U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
AMENDMENT NO. 1
FILE NO. 0-29834
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS UNDER SECTION 12(b) OR 12(g) OF THE
SECURITIES ACT OF 1934
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Name of Small Business Issuer as specified in its charter)
DELAWARE 22-3639092
(State or other jurisdiction of (IRS Employer ID No.)
incorporation or organization)
5230 South Service Road
Burlington, Ontario L7L 5K2 Canada
(Address of Principal Executive Offices)
Issuer's Telephone Number, including area code: (905) 631-0235
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: Common
Stock, $.001/share par value
INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
Alternative 2
This document contains forward-looking statements that involve risks and
uncertainties. Many factors, including those described below, may cause actual
results to differ significantly from anticipated results. Certain statements
contained in this document including without limitation statements containing
the words "believes," "anticipates," "expects" and words of similar import,
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve unknown and known risks, uncertainties and other factors which may
cause the Company's actual results, performance or achievements, or industry
results, to be materially different from any future results, performance or
achievements, express or implied. Such factors include, among others:
1. If the economy enters a severe recessionary period with a concurrent
collapse of the new housing market, then the demand for molding and trim
products would be reduced.
2. If the commodity price for the raw material substrates (wood and wood
composite products) were to decrease the Company could experience margin and
profit pressure.
3. Pending U.S. / Canadian trade disputes relative to steel, plastics, etc.
could prevent the Company from being price competitive in the U.S. if the
Company manufactured only in Canada (as is the present case). Expansion into
the U.S. of its manufacturing capabilities would necessitate additional
financing and put pressure on the Company's profits and cash flows.
Given these circumstances, the reader should not place undue reliance on such
forward-looking statements. The Company disclaims any obligation to update any
such factors or to publicly announce the result of any revisions to any of the
forward-looking statements contained elsewhere in this document.
Description of the Business/Properties
Environmental Products Group, Inc. ("Company") was originally incorporated
December 1, 1976 as Axelson Advertising and Research, Inc. in the State of
Utah. The Company was merged into District Corporation, a Nevada corporation,
formed November 14, 1990 and was subsequently merged into Environmental
Satellite Corporation, a Delaware corporation, formed on September 26, 1990.
The Company's name was changed to Versatech Environment Group, Inc. on July 9,
1993 and changed to Environmental Products Group, Inc. on October 21, 1998.
1. Recent Consolidation
In November 1998 the Company, through a number of transactions, acquired
Formulated Mouldings (Canada) Inc. ("FMCI"), Environmental Shelter Corporation
Inc. ("ESC") and Environmental Fuel Technology, Inc. ("EFT"). In addition, the
Company also purchased a promissory note of FMCI from The Reclamation (US)
Corp. The terms and conditions of these transactions are as set forth below.
EFT owned all right, title and interest in and to proprietary information
concerning the production of fuel from scrap containerboard waste and other
material. The Company acquired that know-how by way of an agreement and plan of
reorganization (the "EFT Plan"). Under the terms of the EFT Plan, the Company
issued 544,500 shares of its voting common stock to the shareholders of EFT in
exchange for all of the outstanding shares of EFT common stock. Under the EFT
Plan, EFT is now a wholly owned subsidiary of the Company. Certain officers of
the Company were also officers and/or shareholders of EFT (see Item 11 herein
for further details).
ESC owned all right, title and interest in and to proprietary technology and
know-how regarding the production of extruded plastic sheeting from scrap
diaper and other materials. These materials were then designed to be used in
connection with plastic shelters. The Company acquired this technology by way
of an agreement and plan of reorganization (the "ESC Plan"). Under the ESC
Plan, the Company issued 665,000 voting common shares in exchange for all of
the outstanding common stock of ESC thereby causing ESC to become a wholly
owned subsidiary of the Company. Certain officers of the Company were also
officers and/or shareholders of ESC (see Item 11 herein for further details).
FMCI owned all right, title and interest in and to proprietary information
concerning the production of extruded plastic moldings from scrap diaper and
other material. The Company acquired that know-how by way of an agreement and
plan of reorganization (the "FMCI Plan"). Under the terms of the FMCI Plan, the
Company issued 7,180,426 shares of its voting common stock to the shareholders
of FMCI in exchange for all of the outstanding shares of FMCI common stock.
Under the FMCI Plan, FMCI is now a wholly owned subsidiary of the Company.
Certain officers of the Company were also officers and/or shareholders of FMCI
(see Item 11 herein for further details).
The Company also purchased a promissory note made by FMCI in the principal
amount of $885,636.12 (Canadian). FMCI borrowed this money from The Reclamation
(US) Corporation for a variety of purposes, including without limitation,
working capital and research and development of its extruded plastic molding
products. The Company issued 3,129,878 shares of its voting common stock to
purchase the promissory note and subsequently received this technology as
security for the note. As a result of the purchase, FMCI now owes the Company
the principal amount of the note. Certain officers of the Company were also
officers and/or shareholders of The Reclamation (US) Corporation.
As a result of the foregoing transactions, the Company now owns FMCI, EFT and
ESC. All of these companies are involved in the business of producing moldings,
fuel and shelter, respectively, from recycled plastic materials. Thus, the
Company is now in a position to further expand its abilities and technologies
in the use of recycled plastic materials.
2. Products
The subsidiary (FMCI) company produces a line of paint grade decorative trim
and molding products for the construction industry. The product is made from a
plastic compound (patent pending) utilizing an extrusion process. The plastics
are purchased as clean recycled material produced as scrap from other
manufacturers processes (diaper off-cuts, dental face masks off-cuts) as well
as from clean recovered traditional waste management sources.
The formulation is a proprietary mix of the plastics that has additives to
decrease the density, inhibit UV deterioration and to ensure paint adhesion.
The product contains no toxic elements and has been tested to demonstrate that
it meets the same inflammability standards as equivalent wood products. The
plastic is extruded using standard extrusion techniques and equipment.
The raw materials are readily available as commodity products in the industry
from numerous suppliers, with at least one supplier in Canada offering volumes
in excess of 80 times the quantity that the Company will require in the
foreseeable future.
