U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 19, 2000
OMNI ACQUISITION CORPORATION
(Exact Name of registrant as specified in its Charter)
Nevada 000-29613 91-2019156
- ------------------------ ------------------- --------------
(State of Incorporation) Commission File No. (IRS Employer
Identification No.)
P.O. Box 270234, Corpus Christi, TX 78247
- --------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,( 361 ) 241 - 7748
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TIDELANDS OIL & GAS CORPORATION
P.O. Box 270234
Corpus Christi, TX 78247
(Successor's name and address)
<PAGE>
Item 1. CHANGES IN CONTROL OF REGISTRANT.
(a) In accordance with Business Combination Agreement effective April
19, 2000, Tidelands Oil & Gas Corporation, ("Tidelands"), a Nevada corporation,
acquired all of the issued and outstanding shares of common stock of Omni
Acquisition Corporation, ("Omni"), a Nevada corporation, in exchange for 250,000
restricted shares of Tidelands common stock. The agreement was adopted by the
board of directors of Tidelands and Omni. Prior to the business combination,
Tidelands had 17,240,489 shares issued and outstanding.
Following the business combination, Tidelands became the successor
issuer to Omni for reporting purposes under the Securities Exchange of 1934, as
amended. The officers, directors and by-laws of Tidelands continued without
changes as the officers, directors and by-laws of the successor issuer. See Item
5. "Other Events" in this report.
A copy of the Business Combination Agreement is filed as an Exhibit to
this Form 8-K Report and is incorporated into this report.
(b) There are presently no arrangements which may result in a change in
control of the successor issuer, Tidelands.
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On April 19, 2000 Tidelands acquired all of the issued and
outstanding stock of Omni Acquisition Corporation in exchange for 250,000
restricted shares of Tidelands common stock. The Omni shares were acquired from
Long Lane Capital, Inc. and Gregory Wilson. Mr. Wilson is an attorney performing
legal services for Omni and will continue to act in that capacity for Tidelands.
The consideration exchanged in accordance with the Business Combination
Agreement was negotiated between Tidelands and Omni. In evaluating Tidelands as
a candidate for the business combination, Omni used criteria such as the value
of the assets of Tidelands, particularly its oil and gas properties, its gas
pipeline system, expertise of management, current business operations, and
anticipated operations. Omni determined that the consideration for the business
combination was reasonable. In evaluating Omni as a candidate for the proposed
business combination, Tidelands used Omni's status as a reporting company, its
lack of operating history and lack of potential related liabilities. Tidelands
determined that the consideration for the business combination was reasonable.
Item 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNT.
Not applicable.
Item 5. OTHER EVENTS.
(a) Successor Issuer Election. In accordance with Rule 12g-3(a) of the
General Rules and Regulations of the Securities and Exchange Commission,
Tidelands became the successor issuer to Omni for reporting purposes under the
Securities Exchange Act of 1934 and elects to report under the Act effective
with the filing of this 8-K report.
(b) Important Information about the Registrant. The information
reported in this item is the same information that is reported in a Form 10-SB
Registration Statement under the Securities Exchange Act of 1934, as amended.
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The following format will follow the Parts and Items of the Form 10-SB and will
include the following:
Table of Contents
Part I
Item 1. Description of Business.
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Description of Property.
Item 4. Security Ownership of Certain Beneficial Owners and
Management.
Item 5. Directors, Executive Officers, Promoters and Control
Persons.
Item 6. Executive Compensation.
Item 7. Certain Relationships and Related Transactions.
Item 8. Description of Securities.
Part II.
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters.
Item 2. Legal Proceedings.
Item 3. Changes in and Disagreements with Accountants.
Item 4. Recent Sales of Unregistered Securities.
Item 5. Indemnification of Directors and Officers.
PART I
Item 1. Description of Business.
(a) Forward-looking Statements. Certain statements in this Form 10SB
Registration Statement, particularly under Items 1 and 2, constitute "forward-
looking statements" with the meaning of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance or achievements, expressed or implied by the
forward-looking statements. All statements other than statements of historical
fact, including, among other things, statements regarding our future financial
position, business strategy, reserve information, projected levels of
production, projected costs and plans and objectives of management for future
operations, are forward-looking statements.
We typically use words such as "expect", "anticipate", "estimate",
"strategy", "intend", "plan", and "believe" or the negative of those terms or
other variations of them or by comparable terminology to identify our forward-
looking statements. In particular, statements, express or implied, concerning
future operations, operating results or the ability to generate income or cash
flows are forward-looking statements.
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Although we believe our expectations reflected in forward-looking
statements are based on reasonable assumptions, no assurance can be given that
these expectations will be achieved. Important factors that could cause actual
results to differ materially from the expectations reflected in the forward-
looking statements include, among others:
-timing and extent of changes in commodity prices for crude oil,
natural and related products and interest rates;
-extent of our success in discovering, developing, marketing and
producing reserves and in acquiring oil and gas products;
-political developments around the world;
-financial market conditions.
In light of the risks, uncertainties and assumptions, the events
anticipated by our forward-looking statements might not occur. We undertake no
obligation to update or revise our forward-looking statements, whether as a
result of new information, future events or otherwise.
(b) Business. Tidelands Oil & Gas Corporation (the "Company"), formerly
known as C2 Technologies, Inc., was incorporated under the laws of the State of
Nevada on February 25, 1997. C2 Technologies, Inc. changed its name to Tidelands
Oil & Gas Corporation on November 19, 1998. The Company has two operating
subsidiaries named Tidelands Oil Corporation (TOC) and Tidelands Gas Corporation
(TGC), both Texas corporations.
Tidelands Oil Corporation was formed in May 1985. Since inception and until
recently, Tidelands Oil Corporation has devoted virtually all of its efforts to
acquiring control of leases which comprise the remaining portion of the Sacatosa
Field in Maverick County, Texas. This acreage is located on the Ewing Halsell
Foundation Ranch also known as the Farias Ranch. These oil and gas leases
directly offset Continental Oil Company (CONOCO) which has leases on the Chittam
Ranch. The CONOCO leases have produced in excess of 40,000,000 barrels of oil
and 20 BCF of gas. Tideland's leases have approximately 156 oil and gas wells
scattered across the leases with largest concentration being on the northern
portion of the acreage offsetting CONOCO. Tidelands has began a reworking
program to place all of the wells back into production.
Tidelands Gas Corporation was formed on August 29, 1996. Tidelands Gas
Corporation was formed primarily for the purpose of acquiring the Delhi Pipeline
System for use as a gas transportation outlet for the shallow gas reserves
underlying Tideland's leases. Engineering reports estimate that one zone, above
1500' in depth, which the leases contain in excess of 17 BCF of recoverable gas.
Tidelands has drilled numerous gas wells on the leased acreage.
