Filed: with SEC on January 28, 2000
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
NEVTAH CAPITAL MANAGEMENT CORPORATION
(Name of Small Business Issuer in its charter)
State of Nevada
(State or other jurisdiction of incorporation or organization)
88-0308333
(I.R.S. Employer Identification No.)
4400 PGA Boulevard, Suite 716
Palm Beach Gardens, Florida 33410
(Address of Principal Executive Offices)
(561) 626-9901
(Issuer's telephone number)
Securities to be registered pursuant to Section 12(b) of the Act: NONE
Securities to be registered pursuant to Section 12(g) of the Act: COMMON STOCK,
$.005 PAR VALUE.
FORM 10-SB Nevtah Capital Management Corporation Page 1
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TABLE OF CONTENTS
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PART I 3
Item 1. Description of Business......................................... 3
Item 2. Management's Discussion and Analysis or Plan of Operation....... 15
Item 3. Description of Property......................................... 17
Item 4. Security Ownership of Certain Beneficial Owners
and Management.................................................. 17
Item 5. Directors, Executive Officers, Promoters and Control Persons.... 18
Item 6. Executive Compensation.......................................... 19
Item 7. Certain Relationships and Related Transactions.................. 20
Item 8. Description of Securities....................................... 21
PART II 21
Item 1. Market Price and Dividends on the Registrant's Common
Equity and Other Shareholder Matters............................ 21
Item 2. Legal Proceedings............................................... 22
Item 3. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure............................. 22
Item 4. Recent Sales of Unregistered Securities......................... 22
Item 5. Indemnification of Directors and Officers....................... 26
Item 6. Financial Statements............................................ 27
PART III 27
Item 1. Index to Exhibits............................................... 27
Item 2. Description of Exhibits......................................... 27
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FORM 10-SB Nevtah Capital Management Corporation Page 2
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PART I
As used in this Registration Statement, the term "Company" refers to Nevtah
Capital Management Corporation. The term "Pamco" refers to Petroleum Asset
Management Company, a Delaware corporation. The term "Cybersensor" refers to
Cybersensor.Com, Inc., a Nevada corporation.
Item 1. Description of Business.
Overview
Nevtah Capital Management Corporation was incorporated on September 15,
1986 as a Nevada corporation. The Company's principal executive offices are
located at 4400 PGA Boulevard, Suite 716, Palm Beach Gardens, Florida 33410. Its
telephone number is (561) 626-9901, its facsimile number is (561) 626-2415,and
its email address is [email protected].
The Company is organized generally for the purpose of seeking and
identifying investment opportunities in certain companies that demonstrate the
potential for long-term growth primarily in the energy and technology
industries. Such opportunities may generally entail (i) investment in the common
stocks of small capitalization companies, (ii) a joint venture with a private
company, or (iii) acquisition of or a business combination with a private
company involving either a statutory merger or consolidation, asset purchase, or
"reverse merger" in which the Company acquires all of the private company's
outstanding common stock in exchange for the issuance of unregistered shares of
the Company's common stock.
Management of the Company will exercise its own judgment as to, and will be
solely responsible for, the ultimate selection of businesses for investment
opportunities. Management will consider substantial and detailed information in
connection with its decisions of whether or not to invest in an available
business opportunity. Participation by the Company in a proposed transaction may
also be based in large part on the perceived quality of the private company's
management and personnel, properties or proprietary rights, products and/or
services, marketing concepts, level of technology or other factors which may be
difficult to analyze with complete objectivity. See "Item 1. Description of
Business - Analysis and Investigation of Opportunities".
After consideration of substantial and detailed information by management,
the Company entered into an agreement with Petroleum Asset Management Company, a
Delaware corporation ("Pamco"), which generally provided for the joint
commercialization of patentable technology that radically decreases the cost of
producing oil and gas from low-volume wells (stripper wells). Pamco had
developed patentable technology for stripper well oil and gas production,
associated controller, satellite monitoring systems and Internet software.
On April 19, 1999 Pamco transferred its patentable technology to
Cybersensor.com, Inc., a new corporation formed under the laws of the State of
Nevada ("Cybersensor"). Pursuant to the transfer by Pamco to Cybersensor of the
patentable technology, associated controller, satellite monitoring systems and
Internet software (the "Cybersensor Technology"), Cybersensor issued to Pamco
5,924,816 shares of its restricted common stock, representing an approximate 80%
equity ownership interest. See "Item 1. Description of Business - Cybersensor
Technology" and "Item 7. Certain Relationships and Related Transactions."
During December 1999, the Company and Pamco agreed to amend the agreement
to provide that the Company would limit its monetary investment in Pamco to the
amount of funds already advanced. In accordance with the terms and provisions of
the amended agreement, the Company currently is the owner of record of 193,883
shares of the restricted common stock of Pamco (which represents an approximate
26.2% equity ownership interest) and the owner of record of 1,551,064 shares of
restricted common stock of Cybersensor (which represents an approximate 20.7%
equity ownership interest).
FORM 10-SB Nevtah Capital Management Corporation Page 3
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The Company's current marketing plan will focus on (i) creation and
establishment of a European market for the distribution and sale of the
Cybersensor Technology, and (ii) continuation of identification of additional
investment opportunities in certain companies that demonstrate the potential for
long-term growth. See "Item 1. Description of Business - Identification of
Additional Investment Opportunities" and " - Customers and Marketing".
As of the date of this Registration Statement, the Company is in the
developmental stage and has not generated revenues from operations. The Company
is a "development stage company" as that term is defined under the Statement of
Financial Accounting Standards, i.e., "a company for which principal operations
have not yet commenced or principal operations have generated an insignificant
amount of revenue."
Business Strategy
Investment in Petroleum Asset Management Company
Overview of the Stripper Oil and Gas Well Industry
Over the past fifteen years, the United States has been importing over half
of its crude oil products. According to the U.S. Department of Energy, the U.S.
dependence on foreign oil will reach approximately 64% by the year 2003 and
continue to grow after that. At the same time, domestic production has declined
approximately 44%. The combination resulted in a substantial decline in oil
prices over the past ten years. When oil prices fall at times to $15.00 a barrel
or lower, it becomes more and more difficult for domestic companies to produce
oil at a reasonable price. When world oil prices fall to such levels, American
producers are forced to shut down wells and, in turn, foreign oil replaces
valuable U.S. production.
This decline in oil prices had a substantial impact on the small producers
of marginal wells, known as oil and gas stripper wells. A stripper well is
defined as a well which produces 12 barrels or less of oil a day or 90,000 cubic
feet of gas or less a day. The oil stripper wells produce approximately 13% of
the U.S. domestic production, which is about a million barrels a day and 352
million barrels of oil a year. The gas stripper wells produce nearly one billion
cubic feet of gas a year. Collectively, the stripper wells produce approximately
$1.9 billion in earnings, representing a significant contribution to the U.S.
domestic oil and gas production. As of the date of this Registration Statement,
testing has shown that the Cybersensor Technology systems have reduced operating
costs by 50% to 80% on stripper oil wells while increasing production by 25% to
100%.
Management believes, therefore, that the investment by the Company in Pamco
represents a significant potential for long-term growth considering the market
potential for the Cybersensor Technology systems within the United States.
Moreover, management believes that its current strategy of focusing on the
creation and establishment of a European market for the distribution and sale of
the Cybersensor Technology will have a major impact on its long-term potential.
The Pamco Agreement
Petroleum Asset Management Company, a Delaware corporation based in
Nashville, Tennessee ("Pamco") has developed two unique technologies for
stripper well oil and gas production: (i) a computer controlled pumping system
to lift oil from stripper oil wells and water from stripper gas wells with low
pressure air or gas; and (ii) a remote monitoring and control system which
allows users to monitor and control remote units via the Internet and Low Earth
Orbit satellites. Over the past fifteen years, Pamc s technologies systems have
been under continuous development and improvement. For the last five years, the
technology systems have been in field operation, and are now ready for the
marketplace on a large scale. Subsequently, Pamco transferred its patentable
technologies, associated controller, satellite monitoring systems and Internet
software to Cybsensor.com, Inc. (the "Cybersensor Technology").
FORM 10-SB Nevtah Capital Management Corporation Page 4
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On June 4, 1998, the Company and Pamco entered into an agreement which
generally provided for the utilization of the pumping technology on oil and gas
producing wells or leases (the "Pamco Agreement"). The Pamco Agreement required
the Company to make periodic payment of capital contributions to Pamco. The
capital contributions would be used by Pamco to fund its large-scale acquisition
program of stripper oil and gas well leases within the United States and the
subsequent conversion of such wells to utilization of its technology systems.
The Pamco Agreement generally provided for the acquisition by the Company of the
exclusive rights to the technology systems to market and distribute for all
stripper oil and gas well applications, as well as for environmental uses in
cleaning up contaminated ground water, within the European market. The Pamco
Agreement also provided for the issuance by Pamco to the Company of a
convertible debenture, which provided the Company with the right to convert the
full amount of the debenture to shares of restricted common stock in Pamco at a
conversion rate of $55.56 per share or the latest market price of sales Pamco's
common stock.
Due to extreme interest in the Cybersensor Technology and the recent low
oil prices, the Company and Pamco jointly agreed to focus their current
priorities on the continued development and marketing of the Cybersensor
Technology to the oil and gas industry, including stripper oil and gas well
producers. Therefore, during December 1999, the Company and Pamco agreed to
amend the Pamco Agreement to limit Nevtah's investment in Pamco to the amount of
funds invested to date by Nevtah pursuant to its payment of the capital
contributions. In accordance with the terms and provisions of the convertible
debenture and the subsequent conversion by the Company, the Company is currently
the record holder of 193,883 shares of restricted common stock of Pamco (which
represents approximately a 26.2% equity ownership interest) and the record
holder of 1,551,064 shares of restricted common stock of Cybersensor (which
represents approximately a 20.7% equity ownership interest). See "Item 7.
Certain Relationships and Related Transactions".
Management of the Company intends to concentrate its financial resources in
the establishment and creation of a European market for the distribution and
sale of the Cybersensor Technology. As of the date of this Registration
Statement, the Company has no further plans to increase its equity position in
either Pamco or Cybersensor. Management intends to raise funds during the latter
part of fiscal year 2000 to commence its market strategy for the Cybersensor
Technology. See "Item 4. Management's Discussion and Analysis or Plan of
Operation".
The Cybersensor Technology and Related Technology
The Cybersensor Technology and related pumping technology is comprised of:
(i) a computer controlled pumping system to lift oil from stripper oil wells and
water from stripper gas wells with low pressure air or gas, providing a
significant economy of operation (the "WellMinder"); and (ii) a remote
monitoring and control system which allows users to monitor and control remote
equipment via the Internet and Low Earth Orbit satellites, without the need for
any special hardware or software other than a plug and play unit with a
universal interface/protocal on the site (the "CyberVip", also referred to as
the "Cybersensor Technology").
The WellMinder
Today, the traditional pump jack is generally utilized to pump oil from
stripper wells or to remove water from gas wells. The traditional pump jack
system has no function to monitor if fluid is present, and the only way the
operator can control a pump jack is by setting a timer based on his experience
to anticipate the well's production. If fluid is not present, wear increases
exponentially, with the result that the well goes dry and the pump system is
exposed to excess wear which results in increased maintenance costs or the pump
FORM 10-SB Nevtah Capital Management Corporation Page 5
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system breaks down. Due to the risk of damage to the pump jack system, frequent
on-site monitoring is required to avoid damage and excessive maintenance costs.
Moreover, if the well goes dry due to excessive pumping, the structure can dry
up and oil production will stop or be reduced. The well then has to be
maintained by pulling the equipment and subjecting the well to acid treatment.
After five years of extensive research and development, Pamco developed a
computer controlled pumping system to lift oil from stripper oil wells and water
from stripper gas wells with low pressure air or gas (the "WellMinder"). The
pumping system works by sensing the presence of oil in the bore hole in the
well. The pump is a simple chamber to collect fluid and fit in the well bore
casing. It has only one moving part down hole, which is a simple one way
floating ball valve. Once the WellMinder senses the presence of oil in the bore
hole of a well, it signals a computer to electronically release air or gas
pressure. The ball valve is in the inlet for allowing fluid into the system,
which then closes as pressure is applied. The system is unique in that pressure
is applied on top of the fluid forcing it down, then returning up through the
chamber and return line rather than applying pressure under the fluid at the
lowest point. This will create a slug or column affect and when enough fluid is
collected, it will hold together. The oil is collected in a cylinder. The air or
gas pressure closes the system and forces a continuous slug of oil to the
surface into a receiver for transfer to a receiving tank.
The WellMinder's efficiency is achieved through certain key features not
found on other systems: (i) monitoring the well liquid level by a down hole
sensor technique and a specifically developed controller thus pumping only on
demand when sufficient liquid is present; (ii) lifting oil to the surface with
the assistance of compressed air or gas; (iii) no moving parts above the ground,
except the compressor, and no moving down hole parts except for a ball valve
operated by the difference in pressure provided by the compressor; and (iv)
remotely controlled and monitored by a computer controller capable of
communication by satellite of the entire system (the "Cybersensor Technology").
The WellMinder has the ability to pump any type of liquid, simply by setting the
properties for the liquid in its controller. Pamco also developed a system to
allow the compressor to run of filtered gas available from either the oil or gas
well itself for locations where supply of electrical power is expensive.
Moreover, since the entire system is in contact with the liquid, including the
down hole ball valve, it is made from non-corrosive materials, such as PVC.
In addition to the unique pumping system of the WellMinder, Pamco developed
a remote control and monitoring system, which can monitor and control functions
of the system including production, pressure and tank levels. Pamco developed
technology to enable the controller of the system to communicate by satellite,
accessible via the Internet. See " - Cybersensor".
The installation cost of the WellMinder, including removal of the existing
pump jack, ranges from approximately $5,750 for a 500 ft. well to $6,800 for a
1,000 ft. well. Management of the Company has calculated that a stripper oil
well with a current production of only one barrel per day will realize an
approximate 25% increase in production and reduced annual maintenance costs of
approximately $1,000, thus realizing a full return on the investment in
approximately three years (1.7 years if 50% increase in production). Stripper
wells will typically remain in production for up to twenty years, thus providing
a significant marketing incentive for producers of stripper wells.
Management believes that the benefits of the WellMinder have the potential
to revitalize oil and gas production. These benefits include: (i) sensing and
controlling the liquid level and thus pumping on demand; (ii) separating the oil
from the gas propellent when it reaches the surface by capturing the oil in a
small receiving vessel and sending it to a storage tank, thus allowing
collection of the gas propellent; (iii) remove water from coal bed methane gas
wells automatically, thus using the gas as an energy source or allowing
collection of the gas; (iv) minimal down hole maintenance due to only one moving
part located in collection chamber; and (v) computerized operations.
FORM 10-SB Nevtah Capital Management Corporation Page 6
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Cybersensor
The development of the WellMinder was based on computer automation and an
economy of scale approach to solve the high operating and maintenance costs
associated with stripper oil and gas wells. An important feature of the
WellMinder utilizes a field computer controller to link the well site to a
central monitoring and control center. Subsequently, Pamco developed a remote
control and monitoring system which can monitor and control functions of the
WellMinder, including production, pressure and tank levels, and further
developed technology to enable its controller to communicate by satellite,
accessible via the Internet (the "Cybersensor Technology"). On April 19, 1999,
Pamco transferred the Cybersensor Technology to Cybersensor.
During the process of developing the WellMinder, Pamco discovered that the
most reliable and cost effective method of communication is by low-earth orbit
("LOE") satellite link through ORBCOMM Global, L.P. ("ORBCOMM"). The existing
satellite link technology, however, only allowed for one-way communication.
Therefore, Pamco invented and developed a proprietary web-based software system
that offers a direct satellite link to access equipment from a remote location
(the "CyberVip"). The CyberVip system provides economical two-way monitoring and
control. It utilizes low-earth orbit satellite based data communications systems
to allow end-users to adjust, control and reset parameters for sensors and field
components without the need for new PCs, software installation, special training
or additional maintenance systems.
Management of the Company believes that the strength of CyberVip is its
simplicity and versatility. A website will serve as a worldwide marketing,
information, user access and demonstration center, providing instructions to set
up, use and install CyberVip. Upon setting up the account, a Stellar radio will
be delivered to the user with instructions to plug in a specified list of
sensors and/or parameters for other compatible field equipment. The "plug and
play" approach for the low-end user is designed to limit the need for
application development and avoid the need for special training or computer
skilled people. The user can, however, expand the applications and interfacing
ability with other systems and equipment.
Management has determined that most users in the low-end market have access
to the Internet with Netscape or Internet Explorer. Thus, these users will have
computer capability to link spreadsheets and various programs on their computers
to file reports, collect and record data, and store their own information,
without the need of additional software. The user can then transfer information
from the field to his computer without special equipment, other than the Stellar
radio, a sensor and the user's own PC. The user will have the ability to
immediately receive information on an instrument panel where parameters and
feature lists can be set up and changed. The user will be able to incorporate
six sensor inputs on the basic set-up at one subscriber location and will be
billed monthly.
Management believes that certain of Cybersensor's contractual agreements
have strengthened the marketability of the Cybersensor Technology due to
Cybersensor currently being the only internet server offering a direct satellite
link and economical two-way communication capability in one process. As of the
date of this Registration Statement, Cybersensor has entered into a value added
reseller agreement with ORBCOMM and has formed an alliance with Stellar
Satellite Communications, Inc. ("Stellar") to furnish equipment, accommodate the
target market and meet communications requirements.
Cybersensor is responsible for the development of a marketing strategy to
target the demand for an efficient and cost-effective method of controlling and
monitoring a variety of oil and gas well field equipment from remote locations
around the world (plus flow meters, water meters and other equipment). The first
installation and beta test is being conducted using the WellMinder. Many oil and
gas companies have both stripper and high volume wells, thus bringing the
marketing potential within the United States to over 500,000 wells. Although the
CyberVip software is currently in operation for monitoring wells in the energy
industry, management believes that the application of CyberVip will extend to
virtually any industry or any remote monitoring/control need. See " - Customers
and Marketing".
FORM 10-SB Nevtah Capital Management Corporation Page 7
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Identification of Additional Investment Opportunities
As of the date of this Registration Statement, management of the Company
has not identified any other business opportunities that it plans to pursue nor
has the Company reached any agreement or definitive understanding concerning
such an acquisition. Management intends to search for business opportunities in
any geographical area primarily in the energy and technology industries.
