subject to state and local licensing
regulations applicable to food service establishments (health and
sanitation codes, occupational safety codes and the like) and zoning
restrictions. Although the Company's Mobile Vending Carts comply with
all local restrictions and requirements in Canada, there can be no
assurance that the same Mobile Vending Carts at any specific site will
be able to comply with all such local regulations or that compliance,
where possible, will not involve additional expenditures.
7. Reliance Upon Directors and Officers. The Company is wholly
dependent, at the present, upon the personal efforts and abilities of
its Officer and Directors, James Oste, a member of the Board of
Directors; David Glass, Treasurer and member of the Board of Directors;
and, Rob Kinloch, President and member of the Board of Directors, who
exercise control over the day to day affairs of the Company. See
"Business" and "Management."
8. Issuance of Additional Shares. As of December 31, 1999,
86,941,750 shares of Common Stock or 86.95% of the 100,000,000
authorized shares of Common Stock of the Company are unissued. The
Board of Directors has the power to issue such shares, subject to
shareholder approval, in some instances. Although the Company
<PAGE> 7
presently has no commitments, contracts or intentions to issue any
additional shares to other persons, other than in the exercise of
options and warrants, the Company may in the future attempt to issue
shares to acquire products, equipment or properties, or for other
corporate purposes. Any additional issuance by the Company, from its
authorized but unissued shares, would have the effect of diluting the
interest of existing shareholders. See "Description of Securities."
9. Indemnification of Officers and Directors for Securities
Liabilities. The Company's Articles of Incorporation provide that the
Company will indemnify any Director, Officer, agent and/or employee as
to those liabilities and on those terms and conditions as are specified
in The Company Act of the State of Nevada. Further, the Company may
purchase and maintain insurance on behalf of any such persons whether
or not the corporation would have the power to indemnify such person
against the liability insured against. The foregoing could result in
substantial expenditures by the Company and prevent any recovery from
such Officers, Directors, agents and employees for losses incurred by
the Company as a result of their actions. Further, the Company has
been advised that in the opinion of the Securities and Exchange
Commission, indemnification is against public policy as expressed in
the Securities Act of 1933, as amended, and is, therefore,
unenforceable.
10. Cumulative Voting, Preemptive Rights and Control. There are
no preemptive rights in connection with the Company's Common Stock.
Shareholders may be further diluted in their percentage ownership of
the Company in the event additional shares are issued by the Company in
the future. Cumulative voting in the election of Directors is not
provided for. Accordingly, the holders of a majority of the shares of
Common Stock, present in person or by proxy, will be able to elect all
of the Company's Board of Directors. See "Description of Securities."
11. No Dividends Anticipated. At the present time the Company
does not anticipate paying dividends, cash or otherwise, on its Common
Stock in the foreseeable future. Future dividends will depend on
earnings, if any, of the Company, its financial requirements and other
factors. See "Dividend Policy."
ITEM 2. DESCRIPTION OF PROPERTIES.
The Company doe not own any real property. The Company owns five
easy-two trailer carts and has cash in its bank account.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not the subject of any pending legal proceedings;
and to the knowledge of management, no proceedings are presently
contemplated against the Company by any federal, state or local
governmental agency.
Further, to the knowledge of management, no director or executive
officer is party to any action in which any has an interest adverse to
the Company.
<PAGE> 8
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company has not submitted any matters to the Security Holders
of the Company for a vote during the year ended December 31, 1999.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS.
(a) Market Information.
The Registrant's securities are traded over-the-counter on the
Bulletin Board operated by the National Association of Securities
Dealers, Inc. under the symbol PFCS. The table shows the high and low
bid of Registrant's Common Stock since June 23, 1999 when the
Registrant's securities began trading.
Quarter Ended BID
1999 High Low
Fourth Quarter 1.75 0.50
Third Quarter 1.75 0.62
Second Quarter -0- -0-
First Quarter -0- -0-
(b) Holders.
As of December 31, 1999, there were approximately 43 holders of
the Registrant's Common Stock. This number does not include those
beneficial owners whose securities are held in street name.
(c) Dividends.
The Registrant has never paid a cash dividend on its Common Stock
and has no present intention to declare or pay cash dividends on the
Common Stock in the foreseeable future. The Registrant intends to
retain any earnings which it may realize in the foreseeable future to
finance its operations. Future dividends, if any, will depend on
earnings, financing requirements and other factors.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULT OF OPERATIONS.
During the first half of year ended December 31, 1999, management
divided their time between planning for development of the newly
acquired territories and meeting the requirements of the new regulatory
environment that began January 5, 1999.
During the Third Quarter the Company entered into discussions with
Mr. Tube Steak Canada Inc. for the purchase of their assets, trademarks
and operating systems. These discussions concluded with a Letter of
Intent between the two parties, signed on August 31, 1999.
Due to the shareholder approval requirements of Mr. Tube Steak
Canada Inc., which concluded with their Annual General Meeting on
December 15, 1999, the transaction could not be completed in the fiscal
year ended 1999.
<PAGE> 9
In 1998, the Company had no active business activity. For this
reason management believes any comparison with the period December 31
is not meaningful.
No Revenues from Operations were earned in fiscal 1999,
Total expenses incurred by the Company for the twelve months ended
December 31, 1999 were $219,684. Administrative Expenses make up 100%
of Total Expenses. These include $46,500 in salaries for the Company's
management, $24,875 in legal expenses, and $30,415 in travel. The
balance of the administrative expenses consists of Consulting Services,
Amortization of Deferred Compensation and other general corporate and
office expenses.
During 1999, the Company purchased a small amount of equipment for
$25,662 in anticipation of beginning operations. Depreciation on this
equipment during the year was $4,560.
The net loss for the Company for the twelve months ended December
31, 1999 was $219,684 compared with a loss of $46,783 in fiscal 1998.
The entire loss was due to Administrative Charges.
The Company's Per Share Loss for the year on both a basic and
diluted basis was $0.02 per share. While, management anticipates
revenue generation in the foreseeable future until our acquisition is
closed the Company will continue to operate at a loss due to ongoing
administration.
LIQUIDITY AND CAPITAL RESOURCES
During the twelve months ended December 31, 1999, we raised an
aggregate of $77,251 from the issuance of common stock pursuant to two
private placements. In addition, the Company realized $3,000 from the
exercise of options granted under the Company's option plan. As at
December 31, 1999, the Company had a note payable to the then
President, James Oste for $33,552. The note is non-interest bearing
and due March 15, 2001. In addition, the Company had a note payable
bearing 9% interest to Mallard Constructions Ltd. for 26,998 and due in
the first quarter of 2000. As of December 31, 1999, the Company has a
cash position of $44,014.
The Company utilized $155,232 in its operating activities per the
cash flow statement.
Other than cash and cash equivalents, the Company has no other
sources of liquidity and does not anticipate revenue generation from
its acquisition until closing sometime in 2000. The Company continues
to search for a suitable equity investor to fund long-term growth. The
Company cannot be certain that it will be successful in this search.
Failure to raise additional capital going forward could have a
deleterious effect on our ability to continue as a going concern. The
corporation may rely on short-term debt until the Company can begin to
generate revenue. It is not certain that the Company will find this
debt on terms acceptable to the Company.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements begin on the following page.
<PAGE> 11
MOEN AND COMPANY
CHARTERED ACCOUNTANTS
PO Box 10129
1400 IBM Tower Telephone: (604) 662-8899
701 West Georgia Street Fax: (604) 662-8809
Vancouver, BC V7Y 1C6
INDEPENDENT AUDITORS' REPORT
To the Directors of
Pacific Cart Services Ltd. (A Nevada Corporation)
(A Development Stage Company)
We have audited the accompanying Balance Sheet of Pacific Cart Services
Ltd (A Development Stage Company) as at December 31, 1999 and December
31, 1998, and the related Statements of Income, Retained Earnings
(Deficit), Cash Flows and Shareholders' Equity for the year ended
December 31, 1999 and the comparative figures from date of inception on
August 27, 1998 to December 31, 1998. 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 an audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Pacific
Cart Services Ltd. (A Development Stage Company) as of December 31,
1998 and December 31, 1999 and the results of its operations and Cash
Flows for the period from August 27, 1998 to December 31, 1998 and for
the year ended December 31, 1999 in conformity with United States
generally accepted accounting principles (GAAP).
