UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
----------------------------------------------
(Name of Small Business Issuer in its Charter)
Nevada 88-0284209
--------------------------- ------------------
(State of other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
1380 Greg Street, Suite 220, Sparks, Nevada 89431
------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Issuer's Telephone number: (775) 331-6555
--------------
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, Par Value $0.001 Per Share
----------------------------------------
(Title of Class)
<PAGE>
PART I
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ITEM 1. DESCRIPTION OF BUSINESS
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(a) Business Development
Eagle Environmental Technologies, Ltd. (the "Company" or the
"Registrant" ) was originally incorporated in the State of Utah on February 28,
1978 under the name of Boshir Uranium and Development Company. The Company was
originally incorporated to engage mainly in the acquisition, development,
mining, milling, leasing and sale of mining properties. The Company was
originally authorized to issue 50,000 shares of common stock with a par value of
$1.00 per share.
On December 17, 1984, the stockholders approved an amendment to the
Articles of Incorporation which changed the authorized capitalization to
50,000,000 shares with a par value of $0.001 per share. On February 21, 1986,
the Company's Articles of Incorporation were amended to change the name of the
corporation to The College of Physicians and Surgeons and to increase the
authorized shares to 100,000,000, par value $0.001 per share. On or about the
11th day of February 1988 by Amendment to the Articles of Incorporation the name
of the corporation was changed to Cholla Precious Metals, Inc.
On July 12, 1991, Cholla Precious Metals, Inc., was merged into Eagle
Environmental Technologies, Inc., ("Eagle") a Nevada corporation, which was
organized on June 15, 1990. Eagle was the surviving corporation. Eagle's
capitalization consisted of 100,000,000 shares, par value $0.001 per share,
divided into two classes: (1) Ten Million (10,000,000) shares of Convertible
Preferred stock, with no voting rights; and Ninety Million (90,000,000) shares
of voting capital stock. At that time, Eagle was in the business of acquiring,
developing and testing high technological developments for the protection of the
environment. Prior to the merger, Cholla Precious Metals, Inc. liquidated its
assets and liabilities under Chapter 7 of the U.S. Bankruptcy laws.
The stockholders of Eagle authorized the issuance to the stockholders
of Cholla Precious Metals, Inc. one (1) share of the Company's authorized but
unissued common stock for each three (3) shares of Cholla Precious Metals, Inc.
common stock. Thereafter, 8,766,667 shares of the Company's stock was exchanged
for all of the outstanding stock of Cholla Precious Metals, Inc.
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In November of 1997, the Company's shares of common stock underwent a
10 to 1 reserve split. Accordingly, the number of the Company's issued and
outstanding shares was reduced to 1,776,462.
The Company has one subsidiary, Lone Eagle Technology Site, Inc.
("LETSI"). LETSI is a Nevada corporation incorporated on December 1, 1995. The
Company organized LETSI for the purpose of establishing a technology development
center for research, development and commercialization of technologies to
process hazardous waste. The Company owns all of the issued and outstanding
shares of LETSI.
On July 30, 1998, the Company issued 500,000 shares of its common stock
as a down payment on the acquisition of a Texas company named Power
Environmental, Inc. The Company also signed a promissory note for $500,000 in
connection with this acquisition. The transaction was never consummated and the
stock was canceled and returned to treasury in December of 1998.
As of February 11, 2000, 13,706,147 shares of the Company's authorized
shares of common stock were issued and outstanding and there are 365
shareholders.
To management's knowledge, the Company has not been subject to
bankruptcy, receivership or any similar proceedings, except that Cholla Precious
Metals, Inc., which was merged into the Company on September 23, 1991,
liquidated all assets and liabilities under Chapter 7 of the U.S. Bankruptcy law
on December 5, 1990.
(b) Business of the Issuer
(1) Principal Services
The Company is in the development stage. The Company is in the process
of developing, testing and obtaining patents for the most cost effective
technologies for treatment of toxins and wastes in the environment. The Company
plans to license the developments and technologies to production companies,
treatment plants or governments.
To this end, the Company has entered into a joint venture agreement
with a Hungarian firm named Palota Environmental Protection, Ltd. Through this
joint venture, the Company has acquired the right to sell waste elimination
units which use plasma technology. The units are manufactured in Hungary.
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The plasma technology involves the incineration of hazardous wastes.
This technology uses plasma, a partially ionized gas at atmospheric pressure,
which operates at temperatures ranging from 7,200 to 36,000 degrees F. These
temperatures are higher than those in conventional combustion flames.
The high temperatures generated in this process reduce the presences of
undesirable toxic organic compounds. While toxic elements such as arsenic, lead,
mercury and cadmium will not be destroyed by this process, they often can be
concentrated for economic recovery. Metals, slags, glasses or ashes produced by
this system do not pose great problems because they have been subjected to high
temperatures for long periods of time. Accordingly, volaties have been removed,
organics decomposed and heavy metals may be rendered non-leachable through
careful control of slag chemistry. The Company believes that is process is a
significant advance in incinerating technology.
The Company intends to develop and market this process in the United
States.
(2) Distribution Methods
Items are distributed by a franchise plan developed by the Company.
That is, the Company will license the technology to hazardous waste disposal
firms in the Untied States. To date, only one franchise has been sold.
Management believes that, in the foreseeable future, cash generated
from operations will be inadequate to support full marketing roll out and
ongoing product development, and that the Company will thus be forced to rely on
additional equity financing. Management is confident that it can identify
sources and obtain adequate amounts of such financing.
(3) Status of Publicly Announced New Products or Services
On October 5, 1999, the Company announced a relationship with Bruce
Klein, partner in the brokerage of Rutledge Securities Group LLC, New York City,
New York, members of the New York Stock Exchange in an effort to list the
Company on new stock exchanges such as Montreal, Boston and Chicago upon
finalization of its registration with the SEC.
On September 3, 1999, the Company acquired Zawtech International, Inc.
of Atlanta, Georgia for cash and stock. Zawtech has exclusive national licenses
for the patented Cryogenic and Laser ZAWCAD (Zero Added Waste Cutting Abrading
and Drilling) technologies from the U.S. Government Department of Energy,
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technology transfer program. Lockheed Martin Corporation, a participant in the
technology development program and licensor of the ZAWCAD technology, is also a
customer and overseas distributor for Zawtech. Cryogenic ZAWCAD's high velocity
jets of liquefied low temperature nitrogen are precisely delivered for cutting
and drilling operations, for surface coatings removal, and for hazardous and
nuclear waste decontamination. A controversy between the Company and Zawtech has
arisen regarding representations made by Zawtech in connection with the
transaction. At this point, the Company is investigating the accuracy of the
representations made by Zawtech.
(4) Competition
The Company faces well-established and well-funded competition. The
Company intends to compete against these established entities on the basis of
technology differentiation. Management believes that the Company's technology is
incomparable as to its nature and the ability to detoxify liquid wastes at the
sites. Management believes the Company's underlying technology allows it to
compete aggressively through convenience of on-site detoxification, lower costs
to plants for this treatment process and reduction of air pollution from the
elimination of transporting of liquid wastes.
In addition to established competition, the Company also faces
uncertainty regarding acceptance of, and demand for, its method of
detoxification. The Company's method represents a new development in an
established industry.
The Company's principal competition consists of entities with burner
units or burial sites. The Company intends to compete against these
well-established entities on the basis of technology differentiation, savings to
clients and convenience of use of the detoxifying equipment.
(5) Dependence on Major Customers
The waste business is not dependent on any one customer or industry.
Large volume generators of waste may contribute up to 30% of the waste stream,
but it would be divided among seven or eight companies. Equipment buyers would
be medium to large companies with specific problems and would normally
constitute a single sale of equipment to a single remediation or processing
site.
(6) Patents, Trademarks, Licenses, Copyrights, etc.
The Company owns the rights to a "Chemstasis" process for disposing of
toxic materials and solid waste products. The Company is in the process of
completing the development of these intellectual properties through research,
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development and patenting of the processes. The Company would then license the
processes to major toxic cleaning corporations, countries and franchisers. The
Company does not plan to operate the plants directly.
Conventional methods of waste treatment are based on extraction of
toxins and their disposal through destruction or storage. Chemstasis converts
the toxins to less toxic or non-toxic compounds. The cost savings achieved by
the Chemstasis process, as well as the energy savings, are significant over the
requirements for conventional processes. The Chemstasis process removes various
contaminants from dilute water based solutions. The process also removes
particulates, reduces emulsions, can enhance emulsifications, reduce organic
halogens, room temperature catalysis and modify pesticides in water.
By-products of the Chemstasis process will be non-toxic liquid waste as
well as a non-toxic stream with yield results that come under the UPA Guidelines
for discharge. The waste treatment industry has not been able to provide on all
service for on-site treatment of liquid wastes except for pick up and
transportation. The Chemstasis process can be performed on-site through a mobile
plant.
The Company also the right to market the plasma technology developed in
Hungary mentioned above.
The Company's long-term success is predicated on the strength of
obtaining the necessary patents to protect its intellectual property. The
Company relies on trade secrets and unpatented proprietary technology in its
detoxification services.
(7) Governmental Approval, Effect of Governmental Regulations and Costs and
Effects of Compliance with Environmental Laws
The hazardous waste disposal industry faces governmental regulation at
both the federal and state levels. The Company intends to limit the impact of
such regulation on its operations by becoming a developer and marketer of waste
disposal technology. At this point in time, there is no need for governmental
approval of the Company's hazardous waste processing equipment and manufacturing
of processing equipment developed at the Company's facility. Federal government
regulations are an asset to the business of the Company as it forces customers
to evaluate and purchase the new technology offered by the Company to meet
government standards.
(8) Research and Development in the Last Two Years
During the last two years, the Company has spent approximately $800,000
on development of its Plasma process and the feasibility of developing a
technology development center at a hazardous waste facility. These costs have
been borne by the Company.
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(9) Employees
As of August 31, 1999, the Company had five (5) full time and two (2)
part time employees. The four (4) officers and directors of the Company also
perform services on behalf of the Company, but do so on a non-exclusive basis.
None of the Company's employees or independent contractors is subject to a
collective bargaining agreement and the Company believes its relations with its
employees and independent contractors are good.
(c) Reports to Security Holders
Prior to filing this Form 10-SB, the Company has not been required to
deliver annual reports. To the extent that the Company is required to deliver
annual reports to security holders through its status as a reporting company,
the Company shall deliver annual reports. Also, to the extent the Company is
required to deliver annual reports by the rules or regulations of any exchange
upon which the Company's shares are traded, the Company shall deliver annual
reports. If the Company is not required to deliver annual reports, the Company
will not go the expense of producing and delivering such reports. If the Company
is required to deliver annual reports, they will contain audited financial
statements as required.
Prior to the filing of this Form 10-SB, the Company has not filed
reports with the Securities and Exchange Commission. Once the Company becomes a
reporting company, management anticipates that Forms 3, 4, 5, 10K-SB, 10Q-SB,
8-K and Schedules 13D along with appropriate proxy materials will have to be
filed as they come due. If the Company issues additional shares, the Company may
file additional registration statements for those shares.
The public may read and copy any materials the Company files with the
Securities and Exchange Commission at the Commission's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by call the Commission
at 1-800-SEC- 0330. The Commission maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission. The Internet address of
the Commission's site is (http://www.sec.gov).
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION OR PLAN OF OPERATION
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Plan of Operation
During 2000, the Company plans to focus on efforts to secure the newest
technologies available, to secure the best expertise and team available, to
develop the most cost effective technologies for the treatment of toxins and
wastes in the environment, and to complete the development of its intellectual
properties. Unless a client base is established, the Company will be forced to
rely on investment financing to meet its short and long term cash requirements.
Management believes that demand for its services will be high in the
disposal of toxic wastes. The USA leads the world in production of consumable
goods and the utilization and disposal of their remains. The ever growing
stringency of anti-pollution regulations and their enforcement by the regulators
has put the manufacturing industry in a very precarious position. Manufacturing
plants are avoiding discharge of their wastes by transporting them to
centralized treatment facilities. There is increased awareness of the hazards
from polluted water, both on wildlife and humans, and greater emphasis is being
placed on finding cost effective methods to clean up our water systems. The
Company offers manufacturing plants and others an on-site process for disposal
of toxic wastes at a lower cost.
Unless revenues increase, the Company will not be able to meet its
short-term or long-term cash requirements. Current revenues and financing likely
will be adequate through December 31, 2000. The Company will have to raise
additional funds after that point. Though management has successfully obtained
such financing in the past, there is no assurance that investment financing will
be available in the future. And if it is, additional investment financing will
result in a dilution of current shareholder equity.