Management intends to seek business opportunities demonstrating the potential
for long-term growth.
Analysis and Investigation of Opportunities
Management of the Company will exercise its own judgment as to, and will be
solely responsible for, the ultimate selection of additional business
opportunities. Management will consider substantial and detailed information in
connection with its decisions of whether or not to invest in a business
opportunity. Such information may include financial analysis and review of the
proposed business and industry, market surveys and consultations with industry
experts. Management also anticipates that it will consider the following
factors: (i) total and net assets and shareholders' equity, (ii) current and
long-term liabilities, (iii) gross revenues and earnings for the prior three
fiscal years, (iv) potential for revenue and earnings growth, (v) existing and
potential competition, (vi) proprietary and state-of-the-art technology, patents
and trademarks, (vii) capabilities and experience of current management and
potential for recruitments, (viii) capital requirements, (ix) availability of
new capital, debt financing sources and relationships with existing lenders, (x)
cost and form of participation by the Company, (xi) special risks associated
with the business and its industry, and (xii) perceived desirability of the
business to investors in the capital markets.
Participation by the Company in a proposed investment opportunity may also
be based in large part on the perceived quality of the company's management and
personnel, properties or proprietary rights, products and/or services, marketing
concepts and potential, level of technology or other factors which may be
difficult to analyze with complete objectivity.
Forms of Potential Investment in Business Opportunities
Management of the Company will generally consider substantial and detailed
information in connection with its decision of whether or not to invest in a
business opportunity. Based upon such an analysis and review, management will
determine the suitable legal structure or method to be selected. As of the date
of this Registration Statement, it is impossible to predict the manner in which
the Company may participate in a future business opportunity.
An acquisition or a business combination may occur in one of several
methods, such as investment in the common stocks of private companies, a
statutory merger or consolidation, asset purchase, or "reverse merger" in which
the Company acquires all of the private company's outstanding common stock in
exchange for the issuance of unregistered shares of the Company's common stock.
Management of the Company does not anticipate that such acquisitions or business
combinations will involve a cash purchase of the assets or the outstanding
voting stock of a viable business due to the focus of the Company's financial
resources on the marketing strategy of the Cybersensor Technology.
Prior to any merger or consolidation or other corporate transaction
involving substantially all of the Company's assets, management will voluntarily
seek the approval of the Company's shareholders. Management intends to provide
its shareholders with complete disclosure and documentation regarding the
proposed business opportunity. Such disclosure and documentation will be in the
form of a proxy statement in compliance with the rules and regulations of the
Securities Exchange Act of 1934, as amended (the "1934 Exchange Act"), and will
be distributed to the shareholders of the Company at least twenty (20) days
prior to any shareholders meeting.
FORM 10-SB Nevtah Capital Management Corporation Page 8
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Sources of Revenue
From inception (September 15, 1986) to December 31, 1998, the Company has
spent approximately $2,075,569 on general and administrative expenses and
interest relating to the business of seeking and identifying investment
opportunities with certain companies, the consummation of the Pamco Agreement,
and fulfillment of certain of its obligations under the Pamco Agreement. As of
the date of this Registration Statement, the Company has limited its financial
investment in Pamco to amounts invested to date and has conducted limited
business operations pertaining to the creation and establishment of a European
market for the distribution and sale of the Cybersensor Technology.
A twelve-month development plan and budget for fiscal year 2000 of
approximately $1,000.000 is proposed by the Company. Funding will cover the
following major areas of business activity:
o Establishment and Creation of a European Market for the
Distribution and Sale of the Cybersensor Technology.
o Continued identification of Additional Investment Opportunities
in Certain Companies.
Management believes that a substantial portion of the twelve-month budget
of $1,000,000 will be funded pursuant to a private placement offering under
Regulation D, Rule 506, and through bond issues.
During fiscal years 1997 and 1998, the Company has not generated
significant revenues from operations. The Company's continued financial
operations and movement into an operating basis are contingent on the successful
marketing of the Cybersensor Technology , the further identification of possible
investment opportunities, and the continuing ability to generate capital
financing..
Competition
The Company is aware that any competition to utilization of the Cybersensor
Technology and related pumping technology by producers of stripper wells is from
use of the traditional pump jack. Although there are initial installation
charges for the Cybersensor Technology, management believes that the
start-of-the-art technology and efficiency of the Cybersensor Technology will
provide long-term benefits to the producers of stripper wells, thereby
diminishing any existing viable competition. Moreover, as of the date of this
Registration Statement, management of the Company is not aware of any kind of
technology within the United States or Europe which challenges the WellMinder.
The technology of the WellMinder is covered under patent and, in management's
opinion, is fully protected. Management also does not believe that technology
exists within the United States or Europe similar to the Cybersensor Technology
(remote control and communication by satellite via the Internet and proprietary
low cost controllers). There is no guarantee, however, that other similar
technologies or new technologies with similar capabilities will not be developed
thus developing long-term competition. Such potential competitors may have more
experience and greater technical, financial and marketing resources than Pamco
and Cybersensor, and thus have an adverse and material impact on the marketing
operations of the Company within Europe and on the Company's investment in Pamco
and Cybersensor.
The Company will also be in direct competition with many entities in its
efforts to identify and locate investment opportunities in suitable businesses.
The Company's major competitors include business development companies, venture
capital partnerships and corporations, small business investment companies,
venture capital affiliates of industrial and financial companies, broker-dealers
and investment bankers, management consultant firms, and private individual
investors. Most of these entities may possess greater financial resources and
will be able to assume greater risks than those which the Company, with its
limited capital, could consider.
FORM 10-SB Nevtah Capital Management Corporation Page 9
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Marketing Strategy
The WellMinder
Management believes that Pamco intends to concentrate its resources in
marketing the Cybersensor Technology and related pumping technology within the
United States for stripper well oil and gas production, and believes that
stripper wells represent an immediate market opportunity. Statistics reflect
that there are approximately 433,171 stripper wells in operation in the United
States. Moreover, pursuant to the provisions of the Pamco Agreement, the Company
has acquired the rights to market and distribute the Cybersensor Technology
within Europe. Management anticipates commencement of such marketing and
distribution of the Cybersensor Technology in Europe by the end of the third
quarter of fiscal year 2000. To benefit from the opportunities in the European
markets, management has taken steps to find a suitable location in Europe in
order to set up a sales, distribution and manufacturing base. As of the date of
this Registration Statement, the Company has reviewed various locations,
potential customers and strategic alliances.
CyberVip
The marketing plan relating to CyberVip is based in part on the philosophy
that the services will be priced at a very affordable level for virtually any
business customer, including those producers of stripper oil and gas wells
utilizing the WellMinder. Management believes that by offering low, affordable
pricing and relying on monthly fees that can create financial returns that will
increase on an exponential basis as the client base increases, future
competition will be discouraged. Moreover, the marketing plan and approach
regarding the CyberVip is not to solve complex applications or systems requiring
high speed data transfer or data logging, but the small "data snapshot"
information systems where the user will only need to operate a simple valve,
monitor a sensor or change a small setting or operating parameter.
Although the CyberVip is currently in operation for monitoring wells in the
energy industry, management believes it is clear that the application of
CyberVip will extend to virtually any industry or any remote monitoring/control
need. Management believes that the potential market is expected to be in the
tens of thousands of units annually, and is preparing to meet a significant
demand in the marketplace. Therefore, management also intends to target the
following initial industries and users within Europe: (i) utility organizations
including gas, water, electric and sewer; (ii) oil and gas producers,
distributors and transportation operations; (iii) various industry and
manufacturing equipment such as robotic sorters, conveyor systems, tanks, meters
and valving; (iv) companies having components and/or equipment operated by
others with access to integral working components for recording, regulating and
monitoring of operations.
The first installation of the CyberVip and beta test is being conducted
using the WellMinder. The CyberVip will soon be ready to market in this segment
of the energy industry and then expand into other applications. In developing
the markets, the intent is to limit the use of CyberVip to a "data snapshot"
transmitting level of communications. This process has begun by interfacing the
WellMinder with the Stellar EL-2000 to control and monitor stripper well
functions. Management believes that Cybersensor intends to demonstrate to major
oil and gas companies the ability to operate the WellMinder with remote
management and to then expand the same limited, low-end applications to other
areas of the industry that need low-cost systems to monitor and control other
field equipment and components.
Employees and Consultants
As of the date of this Registration Statement, the Company does not employ
any persons on a full-time or on a part-time basis. All services for the Company
are provided either by verbal commitment, contract or work orders on an "as
needed" basis. During January 1999, the Company entered into a contract with RLK
FORM 10-SB Nevtah Capital Management Corporation Page 10
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International Group, Inc., a Florida corporation ("RLK") whereby RLK performs a
wide range of management, administrative, financial, marketing and public
company operational services. See " Item 5. Directors, Executive Officers,
Promoters and Control Persons".
The Company is not a party to any labor contract or collective bargaining
agreement. The Company has experienced no significant labor stoppages in recent
years, and management believes that such relations are satisfactory.
Patents, Licenses, Trademarks, Concessions and Royalty Agreements
The Company has no patents, trademarks, licenses, franchisees, concessions
or royalty agreements that are material to the business as a whole.
Pamco applied to the United Stated Department of Commerce, Patent and
Trademark Office and received issuance of patents for a number of claims
covering the pumping technology (the "WellMinder").
During 1999, Cybersensor applied to the United States Department of
Commerce, Patent and Trademark Office for issuance of patents for a number of
claims covering the CyberVip. Upon issuance, the patents will be the property of
Cybersensor.
Obtaining patents is a time consuming process, therefore, management
expects that it may be as long as two years before the patents are issued to
Cybersensor. Cybersensor will have the right for a period of time to modify its
original filings to incorporate new data and processes that are added to the
CyberVip process in the near future. With the U.S. Patent Office's established
policy of allowing software patents as well as the recent U.S. Supreme Court
ruling allowing "business methods" to be patented, management believes that the
protection afforded by the patent for the intellectual property will be broad in
scope.
In addition to the patent applications, Cybersensor has filed for national
trademark protection for the names "cybersensor.com", "Cyber.Vip", "CyberStat"
and other names that are expected to be used for future products or product
features.
Government Regulation
Cybersensor Technology Products. The ownership and operations of satellite
communication systems are subject to significant regulation by the Federal
Communications Commission (the "FCC") under authority granted by the
Communications Act of 1934, as amended, and related federal laws. Cybersensor
and other related companies must comply with such rules and regulations and with
any applicable licensing requirements. While such rules and regulations
currently support Cybersensor's ongoing operations, such rules and regulations
may be amended in the future possibly resulting in increased operational costs
and restraint of activity. Moreover, the satellite operations are also subject
to international frequency coordination which may require Cybersensor to
entertain requests for accommodation by other nearby satellite systems.
Stripper Wells. Pamco's business operations in general are subject to
substantial governmental regulation including federal, state and local laws
concerning, but not limited to, such factors as safety, land use and
environmental protection. Pamco must also comply with local, state and federal
requirements regarding well drilling and production operations, well testing and
completion, inspections, royalty payments, lease rental fees, public safety, air
quality, reclamation and wildlife protection, as well as laws protecting the
rights of other property owners and the public. Pamco must also obtain and
comply with local, state and federal permits, including environmental permits.
Due to the overall substantial decline in oil prices and the adverse effect
on stripper wells, their continued existence and contribution to the domestic
oil production, Congress and state legislatures have recently enacted laws which
generally provide for tax relief and incentives. The Federal Oil and Gas
FORM 10-SB Nevtah Capital Management Corporation Page 11
<PAGE>
Stripper Well Preservation Act of 1998 authorizes and directs the Secretary of
the Interior to provide permanent regulatory authority to reduce the royalty
rates paid on oil and gas wells on federal lands. In addition, the statute also
requires the Secretary of Interior to suspend any maximum royalty and per acre
lease rental on stripper gas wells on federal lands during the time of any
royalty rate reduction. The Federal Gas Lease Management Improvement Act of 1998
transfers the authority of the Bureau of Land Management ("BLM") to perform
certain duties such as well drilling and production operations, well testing and
completion, inspections, and enforcement activities to the States. The statute
further requires the BLM to offer competitive oil and gas leases 90 days after
lands are nominated by prospective lessees, and to render final decisions on
administrative appeals within ten days, thus eliminating costly delays and
litigation.
Risk Factors
The shares of the Company are highly speculative and involve an extremely
high degree of risk. Shareholders of the Company should consider the following
risk factors.
Risk Factors Pertaining to the Company
THE COMPANY HAS A LACK OF SUBSTANTIAL OPERATING HISTORY AND REVENUES
The Company is in the developmental stage, and has no substantial history
of operations. Therefore, the Company does not have any prior financial results
upon which an assessment of the Company's potential for success may be based.
Accordingly, the success of the Company is dependent on its ability to market
the Cybersensor Technology and related technology products within Europe, and to
continue to identify additional investment opportunities for the Company. The
success of the Company is also dependent on management's ability to continue
generating capital financing. The Company faces all of the risks specifically
inherent in the type of business in which the Company engages. There can be no
assurance that the Company will be able to operate successfully or profitably.
The auditors have deemed the Company a going concern; that is, assumption of the
continuity of operations of the Company in the absence of evidence to the
contrary. See "Financial Statements"
THE COMPANY DEPENDS ON KEY PERSONNEL
The Company is in the developmental stages with no substantial prior
operating history. The success of the Company will depend to a significant
extent upon the efforts and abilities of its officers and directors. The
officers and directors of the Company have considerable experience in marketing
and finance, and limited experience in the oil and gas industry. The loss of any
of the Company's officers or directors could be detrimental to the operations of
the Company. The Company has not entered into any long-term employment
agreements with nor has it purchased "key man" life insurance for any of its
officers and directors. The Company's officers and directors may engage in other
businesses for their own account. They will devote such time to the affairs of
the Company as they deem necessary. See "Item 5. Directors, Executive Officers,
Promoters and Control Persons".
THE COMPANY MAY NEED ADDITIONAL CAPITAL BUT IT MIGHT NOT BE AVAILABLE
The Company's business operations have been designed to generally focus on
its investment in Pamco, the marketing of the Cybersensor Technology and related
technology, and the identification of additional investment opportunities. If
Pamco and Cybersensor do not proceed in the form and manner anticipated by
management of the Company, substantial additional financing may be needed to
fund further marketing efforts and operational processes. The Company may not
have sufficient funds to cover such expenses and, therefore, substantial
additional funds will be required. The Company may attempt to raise such funds
from additional debt offerings and offerings of shares of stock, however, there
can be no assurance that the Company will be successful in raising additional
capital.
FORM 10-SB Nevtah Capital Management Corporation Page 12
<PAGE>
CONFLICTS OF INTEREST MAY EXIST
The Company's officers and directors may engage in other business interests
for their own account in which they, respectively, may devote a certain amount
of their attention. As a result, there may be potential conflicts of interest
including, among other things, time, effort and corporate opportunity, which may
result from participation by such officers and directors in potentially
competing business ventures. Such conflicts can be resolved through the exercise
by these individuals of judgment consistent with their respective fiduciary
duties to the Company. The officers and directors of the Company intend to
resolve such conflicts in the best interests of the Company. Moreover, the
officers and directors of the Company will devote their time to the Company as
they deem necessary.
FUTURE SALES OF COMMON STOCK MAY ADVERSELY AFFECT MARKET PRICE
As of the date of this Registration Statement, the Company has 18,333,511
shares of its Common Stock issued and outstanding. Of the 18,333,511 of the
Company's current outstanding shares of Common Stock, 10,394,511 shares are free
trading and 7,939,000 shares are restricted as that term is defined in Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
The Securities Act and Rule 144 promulgated thereunder place certain
prohibitions on the sale of such restricted securities. Such restricted shares
will not be eligible for sale in the open market without registration except in
reliance upon Rule 144 under the Securities Act. In general, a person who has
beneficially owned such shares in a non-public transaction for at least one
year, including persons who may be deemed "affiliates" of the Company as that
term is defined under the Securities Act, would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of 1% of
the then outstanding shares or the average weekly trading volume on all national
securities exchanges and through NASDAQ during the four calendar weeks preceding
such sale, provided that certain current public information is then available.
If a substantial number of the shares owned by the existing shareholders were
sold pursuant to Rule 144 or a registered offering, the market price of the
Company's Common Stock could be adversely affected.
VOLATILITY OF STOCK PRICE
The markets for equity securities have been volatile and the price of the
Company's Common Stock could be subject to wide fluctuations in response to
quarter to quarter variations in operating results, news announcements, trading
volume, sales of Common Stock by officers, directors and principal shareholders
of the Company, general trends, changes in the supply and demand for the
Company's shares, the price of oil, and other factors.
BROKER-DEALER SALES OF THE COMPANY'S COMMON STOCK
The common shares of the Company will be defined as "penny stocks" under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Exchange Act and such penny stock rules and regulations promulgated thereunder
generally impose additional sales practice and disclosure requirements upon
broker-dealers who sell the Company's Common Stock to persons other than
"accredited investors" (generally, defined as institutions with assets in excess
of $5,000,000 or individuals with net worth in excess of $1,000,000 or an annual
income exceeding $200,000 ($300,000 jointly with a spouse)) or in transactions
not recommended by the broker-dealer.
For transactions covered by the penny stock rules, the broker-dealer must
make a suitability determination for each purchaser and receive the purchaser's
written agreement prior to the sale. In addition, the broker-dealer must make
certain mandated disclosures in penny stock transactions, including the actual
sale or purchase price and actual bid and offer quotations, the compensation to
be received by the broker-dealer and certain associated persons, and deliver
certain disclosures required by the Securities and Exchange Commission.
Consequently, the penny stock rules may affect the willingness of broker-dealers
to make a market in or trade the common shares of the Company and thus may also
affect the ability of shareholders of the Company's Common Stock to resell those
shares in the public markets.
