<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
<P>
-----------------
<P>
FORM 8-K12G3/A
<P>
-----------------
<P>
CURRENT REPORT
<P>
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
<P>
Date of Report (Date of earliest event reported):
April 26, 2000
<P>
PANGEA PETROLEUM CORPORATION
<P>
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
Colorado 0-29585 76-0635938
(State or Other Jurisdiction --------- ----------
of Incorporation) (Commission File Number) (IRS Employer Identification No.)
<P>
</TABLE>
<P>
6666 Harwin Drive, Suite 545, Houston, Texas 77036
-------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
<P>
(713) 933-0374
<P>
(Registrant's Telephone Number, Including Area Code)
<P>
SEGWAY II CORP.
4400 ROUTE 9, 2ND FLOOR
FREEHOLD, NJ 07728
<P>
(Former Name or Former Address, if Changed
Since Last Report)
<P>
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
----------------------------------------
<P>
Pursuant to a Stock Acquisition and Reorganization Agreement
(the "Acquisition Agreement") effective April 26, 2000,
Pangea Petroleum Corp., a Colorado corporation (the
"Company"), acquired one hundred percent (100%) of all the
outstanding shares of common stock ("Common Stock") of
Segway II Corp., a New Jersey corporation ("Segway"), from
RGR Corp. and Robert Jaclin, together representing all of
the shareholders of issued and outstanding common stock of
Segway, for $75,000 and 5,000 shares of $.001 par value
common stock of the Company (the "Acquisition").
<P>
The Acquisition was approved by the unanimous consent of the
Board of Directors of Segway and the Company on April 26,
2000. The Acquisition is intended to qualify as a
reorganization within the meaning of Section 368(a)(1)(A) of
the Internal Revenue Code of 1986, as amended ("IRC").
<P>
Upon effectiveness of the Acquisition, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission (the "Commission"), the
Company elected to become the successor issuer to Segway for
reporting purposes under the Securities Exchange Act of 1934
(the "Act") and elects to report under the Act effective
April 26, 2000.
<P>
As of the effective date of the Acquisition Agreement,
Segway shall assume the name of the Company. The Company's
officers and directors will become the officers and
directors of Segway. As of the Effective Date, Mr. Anslow
shall have resigned as an officer and director of Segway.
<P>
No subsequent changes in the officers, directors and five
percent shareholders of the Company are presently known. The
following table sets forth information regarding the
beneficial ownership of the shares of the Common Stock (the
only class of shares previously issued by the Company) at
April 24, 2000 by (i) each person known by the Company to be
the beneficial owner of more than five percent (5%) of the
Company's outstanding shares of Common Stock, (ii) each
director of the Company, (iii) the executive officers of the
Company, and (iv) by all directors and executive officers of
the Company as a group, prior to and upon completion of this
Offering. Each person named in the table, excluding Cede
&Company, has sole voting and investment power with respect
to all shares shown as beneficially owned by such person and
can be contacted at the address of the Company.
<TABLE>
<S> <C> <C> <C>
NAME OF SHARES OF
TITLE OF CLASS BENEFICIAL OWNER COMMON STOCK PERCENT OF CLASS
------------------------------------------------------------------------------
Common Kendall Dorsett 5,643,800 25.93%
Roland Fink 4,375,600 20.10%
Cede & Company(a) 3,332,332 15.27%
Patricia Cudd 2,088,000 9.59%
Rhea Laws 1,895,000 8.71%
David H. Lennox 300,000 1.38%
Charles B. Pollock 0 0
Karen L. Cloud 0 0
DIRECTORS AND
OFFICERS AS A
GROUP 300,000 1.38%
</TABLE>
<PAGE>
<P>
(a) Cede & Company is a holding company for private
investors. Cede & Company does not hold any shares of the
Company's Common Stock for the benefit of any of
the Company's officers or directors.
<P>
The following is a biographical summary of the directors and
officers of the Company:
<P>
CHARLES B. POLLOCK, 60, has been the Chairman of the Board
and Chief Executive Officer of the Company since June 1999.
From January 1994 to September 1995, Mr. Pollock was
President of Praxair Indonesia, an industrial gas company
where his responsibilities were those as Chief Executive
Officer of such company. From October 1995 to August 1996,
he was manager of Praxair, Inc., an industrial gas
company. His responsibilities included strategic marketing
and competition analysis. From September 1996 to May 1999,
Mr. Pollock was self employed as a consultant in which his
projects included the acquisition and sale of businesses,
competitive analysis and strategic marketing. Mr. Pollock
received his Bachelor's of Science degree in 1962 from North
Carolina State University, his Master of Science degree in
Ceramic Engineering from North Carolina State University in
1968 and his Ph.D in Material Engineering from North
Carolina State University in 1972.
<P>
DAVID H. LENNOX, 63, has been the President of the Company
since January 5, 2000. Mr. Lennox has over 20 years
management experience in the construction industry. Since
January 1976, Mr. Lennox is President of Legend Construction
where his responsibilities include the day to day operations
of such company. Mr. Lennox received his Bachelor's Degree
from Lehigh University in 1962 and his Masters of Science
Degree in Operations Research from Lehigh University in
1966.
<P>
KAREN L. CLOUD, 43, has been Secretary of the Company since
July 1999. From 1986 to 1999, Ms. Cloud was an Administrator
at Praxair Inc. where her responsibilities included computer
development, accounting manual development, web development
and travel coordinator.
<P>
The Directors named above will serve until the next annual
meeting of the shareholders of the Company in the year 2001.
Directors will be elected for one-year terms at each annual
shareholder's meeting. Officers hold their positions at the
appointment of the Board of Directors.
<P>
<PAGE>
<P>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
--------------------------------------------
<P>
Pursuant to the Acquisition Agreement, the Company acquired
one hundred percent (100%) of the issued and outstanding
shares of common stock (Common Stock) of Segway from RGR
Corp. and Robert Jaclin, together representing all of the
shareholders of issued and outstanding Common Stock of
Segway, for $75,000 and 5,000 shares of $.001 par value
common stock of the Company. In evaluating the Acquisition,
Segway used criteria such as the value of the Company's
business relationships, goodwill, the Company's ability to
compete in the oil and natural gas industry, the Company's
current and anticipated business operations, and the
background of the Company's officers and directors in the
oil and natural gas industry. No material relationship
exists between the selling shareholders of Segway or any of
its affiliates, any director or officer, or any associate of
any such director or officer of Segway and the Company
except that Richard I. Anslow, the majority shareholder of
RGR Corp., is the principal of Richard I. Anslow &
Associates who was legal counsel for the Company until it
resigned as legal counsel for the purposes of avoiding a
conflict of interest to effectuate the Acquisition
Agreement. For the purpose of filing this Form 8-K12G3 and
subsequent to the effectiveness of the Acquisition
Agreement, Richard I. Anslow & Associates will resume as
legal counsel of the Company. Segway II was formed,
and RGR Corp. became a shareholder of Segway, prior to being
retained as legal counsel by the Company. The consideration
exchanged pursuant to the Acquisition Agreement was
negotiated between Segway and the Company in an arm's-length
transaction. The consideration paid derived from the
Company's cash on hand and treasury stock.
<P>
Company. Pangea Petroleum Corporation is a publicly trading
company listed on the OTC Electronic Bulletin Board under
the symbol PAPO. The Company is in the business of
producing oil and natural gas from proven reserves. It is
not in the business of exploring for unknown deposits of
these materials. The Officers and Directors of the Company
are familiar with and understand the petroleum business. The
Company structure will remain small through the use of
carefully selected consultants, contractors and service
companies.