The Company will continue to improve its intellectual properties
through its research and development efforts. The Company plans to protect its
developments through appropriate patent applications. If the Company receives
the appropriate patent and copyright approvals, which is not certain, the
Company expects to be able to capitalize on the anticipated trend in the
industry for technologies the Company employs. Additional development efforts
and expansion into new markets depend on the Company's ability to develop
revenue streams.
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The Company expects to obtain capital funds either from the issuance of
common stock or debt. It is expected that external sources will be available to
provide these funds, but there can be no guarantees of such funding.
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ITEM 3. DESCRIPTION OF PROPERTY
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(a) Principal Plants and Property and Description of Real Estate and
Operating Data.
The Company's principal address is located at 1380 Greg Street, Suite
220, Sparks, Nevada 89431, telephone number (775) 331-6555. This is the address
of the Company's resident agent in the State of Nevada, Nevada Agency and Trust
Company. Nevada Agency and Trust Company allows its corporate clients, such as
the Company to use its offices on a as needed basis. The Company also rents
office space in Angels Camp, California from JAB Enterprises for $960 per month.
The Company believes that such facilities are adequate for its present needs.
The Company does not own any real estate, nor is the Company engaged in
the business of investing in real estate or real estate mortgages.
(b) Investment Policies
The Company's plan of operations is focused on the sale of hazardous
waste processing equipment and manufacturing of processing equipment developed
at the Company's facility described in Item (1) of this part. Accordingly, the
Company has no particular policy regarding each of the following types of
investments:
(1) Investments in real estate or interests in real estate;
(2) Investments in real estate mortgages; or
(3) Securities of or interests in persons primarily engaged in real
estate activities.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
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(a) 5% Shareholders:
The following information sets forth certain information as of June 11,
1999 about each person who is known to the Company to be the beneficial owner of
more than five percent (5%) of the Company's Common Stock:
<TABLE>
<CAPTION>
(2)
(1) Name and Address (3) (4)
Title of Beneficial Amount and Nature of Percent of
of Class Owner Beneficial Ownership Class
-------- --------------- -------------------- -----
<S> <C> <C>
Common Brian D. Wilmot and
Judith A. Wilmot 5,044,828 1 35.74%
50 West Liberty St., Suite 880
Reno, Nevada 89501
Cede & Co. 2,544,480 18.03%
Bowling Green Station
P.O. Box 20
New York, N.Y. 10004
The Wall Street Trading Group 708,334 05.02%
465 California St., #433
San Francisco, CA 94104
Gerald A. Wilmot 1,252,500 08.73%
P.O. Box 999
Angels Camp, California 95222
</TABLE>
(b) Security Ownership of Management:
<TABLE>
<CAPTION>
(2)
(1) Name and Address (3) (4)
Title of Beneficial Amount and Nature of Percent of
of Class Owner Beneficial Ownership Class
-------- --------------- -------------------- -----
<S> <C> <C>
Common Brian D. Wilmot 5,044,828 2 35.74%
Judith A. Wilmot
P.O. Box 999
Angels Camp, CA 95222
Gerald A. Wilmot 1,252,500 08.73%
P.O. Box 999
Angels Camp, CA 95222
All Directors and 5,104,992 44.47%
Officers as a Group
</TABLE>
--------
1 Of this amount, 4,140,555 shares are registered in the name of
Buzzard Bait Transfer Co., 779,167 shares are registered in the name of Buzzard
Bait Transfer Co. Trustee JAB Enterprise Pension Pro. Plan and 21,573 shares are
registered in the name of JAB Enterprises Inc. Brian Wilmot is an officer and
director of Buzzard Bait Transfer Co. and JAB Enterprises Inc.
2 Of this amount, 4,140,555 shares are registered in the name of
Buzzard Bait Transfer Co., 779,167 shares are registered in the name of Buzzard
Bait Transfer Co. Trustee JAB Enterprise Pension Pro. Plan and 21,573 shares are
registered in the name of JAB Enterprises Inc. Brian Wilmot is an officer and
director of Buzzard Bait Transfer Co. and JAB Enterprises Inc.
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(c) Changes in Control:
There is no arrangement which may result in a change in control.
10
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS
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(a) Directors and Executive Officers
As of August 31, 1999, the directors and executive officers of the
Company, their ages, positions in the Company, the dates of their initial
election or appointment as director or executive officer, and the expiration of
the terms as directors are as follows:
<TABLE>
<CAPTION>
Period Served As
Name Age Position Director*
---- --- -------- ---------
<S> <C> <C>
Brian D. Wilmot 55 President, Chief June 1990 to present
Executive Officer
and Director
Judith A. Wilmot 57 Secretary, June 1990 to present
Treasurer and
Director
Gerald A. Wilmot 58 Vice President June 1990 to present
and Director
Richard LaMantain 49 Vice President June 17, 1998 to present
and Director
</TABLE>
*The Company's directors are elected at the annual meeting of stockholders and
hold office until their successors are elected and qualified. The Company's
officers are appointed annually by the Board of Directors and serve at the
pleasure of the Board.
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(b) Business Experience:
Brian D. Wilmot, age 55, is the President, Chief Executive Officer and
a Director of Eagle Environmental Technologies, Inc. Mr. Wilmot is a graduate of
Fresno Junior College, Fresno, California receiving an AA Degree in Liberal Arts
in 1964 and a graduate of the University of Minnesota, Minneapolis, Minnesota
receiving a BA degree in History in 1966. From June 1966 to January 1967, he was
a sales representative for Texaco, Inc. in Minneapolis, Minnesota. From January
of 1967 to January of 1969 he was in the U.S. Army. From 1969 to 1973 he was a
sales supervisor for Texaco, Inc. In 1969 he ranked second in the nation on
sales performance. From 1973 to 1974 he opened an art gallery and antique shop
in the Mother Lode area of California. From 1974 to 1979 he was the owner and
manger of an office supply business in Angels Camp, California servicing also
Lodi and Stockton, California. This business was sold in 1979. There were two
supplementary businesses, Call-Us Leasing Co.,d an equipment lessor, and
Scenario Creation, a high quality art gallery and craft supply store. From 1979
to 1981 he operated JAB Enterprises, Inc., a company engaged in real estate
investments and property developments; continued the art gallery; and organized
local businessmen to form a full-service bank, for which he acted as the
Chairman of the Board. From 1981 to 1987 sold real estate in the Angels Camp
area; did management consulting with small local businesses concerning financing
and management problems in the Angels Camp area. From 1987 to 1994, formed and
operated Jaguar Realty, Inc., a commercial and business opportunity sales
specialist company; developed alternative financing programs for purchasing
businesses, including the leveraged buy-outs and financing plans. From 1990 to
1994 was a real estate broker with two offices. From June of 1990 to present has
been the President and Director of Eagle Environmental Technologies, Ltd.
Judith A. Wilmot, age 57, is the Secretary, Treasurer and a Director of
Eagle Environmental Technologies, Inc. She attended St. Cloud State College at
St. Cloud, Minnesota in 1960-1961. Attended Minneapolis School of Art,
Minneapolis, Minnesota in 1962. Graduates with a BS degree in Art Education from
the University of Minnesota, Minneapolis, Minnesota in 1969. From January of
1970 to January of 1972 was a substitute teacher for several schools in the
Minneapolis area. Along with her husband, Brian D. Wilmot, she operated an art
gallery and antique shop in the Mother Lode area of California. From 1974 to
1979, owned and operated an office supply business in Angels Camp, California
managing the inside sales, bookkeeping and printing/art department. From 1979 to
1984 operated Scenario Creations, an art gallery in Angels Camp, California.
From 1984 to the present, in the free lance art sales business. During this time
she also was an illustrator for zoos and animal groups. From June 1990 to the
present, she has been an officer and a Director of Eagle Environmental
Technologies, Ltd.
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Gerald A. Wilmot, age 58, is the Vice President and a Director of Eagle
Environmental Technologies, Ltd. Mr. Wilmot graduated with a BA degree in
Psychology and a minor in Business Administration from Fresno State College at
Fresno, California in 1966. From 1968 to 1974 a Senior Underwriter for Employers
Insurance of Wausau in the Los Angeles, California area. From 1974 to 1985, was
an underwriting manager, a branch manager and a Director of Special Risk
Underwriting for Western Employers Insurance in the Los Angeles, California
area. From 1985 through 1989 was the President, Insurance Broker and consultant
for Capital Alternatives, a company he formed, to offer management assistance
involving Workman's Compensation Insurance, liability and market conditions of
the insurance industry and was a licensed Insurance Broker in the State of
California. From 1989 to June of 1994, was the Senior Underwriter with AIG
Insurance Company in Los Angeles, California reviewing and approving major
policies involving the reinsurance market and workers compensation policies.
Richard LaMantain, age 49, is a Vice President and Director of Eagle
Environmental Technologies, Ltd. Mr. LaMantain acts as the national marketing
EPA liaison, coordinating the marketing of the franchises within the various
regions and coordinating with the international markets on training and testing
of the various technologies. He is experienced in sales and market development.
Mr. LaMantain has operated his own health club business. He serves as the
liaison between the Company and Canadian marketing partners. He has been an
officer and director of the Company since June of 1998.
(c) Directors of Other Reporting Companies:
None of the directors are directors of other reporting companies.
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(d) Employees:
As of December 31, 1999, the Company had five (5) full time
and two (2) part time employees. The four (4) officers and directors who are
identified above are significant employees of the Company.
(e) Family Relationships:
Brian D. Wilmot and Judith A. Wilmot are husband and wife. Gerald A.
Wilmot is the brother of Brian D. Wilmot. There are no other relationships
between the directors, executive officers or any other person who may be
selected as a director or executive officer of the Company.
(f) Involvement in Certain Legal Proceedings:
None of the officers and directors of the Company have been involved in
the past five (5) years in any of the following:
(1) Bankruptcy proceedings;
(2) Subject to criminal proceedings or convicted of a criminal act;
(3) Subject to any order, judgment or decree entered by any Court for
violating any laws relating to business, securities or banking
activities; or
(4) Subject to any order for violation of federal or state securities
laws or commodities laws.
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ITEM 6. EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------
The following table sets forth information about compensation paid or
accrued by the Company officers and directors during the years ended December
31, 1998, 1997 and 1996:
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<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
(e) (g)
Other (f) Securities (i)
(a) Annual Restricted Under- (h) Other
Name and (c) (d) Compen- Stock Lying LTIP Compen-
Principal (b) Salary Bonus sation Awards Options/ Payouts sation
Position Year $ ($) ($) ($) SARs(#) ($) ($)
-------- ---- - --- --- --- ------- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brian D. Wilmot
President 1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
1996 $ None $ None $ None $ None None None None
Judith A. Wilmot
Secretary 1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
1996 $ None $ None $ None $ None None None None
Gerald A. Wilmot
Treasurer 1998 $ 3,750 $ None $ None $ None None None None
1997 $ 9,800 $ None $ None $ None None None None
1996 $ None $ None $ None $ None None None None
Richard LaMantain
Vice President 1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
1996 $ None $ None $ None $ None None None None
</TABLE>
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------------------------------
During the past two (2) years, the Company has not entered into a
transaction with a value in excess of $60,000 with a director, officer or
beneficial owner of 5% or more of the Company's common stock, except as
disclosed hereunder:
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On or about January 7, 1998, the Company issued 1,399,085 shares of its
capital stock to Buzzard Bait Transfer Co. in exchange for debt. Such debt was
valued at $279,817 and shares were issued at the rate of $0.20 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended. Brian and Judy Wilmot, the
Company's president and secretary, respectively, own and control Buzzard Bait
Transfer Co.
On or about January 7, 1998, the Company issued 175,000 shares of its
capital stock to JAB Enterprises in exchange for debt. Such debt was valued at
$35,000 and shares were issued at the rate of $0.20 per share. Such shares were
issued pursuant to the exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended. Brian Wilmot, the Company's president,
controls JAB Enterprises.
In 1998 in the Company paid Buzzard Bait Transfer Co. a total of
$13,100 in cash in exchange for management services rendered to the Company by
Brian and Judy Wilmot, the Company's president and secretary, respectively.
Brian and Judy Wilmot own and control Buzzard Bait Transfer Co.
In 1999 in the Company paid Buzzard Bait Transfer Co. a total of
$26,200 in cash in exchange for management services rendered to the Company by
Brian and Judy Wilmot, the Company's president and secretary, respectively.
Brian and Judy Wilmot own and control Buzzard Bait Transfer Co.
On or about June 4, 1999, the Company issued 657,500 shares of its
common stock to Gerald Wilmot in exchange for contract wages. Such contract
wages were valued at $105,200 and shares were issued at the rate of $0.16 per
share. Such shares were issued pursuant to the exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended.
On or about June 4, 1999, the Company issued 1,499,375 shares of its
common stock to Buzzard Bait Transfer Co. in exchange for services. Such
services were valued at $239,900, and the shares were issued at the rate of
$0.16 per share. Such shares were issued pursuant to the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended.