Tidelands Gas Corporation organized two Texas Limited Liability companies, Rio
Bravo Energy, LLC and Sonora Pipeline, LLC. Tidelands owns fifty percent of each
LLC. The remaining fifty percent is owned by Hudson SVD, LLC. Sonora will
finance the testing and operational integrity of the Tidelands gas pipeline and
make is operational. Rio Bravo Energy, LLC. purchased the Chittim gas processing
plant from Conoco, Inc.
Sonora will operate the gas pipeline transporting gas to the gas plant. Sonora
will transport gas produced from Tideland's property as well as from other gas
suppliers. Rio Bravo will operate the gas plant. It will process the natural gas
into gas products such as natural gasoline, propane, butane. Rio Bravo will also
market the gas products.
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Sonoro Pipeline and Rio Bravo will transport and process gas for suppliers such
as Tidelands, Merit Energy, Cononco, Cuantro Petroluem, Inc., Prime Operating,
Inc., The Exploration Company,. The maximum operating capacity of gas plant is
10 million cubic feet of gas per day. The Sonoro pipeline capacity is higher.
Rio Bravo intends to ship all propane and butane products to Mexico and to sell
natural gasolines to Enron Oil Trading and Transportation Company.
The Texas Railroad Commission regulates all aspects of the production,
transportation and processing of petroleum products.
COMPETITION
Tidelands will actively compete for reserve acquisitions and
exploration/exploitation leases, licenses, gas suppliers and petroleum product
purchasers. This competition will be against companies with greater financial
and other resources. Competitive factors will include price, contract terms and
quality of service, including pipeline connection times and distribution
efficiencies and financial resources. The Company will face competition from
other producers and suppliers, including competition from other local and world
wide energy suppliers.
EMPLOYEES
The Company has seven employees, including the Company officers, two plant
operators and three field personnel.
Item 2. Management's Discussion and Analysis or Plan of Operation
The following discussion and analysis should be read in conjunction with
"Selected consolidated financial Data" and the Company's consolidated Financial
Statements and Notes thereto included elsewhere in this document.
Overview
RESULTS OF OPERATIONS
Year 1999
Revenues of $45,299 resulted from gas and oil sales. Lease operating costs of
$15,691, depreciation, depletion and amortization of $205,948, a loss in the
equity of joint ventures $28,282, litigation settlements of $220,400 and
interest of $34,870 were incurred. General and administrative costs of $516,317
consisted of personnel costs of $252,482, professional fees of $90,513,
shareholder communication costs of $43,751, travel costs of $67,251 and $62,320
for miscellaneous expenses
Year 1998
Revenues of $14,381 resulted from gas and oil sales. Lease operating costs of
$15,691, depreciation and amortization of $51,776 and a loss in the equity of
joint ventures of $7,254 were incurred. General and administrative costs of
$164,062 consisted of professional fees of $29,600, reorganization costs of
$29,289, personnel costs of $79,590 and $25,583 for miscellaneous expenses.
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LIQUIDITY AND CAPITAL RESOURCES
Year 1999
The Company required $602,647 from operations, acquired oil and gas properties
of $47,573, decreased debt by $159,533, increased due to related parties by
$148,134 and sold stock of $712,637. The Company maintains a $1,000,000 credit
line to be funded on an as-needed basis.
Year 1998
The Company required $79,940 from operations, acquired oil and gas properties
and additional investments of $2,198 incurred debt of $43,043 increased due to
related parties of $34,438 and reduced subscription receivables by $3,150. On
February 1, 1999, the Company obtained a $1,000,000 credit line to be funded on
an as-needed basis.
Year 1997
The Company received $21,200 in cash and a note for $70,000 resulting from the
sale of common stock.
Item 3. Description of Property.
The Rio Bravo gas plant is located Maverick County, Texas. The oil and
gas leases are located in Maverick and Dimmit Counties, Texas.
The following table sets forth our net proved and proved developed
reserves at December 31, 1999, as set forth in the financial statements on the
Consolidated Supplemental Information (unaudited).
Table 1. Net Proved and Proved Developed Reserve Summary
Natural Gas (Mcf)
Proved developed and Undeveloped reserves 19,995,825
Proved Developed reserves 2,934,851
Production -0-
Oil (BBLS)
Proved developed and undeveloped reserves 6,981,930
Proved developed reserves 3,916,777
Production 1,130
ACREAGE
The following table summarizes our developed and undeveloped acreage at
December 31, 1999 in Texas. We have excluded acreage in which the Company's
interest is limited to owned royalty, overriding royalty and other similar
interests.
Table 2. Acreage
Location Developed Undeveloped
Gross Net Gross Net Total
Oil 2429 1821 9419 7064 8885
-------- -------- ------ ------ ------
Gas 2280 1710 9908 7431 9711
-------- -------- ------ ------ ------
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<TABLE>
<CAPTION>
PRODUCING WELLS
The following table reflects the Company's ownership interests in gas
and oil wells located in Texas at December 31, 1999.
Table 3.
Gross Net
Oil 133 99.76
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Gas 23 4.31
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DRILLING AND ACQUISITION ACTIVITIES
During the year ended December 31, 1999, we conducted no drilling
activity.
PRESENT ACTIVITIES
No drilling operations are presently in process. Current activities
include reworking wells and placing wells back into production.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
Table 1 lists the persons who are known to the Company to be the owners
of more than five percent of the Company's equity shares according to the
stockholder list provided by the Company's transfer agent as of February 2,
2000.
(a) Beneficial Ownership of more than 5% based on 17,420,489 shares issued
and outstanding.
Table 1.
(1) (2) (3) (4)
Title of Class Name and Address Amount and Nature Percent of
Class
<S> <C> <C> <C>
Common Michael Ward 3,513,125 20.16%
9309 North Star
Corpus Christi, TX
Common Royis Ward 3,513,125 20.16%
5902 Fenway
Corpus Christi, TX
Common Cede & Co 4,523,471 25.9%
P.O. Box 20
Bowling Green Station, NY
*Common Pan Pacific Investments, Ltd. 1,000,000 5.6%
Buckingham Square Penthouse
Seven Mile Beach
West Bay Road
Grand Cayman, Cayman Island
British West Indies
</TABLE>
* Beneficial ownership based on outstanding common stock option to purchase
1,000,000 shares at $1.00 per share on, or before February 2, 2002. The option
has not been exercised as of the filing date of this registration statement.
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
(b) Security Ownership of Management. Based on 17,420,489 shares issued and
outstanding March 28, 2000.
Table 2.
(1) (2) (3) (4)
Title of Class Name and Address Amount and Nature Percent of
Class
*Common Michael Ward 3,513,125 20.16%
9309 North Star
Corpus Christi, TX
Common Royis Ward 3,513,125 20.16%
5902 Fenway
Corpus Christi, TX
Common Allen Alderson 165,000 0.01%
6857 N. Lakeshore Dr.
Shreveport, LA 71107
**Common Danny Vines 160,000 0.01%
Rt. 4, Box 2620
Lufkin, TX 75904
Common Ahmmed Karim 27,500 0.001%
1532 Woods Dr.
N. Vancouver, B.C.
Canada V7R 1A9
</TABLE>
** Includes common stock options granted to Vines totaling 50,000 shares.
(c) Changes in Control. See Item 1 "Changes in Control of Registrant"
paragraph (b).