<P>
Pangea Petroleum will use capital and established proven
technology to create value by generating significant
production from proven reserves that are of little interest
to the major companies in the industry. Initially, the
Company will focus on mature petroleum provinces in the
United States that have adequate production and distribution
infrastructures. In most cases, the Company will
invest in projects to a sufficient degree to maintain
decision-making control while leaving routine operating
responsibility in the hands of competent partners and/or
contractors. The Company will market it products through a
mix of short and long term contracts to assure a reliable
revenue stream and hedge marketing to flatten the swings in
energy prices. Producing properties will be resold after
enhanced production is established as appropriate to
establish and maintain maximum asset value.
<P>
Pangea Petroleum Organization. The Company is headquartered
in Houston, Texas, and maintains all business functions in
the Houston area. Primary corporate functions include
business support, financial control, technology, production
and technical support.
<P>
<PAGE>
<P>
The group working with the financial control function will
identify capital resources required to support the strategic
goals of the Company. This office will also be responsible
for human resources, planning, and other ordinary
Company functions. The financial control department will
report to the Chairman and will control all of the Company
finances and coordinate with corporate financial control.
The department will be responsible for payables, receivables
and financial planning. Technology is responsible for
identifying and qualifying products, services, and systems
required to support the petroleum production business. It
will take the lead in selecting and qualifying contractors,
consultants, and service companies required for the
implementation of the Company's business plan. Finally, it
will stay abreast of technology changes on the outside that
will impact Pangea.
<P>
Production will control the production of petroleum
products. It will work with partners and contractors to
ensure optimum production at all times. Production
will also take the lead in marketing all produced products.
Technical support will be responsible for initial start up
of new projects in conjunction with technology and
production. It will serve in a coordinating role on all
projects. Additionally, it will be the primary interface
between service providers and the rest of the Company. It
will approve all production plans and monitor
implementation.
<P>
Revenue Model. Revenue potential and asset enhancement will
be the guiding principal for all Company investments.
Projects will be selected and developed in a manner that
will minimize capital required and maximize the utilization
of existing production and collection infrastructure and
geologic data. The Company will try to minimize risk by
producing from known reserves first and then producing from
other reserves made available by workovers and other
established techniques. Revenue streams from product sales
will be enhanced by the careful selection and priorization
projects based on the above listed criteria.
<P>
Pangea Petroleum intends to become a significant industry
player by capturing a disproportion share of available
revenue from key energy investments and maintain financial
strength by developing a strategic mix of saleable products
(oil and natural gas) that are marketed in a manner to
minimize the fluctuations common to the energy marketplace.
The planned mix of investments will support a predictable,
growing revenue stream from product sales and augmented by
income from the sale of enhanced productive properties.
<P>
The key financial assumption in the Company's business plan
is that a significant number of attractive energy
investments will continue to be available for purchase and
appropriate technology will be available through
service companies and consultants to develop these
properties.
<P>
Pangea Petroleum will create value in three ways. First of
all, the Company will develop a market leading position in
the identification and exploitation of under-producing oil
and gas reserves in established energy provinces such as the
State of Texas. Using a judicial mix of current, proven
technology, and capital will produce the reserves.
First-rate service companies that have been selected
from an approved group of merit-based companies will
implement approved projects. Revenue streams will be
maximized by carefully marketing the products through a
combination of spot and contract sales and in some cases
product sales will be hedged.
<P>
The second major thrust for value creation will be the
enhanced asset value realized from the development of the
under-utilized reserves acquired by purchase. These reserves
can frequently be produced for a number of years and
then re-sold in the market place for greater value because
of enhanced production and timing.
<PAGE>
<P>
The final thrust will be the formation of strategic
alliances and partnerships that will enable Pangea Petroleum
to play a greater role in the development of older reserves
than it could achieve on its own. These partnerships might
take the form of jointly owned reserves, production sharing
agreements with service companies in return for production
guarantees, or some combination of these and other shared
business arrangements.
<P>
The Pangea Petroleum organization will fully utilize
strategic marketing to fully implement its business plan.
The Company will select a strategic marketing
consultant to guide the company through this process.
<P>
Pangea Petroleum intends to become a significant participant
in select market niches in the energy industry. The niches
include the development of under producing oil and natural
gas reserves with capital and technology, the resale
of improved and re-packaged producing properties and
participation in the final production stage and disposition
of select offshore projects. We will create value for our
shareholders by leading the market in our niches and
maintaining a strong financial base. We will use strategic
marketing to stay ahead of the curve in our industry.
<P>
Industry. The petroleum industry is a global industry that
is fundamental to all economic activity. It is composed of
the down stream sector (refining, marketing, products and
derivatives) and the upstream sector that is focused on
finding and producing crude oil and natural gas. Oil and
natural gas are commodities that are found throughout the
world and they have been produced in increasing quantities
since the mid 19th century. The exploration, production
and transportation of these materials in the modern era
generate an enormous appetite for capital because quantities
sufficient to fuel the world's economic machine are rapidly
becoming more difficult to find and expensive to produce.
Consequently, a few global corporations and state energy
companies dominate the industry. These companies tend to
concentrate their investments on very large prospects and to
quickly abandon less productive, older reserves.
<P>
The technology of producing oil and natural gas has improved
tremendously but significant quantities of these materials
are never produced from the typical reservoir. Increased
capital and technology are almost always required as the
reserves are produced in order to maintain an economic level
of production. In many cases older fields have been
abandoned with significant reserves still in place because
the owners did not have access to capital and technology,
but chose to deploy their resources in more prolific areas
or the field was not accurately analyzed so that appropriate
technology could be deployed. Practically all major oil
companies in the United States are walking away from
mature, productive fields (onshore and offshore) because
they wish to deploy their capital to frontier areas with
greater potential.
<P>
Mature energy provinces such as the United States have many
productive fields with production and collection
infrastructure in place that can be purchased.
The infrastructure represents a significant required
investment if production is to continue. These fields offer
investment potential for those companies willing
to commit capital and appropriate technology. The technology
is readily available from consultants, service companies,
and other groups established to support the petroleum
production sector.
<PAGE>
<P>
This plan will target the petroleum niche composed of fields
with proven reserves that require capital and/or technology
in order to enhance or restore production.
<P>
Competition. Pangea Petroleum will be the strongest
competitor in its niche by identifying and utilizing in a
timely manner the best, proven technology in the
industry. It will be positioned to quickly analyze and be
prepared to invest in attractive projects that meet its
financial criteria. Pangea will differentiate itself by
consistently selecting and investing in projects that
produce attractive returns at a reasonable investment level.
Availability of high quality project data, production
infrastructure and environmental safeguards will be major
factors when grading investment opportunities. Risk
management will be a major factor in all of our business
decisions.
<P>
MANAGEMENT COMPENSATION. The following table sets forth the
annualized base salary that indicates that the compensation
for our executives, officers and directors has not exceeded
$100,000 on an annualized basis. We reimburse our
officers and directors for any reasonable out-of-pocket
expenses incurred on our behalf.