16
<PAGE>
As of December 22, 1999, the following is a list of outstanding options
granted by the Company:
<TABLE>
<CAPTION>
Name No. Shares Price Per Share Option Expires
---- ---------- --------------- --------------
<S> <C> <C> <C> <C>
Silver Tree 100,000 $0.30 12-31-03
Gerald Wilmot 50,000 $0.30 6-30-04
BBTC-BW 400,000 $0.30 7-31-00
BBTC-JW 100,000 $0.30 7-31-00
Richard Pennak 100,000 $0.18 9-04-04
Paul Emery 1,000 $0.30 9-30-00
Acquafore Inc.* 100,000 $0.30 12-31-03
Venture America 437,591 $0.38 11-03-02
Dennis Bingham 100,000 $0.18 9-30-02
Gary Palmer 100,000 $0.18 9-30-02
Douglas Stacey 100,000 $0.18 9-30-02
Alex Willems 100,000 $0.18 9-01-02
Jorg Willems 100,000 Market less 20% 9-01-02
John Bowles 100,000 $0.25 1-31-00
Richard Nye 100,000 $0.25 1-31-00
John Bowles 100,000 $0.25 5-31-00
Bruce Dorfman 1,000,000 $0.18 9-01-00
</TABLE>
*Assigned to Buzzard Bait Transfer Company in 1997.
As of December 22, 1999, the following is a list of outstanding
warrants granted by the Company:
Name No. Shares Price Per Share Warrant
---- ---------- --------------- -------
Jerry Stringer 70,000 $0.05 Prepaid
As of December 22, 1999, the following is a list of outstanding
convertible debentures granted by the Company:
Name No. Shares Price Per Share Terms
---- ---------- --------------- -----
Charles O'Malley 50,000 $0.10 Paid on Demand 8-31-01
Christopher Bohn 20,000 $0.10 Paid on Demand 8-31-01
Joel W. Rogde 10,000 $0.10 Paid on Demand 8-31-01
Becky Demarr 10,000 $0.10 Paid on Demand 8-31-01
T. Dunn 1,500,000 Various **
**Part of Zawtech acquisition, a transaction which has not been completed and is
pending clarification on values of property to be acquired.
17
<PAGE>
--------------------------------------------------------------------------------
ITEM 8. LEGAL PROCEEDINGS
--------------------------------------------------------------------------------
The Company is not party to, and none of the Company's property is
subject to, any pending or threatened legal, governmental, administrative or
judicial proceedings that will have a materially adverse effect upon the
Company's financial condition or operation, except as disclosed below:
The Company is bringing suit against Dakota Partners, Bismarck, North
Dakota. The case has not yet been filed. The Company is seeking the return of
funds resulting from a liquidation of assets by a lienholder for a loan made to
the Company's subsidiary, Lone Eagle Technology Site, Inc. The partners were
overpaid by the liquidation and have not returned the overpaid sum of $25,000,
plus over-charges of $50,000.
The Company is investigating facts on a suit against Plasma
Environmental Technologies Inc. Canada. PETI has granted the Company the
exclusive marketing rights to its Plasma equipment by contract and its offering
circulars, and then tried to disclaim the commitment. The Company would
seek-reaffirmation of the agreements and cash to pay legal expenses of
approximately $10,000.
The Company has filed a suit against American Water Technologies Inc.,
Stockton, California and its president Paul Chapman for damages and the return
of issued purchase money stock of 165,500 shares. AWT was a corporation which
the Company planned to acquire. Purchase contracts were signed and the Company
paid a cash deposit of $10,000, plus the stock, to purchase 100% of the
outstanding shares of AWT. AWT failed to produce audited financial statements,
failed to disclose numerous tax authority debts and misrepresented its business
condition. AWT failed to deliver its shares to the Company. The Company
terminated the agreement and made demand that its shares be returned.
--------------------------------------------------------------------------------
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON REGISTRANT'S
COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
--------------------------------------------------------------------------------
Market Information:
Prior to November of 1999, the Company's common stock was quoted for
trading on the system of the National Association of Securities Dealers, Inc.
("NASDAQ"), known as the Bulletin Board under the symbol "EGVR". On November 15,
1999, the Company's stock no longer qualified for such quotation because the
Compamy was not a "reporting company." When this Form 10-SB registration
statement becomes effective 60 days after it is filed and after any comments
that the staff of the Commission has with regard to this registration statement
have been satisfied, management anticipates that one or more NASD-member market
makers will apply for a resumption of quotation privileges on the OTC Bulletin
Board. The Company will request a resumption of quotation privileges on the OTC
bulletin board should no NASD-member market maker do so.
18
<PAGE>
Management of the Company believes that the common stock will be quoted
in the Pink Sheets during the period when it is not eligible for quotation on
the OTC Bulletin Board. The Pink Sheets is a weekly publication of the National
Quotation Bureau, a private business concern that lists the names, telephone
numbers and indications of interest of broker-dealers in buying or selling the
securities listed in the publication. Because the prices quoted are only
indications of interest printed weekly, the trading markets of Pink Sheet
companies tend to be thin, sporadic and volatile.
The following table sets forth the range of high and low bid prices for
the Company's Common Stock for each quarterly period indicated as reported by
the Trading and Market Services department of the NASDAQ Stock Market, Inc.:
Common Stock
-------------------------------------------------------------
Quarter Ended High Bid Low Bid
-------------------------------------------------------------
June 30, 2000 N/A N/A
March 31, 2000 N/A N/A
December 31, 1999 N/A N/A
September 30, 1999 $0.24 $0.1
June 30, 1999 $0.4 $0.1
March 31, 1999 $0.8125 $0.08
December 31, 1998 $0.25 $0.1
September 30, 1998 $0.8125 $0.1
June 30, 1998 $1.21875 $0.3125
March 31, 1998 $1.5625 $0.375
December 31, 1997 $0.1 $0.02
September 30, 1997 $0.02 $0.02
June 30, 1997 $0.0625 $0.02
March 31, 1997 $0.0625 $0.03125
Holders:
There were approximately 380 holders of record of the Company's common
stock as of July 24, 2000.
19
<PAGE>
Dividends:
The Company has never paid cash dividends on its stock and does not
intend to do so in the foreseeable future. The Company currently intends to
retain its earnings for the operation and expansion of its business. The
Company's continued need to retain earnings for operations and expansion are
likely to limit the Company's ability to pay dividends in the future.
--------------------------------------------------------------------------------
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
--------------------------------------------------------------------------------
On or about August 8, 1997, the Company issued 200,000 shares (20,000
restated shares) of its capital stock to Alexander H. Walker, Jr. in exchange
for legal services. Such legal services were valued at $10,000 and shares were
issued at the rate of $0.50 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about December 3, 1997, the Company authorized a reverse split of
the Company's capital stock on a basis of ten (10) shares to one (1).
On or about January 7, 1998, the Company issued 500,000 shares of its
capital stock to Vanity A.V.V. in exchange for promotional services. Such
services included general shareholder relations services and the design of the
Company's initial web page. Such services were valued at $100,000 and shares
were issued at the rate of $0.20 per share. Such shares were issued pursuant to
the exemption from registration under Section 4(2) of the Securities Act of
1933, as amended.
On or about January 7, 1998, the Company issued 100,000 shares of its
capital stock to Roy Meadows in exchange for cash. The Company received $20,000
in this regard and issued such shares at the rate of $0.20 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.
On or about January 7, 1998, the Company issued 50,000 shares of its
capital stock to Crystal Recovery Systems Inc. in exchange for cash. The Company
received $10,000 in this regard and such shares were issued at the rate of $0.20
per share. Such shares were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.
On or about January 7, 1998, the Company issued 100,000 shares of its
capital stock to Balanced Resource Corp. in exchange for cash. The Company
received $20,000 in this regard and such shares were issued the rate of $0.20
per share. Such shares were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.
On or about January 7, 1998, the Company issued 1,399,085 shares of its
capital stock to Buzzard Bait Transfer Co. in exchange for debt. Such debt was
valued at $279,817 and shares were issued at the rate of $0.20 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.
On or about January 7, 1998, the Company issued 175,000 shares of its
capital stock to JAB Enterprises in exchange for debt. Such debt was valued at
$35,000 and shares were issued at the rate of $0.20 per share. Such shares were
issued pursuant to the exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended.
20
<PAGE>
On or about January 26, 1998, the Company issued 75,000 shares of its
capital stock to Roy Meadows in exchange for cash. The Company received $15,000
in this regard and such shares were issued at the rate of $.20 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.
On or about January 26, 1998, the Company issued 575,000 shares of its
common stock to Gerald Wilmot in exchange for office management services. Such
services were valued at $115,000, and the shares were issued at the rate of
$0.20 per share. Such shares were issued pursuant to the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended.
On or about February 18, 1998, the Company issued 40,000 shares of its
capital stock to Brian D. Bisset in exchange for services. Such services were
valued at $8,000 and shares were issued at the rate of $0.20 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.
On or about February 18, 1998, the Company issued 10,000 shares of its
capital stock to Andrew G. Walker in exchange for services. Such services were
valued at $2,000 and shares were issued at the rate of $0.20 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.
On or about February 18, 1998, the Company issued 75,000 shares of its
capital stock to Stockbroker Relations, Inc. in exchange for cash. The Company
received $15,000 in this regard and such shares were issued at the rate of $0.20
per share. Such shares were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.
On or about March 12, 1998, the Company issued 165,500 shares of its
capital stock to Paul Chapman in exchange for all of the issued and outstanding
stock of American Water Technologies, Inc. The transaction was never consummated
and the shares were canceled on the books and records of the Company. A lawsuit
has been instituted as set forth in Item 8, Legal Proceedings for the return of
the shares.
On or about April 16, 1998, the Company issued 20,000 shares of its
capital stock to Roy Meadows in exchange for cash. The Company received $4,000
in this regard and such shares were issued at the rate of $0.20 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.
21
<PAGE>
On or about April 16, 1998, the Company issued 155,000 shares of its
common stock to Stockbrokers Relations Inc. in exchange for $31,000 in cash. The
shares were issued at the rate of $0.20 per share. Such shares were issued
pursuant to the exemption from registration under Section 4(2) of the Securities
Act of 1933, as amended.
On or about May 27, 1998, the Company issued 4,500 shares of its common
stock to Michael Lamaintain in exchange for $900 in cash. The shares were issued
at the rate of $0.20 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about May 29, 1998, the Company issued 50,000 shares of its
common stock to Roy Meadows in exchange for $10,000 in cash. The shares were
issued at the rate of $0.20 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about June 29, 1998, the Company issued 6,000 shares of its
common stock to Charles Wenger in exchange for $2,460 in cash. The shares were
issued at the rate of $0.41 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about June 29, 1998, the Company issued 14,634 shares of its
common stock to Michael Lamantain in exchange for $5,500 in cash. The shares
were issued at the rate of $0.38 per share. Such shares were issued pursuant to
the exemption from registration under Section 4(2) of the Securities Act of
1933, as amended.
On or about August 5, 1998, the Company issued 11,029 shares of its
common stock to Michael LaMantain in exchange for $7,741 in cash. The shares
were issued at the rate of $0.70 per share. Such shares were issued pursuant to
the exemption from registration under Section 4(2) of the Securities Act of
1933, as amended.
On or about September 1, 1998, the Company issued 20,000 shares of its
common stock to Michael LaMantain in exchange for $5,000 in cash. The shares
were issued at the rate of $0.25 per share. Such shares were issued pursuant to
the exemption from registration under Section 4(2) of the Securities Act of
1933, as amended.
On or about December 31, 1998, the Company issued 1,253,524 shares of
its common stock to Buzzard Bait Transfer Co. Such shares were issued in
consideration for cash provided for the operations of the Company. Such
consideration total $123,172. These shares were issued pursuant to the exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended.
22
<PAGE>
On or about February 1, 1999, the Company issued 227,371 shares of its
common stock to Buzzard Bait Transfer Co. in exchange for providing collateral
to a lender on behalf of Eagle. Such collateral use was valued at $35,000, and
the shares were issued at the rate of $0.15 per share. Such shares were issued
pursuant to the exemption from registration under Section 4(2) of the Securities
Act of 1933, as amended.
On or about April 19, 1999, the Company issued a total of 150,000
shares of its common stock to John Bowles in exchange for $10,000 in cash and as
a fee for investor relation services. Such cash and services were valued at
$15,000, and the shares were issued at the rate of $0.10 per share. Such shares
were issued pursuant to the exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended.
On or about April 27, 1999, the Company issued 100,000 shares of its
common stock to Thomas Persson in exchange for $20,000 in cash. The shares were
issued at the rate of $0.20 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about April 27, 1999, the Company issued 25,000 shares of its
common stock to John Bowles in exchange for investor relation services. Such
services were valued at $2,500, and the shares were issued at the rate of $0.10
per share. Such shares were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.