Item 5. Directors, Executive Officers, Promoters and Control Persons.
(a) Identify Directors and Executive Officers. Set forth below is the
information regarding the directors and executive officers of the
company.
Table 3.
Name Age Position
- --------------------------------------------------------------------------------
Michael Ward 44 Director, President
Royis Ward 67 Director, Secretary/Treasurer
Ahmmed Karim 28 Director, Vice President
Allen Alderson 51 Director
Danny Vines 43 Director
The Company directors are Royis Ward, Michael Ward, Ahmmen Karim, Danny
Vines and Allen Alderson.
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Michael Ward is the President and Chief Executive Officer. Michael Ward
has served in his present capacities since October 21, 1998. He is Vice
President and Chief Executive Officer of Tidelands Gas Corporation. He is a
Manager and Vice President of Development of Rio Bravo Energy, LLC. Mr. Ward has
more than 25 years of diversified experience as an oil and gas professional. He
was educated in business management and administration at Southwest Texas State
University and the University of Texas. He has wide experience in the capacity
in which he successfully served in operating oil and gas companies in the United
States. During the past 20 years, he has been associated with Century Energy
Corporation where his duties and responsibilities were production and drilling
superintendent and supervised 300 re-completions and new drills in Duval County,
Texas. In association with Omega Minerals, Inc., where he was vice president and
part owner, he operated 65 wells in 23 counties in South and West Texas: 17
wells in Seminole and Osage Counties, Oklahoma, 44 wells in Neosho and Wilson
Counties, Kansas and 125 wells in Brown, Pike, Schuyler and Scott Counties.
Illinois. He was president and owner of Major Petroleum Company. He drilled,
completed and produced 42 wells in South and West Texas counties. The company
was sold. With Tidelands Oil Corporation, his duties included supervising and
performing remedial well work, work-overs and economic evaluation of the
corporate properties. The primary area of interest was in Maverick County,
Texas. He has performed project financing analysis and consulting of refinery
acquisitions for the Yemen government. Currently, he is negotiating new gas
purchase and sale contracts, supervising and administering the sale of gas line
connections and hookups.
Royis Ward is the Secretary/Treasurer and director of the Company. He
is a Manager of Rio Bravo Energy, LLC and Sonora Pipeline, LLC. He is an oil and
gas professional. He has been engaged in the oil and gas industry since
graduation from Tyler Junior College, Tyler, Texas in 1952. Initially, he was
employed as a production superintendent and landman for Coffield & Guthrie,
Inc., a large independent oil and gas operator and thereafter placed in charge
of pipeline and drilling operations from 1952-1955. In 1955. he began to develop
oil and gas properties for his own account as an independent oil and gas
operator throughout the southwest until 1962. At that time, he became President
of Omega Petroleum Corporation, Shreveport, Louisiana. Thereafter, he continued
as an independent oil and gas operator drilling individual in excess of 50 wells
in the South Texas Area. In 1968, he became the President and CEO of Omega
Minerals, Inc. and was instrumental in acquiring vast oil and gas properties by
drilling, development, and re-acquisitions. In 1985, Tidelands Oil Corporation,
a Texas Corporation, was formed for the purpose of drilling and developing oil
and gas properties in South Texas. He presently serves as President of Tidelands
Oil Corporation with emphasis primarily devoted to acquisitions of oil and gas
properties.
Ahmmed Karim Vice President and director of the Company. He is a
graduate of Simon Fraser University. He holds a degree in Business
Administration, specializing in marketing and international business. Since 1995
his business experience includes work with Quest Investments Group and
Interworld Trade and Finance where his responsibilities included marketing,
finance and investor relations.
Mr. Allen Alderson a member of the Company's board of directors. He is
currently President of Falco Energy Services, L.L.C. (FES), a natural gas
marketing and transportation company formed in 1995 with its headquarters
located in Shreveport, Louisiana. Falco Energy Services is engaged in the
marketing, transportation and processing of natural gas with emphasis on the
development and operation of natural gas pipeline systems. He is a Manager and
President of Rio Bravo Energy L.L.C. and Sonora Pipeline L.L.C.
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Mr. Alderson attended Louisiana Tech University and the University of
Texas at Austin, graduating with a Bachelor of Science Degree in Finance. He is
a member of the Independent Petroleum Association of America, the Texas
Independent Producers and Royalty Owners Association, the Houston Energy
Association and is a charter member of the Natural Energy Services Association.
Danny Vines is a member of the Company's board of directors. He is a
graduate of Stephen F. Austin State University. He holds a Bachelor of Science
in Forestry. He has been employed with CLECO Energy L.L.C., a Houston based
energy services company. CLECO markets natural gas, provides energy management
services for industrial and end-use customers, engages in acquisition and
development of energy assets. He is also Vice President of Operations and
Secretary for Rio Bravo, LLC. and Sonora Pipeline, LLC. He is the President of
Hudson SVD, LLC.
(b) Identify Significant Employees. The Company has no significant
employees,
as that term is defined, other than its Michael, Royis Ward and Ahmmed
Karim.
(c) Family Relationships. Royis Ward is the father of Michael Ward.
(d) Involvement in Certain Legal Proceedings. None of the Company's
directors, officers, promoters or control persons, if any, during the
past five years was, to the best of the Company's knowledge:
1. A general partner or executive officer of a business that had a
bankruptcy petition filed by or against it either at the time of the
bankruptcy or within the two years before the bankruptcy; 2. Convicted
in a criminal proceeding or been subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses); 3.
Subject to any order, judgement, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his or her involvement in any type of business, securities or
banking activities; and
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities or
commodities law, and the judgement has not been reversed, suspended or
vacated.
Item 6. Executive Compensation.
The Company has three executive officers, Michael, Royis Ward and
Ahmmed Karim. Michael Ward's annual salary is $120,000. Royis Ward's annual
salary is $120,000. The company has not paid any of these salaries to date and
the amounts due are accruing. These salaries include work performed by the Wards
on the Company's subsidiaries in their respective executive officer capacities.
Item 7. Certain Relationships and Related Transactions.
(a) Transactions with Management and Others.
Except as otherwise set forth in this document, no member of
management, executive officer, director, nominee for a director or security
holder who is known to the Company to own of record or beneficially more than
five percent of any class of the Company's voting securities, nor any member of
the immediate family of any of the foregoing persons, has had any direct or
indirect material interest in any transaction to which the Company was or is to
be a party.
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The Company granted common stock options on January 10, 1999 to its
officers and directors totaling 1,650,000 common shares execiseable on, or
before January 10, 2000. None of the options were exercised.