<TABLE>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C>
LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
NAME AND PRINCIPAL STOCK UNDERLYING
POSITION YEAR SALARY ($) AWARDS OPTIONS
------------------ ---- ---------- ------ -------
<P>
None
</TABLE>
<P>
<PAGE>
RISK FACTORS
<P>
LIMITED OPERATING HISTORY: Although the Company was
founded in 1997, its business plan is newly-organized, in
its initial stages of development, and lacks a substantial
prior operating history. The Company's prospects must be
considered in light of the risks, expenses and difficulties
frequently encountered by companies in early stages of
development. Such risks include, but are not limited to, an
evolving and unproven business model and the management
of growth. To address these risks, the Company must, among
other things, maintain and significantly increase its
customer base, implement and successfully execute its
business and marketing strategy, respond to competitive
developments, and attract, retain and motivate qualified
personnel.
<P>
There is no assurance that the Company's business strategy
will be successful, or that additional capital will not be
required to continue business operations.
<P>
As of April 26, 2000, the Company had limited working
capital. The Company has limited material tangible assets.
To date, the Company has not created any revenues and, as a
result of the significant expenditures that the Company
plans to make in sales and marketing, research and
development and general and administrative activities over
the near term, the Company expects that it will
continue to incur significant operating losses and negative
cash flows from operations on both a quarterly and annual
basis for the foreseeable future. For these and other
reasons, there can be no assurance that the Company will
ever achieve or be able to sustain profitability.
<P>
DEPENDENCE ON KEY MANAGEMENT. The Company is highly
dependent on the services of Charles B. Pollock, Chairman
and Chief Executive Officer, David H. Lennox, President and
Karen L. Cloud, Secretary. The loss of their services
could have a materially adverse impact on the Company. The
Company does not currently maintain any key-man life
insurance policy with respect to any of these key management
personnel.
<P>
POSSIBLE DIFFICULTY IN RAISING ADDITIONAL EQUITY
CAPITAL. There is no assurance that the Company will be able
to raise equity capital in an amount which is sufficient to
continue operations. In the event the Company requires
financing, the Company will seek such financing through bank
borrowing, debt or equity financing, corporate partnerships
or otherwise. There can be no assurance that such financing
will be available to the Company on acceptable terms, if at
all. The Company does not presently have a credit line
available with any lending institution. Any additional
equity financing may involve the sale of additional shares
of the Company's Common Stock or Preferred Stock on terms
that have not yet been established.
<P>
RISKS OF RAPID GROWTH. The Company anticipates a
period of rapid growth, which may place strains upon the
Company's management and operational resources.
The Company's ability to manage growth effectively will
require the Company to integrate successfully its business
and administrative operations into one dynamic management
structure.
<PAGE>
<P>
POSSIBLE ISSUANCE OF ADDITIONAL SHARES. The Company
has authorized 50,000,000 shares of Common Stock. The
Company presently has outstanding 21,766,231 shares of
Common Stock, the only class of stock of the Company for
which shares have been previously issued. As of the
Effective Date of the Acquisition Agreement, the Company
will have authorized, but un-issued, 28,228,769 shares of
Common Stock which are available for future issuance. The
Company may issue shares of Common Stock beyond those
already issued for cash, services, or as further employee
incentives. To the extent that additional shares of Common
Stock or Preferred Stock are issued, the percentage of the
Company's issued and outstanding shares of stock shall be
increased and the issuance may cause dilution in the book
value per share.
<P>
DIVIDENDS NOT LIKELY. No dividends on the Company's
Common Stock have been declared or paid by the Company to
date. The Company does not presently intend to pay dividends
on shares for the foreseeable future, but intends to
retain all earnings, if any, for use in the Company's
business. There can be no assurance that dividends will ever
be paid on the Common Stock of the Company.
<P>
RISKS ASSOCIATED WITH NEW PRODUCTS AND NEW MARKETS.
The business of producing oil and natural gas from proven
reserves is characterized by rapid technological changes,
changing customer requirements, frequent service and
product enhancements and introductions, and emerging
industry standards. The introduction of services or products
embodying new technologies and the emergence of new industry
standards can render existing services or products obsolete
and unmarketable. The Company's future success will depend,
in part, on its ability to develop and use new technologies,
respond to technological advances, enhance its existing
services and products and, develop new services
and products on a timely and cost-effective basis. There can
be no assurance that the Company will be successful in
effectively developing or using new technologies, responding
to technological advances or developing, introducing or
marketing service and product enhancements or new services
and products. In addition, the Company may enter into new
markets in connection with enhancing its existing services
and products and developing new services and products.
There can be no assurance that the Company will be
successful in pursuing new opportunities or will compete
successfully in any new markets.
<P>
SUBSTANTIAL COMPETITION. A number of the Company's
competitors have significantly greater financial, technical,
administrative, manufacturing, marketing and other resources
than the Company. Some of the our competitors also
offer a wider range of services and products than us and
have greater name recognition and more extensive customer
bases than we do. These competitors may be able to respond
more quickly to new or changing opportunities and
technologies than we can. Moreover, current and potential
competitors have established or may establish cooperative
relationships among themselves or with third parties or may
consolidate to enhance their services and products. We
expect that new competitors or alliances among competitors
will emerge and may acquire significant market share.
<P>
The Company must overcome significant barriers to enter into
the business of producing oil and natural gas from proven
reserves a result of its limited operating history. Many of
its competitors have substantially greater financial,
technical, managerial and marketing resources, longer
operating histories and greater name recognition. Such
competitors may be able to devote more resources
to developing oil and gas production than our Company. There
can be no assurance that the Company will be able to compete
effectively with current or future competitors or that the
competitive pressures faced by the Company will not have
a material adverse effect on the Company's business,
financial condition and operating results.
<P>
<PAGE>
RISKS ASSOCIATED WITH STRATEGIC ACQUISITIONS AND
RELATIONSHIPS.
<P>
The Company has pursued and may in the future pursue
strategic acquisitions of complimentary businesses and
technologies. Acquisitions entail numerous risks,
including difficulties in the assimilation of acquired
operations and products, diversion of management's attention
to other business concerns, amortization of acquired
intangible assets, and potential loss of key employees of
acquired companies. There can be no assurance that the
Company will be able to integrate successfully any
operations, personnel, services or products that might be
acquired in the future or that any acquisition will enhance
the Company's business, financial condition or operating
results.
<P>
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
----------------------------------
<P>
No court or governmental agency has assumed jurisdiction
over any substantial part of the Company's business or
assets.
<P>
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
-----------------------------------------------------
<P>
There has been no change in accountants.
<P>
ITEM 5. OTHER EVENTS
--------------------
<P>
SUCCESSOR ISSUER ELECTION. Pursuant to Rule 12g-3(a) of the
General Rules and Regulations of the Securities and Exchange
Commission, the Company elected to become the successor
issuer to Segway II Corp. for reporting purposes under the
Securities Exchange Act of 1934 and elects to report under
the Act effective April 26, 2000.
<P>
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------------------------------
<P>
No directors have resigned due to a disagreement with the
Company since the date of the last annual meeting of
shareholders.
<P>
ITEM 7. FINANCIAL STATEMENTS
----------------------------
<P>
The audited consolidated financial statements for the year
ending December 31, 1999 and reviewed consolidated financial
statements for the quarter ending March 31, 2000 are filed
herewith.
<P>
ITEM 8. CHANGE IN FISCAL YEAR
-----------------------------
<P>
There has been no change in the Company's fiscal year.