FORM 10-SB Nevtah Capital Management Corporation Page 13
<PAGE>
Risk Factors Pertaining to the Business of the Company
Cybersensor Technology Products
THE COMPANY'S BUSINESS COULD SUFFER IF CYBERSENSOR DOES NOT KEEP CURRENT
WITH RAPIDLY CHANGING MARKET FOR SATELLITE COMMUNICATIONS
The market for satellite communications may change rapidly. The Company's
success depends, in part, on the ability of Pamco/Cybersensor to respond and
adapt to such changes if necessary. Management cannot guarantee that if the
market changes rapidly, Cybersensor will be able to implement an operational
strategy that would be successful. The market for satellite communications is
also marked by the continuous introduction of new products and services and
increased capacity for services similar to those of the Cybersensor Technology
products. Future technological advances may result in the availability of new
products or services and increase the efficiency of existing products or
services. If a technology becomes available that is more cost-effective or
creates a superior product, Cybersensor may be unable to access such technology
or finance the necessary substantial capital expenditures that may be required.
The Cybersensor Technology may be rendered less profitable or less viable by
existing, proposed or as yet undeveloped technologies, thus adversely affecting
the Company's marketing of the Cybersensor Technology products.
THE CYBERSENSOR TECHNOLOGY PRODUCTS DEPEND ON PROPRIETARY INFORMATION
The Cybersensor Technology products depend on technical knowledge, and
management believes that the Company's future success is based in part on the
ability of Pamco/Cybersensor to keep up with new technological developments.
Pamco/Cybersensor will own or have the right to use such inventions, designs,
software, systems and know-how pursuant to the pending patent application.
Pamco/Cybersensor must diligently protect that information, and while
Pamco/Cybersensor has taken steps to protect such information, Pamco/Cybersensor
cannot guarantee that the information will not be disclosed to others or that
others will not independently develop similar information, systems and know-how.
The disclosure of such information or development of similar information by
others may adversely affect the Company's marketing of the Cybersensor
Technology products.
THE COMPANY'S BUSINESS DEPENDS ON EXISTING CONTRACTUAL RELATIONS
The Company's success will depend on the successful introduction and
marketing of the Cybersensor Technology products in the marketplaces of Europe
which, in turn, is dependent on the continued existence of favorable contractual
relations with Pamco. The Company's success will also depend, in turn, on the
continued existence of favorable contractual relations between PAMCO and
Cybersensor and the respective suppliers, including ORBCOMM and Stellar. The
Company's operations may be materially and aversely affected by the failure of
any such parties to honor such contractual agreements. In the event of a
dispute, enforcement of these agreement could be time consuming and costly.
There is no assurance that such favorable contractual relations will continue
and, if so, that they will be in the best interests of the Company.
LACK OF EUROPEAN MARKET ANALYSIS FOR CYBERSENSOR TECHNOLOGY PRODUCTS
The success of marketing the Cybersensor Technology and related technology
products in Europe is subject to a number of business, economic and regulatory
factors, including the extent to which prospective customers will purchase the
Cybersensor Technology and related technology products. Such factors are beyond
the Company's control. The vitality of the Company's business, therefore,
depends on the successful implementation of a marketing strategy. The Company
has not conducted any formal market surveys in Europe, and the view of
management concerning the market potential for the Cybersensor Technology and
related technology products are the personal views of management and are not
based upon any formal market research. If the Company cannot gain market
acceptance for the Cybersensor Technology and related technology products in
Europe or, if such a market acceptance exists and is not of the magnitude
anticipated by management, the business operations of the Company may be
adversely affected.
FORM 10-SB Nevtah Capital Management Corporation Page 14
<PAGE>
SATILLITE COMMUNICATIONS IS SUBJECT TO GOVERNMENT REGULATION
The operations of satellite communications are subject to significant
regulation by the Federal Communications Commission (the "FCC"), under authority
granted by the Communications Act of 1934, as amended, and related federal laws.
The Company cannot guarantee that the rules and regulations of the FCC will
continue to support the business operations as presently conducted by
Cybersensor, ORBCOMM and Stellar. Also, satellite operations are subject to
international frequency coordination, which may require consideration of
accommodation requests from nearby satellite systems. The Company cannot
guarantee that any and all existing licenses held by either Cybersensor, ORBCOMM
or Stellar will be renewed and requisite frequencies coordinated, which would
have an adverse effect on the business operations of the Company.
PAMCO/CYBERSENSOR COULD LOSE REPUTATION IF IT IS NOT YEAR 2000 READY
Many currently installed computer systems and software products are coded
to accept only two-digit entries in the date code field. Many such systems will
need to accept four-digit entries in order to distinguish 20th century dates
from 21st century dates. As a result, before the end of year, computer systems
and software used by many companies need to be upgraded to comply with these
"Year 2000" requirements. Otherwise, these systems may cause miscalculations
that will interfere with business activities or simply fail to work. The use of
the term "Year 2000 Ready" means that customers will not experience any material
difference in performance and functionality as a result of the date being prior
to, during or after the year 2000. Management of the Company believes that the
systems of Pamco, Cybersensor, ORBCOMM and Stellar are Year 2000 ready, however,
there are no assurances that some applications may fail.
RISKS OF INTERNATIONAL SALES OF CYBERSENSOR TECHNOLOGY PRODUCTS
The Cybsensor Technology and related technology products will be sold by
the Company in the marketplaces of Europe. International sales may be subject to
political and economic risks, including political instability, currency controls
and exchange rate fluctuations, and changes in import/export regulations, tariff
and freight rates. Changes in tariffs or other trade policies could adversely
affect the Company's potential customers.
Identification of Additional Investment Opportunities
THERE ARE UNSPECIFIED ADDITIONAL BUSINESS OPPORTUNITIES
Management has not identified any potential business opportunities for
acquisition by the Company nor has it identified any specific business within an
industry or geographical area of operation for evaluation of potential business
opportunities. The Company does not have any current arrangements, agreements or
understandings with respect to acquiring or engaging in a business combination
with any privately held company or other business venture. Shareholders of the
Company will be entirely dependent upon management to select suitable business
opportunities. There can be no assurance that the Company will be successful in
identifying and evaluating suitable business opportunities or in consummating
any investment transaction.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Results of Operation
For Fiscal Year Ended December 31, 1998 compared with Fiscal Year Ended
December 31, 1997
The Company's net losses for fiscal year ended 1998 were approximately
$743,263 compared to a net loss of approximately $1,019,083 for fiscal year
ended 1997. During both fiscal years, the Company recorded no income.
FORM 10-SB Nevtah Capital Management Corporation Page 15
<PAGE>
During fiscal year 1998, the Company recorded operating expenses of
$743,263 compared to $1,019,083 of operating expenses recorded during fiscal
year 1997. Although interest expense increased by approximately $45,746 during
fiscal year 1998, general overhead and administrative expenses decreased
approximately $321,566 during fiscal year 1998 compared to fiscal year 1993,
generally resulting in the decrease of operating expenses during fiscal year
1998. The overhead and administrative expenses are primarily costs associated
with consummation of the transaction with Pamco and the continuous
identification of potential investment opportunities, which includes travel,
financing, administration, and consulting.
For Nine Month Period Ended September 30, 1998 compared with Nine Month
Period Ended September 30, 1997
The Company's net losses for the nine month period ended September 30, 1999
were approximately $480,971 compared to a net loss of approximately $506,199 for
the nine month period ended September 30, 1998. During both nine month periods,
the Company recorded no income.
During the nine month period ended September 30, 1999, the Company recorded
operating expenses of $480,971 compared to $506,199 of operating expenses
recorded during the nine month period ended September 30, 1998. General overhead
and administrative expenses decreased approximately $16,071 and interest expense
decreased approximately $9,157 during the nine month period ended September 30,
1999 compared to the nine month period ended September 30, 1998, resulting in
the decrease of operating expenses during the nine month period ended September
30, 1999. The overhead and administrative expenses are primarily costs
associated with consummation of the transaction with Pamco and the continuous
identification of potential investment opportunities, which includes travel,
financing, administration, and consulting.
Liquidity and Capital Resources
For Fiscal Year Ended December 31, 1998
As of December 31, 1998, the Company had no current assets and its long
term assets were $415,000. As of December 31, 1998, the Company's liabilities
were $1,611,909. As of December 31, 1998, the liabilities exceeded assets by
$1,196,909.
The increase in assets in fiscal year 1998 was due primarily to the value
of the convertible debenture issued to the Company by Pamco pursuant to the
terms of the Pamco Agreement. The increase in liabilities in fiscal year 1998
was due primarily to notes payable to related parties in the aggregate amount of
$1,231,648. The notes are due on demand until paid in full and/or converted into
shares of common stock of the Company.
Stockholders' equity (deficit) decreased from ($974,556) for fiscal year
ended 1997 to ($1,196,909) for fiscal year ended 1998. To provide capital, the
Company sold stock in private placement offerings or issued stock in exchange
for debts or pursuant to contractual relations of the Company. See "Part II.
Item 4. Recent Sales of Unregistered Securities".
For Nine Month Period Ended September 30, 1999
As of the nine month period ended September 30, 1999, the Company had no
current assets and its long term assets were $1,015,000. This increase in assets
from fiscal year ended December 31, 1998 was due primarily to the Company's
investment in and receipt of a promissory note in the amount of $1,015,000 in
the Cybersensor Technology. As of the nine month period ended September 30,
1999, the Company's liabilities were $1,310,380. This decrease in liabilities
from fiscal year ended December 31, 1998 was due primarily to the issuance of
20,000,000 shares of Common Stock of the Company in consideration of the
advancement of $200,000 of stock subscriptions and the conversion of $1,000,000
in debt into 26,000,000 shares of Common Stock. See "Part II. Item 4. Recent
Sales of Unregistered Securities".
FORM 10-SB Nevtah Capital Management Corporation Page 16
<PAGE>
Stockholders' equity (deficit) increased from ($1,196,909) for fiscal year
ended December 30, 1998 to ($295,380) for the nine month period ended September
30, 1999.
Significant and Estimated Commitments
As of the date of this Registration Statement, the Company has the
following significant and material contractual commitments for fiscal year 2000.
A significant and estimated commitment for the Company for fiscal year 2000
pertaining to contractual arrangements and work orders is an amount not greater
than approximately $204,000 to RLK International Group, Inc., a Florida
corporation ("RLK"). During January 1997, the Company entered into a management
services agreement with RLK for the day-to-day operations of the Company. The
agreement provides rendering of services at a cost not to exceed $12,000 per
month and payment of office and overhead not to exceed $5,000 per month. The
Company is charged the monthly fee by RLK for performance of services rendered
on an ongoing basis commensurate with the needs and requirements of the Company
for that particular month, including services related to marketing,
administrative, public company operations, and maintenance.
From the date of this Registration Statement, management believes that the
Company can satisfy its cash requirements for approximately the next two months
based on its current assets.
Based upon the twelve-month operational plan proposed by management
discussed above in "Description of Business - Sources of Revenue", it is
anticipated that such an operational plan would require approximately $1,000,000
of additional financing. Such financing would cover the following major areas in
the approximate amounts as follows: $600,000 for establishment of sales and
distribution base in Europe; $100,000 for further identification of acquisition
of investments in certain companies, and $200,000 for overhead and
administrative expenses.
Management does not anticipate any purchases or sales of plant and/or
significant equipment, nor does it expect any significant changes in the number
of its employees.
Item 3. Description of Property.
Except as described above, the Company does not own any other real estate
or other properties. The Company leases office space and its offices are located
at 4400 PGA Boulevard, Suite 716, Palm Beach Gardens, Florida 33410. Management
believes that the Company's offices are adequate for its reasonable foreseeable
needs. The Company does not intend to acquire any additional properties.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth the name and address, as of the date of this
Registration Statement, and the approximate number of shares of Common Stock of
the Company owned of record or beneficially by each person who owned of record,
or was known by the Company to own beneficially, more than five percent (5%) of
the Company's Common Stock, and the name and shareholdings of each officer and
director, and all officers and directors as a group as of the date of this
Registration Statement.
- --------------------------------------------------------------------------------
Title of Class Name and Address Amount and Nature (1) Percent
of Beneficial Owner of Beneficial Owner of Class
- --------------------------------------------------------------------------------
(2)
Common Stock All directors as a group 1,242,500 6.8%
(3 persons)
- --------------------------------------------------------------------------------
FORM 10-SB Nevtah Capital Management Corporation Page 17
<PAGE>
(1) Does not assume the exercise of options pursuant to the terms of the
Non-Qualified Stock Option Plan to purchase an aggregate of 1,040,000
shares of restricted Common Stock at $.40 per share (excluding the 400,000
options exercised by Mr. Kesonen). See "Executive Compensation - Non
Qualified Stock Option Plan."
(2) These are restricted shares of Common Stock.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and executive officers of the Company are as follows:
Name Age Position with the Company
- ---- --- -------------------------
Daniel Kesonen 53 President and Director
Laurence C. Jones 52 Director
Michael MacDonald 56 Secretary, Treasurer and Director
DANIEL KESONEN has been the President and a Director of the Company since
October 6, 1995. Mr. Kesonen has lead a distinguished career in the private
sector in project management, finance and business management. His background in
the investment banking industry will aid in the course of developing the
nfrastructure, financial resources and marketing strategy for the Company. Mr.
Kesonen devotes a substantial amount of his time to the operations of the
Company. For the past five years, Mr. Kesonen has been a managing director of
RLK International Group, investment bankers with offices in Florida and Zurich,
Switzerland. He was also president of PLC Systems, Inc., a vice president of
Shearson Lehman Brothers, a vice president of E.F. Hutton and a vice-president
of A.G. Edwards & Sons.
LAURENCE C. JONES has been the Secretary, Treasurer and a Director of the
Company since 1997. Mr. Jones has extensive experience in the London financial
markets. His background in the international investment banking industry will
aid in the course of establishing the Company's base in Europe. Mr. Jones
devotes most of his time to the operations of the Company. For the past five
years, Mr. Jones has been a consultant to the financial company of Chiltern
Group Plc. He was also a former chairman and managing director of Barclays
Metals Limited and a current director of the London Metal Exchange Ltd.
MICHAEL MACDONALD has been a Director of the Company since 1999. Mr.
MacDonald has extensive investment experience in corporate finance and public
accounting. Mr. MacDonald has spent that past twenty years as the founder of
Business Advisory Group, Inc., a Florida company specializing in the
consultation to the private investment community and is currently Managing
Director.
Mr. Kesonen devotes a substantial amount of his time to the business
operations of the Company. Messrs. Jones and MacDonald each devote part of their
time to the business operations of the Company. At the present time, no family
relationship exists among any of the named directors and executive officers. No
arrangement or understanding exists between any such director or officer and any
other persons pursuant to which any director or executive officer was elected as
a director or executive officer of the Company. The directors of the Company are
elected annually and serve until their successors take office or until their
death, resignation or removal. The executive officers serve at the pleasure of
the Board of Directors of the Company.
As of the date of this Registration Statement, no director or executive
officer of the Company is or has been involved in any legal proceeding
concerning (i) any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
FORM 10-SB Nevtah Capital Management Corporation Page 18
<PAGE>
bankruptcy or within two years prior to that time; (ii) any conviction in a
criminal proceeding or being subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses) within the past five years; (iii)
being subject to any order, judgment or decree permanently or temporarily
enjoining, barring, suspending or otherwise limiting involvement in any type of
business, securities or banking activity; or (iv) being found by a court, the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law (and the
judgment has not been reversed, suspended or vacated).
Item 6. Executive Compensation.
As of the date of this Registration Statement, the Company does not pay
fees to any of its directors or officers as compensation for their directorship
or executive officer roles. As of fiscal years ended December 31, 1998 through
date of inception, the Company has not accrued nor paid its officers and
directors compensation. All executive officers and directors of the Company are
reimbursed, however, for any out-of-pocket expenses incurred by them on behalf
of the Company. Executive compensation is subject to change concurrent with
board of director approval. Mr. Kesonen is also a member of the board of
directors of Pamco.
Pursuant to the agreement between the Company and RLK International Group,
Inc., a Florida corporation ("RLK"), services rendered or to be rendered
pursuant to the terms and provisions are: (i) financial, such as business
planning, capital and operating budgeting, bookkeeping, financial statement
services, auditor liaison, banking, record keeping and documentation, database
records, and (ii) administration, such as legal liaison, corporate minute book
maintenance and record keeping, corporate secretarial services, printing and
production, office and general duties, international business relations,
corporate information distribution and public relations, and media liaison. Mr.
Kesonen is a director and the president of RLK.
Non-Qualified Stock Option Plan
On March 1, 1999, the Board of Directors of the Company adopted a
Non-Qualified Stock Option Plan (the "SOP") which provides for the grant of
options to purchase an aggregate of 2,000,000 shares of Common Stock at $.40 per
share. The purpose of the SOP is to make options available to directors,
management and significant contractors of the Company in order to encourage them
to secure an increase on reasonable terms of their stock ownership in the
Company and to encourage them to remain in the employ of the Company, and to
provide them compensation for past services provided.
The SOP is administered by the Board of Directors which determines the
persons to be granted options under the SOP, the number of shares subject to
each option, the exercise price of each option and the option period, and the
expiration date of such options. The exercise of an option may be less than fair
market value of the underlying shares of Common Stock. No options granted under
the SOP will be transferable by the optionee other than by that provided by the
Option Grant Agreements or will or the laws of descent and distribution and each
option will be exercisable, during the lifetime of the optionee, only by such
optionee.
The exercise price of an option granted pursuant to the SOP may be paid in
cash, by the surrender of options, in Common Stock, in other property, including
the optionee's promissory note, or by a combination of the above.
As of the date of this Registration Statement, options have been granted in
the aggregate of 1,440,000 shares to the following individuals. All options
granted are exercisable by the respective individual from the date of grant
through the date of expiration.
FORM 10-SB Nevtah Capital Management Corporation Page 19
<PAGE>
- --------------------------------------------------------------------------------
Number of Date Exercise Date of
Shares Granted of Grant Price Expiration
- --------------------------------------------------------------------------------
Daniel P. Kesonen 1,000,00 April 1, 1999 $0.40 April 1, 2019
Ron Fisher 240,000 April 1, 1999 $0.40 April 1, 2019
Michael MacDonald 100,000 April 1, 1999 $0.40 April 1, 2019
Laurence Jones 100,000 April 1, 1999 $0.40 April 1, 2019
TOTAL 1,440,000
- --------------------------------------------------------------------------------
On December 19, 1999, Mr. Kesonen elected to exercise his option to
purchase 400,000 shares of the restricted Common Stock of the Company at $0.40
per share.
Item 7. Certain Relationships and Related Transactions.