The Company granted common stock options on November 11, 1999 to
directors Allen Alderson and Danny Vines. The options are execiseable in three
50,000 share blocks. The exercise price is 45 cents per share. Mr. Alderson
exercised all of his options. Mr. Vines exercised 100,000 share options and has
50,000 shares remaining unexercised.
The boards of directors of the Company's wholly owned subsidiaries had
previously approved the accrual of officer salaries totaling $370,000 for
services rendered during 1998 and previous years. These salaries remain unpaid.
As of December 31, 1998, the cumulative non-interest bearing advances
due from Michael and Royis Wards, as officers and directors of the Company's
wholly owned subsidiaries, totaled $90,220.
(b) Indebtedness of Management.
No member of the Company's management is or has been indebted to the
Company since the beginning of the Company's last fiscal year or January 1,
1999.
Item 8. Description of Securities.
(a) Common or Preferred Stock.
The Company is authorized to issue One Hundred Million (100,000,000)
shares of common stock, par value $0.001 per share. As of March 28, 2000, there
are 17,420,489 shares of common stock issued and outstanding. The holders of the
common stock are not entitled to pre-emptive or preferential rights to subscribe
to any unissued stock or other securities. The shareholders are not entitled to
cumulative voting rights. The common stock is not assessable and not subject to
the payment of any corporate debts.
(b) Debt Securities.
The company has no outstanding debt securities.
(c) Other Securities To Be Registered.
The Company is only registering its common stock securities.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters.
(a) Market Information.
The Company's common stock trades Over-the-Counter (OTC) on the OTC
Bulletin Board under the symbol TIDE. Table 3 sets forth the high and low bid
information for each fiscal quarter beginning with September 30, 1998, the first
quoted quarter. These quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions.
These data provided by NASDAQ Trading and Market Services.
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Table 3.
Bid Information
- --------------------------------------------------------------------------------
Fiscal Quarter Ended High Low
- --------------------------------------------------------------------------------
December 31, 1999 1.25
September 30, 1999 4.00 0.875
June 30, 1999 1.50 0.375
March 31, 1999 0.70 0.40
December 31, 1998 0.875 0.125
September 30, 1998 0.5625 0.375
- --------------------------------------------------------------------------------
(b) Holders.
The Company has 81 active shareholders of its common stock as of March
28, 2000 holding 17,420,489 common shares. The Company believes that many
additional holders of the Company common stock are unidentified because their
shares are held by brokers in nominee accounts or "street name". The number of
beneficial owners holding stock in nominee or "street name" is estimated by the
Company to be approximately 600.
(c) Dividends.
A ten percent common stock dividend was declared on December 28, 1999.
An additional 1,385,959 shares were issued to existing shareholders. There are
no restrictions imposed on the Company which limit its ability to declare or pay
dividends on its common stock. No cash dividends have been declared or paid to
date and none are expected to be paid in the forseeable future.
Item 2. Legal Proceedings.
The Company is not a party to any pending or threatened legal
proceedings.
Item 3. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
There have been no changes or disagreements with accountants on
accounting or financial disclosure during the Company's two most recent fiscal
years.
Item 4. Recent Sales of Unregistered Securities.
On October 21, 1998, the Company issued 8,635,000 common shares to the principal
shareholders of Tidelands Oil Corporation and Tidelands Gas Corporation in
connection with the Company's acquisition of those two corporations as wholly-
owned subsidiaries based on the Section 4(2) securities transaction exemption.
On January 13, 1999, the Company issued 90,000 common shares to a creditor as
payment for an outstanding debt. The debt was $64,414. In connection with this
transaction, the Company issued 40,000 common stock purchase warrants
exercisable at $2.50 per share. The warrants expire on January 13, 2001. The
securities transaction exemption was Section 4(2).
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On February 15, 1999, the Company issued 88,570 common shares to a creditor as
payment for an outstanding debt. The debt was $61,390. In connection with this
transaction, the Company issued 40,000 common stock purchase warrants
exercisable at $2.50 per share. The warrants expire on February 5, 2001. The
securities transaction exemption was Section 4(2).
On April 6, 1999, the Company sold 2,000,000 shares of common stock for 50 cents
per share. The securities transaction exemption was Regulations D and S.
On August 18, 1999, the Company issued 175,000 shares of common stock in
connection with the settlement of a lawsuit. The consideration was par value.
The securities transaction exemption was Section 4(2).
On December 27, 1999, Alan Alderson exercised his option to purchase 150,000
common shares at the price of 45 cents per share. Danny Vines exercised his
option to purchase 100,000 common shares at the price of 45 cents per share. The
securities transaction exemption was Section 4(2).
Item 5. Indemnification of Directors and Officers.
Article Twelve of the Company's Articles of Incorporation provides that
the Company's directors and officers will not have any personal liability to the
Company or its stockholders for damages for breach of fiduciary duties as
directors or officers. This provision does not alleviate or limit any liability
of an officer or director for acts or omissions which involve intentional
misconduct, fraud or a knowing violation of the law or the payment of dividends
in violation of the Nevada Revised Statutes. This article does not provide for
the Company to indemnify the officers or directors, however, such
indemnification may be implied.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted for directors, officers and
controlling persons of the Company, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy and is
therefore, unenforceable.
Part F/S
Financial Statements of the Registrant for the period ending December
31, 1999 presented in accordance with Item 310 of Regulation S-B and
appear in the Form 8-K in Item 7 "Financial Statements and Exhibits".
Part III.
Item 1. Index to Exhibits. The exhibits are attached to the Form
8-K in Item 7 "Financial Statements and Exhibits".
Item 6. RESIGNATION OF DIRECTORS AND EXECUTIVE OFFICERS.
Not applicable.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
TIDELANDS OIL & GAS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
YEARS ENDED DECEMBER 31, 1999 AND 1998
<PAGE>
TIDELANDS OIL & GAS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
YEARS ENDED DECEMBER 31, 1999 AND 1998
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT .............................................. 3
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheet ............................... 4
Statements of Consolidated Stockholders' Equity ......... 5
Statements of Consolidated Operations .................... 6
Statements of Consolidated Cash Flows ................... 7
Notes to Consolidated Financial Statements ............... 8-17
SUPPLEMENTAL INFORMATION (UNAUDITED).......................................18-20
-2-
<PAGE>
BAUM & COMPANY, P.A.
4310 SHERIDAN STREET, SUITE 202
HOLLYWOOD, FLORIDA 33021
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Tidelands Oil & Gas Corporation
Corpus Christi, Texas
We have audited the accompanying consolidated balance sheet of Tidelands Oil &
Gas Corporation as of December 31, 1999, and the related statements of
consolidated stockholders' equity, operations, and cash flows for the years
ended December 31, 1999 and 1998. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Tidelands Oil & Gas Corporation as of December 31, 1999 and the results of their
consolidated operations and their consolidated cash flows for the years ended
December 31, 1999 and 1998 in conformity with generally accepted accounting
principles.