On or about April 27, 1999, the Company issued 25,000 shares of its
common stock to Richard Nye in exchange for investor relation services. Such
services were valued at $2,500, and the shares were issued at the rate of $0.10
per share. Such shares were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.
On or about June 4, 1999, the Company issued 657,500 shares of its
common stock to Gerald A. Wilmot in exchange for officer management services.
Such services were valued at $105,200, and the shares were issued at the rate of
$0.16 per share. Such shares were issued pursuant to the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended.
On or about June 4, 1999, the Company issued 1,499,375 shares of its
common stock to Buzzard Bait Transfer Co. in exchange for providing two officers
for management services. Such services were valued at $239,900, and the shares
were issued at the rate of $0.16 per share. Such shares were issued pursuant to
the exemption from registration under Section 4(2) of the Securities Act of
1933, as amended.
23
<PAGE>
On or about June 23, 1999, the Company issued 28,000 shares of its
common stock to Laszld Heredy in exchange for technical advice on plasma
technology and related uses services. Such services were valued at $28,000, and
the shares were issued at the rate of $1.00 per share. Such shares were issued
pursuant to the exemption from registration under Section 4(2) of the Securities
Act of 1933, as amended.
On or about July 21, 1999, the Company issued 100,000 shares of its
common stock to Michael Ervin in exchange for $10,000 in cash. The shares were
issued at the rate of $0.10 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about September 8, 1999, the Company issued 600,000 shares of its
common stock to Carl Dunn in exchange for the purchase of ZAWCAD rights and
related technologies held by the company Zawtech International Inc. Such rights
were valued at $132,000, and the shares were issued at the rate of $0.22 per
share. Such shares were issued pursuant to the exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended.
On or about September 8, 1999, the Company issued 400,000 shares of its
common stock to Laura Decker in exchange for the purchase of ZAWCAD rights and
related technologies held by the company Zawtech International, Inc. Such rights
were valued at $88,000 and the shares were issued at the rate of $0.22 per
share. Such shares were issued pursuant to the exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended.
On or about September 16, 1999, the Company issued 400,000 shares of
its common stock to John Bowles in exchange for $20,000 in cash. The shares were
issued at the rate of $0.05 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about October 4, 1999, the Company issued 35,000 shares of its
common stock to Mohommad N. Safi in exchange for $5,000 in cash. The shares were
issued at the rate of $0.14 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about October 7, 1999, the Company issued 375,000 shares of its
common stock to Innovation Finance Inc. in exchange for services securing other
technologies for purchase or merger with Eagle, namely ZAWCAD as the first
technology provided. Such services were valued at $75,000, and the shares were
issued at the rate of $0.20 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
24
<PAGE>
On or about October 7, 1999, the Company issued 375,000 shares of its
common stock to Richard Marler in exchange for services in securing other
technologies for purchase or merger with Eagle, namely ZAWCAD as the first
technology provided. Such services were valued at $75,000, and the shares were
issued at the rate of $0.20 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about November 5, 1999, the Company issued 50,000 shares of its
common stock to Dennis Bingham as a bonus for his agreement to perform services
for the new management of Zawtech as needed after the transition. Such bonus was
valued at $500, and the shares were issued at the rate of $0.01 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.
On or about November 5, 1999, the Company issued 50,000 shares of its
common stock to Gary Palmer as a bonus for his agreement to perform services for
the management of Zawtech as needed after the transition. Such bonus was valued
at $500, and the shares were issued at the rate of $0.01 per share. Such shares
were issued pursuant to the exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended.
On or about November 5, 1999, the Company issued 50,000 shares of its
common stock to Douglas Stacey as a bonus for his agreement to perform services
for the management of Zawtech as needed after the transition. Such bonus was
valued at $500, and the shares were issued at the rate of $0.01 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.
On or about December 30, 1999, the Company issued 250,000 shares of its
common stock to Rutledge Securities in exchange for financial services rendered
to the company. Such services were valued at $60,000, and the shares were issued
at the rate of $0.24 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about December 30, 1999, the Company issued a total of 1,779,167
shares of its common stock to Buzzard Bait Transfer Co. in exchange for
management services rendered in connection with the Company's acquisition of its
ZAWCAD technology. Such services were valued at $17,791 and the shares were
issued at the rate of $0.01 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about January 19, 2000, the Company issued 4,000 shares of its
common stock to Mathew Hill in exchange for $200 in cash. The shares were issued
at the rate of $0.05 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
25
<PAGE>
On or about May 5, 2000, the Company issued 250,000 shares of its
common stock to Rutledge Securities in exchange for financial services. Such
services were valued at $60,000, and the shares were issued at the rate of $0.24
per share. Such shares were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.
On or about May 25, 2000, the Company issued 50,000 shares of its
common stock to Mohammad N. Safi in exchange for $2,500 in cash. The shares were
issued at the rate of $0.05 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about May 25, 2000, the Company issued 10,000 shares of its
common stock to Mohammad A. Safi in exchange for $500 in cash. The shares were
issued at the rate of $0.05 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
On or about June 2, 2000, the Company issued 100,000 shares of its
common stock to Michelle Sweeten in exchange for $5,000 in cash. The shares were
issued at the rate of $0.05 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.
26
<PAGE>
--------------------------------------------------------------------------------
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED
--------------------------------------------------------------------------------
The Company is registering all of its issued and outstanding shares of
its capital stock with a par value of One Mill ($0.001) per share. On June 30,
2000, there were 14,116,147 shares of stock issued and outstanding.
Common Stock
Each of the holders of record of Common Stock is entitled to one (1)
vote per share thereof in the election of the Company's directors and all other
matters submitted to such holders for a vote of stockholders; to share ratably
in all dividends, when, as, and if declared by the Company's Board of Directors
from funds legally available therefor; and to share ratably in all assets
available for distribution to holders of record of capital stock upon
liquidation or dissolution. There are no cumulative voting rights with respect
to the election of the Company's directors, no pre-emptive rights to subscribe
for any of the Company's securities, and no conversion rights or sinking fund
provisions applicable to the common stock.
"Anti-Takeover" Provisions. Although the Board of Directors is not
presently aware of any takeover attempts, the Company's Certificate of
Incorporation and By- laws contain certain provisions which may be deemed to be
"anti-takeover" in nature in that such provisions may deter, discourage, or make
more difficult the assumption of control of the Company by another corporation
or person through a tender offer, merger, proxy contest or similar transaction
or series of transactions. These provisions were adopted unanimously by the
Board of Directors and approved by the stockholders of the Company.
Authorized but Unissued Shares. The Company has authorized 100,000,000
shares of capital stock, 10,000,000 shares of which are Convertible Preferred
stock. These shares were authorized for the purpose of providing the Board of
Directors of the Company with as much flexibility as possible to issue
additional shares for proper corporate purposes including equity financing,
mergers, stock dividends, stock splits, stock options and other purposes. The
Company has no agreements, commitments or plans at this time for the sale or use
of the additional shares of capital stock except as described herein. Through
June 30, 2000, the Company had issued 14,116,147 shares of capital stock.
27
<PAGE>
No Cumulative Voting. The Company's Certificate of Incorporation and
By-laws do not contain any provisions for cumulative voting. Cumulative voting
entitles stockholders to as many votes as equal the number of shares owned by
such holder multiplied by the number of directors to be elected. A stockholder
may cast all these votes for one candidate or distribute them among any two or
more candidates. Thus, cumulative voting for the election of directors allows a
stockholder or group of stockholders who hold less than fifty percent (50%) of
the outstanding shares voting to elect one or more members of a Board of
Directors. Without cumulative voting for the election of directors, the vote of
holders of a plurality of the shares voting is required to elect any member of a
Board of Directors and would be sufficient to elect all the members of the Board
of Directors being elected.
General Effect of Anti-Takeover Provisions. The overall effect of these
provisions may be to deter a future tender offer or other takeover attempt that
some stockholders might view to be in their best interest as the offer might
include a premium over the market price of the Company's capital stock at that
time. In addition, these provisions may have the effect of assisting the
Company's current management in retaining its position and place it in a better
position to resist changes which some stockholders may want to make if
dissatisfied with the conduct of the Company's business.
Options and Warrants
--------------------
On or about August 15, 1990, the Company entered into a Stock Option
Agreement with Buzzard Bait Transfer Co. Under the terms of this option
agreement, the Company granted Buzzard Bait the right to purchase a total of
1,000,000 shares of the Company's common stock on or before July 31, 2000. Under
the terms of this agreement, Buzzard Bait agreed to pay the Company $0.30 per
share for the shares Buzzard Bait chose to purchase. The option agreement with
Buzzard Bait is assignable.
28
<PAGE>
On or about August 15, 1990, the Company entered into a Stock Option
Agreement with Buzzard Bait Transfer Co. Under the terms of this option
agreement, the Company granted Buzzard Bait the right to purchase a total of
4,000,000 shares of the Company's common stock on or before July 31, 2000. Under
the terms of this agreement, Buzzard Bait agreed to pay the Company $0.30 per
share for the shares Buzzard Bait chose to purchase. The option agreement with
Buzzard Bait is assignable.
On or about January 1, 1993, the Company entered into a Stock Option
Agreement with Aquafore Inc. which was subsequently assigned to Buzzard Bait
Transfer Co. on April 15, 1993. Under the terms of this option agreement, the
Company granted the Optionee the right to purchase a total of 1,000,000 shares
of the Company's common stock on or before December 31, 2003. Under the terms of
this agreement, the Optionee agreed to pay the Company $0.30 per share for the
shares Optionee chose to purchase. The option agreement with Optionee is
assignable.
On or about May 8, 1993, the Company entered an Agreement for Revision
International Advisory Agreement with Venture Americas. Under the terms of this
agreement, the Company granted an option to Venture Americas to purchase a total
of 4,375,912 shares of the Company's common stock on or before the period of ten
(10) years from the date of the agreement. Under the terms of this agreement,
Venture Americas agreed to pay the Company $0.38 per share for the shares
Venture Americas chose to purchase. Partial exercising of the option is allowed.
On or about July 1, 1994, the Company entered into a Stock Option
Agreement with Gerald A. Wilmot. Under the terms of this option agreement, the
Company granted Gerald A. Wilmot the right to purchase a total of 500,000 shares
of the Company's common stock on or before June 39, 2004. Under the terms of
this agreement, Mr. Wilmot agreed to pay the Company $0.30 per share for the
shares Mr. Wilmot chose to purchase.
On or about November 1, 1994, the Company entered into a Stock Option
Agreement with Paul Emery Associates. Under the terms of this option agreement,
the Company granted Paul Emery Associates the right to purchase a total of
500,000 shares of the Company's common stock on the following basis: 250,000
vested over 5 years; 10,000 issued upon signing Employment Agreement; 120,000
shares when stock value achieves $3.00 trade value; and 120,000 when stock value
achieves $6.00 trade value. The 250,000 share option expired as of the close of
business on October 31, 1999. Under the terms of this agreement, Paul Emery
Associates agreed to pay the Company $0.30 per share for the shares Paul Emery
Associates chose to purchase. The option agreement with Paul Emery Associates is
assignable.
29
<PAGE>
On or about January 11, 1999, the Company entered into a Stock Option
Agreement with John Bowles. Under the terms of this option agreement, the
Company granted John Bowles the right to purchase a total of 100,000 shares of
the Company's common stock on or before January 10, 2001. Under the terms of
this agreement, Mr. Bowles agreed to pay the Company $0.25 per share for the
shares Mr. Bowles chose to purchase. The option agreement with Mr. Bowles is
assignable.
On or about January 25, 1999, the Company entered into a Stock Option
Agreement with Richard Nye. Under the terms of this option agreement, the
Company granted Richard Nye the right to purchase a total of 100,000 shares of
the Company's common stock on or before January 24, 2001. Under the terms of
this agreement, Mr. Nye agreed to pay the Company $0.25 per share for the shares
Mr. Nye chose to purchase. The option agreement with Mr. Nye is assignable.
On or about May 27, 1999, the Company entered into a Stock Option
Agreement with John Bowles. Under the terms of this option agreement, the
Company granted John Bowles the right to purchase a total of 100,000 shares of
the Company's common stock on or before May 27, 2001. Under the terms of this
agreement, Mr. Bowles agreed to pay the Company $0.25 per share for the shares
Mr. Bowles chose to purchase. The option agreement with Mr. Bowles is
assignable.
On or about July 14, 1999, the Company entered into a fee agreement
with Rutledge Securities Group, LLC. Under the terms of this fee agreement, the
Company granted Rutledge Securities Group, LLC an option to purchase 100,000
shares of the Company's common stock at $0.14 per share with a two year
expiration period if a goal of $1,000,000 is raised over the next nine (9)
months.