<P>
<P>
INDEPENDENT ACCOUNTANT'S REPORT
<P>
To the Board of Directors
Pangea Petroleum Corporation
6666 Harwin, Suite 545
Houston, Texas 77036
<P>
I have reviewed the pro forma adjustments reflecting the
event described in Note 1 and the application of those
adjustments to the historical amounts in the
accompanying pro forma balance sheet of Pangea Petroleum
Corporation as of April 26, 2000, and the pro forma
statement of operations for the three month period
then ended. These historical financial statements are
derived from the March 31, 2000 historical financial
statements of Pangea Petroleum Corporation, which were
reviewed by me, and the audited financial statements of
Segway II Corp. as of January 31, 2000, which were audited
by Varma and Associates, Certified Public Accountants. My
review was conducted in accordance with standards
established by the American Institute of Certified Public
Accountants.
<P>
A review is substantially less in scope than an examination,
the objective of which is the expression of an opinion on
management's assumptions, the pro forma adjustments , and
the application of those adjustments to historical
information. Accordingly, I do not express such an opinion.
<P>
The objective of this pro forma financial information is to
show what the significant effect s on the historical
information might have been had the event
described in Note 1 had occurred at an earlier date.
However, the pro forma financial statements are not
necessarily indicative of the results of operations
or related effects on financial position that wold have been
attained had the above mentioned event actually occurred
earlier.
<P>
Based on my review, nothing came to my attention that caused
me to believe that management's assumptions do not provide a
reasonable bases for presenting the significant effects
directly attributable to the above mentioned event described
in Note 1, that the related pro forma adjustments do not
give appropriate effect to those assumptions, or that the
pro forma column does not reflect the proper application of
those adjustments to the historical financial statement
amounts in the pro forma balance sheet as of March 31, 2000,
and the pro forma statement of operations for the three
months then ended.
<P>
April 27, 2000
<P>
James J. Taylor,
Certified Public Accountant
New Braunfels, Texas
<P>
<PAGE>
PANGEA PETROLEUM CORPORATION
PRO FORMA BALANCE SHEET
MARCH 31, 2000
<TABLE>
<CAPTION>
PANGEA SEGWAY COMBINED
------ ------ --------
ASSETS
Current Assets:
<S> <C> <C> <C>
Cash $38,450 $500 $38,950
Accounts receivable:
Trade 36,619 36,619
Employees 11,841 11,841
Less - Allowance for doubtful accounts (29,868) (29,868)
-----------------------------------
Net accounts receivable 18,592 0 18,592
<P>
Real estate for investment (at cost) 46,642 46,642
Excess payroll tax withholding 70 70
Deferred tax asset 82,858 82,858
-----------------------------------
Total current assets 186,612 500 187,112
-----------------------------------
Fixed Assets:
Office equipment 15,245 15,245
Worldlink equipment 61,000 61,000
Oil and gas property 58,000 58,000
Less - Accumulated depreciation (17,247) (17,247)
-----------------------------------
Net fixed assets 116,998 0 116,998
-----------------------------------
Other Assets:
Deposits 988 988
Radio advertising credits 1,000 1,000
Purchased company 75,000 75,000
Worldlink goodwill 100,000 100,000
Organization expense (net
of $283 amortization) 192 192
-----------------------------------
Net other assets 177,180 177,180
-----------------------------------
Total Assets $480,790 $500 $481,290
===================================
<P>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable - trade $166,867 150 167,017
Accrued interest payable 10,581 10,581
Sales taxes payable 539 539
-----------------------------------
Total current liabilities 177,987 150 178,137
<P>
Long-Term Liabilities
Note payable to related company 162,000 162,000
-----------------------------------
<P>
Other Liabilities:
Accounts payable - affiliated companies 308,120 308,120
-----------------------------------
Total liabilities 648,107 150 648,257
-----------------------------------
<P>
Stockholders' Equity:
Common stock ($0.001 par value, 50,000,000 shares authorized,
19,285,500 shares issued and outstanding) 19,280 500 19,780
Additional paid in capital 311,277 311,277
Deficit accumulated (497,874) (150) (498,024)
-----------------------------------
Total stockholders' equity (167,317) 350 (166,967)
-----------------------------------
Total Liabilities and Stockholders' Equity $480,790 $500 $481,290
===================================
</TABLE>
<P>
See Accountant's Pro Forma Report and Note to Pro Forma Statements
-2-
<P>
<PAGE>
PANGEA PETROLEUM CORPORATION
PRO FORMA STATEMENT OF OPERATION
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
PANGEA SEGWAY COMBINED
------ ------ --------
<S> <C> <C> <C>
Revenues:
Advertising income $516 $0 $516
<P>
Operating Expenses:
Amortization expense 25 0 25
Bank charges 27 27
Depreciation expense 4,474 4,474
Delivery and postage 43 43
Medical insurance 4,721 4,721
Legal and professional expense 26,645 150 26,795
Stock registration fees 11,370 11,370
PR newswire 400 400
Late payment fees 79 79
Meals and entertainment 773 773
Office expense 221 221
Payroll tax expense 3,988 3,988
Salaries expense 39,625 39,625
Supplies 1,731 1,731
Telephone expense 885 885
Travel expense 6,151 6,151
Production expense 3,480 3,480
-----------------------------------------
Total operating expenses 104,638 150 104,788
-----------------------------------------
Net Income (Loss) from Operations (104,122) (150) (104,272)
<P>
Other Income (Expenses):
Interest income 0 0
Interest expense (3,231) (3,231)
-----------------------------------------
Total other income (expense) (3,231) 0 (3,231)
-----------------------------------------
<P>
Net Income (Loss) before
Income Tax Benefit (107,353) (107,503)
<P>
Income tax benefit 17,597 0 17,597
-----------------------------------------
<P>
Net Income (Loss) (89,756) (150) (89,906)
<P>
Accumulated deficit,
beginning of period (408,118) 0 (408,118)
-----------------------------------------
<P>
Accumulated Deficit, End of Period ($497,874) ($150) ($498,024)
=========================================
<P>
</TABLE>
See Accountant's Pro Forma Report and Note to Pro Forma Statements
-3-
<PAGE>
<P>
PANGEA PETROLEUM CORPORATION
(A Development Stage Company)
Notes to Pro Forma Financial Statements
<P>
March 31, 2000
<P>
Note 1 - Acquisition of Company
<P>
On April 26, 2000, an agreement was entered into by Pangea
Petroleum Corporation and Segway II Corp. for Pangea to
acquire all of the assets and equity of Segway. The
agreement called for a cash payment of $75,000 and 5,000
shares of $0.001 par value stock of Pangea in exchange for
all of the assets and equity of Segway. These statements
are based on the transaction having taken place on March 31,
2000, and utilize the reviewed financial statements of
Pangea Petroleum Corporation as of that date by James J.
Taylor, Certified Public Accountant, combined with the
audited financial statements of Segway II Corp. audited by
Varma and Associates, Certified Public Accountants.
The resulting pro forma statements reflect the effect on
those historical financial statements.
<P>
<PAGE>
<PAGE>
<TABLE>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2000
TABLE OF CONTENTS
<S> <C>
PAGE
----
Independent Auditor's Report 1
<P>
Financial Statements:
<P>
Balance Sheet 2
<P>
Statement of Operations 3
<P>
Statement of Stockholders' Equity 4
<P>
Statement of Cash Flows 5
<P>
Notes to the Financial Statements 6-8
</TABLE>
<PAGE>
<P>
The Board of Directors
Pangea Petroleum Corporation
6666 Harwin, Suite 545
Houston, Texas 77036
<P>
I have reviewed the accompanying balance sheet of Pangea
Petroleum Corporation as of March 31, 2000 the related
statements of operation and accumulated deficit,
stockholder's equity, and cash flows for the three month
period then ended, in accordance with Statements for
Accounting and Review Services issued by the American
Institute of Certified Public Accountants. All information
included in these financial statements is the representation
of the management of Pangea Petroleum Corporation.