/s/ Baum & Company, P.A.
- ------------------------
Baum & Company, P.A.
Hollywood, Florida
April 17, 2000
-3-
<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
ASSETS
<S> <C>
Current Assets:
Cash $ 51,065
Accounts Receivable 14,365
Prepaid Expenses 11,851
------------------
Total Current Assets 77,281
------------------
Oil and Gas Properties, Net (Notes 1,3) 506,310
------------------
Other Assets:
Deposits and Organizational Costs, Net 1,101
Investments (Notes 1,4) 115,742
Intangible Assets, Net (Notes 1,2,5) 3,503,633
------------------
Total Other Assets 3,620,476
------------------
Total Assets $ 4,204,067
==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 438,456
Current Maturities of Long-Term Debt (Note 6) 19,552
Drilling Advances (Note 7) 25,967
------------------
Total Current Liabilities 483,975
Long-Term Debt (Note 6) 37,000
Due to Related Parties (Note 9) 430,218
------------------
Total Liabilities 951,193
------------------
Commitments and Contingencies (Note 11 )
Stockholders' Equity
Common Stock, $.001 Par Value Per Share,
100,000,000 Shares Authorized, 17,420,489 Shares
Issued and Outstanding 17,420
Paid-in Capital, in Excess of Par Value 4,682,270
Subscriptions Receivable (124,575)
Accumulated (Deficit) (1,322,241)
-------------------
Total Stockholders' Equity 3,252,874
------------------
Total Liabilities and Stockholders' Equity $ 4,204,067
==================
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
-4-
<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION
STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999 and 1998
Excess of Accumulated
Shares Amount Par Value Deficit
---------------- ----------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Balance December 31, 1997 4,457,571 $ 4,458 $ 89,892 $ (15,554)
Purchases of Common Stock 133,389 133 58,512
Issuance of Stock for Acquisitions 8,635,000 8,635 3,134,688
Net (Loss) (224,382)
---------------- ----------------- ------------------ -------------------
Balance December 31, 1998 13,225,960 $ 13,226 $ 3,283,092 (239,936)
================ ================= ================== ===================
Issuance of Common Stock 2,608,570 2,608 1,358,094
Stock Dividends 1,585,959 1,586 (1,586)
Net (Loss) (1,082,305)
---------------- ----------------- ------------------ -------------------
Balance December 31, 1999 17,420,489 $ 17,420 $ 4,682,270 $ (1,322,241)
================ ================= ================== ===================
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
-5-
<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
YEARS ENDED
December 31, December 31,
1999 1998
---- ----
(Note 2)
<S> <C> <C>
Revenues:
Oil and Gas Sales $ 45,299 $ 14,381
-------------- --------------
Expenses
Lease Operating 121,787 15,691
Depreciation, Depletion and Amortization 205,948 51,776
(Loss) In Equity of Investments 28,282 7,254
Litigation Settlement 220,400 -
Interest 34,870 6,549
General and Administrative 516,317 157,493
-------------- --------------
Total Expenses 1,127,604 238,763
-------------- --------------
(Loss) Before Provision
for Income Taxes $ (1,082,305) $ (224,382)
-------------- --------------
Provision for income taxes 0 0
-------------- --------------
Net (Loss) $ (1,082,305) $ (224,382)
============== ==============
Net (Loss) Per Common Share, Basic $ (0.071) $ (.025)
-------------- --------------
Weighted Average Number of Common
Shares Outstanding, Basic 15,323,224 8,841,765
============== ==============
Net (Loss) Per Common Share, Diluted $ (.067) $ (.025)
-------------- --------------
Weighted Average Number of Common
Shares Outstanding, Diluted 16,213,224 8,841,765
============== ==============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
-6-
<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION
STATEMENTS OF CONSOLIDATED CASH FLOWS
YEARS ENDED
December 31, December 31,
1999 1998
---- ----
(Note 2)
<S> <C> <C>
Cash Flows (Required)
By Operating Activities:
Net (Loss) $ (1,082,305) $ (224,382)
Adjustments to Reconcile Net (Loss)
to Operating Cash Flow:
Depreciation, Depletion and Amortization 205,948 51,776
Litigation Settlement 120,400 -
Loss in J.V.'s and L.L.C 28,367 7,254
(Increase) Decrease in Receivables (2,676) 3,341
(Increase) in Prepaid Expenses (11,851) -
(Increase) in Deposits and Organization Costs (450) -
Increase in Accounts Payable
and Accrued Expenses 139,920 82,071
---------------- --------------
Net Cash (Required)
By Operating Activities (602,647) (79,940)
----------------- ---------------
Cash Flows (Required) By Investing Activities:
Acquisitions of Oil and Gas Properties (47,573) (1,200)
Increase in Investments - (998)
---------------- ---------------
Net Cash (Required) By Investing Activities (47,573) (2,198)
----------------- ---------------
Cash Flows from Financing Activities:
Sale of Common Stock 712,637 -
Subscription Receivable - 3,150
(Decrease) Increase in Debt (159,533) 43,043
Increase in Due To Related Parties 148,134 34,438
---------------- --------------
Net Cash From Financing Activities 701,238 80,631
---------------- --------------
Net Increase (Decrease) in Cash 51,018 (1,507)
Cash - Beginning of Year 47 1,554
---------------- --------------
Cash - End of Year $ 51,065 $ 47
================ ==============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
-7-
<PAGE>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ------ ------------------------------------------
This summary of significant accounting policies is presented to
assist in understanding these consolidated financial statements.
The consolidated financial statements and notes are representations
of management who is responsible for their integrity and
objectivity. The accounting policies used confirm to generally
accepted accounting principles and have been consistently applied
in the preparation of these consolidated financial statements.
Organization
------------
Tidelands Oil & Gas Corporation (formerly C2 Technologies, Inc.)
(the Company) was incorporated in the state of Nevada on February
25, 1997. On October 21, 1998 the Company acquired all of the
issued and outstanding capital stock of Tidelands Oil Corporation
and Tidelands Gas Corporation. On November 19, 1998, the legal name
of the Company was changed to Tidelands Oil and Gas Corporation,
and the aggregate number of shares in which the Company has
authority to issue was increased to 100,000,000 shares.
Nature of Operations
--------------------
The Company is presently engaged, through its wholly-owned
subsidiaries and investments in joint ventures and limited
liability companies, in the acquisition, exploration and
development of oil and gas properties in southern Texas.
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant
inter-company accounts and transactions are eliminated.
Fair Value of Financial Investments
-----------------------------------
The Company has adopted Statement of Financial Accounting Standards
No. 107 "disclosure about fair value of financial instruments,"
which requires the disclosure of the fair value of off-and-on
balance sheet financial instruments. Unless otherwise indicated,
the fair values of all reported assets and liabilities, which
represent financial investments (none of which are held for trading
purposes), approximate the carrying values of such amounts.