Vancouver, British Columbia, Canada /s/ Moen and Company
March 27, 2000 Chartered Accountants
F-1
<PAGE> 12 PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Balance Sheet
December 31, 1999
(With Comparative Figures at December 31, 1998)
(In U.S. Dollars)
ASSETS
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Current Assets
Cash $ 44,014 $ 105,553
Advances for expenses 6,838 -
---------- ----------
50,852 105,553
---------- ----------
Fixed Assets
Equipment at cost 25,662 -
Less: Accumulated depreciation 5,560 -
---------- ----------
20,102 -
---------- ----------
70,954 105,553
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 148 $ 750
Note payable to shareholder, James
Oste, unsecured, non-interest bearing
and not subject to demand before
March 15, 2001 33,552 20,000
Note payable - Mallard Construction
Ltd., payable on demand 26,998 -
Due to related parties (note 4(d)) - 2,436
---------- ----------
60,698 23,186
---------- ----------
Shareholders' Equity
Capital Stock (note 3)
Authorized:
100,000,000 common shares at $0,001
par value
Issued and fully paid:
13,058,250 common shares at par
value (1998, 8,283,000) 14,296 8,283
Additional paid-in capital 609,605 405,867
Deferred compensation (note 7) (347,168) (285,000)
---------- ----------
276,733 129,150
Deficit, accumulated during
the development stage (266,467) 46,783
---------- ----------
10,266 175,933
---------- ----------
$ 70,964 $ 199,119
========== ==========
</TABLE>
Approved on Behalf of the Board
/s/ James Oste, Director /s/ David Glass, Director
/s/ Robert J. Kinloch, Director
See Accompanying Notes and Independent Auditors' Report
F-2
<PAGE> 13
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Statement of Income
For the year ended December 31, 1999
(With Comparative Figures from the date of Inception on August 27,
1998 to December 31, 1998)
(In U.S. Dollars)
<TABLE>
<CAPTION>
Administration Expenses 1999 1998
<S> <C> <C>
Accounting $ 3,350 $ 2,050
Acquisition administration fees 5,000 -
Amortization of deferred
compensation (note 7) 57,332 15,000
Consulting services 28,490 -
Depreciation 4,560 -
Investor relations 10,000 -
Legal expenses 24,875 20,152
Office expenses 5,826 733
Management fees 46,500 -
Merchandise design 1,650 -
Transfer agent fees 1,696 1,000
Travel expenses 30,415 7,848
---------- ---------
Total administration expenses 219,684 46,783
---------- ---------
Net Loss for the Year $ (219,684) $ (46,783)
========== =========
Net Loss Per Common Share
Basic $ (0.02) $ (0,01)
Diluted $ (0.02) $ (0.01)
Average Number of Common Shares
Outstanding
Basic 11,388,433 5,092,851
Diluted 11,388,433 5,092,851
</TABLE>
See Accompanying Notes and Independent Auditors' Report
F-3
<PAGE> 14
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Statement of Retained Earnings (Deficit)
For the year ended December 31, 1999
(With Comparative Figures from the Date of Inception on August 27,
1998 to December 31, 1999)
(In U.S. Dollars)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Balance, beginning of year $ (46,783) $ -
Net loss for the year (219,684) (46,783)
---------- ----------
Retained earnings (Deficit),
end of year $ (266,467) $ (46,783)
========== ==========
</TABLE>
See Accompanying Notes and Independent Auditors' Report
F-4
<PAGE> 15
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Statement of Cash Flows For the year ended December 31, 1999
(With Comparative Figures from the Date of Inception on August 27,
1998 to December 31, 1998)
(In U.S. Dollars)
<TABLE>
<CAPTION>
Cash Provided by (Used for) 1999 1998
<S> <C> <C>
Operating Activities
Net loss for the year $ (219,684) $ (46,783)
Shares issued for consulting services 10,000 -
Changes in non-cash working capital items
Advances for expenses (6,838) -
Accounts payable (602) 750
Depreciation 4,560 -
Deferred compensation expense 57,332 15,000
---------- ---------
(155,232) (31,033)
---------- ---------
Investing Activities (24,662) -
---------- ---------
Financing Activities
Capital stock subscribed for cash 80,251 114,150
Notes payable 40,540 20,000
Due to related parties (2,436) 2,436
---------- ---------
118,355 136,586
---------- ---------
Increase (Decrease) in Cash During
the Period (61,539) 105,553
Cash, Beginning of the Year 105,553 -
---------- ---------
Cash, End of the Year $ 44,014 $ 105,553
========== =========
</TABLE>
See Accompanying Notes and Independent Auditors' Report
F-5
<PAGE> 16
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Statement of Shareholders' Equity
For the Period From Date of Inception on August 27, 1998
to December 31, 1999
(in U.S. Dollars)
<TABLE>
<CAPTION>
Price Number of Additional
Per Common par Paid-in
Share Shares Value Capital
<S> <C> <C> <C> <C> <C>
10/05/98 Shares subscribed by
Director for cash
(Note 7(b)) $ 0.05 5,000,000 $ 5,000 $ 245,000
10/05/98 Shares subscribed by
Director for finders'
fee (note 7(a)) $ 0.05 2,000,000 2,000 98,000
12/07/98 Share subscribed by
private placement for
cash $ 0.05 1,283,000 1,283 62,867
Defer compensation
Deferred compensation
amortization
Net loss for the period
--------- ------- ---------
Balance at 12/31/98 8,283,000 8,283 405,867
02/02/99 Shares subscribed by
Director for consulting
services $ 0.05 250,000 250 12,250
02/03/99 Shares subscribed by
private placement for
cash $ 0.04 1,500,000 1,500 58,500
06/15/99 Shares subscribed by
stock option exercised -
shares to be issued $ 0.04 3,000,000 3,000 117,000
Deferred compensation
12/03/99 Shares subscribed by
private placement for
cash $ 0.65 25,250 1,263 15,988
Deferred compensation
amortization
Net loss for year ended
December 31, 1999
--------- -------- ---------
Balance, December 31, 1999 13,058,250 14,296 609,605
========= ======== =========
See Accompanying Notes and Independent Auditors' Report
F-6a
<PAGE> 17
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Statement of Shareholders' Equity
For the Period From Date of Inception on August 27, 1998
to December 31, 1999
(in U.S. Dollars)
Total Retained Total
Deferred Capital Earnings Shareholders'
Compensation Stock (Deficit) Equity
<S> <C> <C> <C> <C> <C>
10/05/98 Shares subscribed by
Director for cash
(note 7(b)) $ 250,000 $ 250,000
10/05/98 Shares subscribed by
Director for finders'
fee (note 7(a)) 100,000 100,000
12/07/99 Share subscribed by
private placement
for cash 64,150 64,150
Deferred compensation (300,000) (300,000) (300,000)
Deferred compensation
amortization 15,000 15,000 15,000
Net loss for the period (46,783) (46,783)
-------- --------- -------- ---------
Balance, 12/31/98 (285,000) 129,150 (46,783) 82,367
02/02/99 Shares subscribed
by Director for
consulting services 12,250 12,500
02/03/99 Shares subscribed
by private placement
for cash 60,000 60,000
06/15/99 Shares subscribed
by stock option
exercised - shares
to be issued (117,000) 3,000 3,000
Deferred compensation (2,500) (2,500) (2,500)
12/03/99 Shares subscribed
by private placement
for cash 17,251 17,251
Deferred compensation
amortization 57,332 57,332 57,332
Net loss for year ended
December 31, 1999 (219,684) (219,684)
-------- --------- -------- ---------
Balance, 12/31/99 (347,168) 276,713 (266,467) 10,266
======== ========= ======== =========
</TABLE>
See Accompanying Notes and Independent Auditors' Report
F-6b
<PAGE> 18
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Notes to Financial Statements December 31, 1999
(in U.S. Dollars)
Note 1. BUSINESS OPERATIONS
a) The Company date of incorporation and inception was on August 27,
1998 under the Company Act of the State of Nevada, U.S.A. to
pursue opportunities in the business of franchising fast food
distributor systems.