<P>
A review consists principally of inquiries of company
personnel and analytical procedures applied to financial
data. It is substantially less in scope than an
audit in accordance with generally accepted auditing
standards, the objective of which is the expression of an
opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
<P>
Based on my review, I am not aware of any material
modification that should be made to the accompanying
financial statements in order for them to be in
conformity with generally accepted accounting principles.
<P>
The accompanying financial statements have been prepared
assuming Pangea Petroleum Corporation will continue as a
going concern. As shown in the financial statements, the
Company has a deficit accumulated during the development
stage of $497,874. The Company has operated as a development
stage enterprise since its inception by devoting
substantially all of its efforts to financial planning and
raising capital. These conditions raise substantial doubt
about the Company's continued existence. The financial
statements do not include any adjustments that might result
from the outcome of these uncertainties.
<P>
April 27, 2000
<P>
James J. Taylor,
Certified Public Accountant
New Braunfels, Texas
<P>
<PAGE>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
MARCH 31, 2000
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets:
Cash $ 38,450
Accounts receivable:
Trade 36,619
Employees 11,841
Less - Allowance for doubtful accounts (29,868)
---------
Net accounts receivable 18,592
Real estate for investment (at cost) 46,642
Excess payroll tax withholding 70
Deferred tax asset 82,858
---------
Total current assets 186,612
---------
<P>
Fixed Assets:
Office equipment 15,245
Worldlink equipment 61,000
Oil and gas property 58,000
Less - Accumulated depreciation (17,247)
---------
Net fixed assets 116,998
---------
Other Assets:
Deposits 988
Radio advertising credits 1,000
Worldlink goodwill 100,000
Organization expense (net of
$283 amortization) 192
---------
Net other assets 102,180
---------
Total Assets $ 405,790
=========
<P>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable - trade $91,867
Accrued interest payable 10,581
Sales taxes payable 539
---------
Total current liabilities 102,987
<P>
Long-Term Liabilities
Note payable to related company 162,000
---------
<P>
Other Liabilities:
Accounts payable - affiliated companies 308,120
---------
Total liabilities 573,107
---------
<P>
Stockholders' Equity:
Common stock ($0.001 par value,
50,000,000 shares authorized,
19,280,500 shares issued and
outstanding at March 31, 2000) 19,280
Additional paid in capital 311,277
Deficit accumulated during the
development stage (497,874)
---------
Total stockholders' equity (167,317)
---------
Total Liabilities and Stockholders' Equity $ 405,790
=========
</TABLE>
See Accountant's Report and Notes to Financial Statements
-2-
<PAGE>
<P>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATION AND ACCUMULATED DEFICIT
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Revenues:
Advertising income $516
<P>
Operating Expenses:
Amortization expense 25
Bank charges 27
Depreciation expense 4,474
Delivery and postage 43
Medical insurance 4,721
Legal and professional expense 26,645
Stock registration fees 11,370
PR newswire 400
Late payment fees 79
Meals and entertainment 773
Office expense 221
Payroll tax expense 3,988
Salaries expense 39,625
Supplies 1,731
Telephone expense 885
Travel expense 6,151
Production expense 3,480
-------------
Total operating expenses 104,638
-------------
Net Income (Loss) from Operations (104,122)
<P>
Other Income (Expenses):
Interest income 0
Interest expense (3,231)
-------------
Total other income (expense) (3,231)
-------------
Net Income (Loss) before Income Tax Benefit (107,353)
<P>
Income tax benefit 17,597
-------------
Net Income (Loss) (89,756)
<P>
Accumulated deficit, beginning of period (408,118)
-------------
Accumulated Deficit, End of Period ($497,874)
=============
<P>
(Loss) per Share of Common Stock Outstanding ($0.0049)
=============
<P>
Weighted Average of Common Stock Shares Outstanding 18,503,763.74
=============
</TABLE>
See Accountant's Report and Notes to Financial Statements
<P>
-3-
<PAGE>
<P>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD OF JANUARY 1, 1998 to MARCH 31, 2000
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
ADDITIONAL DURING
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
<S> <C> <C> <C> <C> <C>
Balances
January 1, 1998 410,000 $410 $15,895 ($15,526) $779
<P>
Issuance of stock
for services 12,000 12 1,488 1,500
<P>
Record 14 for 1
forward stock split 5,486,000 5,486 (5,486) 0
<P>
Record 3 for 1
forward stock split 11,816,000 11,816 (11,816) 0
<P>
Net loss for period (1,962) (1,962)
---------------------------------------------------------------------------------
Balances
December 31, 1998 17,724,000 $17,724 $81 ($17,488) $317
<P>
Stock sold
July 1, 1999 50,000 50 49,950 50,000
<P>
Stock traded July 1, 1999
for oil and
gas property 35,000 35 34,965 35,000
<P>
Net loss for period (390,630) (390,630)
---------------------------------------------------------------------------------
Balances
December 31, 1999 17,809,000 $17,809 $84,996 ($408,118) ($305,313)
Stock sold
Jan.- March, 2000 1,471,500 1,471 226,281 227,752
<P>
Net loss for period (89,756) (89,756)
---------------------------------------------------------------------------------
Balances
March 31, 2000 19,280,500 $19,280 $311,277 ($497,874) ($167,317)
=================================================================================
</TABLE>
See Accountant's Report and Notes to Financial Statements
<P>
-4-
<PAGE>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2000
<TABLE>
<S> <C>
Cash Flows from Operating Activities
Net loss ($89,756)
Adjustment to reconcile net loss to
net cash used in operating activities:
Amortization 25
Depreciation 4,474
(Increase) in current assets (74,892)
(Decrease) in current liabilities (13,496)
---------
Net cash used in operating activities (173,645)
<P>
Cash Flows from Investing Activities:
(Purchases) of fixed assets (23,000)
Net cash provided (utilized) by investing activities (23,000)
---------
<P>
Cash Flows from Financing Activities:
Proceeds from related company loans 7,000
Proceeds from sales of common stock 1,471
---------
Additional paid-in capital 226,281
---------
Net cash provided (utilized) by
financing activities 234,752
---------
<P>
Net Increase in Cash and Equivalents 38,107
<P>
Cash and equivalents, beginning of period 343
---------
<P>
Cash and Equivalents, end of Period $38,450
=========
</TABLE>
See Accountant's Report and Notes to Financial Statements
-5-
<PAGE>
PANGEA PETROLEUM CORPORATION
(A Development Stage Company)
Notes to Financial Statements
March 31, 2000
<P>
Note 1 - Going Concern
<P>
As shown in the accompanying balance sheet, the
Company has a negative deficit accumulated during the
development stage in the amount of $408,118. As discussed
below, the Company has operated as a development stage
enterprise since its inception, March 11, 1997. The Company
has devoted substantially all of its efforts to financial
planning, raising capital, and developing markets. These
factors create an uncertainty about the Company's ability to
continue as a going concern. The financial statements do not
include any adjustments that might be necessary, if the
Company is unable to continue as a going concern.
<P>
Note 2 - Company History
Zip Top, Inc. (the Company), a Colorado
Corporation, was incorporated March 11, 1997. The Company's
purpose is the manufacturing, marketing and distributing a
specialized line of kitchen accessories based on the Zip to
, a multipurpose bottle and jar opener made of natural
rubber and first sold in the 1950's.
<P>
The Company has operated as a development stage
enterprise since its inception by devoting substantially all
of its efforts to product development, market development
and raising capital to support these efforts.