-8-
<PAGE>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
- ------ ------------------------------------------------------
Use of Estimates
----------------
The preparation of consolidated financial statements in accordance
with generally accepted accounting principles requires management
to use estimates and make judgements. While management has
considered all available information, actual amounts could differ
from those reported as assets, liabilities, related revenues, costs
and expenses and the disclosed amounts of contingencies.
Investments
-----------
The equity method of accounting is used for investments, owned 50%
or less, including corporate joint ventures and limited liability
companies. Under this method, equity in the pre-tax income or
losses of limited liability companies, and in the net income or
losses of joint-ventures, is reflected in the Company's revenues or
expenses rather than when realized through dividends or
distributions.
Oil and Gas Properties
----------------------
The Company uses the successful efforts method of accounting for
oil and gas producing activities. Costs, including interest, to
acquire mineral interests in oil and gas properties, to drill and
equip exploratory wells that find proved reserves, and to drill and
equip development wells are capitalized. Costs to drill exploratory
wells that do not find proved reserves, geological and geophysical
costs, and the costs of carrying and retaining unproved properties
are expensed.
Unproved oil and gas properties that are individually significant
are periodically assessed for impairment of value, and a loss is
recognized at the time of impairment by providing an impairment
allowance. Other unproved properties are amortized based on the
Company's experience of successful drilling and average holding
period. Capitalized costs of producing oil and gas properties,
after considering estimated dismantlement and abandonment costs and
estimated salvage values, are depleted by the unit-of-production
method.
On the sale or retirement of a complete unit of a proven property,
the cost and related accumulated depreciation and depletion are
eliminated from the property accounts, and the resultant gain or
loss is recognized. On the retirement or sale of a partial unit of
proved property, the cost is changed to accumulated depreciation
and depletion with a resulting gain or loss recognized in income.
-9-
<PAGE>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
- ------ ------------------------------------------------------
On the sale of an entire interest in an unproved property for cash
or cash equivalent, gain or loss on the sale is recognized, taking
into consideration the amount of any recorded impairment if the
property has been assessed individually. If a partial interest in
an unproved property is sold, the amount received is treated as a
reduction of the cost of the interest retained.
Support equipment, facilities and other related equipment are
recorded at historical cost. Depreciation of property and equipment
is provided on the straight-line method over the estimated useful
economic lives of the related assets. Maintenance and repairs are
charged to operations. Additions and betterments, which extend the
useful lives of the assets are capitalized. Upon retirement or
disposal, the cost and accumulated depreciation are eliminated from
the account, and the resulting gain or loss is reflected in
operations.
Intangible Assets
-----------------
Intangible assets, which primarily consist of the cost of acquired
business in excess of the fair value of tangible assets and
liabilities acquired (goodwill), are amortized, by the
straight-line method, over an estimated economic useful life, of
the underlying values of the companies required, of twenty years.
Long-Lived Assets
-----------------
The Company adopted statement of Financial Accounting Standards 121
(SFAS 121) "Accounting for the Impairment of Long-Lived Assets to
be Disposed Of." SFAS 121 required that long-lived assets to be
held and used by the Company be reviewed for impairment whenever
events or changes in circumstances indicate that the related
carrying amount may not be recoverable. When required, impairment
losses on assets to be held and used are recognized based on the
fair value of the asset and long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less cost to
sell.
The adoption of SFAS 121 and the evaluation by the Company did not
have a significant effect on the consolidated financial position or
results of consolidated operations.
-10-
<PAGE>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
- ------ ------------------------------------------------------
Income Taxes
------------
The Company accounts for income taxes in accordance with Statement
of Financial Accounting Standards 109 (SFAS 109). "Accounting for
Income Taxes," which requires the establishment of a deferred tax
asset or liability for the recognition of future deductions or
taxable amounts and operating loss carryforwards, deferred tax
expense or benefit is recognized as a result of the change in the
deferred asset or liability during the year. If necessary, the
Company will establish a valuation allowance to reduce any deferred
tax asset to an amount which will, more likely than not, be
realized.
Net Earnings Per Common Share
-----------------------------
The Company accounts for earnings per share in accordance with
statement of Financial Accounting Standard 128 ("SFAS 128")
"Earnings per Share". Basic earnings per share is based upon the
net earnings applicable to common shares after preferred dividend
requirements and upon the weighted average number of common shares
outstanding during the period. Diluted earnings per share reflects
the effect of the assumed conversions of convertible securities and
exercise of stock options only in the periods in which such affect
would have been dilutive.
NOTE 2 - ACQUISITION OF COMPANIES
- ------ ------------------------
On October 21, 1998, the Company, pursuant to an acquisition
agreement, acquired 100% of the issued and outstanding capital
stock of Tidelands Oil Corporation and Tidelands Gas Corporation in
exchange for 8,635,000 shares of its restricted common stock. The
value of this transaction was determined by the mean average of the
bid and asked stock price discounted by 50%. In addition, the
deficit in the equity of the companies acquired was offset against
paid-in capital in excess of par value. Tidelands Oil Corporation
and Tidelands Gas Corporation was owned by current officers of the
Company. The acquisition, accounted for as a purchase, was included
in consolidated operations of the Company from that date through
December 31, 1998.
-11-
<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 2 - ACQUISITION OF COMPANIES (CONTINUED)
- ------ ------------------------------------
In accordance with Accounting Principle Board Opinion #16, the
unaudited proforma condensed consolidated results of operations of
the Company are as follows:
Tidelands Oil & Gas Corporation
Condensed Consolidated Statement Of Operations
Year Ended December 31, 1998
"Pro Forma"
(Unaudited)
<S> <C>
Revenues $ 54,775
--------------
Costs and Expenses $ 503,793
--------------
Net (Loss) $ (449,018)
==============
Net (Loss) Per Common Share $ (.051)
==============
Weighted Average Shares Outstanding 8,841,765
==============
NOTE 3 - OIL AND GAS PROPERTIES
- ------ ----------------------
A summary of oil and gas properties at December 31, 1999 is a
follows:
Proved Properties $ 355,090
Support Equipment 288,792
--------------
Total 643,882
Less Accumulated Depreciation and Depletion 137,572
--------------
Net Oil and Gas Properties $ 506,310
==============
</TABLE>
-12-
<PAGE>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 4 - INVESTMENTS
- ------ -----------
A summary of investments in Joint Ventures and Limited Liability
Companies at December 31, 1999 is as follows:
Ownership
Percentage
-----------
GT-Pla J.V. 96 5.978% $10,767
G-Halsell J.V. 96 4.5% 9,567
Rio Bravo Energy LLC 50.0% 95,408
----------
$115,742
==========
The Company's potential exposure to loss, with respect to its
investments in Joint Ventures and Limited Liability Companies is
generally limited to its positive investments and advances.