The manufacturing extrusion lines are now modular in nature and can be quickly
replicated. The Company's financial plan for the next two years will produce
projected profits and revenues as set forth below.
Projected Results
Year Revenue Profit # Extrusion
Lines
1998 $5,000 $(360,000) Pilot Plant
1999 $4,153,000 $968,000 2
2000 $10,808,000 $2,226,143 4
2001 $22,027,000 $5,326,000 8
The current year loss represents the cost associated with the setup and
operation of the pilot plant in Burlington, Ontario. This plant allowed the
Company to perfect the formulation, dies/calibrators/sizers and the profiles.
The small sales volumes reflect the fact that with the current low volume pilot
plant extruder, the Company only began producing and selling product to the
industry after the November 1998 trade show.
In real terms, the output from one extrusion line laid end-to-end would reach
from the Earth to the Moon. While this seems like a large amount of product,
the second year revenue stream represents 0.3% of the total North American
markets for molding and trim products.
The Company currently employs 10 people on its staff (2 sales people, 3
executive people and 5 administrative staff). However, with the commencement of
full time production, the number of full time employees is expected climb to
15. With the installation of the second extrusion line the Company anticipates
adding another 6 employees for production and 1 additional sales person for a
total of 22 people.
The Company's product is available in the following industry standard profiles:
2 3/4" Colonial Casing
2 1/4"Colonial Casing
2" Colonial Casing
4" Crown Molding
2 3/4" Colonial Chair-rail
3/4" Quarter-round
3/4" Cove mounding
1 1/4" Colonial Door Stop
1 1/8"Lattice
4 1/8" Colonial Baseboard
3 1/8" Colonial Baseboard
The Company expects to add additional profiles as demand in the market
dictates. With its process the Company can duplicate any profile currently
supplied to the market for wood / wood composite materials. In the future, with
additional capital investment, the Company will also manufacture competitive
products for the form molded and injection molded trim market place (dental
crown molding, dental chair rail, etc.).
Product Attributes
The Company's product has a smooth surface clear of any imperfections (raised
grain, knots, furring). It will not crack, split or dent nor will not swell or
degrade when wet. The moldings can be applied with the same methods as used by
industry today for wood and wood composite products.
Sawable, nailed, screwed, drilled, milled and painted
The product is white and does not require a primer coat of paint. In many
applications one (1) finished coat of paint is all that is required. For the
home builders, installers and "Do-it-Yourself" users this means less time and
expense to complete a project.
3. Competition
The competition in the paint-grade, wood moldings industry is as follows:
Finger jointed pine
Finger Jointed Pine is the traditional trim and molding substrate and has wide
market acceptance. However, the market share for this commodity product is
slipping due in part to:
* Increasing cost for the substrate raw material
* Tendency to be labor intensive to finish (grain raising, knots, cracking,
warping, finger joint separation, etc.)
Medium Density Fiberboard (MDF)
MDF has become the substitute for traditional finger jointed pine due to the
lower cost to manufacture. However, the product has reluctant market acceptance
and has experienced a difficult market introduction due in part to:
* The tendency for the product to be difficult to apply (nailing and screwing)
* The product furs-out when painted
* The product swells and degrades when wet
* The product is much heavier than traditional wood
Vinyl wrap wood products
Vinyl wrap wood composite products are another attempt by the manufacturers to
offer a low cost alternative. However, this product has difficulties due in
part to the following factors:
* These products do not wear well (dent, scratch, chip)
* The products are typically not well manufactured
* The process to produce the products is time consuming and capital intensive;
this results in generally lower margins
* The product has not gained wide market acceptance.
PVC and other plastic products
PVC/Plastic suppliers have attempted to make inroads in this market. Its
attributes include:
* High cost to manufacture
* Difficult / different application methodologies
* Limited non-industry standard profiles
* Toxic fumes
* The product has gained limited market share due to the low quality of the
product.
4. Pricing
The Company's (FMCI) products are being sold in the market at prices at least
40% less than Finger Jointed Pine, 25% less than PVC and on a par with MDF and
vinyl wrapped wood. The Company's customers are purchasing the product at these
prices to the full extent of its production capacity.
5. Marketing
The Company has chosen to segregate the market. The Company utilizes both the
traditional distribution channels for construction materials as well as direct
sales to our key identified accounts.
National Accounts
The large national accounts that the Company has chosen to service directly are
concentrated in the:
1. Supply and Install (Subcontractors to the large home/tract builders)
2. Specialty products VAR (Door / Window / Trim)
3. Large Wholesale Lumber Yards
4.
Distribution Channel
The Distribution Channel will be focused on servicing the Small lumberyards,
Single Home Builders and the "Do-it-Yourself" market.
This market is dominated by a small number of Retail Chain stores in the United
States and Canada -
* U.S. -- Home Depot, Menard, True Value, Etc.
* Canada -- Home Depot, Lansing & Revelstoke, Cashway, Home Centre, Beaver
Lumber, Etc.
6. Manufacturing
The current Manufacturing Operation is located in a 10,000 sq.ft. facility that
will handle two complete extrusion lines.
The Company has recently recruited a tool and die maker who will design and
manufacture all of its dies/calibrators/sizers internally. The Company has
acquired a milling machine for this segment of manufacturing. This internal
capability will enable the Company to respond rapidly to the market
requirements for different or additional profiles.
The Company's projections will require relocation to a 100,000 sq.ft. facility.
The Company has acquired the following equipment for the extrusion lines, 1
twin screw extruder, 6 cooling tanks, 4 pullers, 1 cut-offsaw, 4 dump tables
and a complete wood graining system.
The Company plans to acquire a raw material supply company that has exclusive
contracts for the Company' s raw materials. This projected step will enable the
Company to maintain its costs and supply of raw materials.
The Company does not anticipate any difficulties or adverse financial impact if
raw materials are disrupted from one supplier. As previously mentioned, the
Company's raw materials are readily available throughout Canada and the United
States from a wide variety of sources.
Description of Properties
The Company's executive offices are located at 5230 South Service Road,
Burlington, Ontario, Canada. The executive offices are comprised of 11 rooms
covering 2,300 sq.ft. All general, sales and administrative oversight of the
Company is conducted out of these offices. The offices are leased on a
month-to-month basis. Rent is $1,271.00 (US) per month.