On June 4, 1998, the Company entered into an agreement with Petroleum Asset
Managament Corporation, a Delaware corporation ("Pamco") which generally
provided for the utilization of the pumping technology on oil and gas producing
wells or leases (the "Pamco Agreement")/ The Pamco Agreement required the
Company to make periodic payment of capital contributions to Pamco. The capital
contributions would be used by Pamco to fund its large-scale acquisition program
of stripper oil and gas well leases within the United States and the subsequent
conversion of such wells to utilization of its technology systems. The Pamco
Agreement generally provided for the acquisition by the Company of the rights to
the technology systems to market and distribute for all stripper oil and gas
well applications, as well as for environmental uses in cleaning up contaminated
groundwater, within the European market. The Pamco Agreement also provided for
the issuance by Pamco to the Company of a convertible debenture, which provided
the Company with the right to convert the full amount of the debenture to shares
of restricted common stock in Pamco at a conversion rate of $55.56 per share or
the latest market price of sales of Pamco's common stock.
Due to extreme interest in the Cybersenor Technology and related technology
products and the recent low oil prices, the Company and Pamco jointly agreed to
focus their current priorities on the continued development and marketing of the
Cybersensor Technology to the oil and gas industry, including stripper oil and
gas well producers. Therefore, during December 1999, the Company and Pamco
agreed to amend the Pamco Agreement to limit the Company's investment in Pamco
to the amount of funds invested to date by the Company pursuant to its payment
of the capital contributions. In accordance with the terms and provisions of the
amended Pamco Agreement, the Company is currently the record holder of 193,883
shares of restricted common stock of Pamco (which represents approximately a
26.2% ownership interest) and the record holder of 1,551,064 shares of
restricted common stock of Cybersensor (which represents approximately a 20.7%
equity ownership interest).
The above described transaction was conducted pursuant to arms-length
negotiations. The board of directors of the Company has not adopted or approved
any policy regarding future transactions with related third parties.
Certain of the officers and directors of the Company are engaged in other
businesses, either individually or through partnerships and corporations in
which they may have an interest, hold an office or serve on the boards of
directors. Some of the directors of the Company have other business interests to
which they devote a portion of their time. Certain conflicts of interest,
therefore, may arise between the Company and its directors. Such conflicts can
be resolved through the exercise by these individuals of judgment consistent
with their respective fiduciary duties to the Company. The officers and
directors of the Company intends to resolve such conflicts in the best interests
of the Company. Moreover, the officers and directors will devote their time to
the affairs of the Company as they deem necessary.
FORM 10-SB Nevtah Capital Management Corporation Page 20
<PAGE>
Item 8. Description of Securities.
The Company is authorized to issue 100,000,000 shares of $0.005 par value
Common Stock.
Holders of shares of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders of the Company. Except as may be
required by law, holders of shares of Common Stock will not vote separately as a
class, but will vote together with the holders of outstanding shares of other
classes or capital stock. There is no right to cumulate votes for the election
of directors. A majority of the issued and outstanding Common Stock constitutes
a quorum at any meeting of stockholders and the vote by the holders of a
majority of the outstanding shares is required to effect certain fundamental
corporate changes such as liquidation, merger or an amendment to the Articles of
Incorporation.
Holders of shares of Common Stock are entitled to receive dividends if, as
and when, declared by the Board of Directors out of funds legally available
therefore. Upon liquidation of the Company, holders of shares of Common Stock
are entitled to share ratably in all assets of the Company remaining after
payment of liabilities. Holders of shares of Common Stock have no conversion,
redemption or preemptive rights. The outstanding shares of Common Stock are
fully paid and nonassessable. The shares of Common Stock issued upon exercise of
the stock option and payment therefore will be validly issued, fully paid and
nonassessable.
PART II
Item 1. Market for Common Equity and Related Stockholder Matters
The Company's Common Stock is traded only in the United States on the
over-the-counter Bulletin Board, under the trading symbol, NTAH.
The table set forth below presents the range, on a quarterly basis, of high
and low closing sales prices per share of Common Stock as reported for the last
two fiscal years. The quotations represent prices between dealers and do not
include retail markup, markdown or commissions and may not necessarily represent
actual transactions.
Common Stock
------------------------------------------------------
Quarter Ended High Low
------------------------------------------------------
Fiscal Year 1998
----------------
March 31, 1998 $2.80 $1.40
June 30, 1998 2.75 .60
September 30, 1998 1.20 .42
December 31, 1998 .62 .15
Fiscal Year 1999
----------------
March 31, 1999 $0.67 $0.35
June 30, 1999 1.75 .12
September 30, 1999 1.06 .50
December 31, 1999 .73 .22
------------------------------------------------------
The 18,333,511 shares of Common Stock outstanding as of the date of this
Registration Statement were held by approximately 90 holders of record
worldwide.
FORM 10-SB Nevtah Capital Management Corporation Page 21
<PAGE>
The Board of Directors has never authorized or declared the payment of any
dividends on the Company's Common Stock and does not anticipate the declaration
or payment of cash dividends in the foreseeable future. The Company intends to
retain future earnings, if any, to finance the development and expansion of its
business. Future dividend policies will be subject to the discretion of the
Board of Directors and will be contingent upon, among other things, future
earnings, the Company's financial condition, capital requirements, general
business conditions, level of debt, and other relevant factors.
Transfer Agent
The transfer agent and registrar for the Common Stock is Alpha Tech Stock
Transfer, 929 E. Spiers Lane, Draper, Utah 84020, telephone number (801)
571-5118.
Item 2. Legal Proceedings.
Management is not aware of any legal proceedings contemplated by any
governmental authority or other party than those indicated below involving the
Company or its properties. No director, officer or affiliate of the Company is
(i) a party adverse to the Company in any legal proceedings, or (ii) has an
adverse interest to the Company in any legal proceedings. Management is not
aware of any other legal proceedings pending or that have been threatened
against the Company or its properties.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Since the inception of the Company (September 15, 1986) to June 1999, the
Company had a former accountant. Since June 1999 and to date, the Company's
current principal independent accountant have not resigned or declined to stand
for re-election or were dismissed. The Company's former principal independent
accountant declined to stand for re-election after the Company's formative years
as his policy for providing accounting services did not extend to include the
Company's growing scale of operations and transactions. Such decision to change
accountants was approved by the Board of Directors. There were no disagreements
with the former accountant which were not resolved on any matter concerning
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure.
Moreover, neither the Company's current principal independent accountant
nor its former principal independent accountant have provided an adverse opinion
or disclaimer of opinion to the Company's financial statements, nor modified
their respective opinion as to uncertainty, audit scope or accounting
principles.
The Company's principal independent accountant from September 15, 1986 to
June 1999 was Barry L. Friedman of 1582 Tulita Drive, Las Vegas, Nevada 89123.
The Company's principal independent accountant from June 1999 to the current
date is Jones, Jensen & Company of 50 South Main Street, Suite 1450, Salt Lake
City, Utah 84114.
Item 4. Recent Sales of Unregistered Securities.
To provide capital, the Company has sold stock in private placement
offerings or issued stock in exchange for debts of the Company or pursuant to
contractual agreements as follows:
o In September 1986, the Company completed an offering in which it
raised $2,500 under Rule 504 of Regulation D pursuant to which it
sold 25,000 shares of Common Stock at an average of $0.10 per
share. The Company issued shares of Common Stock to three
investors. The investors executed subscription agreements and
FORM 10-SB Nevtah Capital Management Corporation Page 22
<PAGE>
acknowledged that the securities to be issued had not been
registered under the 1933 Securities Act, that the investors
understood the economic risk of an investment in the securities,
and that the investors had the opportunity to ask questions of
and receive answers from the Company's management concerning any
and all matters related to the acquisition of securities. No
underwriter was involved in the transaction, and no commissions
or other remuneration were paid in connection with the offer and
sale of the securities.
o On November 17, 1993, the Company completed an offering in which
it raised $25,000 under Regulation S pursuant to which it sold
100,000 shares of Common Stock at $0.25 per share. The Company
issued shares of Common Stock to one investor who was a
non-resident of the United States. The stock certificate
evidencing the shares of Common Stock was cancelled on June 29,
1994 and the Company returned the $25,000 to the investor.
o On December 20, 1994, the Company entered into an agreement with
Jose F. Carcia whereby the Company issued 400,000 shares of its
Common Stock to Jose F. Carcia in exchange for consideration in
the amount of $10,000 and 60,000 shares of restricted common
stock of Tera West Ventures, Inc., a company which trades its
securities on the ITC Bulletin Board under the symbol of TWVI.
The issuance of the Common Stock described herein was made in
connection with a contractual arrangement not involving a public
offering to a single investor, and is exempt from registration
pursuant to Section 4(2) of the 1933 Securities Act. The
certificate representing issuance of such shares of Common Stock
to Jose F. Carcia has a legend that the shares of Common Stock
cannot be resold without registration under the 1933 Securities
Act or in compliance with an available exemption from
registration. No underwriter was involved in the transaction, and
no commissions or other remuneration were paid in connection with
the offer and sale of the securities.
o On September 26, 1995, the Company completed an offering in which
is raised $17,000 under Regulation S pursuant to which it sold
7,100,000 shares of Common Stock at $0.002 per share. The Company
issued shares of Common Stock to three investors. All three
investors were non-residents of the United States. The investors
executed subscription agreements and acknowledged that the
securities to be issued had not been registered under the 1933
Securities Act, that the investors understood the economic risks
of an investment in the securities, and that the investors had
the opportunity to ask questions of and receive answers from the
Company's management concerning any and all matters related to
the acquisition of securities. No underwriter was involved in the
transaction, and no commissions or other remuneration were paid
in connection with the offer and sale of the securities.
o On September 15, 1996, the Company entered into two separate
settlement agreements with two creditors whereby the Company
agreed to issue to each creditor 100,000 shares of Common Stock
at $0.10 per share pursuant to Section 4(2) of the 1933
Securities Act. Under the terms of the settlement agreements, the
creditors respectively agreed to accept the 100,000 shares of
Common Stock as payment for respective debts owed to such
creditors. The Company issued the shares in reliance upon the
exemption from registration provided by Section 4(2) of the 1933
Securities Act. Both creditors represented to the Company that
they acquired the shares for their own respective account and not
with a view to distribution, and that the Company made available
all material information concerning the Company.
FORM 10-SB Nevtah Capital Management Corporation Page 23
<PAGE>
o In November 1997, the Company completed an offering in which is
raised $77,250 under Rule 504 of Regulation D pursuant to which
it sold 7,725,000 shares of its Common Stock at $0.01 per share.
The Company issued shares of Common Stock to 28 investors, of
which 27 were non-residents of the United States and one was a
resident of the United States who was not an accredited investor
as that term is defined in Regulation D . The investors executed
subscription agreements and acknowledged that the securities to
be issued had not been registered under the 1933 Securities Act,
that the investors understood the economic risk of an investment
in the securities, and that the investors had the opportunity to
ask questions of and receive answers from the Company's
management concerning any and all matters related to the
acquisition of securities. No underwriter was involved in the
transaction, and no commissions or other remuneration were paid
in connection with the offer and sale of the securities.
o In December 1998, the Company completed an offering in which it
raised $520,910 under Rule 504 of Regulation D pursuant to which
it sold 9,507,542 shares of Common Stock at $0.05 per share. The
Company issued shares of Common Stock to 14 investors, of which
13 were non-residents of the United States and one was a resident
of the United States who was an accredited investor as that term
is defined under Regulation D. The investors executed
subscription agreements and acknowledged that the securities to
be issued had not been registered under the 1933 Securities Act,
that the investors understood the economic risk of an investment
in the securities, and that the investors had the opportunity to
ask questions of and receive answers from the Company's
management concerning any and all matters related to the
acquisition of securities. No underwriter was involved in the
transaction, and no commissions or other remuneration were paid
in connection with the offer and sale of the securities.
o In March 1999, the Company completed an offering in which it
raised $200,000 under Regulation S pursuant to which it sold
20,000,000 shares of Common Stock at $0.01 per share. The Company
issued shares of Common Stock to 10 investors, all of who were
non-residents of the United States. The investors executed
subscription agreements and acknowledged that the securities to
be issued had not been registered under the 1933 Securities Act,
that the investors understood the economic risk of an investment
in the securities, and that the investors had the opportunity to
ask questions of and receive answers from the Company's
management concerning any and all matters related to the
acquisition of securities. No underwriter was involved in the
transaction, and no commissions or other remuneration were paid
in connection with the offer and sale of the securities.
o On March 29, 1999, the Company entered into two separate
settlement agreements with creditors whereby the Company agreed
to issue to each of the creditors 13,000,000 shares of Common
Stock at an average of $0.038 per share. Each of the creditors is
a non-resident of the United States. Under the terms of the
respective settlement agreements, the creditors each agreed to
accept the 13,000,000 shares of Common Stock as payment for the
respective debts owed to such creditor. The Company issued the
shares in reliance upon the exemption from registration provided
by Regulation S of the 1933 Securities Act. The creditors each
represented to the Company that they acquired the shares of their
own respective account and not with a view to distribution, and
that the Company made available all material information
concerning the Company.
FORM 10-SB Nevtah Capital Management Corporation Page 24
<PAGE>
o In August 1999, the Company completed an offering in which it
raised $70,800 under Regulation S pursuant to which it sold
160,000 shares of Common Stock at $0.43 per share. The Company
issued shares of Common Stock to one investor, who is a
non-resident of the United States. The investor executed a
subscription agreement and acknowledged that the securities to be
issued had not been registered under the 1933 Securities Act,
that the investor understood the economic risk of an investment
in the securities, and that the investor had the opportunity to
ask questions of and receive answers from the Company's
management concerning any and all matters related to the
acquisition of securities. No underwriter was involved in the
transaction, and no commissions or other remuneration were paid
in connection with the offer and sale of the securities.
o On September 7, 1999, the Company entered into two separate
settlement agreements with creditors whereby the Company agreed
to issue 140,000 shares of Common Stock at $0.45 per share and
60,000 shares of Common Stock at $0.45 per share, respectively,
pursuant to Section 4(2) of the 1933 Securities Act. Under the
terms of the settlement agreements, the creditors each agreed to
accept such shares of Common Stock as payment for the respective
debts owed to such creditor. The Company issued the shares in
reliance upon the exemption from registration provided by Section
4(2) of the 1933 Securities Act. The creditors each represented
to the Company that they acquired the shares for their own
respective account and not with a view to distribution, and that
the Company made available all material information concerning
the Company.
o On September 7, 1999, the Company entered into an agreement with
a consultant whereby the consultant agreed to the preparation of
a business plan and shareholder communications in exchange for
the issuance of 50,000 shares of Common Stock at $0.45 per share
pursuant to Regulation S of the 1933 Securities Act. Under the
terms of the agreement, the consultant agreed to accept the
50,000 shares of Common Stock in lieu of a cash payment. The
Company issued the shares in reliance upon the exemption from
registration provided by Regulation S of the 1933 Securities Act.
The consultant represented to the Company that he acquired the
shares for his own account and not with a view to distribution,
and that the Company made available all material information
concerning the Company.
o On December 9, 1999, the Company entered into nine separate
settlement agreements with creditors whereby the Company agreed
to issue an aggregate of 1,929,000 shares of Common Stock at
$0.40 per share pursuant to Section 4(2) and Regulation S of the
1933 Securities Act. Under the terms of the respective settlement
agreements, each creditor agreed to accept their respective
shares of Common Stock as payment for the respective debt owed to
such creditor. Eight of the creditors are non-residents of the
United States and one creditor is a resident of the United
States. The Company issued the shares in reliance upon the
exemption from registration provided by Regulation S and Section
4(2) of the 1933 Securities Act. The creditors each represented
to the Company that they acquired the shares for their own
respective account and not with a view to distribution, and that
the Company made available all material information concerning
the Company.
o On December 14, 1999, the president and director of the Company,
Daniel Kesonen, exercised his option to purchase 400,000 shares
of Common Stock at $0.40 per share pursuant to Section 4(2) of
the 1933 Securities Act.
FORM 10-SB Nevtah Capital Management Corporation Page 25
<PAGE>
As of the date of this Registration Statement, the Company has 18,333,511
shares of its Common Stock issued and outstanding. Of the 18,333,511 of the
Company's current outstanding shares of Common Stock, 10,394,511 shares are free
trading. At such time, the holders may offer and sell these shares of Common
Stock at such times and in such amounts as they may respectively determine in
their sole discretion.
The holders of free trading Common Stock in the capital of the Company may
offer these shares of Common Stock through market transactions at prices
prevailing in the OTC market or at negotiated prices which may be fixed or
variable and which may differ substantially from OTC prices. The holders have
not advised the Company that they anticipate paying any consideration, other
than the usual and customary broker's commission, in connection with the sales
of these free trading shares of Common Stock. The holders are acting
independently of the Company making such decisions with respect to the timing,
manner and size of each sale.
Of the 18,333,511 of the Company's current outstanding shares of Common
Stock, 7,939,000 shares are "restricted shares" as that term is defined in the
Securities Act and the rules and regulations thereunder. To be eligible for sale
in the public market, the holders must comply with Rule 144. In general, Rule
144 allows a person holding restricted shares for a period of at least one year
to sell within any three month period that number of shares which does not
exceed the greater of 1% of the Company's then outstanding shares or the average
weekly trading volume of the shares during the four calendar weeks preceding
such sale. Rule 144 also permits, under certain circumstances, sale of shares by
a person who is not an affiliate of the Company and who has satisfied a two year
holding period without any volume limitations, manner of sale provisions or
current information requirements. As defined in Rule 144, an affiliate of an
issuer is a person who, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
such issuer, and generally includes members of the Board of Directors. Sales
pursuant to Rule 144 or otherwise, if in sufficient volume, could have a
depressive effect on the market price of the Company's securities. Moreover, the
possibility of such sales may have a depressive effect on market prices.
To date, no sales of restricted shares of Common Stock have been made.
Item 5. Indemnification of Officers and Directors.
Section 78.751 of Chapter 78 of the Nevada Revised Statutes contains
provisions for indemnification of the officers and directors of the Company. The
Bylaws require the Company to indemnify such persons to the full extent
permitted by Nevada law. The Bylaws with certain exceptions, eliminate any
personal liability of a director to the Company or its shareholders for monetary
damages to the Company or its shareholders for gross negligence or lack of care
in carrying out the director's fiduciary duties as such. Nevada law permits such
indemnification if a director or officer acts in good faith in a manner
reasonably believed to be in, or not opposed to, the best interests of the
Company. A director or officer must be indemnified as to any matter in which he
successfully defends himself.
