U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
AMENDMENT NO. 4
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)
3325 North Service Road, Unit 105
Burlington, Ontario L7N 3G2 Canada
(Address of Principal Executive Offices)
Issuer's Telephone Number, including area code: (905) 332-3110
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
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 became 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 2,859,878 shares of its voting common stock to
purchase the promissory note and subsequently cancelled the note in exchange
for
the acquisition of FMCI's technology. As a result of the purchase, FMCI owed
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 owned FMCI, EFT and
ESC. All of these companies are involved in the business of producing moldings,
fuel and shelter, respectively, from recycled plastic materials.
In May of 1999, the Company received the intellectual property rights,
technology and know-how relative to the production of moldings from recycled
plastic from FMCI. FMCI transferred the technology in full payment of the
promissory note that the Company purchased from The Reclamation (U.S.) Corp. in
November of 1998. Shortly after the note was paid, the Company sold all of the
common stock of FMCI to a third party for $100 (U.S.).
Thus, the Company is not in a position to expand its abilities and technologies
in the use of recycled plastic materials for plastic moldings.
2. Products
The Company does not currently have any physical products to sell nor any
immediate plans to produce such products. The Company does maintain the
technology and know-how to produce moldings, fuel and housing/shelter from
recycled plastics for future production. The Company is in a transition period
as it redirects itself into new environmentally safe ventures and products.
Additional funding will be needed by the Company in the near future as the
Company does not generate any cash flow at the present time.
The Company currently employs 4 people on its staff (3 executive people and 1
administrative person).
3. Competition
The Company cannot determine, at this time, its competition since the
Company is
in a transition phase.
4. Pricing
The Company's pricing policies with respect to products will be determined in
the future based on the current market conditions at the time the Company
distributes new products, if any.
5. Marketing
The Company has not undertaken any marketing at this time due to its being in a
transition phase and funding.
6. Manufacturing
The Company has no manufacturing facility at the present time.
Description of Properties
The Company's executive offices are located at 3325 North Service Road, Unit 105
Burlington, Ontario Canada. The executive offices are comprised of 11 rooms
covering 5,000 sq.ft. All general, sales and administrative oversight of the
Company is conducted out of these offices. The offices are leased on a two-year
basis and expire in January of 2002. Rent is $1,200 (US) per month.
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 May 31, 2001
Sean Froats Director Secy/Treasurer May 31, 2001
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
None
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.
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.
Blaine Froats - Annual Salary - $ 40,000
Sean Froats - Annual Salary - $ 40,000
No remuneration, other than as set forth above, for Blaine Froats and Sean
Froats, 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 5% or more of the common stock presently outstanding) starting with
the largest common stockholder, as of August 15, 2000 are:
Name/Address/ Number of Shares Percentage of Class of Shares
Occupation Now Held the Total
First Floatilla (BWI) Inc.
200 North Service Rd.W. Suite 212
Oakville ON L6J 2Y1
4,000,000 (1) 33.138% Common
Blaine C. Froats
1901 Pilgrims Way,
Suite 905
Oakville ON L6M 2X2
4,029,000 (1) 33.158% Common
Sean Froats
1580 Parish Lane
Oakville, ON L6M 3E2
4,000,000
200,000 Option
@ .50 per share
exp. Nov. 30,
1999 (1) 33.158% Common
J. Patrick & Marie
Keenan
8 Bedford Drive
Newtonville, NY 741,487 6.10% Common
(1):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 August 15, 2000 is:
Name/Address/ Number of Shares Percentage of Class of Shares
Occupation Now Held the Total
Sean Froats 4,000,000 (1) 33.138% Common
530 Falgarwood Dr., #15
Oakville, Ontario L6H 1N3
Blaine C. Froats 4,029,000 (1) 33.138% Common
1901 Pilgrims Way, #905,
Oakville, Ontario L6J 2S2
All officers and
directors 4,029,000 (1) 33.138% Common
as a group (2 persons)
(1): Both Blaine Froats 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 August 15, 2000 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
None
All officers and
directors as a
group (2 persons) 0
Note 1: Both Blaine Froats 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 August 15, 2000, 11,779,586 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 American Securities
Transfer & Trust Co., Lakewood, 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 August 15, 2000 is 403. The aggregate number of shares of
the Company's common stock issued and outstanding as of August 15, 2000 was
11,779,586.