The Company also maintains production facilities (FMCI wholly-owned Subsidiary)
for its products at 5430 Harvester Road, Unit A, Burlington, Ontario, Canada.
These production facilities are leased with the current lease due to expire on
February 11, 2002. Rent is $4,290.00(US) per month. At these facilities the
Company maintains all of its production and shipping materials. The Company
also stores its raw materials at these facilities.
Directors, Executive Officers and Significant Employees
The following table sets forth the identity of all officers and directors of
the Company, their titles and when their term as directors, if any, expires.
Name Title as Director Title as Officer Term as
Director Expires
Blaine C. Froats Chairman of the Board CEO 5/31/99
Sean Froats Director Secy/Treasurer 5/31/99
The following table sets forth the identity of all key personnel who are not
officers or directors of the Company and their titles.
Name/Address/Occupation Title
William McMurdy Plant Manager - FMCI
Glen Law Sales Manager - FMCI
Business Experience of Directors, Officers and Significant Employees
Sean Froats - Sean Froats, Secretary/Treasurer of the Company was born on
February 26, 1971 in Canada. Mr. Froats began his employment career in 1989
with Price Club (Canada) in sales and marketing. In December 1994 Sean Froats
began working for Canadian Imperial Bank of Commerce ("CIBC") as a customer
service representative. His primary duties at CIBC involved collection
matters. From June 1995 to the present, Mr. Froats worked for EFT, ESC and
FMCI. His primary duties at these companies included day-to-day oversight of
marketing and sales. Now Mr. Froats' principal responsibilities are as
administrative assistant to the Chairman and the President. Mr. Froats has a
wife and one child.
Blaine Froats - Blaine Froats, Chairman and CEO of the Company was born May 16,
1937. Over the past ten years Mr. Froats has devoted his full time to
developing the process and technological know-how which forms the basis of the
Company's business. He accomplished this while CEO of ESC, EFT, FMCI and
Environmental Plastics Corporation. Mr. Froats is responsible for general
administrative matters at the Company and significantly involved in the
planning and development for the Company and its products. Blaine and his wife
reside in Ontario.
William McMurdy - William McMurdy, Plant Manager for FMCI is 35 years old and
has been employed at FMCI since November 1998. Prior to working at FMCI Bill
worked for Master Shield for 15 1/2 years. Mr. McMurdy has been a plant
manager in the plastics extrusion field for approximately sixteen years. His
experience also includes research and development and die design.
Glen Law - Glen Law, Sales Manager at FMCI was born on November 6, 1962 and has
been working for FMCI since July 1998. Mr. Law has been a sales representative
in the construction trim/molding industry for approximately thirteen years.
Before coming to FMCI, Glen was employed by Plywood & Tent for one year.
Involvement in Certain Legal Proceedings
No officer or director of the Company has been the subject of any order,
judgment or decree of any court of competent jurisdiction or any regulatory
agency enjoining him or her from acting as an investment advisor, underwriter,
broker or dealer in the securities industry or as an affiliated person,
director, or employee of an investment company, bank, savings and loan
association or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase and sale of any securities. Nor has any such person been the subject
of any order of a state authority barring or suspending for more than sixty
(60) days, the right of such person to be engaged in such activities or to be
associated with such activities.
During the past five years no present or former officer, director or person
nominated to become a director or officer of the Company:
1. was a general partner or officer of any business against which any
bankruptcy petition was filed, either at the time of the bankruptcy or two
years prior to that time;
2. was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
3. was subject to any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
4. or was found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission of the Commodities Futures Trading
Commission to have violated a federal or state securities or commodities law,
and the judgment has not been reversed, suspended or vacated.
Family Relationships
There are no family relationships between the directors or officers of the
Company, either by blood or marriage, except as follows: Sean Froats is an
officer and director of the Company. Sean Froats is Blaine Froats', an officer
and director of the Company, son.
Remuneration of Directors and Officers
1. Compensation.
No officer or director or key personnel of the Company has had aggregate
compensation exceeding $50,000 (US) per year over the past 10 years.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the Company in the event of retirement at
normal retirement date pursuant to any existing plan provided or contributed to
by the Company or any of its subsidiaries.
No remuneration, other than as set forth above, is expected to be paid in the
future, either directly or indirectly, by the Company to any officer, director
or key person under any plan presently existing.
The Company does not have written employment agreements with any of its
officers or employees. Neither does the Company have a bonus plan. However, the
Company intends to enter into written employment agreements with its officers
and key employees in the future. Also, the Company intends to implement a stock
bonus plan in the future. The terms and conditions of such plan and employment
agreements are subject to the approval of the Company's board of directors in
their sole discretion.
Security Ownership of Management and Certain Security Holders
Principal owners of the Company (those who beneficially own directly or
indirectly 10% or more of the common stock presently outstanding) starting with
the largest common stockholder, as of April 1, 1999 are:
Name # of Shares Now Held* % of Total Class of Shares
Blaine C. Froats 4,029,000** 33.138% Common
1901 Pilgrims Way, #905,
Oakville, Ontario L6J 2S2
** -- Both Blaine Froats and Sean Froats are shareholders in the Froats family
holding company being First Flotilla (BWI) Inc. which is the record owner of
4,000,000 common shares. Blaine Froats owns directly 29,000 common shares
separate of the family holding company.
* -- Does not include shares purchasable under common stock options (see table
below).
The number of shares beneficially owned by officers and directors, both
individually and as a group, as of April 1, 1999 is:
Name # of Shares Now Held* % of Total Class of Shares
Sean Froats -0-** 0% Common
530 Falgarwood Dr., #15
Oakville, Ontario L6H 1N3
Blaine C. Froats 4,029,000** 33.138% Common
1901 Pilgrims Way, #905,
Oakville, Ontario L6J 2S2
All officers and
directors 4,029,000 33.138% Common
as a group (2 persons)
** -- Both Blaine Frosts and Sean Froats are shareholders in the Froats family
holding company - First Flotilla (BWI) Inc. which is the record owner of
4,000,000 common shares. Blaine Froats owns directly 29,000 common shares
separate of the family holding company.