<P>
On December 11, 1998, the Company name was
officially changed to Pangea Petroleum Corporation. The name
change was based on the decision for the company to be
primarily engaged in the acquisition, development,
production, and exploration for, and the sale of petroleum
products. This entry into the petroleum industry never came
to pass.
<P>
In May of 1999, Pangea Petroleum Corporation
purchased the assets of WorldLink, USA, Inc. a Houston,
Texas based internet company, from the Federal Bankruptcy
Court, Southern District of Texas. The purchase price was
booked at $162,000 for the assets, deposits, and goodwill.
Pangea Petroleum Corporation assumed the management of
WorldLink in June of 1999. During the period of June, 1999,
through September, 1999, WorldLink obtained several sponsors
to provide live concerts to the public through the internet.
Two concerts were produced as planned, but deemed to be
failures because of the lower than expected number of
viewers and anticipated advertising revenues. Some of the
sponsors have not paid their fees because of the failures.
<P>
At this point, Pangea Petroleum Corporation purged
the management and most of the Company staff. New directions
and strategic goals were put into place for the Company by
the new management. The sale of WorldLink became a primary
goal (see subsequent events note).
<P>
Note 3 - Summary of Significant Accounting Policies
This summary of significant accounting policies of
Pangea Petroleum Corporation is presented to assist in
understanding the Company's financial statements. The
financial statements and notes are representations of
management, who is responsible for their integrity and
objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
<P>
(Continued)
-6-
<PAGE>
<P>
PANGEA PETROLEUM CORPORATION
(A Development Stage Company)
Notes to Financial Statements
March 31, 2000
<P>
Note 3 - Summary of Significant Accounting Policies
(Continued)
<P>
Basis of
Accounting - The financial statements of the
Company are prepared using the accrual basis of accounting
where as revenues are recognized when earned and expenses
recognized when incurred.
<P>
Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those
estimates.
<P>
Cash and Cash Equivalents - The Company considers
all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
<P>
Property and Equipment - Property and equipment are
recorded at cost, less accumulated depreciation. Additions,
renewals, and betterments are capitalized, whereas
expenditures for maintenance and repairs are expressed. The
costs and related accumulated depreciation of assets
retired or sold are removed from the appropriate asset and
depreciation accounts, and the resulting gain or loss is
reflected in income. It is the policy of the Company to
depreciate using accelerated methods for both financial
reporting and tax purposes at rates based on the
following useful lives:
<P>
<TABLE>
<S> <C>
Years
-----
Office equipment 7
WorldLink equipment 7
</TABLE>
<P>
Organization Costs - Costs incurred in organizing
the Company are being amortized over a sixty month period.
<P>
Federal Income Taxes - The Company has adopted the
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes"
to account for income taxes. This statement requires the
establishment of a deferred tax asset or liability for the
recognition of future deductible or taxable amounts
and operating loss and tax credit carryforwards. Deferred
tax expense or benefit is recognized as a result of the
changes in the assets and liabilities during the year. The
amount and timing of the reversal of the differences are
estimated and actual amounts may differ from these
amounts.
<P>
Comparative Financial Information - The December
31, 1998 financial information is presented for comparative
purposes only.
<P>
Earnings per Share - Earnings per share is
calculated by dividing the net loss for the period by the
weighted average number of common shares outstanding.
<P>
Note 4 - Related Party Debt
The Company's related party debt consists of two
types liabilities. Related party is defined as a company
with common ownership or a major stockholder. Pangea
Petroleum Corporation has the following debts at
December 31, 1999:
<P>
(Continued)
-7-
<PAGE>
<P>
PANGEA PETROLEUM CORPORATION
(A Development Stage Company)
Notes to Financial Statements
March 31, 2000
Note 4 - Related Party Debt (Continued):
<P>
Account Payable - Affiliated Companies - This
account balance consists of an accumulation of advances made
by related parties for the purpose of funding operating
expenses and normal costs of doing business.
<P>
Note Payable to Related Company - This account
consists of the advance for the purchase price of the
WorldLink USA, Inc. assets. It is supported by a demand note
in the amount of $162,000 dated June 7, 1999, and payable to
Rapid Release Research, LLC. This note is secured by a
security interest in and to the equipment, accounts
receivable and inventory associated with WorldLink USA, Inc.
Interest on this instrument is accrued at the stated rate of
eight (8) percent through March 31, 2000.
<P>
Note 5 - Oil and Gas Property
On July 1, 1999, the Company acquired a
non-producing South Texas oil and gas property in exchange
for common stock. This property is in the development
process, and therefore, has no known production nor
reserves. It is therefore carried on the Company's books at
the value at acquisition or $35,000.
<P>
On March 9, 2000, the company entered into a
contract to drill and develop oil and gas prospects on
certain oil and gas leases in Webb County, Texas at a cost
of $23,000, as of March 31, 2000.
<P>
Note 6 - Subsequent Events
In December, 1999, verbal offers for the WorldLink
USA, Inc. were received and negotiations pursued. This sale
to Paradigm Advanced Technologies was approved, and
negotiations continue to date.
<P>
On April 26, 2000, Pangea Petroleum Corporation and
Segway II corp. entered into an agreement for Pangea to
acquire all of the outstanding shares of Segway at a cost of
$75,000 and 5,000 shares of Pangea common stock and is to be
closed as soon as possible.
<P>
-8-
<P>
<PAGE>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
DECEMBER 31, 1999 and 1998
TABLE OF CONTENTS
<P>
<TABLE>
<S> <C>
PAGE
----
Independent Auditor's Report 1
<P>
Financial Statements:
Balance Sheet 2
<P>
Statement of Operations 3-4
<P>
Statement of Stockholders' Equity 5
<P>
Statement of Cash Flows 6
<P>
Notes to the Financial Statements 7-9
<P>
</TABLE>
<P>
<PAGE>
Independent Auditor's Report
<P>
To The Board of Directors
Pangea Petroleum Corporation
6666 Harwin, Suite 545
Houston, Texas 77036
<P>
I have audited the accompanying balance sheets of Pangea
Petroleum Corporation (a development stage company) as of
December 31, 1999 and 1998, and the related statement of
operations, changes in stockholders' equity and cash flows
for the years then ended. These financial statements are the
responsibility Company's management. My responsibility is
to express an opinion on these financial statements based
on my audit.
<P>
I have conducted my audit in accordance with generally
accepted auditing standards. Those standards require that I
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
<P>
In my opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Pangea Petroleum Corporation as of
December 31, 1999 and 1998, and the results of its
operations and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
<P>
The accompanying financial statements have been prepared
assuming Pangea Petroleum Corporation will continue as a
going concern. As shown in the financial statements, the
Company has a deficit accumulated during the development
stage of $408,118 through 1999 and 17,488 through 1998. The
Company has operated as a development stage enterprise since
its inception by devoting substantially all of its efforts
to financial planning and raising capital. These conditions
raise substantial doubt about the Company's continued
existence. The financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.