On or about September 1, 1999, the Company entered into a Stock Option
Agreement with Alex Willems. Under the terms of this option agreement, the
Company granted Alex Willems the right to purchase a total of 100,000 shares of
the Company's common stock on or before September 1, 2001. Under the terms of
this agreement, Mr. Willems agreed to pay the Company $0.18 per share for the
shares Mr. Willems chose to purchase. The option agreement with Mr. Willems is
assignable.
On or about September 9, 1999, the Company entered into a Stock Option
Agreement with Richard Pennak. Under the terms of this option agreement, the
Company granted Richard Pennak the right to purchase a total of 100,000 shares
of the Company's common stock on or before August 31, 2004. Under the terms of
this agreement, Mr. Pennak agreed to pay the Company $0.18 per share for the
shares Mr. Pennak chose to purchase. The option agreement with Mr. Pennak is
assignable.
On or about September 19, 1999, the Company entered into a
Option/Consulting Agreement with The Wall Street Trading Group. Under the terms
of this agreement, the Company granted The Wall Street Trading Group an option
to purchase 1,000,000 free trading shares of the Company on or before September
20, 2000. Under the terms of this agreement, The Wall Street Trading Group
agreed to pay the Company $0.18 per share for the shares The Wall Street Trading
Group chose to purchase.
On or about October 1, 1999, the Company entered into a Stock Option
Agreement with Dennis Bingham. Under the terms of this option agreement, the
Company granted Dennis Bingham the right to purchase a total of 100,000 shares
of the Company's common stock on or before September 30, 2002. Under the terms
of this agreement, Mr. Bingham agreed to pay the Company $0.18 per share for the
shares Mr. Bingham chose to purchase. The option agreement with Mr. Bingham is
assignable.
30
<PAGE>
On or about October 1, 1999, the Company entered into a Stock Option
Agreement with Douglas Stacey. Under the terms of this option agreement, the
Company granted Douglas Stacey the right to purchase a total of 100,000 shares
of the Company's common stock on or before September 30, 2002. Under the terms
of this agreement, Mr. Stacey agreed to pay the Company $0.18 per share for the
shares Mr. Stacey chose to purchase. The option agreement with Mr. Stacey is
assignable.
On or about October 1, 1999, the Company entered into an Stock Option
Agreement with Gary Palmer. Under the terms of this option agreement, the
Company granted Gary Palmer the right to purchase a total of 100,000 shares of
the Company's common stock on or before September 30, 2002. Under the terms of
this agreement, Mr. Palmer agreed to pay the Company $0.18 per share for the
shares Mr. Palmer chose to purchase. The option agreement with Mr. Palmer is
assignable.
On or about December 13, 1999, the Company entered into a Stock Warrant
Agreement with Jerry Stringer. Under the terms of this prepaid warrant, the
Company granted Jerry Stringer the right to purchase 70,000 shares of the
Company's common stock at a purchase price of $0.05 per share with no expiration
date.
Convertible Debentures
----------------------
On or about August 31, 1999, the Company entered into a Convertible
Debenture or Non-Interest Bearing Convertible Note with Joel W. Rogde. Under the
terms of this Debenture, the Company granted Joel W. Rogde the right to be paid
in cash or to convert the $1,000 paid to 10,000 shares of the Company's common
stock on or before August 31, 2001. Under the terms of this agreement, the
shares would be converted at $0.10 per share.
On or about August 31, 1999, the Company entered into a Convertible
Debenture or Non-Interest Bearing Convertible Note with Becky G. Demar. Under
the terms of this Debenture, the Company granted Becky G. Demar the right to be
paid in cash or to convert the $1,000 paid to 10,000 shares of the Company's
common stock on or before August 31, 2001. Under the terms of this agreement,
the shares would be converted at $0.10 per share.
31
<PAGE>
On or about August 31, 1999, the Company entered into a Convertible
Debenture or Non-Interest Bearing Convertible Note with Christopher Bohn. Under
the terms of this Debenture, the Company granted Christopher Bohn the right to
be paid in cash or to convert the $1,000 paid to 10,000 shares of the Company's
common stock on or before August 31, 2001. Under the terms of this agreement,
the shares would be converted at $0.10 per share.
On or about August 31, 1999, the Company entered into a Convertible
Debenture or Non-Interest Bearing Convertible Note with Charles O'Malley. Under
the terms of this Debenture, the Company granted Charles O'Malley the right to
be paid in cash or to convert the $1,000 paid to 10,000 shares of the Company's
common stock on or before August 31, 2001. Under the terms of this agreement,
the shares would be converted at $0.10 per share.
On or about September 2, 1999, the Company entered into a Convertible
Debenture or Non-Interest Bearing Convertible Note with Zawtech International
expiring on August 31, 2001. The Convertible Note is in the amount of $2,300,000
issuable in denominations of $125,000 and integral multiples thereof. The holder
of these notes is entitled, at its option, at any time commencing 60 days after
the closing date until maturity to convert 100% of the principal amounts of
these Notes or any portion of the principal amount which is at least $125,000
into shares of common stock of the company at a conversion price for each share
of common stock equal to 80% of the market price of the company's common stock.
A controversy between the Company and Zawtech has arisen regarding
representations made by Zawtech in connection with the transaction. At this
point, the Company is investigating the accuracy of the representations made by
Zawtech.
--------------------------------------------------------------------------------
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
--------------------------------------------------------------------------------
Section 78.751 of the Nevada General Corporation Law allows the Company
to indemnify any person who was or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that he or she is or was a director, officer, employee or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of any corporation, partnership, joint venture, trust
or other enterprise. The Company may advance expenses in connection with
defending any such proceeding, provided the indemnitee undertakes to pay any
such amounts if it is later determined that such person was not entitled to be
indemnified by the Company.
32
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
--------------------------------------------------------------------------------
ITEM 13. Financial Statements
--------------------------------------------------------------------------------
<PAGE>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE>
PAGE NO.
TABLE OF CONTENTS
ACCOUNTANT'S REPORT
FINANCIAL STATEMENTS F-1
CONSOLIDATED BALANCE SHEETS F-2 - F-3
CONSOLIDATED STATEMENTS OF OPERATIONS F-4
CONSOLIDATED STATEMENTS OF CHANGES IN F-5 - F-6
STOCKHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS F-7
NOTES TO FINANCIAL STATEMENTS F-8 - F-11
<PAGE>
Town & Country Plaza
DALE MCGHIE
CERTIFIED PUBLIC ACCOUNTANT 1539 Vassar St. Reno, Nevada 89502
Tel: 702-323-7744
Fax: 702-323-8288
To the Board of Directors of
Eagle Environmental Technologies, Ltd.
Reno, Nevada
I have compiled the accompanying consolidated balance sheets of Eagle
Environmental Technologies, Ltd. and subsidary (a development stage company) as
of December 31, 1999, and 1998 and the related consolidated statements of
operations, changes in stockholders' equity, and cash flows for the years then
ended and from inception to December 31, 1999. These financial statements are
the responsibility of the Company's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I have conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Eagle Environmental
Technologies, Ltd. and its subsidiary as of December 31, 1999 and 1998 and the
results of its consolidated operations and its cash flows for the years then
ended and from inception to December 31, 1998, in conformity with generally
accepted accounting principles.
As described in Note 1 and Note 11 to the financial statements, Eagle
Environmental Technologies, Ltd., is a development stage company. The Company's
primary asset is the rights to Chemstasis Technology,. Recovery of these costs
are dependent on development and successful future operations. It is not
possible to predict the outcome of future operations or whether the necessary
financing may be arranged. The consolidated financial statements do not include
any adjustment that might result from the outcome of this uncertainty.
/s/Dale McGhie
--------------
Dale McGhie
Reno, Nevada
June 25, 2000
F-1
<PAGE>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1999 AND 1998
ASSETS
------
CURRENT ASSETS
1999 1998
------- -------
Cash $ -- $ 115
Travel Advances -- 900
Accounts Receivable - Officers -- 1,193
Inventory 614 --
------- -------
EQUIPMENT
Office Equipment (Note 1) 60,958 59,386
Less: Accumulated Depreciation (36,124) (27,840)
Vehicles 36,297 --
Less: Accumulated Depreciation (4,792) --
------- -------
56,339 31,546
------- -------
OTHER ASSETS
Rights to Technology (Note 2) 256,655 256,655
Note Receivable (Note 4) 17,683 17,683
Deposit on Sparks Office 2,480 --
Deposit to Purchase Escrow Acct 168,675 168,675
------- -------
445,493 443,013
------- -------
TOTAL ASSETS $ 502,446 $ 476,767
$
The accompanying Notes are an integral part of these financial statements
F-2
EAGLE ENVIRONMENTAL TECHNOLOGIES LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1999 AND 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
1999 1998
----------- ----------
CURRENT LIABILITIES
Negative Bank Balance 5,438 --
Accounts Payable 103,347 $ 185,355
Accounts Payable - Related Parties 42,050 $ 52,849
Accounts Payable - Credit Card 67,598 56,514
Contracts Payable 135,114 --
Accrued Expenses 60,019 --
Notes Payable - Related Parties 55,966 125,500
Capital Lease, current portion 14,917 8,687
----------- ----------
484,449 428,905
----------- ----------
LONG-TERM LIABILITIES
Capital Lease, net of current portion 23,560 22,609
----------- ----------
TOTAL LAIBILITES 508,009 451,514
STOCKHOLDER'S EQUITY
Common Stock: $0.001 Par Value
90,000,000 Shares Authorized,
Issued and outstanding
11757980 shares at December 31, 1999 117,580 65,102
Preferred Stock: $0.001 Par Value
10,000,000 Shares Authorized,
None Issued
Additional Paid in Capital 1,766,122 1,132,140
Deficit Accumulated During the
Development Stage (1,889,265) (1,171,989)
----------- ----------
TOTAL STOCKHOLDERS' EQUITY (5,563) 25,253
TOTAL LIABILITY AND EQUITY $ 502,446 $ 476,767
========== ===========
The accompanying notes are an integral part of these financial statements
F-3
<PAGE>
<TABLE>
<CAPTION>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATION
FOR THE YEARS ENDING DECEMBER 31, 1999 AND 1998
AND FOR THE PERIOD JUNE 15, 1990 THROUGH DECEMBER 31, 1999
INCEPTION
1999 1998 Dec-99
---------- ---------- ----------
<S> <C> <C> <C>
REVENUES 4,800 -- 4,800
---------- ---------- ----------
OPERATING EXPENDITURES
Auto & Truck Expenses 3,317 1,288 4,605
Advertising 4,993 307 5,300
Contract Services 504,053 254,679 1,142,902
Dues & Subscriptions -- 907 907
Professional Fees 91,271 32,736 269,425
Interest Expense 2,616 3,588 103,740
Consulting 34,400 40,590 60,990
Repair and Maintenance 1,125 1,550 2,675
Office Expense 46,901 33,583 252,989
Travel & Entertainment 21,987 19,339 231,251
---------- ---------- ----------
TOTAL EXPENSES FROM
OPERATIONS 705,863 388,567 2,069,984
OTHER INCOME(EXPENSES)
Interest Income 607 -- 607
Depreciation (13,826) (8,877) (63,034)
Loss on Investment -- (14,506) (14,506)
Bad Debts Recovery -- 17,683 (114,990)
Bad Debt Recapture
Gain on Sale of Assets -- -- 364,355
Miscellaneous 1,462 7,134 8,287
---------- ---------- ----------
TOTAL OTHER INCOME (11,757) 1,434 180,719
Net (Loss) Before Income Taxes (717,620) (387,133 (1,889,266)
---------- ---------- ----------
Income Tax (Note 1) -- -- _
Net (Loss) $ (717,620) $ (387,133) (1,889,266)
========== ============= ==========
Loss per share $ (0.060) $ (0.057) --
========== =============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
<TABLE>
<CAPTION>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS" EQUITY
FOR THE YEARS ENDING DECEMBER 31, 1999 AND 1998 AND 1998+B282
Shares Common Paid in Retained
Issued Stock Capitol Earnings
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance June 15, 1990 3,000,000 $ 3,000 $ 5,400 --
Adjustment for 10 to 1 reverse
split and .01 par value
(restated 12/23/98) (2,700,000) -- -- --
--------- --------- --------- ---------
Balance at June 15, 1990 as restated 300,000 3,000 5,400 --
Common Stock issued in merger of
Cholla Precious Metals 876,667 8,767 6,233 --
Common stock issued for
technology rights 100,000 1,000 255,655 --
Common stock issued for services 111,289 1,113 14,016 --
Net Loss for the years 1990-1992 -- -- -- (96,862)
--------- --------- --------- ---------
Balance at December 31,1992 1,387,956 13,880 281,304 (96,862)
Common stock issued for cash 8,000 80 19,920 --
Net Loss for the year ending
December 31, 1993 -- -- -- (73,671)
--------- --------- --------- ---------
Balance at December 31, 1993 1,395,956 13,960 301,224 (170,533)