* -- Does not include shares purchasable under common stock options (see table
below).
The number of common shares purchasable by option, warrant or rights by
officers and directors, both individually and as a group, and by persons owning
10% or more of the common stock as of February 26, 1999 is:
Name of Holder Title/Amount of Exercise Date of Date of
Securities Called Price Exercise Expiration
For by Options, of Option,
Warrants or Rights Warrants,
Rights
Sean Froats 200,000 Common* $.50/share NA 11/30/99
Blaine C. Froats 200,000 Common* $.50/share NA 11/30/99
All officers and
directors as a
group (2 persons) 400,000 Common $.50/share NA 11/30/99
* -- Both Blaine Frosts and Sean Froats are shareholders in the Froats family
holding company - First Flotilla (BWI) Inc. which is the record owner of
4,000,000 common shares. Blaine Froats owns directly 29,000 common shares
separate of the family holding company.
Interest of Management and Others in Certain Transactions
Blaine Froats, an officer and director of the Company and owner of 29,000
common shares, was also a founder of FMCI, EFT and ESC. The Company recently
acquired each of these companies on terms established by Blaine Froats. While
management believes that the terms of acquisition were fair, no independent
valuation was performed by or on behalf of the Company. Mr. Froats and his
family through their private holding company First Flotilla (BWI) Inc. received
control over 4,000,000 shares of common stock of the Company as a result of the
acquisitions.
Securities Being Offered
The Company's authorized capital stock consists of 20,000,000 shares of common
stock, par value $.001 per share. As of April 1, 1999, 12,161,586 shares of
common stock were issued and outstanding.
Each share of common stock entitles the holder to one vote on all matters
submitted to a vote of the stockholders. The common stock does not have
cumulative voting rights, which means that the holders of a majority of the
outstanding shares of common stock voting for the election of directors can
elect all members of the board of directors. A majority vote is also sufficient
for other actions that require the vote or concurrence of the stockholders
(except in matters in which more than a simple majority is required by law).
Holders of common stock are entitled to receive dividends, when, as and if
declared by the board of directors, in its discretion, from funds legally
available therefore. Upon liquidation, dissolution or winding up of the
Company, after payment to creditors, the holders of common stock are entitled
to share ratably in the assets of the Company, if any. The bylaws of the
Company require that only a majority of the issued and outstanding shares of
common stock of the Company need be represented to constitute a quorum and to
transact business at a stockholders' meeting.
The common stock has no preemptive rights or subscription, redemption or
conversion privileges. All of the outstanding shares of common stock are fully
paid and nonassessable.
The transfer agent for the Company's common stock is United Stock Transfer,
Englewood, Colorado.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON STOCK AND
OTHER SHAREHOLDER MATTERS
A. Market Information: The Company's common stock is not presently
trading in any recognized public market. The Company intends to seek
sponsorship of one or more NASD member registered securities dealers and a
quotation on the NASDAQ Quotation System on either the OTC Bulletin Board,
Small Cap or National Market. No shares of the Company's common stock have
been registered with the Securities and Exchange Commission or any state
securities agency or authority (other than any state registration, if any, that
may have been required with respect to private placements of Company
securities).
B. Holders: The number of record holders of shares of the Company's
common stock as of April 1, 1999 is 403. The aggregate number of shares of the
Company's common stock issued and outstanding as of April 1, 1999 was
12,161,586.
C. Dividends: The Company has not paid or declared any dividends on its
common stock since its inception. Due to its present financial status it is
not contemplated that any dividends will be declared or paid on the Company's
common stock in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
The Company is not involved and has not been involved in any litigation and, to
the best of its knowledge, is not aware of any facts that would likely lead to
litigation. Further, management is not aware of any threatened litigation.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company's accountant and auditor is Gerald R. Hinshaw, CPA. The Company
has no present intention to change accountants. At no time have there been any
disagreements with such accountant regarding any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
In November 1998 the Company, through a number of transactions, acquired
Formulated Mouldings (Canada) Inc. ("FMCI"), Environmental Shelter Corporation
Inc. ("ESC") and Environmental Fuel Technology, Inc. ("EFT"). In addition, the
Company also purchased a promissory note of FMCI from The Reclamation (US)
Corporation and also issued common stock to FMCI employees. The terms and
conditions of these transactions are as set forth below.
EFT owned all right, title and interest in and to proprietary information
concerning the production of fuel from scrap containerboard waste and other
material. The Company acquired that know-how by way of an agreement and plan of
reorganization (the "EFT Plan"). Under the terms of the EFT Plan, the Company
issued 544,500 shares of its voting common stock to the shareholders of EFT in
exchange for all of the outstanding shares of EFT common stock. The book value
of EFT was $544.50. The shares were issued based upon Rule 504 promulgated
under the Securities Act of 1933 as amended as well as Section 4(2) of said act.
ESC owned all right, title and interest in and to proprietary technology and
know-how regarding the production of extruded plastic sheeting from scrap
diaper and other materials. These materials were then designed to be used in
connection with plastic shelters. The Company acquired this technology by way
of an agreement and plan of reorganization (the "ESC Plan"). Under the ESC
Plan, the Company issued 665,000 voting common shares in exchange for all of
the outstanding common stock of ESC. The book value of ESC was $665.00. The
shares were issued based upon Rule 504 promulgated under the Securities Act of
1933 as amended as well as Section 4(2) of said act.
FMCI owned all right, title and interest in and to proprietary information
concerning the production of extruded plastic moldings from scrap diaper and
other material. The Company acquired that know-how by way of an agreement and
plan of reorganization (the "FMCI Plan"). Under the terms of the FMCI Plan, the
Company issued 7,180,426 shares of its voting common stock to the shareholders
of FMCI in exchange for all of the outstanding shares of FMCI common stock. The
book value of FMCI was $324,281.25 Canadian or $214,025.63 (US). The shares
were issued based upon Rule 504 promulgated under the Securities Act of 1933 as
amended as well as Section 4(2) of said act.