<P>
James J. Taylor,
Certified Public Accountant
New Braunfels, Texas
<P>
February 15, 2000
(and as per Note 6,
May 9, 2000)
<P>
-1-
<PAGE>
<P>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, 1999 and 1998
<TABLE>
<S> <C> <C>
1999 1998
---- ----
ASSETS
<P>
Current Assets:
<P>
Cash $ 343 $ 0
Accounts receivable:
Trade 36,619
Employees 1,258
Less - Allowance for doubtful accounts (29,868)
--------
Net accounts receivable 8,009
Deferred tax asset 65,261
-------- --------
Total current assets 73,613 0
-------- --------
<P>
Fixed Assets:
Office equipment 15,245
Worldlink equipment 61,000
Oil and gas property 35,000
Less - Accumulated depreciation (12,774)
-------- --------
Net fixed assets 98,471 0
-------- --------
<P>
Other Assets:
Deposits 988
Radio advertising credits 1,000
Worldlink goodwill 100,000
Organization expense (net of $283 amortization) 217 317
-------- --------
Net other assets 102,205 317
-------- --------
Total Assets $274,289 $ 317
======== ========
<P>
<PAGE>
-2-
LIABILITIES AND STOCKHOLDERS' EQUITY
<P>
Current Liabilities:
Bank overdraft $ 5,931 $ 0
Accounts payable - trade 51,052
Accrued interest payable 7,350
Payroll taxes accrued and withheld 51,611
Sales taxes payable 539
-------- --------
Total current liabilities 116,483 0
<P>
Long-Term Liabilities
Note payable to related company 162,000 0
-------- --------
<P>
Other Liabilities:
Accounts payable - affiliated companies 301,119
-------- --------
Total liabilities 579,602 0
-------- --------
<P>
Stockholders' Equity:
Common stock ($0.001 par value, 50,000,000 shares authorized,
17,809,000 shares outstanding at December 31, 1999,
17,724,000 shares outstanding
at December 31, 1998 17,809 17,724
Additional paid in capital 84,996 81
Deficit accumulated during the
development stage (408,118) (17,488)
-------- --------
Total stockholders' equity (305,313) 317
-------- --------
Total Liabilities and Stockholders' Equity $274,289 $ 317
======== ========
</TABLE>
<P>
See Accountant's Report and Notes to Financial Statements
<P>
-3-
<PAGE>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATION and ACCUMULATED DEFICITS
FOR THE YEARS ENDED DECEMBER 31, 1999 and 1998
<TABLE>
<S> <C> <C>
1999 1998
---- ----
Revenues
Web hosting and e-mail services $ 2,528 $ 0
Advertising income 751
Production income 30,151
-------- --------
Total income 33,430 0
<P>
Cost of Sales:
Direct cost of sales 2,008 0
Direct cost of sales - Hawaii 57,385
-------- --------
Total cost of sales 59,393 0
-------- --------
Gross Profit (Loss) (25,963) 0
<P>
Operating Expenses:
Advertising 900
Amortization expense 100 100
Bad debts 29,869
Bank charges 576 12
Charitable contributions 5,000
Contracted services 33,262
Depreciation expense 12,774
Dues and subscriptions expense 1,925
Employee benefit programs expense 1,403
Delivery and postage 581
Gift expense 52
Medical insurance 7,067
Property insurance 2,500
Legal and professional expense 24,793
Consultants/contract labor 14,650 1,872
Stock transfer fees 4,005
Stock registration fees 6,000
PR newswire 5,740
Late payment fees 57
Licenses expense 505
Maintenance expense 1,267
Meals and entertainment 1,269
Office expense 6,169
Office expense - software/equipment 10,145
Payroll tax expense 14,567
Worldlink payroll tax expense 3,344
Rent or lease expense 19,922
-------- --------
Sub-total of Operating Expenses $208,442 $1,984
<P>
<PAGE>
-4-
<P>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATION and ACCUMULATED DEFICITS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 1999 and 1998
</TABLE>
<TABLE>
<S> <C> <C>
1999 1998
---- ----
Sub-Total of Operating Expenses $208,442 $1,984
<P>
Repairs 3,597
Salaries expense 154,674
Supplies 7,385
Telephone expense 7,543
Telephone expense - cell phone 4,761
Telephone maintenance 6,731
Travel expense 21,945
Production expense 7,500
-------- --------
Total operating expenses 422,578 1,984
-------- --------
Net Income (Loss) from Operations ($448,541) ($ 1,984)
<P>
Other Income (Expenses):
Interest income 0 22
Interest expense (7,350)
---------- ----------
Total other income (expense) (7,350) 22
---------- ----------
<P>
Net Income (Loss) before Income Tax Benefit (455,891) (1,962)
<P>
Income tax benefit 65,261 0
---------- ----------
<P>
Net Income (Loss) (390,630) (1,962)
<P>
Accumulated deficit, beginning of period (17,488) (15,526)
---------- ----------
<P>
Accumulated Deficit, End of Period ($408,118) ($17,488)
========== ==========
<P>
(Loss) per Share of Common Stock Outstanding ($0.0220) ($0.0001)
========== ==========
<P>
Weighted Average of Common Stock
Shares Outstanding 17,766,849 17,572,109
========== ==========
</TABLE>
<P>
See Accountant's Report and Notes to Financial Statements
<P>
-5-
<PAGE>
<P>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD OF JANUARY 1, 1998 to DECEMBER 31, 1999
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
ADDITIONAL DURING
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
<S> <C> <C> <C> <C> <C>
Balances
January 1, 1998 410,000 $410 $15,895 ($15,526) $779
<P>
Issuance of stock
for services 12,000 12 1,488 1,500
Record 14 for 1
forward stock split 5,486,000 5,486 (5,486) 0
<P>
Record 3 for 1
forward stock split 11,816,000 11,816 (11,816) 0
<P>
Net loss for period (1,962) (1,962)
---------- ------- ------- -------- --------
<P>
Balances
December 31, 1998 17,724,000 $17,724 $81 ($17,488) $317
<P>
Stock sold
July 1, 1999 50,000 50 49,950 50,000
<P>
Stock traded July 1, 1999
for oil and
gas property 35,000 35 34,965 35,000
Net loss for period (390,630) (390,630)
------------------------------------------------------------------------------------------
<P>
Balances
December 31, 1999 17,809,000 $17,809 $84,996 ($408,118) ($305,313)
========== ======= ======= ======== ========
</TABLE>
<P>
See Accountant's Report and Notes to Financial Statements
<P>
-6-
<P>
<PAGE>
PANGEA PETROLEUM CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<P>
Cash Flows from Operating Activities
<S> <C> <C>
Net loss ($390,630) ($1,962)
Adjustment to reconcile net loss to
net cash used in operating activities:
Amortization 100 100
Stock issued for services 1,500
Depreciation 12,774
(Increase) in current assets (73,270)
Increase in current liabilities 116,483
-------- ------
Net cash used in operating activities (334,543) (362)
<P>
Cash Flows from Investing Activities:
(Purchases) of equipment (76,245) 0
(Increase) in deposits (1,988)
(Increase) in goodwill (100,000)
-------- ------
Net cash provided (utilized)
by investing activities (178,233) 0
-------- ------
<P>
Cash Flows from Financing Activities:
Proceeds from related company notes 162,000 0
Proceeds from related company loans 301,119
Proceeds from sales of common stock 50
Additional paid-in capital 49,950
-------- ------
Net cash provided (utilized)
by financing activities 513,119 0
-------- ------
<P>
Net Increase in Cash and Equivalents 343 (362)
<P>
Cash and equivalents, beginning of period 0 362
-------- ------
<P>
Cash and Equivalents, end of Period $ 343 $ 0
======== ======
</TABLE>
See Accountant's Report and Notes to Financial Statements
<P>
-7-
<PAGE>
<P>
PANGEA PETROLEUM CORPORATION
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999 and 1998
<P>
Note 1 - Going Concern
<P>
As shown in the accompanying balance sheet, the
Company has a negative deficit accumulated during the
development stage in the amount of $408,118. As discussed
below, the Company has operated as a development stage
enterprise since its inception, March 11, 1997. The Company
has devoted substantially all of its efforts to financial
planning, raising capital, and developing markets. These
factors create an uncertainty about the Company's ability to
continue as a going concern. The financial statements do not
include any adjustments that might be necessary, if the
Company is unable to continue as a going concern.