b) The Company is considered to be a development stage enterprise as
its principal operations have not yet commenced and have not yet
produced revenue. The deficit to December 31, 1999 has been
accumulated in the development stage.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Administration Costs
Administration costs are written off to operations when incurred.
b) Translation of Foreign Currency
The accounts of the Company are translated into U.S. dollars on
the following basis:
- current assets and liabilities at the rate of exchange in
effect at the balance sheet date
- administration expenses at the average rate in effect during
the period
- non-current assets and liabilities at rates prevailing when
the transaction occurred
c) Basis of Presentation
These financial statements are prepared in accordance with United
States Generally Accepted Accounting Principles (GAAP).
d) Net Loss Per Share
Net loss per common share is computed by dividing net loss by the
weighted average number of shares outstanding (including shares
subscribed but unissued) during the period.
e) Fixed Assets/Depreciation
The company depreciates its equipment at 25% per annum on a
straight-line basis.
Note 3. RELATED PARTY TRANSACTIONS:
a) Management fees
Management fees of $46,500 have been incurred by the Company in
1999 (1998 - Nil).
See Accompanying Notes and Independent Auditors' Report
F-7
<PAGE> 19
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
(in U.S. Dollars)
b) Expenses paid by directors
Expenses incurred by directors on behalf of the Company comprised
of office expenses of $721 and travel and related costs or
$12,639, for total costs of $13,360.
c) Agreement with Mister Tube Steak Canada Inc.
James Oste is President, Director and a shareholder of Mister Tube
Steak Canada Inc.
d) Note payable to shareholder, James Oste
The note payable of $33,552 is payable to James Oste and has a due
date of March 15, 2001.
Note 4. INCOME TAXES
The Company has losses that total $266,467 for income tax purposes that
may be carried forward to be applied against future taxable income. The
benefit of a potential reduction in future income taxes has not been
recorded as an asset at December 31, 1999 as it is reduced by a
valuation allowance.
Note 5. AGREEMENT WITH MISTER TUBE STEAK CANADA INC.
By agreement dated January 10, 1999 and signed on January 26, 1999,
between Mister Tube Steak Canada Inc. ("MTS") and Pacific Cart Services
Ltd. ("PCS"), MTS appointed PCS as its exclusive distributor for its
products in California and Washington State.
The effective date of the agreement is February 1, 1999 for an initial
period of five years for the United States, and with respect to all
other countries five years from February 1, 1999 or such date as may be
agreed to by the parties with respect to any additional country.
Products purchased by PCS from MTS represented by equipment and food
and dry goods arc payable on a sixty day basis.
MTS will provide product liability insurance in the amount of
$2,000,000 CDN.
The term of the agreement is for five years unless terminated earlier
on consent of both parties. The agreement shall automatically renew for
successive two-year periods, commencing on the fifth anniversary,
unless PCS provides 180 days prior written notice to MTS of its intent
not to renew.
The agreement provides for reimbursement to PCs for value of business
and goodwill created by PCS if the agreement is terminated by MTS for
other than a default or breach by PCS.
See Accompanying Notes and Independent Auditors' Report
F-8
<PAGE> 20
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
(in U.S. Dollars)
If MTS intends to sell all or any part of its business PCS shall have
a first right of refusal. The agreement is not assignable as security
or otherwise by either party without the prior consent of the other.
James Oste is President, Director and shareholder of Mister Tube Steak
Canada Inc.
Note 6. EMPLOYMENT AGREEMENT
Employment agreements dated March 15, 1999 were entered into by the
Company for a five year period from January 1, 1999 to December 31,
2003, as follows:
i) James Oste to be employed as President, Chief Executive
Officer and Director of the Company, commencing at $24,000
per year,
ii) Robert Kinloch, to be employed as Executive Vice-President,
Chief Operating Officer, and Director of the Company
commencing at $22,000 per year.
iii) for both of the above agreements, subsequent year
compensation is to be negotiated prior to commencement of a
new year. Additional compensation is as follows:
- reimbursement of all out-of-pocket expenses payable or
incurred by the employee in connection with his duties under
the agreement
- all reasonable travelling expenses incurred by the employee
in the course of his duties
- six weeks paid vacation
- club membership not to exceed $1,000
- stock option package to be negotiated during the first year
of employment
Note 7. COMPENSATION/DEFERRED COMPENSATION
Shares have been issued that give rise to compensation expense. This
compensation is amortized over a five year period, with three months
thereof expensed as of December 31, 1998. Details of compensation
expense and deferred compensation are as follows:
See Accompanying Notes and Independent Auditors' Report
F-9
<PAGE> 21
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
(in U.S. Dollars)
<TABLE>
<CAPTION>
Compensation
Deferred Expense
Total Portion Year Ended Dec 31
Compensation 12/31/99 1998 1999
<S> <C> <C> <C> <C> <C>
a) 2,000,000 common shares
issued as a finder's fee
to Robert Kinloch, a
director and officer of
the Company at a price
of $0.05 per share $ 100,000 $ 76,000 $ 5,000 $ 19,000
b) 5,000,000 common shares
subscribed by James Oste,
a director and officer of
the Company at a cash
price of $0.01 per share
for a total of $50,000
giving rise to compensation
at $0.04 per share, or
$200,000 200,000 152,000 10,000 38,000
c) 250,000 common shares issued
for consulting services to
David Glass at a price of
$0.05 per share 2,500 2,168 - 332
d) 3,000,000 common shares
exercised on stock options 117,000 117,000 - -
--------- --------- -------- --------
$ 419,500 $ 347,168 $ 15,000 $ 57,332
========= ========= ======== ========
</TABLE>
Note 8 PENSION AND EMPLOYMENT LIABILITIES
The Company does not have any liabilities as at December 31, 1998 for
pension, postemployment benefits or postretirement benefits, The
Company does not have a pension plan.
Note 9 FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, advances for
expenses, accounts payable and notes payable. It is management's
opinion that the Company is not exposed to significant interest,
currency or credit risks arising from these financial instruments. The
fair value of these financial statements approximates their carrying
values.
See Accompanying Notes and Independent's Auditors' Report.
F-10
<PAGE> 22
PACIFIC CART SERVICES LTD.
(A Nevada Corporation)
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
(in U.S. Dollars)
Note 10. SUBSEQUENT EVENTS
a) Pursuant to a letter of intent and to the AGM of Mr. Tube Steak
Canada Inc. (MTS) the company has drawn up a formal agreement of
Purchase and Sale between it's wholly owned subsidiary Gretna
Capital Corporation and MTS. In January the corporation issued
798,000 shares to be held in trust by Bryan and Co. pending
closing of this transaction.
b) On March 6, 2000, the company signed three promissory notes with
three individuals for loans to the company totaling $42,000 US for
90 days with interest at 9% payable upon repayment of the notes.
c) In February 2000, the company entered into a formal agreement with
United Keno Hill Mines Ltd, (UKH) to provide that company with
$150,000 CDN, over a six-week period ending March 30, 2000, The
agreement provides for conversion of the loan to UKH stock at
$0.09 per share; Secondly, that PCS would provide an additional
loan for a further $4,000,000 CDN convertible into 46,000,000
shares of UKH treasury stock representing 50% of the outstanding
stock of that company.
d) On March 5, 2000, Robert Kinloch replaced James Oste as President
and Chief Executive Officer of PCS. Pursuant to this appointment,
Mr. Kinloch was granted a stock option to purchase 2,000,000
common shares of the company's stock @ 0,50 per share.
e) The company entered into a consulting agreement with Alan Berkun
of New York City for the provision of services relating to Mergers
and Acquisitions. Pursuant to this agreement, the company issued
1,220,000 treasury shares. The company filed form S-8 for the
stock and issued a letter of authorization to its transfer agent
to issue the shares.