The Company also purchased a promissory note made by FMCI in the principal
amount of $885,636.12 (Canadian) ($584,519.76 (US)). FMCI borrowed this money
from The Reclamation (US) Corporation for a variety of purposes, including
without limitation, working capital and research and development of its
extruded plastic molding products. The Company issued 3,129,878 shares of its
voting common stock to purchase the promissory note and later received a lien
on the technology from FMCI as security for the note. The shares were issued
based upon Rule 504 promulgated under the Securities Act of 1933 as amended as
well as Section 4(2) of said act.
Finally, the Company issued 581,000 shares of common stock to fourteen
employees of FMCI. These shares were issued to acknowledge loyal, good and
faithful service on the part of those employees. The shares were issued based
upon Rule 504 promulgated under the Securities Act of 1933 as amended as well
as Section 4(2) of said act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware law (8 Del. Code Section 145) under certain circumstances provides for
the indemnification of the Company's officers, directors and agents against
liabilities that they may incur in such capacities. The Company's Certificate
of Incorporation, as amended, provides indemnification to the fullest extent
allowed by Delaware law. A summary of the circumstances under which such
indemnification is provided is set forth herein.
In general, any officer, director, employee or agent may be indemnified against
expenses, fines, settlements or judgments arising in connection with a legal
proceeding to which such person is or was a party, as a result of such
relationship, if that person's actions were in good faith, were believed to be
in the Company's best interest and were not unlawful. Unless such person is
successful upon the merits in such action, indemnification may be awarded only
after a determination by independent decision of the board of directors, by
legal counsel or by a vote of the shareholders that the applicable standard of
conduct was met by the person to be indemnified.
The circumstances under which indemnification is granted in connection with an
action brought by or on behalf of the Company are generally the same as set
forth above; however, with respect to such actions, indemnification is granted
only with respect to expenses actually incurred in connection with the defense
or settlement of the action. In such actions, the person to be indemnified must
have acted in good faith, in a manner believed to have been in the Company's
best interest and with respect to which such person was not adjudged liable for
negligence or misconduct.
Indemnification may also be granted pursuant to the terms of agreements that
may be entered into in the future or pursuant to a vote of shareholders or
directors. The law also grants the Company the power to purchase and maintain
insurance which protects its officers and directors against liabilities
incurred in connection with their service in such position.
PART F/S
The financial statements for the Company for the years ended May 31, 1996
through May 31, 1998, inclusive, have been examined to the extent indicated in
reports by Gerald R. Hinshaw, independent certified public accountant.
VERSATECH ENVIRONMENT GROUP, INC.
(FORMERLY ENVIRONMENTAL SATELLITE CORPORATION)
AUDITED
FINANCIAL STATEMENTS
MAY 31, 1998, 1997 AND 1996
GERALD R. HINSHAW CERTIFIED PUBLIC ACCOUNTANT
113 DEERPATH DR., P.O. BOX 250 MINOOKA, ILLINOIS 60447
PHONE: (815) 467-2111 FAX: (815) 467-2116
VERSATECH ENVIRONMENT GROUP INC
(FORMERLY ENVIRONMENTAL SATELLITE CORPORATION)
TABLE OF CONTENTS Page Number
ACCOUNTANTS' REPORT 1
FINANCIAL STATEMENTS
STATEMENT 1 - BALANCE SHEETS 2
2 - INCOME STATEMENTS 3
3 - STATEMENTS OF CHANCES IN SHAREHOLDERS'
EQUITY 4-5
4 - STATEMENTS OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-9
GERALD R. HINSHAW
CERTIFIED PUBLlC ACCOUNTANT 113 DEERPATH DRIVE P.O. BOX 250 MINOOKA IL 60441
BUSINESS NUMBER (815) 467-2111 FAX NUMBER(815)467-2116
INDEPENDENT AUDITORS REPORT
The Board of Directors and Stockholders
Versatech Environment Group Inc.
(Formerly Environmental Satellite Corporation)
5310 Harvester Rd., Unit A Burlington, Ontario, Canada L7L5N5
I have audited the balance sheets of Versatech Environment Group, Inc. (a
Delaware Corporation) (Formerly Environmental Satellite Corporation) as of May
31, 1998, 1997 and 1996 and the related statements of income and shareholders'
equity and of cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based upon my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance that 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.
In my opinion, the financial statements referred to above presents fairly, in
all material respects, the financial position of VERSATECH ENVIRONMENT GROUP,
INC. as of May 31, 1998, 1997 and 1996, and the results of its operations and
of cash flows for the years then ended in conformity with generally accepted
accounting principles.
/s/GERALD R. HINSHAW Certified Public Accountant
Minooka, Illinois
November 24, 1998
VERSATECH ENVIRONMENT GROUP INC (FORMERLY ENVIRONMENTAL SATELLITE
CORPORATION)
BALANCE SHEETS May 31, 1998, 1997 and 1996
ASSETS 1998 1997 1996
CURRENT ASSETS
Cash in Bank $ -0- $ -0- $ -0-
OTHER ASSETS
Organization Costs
(Note 3) $ 86,094 $ 79,594 $ 77,594
TOTAL ASSETS $ 86,094 $ 79,594 $ 77,594
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts Payable/
Accruals(Note 4) $ 21,464 $ 18,964 $ 16,964
OTHER LIABILITIES
Loans/Advances due
Shareholders(Note 5) $ 21,050 $ 17,050 $ 17,050
TOTAL LIABILITIES $ 42,514 $ 36,014 $ 34,014
STOCKHOLDERS' EQUITY (See NOTE 8 - SUBSEQUENT EVENTS)
CAPITAL STOCK
Preferred Stock-
5,000,000 Shares $ -0- $ -0- $ -0-
Authorized at $.01
(0) shares issued
and outstanding.
Common Stock -
100,000,000 Shares $ 608 $ 608 $ 608
authorized at $.001
per share, 607,817
shares issued and
outstanding at $.001
per share at May 31,
1998, 1997 and 1996.