The officers and directors of the Company are accountable to the
shareholders of the Company as fiduciaries, which means such officers and
directors are required to exercise good faith and integrity in handling the
Company's affairs.
A shareholder may be able to institute legal action on behalf of himself
and all other similarly situated shareholders to recover damages where the
Company has failed or refused to observe the law. Shareholders may, subject to
applicable rules of civil procedure, be able to bring a class action or
derivative suit to enforce their rights, including rights under certain federal
FORM 10-SB Nevtah Capital Management Corporation Page 26
<PAGE>
and state securities laws and regulations. Shareholders who have suffered losses
in connection with the purchase or sale of their interest in the Company due to
a breach of a fiduciary duty by an officer or director of the Company in
connection with such sale or purchase including, but not limited to, the
misapplication by any such officer or director of the proceeds from the sale of
any securities, may be able to recover such losses from the Company.
The Company and its affiliates may not be liable to its shareholders for
errors in judgment or other acts or omissions not amounting to intentional
misconduct, fraud or a knowing violation of the law, since provisions have been
made in the Articles of Incorporation and By-laws limiting such liability. The
Articles of Incorporation and By-laws also provide for indemnification of the
officers and directors of the Company in most cases for any liability suffered
by them or arising out of their activities as officers and directors of the
Company if they were not engaged in intentional misconduct, fraud or a knowing
violation of the law. Therefore, purchasers of these securities may have a more
limited right of action than they would have except for this limitation in the
Articles of Incorporation and By-laws. In the opinion of the Securities and
Exchange Commission, indemnification for liabilities arising under the
Securities Act of 1933 is contrary to public policy and, therefore,
unenforceable.
The Company may also purchase and maintain insurance on behalf of directors
and officers insuring against any liability asserted against such person
incurred in the capacity of director or officer or arising out of such status,
whether or not the Company would have the power to indemnify such person.
The Company will not acquire assets from its current management or any
entity in which such management has a five percent (5%) or greater equity
interest unless the Company has first received an independent opinion as to the
fairness of the terms of the acquisition. In negotiating the terms of the
acquisition of the assets, management may be influenced by the possibility of
future personal benefit from unrelated business dealings with such persons or
entities. Management believes that any such conflict will be resolved in favor
of the Company and its shareholders. The officers and directors are required to
exercise good faith and integrity in handling the Company's affairs. Management
of the Company has agreed to abide by this fiduciary duty.
Item 6. Financial Statements.
Reference is made to Part III, Item 1 and 2 - Index to and Description of
Exhibits for a list of all financial statements filed as part of this
Registration Statement on Form 10-SB.
PART III
Item 1 & 2. Index to and Description of Exhibits.
(a) The following Financial Statements are filed as a part of this
Registration Statement:
1. Independent Auditors' Report dated June 30, 1999.
2. Balance Sheets for fiscal year ended December 31, 1998 and December
31, 1997.
3. Statements of Operation for fiscal year ended December 31, 1998,
December 31, 1997 and from inception (September 15, 1986) to December
31, 1998.
4. Statements of Cash Flow for fiscal year ended December 31, 1998,
December 31, 1997 and from inception (September 15, 1986) to December
31, 1998.
5. Statements of Stockholders' Equity (Deficit) for year from inception
(September 15, 1986) to December 31, 1998.
6. Notes to Financial Statements.
7. Balance Sheet for Nine-Month Period Ended September 30, 1999 and
September 30, 1998.
FORM 10-SB Nevtah Capital Management Corporation Page 27
<PAGE>
8. Statement of Operations for Nine-Month Period Ended September 30, 1999
and September 30, 1998.
9. Statement of Changes in Stockholders' Equity Period for Nine-Month
Period Ended September 30, 1999.
10. Notes to the Financial Statements for Nine-Month Period Ended
September 30, 1999.
(b) The following Exhibits are filed as part of this Registration
Statement:
- --------------------------------------------------------------------------------
Exhibit Description
No.
- --------------------------------------------------------------------------------
2 Not applicable.
3 Articles of Incorporation and amendment thereto for the Company
By-laws of the Company
4 Not Applicable
9 Not Applicable
10.1 Agreement between the Company and Petroleum Asset Management
Corporation dated March 9, 1998 and Agreement between the Company and
Petroleum Asset Management Corporation dated June 4, 1998.
11 Not Applicable
16 Letter on Change in Certifying Accountant - to be supplied in next
filing
21 Not Applicable
24 Not Applicable
- --------------------------------------------------------------------------------
FORM 10-SB Nevtah Capital Management Corporation Page 28
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1998 and 1997
<PAGE>
C O N T E N T S
Independent Auditors' Report............................................... F-3
Balance Sheet.............................................................. F-4
Statements of Operations................................................... F-6
Statements of Stockholders' Equity (Deficit)............................... F-7
Statements of Cash Flows................................................... F-9
Notes to the Financial Statements.......................................... F-10
F-2
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
Nevtah Capital Management Corporation
Palm Beach Gardens, Florida
We have audited the accompanying balance sheet of Nevtah Capital Management
Corporation as of December 31, 1998 and the related statements of operations,
stockholders' equity (deficit) and cash flows for the years ended December 31,
1998 and 1997. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nevtah Capital Management
Corporation, as of December 31, 1998 and the results of its operations and cash
flows for the years ended December 31, 1998 and 1997 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company has suffered recurring losses from operations and has no
established source of revenue which raises substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters are
also described in Note 4. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
June 30, 1999
F-3
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Balance Sheet
ASSETS
------
December 31,
1998
----
CURRENT ASSETS
Cash $ --
--------
Total Current Assets --
--------
OTHER ASSETS
Note receivable - related party (Note 6) 415,000
--------
Total Other Assets 415,000
--------
TOTAL ASSETS $415,000
========
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Balance Sheet (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
December 31,
1998
----
CURRENT LIABILITIES
Notes payable - related parties (Note 7) $ 1,231,648
Accounts payable 104,413
Accrued liabilities 75,848
Stock subscription advance (Note 5) 200,000
-----------
Total Current Liabilities 1,611,909
-----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: $0.001 par value, authorized 50,000,000 shares;
26,972,542 shares issued and outstanding 26,972
Additional paid-in capital 851,688
Deficit accumulated during the development stage (2,075,569)
-----------
Total Stockholders' Equity (Deficit) (1,196,909)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 415,000
===========
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Statements of Operations
From
Inception on
For the Years Ended September 15,
December 31, 1986 Through
-------------------- December 31,
1998 1997 1998
---- ---- ----
REVENUE $ -- $ -- $ --
------------ ------------ ------------
EXPENSES
General and administrative 218,610 208,630 740,463
Interest expense 93,903 48,157 142,060
------------ ------------ ------------
Total Expenses 312,513 256,787 882,523
------------ ------------ ------------
OTHER EXPENSES
Loss on asset valuation 430,750 762,296 1,193,046
------------ ------------ ------------
Total Other Expenses 430,750 762,296 1,193,046
------------ ------------ ------------
NET LOSS $ (743,263) $ (1,019,083) $ (2,075,569)
============ ============ ============
BASIC LOSS PER SHARE $ (0.04) $ (0.08)
============ ============
BASIC WEIGHTED AVERAGE OF
SHARES OUTSTANDING 20,944,669 12,012,917
============ ============
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Common Stock Additional During the
-------------------- Paid-in Development
Shares Amount Capital Stage
------ ------ ------- -----
<S> <C> <C> <C> <C>
Balance, September 15, 1986 -- $ -- $ -- $ --
Common stock issued for
cash at an average of $0.01
per share 2,140,000 2,140 25,360 --
Net loss from inception on
September 15, 1986 through
December 31, 1993 -- -- -- (3,266)
---------- ---------- ---------- ----------
Balance, December 31, 1993 2,140,000 2,140 25,360 (3,266)
Common stock canceled for
cash at $0.25 per share (100,000) (100) (24,900) --
Common stock issued for
cash and marketable
securities at $0.60 per share 400,000 400 240,600 --
Net loss for the year ended
December 31, 1994 -- -- -- (834)
---------- ---------- ---------- ----------
Balance, December 31, 1994 2,440,000 2,440 241,060 (4,100)
Common stock issued for
cash at $0.002 per share 7,100,000 7,100 9,900 --
Net loss for the year ended
December 31, 1995 -- -- -- (13,400)
---------- ---------- ---------- ----------
Balance, December 31, 1995 9,540,000 9,540 250,960 (17,500)
Common stock issued for
services at $0.10 per share 200,000 200 19,800 --
Net loss for the year ended
December 31, 1996 -- -- -- (295,723)
---------- ---------- ---------- ----------
Balance, December 31, 1996 9,740,000 $ 9,740 $ 270,760 $ (313,223)
---------- ---------- ---------- ----------
F-7
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Common Stock Additional During the
-------------------- Paid-in Development
Shares Amount Capital Stage
------ ------ ------- -----
Balance, December 31, 1996 9,740,000 $ 9,740 $ 270,760 $ (313,223)
Common stock issued for
cash at an average of
$0.01 per share 7,725,000 7,725 69,525 --
Net loss for the year ended
December 31, 1997 -- -- -- (1,019,083)
----------- ----------- ----------- -----------
Balance, December 31, 1997 17,465,000 17,465 340,285 (1,332,306)
Common stock issued for
cash at an average of
$0.05 per share 9,507,542 9,507 511,403 --
Net loss for the year ended
December 31, 1998 -- -- -- (743,263)
----------- ----------- ----------- -----------
Balance, December 31, 1998 26,972,542 $ 26,972 $ 851,688 $(2,075,569)
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
F-8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Statements of Cash Flows
From
Inception on
For the Years Ended September 15,
December 31, 1986 Through
------------------- December 31,
1998 1997 1998
---- ---- ----
CASH FLOWS FROM OPERATING
ACTIVITIES
<S> <C> <C> <C>
Net loss $ (743,263) $(1,019,083) $(2,075,569)
Adjustment to reconcile net loss to net
cash provided by operating activities:
Issuance of common stock for services -- -- 20,000
Increase in accounts payable 53,195 51,218 104,413
Increase in accrued liabilities 73,080 2,768 75,848
----------- ----------- -----------
Net Cash Used In Operating Activities (616,988) (965,097) (1,875,308)
----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Note receivable - related party (415,000) -- (415,000)
----------- ----------- -----------
Net Cash Used in Investing Activities (415,000) -- (415,000)
----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of common stock for cash 520,910 77,250 858,660
Borrowings from related parties 650,823 887,847 1,571,393
Repayment to related parties (139,745) -- (139,745)
----------- ----------- -----------
Net Cash Provided by Financing
Activities 1,031,988 965,097 2,290,308
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH -- -- --
CASH, BEGINNING OF PERIOD -- -- --
----------- ----------- -----------
CASH, END OF PERIOD $ -- $ -- $ --
=========== =========== ===========
NON-CASH FINANCING ACTIVITIES
CASH PAID FOR:
Interest $ -- $ -- $ --
Income taxes $ -- $ -- $ --
F-9
</TABLE>
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
NOTE 1 - ORGANIZATION AND HISTORY
The Company was organized September 15, 1986, under the laws of the State
of Nevada. The purpose of the Company is to perform any lawful activity
permitted by the State of Nevada. The Company has never been able to
commence any operations and in accordance with SFAS #7, is considered a
development stage company.
On August 14, 1993, the Company amended its Articles of Incorporation
changing the par value of the common stock from $1.00 per share to $0.001
per share, and increasing the authorized shares from 25,000 shares to
50,000,000 shares.
On November 17, 1993, the Company authorized a forward stock split on the
basis of 40:1, increasing the outstanding shares of common stock to
1,000,000 shares.
On November 17, 1993, the Company sold 100,000 shares of common stock for
$25,000. On June 29, 1994, these shares were canceled and the $25,000 was
returned to the investor.
On July 29, 1994, the Company approved a 2-for-1 forward stock split
increasing the outstanding shares of common stock from 1,000,000 to
2,000,000 shares.
On December 20, 1994, the Company issued 400,000 shares of its common stock
for $10,000 in cash and 60,000 restricted shares of Tera West Ventures,
Inc. On December 20, 1994, the stock was $5.50 bid $6.50 asking . Because
of the restriction, the stock was valued at the bid price of $5.50 times
60,000 shares less a 30% discount or $231,000.
On September 15, 1996, the Company issued 200,000 common shares of stock
for $20,000 for services.
The stock splits are reflected in the accompanying financial statements on
a retroactive basis.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES
The Company has no operations to date and its accounting policies and
procedures have not been determined, except as follows:
Accounting Method
-----------------
The Company uses the accrual method of accounting.
Basic Loss Per Share
--------------------
Basic loss per share has been calculated based on the weighted average
number of shares of common stock outstanding during the period.
F-10
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES
Income Taxes
------------
As of December 31, 1998, the Company had a net operating loss carryforward
for federal income tax purposes of approximately $2,000,000 that may be
used in future years to offset taxable income through 2013.The tax benefit
of the cumulative carryforwards has been offset by a valuation allowance of
the same amount.
Cash and Cash Equivalents
-------------------------
For purposes of financial statement presentation, the Company considers all
highly liquid investments with a maturity of three months or less, from the
date of purchase to be cash equivalents.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
NOTE 3 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock of the Company.
NOTE 4 - GOING CONCERN
The Company has had no operations since inception in 1986. The Company has
not established revenues sufficient to cover its operating costs and allow
it to continue as a going concern. The Company is currently seeking merger
partners or other business ventures in order to become an operating
company.
NOTE 5 - SUBSEQUENT EVENTS
Subsequent to December 31, 1998, the Company increased its authorized
capital to 100,000,000 shares of common stock. The Company issued
20,000,000 shares of its common stock at $0.01 per share and 26,000,000
shares for $1,000,000 of related party debt. On April 1, 1999, the Company
issued options to purchase 7,200,000 shares at $0.08 per share. On May 24,
1999, the Company's common stock was reverse split on a 1 share for 5
shares basis.
F-11
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
NOTE 5 - SUBSEQUENT EVENTS (Continued)
On March 18, 1999, the Company entered into an agreement with Petroleum
Asset Management Company. The agreement dictates that upon payment by the
Company of a determined funding schedule, Petroleum Asset Management
Company agrees to issue to the Company 40% of its authorized voting common
stock on a fully diluted basis as well as the right to acquire an
additional 10% of their authorized common stock. This will bring the
Company's total equity position to 50% of all of Petroleum Asset Management
Company's issued common stock on terms to be negotiated.
NOTE 6 - NOTE RECEIVABLE - RELATED PARTY
On December 31, 1998, the Company received a promissory note for $415,000
from Petroleum Asset Management Company in exchange for cash advances. This
amount, along with interest at the rate of 8% per annum, is due on demand
until paid in full and/or converted into shares of Petroleum Asset
Management Company.
NOTE 7 - NOTES PAYABLE - RELATED PARTIES
As of December 31, 1998, the Company had notes payable due to related
parties of $1,231,648. These notes are unsecured and bear interest at the
rate of 8% per annum. This amount, along with the accrued interest, is due
on demand until paid in full and/or converted into shares of the Company.
F-12
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
9 Months to September 30, 1999
(unaudited)
F-13
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Balance Sheet
ASSETS
September 30, September 30,
1999 1998
------------------------------
CURRENT ASSETS
Cash -- --
------------------------------
Total Current Assets -- --
------------------------------
OTHER ASSETS
Investment in technology 1,015,000 350,000
------------------------------
------------------------------
Total Other Assets 1,015,000 350,000
------------------------------
TOTAL ASSETS 1,015,000 350,000
========== =========
F-14
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Developments Stage Company)
Balance Sheet (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
September 30, September 30,
1999 1998
----------------------------
CURRENT ASSETS
Notes payable - related parties 1,143,986 1,223,197
Accounts payable 123,904 75,000
Accrued liabilities 42,490 51,647
Stock Subscriptions Advance -- --
----------------------------
Total Current Liabilities 1,310,380 1,349,844
----------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 0.005 par value, authorized
100,000,000 shares
15,004,511 (1999) 4,594,508 (1998) shares
issued and outstanding 75,023 22,973
Additional paid-in capital 2,186,137 815,688
Deficit accumulated during the development stage (2,556,540) (1,838,505)
----------------------------
Total Stockholders' Equity (Deficit) (295,380) (999,844)
----------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) 1,015,000 350,000
========== ==========
F-15
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Statements of Operation
9 Months 9 Months
Ended Ended
September September
30, 1999 30, 1998
-------- --------
REVENUE -- --
EXPENSES
General and Administrative 438,481 454,552
Interest Expense 42,490 51,647
----------- -----------
Total Expenses 480,971 506,199
----------- -----------
NET PROFIT (LOSS) (480,971) (506,199)
=========== ===========
BASIC LOSS PER SHARE 0.047 0.127
=========== ===========
BASIC WEIGHTED AVERAGE OF SHARES OUTSTANDING
10,199,510 3,993,000
=========== ===========
F-16
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Statements of Operation
9 Months Ended 9 Months Ended
September September
30, 1999 30, 1998
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss (480,971) (506,199)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Increase in accounts payable 19,491 23,782
Increase in accrued liabilities (33,358) 48,879
Decrease in stock subscription advance (200,000) --
-------------------------
Net cash from operating activities (694,838) (433,538)
========== ==========
CASH FLOWS FROM INVESTING ACTIVITIES
Note receivable -related parties (600,000) (350,000)
---------- ----------
Net cash from investing activities (600,000) (350,000)
========== ==========
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash 1,382,500 480,911
Borrowings from related parties 912,338 302,627
Repayment of related parties (1,000,000) --
-------------------------
Net cash provided by financing activities 1,294,838 783,538
========== ==========
NET INCREASE (DECREASE) IN CASH -- --
CASH, BEGINNING OF PERIOD -- --
CASH, END OF PERIOD -- --
F-17
<PAGE>
NEVTAH CAPITAL MANAGEMENT CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - ORGANIZATION AND HISTORY
The Company was organized September 15, 1986, under the laws of the State of
Nevada, USA. The purpose of the Company is to perform any lawful activity
permitted by the State of Nevada. The Company has never been able to commence
any operations and in accordance with SFAS #7, is considered a development stage
company.