Expenses Incurred in Stock sales -- -- (4,000) --
Common Sstock issued for services 10,000 100 (100) --
Net Loss for the Year Ending
December 31, 1994 -- -- -- (68,504)
--------- --------- --------- ---------
Balance at December 31, 1994 1,405,956 14,060 297,124 (239,037)
Common stock issued for services 89,950 899 (899) --
Contributions to Capitol
by Shareholders -- -- 109,070 --
Net Loss for the Year Ending
December 31, 1995 -- -- -- (126,665)
--------- --------- --------- ---------
Balance at December 31, 1995 149,506 14,959 405,295 (365,702)
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE>
<TABLE>
<CAPTION>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS" EQUITY
FOR THE YEARS ENDING DECEMBER 31, 1999 AND 1998
(CONTINUED)
Shares Common Paid in Retained
Issued Stock Capitol Earnings
--------- --------- -------- ---------
<S> <C> <C> <C> <C>
Common stock issued for cash 251,866 2,518 57,061 --
Common Sstock held as security
returned to treasury (25,000) (250) -- --
Common Sstock issued for services 33,190 332 (332) --
Net Loss for year ended 12/31/96 -- -- -- (309,811)
--------- --------- --------- ----------
Balance at December 31, 1996 1,755,962 17,559 462,024 (675,513)
Common Stock issued for services1,145,000 11,450 -- -- --
Common Stock issued for cash 200,500 2,005 38,495 --
Common stock issued for
Debt Reduction 1,574,085 15,741 284,608 --
Net loss for year ended 12/31/97 -- -- -- (109,343)
--------- --------- --------- ----------
Balance at December 31, 1997 4,675,547 46,755 785,127 (784,513)
Stock issued for cash 531,163 5,312 115,149 --
Stock issued for services 1,303,524 13,035 231,864
Net loss year ended 12/31/98 -- -- -- (387,133)
--------- --------- --------- ----------
Balance at December 31, 1998 6,510,234 $ 65,102 $ 1,132,140 $(1,171,989)
--------- --------- --------- ----------
Prior Year Adjustment -- -- -- 344
Stock issued for cash 735,000 7,350 47,208 --
Stock isued for services 3,807,246 38,072 440,328 --
Stock issued for Debt Reduction 705,500 7,055 146,445 --
Net Loss year ended 12/31/99 -- -- -- (717,620)
--------- --------- --------- ----------
Balance at December 31, 1999 11,757,980 117,579 1,766,121 $(1,889,265)
========== ======= ========= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements
F-6
<PAGE>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGIPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
AND FROM JUNE 15 1990 THROUGH DECEMBER 31, 1999
<TABLE>
<CAPTION>
INCEPTION
TO
1999 1998 Dec-99
------------ ----------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (717,620) $ (387,133) $(1,889,266)
Adjustments to reconcile
net income to net cash provided
from operations:
Depreciation and Amortization 13,826 8,877 40,915
Services rendered for common stock 478,400 244,900 744,079
Changes in Operating Assets and
Liabilities:
(Increase) in Receivables 1,193 (1,193)
(Increase) in Notes Receivable (17,683)
(Increase in Organizational Cost (12,500)
(Increase in Deposits) (2,480) (168,675) (2,480)
Increase in Accounts Payable and 119,687 87,392 523,877
accrued expenses
Accounts Payable Converted to 5,800
Stock
Notes Payable (68,748) 125,500 46,752
------------ ----------- ------------
Net Cash Used by Operating Activities (175,742) (108,015) (542,823)
------------ ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment (37,869) (7,514) (97,253)
------------ ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issuance of Common Stock 54,558 120,460 331,538
Proceeds from Borrowing -- 345,219
Issuance of Common Stock for Debt Relief 153,500 339,873
Payment on Debt -- (382,107)
------------ ----------- ------------
Net Cash Provided by Financing Activities 208,058 120,460 634,523
------------ ----------- ------------
Net Increase (Decrease) in Cash (5,553) 4,931 (5,553)
Cash at Beginning of Period 115 (4,816) 115
------------ ----------- ------------
Cash at End of Period $ (5,438) $ 115 $ (5,438)
============ =========== ============
</TABLE>
The accompanying notes are an intergral part of these financial statements
F-7
<PAGE>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION:
Eagle Environmental Technologies, Ltd. (the "Company") was incorporated in the
State of Nevada on June 15, 1990, for the purpose of acquiring, developing,
testing, and marketing high technological developments for the protection of the
environment. In June of 1990, the Company issued 3,000,000 shares of its common
stock for $8,400 cash. On July 12, 1991, the Company merged with Cholla Precious
Metals, Inc., for 876,667shares (as restated on December 3, 1997) of the
Company's common stock.
On March 12, 1992, the Company issued 100,000 shares of common stock to an
individual for his current and future rights in the development of tire
recycling, Biomass technology and improvements to the Chemstasis technology. The
Company is involved with other technologies through the execution of joint
venture or value-added resale agreements. See note 3.
On December 31, 1997 the Board voted to issue 165,500 shares as collateral for
purchase of another company. The purchase was never consumated and the company
has refused to return the stock. Eagle has Put a block on this stock and has
started legal proceedings to collect the stock On September 31, 1999 Eagle
issued 1,779,167 shares as collateral for the purchase of a company, this
purchase was never consumated and the stockholders have refused to return stock.
Eagle has placed a block On this stock and started proceedings to collect this
stock..
On August 8, 1994, the Company completed all Securities and Exchange Commission
requirements to publicly trade its stock. The Company currently trades on the
"over the counter" Bulletin Board (Symbol EGVR)
PRINCIPLES OF CONSOLIDATION:
The accompanying consolidated financial statements include the accounts of Eagle
Environmental Technologies Ltd. and its majority owned subsidiary. All
significant intercompany balances and transactions have been eliminated.
USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions that
affect certain reported accounts and disclosures. Accordingly, actual results
could differ from these estimates.
EARNINGS PER SHARE:
The earnings per share calculation is based on the weighted average number of
shares outstanding during the period, 8,566,859 in 1999, 5,139,125 in 98,
2,919,585 in 97, and 1,755,962 shares in 1996 and prior . Stock options are not
included in the calculation since they are anti-dilutive.
F-8
<PAGE>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
(NOTE 1 CONTINUED)
DIVIDEND POLICY;
The Company has not paid dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company and other
revelent factors.
EQUIPMENT:
Equipment is recorded at cost and depreciation is computed using a 5-year life
on a straight-line basis.
INCOME TAX:
Because of losses sustained since inception, no provision for Federal income tax
was made.
NATURE OF BUSINESS
The Company researches existing Waste handling and disposal equipment, as well
as water purification systems., and develop more sophisticated types of
equipment for Waste handling and disposal and Water purification products.
NOTE 2 - RIGHTS TO TECHNOLOGY:
The merger with Cholla Precious Metals, Inc., included total rights to
Chemstasis Technology. The technology is to enable the Company to economically
and easily destroy undesirable toxic and hazardous waste materials. The issuance
of rights ot Zawcad was given to the company by JAB Enterprises A related
company.
NOTE 3 - JOINT VENTURES AND AGREEMENTS
The Company entered into a joint venture with Research Institute of the
Electrical Industry, the largest research institute in Hungary, to form a U.S.
Corporation, Plasma Environmental Technologies, Inc., to sell waste elimination
systems throughout the Americas. The systems use Plasma Technology to destroy
highly toxic wastes by the application of high temperature. The units using the
Plasma Technology systems are manufactured by EPOS, one of the largest specialty
manufacturers in Hungary. The Company is currently awaiting the first shipment
of the units.
The Company entered into an agreement with Plasma Environmental Technologies,
Inc., to market the Plasma Technology. Pursuant to the agreement, the Company
implemented a regional licensing program whereby Canada and the United States
were divided into 10 regions for marketing purposes. The Company intends to
license specific companies to service each region in return for a fee and
minority interest.
One licensing agreement have been signed. with Intercommerce Inc., who purchased
the rights to market Plasma Technology in a third region. Intercommerce Inc. (a
related corporation) will pay the Company $2,000,000, represented by a
promissory note to be paid over 10 years (with interest at 12%). Those
agreements will be finalized, Eagle Environmental Technologies, Ltd, own 25% of
Plasma Enviromemtal, Inc, (see Note). at the time the first plasma units are
delivered.
F-9
<PAGE>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 4 - NOTES RECEIVABLE
The Company has the following note receivable: from Plasma Environmental
Technologies, Inc. dated December 1996. The notes are for $17,683 and interest
at 10% per annum.. Because of the uncertainty of this note, no interest has been
accrued., however Management believes that the principal will be collected.
NOTE 5 - ACCRUED EXPENSES
The company has accrued unpaid wages to Jerry Wilmont in the amount of $50,819
and accrued rent due to JAB in the amount of $9200.
NOTE 6 - NOTES PAYABLE, RELATED PARTIES
1999 1998
------ ------
A non-interest bearing Note Payable to related parties 56,408 105,000
A non-interest bearing Note Payable to BBTC for services 0 20,000
NOTE 7 - CAPITAL LEASES
Future minimum payments under a non-cancelable lease for a Copier exist at
December 31, 1999:
2000 8687
2001 8687
2002 8687
2003 1327
------
Total minimum payments 27388
Amount representing interest 3938
------
Present value of net minimum payments 23450
Current portion 8687
------
$14,763
------
Future minimum payments under a non- cancelable lease for a Ford Explorer exist
as of December 31, 1999.
2000 6230
2001 6230
2002 3116
Total minimum payments 15576
Amount representing interest 551
------
Present value of net minimum payments 15025
Current portion 6230
------
$ 8795
F-10
<PAGE>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 8 - EMPLOYMENT CONTRACTS, STOCK OPTIONS:
The Company signed employment agreements with several individuals and corporate
entities to act as chairman, corporate treasurer and marketing officer,
president, executive and contractor for compensation totaling $1,120,000 per
year. A pool of compensation is to be set aside equal to 25% of net cash flow or
net pre-tax profits, whichever is lesser, as incentive bonuses to be paid to the
above entities. The entities have elected not to be compensated on these
contracts until the Company has a positive cash flow from operations, therefore,
the Company did not accrue a liability on these contracts during the years 1994
and 1995. The employment agreements also contain stock options in lieu of part
of their salaries at a purchase price equal to 70% of the then current market
value.
NOTE 9 - RELATED PARTY TRANSACTIONS
The company rents office space from JAB Enterprises, Inc. a related corporation,
for $960.00 per month The company entered into an agreement with Jab
Enterprises for rights to use the "ZawtcCAD" technology,
The predesseosser has no cost into the Technology there fore no value was
entered in the statements.
NOTE 10 - GOING CONCERN
The financial statements of the Company have been prepared assuming that the
Company will continue as a going concern. The Company is not currently
generating any revenue and substantial capital is necessary to market the
Chemstasis Technology. If additional capital is not secured from the public
offering of the stock, from its current shareholders, or from the marketing
agreements discussed in Note 3, then there is substantial doubt about the
company's ability to continue as a going concern.
F-11
<PAGE>
Eagle Consolidated Report
Balance Sheet UNAUDITED
As of March 31,2000
<TABLE>
<CAPTION>
ASSETS
------
<S> <C> <C>
Current Assets:
Cash $ 5,570 --
Notes receivable Lone Eagle 380,507 --
Notes Rec. Zawtech 8,302 --
Note Receivable, JAB 436 --
Inventory (7,687) --
---------- ----------
TOTAL Current Assets -- $ 388,127
Fixed Assets:
Property & Equipment 61,684 --
Vehicle Accum Deprn (4,792) --
---------- ----------
TOTAL Fixed Assets -- 56,892
Other Assets:
Other Assets 648,172 --
---------- ----------
TOTAL Other Assets -- 648,172
---------- ----------
TOTAL ASSETS -- $1,093,191
========== ==========
LIABILITIES
-----------
Current Liabilities:
Accounts Payable $ 477,700 --
Salaries and Wages Payable 40,754 --
JAB Enterprises Inc. (1,050) --
Lease payable IKON 18,905 --
Lease Payable Auto/Ford 12,952 --
---------- ----------
TOTAL Current Liabilities -- $ 539,260
Long-Term Liabilities:
Notes Payable, Papas 23,678 --
Notes Payable, JAB ENT 71,569 --
Notes Payable, Conv. Debenture 9,000 --
---------- ----------
TOTAL Long-Term Liabilities -- 104,248
---------- ----------
TOTAL LIABILITIES -- 643,508
CAPITAL
-------
Common Stock 132,955 --
Additional paid in Capital 2,152,243 --
Retained Earnings (782,247) --
Year-to-Date Earnings (1,053,268) --
---------- ----------
TOTAL CAPITAL -- 449,683
---------- ----------
TOTAL LIABILITIES & CAPITAL -- $1,093,191
========== ==========
</TABLE>
NOTE: Complete journal detail is not available for the selected period.