ADDITIONAL PAID-IN
CAPITAL $ 42,972 $ 42,972 $ 42,972
TOTAL STOCKHOLDERS'
EQUITY $ 43,580 $ 43,580 $ 43,580
TOTAL LIABILITIES AND
STOCKHOLDERS' $ 86,094 $ 79,594 $ 77,594
EQUITY
"SEE ACCOUNTANTS REPORT AND ACCOMPANYING NOTES"
VERSATECH ENVIRONMENT GROUP. INC. (FORMERLY ENVIRONMENTAL SATELLITE
CORPORATION)
STATEMENTS OF INCOME For the Years Ending May 31, 1998, 1997 and 1996
1998 1997 1996
REVENUES $ -0- $ -0- $ -0-
EXPENSES $ -0- $ -0- $ -0-
NET INCOME (LOSS) $ -0- $ -0- $ -0-
"SEE ACCOUNTANTS' REPORT AND ACCOMPANYING NOTES"
VERSATECH ENVIRONMENT GROUP, INC. (FORMERLY ENVIRONMENTAL SATELLITE CORPORATION)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED MAY 31, 1998,
1997 AND 1996 (1988 to 1995 shown for informational purposes only)
PREFERRED STOCK No (O) Shares issued and outstanding out of 5,000,000 shares
authorized.
COMMON STOCK ONLY
Common Stock Additional Total
No. of Shares Amount Paid In Capital
Balances forwarded from Page 5 (Environmental Satellite Corporation)
May 31, 1991 5,000,000 $ 5,000 $ (1,100) $ 3,900
Write off of Licensing Cost on
5/31/92 -0- -0- (2,900) (2,900)
Waiver of Shareholder
Loans on 5/31/92 -0- -0- 42,580 42,580
Totals as of (Environmental Satellite Corporation)
May 31, 1992 5,000,000 $ 5,000 $ 38,580 $ 43,580
Stock issued 7/1/92
for services
rendered 341,667 342 (342) -0-
Totals as of (Environmental Satellite Corporation)
May 31, 1993 5,341,667 $ 5,342 $ 38,238 $ 43,580
NAME CHANGED TO VERSATECH ENVIRONMENT GROUP, INC. (JUNE 12, 1993)
Stock issued for
debenture cancellation
on June 14, 1993 70,000 70 (70) -0-
Stock issued for consulting
agreements canceled (2)
on June 23, 1993 (1) 162,500 163 (163) -0-
(2) 62,500 62 (62) -0-
New Totals at
6/23/93 5,636,667 $ 5,637 $ 37,943 $ 43,580
(Before Reverse Stock Split)
New Totals after Board
Approved Reverse Stock
Split (1 for 10) Effective
6/30/93 563,667 $ 564 $43,016 $ 43,580
Stock issued 7/29/93
for services rendered 44,150 44 (44) -0-
(Third St. Funding)
Totals as of May 31,
1994, 1995, 1996,
1997, 1998 607,817 $ 608 $ 42,972 $43,580
"SEE ACCOUNTANTS' REPORT AND ACCOMPANYING NOTES"
VERSATECH ENVIRONMENT GROUP, INC. (FORMERLY ENVIRONMENTAL SATELLITE
CORPORATION)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED MAY 31, 1998,
1997 AND 1996 (1988 to 1995 shown for informational purposes only)
PREFERRED STOCK - No (O) Shares issued and outstanding out of 5,000,000 shares
authorized.
COMMON STOCK ONLY
Common Stock Additional Total
No. of Shares Amount Paid In Capital
Axelsen Advertising
and Research, Inc.
December 31, 1987,
1988 and 1989 6,000 $ 6 $ 994 $ 1,000
On November 14, 1990 the shareholders of Axelsen Advertising and Research, Inc.
exchanged all 6,000 shares of common stock for all 20,000 shares of common
stock of District Corporation, with District Corporation being the surviving
corporation.
District Corp. 20,000 $ 200 $ 800 $ 1,000
District Corporation
105 to 1 Share
Stock Split
(November 19,
1990) 2,100,000# $ 2,100 $ (1,100) $ 1,000
Stock Issuance for
License
(November 19, 1990)
2,900,000+ $ 2,900 $ -0- $2,900
Totals -
11/19/90 5,000,000* $ 5,000 $ (1,100) $3,900
Totals as of December
31, 1990 and May 31, 1991
Environmental Satellite
Corporation 5,000,000 * $ 5,000 $ (1,100) $3,900
# Action by the Board of Directors of District Corporation on November 19, 1990
forward split the common stock on a 105 to 1 basis; maintained par value at
$.001 per share after the stock split; increased authorized common shares from
1,000,000 to 100,000,000.
+ Action by the Board of Directors of District Corporation on November 19, 1990
acquired an exclusive license agreement (SEE NOTE 3) in exchange for 2,900,000
shares of common stock.
* On November 19, 1990 the Company, Environmental Satellite Corporation, merged
with District Corporation in a share for share common stock exchange wherein
the stockholders of District Corporation exchanged their shares of stock for
those of Environmental Satellite Corporation, leaving Environmental Satellite
as the surviving Corporation. District Corporation originally merged with
Axelsen Advertising and Research, Inc., a Utah corporation incorporated on
December 1, 1976, on November 14, 1990, leaving District Corporation as the
surviving corporation. (SEE COMMENT ABOVE)
"SEE ACCOUNTANTS' REPORT AND ACCOMPANYING NOTES"
VERSATECH ENVIRONMENTAL GROUP INC (FORMERLY ENVIRONMENTAL SATELLITE
CORPORATION)
STATEMENT OF CASE FLOWS
FOR THE YEARS ENDING MAY 31, 1998, 1997 AND 1996
1998 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES $-0- $-0- $-0-
Net Income (Loss) $-0- $-0- $-0-
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES $-0- $-0- $-0-
CASH FLOWS FROM INVESTING
ACTIVITIES
Decrease in Accounts Payable $(4,000) $-0- $-0-
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES $(4,000) $-0- $-0-
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from:
Shareholder $4,000 $-0- $-0-
NET CASH PROVIDED (USED) FROM
FINANCING ACTIVITIES $4,000 $-0- $-0-
NET INCREASE (DECREASE) IN CASH $-0- $-0- $-0-
CASH BEGINNING OF YEAR $-0- $-0- $-0-
CASH END OF PERIOD $-0- $-0- $-0-
"SEE ACCOUNTANTS' REPORT AND ACCOMPANYING NOTES"
VERSATECH ENVIRONWENT GROUP INC (FORMERLY ENVIRONMENTAL SATELLITE
CORPORATION)
NOTES TO FINANCIAL STATEMENTS
MAY 31 1998 1997 AND 1996
1. ORGANIZATION
The Company was incorporated on September 26, 1990 under the laws of the State
of Delaware. On November 19, 1990, the Company merged with District
Corporation, a company incorporated under the laws of the State of Nevada, in a
share for share stock exchange wherein the shareholders of District
Corporation, exchanged their shares of stock for those of Environmental
Satellite Corporation, leaving Environmental Satellite Corporation as the
surviving corporation. This exchange was accounted for as a tax-free
reorganization under Section 368 (a) (1) (c), or 338H-10, the Internal Revenue
Service Code, 1986, as amended. This method provides for a tax-free exchange
of assets, subject to liabilities, for common stock. District Corporation
originally merged with Axelsen Advertising and Research, Inc., a Utah
corporation incorporated on December 1, 1976, on November 14, 1990.