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 Gentile, Wiener, Penta & Co., CPAs,
P.C., Pleasantville, New York for the year ended May 31, 1999. Gerald R.
Hinshaw, CPA, was the Company's auditor for the years ended May 31,
1997 through
1998, inclusive. The Company has no present intention to change
accountants. At
no time have there been any disagreements with such accountants 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 2,859,878 shares of its voting
common stock to purchase the promissory note and later extinguished the note in
exchange for the transfer of 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 472,000 shares of common stock to 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 year ended May 31, 1999 have
been examined by Gentile, Wiener, Panta & Co., CPAs, P.C., independent
certified
public accountants. The financial statements for the Company for the
years ended May 31, 1997 through May 31, 1998, inclusive, have been examined
to the extent indicated in reports by Gerald R. Hinshaw, independent certified
public accountant. Both auditors have issued their audit reports with a "going
concern" limitation.
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
AUDITED FINANCIAL STATEMENTS
MAY 31, 1999, 1998 and 1997
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS Page 1
FINANCIAL STATEMENTS
BALANCE SHEET Page 2
STATEMENT OF OPERATIONS Page 3
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Page 4
STATEMENT OF CASH FLOWS Page 5
NOTES TO FINANCIAL STATEMENTS Pages 6-9
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Environmental Products Group, Inc. (Formerly
Versatech Environment Group, Inc. and
Environmental Satellite Corporation)
Burlington, Ontario, Canada L7N3G2
We have audited the balance sheet of Environmental Products Group, Inc. (A
Development Stage Company) (formerly Versatech Environment Group, Inc. and
Environmental Satellite Corporation) as of May 31, 1999 and the related
statements of operations, changes in shareholders' equity and cash
flows 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 based on our audit. The financial statements of
Environmental Products Group, Inc. as of May 31, 1998 and 1997 were audited by
another auditor whose report dated November 24, 1998 expressed an unqualified
opinion on those statements.
We conducted our audit in accordance with generally accepted auditing
standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance 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. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above presents fairly, in
all material respects, the financial position of Environmental Products Group,
Inc. as of May 31, 1999, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial
statements,
the Company has experienced severe liquidity problems. Those conditions raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
GENTILE WIENER PENTA & COMPANY CPAs PC
July 18, 2000
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
BALANCE SHEET
MAY 31, 1999, 1998, and 1997
1999 1998 1997
ASSETS
Current Assets
Cash in Bank $ 1,912 $ 0 $ 0
Other Assets
Organization costs (Note 3) 689,563 86,094 79,594
TOTAL ASSETS 691,475 86,094 79,594
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable/accruals
(Note 4) 21,464 21,464 18,964
Other Liabilities
Loans/advances due shareholders
(Note 5) 33,050 21,050 17,050
TOTAL LIABILITIES 54,514 42,514 36,014
Stockholders' Equity (Note 1)
Capital Stock
Preferred stock - 5,000,000 shares authorized
at $.01 per share. No (0) shares issued and
outstanding. 0 0 0
Authorization of shares rescinded on
October 21, 1998 (Note 1)
Common Stock - 20,000,000 shares authorized
at $.001 per share, 11,782,586 shares issued and
outstanding at $.001 per share at May 31, 1999;
60,682 shares issued and outstanding at $.001
per share at May 31, 1998 and 1997- ADJUSTED
FOR 1 FOR 10 REVERSE SPLIT OCCURRING
ON OCTOBER 21, 1998 (Note 1) 11,782 61 61
Additional Paid-in Capital
(Note 1) 625,179 43,519 43,519
Total Stockholders' Equity 636,961 43,580 43,580
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 691,475 86,094 79,594
"See auditors' report"
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
STATEMENT OF OPERATIONS
For the years ending MAY 31, 1999, 1998 and 1997
ACCUMULATED EARNINGS (DEFICIT)
SINCE INCEPTION 1999 1998 1997
Revenues $ -0- $ -0- $ -0-
Expenses -0- -0- -0-
Net Income (Loss) -0- -0- -0-
Earnings (Loss) Per Share -0- -0- -0-
"See auditors' report"
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED MAY 31, 1999, 1998 and 1997
PREFERRED STOCK - No (0) shares issued and outstanding out of 5,000,000 shares
authorized. Authorization of shares rescinded on October 21, 1998.