However, in some cases the Company may be otherwise obligated to
make capital contributions or loans to the ventures to make up cash
flow deficits. The Company's maximum exposure to credit and market
risk is not determinable with any degree to accuracy as
determination of the ultimate amounts is dependent upon the manager
of the joint ventures to optimize cash flows from the operations of
the projects and increase the value of the projects. However,
management does not believe that the Company's exposure would
significantly exceed the aggregate of the exposure described above.
NOTE 5 - INTANGIBLE ASSETS
- ------ -----------------
A summary of intangible assets at December 31, 1999 is as follows:
Goodwill $ 3,737,209
Less Accumulated Amortization 233,576
-----------
Net $ 3,503,633
===========
The company evaluates the amortization period of intangibles on an
ongoing basis, in light of any changes in business conditions,
events or circumstances, that may indicate the potential impairment
of intangible assets.
-13-
<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 6 - LONG-TERM DEBT
- ------ --------------
A summary of notes payable at December 31, 1999 is as follows;
Note Payable, Unsecured, Non Interest
<S> <C> <C>
Bearing, Payable on Demand $ 19,552
Note Payable, Unsecured, 6% Interest,
maturing January 2002 37,000
-----------
56,552
Less: Current Maturities 19,552
-----------
Total Long-Term Debt $ 37,000
===========
NOTE 7 - DRILLING ADVANCES
- ------ -----------------
Drilling advances from joint interest owners amounted to $25,967 as
of December 31, 1999. These advances will be applied toward the
payment of drilling costs to be incurred in subsequent periods.
NOTE 8 - INCOME TAXES
- ------ ------------
At December 31, 1999 the Company had net operating loss
carryforwards of approximately $1,763,887, to offset against future
federal taxable income, that expire in the years through 2019.
The company files a consolidated income tax return and timing
differences between the recognition of certain income and expense
items for income tax purposes and financial reporting purposes are
as follows:
Benefit of net operating loss carryforwards $ 1,763,887
Officers' salary deductions in excess of
tax deduction (610,000)
Tax depreciation in excess of book depreciation 15,080
Other adjustments (22,100)
--------------
$ 1,146,867
Total deferred tax asset $ 666,000
Less valuation allowance 666,000
-------------
Net deferred tax asset $ 0
-------------
</TABLE>
It is currently undeterminable as to when the Company will benefit
from the deferred tax asset.
-14-
<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 9 - RELATED PARTY TRANSACTIONS
- ------ --------------------------
The Boards of Directors of the Company's wholly-owned subsidiaries
had previously approved the accrual of officer salaries of $370,000
for services rendered in prior years and $240,000 in the current
year.
At December 31, 1999, cumulative non-interest bearing advances due
from officers and stockholders of the Company amount to $179,782.
The current officers and shareholders of the Company were formerly
officers and shareholders of Tidelands Oil Corporation and
Tidelands Gas Corporation.
NOTE 10 -SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
- -------- ------------------------------------------------
Cash paid for:
1999 1998
---- ----
Interest $12,515 $ 19
======= =======
Income Taxes $ 0 $ 0
======= =======
Supplemental schedule of non-cash investing and financing
activities.
Year Ended Year Ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
Increase in intangibles $ $ 3,737,209
Acquisitions of oil and gas
properties 597,561
Increase in investments 34,032
Increase in other assets 4,420
Issuance of shares
net of adjustments 523,490 3,244,638
Increase in liabilities 222,106
(Decrease) Increase in debt (403,090) 595,132
Transactions with
related parties 311,346
</TABLE>
-15-
<PAGE>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 11 - COMMITMENTS AND CONTINGENCIES
- ------- -----------------------------
The Company is subject to the laws and regulations relating to
the protection of the environment. The Company's policy is to
accrue environmental and cleanup related costs of a non-capital
nature when it is both probable that a liability has been
incurred and when the amount can be reasonably estimated.
Although it is not possible to quantify with any degree of
certainty the financial impact of the Company's continuing
compliance efforts, management believes any future remediation or
other compliance related costs will not have a material adverse
effect on the financial condition or reported results of
operations of the Company.
NOTE 12 - LITIGATION SETTLEMENTS
- ------- ----------------------
On June 24, 1998 Tidelands Oil Corporation and Tidelands Gas
Corporation (Subsidiaries), wholly-owned subsidiaries of the
Company entered into an acquisition agreement "Jersey Agreement"
with Jersey Petroleum, Inc. On October 16, 1998, the subsidiaries
formerly notified Jersey Petroleum, Inc. that the Jersey
Agreement was terminated due to non-performance of certain
provisions and other misrepresentations relating to pending
litigation.
Under the terms of the original Jersey agreement and a debenture
made a part thereof, the subsidiaries had drawn $155,000 of the
debenture. That amount would be repayable to Jersey Petroleum,
Inc. 10 days after the date of the termination letter or October
26, 1998. This amount had not been repaid pursuant to
management's belief that these costs were incurred as a result of
misrepresentations by Jersey Petroleum, Inc.
On October 22, 1998 Jersey Petroleum, Inc. filed suit against the
subsidiaries and in the Supreme Court of British Columbia
claiming unspecified damages for breach of contract.
-16-
<PAGE>
TIDELANDS OIL & GAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 12 - LITIGATION SETTLEMENTS (CONTINUED)
- -------- -----------------------------------
On December 11, 1998 a default judgment against the subsidiaries
was issued for $157,229.04. In March 1999, Jersey Petroleum, Inc.
filed suit against the subsidiaries in a Texas State court
claiming unspecified damages for breach of contract. On May 20,
1998, the Supreme Court of British Columbia ruled to set aside
the December 11, 1998 default judgment. In June 1999, the Texas
State Court set aside the March 1999 Texas lawsuit pending the
timely refiling by Jersey Petroleum, Inc., of the Canadian
lawsuit. On August 18, 1999 the Company paid Jersey Petroleum,
Inc. $167,499 and issued 175,000 shares of restricted "Section
144" common stock at a value of $120,400 as settlement of the
lawsuit. In August and September 1999 the Supreme Court of
British Columbia and the District Court of Nueces County, Texas
dismissed all claims.
On March 8, 2000 the Company negotiated a settlement of a prior
contract dispute. The terms of such settlement are payment in
cash of $100,000 including legal costs or the issuance of 60,000
shares of the Company's common stock.