On June 12, 1993, the shareholders consented to changing the Company's name to
VERSATECH ENVIRONMENT GROUP, IWC. The Company also decided that it will be in
the business of the manufacture and sales of more environmentally friendly
products for the construction and automobile industries.
On October 21, 1998 the Company the Company changed its name to ENVIRONWENTAL
PRODUCTS GROUP, INC.(See Note 8 - Subsequent Events)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. The accrual method of accounting is employed to meet generally accepted
accounting principles (GAAP).
B. Organization Coats (See Note 3) - Organization costs will be amortized over
sixty (60) months using the straight line method of amortization, upon
commencement of operations.
C. Income Taxes - No provision for income taxes has been made because the
Company had not commenced operations as of May 31, 1998.
D. Accounts Payable/Accruals (See Note 4)
E. Loans/Advances due Shareholders (See Note 5)
F. Capital Stock/Additional Paid-In Capital (See Statement of Changes in
Stockholders Equity - Pages 4, 5 and Note 8)
G. Contingencies(See Note 6)
H. Commitments (See Note 7)
I. Litigation - There is no pending litigation as represented by the
corporation's management.
J. Subsequent Events (See Note 8)
VERSATECH ENNIRONMENT GROUP INC (FORMERLY ENVIRONMENTAL SATELLITE CORPORATION)
NOTES TO FINANCIAL STATEMENTS MAY 31, 1998, 1997 AND 1996
3. ORGANIZATION COSTS
Organization costs are made up of the following items:
1998 1997 1996
Incorporation, filings, etc. $19,000 $17,000 $15,800
FCN Financial Services, Inc.
- - Merger Fees 36,000 36,000 36,000
United Stock Transfer - Transfer
Agent 4,514 4,514 4,514
Audit and accounting fees 21,500 17,000 17,000
Standard and Poor's - Listing Fees 2,080 2,080 2,080
Consulting Fees 2,750 2,750 2,750
Miscellaneous Costs 250 250 250
Total - Organization Costs $86,094 $79,594 $77,594
4, ACCOUNTS PAYABLE/ACCRUALS
Accounts payable/accruals are made up of the following items:
1998 1997 1996
Accounting/Audit Fees $ 4,500 $ 4,000 $ 4,000
Legal Fees 2,000 1,000 -0-
Filing Fees 11,200 10,200 9,200
Stock Transfer Agent Fees 3,764 3,764 3,764
Total - Accounts Payable/Accruals $21,464 $18,964 $16,964
5. LOANS/ADVANCES DUE SHAREHOLDERS
A shareholder advanced payment of $17,050.00 in late 1993 on behalf of the
corporation in payment of the accounts payable by the corporation at May 31,
1993. In October, 1997, the same shareholder loaned $4,000.00 to the Company
to pay audit fees payable. No terms of repayment or interest has been
established as of the report date. The amount of $21,050.00 was still owed the
shareholder on May 31, 1998.
VERSATECH ENVIRONMENT GROUP, INC. (FORMERLY ENVIRONMENTAL SATELLITE
CORPORATION)
NOTES TO FINANCIAL STATEMENTS MAY 31 1998, 1997 AND 1996
6. CONTINGENCIES
These financial statements have been prepared on the basis of accounting
principles applicable to a going concern. The ability of the Company to
continue is dependent on its ability to raise working capital and realize
profitable operations.
7. COMMITMENTS
Stock options for 275,000 shares of common stock, held by shareholders and
directors, excercisable at $.10 (ten cents) per share, expired on October 11,
1994. All restricted common stock issued has expired except for the 44,150
common shares issued on July 29, 1993 and those restricted shares expired on
July 29, 1995, during the fiscal year ending May 31, 1996,
The Company had no other commitments as of the report date.
8. SUBSEQUENT EVENTS
On October 2l, 1998, the State of Delaware approved a name change for the
Company to ENVIRONMENTAL PRODUCTS GROUP, INC. Additionally, the State of
Delaware approved the changing of the authorized common shares from 100,000,000
shares to 20,000,000 shares at the same $0.001 par value; the elimination of
the authorized 5,000,000 shares of preferred stock; and the each share having
one vote on all matters to which they are entitled to vote, without any right
to cumulative voting.
On October 23, 1998, the Board of Directors and controlling shareholder
approved a reverse stock split of 1 for 10 shares of common stock, effective on
that date.
On November 20, 1998, the Company purchased three (3) Canadian companies;
namely (1) Formulated Mouldings (Canada), Inc.; (2) Environmental Fuel
Technology, Inc.; and (3) Environmental Shelter Corporation. These companies
were purchased for a note for $885,636.12 Canadian and 12,100,804 common voting
shares.
Financial Statements of
FORMULATED MOULDINGS (CANADA) INC.
For the year ended May 31, 1998 (All figures in Canadian Dollars)
AUDITORS' REPORT
To the Shareholders of
FORMULATED MOULDINGS (CANADA) INC.