On August 14, 1993, the Company amended its Articles of Incorporation changing
the par value of common stock from $1.00 per share to $0.001 per share, and
increasing the authorized shares from 25,000 shares to 50,000,000 shares.
On November 17, 1993, the Company authorized a forward stock split on the basis
of 40:1, increasing the outstanding shares of common stock to 1,000,000 shares.
On November 17,1993, the Company sold 100,000 shares of common stock for
$25,000. On June 29, 1994 these shares were cancelled and the $25,000 was
returned to the investor.
On July 29, 1994, the Company approved a 2 for 1 forward split increasing the
outstanding shares of common stock from 1,000,000 to 2,000,000 shares.
On December 20, 1994, the Company issued 400,000 shares of its common stock for
$10,000 in cash and 60,000 restricted shares of Tera West Ventures Inc. On
December 20, 1994, the stock was $5.50 bid $6.50 asking. Because of the
restriction, the stock was valued at the bid price of $5.50 times 60,000 shares
less a 30% discount or $231,000.
On September 26, 1995, the Company completed an offering in which it raised
$17,000 under Regulation S pursuant to which it sold 7,100,000 shares of common
stock.
On September 15, 1996, the Company issued 200,000 common shares of stock for
$20,000 for services.
In November 1997, the Company completed an offering in which it sold 7,725,000
shares for $77,250.
In December 1998, the Company completed an offering in which it raised $520,910
for the sale of 9,507,542 shares of common stock.
In March 1999, the Company completed an offering in which it raised $200,000 for
the sale of 20,000,000 shares of common stock.
F-18
<PAGE>
On March 29, 1999, the Company entered into two (2) separate Debt Settlement
Agreements whereby the Company agreed to issue to each of the creditors
13,000,000 shares for $500,000 in debt resulting in a total of 26,000,000 shares
issued for $1,000,000 consideration.
On May 24, 1999, the Company approved a 5:1 rollback decreasing the outstanding
shares to 14,594,511. The Company subsequently increased the authorized share
capital to 100,000,000 shares. The par value increased to $0.005 from $0.001.
In August 1999, the Company completed an offering in which it raised $70,000 for
the sale of 160,000 shares of common stock under Regulation S.
On September 7, 1999, the Company entered into two (2) separate agreements with
creditors whereby the Company agreed to issue 140,000 and 60,000 shares of
common stock for debts of $63,000 and $27,000 respectively.
On September 7, 1999, the Company entered into an agreement with a consultant
whereby the consultant agreed to the preparation of a business plan and
shareholder communications in exchange for the issuance of 50,000 shares of
common stock in lieu of a cash payment of $22,500.
The stock splits are reflected in the accompanying financial statements on a
retroactive basis.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES.
The Company has no operations to date and its accounting policies and procedures
have not been determined, except as follows:
Accounting Method
- -----------------
The Company uses the accrual method of accounting.
Basic Loss Per Share
- --------------------
Basic loss per share has been calculated based on the weighted average number of
shares of common stock outstanding during the period.
Income Taxes
- ------------
As of September 30, 1999, the Company had a net operating loss carry-forward for
federal income tax purposes of approximately $2,550,000 that may be used in
future years to offset taxable income through 2015. The tax benefit of the
cumulative carry-forwards has been offset by a valuation allowance of the same
amount.
Cash and Cash equivalents
- -------------------------
For purposes of financial statement presentation, the Company considers all
highly liquid investments with a maturity of three (3) months or less, from the
date of purchase to be cash equivalents.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
F-19
<PAGE>
NOTE 3 - WARRANTS AND OPTIONS
On March 1, 1999 the Board of Directors of the Company adopted a Non-Qualified
Stock Option Plan which provides for the grant of options to purchase an
aggregate of 1,440,000 shares of common stock at $0.40 per share
NOTE 4 - GOING CONCERN
The Company has had no operations since inception in 1986. The Company has not
established revenues sufficient to cover its operating costs and allow it to
continue as a going concern. The Company is currently seeking merger partners or
other business ventures in order to become an operating company.
NOTE 5 - SUBSEQUENT EVENTS
Subsequent to September 30, 1999, the Company issued 400,000 shares on the
exercise of options at a value of $160,000, issued 1,929,000 shares of common
stock in settlement of debt owing of $771,6000 and issued 1,000,000 shares of
common stock for $200,000.
In December 1999, the Company converted advances in the amount of $1,115,000
into 193,883 shares of Petroleum Asset Management Company ("Pamco") and
1,551,064 shares of Cybersensor.com ("Cybersensor") a subsidiary of Pamco. The
Company advanced Pamco an additional $100,000 in the 4th Quarter of 1999.
NOTE 6 - INVESTMENT IN TECHNOLOGY
On June 4, 1998, the Company entered into an agreement with Pamco. The agreement
dictates that upon payment by the Company of a determined funding schedule,
Pamco agrees to issue to the Company 40% of its authorized voting common stock
on a fully diluted basis as well as the right to acquire an additional 10% of
their authorized common stock. This would bring the Company's total equity
position to 50% of all of Pamco's issued common stock on terms to be negotiated.
During December 1999, the Company and Pamco agreed to amend the agreement to
provide that the Company would limit its monetary investment in Pamco to the
amount of funds already advanced. In accordance with the terms and provisions of
the amended agreement, the Company currently is the owner of record of 193,883
shares of the restricted common stock of Pamco (which represents an approximate
26.2% equity ownership interest) and the owner of record of 1,551,064 shares of
restricted common stock of Cybersensor (which represents an approximate 20.7%
equity ownership interest).
NOTE 7 - NOTE RECEIVABLE - RELATED PARTY
To September 30, 1999, the Company had advanced Pamco a total of $1,015,000.
This amount, along with interest at the rate of 8% per annum, is due on demand
until paid in full and/or converted into shares of Pamco.
NOTE 8 - NOTES PAYABLE - RELATED PARTIES
As of September 30, 1999, the Company had notes payable due to related parties
of $1,143,986. This amount, along with the accrued interest is due on demand
until paid in full and/or converted into shares of the Company.
F-20
<PAGE>
SIGNATURES
Pursuant to the requirements of 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.
NEVTAH CAPITAL MANAGEMENT CORPORATION,
a Nevada corporation
By: /s/ Daniel Kesonen
-----------------------------
Daniel Kesonen, President
DATE: January 26, 2000
FORM 10-SB Nevtah Capital Management Corporation Page 29
FILING FEE: $75.00
BY: NEVTAH CAPITAL
MANAGEMENT CORPORATION
FILED C/O TONI SMITH
IN THE OFFICE OF THE P.O. BOX 7773
SECRETARY OF STATE OF THE INCLINE VILLAGE, NV 89450
STATE OF NEVADA ARTICLES OF INCORPORATION
SEP 15, 1996
OF
/S/ SIGNATURE ON FILE
NO. 5463-86 NEVTAH CAPITAL MANAGEMENT CORPORATION
I.
The name of this corporation is: NEVTAH CAPITAL MANAGEMENT CORPORATION.
II.
The principal office or place of business of this corporation shall be located
in the County of Washoe, at:
999 Lakeshore Boulevard, No. 39
Incline Village, Nevada
III.
The nature of the business or objects or purposes to be transacted, promoted or
carried on by the corporation shall be to be engaged in any lawful activity.
VI.
This corporation shall be authorized to issue only one class of shares of stock;
the total number of shares which this corporation shall be authorized to issue
shall be TWENTY-FIVE THOUSAND (25,000) all of which shall be at ONE DOLLAR
($1.00) par value.
V.
The names and addresses of the initial directors of the corporation shall be as
follows:
Michael Haynes
Post Office Box 7773
Incline Village, Nevada 89450
Toni Smith
Post Office Box 7773
Incline Village, Nevada 89450
David L. Smith
Post Office Box 3497
Santa Barbara, CA 93130
<PAGE>
VI.
The shares of this corporation shall not be subject to assessment to pay the
debts of the corporation.
VII.
The name and post office address of the incorporator signing these Articles of
Incorporation is:
Toni Smith
Post Office Box 7773
Incline Village, Nevada 89450
VIII.
The duration of the corporation shall be perpetual.
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of September,
1986.
/s/ Toni Smith
--------------
Toni Smith
STATE OF CALIFORNIA
COUNTY OF SANTA BARBARA
On September 12, 1986, personally appeared before me, a notary public, Toni
Smith who acknowledged that he executed the above instrument.
/s/ Sally Reese
---------------
Sally Reese
Notary Public
OFFICIAL SEAL
SALLY REESE
NOTARY PUBLIC
SANTA BARBARA COUNTY
MY COMMISSION EXPIRES 28 NOV. 1986
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
NOV 18, 1993
CHERYL A. LAW SECRETARY OF STATE
NO. 6463-86
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
Nevtah Capital Management Corporation
-------------------------------------
Name of Corporation
We the undersigned Michael D. Haynes, President and Peter E. Berney, Secretary
of Nevtah Capital Management Corporation do hereby certify:
That the board of Directors of said corporation at a meeting duly convened and
held on the 14th day of August, 1993, adopted a resolution to amend the original
articles as follows:
Article IV is hereby amended to read as follows:
The authorized capital shares of common stock shall be 50,000,000 share with a
par value of $0.001 per share. The issued and outstanding shares of 25,000
shares are forward split 40 to 1 (forty to one) making the issued and
outstanding shares 1,000,000 which is a part of the total of the 50,000,000
authorized capital common shares.
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation are 25,000 before forward split; that
the said change(s) and amendment has been consented to and approved by a
majority vote of the stockholders holding at least a majority of each class of
stock outstanding and entitled to vote thereon.
/s/ Michael D. Haynes
--------------------------------
Michael D. Haynes, President
/s/ Peter E. Berney
------------------------------
Peter E. Berney, Secretary
State of Nevada
County of Clark
On August 14, 1993 personally appeared before me, a Notary Public,
__________________, who acknowledged that he/she executed the above document.
/s/ E.V. Stambro
----------------
E.V. Stambro, Notary Public
Official seal
E.V. Stambro
Notary public - State of Nevada
Clark County
My Commission Expires May 14, 1996 Received Nov 17 1993 Secretary of State
<PAGE>
BY-LAWS
OF
NEVTAH CAPITAL MANAGEMENT CORPORATION
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of the Company shall be
held at its office in the City of LAS VEGAS, CLARK County, NEVADA, at 10 o'clock
in the A.M. noon on the day of SEPTEMBER 17th in each year, if not a legal
holiday, and if a legal holiday, then on the next succeeding day not a legal
holiday, for the purpose of electing directors of the company to serve during
the ensuing year and for the transaction of such other business as may be
brought before the meeting.
At least five days' written notice specifying the time and place, when and
where, the annual meeting shall be convened, shall be mailed in a United States
Post Office addressed to each of the stockholders of record at the time of
issuing the notice at his or her, or its address last known, as the same appears
on the books of the company.
SECTION 2. Special meetings of the stockholders may be held at the office
of the company in the State Of NEVADA, or elsewhere, whenever called by the
President, or by the Board of Directors, or by vote of, or by an instrument in
writing signed by the holders of 51 % of the issued and outstanding capital
stock of the company. At least ten days' written notice of such meeting,
specifying the day and hour and place, when and where such meeting shall be
convened, and objects for calling the same, shall be mailed in a United States
Post Office, addressed to each of the stockholders of record at the time of
issuing the notice, at his or her or its address last known, as the same appears
on the books of the company.
SECTION 3. If all the stockholders of the company shall waive notice of a
meeting, no notice of such meeting shall be required, and whenever all of the
stockholders shall meet in person or by proxy, such meeting shall be valid for
all purposes without call or notice, and at such meeting any corporate action
may be taken.
The written certificate of the officer or officers calling any meeting
setting forth the substance of the notice, and the time and place of the mailing
of the same to the several stockholders, and the respective addresses to which
the same were mailed, shall be prima facie evidence of the manner and fact of
the calling and giving such notice.
If the address of any stockholder does not appear upon the books of the
company, it will be sufficient to address any notice to such stockholder at the
principal office of the corporation.
SECTION 4. All business lawful to be transacted by the stockholders of the
company, may be transacted at any special meeting or at any adjournment thereof.
Only such business, however, shall be acted upon at special meeting of the
stockholders as shall have been referred to in the notice calling such meetings,
but at any stockholders' meeting at which all of the outstanding capital stock
of the company is represented, either in person or by proxy, any lawful business
may be transacted, and such meeting shall be valid for all purposes.
SECTION 5. At the stockholders' meetings the holders of FIFTY-ONE percent
(51%) in amount of the entire issued and outstanding capital stock of the
company, shall constitute a quorum for all purposes of such meetings.
- 1 -
<PAGE>
If the holders of the amount of stock necessary to constitute a quorum
shall fail to attend, in person or by proxy, at the time and place fixed by
these By-Laws for any annual meeting, or fixed by a notice as above provided for
a special meeting, a majority in interest of the stockholders present in person
or by proxy may adjourn from time to time without notice other than by
announcement at the meeting, until holders of the amount of stock requisite to
constitute a quorum shall attend. At any such adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted as originally called.
SECTION 6. At each meeting of the stockholders every stockholder shall be
entitled to vote in person or by his duly authorized proxy appointed by
instrument in writing subscribed by such stockholder or by his duly authorized
attorney. Each stockholder shall have one vote for each share of stock standing
registered in his or her or its name on the books of the corporation, ten days
preceding the day of such meeting. The votes for directors, and upon demand by
any stockholder, the votes upon any question before the meeting, shall be viva
voce.
At each meeting of the stockholders, a full, true and complete list, in
alphabetical order, of all the stockholders entitled to vote at such meeting,
and indicating the number of shares held by each, certified by the Secretary of
the Company, shall be furnished, which list shall be prepared at least ten days
before such meeting, and shall be open to the inspection of the stockholders, or
their agents or proxies, at the place where such meeting is to be held, and for
ten days prior thereto. Only the persons in whose names shares of stock are
registered on the books of the company for ten days preceding the date of such
meeting, as evidenced by the list of stockholders, shall be entitled to vote at
such meeting. Proxies and powers of Attorney to vote must be filed with the
Secretary of the Company before an election or a meeting of the stockholders, or
they cannot be used at such election or meeting.
SECTION 7. At each meeting of the stockholders the polls shall be opened
and closed; the proxies and ballots issued, received, and be taken in charge of,
for the purpose of the meeting, and all questions touching the qualifications of
voters and the validity of proxies, and the acceptance or rejection of votes,
shall be decided by two inspectors. Such inspectors shall be appointed at the
meeting by the presiding officer of the meeting.
SECTION 8. At the stockholders' meetings, the regular order of business
shall be as follows:
1. Reading and approval of the Minutes of previous meeting or meetings;
2. Reports of the Board of Directors, the President, Treasurer and
Secretary of the Company in the order named;
3. Reports of Committee;
4. Election of Directors;
5. Unfinished Business;
6. New Business;
7. Adjournment.
-2-
<PAGE>
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. The Board of Directors of the Company shall consist Of NO LESS
THAN ONE persons who shall be chosen by the stockholders annually, at the annual
meeting of the Company, and who shall hold office for one year, and until their
successors are elected and qualify.
SECTION 2. When any vacancy occurs among the Directors by death,
resignation, disqualification or other cause, the stockholders, at any regular
or special meeting, or at any adjourned meeting thereof, or the remaining
Directors, by the affirmative vote of a majority thereof, shall elect a
successor to hold office for the unexpired portion of the term of the Director
whose place shall have become vacant and until his successor shall have been
elected and shall qualify.
SECTION 3. Meeting of the Directors may be held at the principal office of
the company in the state of NEVADA, or elsewhere, at such place or places as the
Board of Directors may, from time to time, determine.
SECTION 4. Without notice or call, the Board of Directors shall hold its
first annual meeting for the year immediately after the annual meeting of the
stockholders or immediately after the election of Directors at such annual
meeting.
Regular meetings of the Board of Directors shall be held at the office of
the company in the City of LAS VEGAS State of NEVADA on Semi-Annually at 10
o'clock in the A.M. Notice of such regular meetings shall be mailed to each
Director by the Secretary at least three days previous to the day fixed for such
meetings, but no regular meeting shall be held void or invalid if such notice is
not given, provided the meeting is held at the time and place fixed by these
By-Laws for holding such regular meetings.
Special meetings of the Board of Directors may be held on the call of the
President or Secretary on at least three days notice by mail or telegraph.
Any meeting of the Board, no matter where held, at which all of the members
shall be present, even though without or of which notice shall have been waived
by all absentees, provided a quorum shall be present, shall be valid for all
purposes unless otherwise indicated in the notice calling the meeting or in the
waiver of notice.
Any and all business may be transacted by any meeting of the Board of
Directors, either regular or special.
SECTION 5. A majority of the Board of Directors in office shall constitute
a quorum for the transaction of business, but if at any meeting of the Board
there be less than a quorum present, a majority of those present may adjourn
from time to time, until a quorum shall be present, and no notice of such
adjournment shall be required. The Board of Directors may prescribe rules not in
conflict with these By-Laws for the conduct of its business; provided, however,
that in the fixing of salaries of the officers of the corporation, the unanimous
action of all of the Directors shall be required.
SECTION 6. A Director need not be a stockholder of the corporation.
SECTION 7. The Directors shall be allowed and paid all necessary expenses
incurred in attending any meeting of the Board, but shall not receive any
compensation for their services as Directors until such time as the company is
able to declare and pay dividends on its capital stock.
-3-
<PAGE>
SECTION 8. The Board of Directors shall make a report to the stockholders
at annual meetings of the stockholders of the condition of the company, and
shall, at request, furnish each of the stockholders with a true copy thereof.
The Board of Directors in its discretion may submit any contract or act for
approval or ratification at any annual meeting of the stockholders called for
the purpose of considering any such contract or act, which, it approved, or
ratified by the vote of the holders of a majority of the capital stock of the
company represented in person or by proxy at such meeting, provided that a
lawful quorum of stockholders be there represented in person or by proxy, shall
be valid and binding upon the corporation and upon all the stockholders thereof,
as if it had been approved or ratified by every stockholder of the corporation.
SECTION 9. The Board of Directors shall have the power from time to time to
provide for the management of the offices of the company in such manner as they
see fit, and in particular from time to time to delegate any of the powers of
the Board in the course of the current business of the company to any standing
or special committee or to any officer or agent and to appoint any persons to be
agents of the company with such powers (including the power to subdelegate), and
upon such terms as may be deemed fit.