Note 11. CAPITAL STOCK
A stock option was exercised an June 15, 1999 for 3,000,000 common
shares at $0.04 per share for proceeds of $120,000. Issuance of these
shares has been authorized and they are disclosed as issued and fully
paid in these financial statements. The shares, however, are not as yet
issued by the transfer agent.
See Accompanying Notes and Independent Auditors' Report
F-11
<PAGE> 23
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
There have been no disagreements on accounting and financial
disclosures from the inception of the Company through the date of this
Registration Statement.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Identification of Directors and Executive Officers.
The following table sets forth the names and nature of all
positions and offices held by all directors and executive officers of
the Company for the calendar year ending December 31, 1999, and to the
date hereof, and the period or periods during which each such director
or executive officer served in his or her respective positions.
Date of Date of
Position Election of Termination
Name Held Designation or Resignation
James Oste Chairman of the 08/27/99
Board of Directors
President and CEO 08/27/99 03/05/00
Robert Kinloch President, Chief 03/05/00
Executive Officer and
a member of the 08/27/99
Board of Directors
Vice President 08/27/99 03/05/00
and COO
David Glass Treasurer, Chief 08/27/99
Financial Officer
and a member of the
Board of Directors
Secretary 03/05/00
Term of Office
The terms of office of the current directors continue until the
annual meeting of stockholders, which the Bylaws provide shall be held
on the third Friday of November of each year; officers are elected at
the annual meeting of the board of directors, which immediately follows
the annual meeting of stockholders.
James Oste - Chairman of the Board of Directors.
Since inception, Mr. Oste has been a founder and the Chairman of
the Board of Directors. From August 27, 1998 to March 5, 2000, Mr.
Oste was the President of the Company. Since September 1997, Mr. Oste
has been the President, Chief Executive Officer and member of the Board
of Directors of Mr. Tube Steak Canada, Inc. From May 1985 to March
1999, Mr. Oste was a founder, the President and a Director of Karenco
<PAGE> 24
Foods Ltd. Karenco is a franchiser of a soup and sandwich style deli,
under the trade name of Deli Stop. From October 1995 to March 1999,
Mr. Oste was a Director of Mr. Tube Steak Canada Ltd., a Alberta
corporation. From April 1992 to December 1998, Mr. Oste was a Director
of Montana Marketing Group, Inc. Montana Marketing is a wholly owned
subsidiary of Mr. Tube Steak Canada, Inc. From December 1993 to March
1999, Mr. Oste was a Director of Mr. T.S. Holdings Inc., a Nevada
corporation, a wholly owned subsidiary of Mr. Tube Steak of Canada.
From August 1990 to November 1998, Mr. Oste was a Director of D.S.
Holdings Ltd. From September 1996 to June 1998, Mr. Oste was a Director
of Montana Motor Lines Ltd. Mr. Oste attended Red River Community
College and graduate from Dun & Bradstreet in 1975 with a degree in
Commercial Credit Analysis.
Robert Kinloch - President, Chief Executive Officer and Board Member.
Since inception, Mr. Kinloch has been a founder and a member of
the Board of Directors. On March 5, 2000, Mr. Kinloch resigned as the
Vice President and Chief Operations Officer of the Company, and became
the President and Chief Executive Officer. From April 1998 to February
1999, Mr. Kinloch has been the head of investor relations for Mr. Tube
Steak Canada, Inc. From June 1993 to June 1996, Mr. Kinloch was a
commercial charter pilot for Loyal Air. Loyal Air is located in
Belleville, Ontario. From June 1987 to September 1990, Mr. Kinloch was
a registered commodity futures trader with the Ontario Securities
Commission. From June 1987 to September 1990, Mr. Kinloch was an
independent floor trader on the Toronto Futures Exchange, Toronto Stock
Exchange. From December 1988 to December 1997, Mr. Kinloch was a co-
founder and Vice President of Lakebreeze Properties Ltd. Lakebreeze is
a property development company. Mr. Kinloch graduated from the
University of Saskatchewan in 1992 with a degree in Philosophy.
David Glass - Secretary/Treasurer, Chief Financial Officer and Board
Member.
Since inception, Mr. Glass has been a founder, the Treasurer,
Chief Financial Officer and a member of the Board of Directors. On
March 5, 2000, Mr. Glass became the Secretary of the Company. Since
February 1985, Mr. Glass has been a partner with the accounting firm of
Shell & Glass in Winnipeg, Manitoba, Canada. From May 1977 to March
1999, Mr. Glass worked as an independent management consultant. Mr.
Glass graduated from the Accountancy of Manitoba in 1971 with a
certificate in accounting and is a licensed accountant in Winnipeg,
Manitoba, Canada.
Involvement in Certain Legal Proceedings
During the past five years, no present or former director,
executive officer or person nominated to become a director or an
executive officer of the Company has been the subject matter of any
legal proceedings, including bankruptcy, criminal proceedings, or civil
proceedings. Further, no legal proceedings are known to be
contemplated by governmental authorities against any director,
executive officer and person nominated to become a director.
<PAGE> 25
Compliance with Section 16(a) of the Exchange Act.
The directors, executive officers and ten percent stockholders of
the Company did not file any Forms 3, 4 or 5 as required by Section 16
of the Securities Exchange Act of 1934. Said directors, officers and
ten percent stockholders intend to file all delinquent reports in the
near future.
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the period indicated:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> Long Term Compensation Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (I)
Name Other Restricted LTIP All
and Annual Stock Pay- Other
Principal $ $ Compen Awards Options/ Outs Compen
Position Year Salary Bonus sation($) $ SAR's(#) ($) sation$
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James Oste
Chairman 1999 $24,000 $0 $0 $0 3,500,000 $0 $0
1998 $ -0- $0 $0 $0 0 $0 $0
1997 $ -0- $0 $0 $0 0 $0 $0
Robert
Kinloch
President 1999 $22,000 $0 $0 $0 2,500,000 $0 $0
& Director 1998 $ -0- $0 $0 $0 0 $0 $0
1997 $ -0- $0 $0 $0 0 $0 $0
David Glass
Secretary/ 1999 $ -0- $0 $0 $0 0 $0 $0
Treasurer 1998 $ -0- $0 $0 $0 0 $0 $0
& Director 1997 $ -0- $0 $0 $0 0 $0 $0
</TABLE>
The Company anticipates paying the following salaries in 1999,
subject to the Company beginning profitable operations and generating
sufficient revenues to pay the same:
James Oste President 2000 $ 24,000
David Glass Treasurer 2000 $ 0
Robert Kinloch Secretary 2000 $ 22,000
There are no stock option, retirement, pension, or profit sharing
plans for the benefit of the Company's officers and directors.
<PAGE> 26
Option/SAR Grants in the last Fiscal Year.
<TABLE>
<CAPTION>
Percentage
Number of of Options
Securities granted to Market
Underlying Employees Exercise of Price on
Options in the Base Price Date of Expiration
Name Granted Fiscal Year ($/Sh) Grant Date
<S> <C> <C> <C> <C> <C>
James F. Oste 3,500,000 58.3% $0.04 $0.05 05/08/00
Robert J. Kinloch 2,500,000 41.7% $0.04 $0.05 05/08/00
David G. Glass 0 0 -0- -0- N/A
</TABLE>
Aggregate Options Exercised in the Last Fiscal Year and Fiscal Year-End
Option Values
1,000,000 stock options were exercised by Mr. Kinloch during the
1999 fiscal year.
<TABLE>
<CAPTION>
Number of
securities Value of
underlying unexercised
unexercised in-the-money
Options Options
Shares 12/31/99 (#) 12/31/99 ($)
acquired on Value Exercisable/ Exercisable/
Name exercise (#) Realized ($) unexercisable unexercisable
<S> <C> <C> <C> <C>
James Oste 2,000,000 $80,000 1,500,000/0 $1,125,000/0
Robert
Kinloch 1,000,000 $40,000 1,500,000/0 $1,125,000/0
</TABLE>
Long-Term Incentive Plan Awards.