We have audited the balance sheet of Formulated Mouldings (Canada) Inc. as at
May 31, 1998, and the statement of income and retained earnings, and changes in
financial position for the year then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements.
We conducted our audit in accordance with generally accepted auditing
standards. These standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatements. 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at May 31, 1998, and the
results of its operations and the changes in its financial position for the
year then ended in accordance with generally accepted accounting principles.
TORONTO, Ontario
/s/Tinkham & Associates
June 30, 1998 CHARTERED ACCOUNTANTS
Balance Sheet
As at May 31, 1998, with comparative figures for May 31, 1997
1998 1997
Assets
Current assets
Bank $ 6,308 $ 705
Accounts receivable 12,446 -
Due from related party (note 2) 9,499 6,276
Inventory 45,585 -
Prepaid expenses 5,168 6,779
79,006 13,760
Capital assets (note 3) 230,868 5,284
$ 309,874 $19,044
Liabilities
Current liabilities
Accounts payable and accrued liabilities $81,873 $ -
Note payable - related party (note 4) 576,520 30,840
658,393 30,840
Shareholders' Equity
Common shares (note 5) 1 1
Retained earnings (348,520) (11,797)
$ 309,874 $ 19,044
Statement of Income and Retained Earnings
Year ended May 31, 1998, with comparative figures for period ended May 31, 1997
1998 1997
Sales $ 2,082 $ -
Expenses
Advertising and promotion 570 -
Amortization 21,603 -
Automobile 113 -
Bank Charges 493 67
Building maintenance 1,625 -
Casual labour 34,653 1,250
Consulting fees 24,825 -
Dues and subscriptions 80 -
Equipment rental 2,577 206
Forklift lease 9,831 -
Insurance 1,860 -
Miscellaneous 3,479 251
Office supplies 8,232 797
Plant supplies 15,619 783
Postage and delivery 448 -
Printing & reproductions 887 -
Professional services 13,586 -
Rent 48,576 6,529
Repairs and maintenance 1,041 -
Research and development 4,049 -
Security 1,919 -
Shipping and receiving 2,683 160
Telephone 9,756 944
Travel and entertainment 1,063 410
Utilities 11,849 400
Wages and benefits 117,388 -
338,805 11,797
Net (loss) for the year (336,723) (11,797)
Retained earnings (deficit), June 1 (11,797) -
Retained earnings (deficit), May 31 $ (348,520) $(11,797)
Statement of Changes in Financial Position
Year ended May 31, 1998, with comparative figures for period ended May 31, 1997
1998 1997
Operating activities
Cash provided (used) by operations
Net (loss) for the year $ (336,723) $(11,797)
Charges to income not involving cash
Amortization of capital assets 21,603 -
(315,120) (11,797)
Changes in non-cash working capital components
Accounts receivable (12,446) -
Due to related party (3,223) (6,276)
Inventories (45,585) -
Prepaid expenses 1,611 (6,779)
Accounts payable and accrued liabilities 81,872 -
Note payable - related party 545,680 30,840
567,909 17,785
Increase in cash from operating
Activities 252,789 5,988
Financing activities
Issue of common share - 1
Investing activities
Purchase of capital assets (net) (247,186) (5,284)
Increase in cash 5,603 705
Cash, June 1 705 -
Cash, May 31 $ 6,308 $ 705
Notes to Financial Statements
May 31, 1998
1. Accounting policies
The financial statements have been prepared by management in accordance with
generally accepted accounting principles. The preparation of Formulated
Mouldings (Canada) Inc. financial statements in conformance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the balance sheet date and
the reported amounts of revenue and expense during the reporting period.
Actual results could differ from such estimates.
Significant accounting policies are:
(a) Inventory
Inventory is valued at the lower of cost and estimated net realizable value,
with cost being determined on a first-in, first-out basis.
(b) Capital assets, and amortization
Capital assets are valued at historical cost. Amortization is calculated using
the straight-line balance method based on the following annual rates:
Furniture and equipment 20%
Computer equipment 25%
Leasehold improvements 20%
Machine and equipment 10%
Dies 20%
2. Due from related party
Amounts due from related party are non-interest bearing and without specific
terms of repayment.
3. Capital assets
1998 1997
Accum. Net Book Net Book
Cost Amort. Value Value
Furniture and equipment $23,225 $2,323 $20,902 $3,164
Computer equipment 66,251 8,281 57,970 1,105
Leasehold improvements 12,920 2,584 10,336 1,015
Machinery and equipment 131,855 6,593 125,262 -
Dies 18,220 1,822 16,398 -
$252,471 $21,603 $230,868 $5,284
4. Note payable - related party
The note payable to a related party is non-interest bearing and has no fixed
terms of repayment.
Notes to Financial Statements
May 31, 1998
5. Common shares
1998 1997
Authorized
Unlimited common shares
Issued
1 common share $ 1 $ 1
6. Lease commitments
The company has a lease commitment for its premises and requires payments as
follows:
Year Amount
1999 $ 41,790
2000 44,402
2001 46,641
2002 48,879
2003 8,209
Equipment lease commitments require monthly payments of $577 and expire June,
1999.
PART III
ITEM 1. INDEX TO EXHIBITS
The exhibits filed with this Form 10-SB are as follows:
2 (i)
A. Certificate of Incorporation of the Company, as amended
B. Certificate of Incorporation of FMCI, as amended
C. Certificate of Incorporation of EFT, as amended
D. Certificate of Incorporation of ESC, as amended
2. (ii)
E. Bylaws of the Company
F. Bylaws of FMCI
G. Bylaws of EFT
H. Bylaws of ESC
3.
I. Specimen Common Stock Certificate
6.
J. Lease Agreement dated May 1997 by and between Fairgate Centre Ltd. and The
Reclamation (US) Corporation.
K. Agreement and Plan of Reorganization between the Company and FMCI dated
November 20, 1998
L. Agreement and Plan of Reorganization between the Company and EFT dated
November 20, 1998
M. Agreement and Plan of Reorganization between the Company and ESC dated
November 20, 1998
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
ENVIRONMENTAL PRODUCTS GROUP, INC.
By:/s/ Blaine C. Froats, Chairman/CEO
April 28, 1999