COMMON Common Stock Additional
STOCK No. of Paid-in
ONLY shares Amount Capital Total
Totals as of May 31,
1996 607,817 $ 608 $ 42,972 $ 43,580
No changes for period
6/1/96 to 5/31/98 0 0 0 0
Totals as of May 31,
1998 607,817 608 42,972 43,580
NAME CHANGED TO ENVIRONMENTAL PRODUCTS GROUP, INC. (October 21, 1998)
Adjustment to financial
statements reflecting 1 for
10 reverse stock split on
10/21/98 ( 547,035) ( 547) 547 0
The Reclamation (U.S.)
Corp for FMCI Note
(November 20, 1998) 2,859,878 2,860 581,660 584,520
FMCI
(November 20, 1998) 7,180,426 7,180 0 7,180
ESC
(November 20, 1998) 665,000 665 0 665
EFT
(November 20, 1998) 544,500 544 0 544
Employees
(November 22, 1998) 472,000 472 0 472
Totals as of
May 31, 1999 11,782,586 $11,782 $625,179 $636,961
"See auditors' report"
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
STATEMENT OF CASH FLOWS
For the Years Ending MAY 31, 1999, 1998 and 1997
1999 1998 1997
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Income (Loss) $ -0- $ -0- $ -0-
Net Cash Provided (Used) By
Operating Activities -0- -0- -0-
CASH FLOWS FROM INVESTING
ACTIVITIES
Increase in organization costs (10,087) -0- -0-
Decrease in accounts payable - ( 4,000) -0-
Net Cash Provided (Used) By
Investing Activities (10,087) ( 4,000) -0-
CASH FLOWS FROM FINANCING
ACTIVITIES
Loans from shareholder 12,000 4,000 -0-
Net Cash Provided (Used) By
Financing Activities 12,000 4,000 -0-
Net Increase (Decrease) in Cash 1,913 -0- -0-
Cash - Beginning of Year -0- -0- -0-
Cash - End of Year $ 1,913 $ -0- $ -0-
"See auditors' report"
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1999, 1998 and 1997
NOTE 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, INC.. 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 changed its name to ENVIRONMENTAL
PRODUCTS GROUP, INC.. On the same date, the Company amended its
Certificate of Incorporation to rescind the authorization to issue preferred
shares and to reduce the number of authorized common shares it could issue from
200,000,000 with par value of $0.001 per share to 20,000,000 with a par
value of
$0.001 per share.
On November 20, 1998, the Company acquired all the outstanding shares of
Formulated Mouldings (Canada) Inc. (FMCI), Environmental Shelter Corporation
(ESC) and Environmental Fuel Technology, Inc.(EFT). These companies were
purchased by issuing 11,249,804 shares of the Company's common stock. The
foregoing shares issued by the Company were issued pursuant to an exemption
from registration (Section 4(2) under the Securities Act of 1933, as amended
("Act") and Rule 504 promulgated under the Act. As a result, the shares issued
by the Company are "restricted" within the meaning of the Act and the rules and
regulations promulgated thereunder. The shares cannot be sold or otherwise
transferred without a registration under the Act or an exemption from
registration.