The Company does not have any long-term incentive plans that
provide compensation intended to serve as incentive for performance.
Compensation of Directors.
Directors do not receive any compensation for serving as members
of the Board of Directors. The Board has not implemented a plan to
award options to any Directors. There are no contractual arrangements
with any member of the Board of Directors.
The Company has not paid any paid salaries to its officers for
since the Company's inception and does not plan to do so until such
time as the Company beings operating profitably.
Compensation of Directors.
The Company's Board of Directors unanimously resolved that members
receive no compensation for their services, however, they are
reimbursed for travel expenses incurred in serving on the Board of
Directors.
<PAGE> 27
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Security Ownership of Certain Beneficial Owners
The following table sets forth the share holdings of those persons
who own more than five percent of the Company's Common Stock as of
December 31, 1999:
Name and Number of Percent of
address of owner Shares Position Class
James F. Oste 7,000,000 Chief Executive 53.61%
350 Margaret Ave. Officer and a member of
Winnipeg, Manitoba the Board of Directors
Canada R2V 1T8
Robert J. Kinloch 3,000,000 President, Chief 22.97%
2501 Lansdowne Ave. Operations Officer and a
Saskatoon, Saskatchewan member of the Board of
Canada S7J 1H3 Directors
David G. Glass 260,000 Treasurer, Chief 1.89%
201 Ambassador Row Financial Officer and a
Winnipeg, Manitoba member of the Board of
Canada R2U 3L9 Directors
All officers and 10,260,000 78.57%
directors as a
group (3 persons)
Changes in Control
To the knowledge of management, there are no present arrangements
or pledges of securities of the Company which may result in a change in
control of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Registrant has engaged in no transactions with management or
others in which the amount involved exceeds $60,000 other than the
following:
In October 1998, the Company issued 5,000,000 shares of common
stock to James F. Oste, the Company's Former President in consideration
of the $50,000.
On August 27, 1998, Mr. Oste lent the Company $20,000 as evidenced
by a promissory note dated August 27, 1998. The promissory note does
not accrue any interest. Pursuant to the agreement of the parties,
demand to pay the promissory note could not be made by Mr. Oste until
June 1, 1999. On March 15, 1999, Mr. Oste extended the time period to
call the promissory note to March 15, 2000.
In February 1999, the Company issued 250,000 shares of common
stock to David G. Glass, the Company's Treasurer in consideration of
the $10,000.
<PAGE> 28
In October 1998, the Company issued 2,000,000 shares of common
stock to Robert J. Kinloch, the Company's President in consideration of
services rendered by Mr. Kinloch as a finder in locating investors for
the Company's securities.
On January 10, 1999, the Company entered into an agreement with
Mister Tube Steak Canada Inc. ("MTS") wherein the Company was appointed
MTS's exclusive distributor in California and Washington. See "ITEM 1.
BUSINESS." Mr. Oste is President and a Director of MTS and Mr. Kinloch
is head of investor relations for MTS. As a result of Messrs. Oste and
Kinloch's positions with the Company and MTS, a potential conflict of
interest exists with respect to matters relating to the operation of
the Company. Messrs. Oste and Kinloch have agreed, so long as they are
officers and directors of the Company and affiliated with MTS, that all
opportunities presented to them will be made available to MTS and the
Company on an equal basis, but subject to the terms and conditions of
the agreement between the Company and MTS. For example, orders for the
purchase of the Mobile Vending Carts and Products emanating from
California and Washington will belong to the Company. Orders for
products emanating from outside California and Washington will belong
to MTS since those jurisdictions are not covered by the Agreement. In
the event that some business opportunity is presented to the Company
which does not fall within the foregoing parameters, the business
opportunity will be offered to the Company and MTS on an equal basis.
At the present time the Company cannot comprehend an opportunity which
would cause the Company to offer the same to MTS on an equal basis,
however, in the event such opportunity does appear, the same will be so
offered.
On February 22, 1999, the Company acquired five easy-tow trailer
carts from Karenco Food Ltd., owned by James Ostee, the Company's
former President, in consideration of $15,000.
Further, Mr. Oste has agreed to abstain from voting, as an officer
and director of the Company and MTS, on matters which result in a
conflict of interest with respect to both corporations. Mr. Kinloch,
on the other hand, is not an officer or director of MTS and accordingly
will not be voting or involved with the policy decisions of MTS. Mr.
Kinloch, however, has agreed not to vote, as an officer or director of
the Company on matters which result in a conflict of interest between
the Company and MTS. Accordingly, where a conflict of interest exists
between the Company and MTS, the same will be decided by the Company's
remaining officer and director, Mr. David Glass.
To date, there have not been any transactions between the Company
and its Officers, Directors, principal shareholders or affiliates other
than as set forth above. If such transactions occur in the future,
they will be on terms no less favorable to the Company than could be
obtained from unaffiliated parties.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter of
the period covered by this report.
<PAGE> 29
Exhibits
The following documents are incorporated herein by reference from
the Registrant's Form 10SB Registration Statement and all amendments
thereto, which was filed with the Securities and Exchange Commission on
August 8, 1999, and all exhibits thereto, as filed with the Commission:
Exhibit
No. Description
3.1 Articles of Incorporation.
3.2 Bylaws.
4.1 Specimen Stock Certificate.
10.1 Agreement with Mr. Tube Steak of Canada, Inc.
10.2 Amendment to Agreement with Mr. Tube Steak.
The following documents are incorporated herein by reference from
the Registrant's Form S-8 Registration Statement and all amendments
thereto, which was filed with the Securities and Exchange Commission on
March 10, 2000, and all exhibits thereto, as filed with the Commission:
4.1 Agreement dated March 7, 2000 by and between Pacific
Cart Services, Ltd. and Alan Berkun.
The following documents are incorporated herein:
10.3 Letter of Intent to Purchase the Assets of Mr. Tube Steak of
Canada.
23.1 Consent of Moen and Company, Chartered Accountants
27 Financial Data Schedule
99.1 Consulting Agreement between the Company and Richard L.
Woytkiiw and Francis H. Schenstead.
<PAGE> 30
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto
duly authorized, on this 5th day of April, 2000.
PACIFIC CART SERVICES, LTD.
(Registrant)
BY: /s/ Robert J. Kinlock
Robert J. Kinloch, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following person on
behalf of the Registrant and in the capacities and on this 5th day of
April, 2000.
SIGNATURES TITLE DATE
/s/ James F. Oste Chairman of the Board April 5, 2000
James F. Oste of Directors
/s/ Robert J. Kinloch President, COE and a April 5, 2000
Robert J. Kinloch Member of the Directors
/s/ David G. Glass Secretary/Treasurer, April 5, 2000
David G. Glass CFO and a member of the
Board of Directors
<PAGE> 30
EXHIBIT 10.3
PACIFIC CART SERVICES LTD.
Canada USA
2501 Lansdowne Avenue Box 492
Saskatoon, SK S7J IH3 561 Keystone Avenue
Tel (306) 343-5799 Reno, Nevada 89503
Fax (306) 343-0888 Tel (702) 334-6476
August 25, 1999
Mr. Tube Steak Canada Inc.
609 Grenville Street
Suite 1600, Box 10068
Vancouver, BC V7Y IC3
Dear Sirs:
Re: Purchase of Assets of Mr. Tube Steak Canada Inc. (ML Igoe Steak
by Pacific Cart Services Ltd. (Pacific)
Pacific understands that Mr. Tube Steak has expressed an interest
in selling; the assets, equipment, trademarks, tradenames, intellectual
property and inventory (hereinafter collectively, referred to as the
Assets) of Mr. Tube Steak as a going concern. This letter of intent is
delivered by Pacific to set out the terms and conditions in which
Pacific would be willing to purchase the Assets from Mr. Tube Steak,
This letter of intent is a statement of intent to the signatories
and is intended to set forth the general understanding and the basic
terms of the transactions contemplated herein: (the Transactions). The
parties agree that they will work together to prepare the necessary
legal documentation and agreements which will include the detail
necessary to complete the Transactions.