The figures reported may not be correct. Without supportive
journal detail, you should be cautious when interpreting this
report.
F-12
<PAGE>
Eagle Consolidated Report
Income Statement UNAUDITED
January 1, 2000
March 31, 2000
---------------
NET REVENUE 0
-----------
Cost of Goods Sold
Cost of Goods Sold 2,866
-----------
TOTAL Cost of Goods Sold 2,866
-----------
GROSS PROFIT (2,866)
-----------
Expenses
Payroll Costs
Officers Salaries 13,500
Employee Benefits 1,946
-----------
TOTAL Payroll Costs 15,446
-----------
Advertising 798
Utilities 1,086
General Expenses 627,925
-----------
TOTAL Expenses 645,255
-----------
OPERATING PROFIT (648,121)
-----------
Other Income & Expenses
Other Income & Expenses (405,147)
-----------
TOTAL Other Income & Expenses (405,147)
-----------
PROFIT BEFORE TAXES (1,053,268)
-----------
NET PROFIT $(1,053,268)
===========
F-13
<PAGE>
<TABLE>
<CAPTION>
Eagle Consolidated Report
Statement of Cash Flows UNAUDITED
Mar/00 Dec/99 Inc/(Dec)
------------ ------------ ------------
CASH FLOWS, OPERATIONS:
<S> <C> <C> <C>
Period Earnings: (925,125)
Adjustments to Year-to-Date Earnings:
US BANK, Reno 1,974 22,805 (20,831)
Checking, Sparks (3,993) (527) (3,467)
Interest Receivable 0 529 (529)
Travel Advances 0 (900) 900
Employee Advances 0 (1,193) 1,193
Notes receivable Lone Eagle (381,507) (378,166) (3,342)
Notes Rec. Zawtech (8,302) (27,802) 19,500
Note Receivable, JAB (436) 0 (436)
Inventory Account #1 7,687 (615) 8,302
Accounts Pay. Related Parties 4,731 2,023 2,709
Contract payables 226,548 87,615 138,933
Trade Payables 112,699 146,047 (33,348)
CC CapOne Visa BW 1,252 1,734 (482)
CaponeBWvisa200 35 195 (160)
CC CapOne MC BW 37 395 (358)
CC NorWest/Wells Bank 3,230 3,687 (457)
CC Mellon/Citi Bank 5,848 5,932 (84)
CC MNBA 8,758 9,421 (663)
CC American Express 21,177 22,376 (1,199)
CC Household Bank 1,161 1,427 (266)
CC First Bank 1,402 1,888 (486)
CC Chevron 372 253 118
CC Shell 138 99 38
CC CapOne Visa JW 15 45 (31)
CC CapOne MCJW (48) 0 (48)
Household Finance Bank 10,834 12,175 (1,341)
Deposits on Equipment 69,045 70,000 (955)
Salaries and Wages Payable 40,754 30,754 10,000
JAB Enterprises Inc. (11,050) (14,064) 3,014
Lease payable IKON 18,905 26,218 (7,313)
Lease Payable Auto/Ford 12,952 16,060 (3,109)
------------
NET CASH FLOWS, OPERATIONS (819,322)
------------
CASH FLOWS, FINANCING and INVESTING:
Rights To Technology (256,655) (237,155) (19,500)
Licenses for Zawcad (391,417) (440,000) 48,583
Deposits 0 (1,188,042) 1,188,042
Equipment (61,002) (55,431) (5,571)
Equipment Accum. Deprn. 36,874 26,689 10,185
Vehicles (37,342) (1,747) (35,595)
Vehicle Accum Deprn 4,792 0 4,792
Notes Payable, Papas 23,678 11,656 12,022
Notes Payable, JAB ENT 71,569 (2,000) 73,569
Notes Payable, Conv. Debenture 9,000 0 9,000
Common Stock 132,955 78,812 54,143
Additional paid in Capital 2,152,243 2,658,751 (506,508)
------------
NET CASH FLOWS, FINANCING and INVESTING 833,163
------------
Net Increase (Decrease) in CASH 13,841
------------
CASH and CASH EQUIVALENTS
Beginning of the Period (10,291)
------------
CASH and CASH EQUIVALENTS
Current 3,550
============
CASH and CASH EQUIVALENTS:
Checking, Other AW 3,550
------------
TOTAL CASH and CASH EQUIVALENTS 3,550
============
</TABLE>
F-14
<PAGE>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION:
Eagle Environmental Technologies, Ltd. (the "Company") was incorporated in the
State of Nevada on June 15, 1990 for the purpose of acquiring, developing,
testing, and marketing high technological developments for the protection of the
environment. In June of 1990, the Company issued 3,000,000 shares of its common
stock for $8,400 cash. On July 12, 1991 the Company merged with Cholla Precious
Metals, Inc., for 876,667 shares of the Company's common stock. (Post
consolidation number)
On March 12, 1992, the Company issued 100,000 shares of common stock to an
individual for his current and future rights in the development of tire
recycling, Biomass technology and improvements to the Chemstasis technology. The
Company is involved with other technologies through the execution of joint
venture or value-added resale agreements. See note 3.
On December 31, 1997 the Board voted to issue 165,500 shares as collateral for
purchase of another company. The purchase was never consummated and the company
has refused to return the stock. Eagle has put a block on this stock and has
started legal proceedings to collect the stock. On September 30, 1999 Eagle
issued 1,779,167 shares as collateral for the purchase of a company. This
purchase was never consummated and the stockholders have refused to return
stock. Eagle has placed a block on this stock and started proceedings to collect
this stock.
On August 8, 1994 the Company completed all Securities and Exchange Commission
requirements to publicly trade its stock. The Company currently trades on the
"over the counter" Exchange (Symbol EGVR).
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of Eagle
Environmental Technologies Ltd., and its majority owned subsidiary. All
significant intercompany balances and transactions have been eliminated.
USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions that
affect certain reported accounts and disclosures. Accordingly, actual results
could differ from these estimates.
EARNINGS PER SHARE:
The earnings per share calculation is based on the weighted average number of
shares outstanding during the period, 13,295,500 end of first quarter 2000,
8,566,859 in 1999, 5,139,125 in '98, 2,919,585 in '97 and 1,755,962 in 1996.
Stock options or convertible debentures or warrants are not included in the
calculation since they are anti-dilutive.
DIVIDEND POLICY:
The Company has not paid dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company and other
relevant factors.
EQUIPMENT:
Equipment is recorded at cost and depreciation is computed using a 5-year life
on a straight-line basis.
F-15
<PAGE>
INCOME TAX:
Because of losses sustained since inception, no provision for Federal income tax
was made.
NATURE OF BUSINESS:
The Company researches existing waste handling and disposal equipment, as well
as water purification systems, and develops more sophisticated types of
equipment for waste handling and disposal procedures and water purification
products.
NOTE 2 - RIGHTS TO TECHNOLOGY:
The merger with Cholla Precious Metals, Inc., included total rights to
Chemstasis Technology. The technology is to enable the Company to economically
and easily destroy undesirable toxic and hazardous waste materials. As of the
first of 2000, the company gained worldwide license rights to ZawCAD technology.
ZawCAD is a new technology developed in conjunction with the Department of
Energy and Lockheed Martin Corporation for using liquid nitrogen as a drilling,
ablating or cutting system to reduce waste streams in coating removal etc. on
various surfaces.
NOTE 3 - JOINT VENTURES AND AGREEMENTS:
The Company entered into a joint venture with Research Institute of the
Electrical Industry, the largest research institute in Hungary, to form a U.S.
Corporation, Plasma Environmental Technologies, Inc., to sell waste elimination
systems throughout the Americas. The systems use Plasma Technology to destroy
highly toxic wastes by the application of high temperature. The units using the
Plasma Technology systems are manufactured by EPOS, (now Hungaroplasma) one of
the largest specialty manufacturers in Hungary
The Company entered into an additional agreement with Plasma Environmental
Technologies, Inc., to market the Plasma Technology. Pursuant to the agreement,
the Company implemented a regional licensing program whereby Canada and the
United States were divided into 10 regions for marketing purposes. The Company
intends to license specific companies to service each region in return for a fee
and minority interest.
Under the licensing agreement, Intercommerce Inc. purchased the rights to market
Plasma Technology. Intercommerce Inc. will pay the Company $2,000,000,
represented by a promissory note to be paid over 10 years (with interest at
12%). The agreements will be finalized in the future upon delivery of the
equipment.
NOTE 4 - NOTES RECEIVABLE
The Company had the following notes receivable 1999:
Notes receivable from Plasma Environmental Technologies, Inc for $17,683 with
interest at 10% per annum. Note receivable from Lone Eagle Technology Site Inc
for $381,507 with 12% interest due to prior investment in the Texas acquisition
efforts. Note receivable from Zawtech International Inc. for $8,302 with
interest of 12% for assistance in transferring the ZawCAD technology. Management
believes the notes to be collectable.
NOTE 5 - ACCRUED EXPENSES:
The Company has accrued unpaid wages to Jerry Wilmot in the amount of $12,000
NOTE 6 - NOTES PAYABLE, RELATED PARTIES
2000 1999
A non interest bearing note payable to related parties, 71,569 56,408
A non-interest bearing Note Payable to BBTC for services: 13,600 0
NOTE 7 - CAPITAL LEASE
Future minimum payments for a copier under a non-cancelable lease exist at March
31, 2000
2000 6,515
--------------
2001 8,687
--------------
2002 8,687
2003 1,327
--------------
Total minimum lease payments: 25,216
Amount representing interest 3,938
-------
Present value of net, current portion: 21,278
Current portion 6,515
-------
14,763
-------
Future minimum payments for a Ford Explorer under a non-cancelable lease exist
at March 31, 2000
2000 4,673
2001 6,230
2002 3,116
Total minimum lease payments: 14,019
Amount representing interest 551
--------
Present value of net, current portion: 13,468
Current portion 4,673
-------
8,795
-------
NOTE 8 - NOTE PAYABLE: EMPLOYMENT CONTRACTS, STOCK OPTIONS:
The Company signed modified employment agreements with several individuals and
corporate entities to act as chairman, corporate treasurer and marketing
officer, president, executive and contractor for compensation totaling
$1,120,000 per year. A pool of compensation is to be set aside equal to 25% of
net cash flow or net pre-tax profits, whichever is lesser, as incentive bonuses
to be paid to the above entities. The entities have elected not to be
compensated on these contracts until the Company has a positive cash flow from
operations, therefore, the Company did not accrue a liability on these contracts
during the years previously. The employment agreements also contain stock
options in lieu of part of their salaries at a purchase price equal to 70% of
the then current market value.
NOTE 9 - RELATED PARTY TRANSACTIONS:
The Company rents office space from JAB Enterprises, Inc., a related
corporation, for $960 per month.
F-16
<PAGE>
NOTE 10 GOING CONCERN
The 2000 financial statements of the Company have been prepared assuming that
the Company will continue as going concern as of June 2000. The Company is
currently generating limited revenue and substantial capital is necessary to
market the Chemstasis Technology, Plasma technology, WaterClear Technology and
the Zawcad Technology. If additional capital is not secured from the public
offering of the stock, from its current shareholders, or from the marketing
agreements discussed in Note 3, then there is substantial doubt about the
company's ability to continue as a going concern.
The company currently has orders for the ZawCAD equipment from Lockheed Martin
Corporation for delivery in fourth quarter 2000. The company has contracted with
EDC Engineering in Santa Fe, NM to construct the equipment The company has a
pending agreement with Osmonics Inc, the manufacturer of the WaterClear for the
company to continue the manufacturing of the equipment to the Eagle
specifications. The final agreement is expected in the third quarter of 2000.