SECTION 10. The Board of Directors is vested with the complete and
unrestrained authority in the management of all the affairs of the company, and
is authorized to exercise for such purpose as the General Agent of the Company,
its entire corporate authority.
SECTION 11. The regular order of business at meetings of the Board of
Directors shall be as follows:
1. Reading and approval of the minutes of any previous meeting or
meetings;
2. Reports of officers and committeemen;
3. Election of officers;
4. Unfinished business;
5. New business;
6. Adjournment.
-4-
<PAGE>
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The Board of Directors, at its first and after each meeting
after the annual meeting of stockholders, shall elect a President, a
Vice-President, a Secretary and a Treasurer, to hold office for one year next
coming, and until their successors are elected and qualify. The offices of the
Secretary and Treasurer may be held by one person.
Any vacancy in any of said offices may be filled by the Board of Directors.
The Board of Directors may from time to time, by resolution, appoint such
additional Vice Presidents and additional Assistant Secretaries, Assistant
Treasurer and Transfer Agents of the company as it may deem advisable; prescribe
their duties, and fix their compensation, and all such appointed officers shall
be subject to removal at any time by the Board of Directors. All officers,
agents, and factors of the company shall be chosen and appointed in such manner
and shall hold their office for such terms as the Board of Directors may by
resolution prescribe.
SECTION 2. The President shall be the executive officer of the company and
shall have the supervision and, subject to the control of the Board of
Directors, the direction of the Company's affairs, with full power to execute
all resolutions and orders of the Board of Directors not especially entrusted to
some other officer of the company. He shall be a member of the Executive
Committee, and the Chairman thereof; he shall preside at all meetings of the
Board of Directors, and at all meetings of the stockholders, and shall sign the
Certificates of Stock issued by the company, and shall perform such other duties
as shall be prescribed by the Board of Directors.
SECTION 3. The Vice-President shall be vested with all the powers and
perform all the duties of the President in his absence or inability to act,
including the signing of the Certificates of Stock issued by the company, and he
shall so perform such other duties as shall be prescribed by the Board of
Directors.
SECTI0N 4. The Treasurer shall have the custody of all the funds and
securities of the company. When necessary or proper he shall endorse on behalf
of the company for collection checks, notes, and other obligations; he shall
deposit all monies to the credit of the company in such bank or banks or other
depository as the Board of Directors may designate; he shall sign all receipts
and vouchers for payments made by the company, except as herein otherwise
provided. He shall sign with the President all bills of exchange and promissory
notes of the company; he shall also have the care and custody of the stocks,
bonds, certificates, vouchers, evidence of debts, securities, and such other
property belonging to the company as the Board of Directors shall designate; he
shall sign all papers required by law or by those By-Laws or the Board of
Directors to be signed by the Treasurer. Whenever required by the Board of
Directors, he shall render a statement of his cash account; he shall enter
regularly in the books of the company to be kept by him for the purpose, full
and accurate accounts of ail monies received and paid by him on account of the
company. He shall at all reasonable times exhibit the books of account to any
Directors of the company during business hours, and he shall perform all acts
incident to the position of Treasurer subject to the control of the Board of
Directors.
The Treasurer shall, if required by the Board of Directors, give bond to
the company conditioned for the faithful performance of all his duties as
Treasurer in such sum, and with such surety as shall be approved by the Board of
Directors, with expense of such bond to be borne by the company.
-5-
<PAGE>
SECTION 5. The Board of Directors may appoint an Assistant Treasurer who
shall have such powers and perform such duties as may be prescribed for him by
the Treasurer of the company or by the Board of Directors, and the Board of
Directors shall require the Assistant Treasurer to give a bond to the company in
such sum and with such security as it shall approve, as conditioned for the
faithful performance of his duties as Assistant Treasurer, the expense of such
bond to be borne by the company.
SECTION 6. The Secretary shall keep the Minutes of all meetings of the
Board of Directors and the Minutes of all meetings of the stockholders and of
the Executive Committee in books provided for that purpose. He shall attend to
the giving and serving of all notices of the company; he may sign with the
President or Vice-President, in the name of the Company, all contracts
authorized by the Board of Directors or Executive Committee; he shall affix the
corporate seal of the company thereto when so authorized by the Board of
Directors or Executive Committee; he shall have the custody of the corporate
seal of the company; he shall affix the corporate seal to all certificates of
stock duly issued by the company; he shall have charge of Stock Certificate
Books, Transfer books and Stock Ledgers, and such other books and papers as the
Board of Directors or the Executive Committee may direct, all of which shall at
all reasonable times be open to the examination of any Director upon application
at the office of the company during business hours, and he shall, in general,
perform all duties incident to the office of Secretary.
SECTION 7. The Board of Directors may appoint an Assistant Secretary who
shall have such powers and perform such duties as may be prescribed for him by
the Secretary of the company or by the Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of Directors, the
President shall have full power and authority in behalf of the company to attend
and to act and to vote at any meetings of the stockholders of any corporation in
which the company may hold stock, and at any such meetings, shall possess and
may exercise any and all rights and powers incident to the ownership of such
stock, and which as the new owner thereof, the company might have possessed and
exercised if present. The Board of Directors, by resolution, from time to time,
may confer like powers on any person or persons in place of the President to
represent the company for the purposes in this section mentioned.
-6-
<PAGE>
ARTICLE IV
CAPITAL STOCK
SECTION 1. The capital stock of the company shall be issued in such manner
and at such times and upon such conditions as shall be prescribed by the Board
of Directors.
SECTION 2. Ownership of stock in the company shall be evidenced by
certificates of stock in such forms as shall be prescribed by the Board of
Directors, and shall be under the seal of the company and signed by the
President or the Vice-President and also by the Secretary or by an Assistant
Secretary.
All certificates shall be consecutively numbered; the name of the person
owning the shares represented thereby with the number of such shares and the
date of issue shall be entered on the company's books.
No certificates shall be valid unless it is signed by the President or
Vice-President and by the Secretary or Assistant Secretary.
All certificates surrendered to the company shall be canceled and no new
certificate shall be issued until the former certificate for the same number of
shares shall have been surrendered or canceled.
SECTION 3. No transfer of stock shall be valid as against the company
except on surrender and cancellation of the certificate therefor, accompanied by
an assignment or transfer by the owner therefor, made either in person or under
assignment, a new certificate shall be issued therefor.
Whenever any transfer shall be expressed as made for collateral security
and not absolutely, the same shall be so expressed in the entry of said transfer
on the books of the company.
SECTION 4. The Board of Directors shall have power and authority to make
all such rules and regulations not inconsistent herewith as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the capital stock of the company.
The Board of Directors may appoint a transfer agent and a registrar of
transfers and may require all stock certificates to bear the signature of such
transfer agent and such registrar of transfer.
SECTION 5. The Stock Transfer Books shall be closed for all meetings of the
stockholders for the period of ten days prior to such meetings and shall be
closed for the payment of dividends during such periods as from time to time may
be fixed by the Board of Directors, and during such periods no stock shall be
transferable.
SECTION 6. Any person or persons applying for a certificate of stock in
lieu of one alleged to have been lost or destroyed, shall make affidavit or
affirmation of the fact, and shall deposit with the company an affidavit.
Whereupon, at the end of six months after the deposit of said affidavit and upon
such person or persons giving Bond of Indemnity to the company with surety to be
approved by the Board of Directors in double the current value of stock against
any damage, loss or inconvenience to the company, which may or can arise in
consequence of a new or duplicate certificate being issued in lieu of the one
lost or missing, the Board of Directors may cause to be issued to such person or
persons a new certificate, or a duplicate of the certificate, so lost or
destroyed. The Board of Directors may, in its discretion refuse to issue such
new or duplicate certificate save upon the order of some court having
jurisdiction in. such matter, anything herein to the contrary notwithstanding.
-7-
<PAGE>
ARTICLE V
OFFICES AND BOOKS
SECTION 1. The principal office of the corporation, in NEVADA shall be at
999 LAKESHORE BLVD., #39, INCLINE VILLAGE, NEVADA, and the company may have a
principal office in any other state or territory as the Board of Directors may
designate.
SECTION 2. The Stock and Transfer Books and a copy of the By-Laws and
Articles of Incorporation of the company shall be kept at its principal office
in the County of WASHOE, state of NEVADA, for the inspection of all who are
authorized or have the right to see the some, and for the transfer of stock. All
other books of the company shall be kept at such places as may be prescribed by
the Board of Directors.
-8-
<PAGE>
ARTICLE VI
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to reserve over and
above the capital stock paid in, such an amount in its discretion as it may deem
advisable to fix as a reserve fund, and may, from time to time, declare
dividends from the accumulated profits of the company in excess of the amounts
so reserved, and pay the some to the stockholders of the company, and may also,
if it deems the same advisable, declare stock dividends of the unissued capital
stock of the company.
SECTION 2. No agreement, contract or obligation (other than checks in
payment of indebtedness incurred by authority of the Board of Directors)
involving the payment of monies or the credit of the company for more than N/A
dollars, shall be made without the authority of the Board of Directors, or of
the Executive Committee acting as such.
SECTION 3. Unless otherwise ordered by the Board of Directors, all
agreements and contracts shall be signed by the President and the Secretary in
the name and on behalf of the company, and shall have the corporate seal thereto
affixed.
SECTION 4. All monies of the corporation shall be deposited when and as
received by the Treasurer in such bank or banks or other depository as may from
time to time be designated by the Board of Directors, and such deposits shall be
made in the name of the company.
SECTION 5. No note, draft, acceptance, endorsement or other evidence of
indebtedness shall be valid or against the company unless the same shall be
signed by the President or a Vice-President, and attested by the Secretary or an
Assistant Secretary, or signed by the Treasurer or an Assistant Treasurer, and
countersigned by the President, Vice-President, or Secretary, except that the
Treasurer or an Assistant Treasurer may, without countersignature, make
endorsements for deposit to the credit of the company in all its duly authorized
depositories.
SECTION 6. No loan or advance of money shall be made by the company to any
stockholder or officer therein, unless the Board of Directors shall otherwise
authorize.
SECTION 7. No director nor executive officer of the company shall be
entitled to any salary or compensation for any services performed for the
company, unless such salary or compensation shall be fixed by resolution of the
Board of Directors, adopted by the unanimous vote of all the Directors voting in
favor thereof.
SECTION 8. The company may take, acquire, hold, mortgage, sell, or
otherwise deal in stocks or bonds or securities of any other corporation, if and
as often as the Board of Directors shall so elect.
SECTION 9. The Directors shall have power to authorize and cause to be
executed, mortgages, and liens without limit as to amount upon the property and
franchise of this corporation, and pursuant to the affirmative vote, either in
person or by proxy, of the holders of a majority of the capital stock issued and
outstanding; the Directors shall have the authority to dispose in any manner of
the whole property of this corporation.
SECTION 10. The company shall have a corporate seal, the design thereof
being as follows:
-9-
<PAGE>
ARTICLE VII
AMENDMENT OF BY-LAWS
SECTION 1. Amendments and changes of these By-Laws may be made at any
regular or special meeting of the Board of Directors by a vote of not less than
all of the entire Board, or may be made by a vote of, or a consent in writing
signed by the holders of FIFTY ONE PERCENT (51%) of the issued and outstanding
capital stock.
KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned, being the
directors of the above named corporation, do hereby consent to the foregoing
By-Laws and adopt the same as and for the By-Laws of said corporation.
IN WITNESS WHEREOF, we have hereunto set our hands this day of SEPTEMBER
17, 1986
/s/ Michael D. Haynes
---------------------
Michael D. Haynes, Director
/s/ Toni Smith
--------------
Toni Smith, Director
/s/ David L. Smith
------------------
David L. Smith, Director
-10-
AGREEMENT
---------
This Agreement is entered into this 4th day of June, 1999, by and between
NEVTAH CAPITAL MANAGEMENT CORPORATION, 4400 PGA Boulevard, Suite 716, Palm Beach
Gardens, Florida 33410 (hereinafter referred to as "NEVTAH"), and PETROLEUM
ASSET MANAGEMENT COMPANY, 204 Point East Drive, Nashville, Tennessee 37216, and
AIR PULSE OIL PUMP, INC., 204 Point Fast Drive, Nashville, Tennessee 37216
(hereinafter collectively referred to as "PAMCO").
WITNESSETH
WHEREAS, NEVTAH desires to take advantage of investment opportunities that
provide significant potential for return, including projects in the energy and
technology field; and
WHEREAS, PAMCO has developed a state-of-the-art pumping technology that
will provide particular economic benefit to the operation of "stripper" oil
wells (wells which produce less than ten barrels of oil per day); and
WHEREAS, the PAMCO technology includes a downhole pumping unit and an
aboveground computer controller, all of which is referred to herein as the
"Technology; and
WHEREAS, NEVTAH and PAMCO desire to combine their efforts to exploit the
Technology in the oil industry through the acquisition of existing stripper well
production (the "Production") and conversion of the Production to the
Technology; and
WHEREAS, NEVTAH is capable of providing the capital, necessary to acquire
the Production and PAMCO is capable of finding the Production and installing and
operating the Technology;
NOW, THEREFORE, for and in consideration of the covenants contained herein,
the parties agree as follows:
1. Prior Agreement: Initial Advances. A prior agreement was entered into
between the parties in March of 1998 (the "Prior Agreement"). PAMCO acknowledges
receipt of One Hundred Thousand Dollars (100,000) under the terms of the Prior
Agreement (the "Initial Advances"). PAMCO further agrees that upon execution of
this Agreement NEVTAH is under no obligation to make additional capital
contributions under the Prior Agreement. PAMCO further acknowledges that the
Initial Advances will be added to and will be considered part of the convertible
debenture to NEVTAH under the Production data phase under Section 2 of this
Agreement.
2. Collection of Production Data. As a preliminary step to funding a
large-scale acquisition program, NEVTAH agrees to loan Two Hundred Thousand
Dollars, ($200,000) for PAMCO to use in-acquiring leases and stripper wells in
Oklahoma, Texas, and/or Kentucky and installing the Technology on as many as
twenty (20) wells (including operating capital). The payments by NEVTAH to PAMCO
will be made Fifty Thousand Dollars ($50,000) on or before June 12, 1998; One
Hundred Thousand Dollars ($100,000) on or before June 30, 1998; and Fifty
Thousand Dollars ($50,000) on or before July 30, 1998. This loan to PAMCO will
be structured as a convertible debenture to NEVTAH, payable in full in one (1)
year and bearing interest at five percent (5%) simple interest per annum. NEVTAH
will have the right, at any time during the
<PAGE>
Agreement between NEVTAH and PAMCO
Page 2
first year, to convert the full amount of the debenture to common stock in PAMCO
at a conversion rate of the lesser of Fifty-Five Dollars and Fifty Six Cents
($55.56) per share or the latest price of PAMCO share sales. Full conversion at
current pricing would result in 5,399.57 shares being issued to NEVTAH on
conversion, which will convey not less than ten percent (10%) of total issued
stock in PAMCO at the date of this Agreement (allowing for ESOP stock and
current option agreements). The conversion rights of NEVTAH may not be diluted
by the issuance of any additional securities by PAMCO without first giving
NEVTAH the right of first refusal to acquire any securities proposed to be
issued by PAMCO. The right of NEVTAH to convert this debenture to common stock
must be exercised in writing no later than one (1) year after the date of this
Agreement. Under the right of first refusal described in this Section, PAMCO
will provide, written notice to NEVTAH of any proposed issuance and/or sale of
securities, and NEVTAH will have ten (10) days to accept Or reject the right of
first refusal and an additional thirty (30) days to make payment for the
securities if the right is accepted.
The wells acquired and the Technology acquired with the proceeds of the
debenture will be operated for a period of up to 90 days to allow NEVTAH and
PAMCO to review the field operations and Production data for these wells. At
such time as meaningful data is available, but in no event later than 60 days
after conversion of the acquired Production to the Technology, PAMCO will
provide NEVTAH a written report and accounting of funds used and data collected
in order to establish a budget for future operations. If NEVTAH is not satisfied
with the Production data collected, NEVTAH will have the option of terminating
this Agreement. This election must be made by NEVTAH in writing to PAMCO within
ten (10) days after receipt by NEVTAH of the report of operations of the
acquired wells provided by PAMCO.
3. Capital Contributions by NEVTAH. Unless this Agreement is terminated by
NEVTAH upon completion of the operations described in Section 2, NEVTAH agrees
to provide the capital necessary for PAMCO to acquire additional Production in
amounts sufficient to satisfy the installation and operational capabilities of
PAMCO over the period of this Agreement. The initial capital funding commitment
of NEVTAH in this regard is described on Exhibit A attached hereto. NEVTAH
agrees to make additional minimum capital contributions, in addition to those
listed on Exhibit A, as established in Section 10 herein and as described on
Exhibit B attached hereto.
4. Joint Venture Entity. At such time as NEVTAH has met the funding
schedule described on Exhibit A, NEVTAH and PAMCO will create a joint venture
entity called NEVCO LLC ("NEVCO"), a Tennessee limited liability company
("LLC"). NEVTAH and PAMCO will each own fifty percent (50%) of the Financial
Interest and Governance Interest, and will be the only members, of NEVCO. NEVCO
will be a board-managed LLC and NEVTAH and PAMCO will each select two (2)
members to sit on the Board of Governors, which will be limited to no more than
five (5) Governors. A fifth member of the Board will be added only on the joint
approval and agreement of NEVTAH and PAMCO. The officers of NEVCO will be
selected by the Board at the time of formation.
To minimize total operating costs, all administrative functions and
management overhead required for NEVCO will be carried out by PAMCO and carried
as part of the operating overhead of PAMCO. Payment of such overhead will be
included in the operating budget to be prepared by PAMCO and submitted to NEVTAH
for approval pursuant to Section 9 of this Agreement.
<PAGE>
Agreement between NEVTAH and PAMCO
Page 3
5. Purpose of NEVCO. The purpose of NEVCO will be to provide a vehicle for
the combined efforts of NEVTAH and PAMCO in acquiring the Production and
conversion of the Production to the Technology. All Production acquired under
this Agreement will De transferred to and held in the name of NEVCO. NEVCO will
also receive an exclusive license to the Technology of PAMCO under the
provisions of Section 7 herein.