1. Purchase of Assets
Pacific will agree to purchase all of the Assets which Assets
represent all or substantially all the assets of Mr. Tube Steak plus
all associated goodwill for the aggregate purchase price of $1,000,000
exclusive of GST (the Purchase Price). The purchase of Assets will be
completed pursuant to an asset purchase agreement (the Purchase
Agreement) to be prepared in accordance with this letter of intent. The
parties jointly agree that they will do all things necessary to
complete all filings with the appropriate authorities as required,
obtain all regulatory, shareholder and directors approval as required
to complete the Transactions.
2. Purchase Price
The aggregate Purchase Price of the Assets shall be $1,000,000.00
exclusive of GST payable on the Closing Date (as defined below), such
Purchase Price to be payable by way of the issuance of that number of
common shares of Pacific that have a market value equal to $1,000,000.
The market value shall be determined by the closing price of the common
shares of Pacific as traded on the NASDAQ Over-the-Counter Bulletin
Board on the most recent trading date preceding the Closing Date, or if
the common shares have not traded on that date, the next most recent
preceding date on which the common shares had traded.
<PAGE> 31
The issuance of the Pacific shares is subject to such necessary
regulatory, shareholder and corporate approval as may be required,
including, but not limited to, approval of all applicable securities
regulatory authorities
3. Closing Date
The Closing Date of the Transactions shall be that date which is
30 days after Mr. Tube Steak gives notice to it shareholders of a
special meeting of the shareholders to approve the Transactions, or
such other later date as the parties may mutually agree to.
4. Intellectual Property Rights
As part of the Transactions, Mr. Tube Steak agrees to assign to
Pacific all its rights, titles, and interests in and to any
intellectual property, copyrights, tradenames and trademarks made by or
contributed to by Mr. Tube Steak, including all records relating
thereto.
Mr. Tube Steak agrees to execute any and all assignments,
documents and further assurances which Pacific may require, from time
to time to convey to Pacific its respective rights, title, and interest
in and to any intellectual property, copyrights, tradenames or
trademarks made by or contributed to by Mr. Tube Steak including all
records relating thereto.
Mr. Tube Steak will fully cooperate and assist in every way in the
prosecution, maintenance and protection of any intellectual property,
tradenames, or copyrights made by or contributed to by Mr. Tube Steak
in respect to the transactions contemplated herein.
Mr. Tube Steak shall continually and fully communicate to Pacific
all intellectual property, trademarks, tradenames, or copyrights made
by or contributed to by Mr. Tube Steak in respect to the transactions
contemplated herein, and in this regard Mr. Tube Steak shall make,
maintain and provide to Pacific full and proper records relating to all
such intellectual property.
5. Conditions Precedent
Pacific's obligation to proceed with and complete the Transactions
is subject to the following conditions, it being understood that such
conditions are solely for the benefit of Pacific and may be waived at
any time by Pacific in its sole discretion:
a. receipt of all required approvals including any corporate,
regulatory or other such approvals that are required pursuant
to applicable securities laws;
b. receipt of the approval of the shareholders of Mr. Tube
Steak, directors of Mr. Tube Steak and the directors of
Pacific;
c. completion and execution of the formal Purchase Agreement.
<PAGE> 32
1. Investigation
Mr. Tube Steak shall provide Pacific and/or its representatives,
including counsel, accountants and other technical consultants with all
technical, corporate and financial reviews including providing access
to all records, documents, and data required by Pacific (in its sole
discretion including furnishing all other information related to those
matters as may be reasonably requested by Pacific or its
representatives. Once the Purchase Agreement hat been executed, Mr.
Tube Steak shall also permit Pacific and/or its representatives access
to all key operating personnel of Mr. Tube Steak for the purpose of
conducting interviews and information review.
5. Standstill
Between the date of acceptance of this letter of intent and the
Closing Date, except with the written consent of Pacific, Mr. Tube
Steak will not:
a. sell, license, transfer, assign, pledge, encumber or
otherwise transfer any of its assets other then in the
ordinary course of its business;
b. issue any securities, enter into any new agreements, or
modify any material contracts existing at the date of this
letter of intent;
c. make any changes in key personnel other than in the ordinary
course of business;
d. or alter Its current business or businesses.
2. Employees and Employment Contracts
Mr. Tube Steak agrees to pay and satisfy all salaries, wages,
holiday pay, unemployment insurance premiums, workers compensation
payments, Income Tax and Canada Pension Plan deductions for any and all
employees of Mr. Tube Steak up to and including the Closing Date.
Mr. Tube Steak shall terminate all of its employees on the Closing
Date in accordance with the provisions of applicable labour
legislation.
Pacific shall, on the Closing Date, offer employment to the
employees of Mr, Tube Steak existing on the day prior to the Closing
Date, under terms and conditions that are substantially consistent with
the terms of such employees employment with Mr. Tube Steak, provided it
is understood and agreed that Pacific shall be entitled to conduct
interviews of each and every employee prior to the: Closing Date and
Pacific shall not be required to hire any employees who are in the
opinion of Pacific, not employable by Pacific.
3. Representations and Warranties
Mr. Tube Steak shall represent and warrant as of the Closing Date,
that the Assets are beneficially owned by Mr. Tube Steak, with good and
marketable title thereto, free and clear of all liens, security,
interests, charges, encumbrances, and any rights in favour of third
parties whatsoever, and that no person or other entity has any right or
option or any right or privilege capable of becoming an agreement or
option for the purchase of the assets.
<PAGE> 33
4. Confidentiality
The parties mutually agree that any information obtained by either
party respecting the other, including the existence in terms of this
letter of intent or any other documents or discussions respecting the
transactions contemplated herein shall be treated as confidential by
the receiving party and shall not be disclosed to any third party,
excepting the case of information disclosed in order for Pacific to
complete its due diligence review and consummate the transactions.
No party shall make any Public announcements or issue any press
releases regarding the transaction without the prior written consent of
the other party.
5. Fees and Expenses
Pacific shall pay to Mr. Tube Steak, upon the execution of this
Letter of intent, the administration fee in the amount of Five Thousand
($5,000.00) Dollars U.S. Apart from such administration fee, the
parties shall bear their own costs in connection with the transactions
contemplated in this Letter of Intent, including, without limitation,
legal, accounting and other professional fees.
6. Termination
This letter of intent maybe terminated by Pacific on notice to Mr.
Tube Steak and the shareholders at any time prior to the Closing Date,
if Pacific is not satisfied in its sole discretion, with the Conditions
Precedent forming part of this letter of intent. The parties agree that
any agreements entered into between them in order to give affect of the
transactions can be terminated by one party without cause and without
giving prior notice in the event that the other party breaches the
terms of any of such of agreements. The parties agree that any
agreements entered, into between them in order to give effect to the
transactions can be terminated at any time by mutual agreement of the
parties.
7. Governing Law
This letter of intent shall be governed by and construed and in
accordance with the laws of the Province of Alberta and the laws of
Canada applicable therein.
8. Acceptance and Closing
This letter of intent is open for Acceptance by Pacific or its
duly authorized representative until 4:00 p.m. on August 31, 1999.
Forthwith upon execution of this letter of intent, the parties shall
commence negotiations and instruct their solicitors to draft the
required Purchase Agreement. The Purchase Agreement shall contain
provisions with respect to the matters set out in this letter of
intent, and will also incorporate all such terms and conditions as the
parties may deem necessary or appropriate to complete the transactions,
including all conditions on closing, all representations and
warranties, all covenants, all opinions, and all necessary
indemnifications in relation to such representations and warranties
provided.
<PAGE> 34
9. General
This letter of intent may be executed in one or more counterparts,
by facsimile or original copies, each of which shall constitute an
original, but all of which shall constitute one and the same document.
The parties hereto covenant and agree to do such things and
execute such further documents, agreement, instruments or assurances as
may be reasonably required by the other party hereto from time to time
in order to carry out the terms of this letter of intent in accordance
with its true intent.