Rule 144 promulgated under the Act requires, among other things, a holding
period of one year from the date of receiving full consideration for the shares.
On May 28, 1999, the Company sold the operations of FMCI for $100.00. The
sale did not include any of the right, title and interest in and to the
proprietary information and technology concerning production of
extruded plastic
moldings from scrap diaper and other material.
The Company is considered a development stage company as defined in
Statement of Financial Accounting Standards No. 7, "Accounting and Reporting
by Development Stage Enterprises."
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. The accrual method of accounting is employed to meet generally accepted
accounting principles (GAAP).
B. Organization costs (see Note 3) - Organization costs will be amortized
over sixty (60) months using the straight line method of amortization,
upon commencement of operations. The Company is presently considered
a "Development Stage Company", per SFAS No. 7.
C. Income Taxes - No provision for income taxes has been made because the
Company had not commenced operations as of May 31, 1999.
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 ( See page 4/Note 1).
G. Contingencies (See Note 6).
H. Commitments (See Note 7).
I. Litigation - There is no pending litigation as represented by the
corporation's management.
NOTE 3 - ORGANIZATION COSTS
Organization costs are made up of the following items:
1999 1998 1997
Incorporation, filings, etc. 19,000 19,000 17,000
FCN Financial Services, Inc. - merger
fee 36,000 36,000 36,000
United Stock Transfer-
transfer agent 4,514 4,514 4,514
Audit and accounting fees 21,500 21,500 17,000
Standard and Poor's -
listing fees 2,080 2,080 2,080
Consulting fees 2,750 2,750 2,750
Miscellaneous costs 722 250 250
Technology and information
Rights 602,997 -0- -0-
Total - organization costs 689,563 86,094 79,594
NOTE 4 - ACCOUNTS PAYABLE/ACCRUALS
Accounts payable/accruals are made up of the following items:
1999 1998 1997
Accounting/audit fees 4,500 4,500 4,000
Legal fees 2,000 2,000 1,000
Filing fees 11,200 11,200 10,200
Stock transfer agent fees 3,764 3,764 3,764
Total - accounts payable/accruals 21,464 21,464 18,964
NOTE 5 - LOANS/ADVANCES DUE SHAREHOLDERS
A shareholder has advanced a series of loans to the Company from 1993 through
1999 totaling $33,050. No terms of repayment or interest have been established
as of the report date.
NOTE 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.
NOTE 7 - COMMITMENTS
Stock options for 400,000 shares of common stock, held by shareholders and
directors, exercisable at $.50 (fifty cents) per share, will expire on November
30, 1999. All restricted common stock issued has expired, except for
the shares
issued pursuant to the acquisition of FMCI, ESC and EFT (See Note 1).
The Company had no other commitments as of the report date.
To the Board of Directors and Stockholders of
Environmental Products Group, Inc.
(Formerly Versatech Environment Group, Inc.
and Environmental Satellite Corporation)
3325 North Service Rd.
Burlington, Ontario, Canada L7N3G2
I have audited the balance sheets of Versatech Environment Group, Inc. (A
Development Stage Company) (Formerly Environmental Satellite Corporation) as of
May 31, 1998, and 1997 and the related statements of operations 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 and 1997, and the results of its operations and of cash
flows for the years then ended in conformity with generally accepted accounting
principles. Pages 5 and 6, as related to Statement of Changes in Stockholders'
Equity from December 31, 1987 to May 31, 1995, are "unaudited" and shown for
informational purposes only.
The Company has not commenced operations and is considered a "Development Stage
Company." Additionally, the Company has not received adequate funding to date
which raises doubt about its ability as a going concern.