6. Obligations of PAMCO. PAMCO agrees to locate and select suitable
stripper well leases for acquisition by NEVCO as part of the Production. PAMCO
further agrees to install and operate the Technology on the Production and to
use reasonable efforts to optimize Production from each well acquired by NEVCO.
PAMCO will also monitor the operations of the Production and provide a written
report to NEVTAH no less frequently than monthly.
As part of PAMCO's duties in locating and selection suitable leases for
acquisition as part of the Production, PAMCO will provide a written report to
NEVTAH which will include an acquisition budget for a proposed lease acquisition
and a summary of all information relating to the lease and its history of
operation. This budget will include operating capital estimated to be required
by PAMCO to fully support the planned operations. The Board of Governors of
NEVTAH will then follow the procedure outlined in Section 8 herein.
7. Exclusive License of Technology. Upon completion of payments by NEVTAH
under Exhibit A, PAMCO agrees to provide an exclusive license to NEVCO of all
rights to the Technology (the "Exclusive License"), subject to timely completion
of obligations of NEVTAH under this Agreement. Until completion of payments by
NEVTAH under Exhibit B, PAMCO will retain the right to utilize the Technology
under the terms of this Agreement, in trust for NEVCO. As long as this Agreement
is in effect and NEVTAH is in compliance with the terms of this Agreement, PAMCO
agrees that it may not license the Technology to any other company.
The Exclusive License described in this Section will terminate in the event
that NEVTAH does not provide on-going capital to NEVCO in a timely manner in
Exhibit B established in Section 10. In addition, NEVCO will not have the right
to sub-license, hypothecate, or transfer any rights in the Exclusive License
granted herein to any third party without the express written consent of PAMCO.
8. Acquisition of Production. The acquisition of Production by PAMCO under
this Agreement will initially involve only the use of funds contributed by
NEVTAH as described In Section 2 and on Exhibit A. Beginning January 1, 1999,
however, NEVTAH agrees that it will continue to provide capital to NEVCO as
needed by NEVCO under the schedule shown on Exhibit B. As producing oil well
leases are evaluated and selected by PAMCO, from time to time, for acquisition
with funds provided by NEVTAH, PAMCO will provide a written report to NEVTAH (or
NEVCO, as appropriate) including an acquisition and conversion budget and a
summary of basic information concerning the history of the target wells (the
"Target Wells"). The report by PAMCO will also provide a timetable for
acquisition and conversion of the Target Wells, as well as the terms proposed
for evaluation and/or acquisition of the Target Wells. The report will state
whether funds will be required to be advanced for evaluation of the lease,
whether the lease will be initially acquired by (and funds required for) an
option of the lease pending acquisition, and the timetable for the payment for
such advances, options, or purchase. The budget will include an operating
capital component for PAMCO as described in Section 9 herein.
<PAGE>
Agreement between NEVTAH and PAMCO
Page 4
If neither NEVCO or NEVTAH objects in writing to the acquisition of the
Target Wells within five (5) days after receipt of the report from PAMCO, PAMCO
will proceed with the acquisition, conversion, and operation of the Target
Wells, provided that if PAMCO discovers information during this process that
indicates acquisition should not be completed, they will so notify NEVTAH,
and/or NEVCO. If either NEVCO or NEVTAH objects to acquisition of the Target
Wells, PAMCO or any other entity may acquire the Target Wells for its own
account or for the account of others (but not using funds provided under this
Agreement), subject to the sharing of revenue established in Section 9 of this
Agreement.
The requirement of PAMCO to follow the procedures outlined in this Section
will terminate at such time, if any, as this Agreement terminates.
9. Sales or Joint Ventures: PAMCO Operating Capital: Revenue Sharing Prior
to Merger. PAMCO will have the right to sell the Technology either directly
(prior to the formation of NEVCO), or through NEVCO, at prices established
according to the formula described below. PAMCO will also have the right to
enter into joint venture arrangements with, other companies who are not a party
to this Agreement, for the acquisition and/or installation of the Technology in
the oil and gas industry, provided that PAMCO agrees that its primary focus
under this Agreement will be acquisition of Production under this Agreement and
that its obligations under this Agreement to NEVTAH and NEVCO are a priority. In
addition, any revenues received by PAMCO from a joint venture with an
independent third party will go to the benefit of both PAMCO and NEVTAH under
this Agreement (or NEVCO if formed at that time) and no such joint venture will
be undertaken by PAMCO that will prevent or hinder PAMCO from carrying out its
obligations to NEVTAH and NEVCO under this Agreement. All revenues received by
PAMCO, or NEVCO, from these activities will be received in trust by PAMCO or
NEVCO for distribution of profits on a 50-50 basis with NEVTAH, subject only to
the operating capital needs of PAMCO described below.
NEVTAH acknowledges that PAMCO does not currently have sufficient operating
capital to support its obligations under this AgreemenE and that a special
allocation of available funds will be required to assure that PAMCO receives and
maintains sufficient capital to fund its operating overhead through the calendar
year 1999. NEVTAH and PAMCO agree that the pricing of the Technology through the
Production data phase described in Section 2. and using funds described on
Exhibits A and B, will be actual costs to PAMCO plus an overhead component to
PAMCO. PAMCO agrees to provide an overhead budget to be approved by NEVTAH to
cover the period from the date of execution of this Agreement through the
calendar year 1999. Any net profits received from sales to third parties, or net
profits received from joint ventures with third parties, will be applied to and
will reduce the overhead component on the Technology sold to PAMCO or NEVCO to
install on Production acquired by funds provided by NEVTAH under this Agreement.
It is the intent of this Agreement that all revenues received by PAMCO or
NEVCO during the term of this Agreement be received for the purposes described
in this Agreement and that any profits remaining be held and/or distributed to
the benefit of PAMCO and NEVTAH on a 50-50 basis.
<PAGE>
Agreement between NEVTAH and PAMCO
Page 5
10. Minimum Contribution of NEVTAH; Termination of Exclusive License. In
addition to the capital contributions required to be provided by NEVTAH under
Exhibit A, NEVTAH agrees to contribute additional capital as set out on Exhibit
B attached hereto. In the event NEVTAH has satisfied the payment schedule under
Exhibit A but fails to satisfy the capital contribution level schedule under
Exhibit B, the Exclusive License and this Agreement will terminate.
11. Merger. Upon completion of payments by NEVTAH as established on Exhibit
A and Exhibit B to this Agreement, it is agreed that PAMCO and NEVCO will merge
operations, either through a statutory or contractual merger arrangement,
provided that voting rights in the surviving entity will remain 50% with PAMCO
and 50% with NEVTAH. The exact form of the merger and the vehicle for bringing
additional capital into the merged entity will be determined by mutual agreement
of PAMCO and NEVTAH.
12. Time of the Essence; Force Majeure. NEVTAH and PAMCO agree that the
time is of the essence regarding obligations under this Agreement. The inability
of NEVTAH to satisfy the funding deadlines established on Exhibit A or Exhibit B
in a timely manner will be considered a default under the terms of this
Agreement, and PAMCO will then have the right to terminate the Agreement under
Section 13. PAMCO and NEVTAH also agree, however, that notwithstanding the
preceding language, if the spot price of crude oil, for the weight and grade of
crude produced in the Tulsa, Oklahoma, area drops below Twelve Dollars ($12) per
barrel, the obligations of NEVTAH under this Agreement will be delayed until
such time as the price of oil recovers above the Twelve Dollar ($12) per barrel
level. It is also agreed that if due to delays based on the price of oil, or for
any other reason, PAMCO does not have sufficient operating capital to carry out
its obligations under this Agreement, PAMCO will not for this reason be in
default under this Agreement and NEVTAH will cooperate with PAMCO in addressing
and solving any operating capital problems.
13. Restriction on Sale of Company. PAMCO agrees that, for so long as
NEVTAH is in compliance with the timetable for funding under the terms of this
Agreement, PAMCO will not contract to sell or sell PAMCO as a company to any
third party.
14. Termination by Agreement. NEVTAH will have the right to voluntarily
terminate this Agreement at any time, upon thirty (30) days written notice to
PAMCO. The rights which NEVCO will retain depends upon the timing of such
termination. If such termination occurs at the end of the collection of
Production data phase of this Agreement (Section 2), NEVCO will have no rights
in any future activities of PAMCO. If this Agreement is terminated by NEVTAH
prior to the completion of capital contribution obligations of NEVTAH under
Exhibit A, NEVCO will retain rights to all Production acquired, or in the
process of being acquired, with funds available to NEVCO at the time of
termination.
In the event that NEVTAH voluntarily terminates this Agreement after all
obligations set out on Exhibit A have been satisfied, NEVCO will retain
ownership of all Production acquired through funds contributed to the date of
termination. NEVTAH will also have a non-exclusive right to purchase the
Technology systems for its own account.
<PAGE>
Agreement between NEVTAH and PAMCO
Page 6
Upon voluntary termination by NEVTAH, or the default of NEVTAH in the
minimum payment provisions or under any other provision set out in this
Agreement, the rights of NEVTAH to the Exclusive License will terminate. Upon
default of NEVTAH in the timely payment of funds required under any section of
this Agreement, PAMCO may terminate this Agreement on written notice to NEVTAH.
15. Scope of Technology. The terms "Technology" as used in this Agreement
will include both the current state of the Technology at the time of execution
of this Agreement and any future developments or improvements of the Technology
developed through the efforts of PAMCO or NEVCO. Any new developments in the
Technology or improvements to existing Technology will remain the property of
PAMCO, but will be included in and subject to the Exclusive License established
in this Agreement. PAMCO agrees to take all steps necessary to obtain
international patent protection, to the extent deemed feasible and subject to
available funds.
16. Binding Effect; Assingment. This Agreement shall be binding upon and
inure to tile benefit to the parties hereto and their respective successors,
assigns, heirs and representatives. No rights or obligations hereunder may be
assigned by a party hereto without the prior written consent of the other party.
17. Entire Agreement. This Agreement, and the Exhibits attached hereto
contain the entire agreement of the parties hereto and supersede all prior
understandings and agreements of the parties with respect to the subject matter
hereof. Any reference herein to this Agreement shall be deemed to include the
Exhibits attached.
18. Headings. The descriptive headings in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
19. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original.
20. Capital Contribution Amounts. All dollar amounts described in this
Agreement will be paid in U.S. dollars and to be timely must be in collected
funds.
21. Notices. Any notice, request, information or other document to be given
hereunder to any of the parties by any other party shall be in writing and
delivered to the parties at the following addresses (or to such other address as
a party may have specified by written notice to tile other party pursuant to
this provision):
if to NEVTAH: NEVTAH Capital Management Corporation
4400 PGA Blvd., Suite 716
Palm Beach, FL 33410
Attn: Dan Kesonen
Phone: (407) 626-9901
Fax: (407) 626-2415
<PAGE>
Agreement between NEVTAH and PAMCO
Page 7
If to PAMCO: Petroleum Asset Management Company
204 Point East Drive
Nashville, TN 37216
Attn: Edward Corlew
Phone: (615) 226-2775
Fax: (615) 226-2776
With a Copy To: R. Laken Mitchell, P.C.
105 South Dixie Avenue
Cookeville, TN 38501
Attn: R. Laken Mitchell
Phone: (931) 528-7449
Phone: (931) 528-3364
Any such notice shall be deemed received (i) when receipted for by the
party to whom addressed, in the case of personal delivery; (ii) the next
business day following service by overnight mail or delivery service; (iii) the
third business day following the deposit in the U.S. mail postage pre-paid,
registered or certified mail, return receipt requested; or (iv) upon receipt of
an electronic facsimile transmission, provided that a copy of such facsimile
notice shall simultaneously be mailed to the appropriate address.
22. Governing Law; Arbitration. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Tennessee
applicable to contracts made and to be performed therein. Any controversy or
claim arising out of or relating to this Agreement or its breach shall be
subject by arbitration in the city of Nashville, Tennessee, and in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
before one arbitrator, who shall be a person with at least ten (10) years
experience in the oil and gas industry, selected by the Chief Judge of the
Federal District Court for the Middle District of Tennessee; judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
23. Severability. If any provision of this Agreement shall be held or
deemed to be, or in fact be, illegal, inoperative or unenforceable, the same
shall not affect any other provision contained herein, or render the same
invalid, inoperative, or enforceable to any extent whatsoever.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and first-above written.
NEVTAH CAPITAL MANAGEMENT CORPORATION
By:
Title:
<PAGE>
Agreement between NEVTAH and PAMCO
Page 8
PETROLEUM ASSET MANAGEMENT COMPANY
By: /s/ Edward Corlew
- ---------------------
Edward Corlew, President
AIR PULSE OIL PUMP, INC.
By: /s/ Edward Corlew
- ---------------------
Edward Corlew, President
<PAGE>
EXHIBIT A
Payments by NEVTAH will be as follows:
A. On or before September 1, 1998 - $300,000 U.S. for acquisition of up to 80
wells
B. On or before January 1, 1999 - $500,000 U.S. for acquisition of up to 100
wells
PAMCO Initials /s/ EAC
NEVTAH Initials /s/ DPK
<PAGE>
EXHIBIT B
Payments by NEVTAH will be as follows:
A. On or before April 1, 1999 - $400,000 U.S. for acquisition of up to 80
wells
B. On or before July 1, 1999 - $300,000 U.S. for acquisition of up to 100
wells
C. On or before October 1, 1999 - $300,000 U.S. for acquisition of up to 100
wells
PAMCO Initials /s/ EAC
NEVTAH Initials /s/ DPK
<PAGE>
ADDENDUM
--------
This addendum is to be attached and made apart of the agreement dated June
3, 1998 by and between Nevtah and PAMCO as the parties thereto. The intent is to
modify and set the guidelines as noted herein and address the paragraphs as
referred to in the original agreement.
#7. Exclusive License as used herein and in the entire agreement shall further
apply to any newly developed technology and patented technology by PAMCO. (See
section on technology)
#12. It is to be understood that the first dates of funding will require a
timely manner for meeting the obligations as set forth herein and budgets to be
submitted by PAMCO. As agreed these changes to the agreement will be
incorporated.
#2. To remain as stated.
EXHIBIT A
(A.) September to be $75,000 with October to be $225,000 for the total
of $300,000 as shown.
(B.) And EXHIBIT B being A., B. & C.
Shall be at the discretion of the Nevco Board or by agreement of PAMC0
and Nevtah parties whereby the funding may be allocated to a monthly
amount or by a project budget to be submitted by PAMCO. It is agreed
that a minimum monthly amount of $150,000 shall be due as per the
intent of the timely manner referred to in the original agreement.
It is agreed that the "timely manner" as stated in the agreement shall have
a cure clause to be applied to (B.) of EXHIBIT A and the entire schedule of
EXHIBIT B to allow Nevtah 30 days after being in default as described in
agreement to cure and provide the funds required by the agreement and these
above modifications.
#14. Nevtah will have and retain 50% interest in any lease or oil production
acquired by PAMCO on the behalf of this agreement should Newco not be formed by
any default, termination or delay.
PAMCO /s/ Edward Corlew
-----------------------
Edward Corlew Pres.
APOP /s/ Edward Corlew
-----------------------
Edward Corlew Pres.
Nevtah /s/ Daniel Kesonen
---------------------
Daniel Kesonen Pres.
<PAGE>
AGREEMENT
---------
This Agreement entered into this 9th day of March 1998 by and between
NEVTAH CAPITAL MANAGEMENT CORPORATION, 475 Howe Street, Suite 720, Vancouver,
B.C. V8C2B3 (hereinafter referred to as "NEVTAH"), party of the first part; and
PETROLEUM ASSET MANAGEMENT CO., 204 Point East Drive, Nashville, Tennessee
37216, and AIR PULSE OIL PUMP, INC., 204 Point East Drive, Nashville, Tennessee
37116, (hereinafter collectively referred to as PAMCO), parties of the second
part:
In consideration of the mutual agreements contained herein, the parties
agree as follows:
1. This Agreement contains the basic terms of the proposed business
structure to be formed by the Parties hereto, and the Parties agree to enter
into a more formal agreement as soon as possible.
2. The basic terms of the proposed business structure is as follows:
a. A Limited Liability Corporation will be formed in the State of
Tennessee which shall be named - to be named at a later date - (hereinafter
referred to as the "LLC").
b. The Board of Directors of the LLC shall consist of five persons,
two of which shall be selected by NEVTAH, two to be selected by PAMCO and one to
be selected by mutual agreement of the Parties.
c. NEVTAH will own 50% of the LLC and PAMCO will own 50% of the LLC.
<PAGE>
i. cont. Form and type of interest and amount of capital to be stated in the
final agreement.
d. PAMCO agrees to transfer and assign to the LLC all interests in the
procedures relative to producing oil from stripper wells (producing less than 10
barrels per day per well) which have been developed by it or its associates in
previous years. See top of page.
e. PAMCO agrees to transfer and assign all its interests in oil
producing wells or leases which it presently owns.
f. NEVTAH agrees to provide to PAMCO the funding described in Exhibit
"A" attached hereto, in accordance with the timing set forth and conforming to
the conditions set forth in said Exhibit.
g. Any new stripper well production technology or acquisition of
leases developed or proposed for development by the LLC will be presented to
NEVTAH for funding. NEVTAH will have a reasonable time, not to exceed 90 days
for any new technology or 60 days for acquisition of leases, within which to
accept or reject each such proposal.
3. this Agreement shall be executed in duplicate and shall become effective
upon execution by both Parties.
NEVTAH CAPITAL MANAGEMENT CORPORATION
By: /s/ Robert H. Barnet
Title: Vice President and Director
PETROLEUM ASSET MANAGEMENT CO.
By: /s/ Edward Corlew
Title: President
AIR PULSE OIL PUMP, INC.
By: /s/ Edward Corlew
Title: President
<PAGE>
EXHIBIT "A"
-----------
Payment by NEVTAH will be as follows:
A. On or before March 15, 1998 - $25,000 U.S.
B. On or before April 1, 1998 - $25,000 U.S.
C. On or before May 1, 1998 - $100,000 U.S.
The above amounts serve as a deposit to PAMCO for its use in acquiring leases
and wells and installing its production procedures. These amounts are for use
until a final more formal agreement can be formulated and executed. In the event
no final agreement is consummated by the Parties hereto by June 1, 1998, then
the above payments must be repaid to NEVTAH and this Agreement will become null
and void.