Time shall be of the essence of this letter of intent.
This letter of intent shall enure to the benefit of and be binding
upon the parties hereto their respective heirs, executors,
administrators, successors and assigns).
Yours truly,
PACIFIC CART SERVICES LTD.
Per: /s/ illegible
The: terms and conditions of this letter of intent are accepted by Mr.
Tube Steak Canada Inc. this 31st day of August, 1999.
MR. TUBE STEAK CANADA INC.
Per: /s/ James Oste
<PAGE> 35
EXHIBIT 23.3
MOEN AND COMPANY
CHARTERED ACCOUNTANTS
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K, into the
Company's previously filed Registration Statement File No. 333-
32056 on Form S-8.
Moen and Company
/s/ Moen and Company
Vancouver, British Columbia
April 3, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at December 31, 1999 Audited and this
Statement of Income for the year ended December 31, 1999 Audited and is
unqualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 44,014
<SECURITIES> 0
<RECEIVABLES> 6,838
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 50,852
<PP&E> 24,662
<DEPRECIATION> (4,560)
<TOTAL-ASSETS> 70,954
<CURRENT-LIABILITIES> 60,688
<BONDS> 0
0
0
<COMMON> 276,733
<OTHER-SE> (266,467)
<TOTAL-LIABILITY-AND-EQUITY> 10,266
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (219,684)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (219,684)
<INCOME-TAX> 0
<INCOME-CONTINUING> (219,684)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (219,684)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
<PAGE> 37
EXHIBIT 99.1
CONSULTING AGREEMENT
This consulting Agreement (the "Agreement"), effective as of
October 05, 1999 is entered into by and between Pacific Civil Services
Ltd. (herein referred to as the "Company") and Richard L. Woytkiw and
Francis H. Schenstead (herein referred to as the "Consultant").
RECITALS
WHEREAS, Company is a publicly hold corporation where its common
stock will be traded on the OTC Bulletin Board.
WHEREAS, Consultant has experience in the area of investor
communications and financial and Investor public relations; and
WHEREAS, Company desires to engage the services of Consultant to
assist and consult with the company in matters concerning investor
relations and to represent the company in investors' communications and
public relations with existing shareholders, brokers, dealers and other
Investment professionals as to the Company's current and proposed
activities;
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, the parties hereto
covenant and agree as follows:
1. Term of Consultancy. Company hereby agrees to retain the
Consultant to act in a consulting capacity to the Company, and the
Consultant hereby agrees to provide services to the Company for a term
of three months plus, commencing on 15th day of November, 1999 and
ending on the 05th day of March, 2000.
2. Duties of Consultant. The Consultant agrees to provide the
following specified consulting services during the term specified in
Section 1.
(a) Advise and assist the Company in developing and implementing
appropriate plans and materiels for presenting the Company and its
business plans, strategy and personnel to the financial community,
establishing an image for the Company in the financial community, and
creating the foundation for subsequent financial public relations
efforts;
(b) Introduce the Company to the financial community.
(c) With the cooperation of the Company, maintain an awareness
during the term of this Agreement of the Company's plans, strategy and
personnel, as they may evolve during such period, and advise and
assists the Company in communicating appropriate information regarding
such plans, strategy and personnel to the financial community.
(d) Assist and advise the Company with respect to its stockholder
and investor relations, relations with brokers, dealers, analysts, and
other investment professionals.
<PAGE> 38
(e) Perform the functions generally assigned to investor/
stockholder relations and public relations departments in major
corporations, including responding to telephone and written inquires,
reviewing press releases reports, and other communications with or to
shareholders, the investment community and the general public, advising
with respect to the timing, form, distributions and other matters
related to such releases, reports and communications; and consulting
with respect to corporate symbols, logos, names the presentation of
such symbols, logos and names and other matters relating to corporate
image.
(f) Disseminate information regarding the company to brokers,
dealers and other investment community professionals and the general
investing public.
(g) Conduct meetings, in person or by telephone, with brokers,
dealers, analysts and other investment professionals to advise them of
the companies plans, goals and activities, and assist the Company in
preparing for press conferences and other forums involving the media,
investment community professionals and the general investing public.
(h) At the Company's request, review business plans, strategies,
mission statements, budgets, proposed transactions and other plans for
the purpose of advising the Company of the investment community
implications thereof.
(i) Otherwise perform as the Company's financial relations and
public relations consultant and
(j) Make public communications and disclosures regarding the
Company only within the scope of the authorizations conferred by the
Company and not make any such communications or disclosures of
information riot provided or authorized by the Company.
(k) Maintain a corporate web site that accurately deals with
conveying all of the above matters pertaining to corporate
communications.
3. Allocation of Time and Energies. The Consultant hereby promises
to perform and discharge well and faithfully the responsibilities which
may be assigned to the consultant from time to time by the officers and
duty authorized representatives of the Company in connection with the
conduct of its financial and investor public relations and
communications activities, so long as such activities are in compliance
with applicable securities laws and regulations. Consultant shall
diligently and thoroughly provide the consulting services required
hereunder. Although no specific hours per day requirement will be
require, Consultant and the Company agree that Consultant will perform
the duties set forth herein above in a diligent and professional
manner. It is explicitly understood that Consultant's performance of
its duties hereunder will in no way be measured by the price of the
Company's common stock nor trading volume of the Company's common
stock, both of which cannot be guaranteed by the Consultant.
<PAGE> 39
4. Remuneration. As full and complete compensation for services
described in this agreement, the Company shall compensate Consultant as
follows:
4.1 Company agrees to pay Consultant a retainer of Seven Thousand
US dollars per 1/3 of the 3 month term paid immediately and the last
equal 2 payments to be paid on the 15th day of December 1999 and
January 15 2000. Fees must include in addition the 7% GST.
4.2 For undertaking this engagement and for other good and
valuable consideration, the company agrees to issue to the Consultant
150,000 options which for this purpose have been valued by the
Company's Board of Directors at .81 cents per share. The Company
understands and agrees that the Consultant has foregone significant
opportunities to accept this engagement. Thus the options issued as a
commencement bonus, therefore constitutes payment for Consultants
agreement to represent the Company and are a non-refundable, non-
apportionable, and non-ratable retainer and that such options are
exercisable for a period of 3 years on the beginning date of this
agreement and expiring on March 06, 2003; such options are not a
prepayment for future services. If the Company decides to terminate
this Agreement for any reason whatsoever, it is agreed and understood
that Consultant will not be requested or demanded by the Company to
return any of the options paid to it hereunder. All options issued
pursuant to this Agreement shall be evidenced by an option agreement
issued in the name of Mr. Richard L. Woytkiw.
5. Expenses. Company agrees to reimburse consultant for all
extraordinary expenses or other expenses incurred when the corporation
requests such. Eg special corporate printing, brochures, ect. Such
items as cell phone, travel, luncheons, faxing, printing, investor
conferences that are handled within regular course of business will all
be paid for by the consultant under his regular monthly retainer of
fees.
6. Financing "Finder's Fee." It is understood that in the event
Consultant introduces Company to a lender or equity purchaser, or its
nominees, not already having a preexisting relationship with the
Company, or its nominees, not already having a preexisting relationship
with the Company, or its nominees, ultimately finances or causes the
completion of such financing, Company agrees to compensate Consultant
for such services with a finders fee in the amount of 7% of total gross
financing provided to Company. This will be payable in Canadian Gold
Maple Leafs at such time as monies are received and the 7% to be
calculated on the day financing is signed and to be given at that days
gold spot price. This will be in addition to any fees payable by the
Company to any other intermediary, if any, which shall be per separate
agreements negotiated between Company and such other intermediary.