F-17
<PAGE>
Eagle Consolidated Report
Balance Sheet UNAUDITED
June 30, 2000
<TABLE>
<CAPTION>
ASSETS
------
<S> <C> <C>
Current Assets:
Cash $ 2,083 --
Account Receivables (3,182) --
Notes receivable Lone Eagle 380,697 --
Notes Rec. Zawtech 8,302 --
Note Receivable, JAB 436 --
Inventory (7,687) --
---------- ----------
TOTAL Current Assets -- $ 380,648
Fixed Assets:
Property & Equipment 62,840 --
Vehicle Accum Deprn (4,792) --
---------- ----------
TOTAL Fixed Assets -- 58,048
Other Assets:
Other Assets 648,172 --
---------- ----------
TOTAL Other Assets -- 648,172
---------- ----------
TOTAL ASSETS -- $1,086,868
========== ==========
LIABILITIES
-----------
Current Liabilities:
Accounts Payable $ 493,321 --
Salaries and Wages Payable 45,254 --
JAB Enterprises Inc. (13,930) --
Lease payable IKON 17,416 --
Lease Payable Auto/Ford 11,358 --
---------- ----------
TOTAL Current Liabilities -- $ 553,418
Long-Term Liabilities:
Notes Payable, Papas 23,678 --
Notes Payable, JAB ENT 70,376 --
Notes Payable, Conv. Debenture 9,000 --
---------- ----------
TOTAL Long-Term Liabilities -- 103,054
---------- ----------
TOTAL LIABILITIES -- 656,473
CAPITAL
-------
Common Stock 132,955 --
Additional paid in Capital 2,162,043 --
Retained Earnings (782,247) --
Year-to-Date Earnings (1,082,356) --
---------- ----------
TOTAL CAPITAL -- 430,395
---------- ----------
TOTAL LIABILITIES & CAPITAL -- $1,086,868
========== ==========
</TABLE>
F-18
<PAGE>
<TABLE>
<CAPTION>
Eagle Consolidated Report
Income Statement UNAUDITED
1 Month Ended 3 Months Ended
June 30, 2000 June 30, 2000
------------ ------------
Income
<S> <C> <C> <C>
Sales $ -- $ 5,000 100.0%
------------ ------------
TOTAL Income -- 5,000 100.0%
------------ ------------
NET REVENUE -- 5,000 100.0%
------------ ------------
Cost of Goods Sold
Cost of Goods Sold 156 156 3.1%
------------ ------------
TOTAL Cost of Goods Sold 156 156 3.1%
------------ ------------
GROSS PROFIT (156) 4,844 96.9%
------------ ------------
Expenses
Payroll Costs
Officers Salaries -- 4,700 94.0%
Employee Benefits 181 2,562 51.2%
------------ ------------
TOTAL Payroll Costs 181 7,262 145.2%
------------ ------------
Utilities 151 818 16.4%
General Expenses 19,590 43,494 869.9%
------------ ------------
TOTAL Expenses 19,922 51,573 1031.5%
------------ ------------
OPERATING PROFIT (20,078) (46,729) -934.6%
------------ ------------
Other Income & Expenses
Other Income & Expenses 3,111 17,641 352.8%
------------ ------------
TOTAL Other Income & Expenses 3,111 17,641 352.8%
------------ ------------
PROFIT BEFORE TAXES (16,967) (29,088) -581.8%
------------ ------------
NET PROFIT ($16,967) ($29,088) -581.8%
============ ============
</TABLE>
F-19
<PAGE>
<TABLE>
<CAPTION>
Eagle Consolidated Report
Statement of Cash Flows UNAUDITED
Jun/00 Mar/00 Inc/(Dec)
CASH FLOWS, OPERATIONS: ------------ ------------ ------------
<S> <C> <C> <C>
Period Earnings: (29,088)
Adjustments to Year-to-Date Earnings:
US BANK, Reno 5,224 1,974 3,250
Checking, Sparks (3,197) (3,993) 796
Interest Receivable 529 0 529
Trade Receivables 900 0 900
Travel Advances 560 0 560
Employee Advances 1,193 0 1,193
Notes receivable Lone Eagle (380,697) (381,507) 810
Accounts Pay. Related Parties 3,120 4,731 (1,612)
Contract payables 231,499 226,548 4,951
Trade Payables 179,103 166,820 12,283
Salaries and Wages Payable 45,254 40,754 4,500
JAB Enterprises Inc. (13,930) (11,050) (2,880)
Lease payable IKON 17,416 18,905 (1,489)
Lease Payable Auto/Ford 11,358 12,952 (1,594)
------------
NET CASH FLOWS, OPERATIONS (6,891)
------------
CASH FLOWS, FINANCING and INVESTING:
Equipment (61,130) (61,002) (129)
Vehicles (38,369) (37,342) (1,028)
Notes Payable, JAB ENT 70,376 71,569 (1,193)
Additional paid in Capital 2,162,043 2,152,243 9,800
------------
NET CASH FLOWS, FINANCING and INVESTING 7,451
------------
Net Increase (Decrease) in CASH 560
------------
CASH and CASH EQUIVALENTS
Beginning of the Period 3,550
------------
CASH and CASH EQUIVALENTS
Current 4,110
============
CASH and CASH EQUIVALENTS:
Checking, Other AW 4,110
------------
TOTAL CASH and CASH EQUIVALENTS 4,110
============
</TABLE>
F-20
<PAGE>
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION: Eagle Environmental Technologies, Ltd. (the "Company") was
incorporated in the State of Nevada on June 15, 1990 for the purpose of
acquiring, developing, testing, and marketing high technological developments
for the protection of the environment. In June of 1990, the Company issued
3,000,000 shares of its common stock for $8,400 cash. On July 12, 1991 the
Company merged with Cholla Precious Metals, Inc., for 876,667 shares of the
Company's common stock. (Post consolidation number)
On March 12, 1992, the Company issued 100,000 shares of common stock to an
individual for his current and future rights in the development of tire
recycling, Biomass technology and improvements to the Chemstasis technology. The
Company is involved with other technologies through the execution of joint
venture or value-added resale agreements. See note 3.
On December 31, 1997 the Board voted to issue 165,500 shares as collateral for
purchase of another company. The purchase was never consummated and the company
has refused to return the stock. Eagle has put a block on this stock and has
started legal proceedings to collect the stock. On September 30, 1999 Eagle
issued 1,779,167 shares as collateral for the purchase of a company. This
purchase was never consummated and the stockholders have refused to return
stock. Eagle has placed a block on this stock and started proceedings to collect
this stock.
On August 8, 1994 the Company completed all Securities and Exchange Commission
requirements to publicly trade its stock. The Company currently trades on the
"over the counter" Exchange (Symbol EGVR).
PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements
include the accounts of Eagle Environmental Technologies Ltd., and its majority
owned subsidiary. All significant intercompany balances and transactions have
been eliminated.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principals requires management to make estimates
and assumptions that affect certain reported accounts and disclosures.
Accordingly, actual results could differ from these estimates.
EARNINGS PER SHARE: The earnings per share calculation is based on the weighted
average number of shares outstanding during the period, 8,566,859 in 1999,
5,139,125 in '98, 2,919,585 in '97 and 1,755,962 in 1996. Stock options or
convertible debentures or warrants are not included in the calculation since
they are anti-dilutive.
DIVIDEND POLICY: The Company has not paid dividends and any dividends that may
be paid in the future will depend upon the financial requirements of the Company
and other relevant factors.
EQUIPMENT: Equipment is recorded at cost and depreciation is computed using a
5-year life on a straight-line basis.
INCOME TAX:
Because of losses sustained since inception, no provision for Federal income tax
was made.
NATURE OF BUSINESS:
The Company researches existing waste handling and disposal equipment, as well
as water purification systems, and develop more sophisticated types of equipment
for waste handling and disposal procedures and water purification products.
F-21
<PAGE>
NOTE 2 - RIGHTS TO TECHNOLOGY:
The merger with Cholla Precious Metals, Inc., included total rights to
Chemstasis Technology. The technology is to enable the Company to economically
and easily destroy undesirable toxic and hazardous waste materials.
NOTE 3 - JOINT VENTURES AND AGREEMENTS:
The Company entered into a joint venture with Research Institute of the
Electrical Industry, the largest research institute in Hungary, to form a U.S.
Corporation, Plasma Environmental Technologies, Inc., to sell waste elimination
systems throughout the Americas. The systems use Plasma Technology to destroy
highly toxic wastes by the application of high temperature. The units using the
Plasma Technology systems are manufactured by EPOS, (now Hungaroplasma) one of
the largest specialty manufacturers in Hungary
The Company entered into an additional agreement with Plasma Environmental
Technologies, Inc., to market the Plasma Technology. Pursuant to the agreement,
the Company implemented a regional licensing program whereby Canada and the
United States were divided into 10 regions for marketing purposes. The Company
intends to license specific companies to service each region in return for a fee
and minority interest.
Under the licensing agreement, Intercommerce Inc. purchased the rights to market
Plasma Technology. Intercommerce Inc. will pay the Company $2,000,000,
represented by a promissory note to be paid over 10 years (with interest at
12%). The agreements will be finalized in the future upon delivery of the
equipment.
NOTE 4 - NOTES RECEIVABLE
The Company had the following notes receivable 1999: Notes receivable from
Plasma Environmental Technologies, Inc for $17,683 with interest at 10% per
annum. Management believes the note to be collectable.
NOTE 5 - ACCRUED EXPENSES:
The Company has accrued unpaid wages to Jerry Wilmot in the amount of $27,000,
and accrued rent due to JAB in the amount $1,920.
NOTE 6 - NOTES PAYABLE, RELATED PARTIES
1999 1998
---- ----
A non interest bearing note payable to related parties, 56,408 105,000
A non-interest bearing Note Payable to BBTC for services: 0 20,000
NOTE 7 - CAPITAL LEASE
Future minimum payments for a copier under a non-cancelable lease exist at
December 31. 1999
2000 8,687
2001 8,687
2002 8,687
2003 1,327
Total minimum lease payments: 27,388
Amount representing interest 3,938
Present value of net, current portion: 23,450
Current portion 8,687
14,763
Future minimum payments for a Ford Explorer under a non-cancelable lease exist
at December 31. 1999
2000 6,230
2001 6,230
2002 3,116
Total minimum lease payments: 15,576
Amount representing interest 551
Present value of net, current portion: 15,025
Current portion 6,230
8,795
F-22
<PAGE>
NOTE 8 - NOTE PAYABLE: EMPLOYMENT CONTRACTS, STOCK OPTIONS:
The Company signed modified employment agreements with several individuals and
corporate entities to act as chairman, corporate treasurer and marketing
officer, president, executive and contractor for compensation totaling
$1,120,000 per year. A pool of compensation is to be set aside equal to 25% of
net cash flow or net pre-tax profits, whichever is lesser, as incentive bonuses
to be paid to the above entities. The entities have elected not to be
compensated on these contracts until the Company has a positive cash flow from
operations, therefore, the Company did not accrue a liability on these contracts
during the years previously. The employment agreements also contain stock
options in lieu of part of their salaries at a purchase price equal to 70% of
the then current market value.
NOTE 9 - RELATED PARTY TRANSACTIONS:
The Company rents office space from JAB Enterprises, Inc., a related
corporation, for $960 per month. The company has entered into an agreement to
receive worldwide license rights for the ZawCAD technology from Zawtech
International Inc. The company paid in stock for the rights at a value of
$391,417. The agreement was entered into in 2000 and is currently reflected in
the balance sheets.
NOTE 10 GOING CONCERN
The 2000 financial statements of the Company have been prepared assuming that
the Company will continue as going concern as of June 2000. The Company is
currently generating limited revenue and substantial capital is necessary to
market the Chemstasis Technology, Plasma technology, WaterClear Technology and
the Zawcad Technology. If additional capital is not secured from the public
offering of the stock, from its current shareholders, or from the marketing
agreements discussed in Note 3, then there is substantial doubt about the
company's ability to continue as a going concern.
The company currently has orders for the ZawCAD equipment from Lockheed Martin
Corporation for delivery in fourth quarter 2000. The company has contracted with
EDC Engineering in Santa Fe, NM to construct the equipment. All redesignes have
been completed and the manufacturing has begun.
The company has a pending agreement with Osmonics Inc, the manufacturer of the
WaterClear for the company to continue the manufacturing of the equipment to the
Eagle specifics. The final agreement is expected in the third quarter of 2000.
F-23
<PAGE>
------------------------------------------------------------------------------
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
------------------------------------------------------------------------------
There have been no disagreements with the Company's independent
accountants over any item involving the Company's financial statements. The
Company's independent accountants are W. Dale McGhie, Certified Public
Accountant, Town & Country Plaza, 1539 Vassar Street, Reno, Nevada 89502.
33
<PAGE>
-------------------------------------------------------------------------------
ITEM 15. Financial Statements and Exhibits
-------------------------------------------------------------------------------
The following exhibits are filed with this Form 10-SB:
Assigned Number Description
--------------- -----------
(2) Plan of acquisition, reorganization, arrangement,
liquidation, or succession: None.
(3)(ii) By-laws of the Company: Included
(4) Instruments defining the rights of holders including
indentures: None
(9) Voting Trust Agreement: None
(10) Material Contracts:
(11) Statement regarding computation of per share
earnings: Computations can be determined from
financial statements.
(16) Letter on change in certifying accountant:None
(21) Subsidiaries of the registrant:None
(24) Power of Attorney:None
(99) Additional Exhibits: None
34
<PAGE>
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SIGNATURES
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Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: July 24, 2000.
EAGLE ENVIRONMENTAL TECHNOLOGIES, LTD.
By: /s/ Brian D. Wilmot
-------------------
Brian D. Wilmot
Chief Executive Officer, President
35