<P>
Note 2 - Company History
<P>
Zip Top, Inc. (the Company), a Colorado Corporation,
was incorporated March 11, 1997. The Company's purpose is
the manufacturing, marketing and distributing a specialized
line of kitchen accessories based on the Zip to , a
multipurpose bottle and jar opener made of natural rubber
and first sold in the 1950's.
<P>
The Company has operated as a development stage enterprise
since its inception by devoting substantially all of its
efforts to product development, market development and
raising capital to support these efforts.
<P>
On December 11, 1998, the Company name was officially
changed to Pangea Petroleum Corporation. The name change was
based on the decision for the company to be primarily
engaged in the acquisition, development, production, and
exploration for, and the sale of petroleum products. This
entry into the petroleum industry never came to pass.
<P>
In May of 1999, Pangea Petroleum Corporation purchased the
assets of WorldLink, USA, Inc. a Houston, Texas based
internet company, from the Federal Bankruptcy Court,
Southern District of Texas. The purchase price was booked at
$162,000 for the assets, deposits, and goodwill. Pangea
Petroleum Corporation assumed the management of WorldLink in
June of 1999. During the period of June, 1999, through
September, 1999, WorldLink obtained several sponsors to
provide live concerts to the public through the internet.
Two concerts were produced as planned, but deemed to be
failures because of the lower than expected number of
viewers and anticipated advertising revenues. Some of the
sponsors have not paid their fees because of the failures.
<P>
At this point, Pangea Petroleum Corporation purged the
management and most of the Company staff. New directions and
strategic goals were put into place for the Company by the
new management. The sale of WorldLink became a primary goal
(see subsequent events note).
<P>
Note 3 - Summary of Significant Accounting Policies
<P>
This summary of significant accounting policies of
Pangea Petroleum Corporation is presented to assist in
understanding the Company's financial statements. The
financial statements and notes are representations of
management, who is responsible for their integrity
and objectivity. These accounting policies conform to
generally accepted accounting principles and have been
consistently applied in the preparation of the financial
statements.
<P>
(Continued)
-8-
<P>
<PAGE>
PANGEA PETROLEUM CORPORATION
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999 and 1998
<P>
Note 3 - Summary of Significant Accounting Policies
(Continued)
<P>
Basis of Accounting - The financial statements of the
Company are prepared using the accrual basis of accounting
where as revenues are recognized when earned and expenses
recognized when incurred.
<P>
Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those
estimates.
<P>
Cash and Cash Equivalents - The Company considers all
highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
<P>
Property and Equipment - Property and equipment are
recorded at cost, less accumulated depreciation. Additions,
renewals, and betterments are capitalized, whereas
expenditures for maintenance and repairs are expensed. The
costs and related accumulated depreciation of assets
retired or sold are removed from the appropriate asset and
depreciation accounts, and the resulting gain or loss is
reflected in income. It is the policy of the Company to
depreciate using accelerated methods for both financial
reporting and tax purposes at rates based on the
following useful lives:
<P>
<TABLE>
<S> <C>
Years
-----
Office equipment 7
WorldLink equipment 7
</TABLE>
<P>
Organization Costs - Costs incurred in organizing the
Company are being amortized over a sixty month period.
<P>
Federal Income Taxes - The Company has adopted the
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes"
to account for income taxes. This statement requires the
establishment of a deferred tax asset or liability for the
recognition of future deductible or taxable amounts
and operating loss and tax credit carryforwards. Deferred
tax expense or benefit is recognized as a result of the
changes in the assets and liabilities during the year. The
amount and timing of the reversal of the differences are
estimated and actual amounts may differ from these
amounts.
<P>
Comparative Financial Information - The December 31,
1998 financial information is presented for comparative
purposes only.
<P>
Earnings per Share - Earnings per share is calculated
by dividing the net loss for the period by the weighted
average number of common shares outstanding.
<P>
Note 4 - Related Party Debt
<P>
The Company's related party debt consists of two types
liabilities. Related party is defined as a company with
common ownership or a major stockholder. Pangea Petroleum
Corporation has the following debts at December 31, 1999:
<P>
(Continued)
-9-
<P>
<PAGE>
PANGEA PETROLEUM CORPORATION
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999 and 1998
<P>
Note 4 - Related Party Debt (Continued):
<P>
Account Payable - Affiliated Companies - This account
balance consists of an accumulation of advances made by
related parties for the purpose of funding operating
expenses and normal costs of doing business. The Company's
working capital position has deteriorated significantly
during 1999. At December 31, 1999, the Company's liabilities
are substantially in excess of its assets. The deterioration
of working capital was caused by losses from operations and
write-offs of accounts receivable deemed uncollectible. The
Company continues to fund its working capital through
advances from the related parties.
<P>
Note Payable to Related Company - This account
consists of the advance for the purchase price of the
WorldLink USA, Inc. assets. It is supported by a demand note
in the amount of $162,000 dated June 7, 1999, and payable to
Rapid Release Research, LLC. This note is secured by a
security interest in and to the equipment, accounts
receivable and inventory associated with WorldLink USA, Inc.
Interest on this instrument is accrued at the stated rate of
eight (8) percent through December 31, 1999.
<P>
Note 5 - Oil and Gas Property
<P>
On July 1, 1999, the Company acquired a non-producing
South Texas oil and gas property in exchange for common
stock. This property is in the development process, and
therefore, has no known production nor reserves. It is
therefore carried on the Company's books at the value
at acquisition or $35,000.
<P>
Note 6 - Financial Information
<P>
Subsequent to the issuance of our audit report on
Pangea Petroleum Corporation for the year ended December 31,
1999, we were engaged to audit the previous year, 1998, for
the Company. We are therefore reissuing our report dated
February 15, 2000, to include the audited statements for the
year 1998, dated May 9, 2000.
<P>
Note 7 - Subsequent Events
<P>
In December, 1999, verbal offers for the WorldLink USA,
Inc. were received and negotiations pursued. This sale to
Paradigm Advanced Technologies was approved, with formal
documentation to pe presented to the Company on March 1,
2000.
<P>
At a meeting of the Board of Directors in January,
2000, the board approved the conversion of Rapid Release
Research, LLC. And Martin R. Nathan and Assoc1iates debt to
Pangea Petroleum Corporation stock.
<P>
-10-
<PAGE>
<P>
Index to Exhibits
<P>
2.1 Stock Acquisition and Reorganization Agreement by
and among Pangea Petroleum Corp and Segway II Corp.
dated April 26, 2000. *
<P>
3.1 Articles of Incorporation of Pangea Petroleum Corp.
as amended. *
<P>
3.2 By-Laws of Pangea Petroleum Corp. *
<P>
17.1 Resignation Letter of Richard I. Anslow *
<P>
27.1. Financial Data Schedule.
<P>
* Filed in the original 8-K filing on April 28, 2000 (SEC File No. 000-30503).
<P>
SIGNATURES
<P>
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
<P>
Pangea Petroleum Corp.,
a Colorado corporation
<P>
/s/ Charles B. Pollock
------------------------------------
Charles B. Pollock
Chief Executive Officer
<P>
DATED: July 31, 2000
<P>