6.1 It is further understood that Company and not Consultant is
responsible to perform any an all due diligence on such lender or
equity purchaser introduced to it by Consultant under this Agreement,
prior to Company receiving funds. However Consultant will not introduce
any parties to Company about which Consultant has any prior knowledge
of questionable, unethical or illicit activities
<PAGE> 40
6.2 Company agrees that said compensation to Consultant shall be
paid in full at the time said financing is closed. Moreover, said
compensation will be a condition precedent to the closing of such
funding or financing and Company shall execute any and all documents
necessary to effect said compensation,
6.3 As further consideration to Consultant, Company agrees not to
obtain any further financing from any lender or equity purchaser, or
its nominees. Supplied or referred to the Company by Consultant for a
period of five years from the date of this Agreement, either directly
or indirectly through third parties or nominees. In the event of
circumvention by Company, or its nominees. Consultant shall receive a
fee equal to that outlined in Section R60 herein.
6.4 Consultant will notify Company of introductions it makes for
potential source of financing in a timely manner (approximately 5 days
within introductions) via Memo. If company has a preexisting
relationship with such nominee and believes such party should be
excluded from this Agreement, then Company will notify Consultant by
registered mail of such circumstances.
7. Indemnification. The Company warrants and represents that all
oral communications, written documents or materials, furnished to
Consultant by the Company with rasped to financial affairs, operations,
profitability and strategic planning of the Company are accurate and
Consultant may rely upon the accuracy thereof without independent
investigation. The Company will Protect, indemnify and hold harmless
Consultant against any claims or litigation including any damages,
liability, cost and attorney's fees with rasped thereto resulting from
Consultant's communications or dissemination of any sold information,
documents or materials not designated by the Company to the Consultant
as "confidential" or "company private" excluding any such claims or
litigation resulting from Consultant's communications or dissemination
of information not provided or authorized by the Company.
8. Representations. Consultant represents that he is not required
to maintain any licenses or registrations under Federal or Provincial
regulations necessary to perform the services set forth herein.
Consultant acknowledges that, to the best of his knowledge, the
performance of the services set forth under this Agreement will not
violate any rule or provision of any regulatory agency having
jurisdiction over Consultant. Consultant acknowledges that he is not a
securities Broker or a registered investment advisor and therefore is
not required to communicate directly with shareholders or private
investors.
9. Status a Independent contractor. Consultant's engagement
pursuant to this agreement shall be as an independent contractor, and
not as an employee, officer or other agent of the Company. Neither
party to this Agreement shall represent or hold itself out to be the
employer or employee of the other. Consultant further acknowledges the
consideration provided herein above is a gross amount of consideration
and other then the 7% GST which will be paid in addition to the
Consultants monthly fee. The Company will not withhold from such
<PAGE> 41
consideration any amounts as to income taxes, pension plans, or
Insurance programs. All such taxes and other such payments shall be
made or provided for by Consultant and the Company shall have no
responsibility or duties regarding such matters. Neither the Company
nor the consultant possess the authority to bind each other in any
agreements without the express written consent of the entity to be
bound.
10. Attorneys fees. If any legal action or any arbitration or
other proceeding is brought for the enforcement or interpretation of
this Agreement, or because of an alleged dispute, breach, default, or
misrepresentation in connection with or related to this Agreement, the
successful or prevailing party shall be entitled to recover reasonable
attorneys fees and other costs in connection with that action or
proceeding, in addition to any other relief to which A or they may be
entitled.
11. Jurisdiction This agreement shall be governed by, construed
and enforced In accordance with the Ian of the Province of British
Columbia. The parties agree that Vancouver, B.C. Canada will be the
venue of any dispute and will have jurisdiction over all parties.
12. Complete Agreement. This Agreement instrument contains the
entire agreement of the parties relating to the subject matter hereof.
This Agreement and its terms may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, extension or discharge is sought.
AGREED IQ
Pacific Cart Services Limited
/s/ Robert Kinlock
Mr. Robert Kinloch
Date November 15, 1999 Witness ________________________
Corporals seal Attached
CONSULTANTS
____________________________ /s/ F. H. Schenstead
Richard L. Woytkiw Mr. F. H. Schenstead
Date November 15, 1999
<PAGE> 42
Number of Shares: ___________ Date of Grant: November 15, 1999
NONQUALIFYING STOCK OPTION AGREEMENT
AGREEMENT made this 15th day of November, 1999, between Richard
Woytkiw (the "Optionee"), and Pacific Cart Services Ltd., a Nevada
corporation (the "Company").
1. Grant of Option. The Company, pursuant to the provisions of
the Pacific Cart Services Ltd. 1999 Nonqualifying Stock Option Plan
(the "1999 Plan") set forth as Attachment A hereto, hereby grants to
the Optionee, subject to the terms and conditions set forth or
incorporated herein, an Option to purchase from the Company all or any
pan of an aggregate of 150,000 Common Shares, as such Common Shares are
now constituted, at the purchase price of $0.81 per share. The
provisions of the 1999 Plan governing the terms and con. conditions of
the Option granted hereby are incorporated in full herein by reference.
2. Exercise. The Option evidenced hereby shall be exercisable in
whole or in part (but only in multiples of 100 Shares unless such
exercise is as to the remaining balance of this Option) on or after
November 15, 1999 and on or before November 15, 2000 provided that the
cumulative number of Common Shares as to which this Option be exercised
(except as provided in paragraph I of Article VI of this 1999 Plan)
shall not exceed the following amounts:
Cumulative Number Prior to Date
of Shares (Net Inclusive of)
The Option evidenced hereby shall be exercisable by the delivery to and
receipt by the Company of (i) a written, notice of election to
exercise, in the form so forth in Attachment B hereto, specifying the
number of shares to be purchased; (ii) accompanied by payment of the
full purchase price thereof in cut or certified check payable to the
order of the Company, or by fully-paid and nonassessable Common Shares
of the Company properly endorsed over to the Company, or by a
combination thereof; and, (iii) by return of this Stock Option
Agreement for endorsement of exercise by the Company on Schedule I
hereof. In the event paid and nonassessable Common Shares are submitted
as whole or partial payment for Shares to be purchased hereunder, such
Common Shares will be valued at their Fair Market Value (as defined in
the 1999 Plan) on the date such Shares are received by the Company and
applied to payment of the exercise price.
3. Transferability. The Option evidenced hereby is NOT assignable
or transferable by the Optionee other than by the Optionee's will, by
the laws of descent and distribution, as provided in paragraph 9 of
Article V of the 1999 Plan. The Option shall be exercisable only by the
Optionee during his/her lifetime,
<PAGE> 43
4. Securities Regulations. The securities issued pursuant to this
Plan are "restricted securities" as defined in Rule 144 of the
Securities Act of 1933 and may not be resold except in compliance with
the registration requirements of the Securities Act of 1933 or an
exemption therefrom. Ninety (90) days aft the Company becomes subject
to the reporting requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, securities issued pursuant to the Plan may be
resold by persons other than affiliates in reliance upon Rule 144
without compliance with paragraphs (c) (d), (e) and (h) thereof, and
affiliates without compliance with paragraph (d) thereof. The Company
is currently not subject to the reporting requirements of tile
Securities Exchange Act of 1934.
PACIFIC CART SERVICES LTD.
BY: /s/ James F. Oste
James F. Oste, President
ATTEST:
/s/ illegible
Secretary
Optionee hereby acknowledges receipt of a copy of the 1999 Plan,
attached hereto and accepts this Option subject to each and every term
and provision of such Plan. Optionee hereby agrees to accept as
binding, conclusive and final, all decisions or interpretations of the
Compensation Committee of the Board of Directors administering the 1999
Plan on any questions arising under such Plan. Optione recognizes that
if Optionee's employment with the Company or any subsidiary thereof
shall be terminated with cause, or by the Optionee, all of the
Optionee's rights hereunder shall thereupon terminate; and that,
pursuant to paragraph 10 of Article V of the 1999 Plan, this Option may
not be exercised while them is outstanding to Optionee any unexercised
Stock Option, granted to Optionee before the date of grant of this
Option, to purchase Common Shares of the Company or any parent or
subsidiary thereof.
Date November 15, 1999
/s/ Richard Woytkiw
Optionee
Type or Print Name Address
Social Security No.
153-140-8380 Landsowne Road
Richmond, British Columbia
Address
640-659-942
Social Security No.