GERALD R. HINSHAW
Certified Public Accountant
Minooka, Illinois
November 24, 1998
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
UNAUDITED
FINANCIAL STATEMENTS
For the period ended FEBRUARY 29, 2000
TABLE OF CONTENTS
FINANCIAL STATEMENTS
STATEMENT 1 - BALANCE SHEET
1
2 - STATEMENTS OF OPERATIONS
2
3 - STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
3
4 - STATEMENTS OF CASH FLOWS
4
NOTES TO FINANCIAL STATEMENTS
5-7
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
UNAUDITED
BALANCE SHEET
FEBRUARY 29, 2000
Info Only
FEB. 29, MAY 31,
ASSETS 2000 1999
CURRENT ASSETS
Cash in Bank $ 84,752 $ 1,912
--------- ---------
OTHER ASSETS
Organization Costs (Note 3) $1,107,223 $ 689,563
---------- ---------
TOTAL ASSETS $1,191,975 $ 691,475
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable/Accruals (Note 4) $ 21,464 $ 21,464
--------- ---------
OTHER LIABILITIES
Loans/Advances due Shareholders (Note 5) $ 533,550 $ 33,050
--------- ---------
TOTAL LIABILITIES $ 555,014 $ 54,514
--------- ---------
STOCKHOLDERS' EQUITY
CAPITAL STOCK
Preferred Stock - None, Authorization of preferred
stock rescinded on October 21, 1998 (Note 1)
-0- $ -0-
Common Stock - 20,000,000 Shares authorized at
$.001 per share; 11,782,586 shares issued and
outstanding at $.001 per share at May 31, 1999,
and February 29, 2000. (SEE NOTE 1) $ 11,782 $ 11,782
ADDITIONAL PAID-IN CAPITAL (SEE NOTE 1) 625,179 625,179
--------- ---------
TOTAL STOCKHOLDERS' EQUITY $ 636,961 $ 636,961
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,191,975 $ 691,475
========= =========
"SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS"
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
UNAUDITED
STATEMENTS OF OPERATIONS
FOR THE NINE MONTH PERIOD ENDING FEBRUARY 29, 2000
ACCUMULATED EARNINGS (DEFICIT)
SINCE INCEPTION FEB. 29, 1999
--------------------------------------------------------------------------------
REVENUES $ -0-
--------------------------------------------------------------------------------
EXPENSES $ -0-
--------------------------------------------------------------------------------
NET INCOME (LOSS) $ -0-
================================================================================
EARNINGS (LOSS)
PER SHARE $ -0-
================================================================================
"SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS"
ENVIRONMENTAL PRODUCTS GROUP, INC.
(FORMERLY VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
UNAUDITED
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE NINE MONTH PERIOD ENDING FEBRUARY 29, 2000
-------------------------------------------------------
PREFERRED STOCK - No (0) Shares issued and outstanding as preferred stock was
rescinded on October 21, 1998 (See Note 1)
--------------------------------------------------------------------------------
COMMON Common Stock Additional
STOCK No. of Paid-In
ONLY Shares Amount Capital Total
--------------------------------------------------------------------------------
Totals as of May 31,
1999 11,782,586 $ 11,782 $ 625,179 $ 636,961
====================================================
============================
NO CHANGES FOR
PERIOD 6/1/99
TO 02/29/00 -0- -0- -0- -0-
----------------------------------------------
Totals as of Feb. 29,
2000 11,782,586 $ 11,782 $ 625,179 $ 636,961
=====================================================
===========================
"SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS"
ENVIRONMENTAL PRODUCTS GROUP, INC.
(FORMERLY VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
--------------------------------------------------------------------------------
UNAUDITED
STATEMENT OF CASH FLOWS
--------------------------------------------------------------------------------
FOR THE NINE MONTH PERIOD ENDING FEBRUARY 29, 2000
FEB. 29, 1999
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ -0-
--------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $ -0-
==============================================
==================================
CASH FLOWS FROM
INVESTING ACTIVITIES
Increase in organization costs $(417,660)
Decrease in Accounts Payable -0-
--------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES $(417,660)
=================================================
===============================
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from:
Shareholder $ 500,050
--------------------------------------------------------------------------------
NET CASH PROVIDED (USED)
FROM FINANCING ACTIVITIES $ 500,050
===================================================
=============================
NET INCREASE
(DECREASE) IN CASH $ 82,840
CASH - BEGINNING OF YEAR $ 1,912
--------------------------------------------------------------------------------
CASH - END OF PERIOD $ 84,752
================================================================================
"SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS"
================================================================================
ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 2000
NOTE 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, INC. 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 changed its name to ENVIRONMENTAL PRODUCTS
GROUP, INC. On the same date, the Company amended its Certificate of
Incorporation to rescind the authorization to issue preferred shares and to
reduce the number of authorized common shares it could issue from 200,000,000
with par value of $0.001 per share to 20,000,000 shares with a par value of
$0.001 per share.
On November 20, 1998, the Company acquired all the outstanding shares of
Formulated Mouldings (Canada), Inc. (FMCI), Environmental Shelter Corporation
(ESC) and Environmental Fuel Technology, Inc. (EFT). These companies were
purchased by issuing 8,389,926 shares of the Company's common stock. The
foregoing shares issued by the Company were issued pursuant to an
exemption from
registration (Section 4(2) under the Securities Act of 1933, as amended ("Act")
and Rule 504 promulgated under the Act. The shares cannot be sold or otherwise
transferred without a registration under the Act or an exemption from
registration. Rule 144 promulgated under the Act requires among other
things, a
holding period of one year from the date of receiving full consideration
for the
shares.
On May 28, 1999, the Company sold the operations of FMCI for $100.00. The sale
did not include any of the right, title and interest in and to the proprietary
information and technology concerning production of extruded plastic moldings
from scrap diaper and other material.
The Company is considered a development stage company, as defined in Statement
of Financial Accounting Standards No. 7, "Accounting and Reporting by
Development Stage Enterprises."
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. The accrual method of accounting is employed to meet generally accepted
accounting principles (GAAP).
B. Organization Costs (See Note 3) - Organization costs will be amortized over
sixty (60) months using the straight line method of amortization, upon
commencement of operations. The Company is presently considered a "Development
Stage Company", per SFAS No. 7.
C. Income Taxes - No provision for income taxes has been made because the
Company had not commenced operations as of this report date.
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 (See Note 1)
G. Contingencies (See Note 6)
H. Commitments (See Note 7)
I. Litigation - There is no pending litigation as represented by the
corporation's management.
NOTE 3. ORGANIZATION COSTS
Organization costs are made up of the following items:
Info
Only
Feb. 29, May 31,
2000 1999
Incorporation, filings, etc. $ 19,000 $ 19,000
FCN Financial Services, Inc. - Merger Fees 36,000 36,000
United Stock Transfer - Transfer Agent 4,514 4,514
Audit and accounting fees 21,500 21,500
Standard and Poor's - Listing Fees 2,080 2,080
Consulting Fees 2,750 2,750
Miscellaneous Costs 722 722
Technology and information rights 602,997 602,997
Research and Development Costs 417,660 -0-
--------- -------
Total - Organization Costs $1,107,223 $689,563
========= =======
NOTE 4. ACCOUNTS PAYABLE/ACCRUALS
Accounts payable/accruals are made up of the following items:
Info
Only
Feb. 29, May 31,
2000 1999
Accounting/Audit Fees $ 4,500 $ 4,500
Legal Fees 2,000 2,000
Filing Fees 11,200 11,200
Stock Transfer Agent Fees 3,764 3,764
------ ------
Total - Accounts Payable/Accruals $21,464 $21,464
====== ======
NOTE 5. LOANS/ADVANCES DUE SHAREHOLDERS
A shareholder has advanced a series of loans to the Company from 1993 through
this reporting period, totaling $533,550. No terms of repayment or interest
has
been established as of the report date.
NOTE 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.
NOTE 7. COMMITMENTS
The Company had no commitments as of the report date.
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:BLAINE C. FROATS
Blaine C. Froats, Chairman/CEO