NOTE 13 - STOCK OPTIONS
- ------- -------------
As of December 31, 1999 the Company had issued stock options as
follows:
Shares Option Price Expiration Date
1,650,000 $ .45 January 10, 2000 (Expired)
40,000 2.50 January 13, 2001
40,000 2.50 February 15, 2001
50,000 .45 January 10, 2002
1,000,000 1.00 February 2, 2002
---------
2,780,000
=========
-17-
<PAGE>
<TABLE>
<CAPTION>
TIDELANDS OIL & GAS CORPORATION
CONSOLIDATED SUPPLEMENTAL INFORMATION
YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
<S> <C>
Capitalized Costs Relating to Oil and Gas Producing Activities at December 31, 1999
- -----------------------------------------------------------------------------------
(Note 2)
Proved Properties $ 355,090
Support Equipment 288,792
--------------
Total 643,882
Less Accumulated Depreciation and Depletion 137,572
--------------
Net Oil and Gas Properties $ 506,310
==============
Costs Incurred in Oil and Gas Producing Activities for the Year Ended December 31, 1999
- ---------------------------------------------------------------------------------------
Property Acquisition Costs
Proved $ 0
==============
Results of Operations for Oil and Gas Producing Activities for the Years Ended December 31, 1999
- -------------------------------------------------------------------------------------------------
(Note 2)
Oil and Gas Sales $ 45,299
Production Costs (121,787)
Depreciation and Depletion (18,830)
--------------
(95,318)
Income Tax Expense 0
--------------
Results of Operations for Oil and Gas Producing
Activities (Excluding Corporate Overhead,
Management Fees and Losses of Joint Ventures) $ (95,318)
==============
</TABLE>
-18-
<PAGE>
TIDELANDS OIL & GAS CORPORATION
CONSOLIDATED SUPPLEMENTAL INFORMATION
YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
Reserve Information
The following estimate of proved reserve and proved developed reserve quantities
and related standardized measure of discounted net cash flow are estimates only,
and do not purport to reflect realizable values or fair market values of the
Company's reserves. The Company emphasizes that reserve estimates are inherently
imprecise and that estimates of new discoveries are more imprecise than those of
producing oil and gas properties. Accordingly, those estimates are expected to
change as future information becomes available. All of the Company's reserves
are located in the state of Texas.
Proved reserves are estimated reserves of crude oil (including condensate and
natural gas liquids) and natural gas that geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions. Proved
developed reserves are those expected to be recovered through existing wells,
equipment, and operating methods.
The standardized measure of discounted future net cash flows is computed by
applying year-end prices of oil and gas (with consideration of price changes
only to the extent provided by contractual arrangements) to the estimated future
production of proved oil and gas reserves, less estimated future expenditures
(based on year-end costs) to be included in developing and producing the proved
reserves, less estimated future income tax expenses (based on year-end statuary
tax rates) to be incurred on pretax net cash flows less tax basis of the
properties and available credits, and assuming continuation of existing economic
conditions. The estimated future net cash flows are then discounted, pursuant to
the requirements of Statement of Financial Accounting Standards 69 (SFAS 69),
"Disclosures About Oil and Gas Producing Activities," using a rate of 10 percent
a year to reflect the estimated timing of the future cash flows.
-19-
<PAGE>
TIDELANDS OIL & GAS CORPORATION
CONSOLIDATED SUPPLEMENTAL INFORMATION
YEARS ENDED DECEMBER 31, 1999
(UNAUDITED)
Reserve Information (continued)
- ------------------------------
GAS (MCF) OIL (BBLS)
--------- ----------
Proved Developed and Undeveloped Reserves
Beginning of Year 19,995,825 6,983,060
Production -- 1,130
------------- -------------
End of Year 19,995,825 6,981,930
============= =============
Proved Developed Reserves
Beginning of Year 2,934,851 3,917,907
End of Year 2,934,851 3,916,777
Standardized Measure of Discounted Future
Net Cash Flows at December 31, 1999
Future Cash Inflows $ 33,661,012 $ 117,031,065
Future Production Costs (2,784,050) (28,657,712)
Future Development Costs (2,775,000) (19,121,292)
Future Income Tax Expense (10,098,407) (33,814,007)
------------- -------------
Future Net Cash Flows 18,003,555 35,429,270
10% Annual Discount for Estimated
Timing of Cash Flows (9,013,514) (13,879,148)
------------- -------------
Standardized Treasures of
Discounted Future Net
Cash Flows Relating to Proved
Oil and Gas Reserves $ 8,990,041 $ 21,640,122
============= =============
The following reconciles the change in the standardized measure of discounted
future net cash flow during 1999
Beginning of Year $ 8,990,041 21,658,808
Oil and Gas Produced Including
Excess Production Costs 0 (18,686)
------------- -------------
End of Year $ 8,990,041 $ 21,640,122
============= =============
-20-
<PAGE>
(b) Index to Exhibits.
Exhibit Number Description
(2.0) Business Combination Agreement
(3.1) Articles of Incorporation of C2 Technologies,
Inc.
(3.2) Certificate of Amendment of Articles of
Incorporation of C2 Technologies, Inc.
(3.3) By-Laws
(21) List of Subsidiaries
(27) Financial Data Schedule
Item 8. CHANGES IN FISCAL YEAR.
Not applicable.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TIDELANDS OIL & GAS CORPORATION
Dated: April 19, 2000 OMNI ACQUISITION CORPORATION
By: /S/ Michael Ward
--------------------------
Michael Ward
Title: President
14
BUSINESS COMBINATION AGREEMENT
This agreement is entered into the 19th day of April, 2000 between
TIDELANDS OIL & GAS CORPORATION, a Nevada corporation, (herein, "Company") and
LONG LANE CAPITAL, INC. and GREGORY M. WILSON (herein, collectively, Sellers)
and OMNI ACQUISITION CORPORATION, a Nevada corporation, (herein, "Omni). The
Company , Sellers and Omni desire to enter into a business combination
transaction whereby the Company will issue shares to Sellers in exchange for
their shares of Omni.
For good and valuable consideration, receipt of which is acknowledged
the parties agree, represent and warrant the following:
Agreement
A. Exchange of Shares. The Company and Sellers agree to exchange shares
whereby the Company will acquire all of the issued and outstanding stock of
Omni. The Company will issue Company shares to Sellers in exchange for their
shares. The Company will issue one (1) share of Company stock for each twenty
(20) shares of Sellers' Omni stock. The Company will acquire the Sellers' shares
and issue to Sellers a total of Two Hundred Fifty Thousand (250,000) shares
Company common stock to Sellers. The shares will be issued from the Company's
treasury pursuant to the securities transaction exemption afforded by Section
4(2) of the Securities Act of 1933, as amended. The shares will be restricted
securities bearing the Company's standard restrictive legend.
B. Representations, Warranties and Covenants of the Company: The
Company represents and warrants to Sellers as of the date hereof and as of the
Closing Date:
SECTION 1. Enforceability of Agreement Against the Company. The Company
has all necessary power and authority to enter into this Agreement to which it
is a party, to carry out the obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement constitutes the legal, valid
and binding obligations of the Company enforceable against it in accordance with
the respective terms.
15
<PAGE>
SECTION 2. Shares. The shares when issued will be free and clear of all
liens, charges, demands or adverse claims or other restrictions on the exercise
of any of the attributes of ownership. There are no contracts, arrangements,
commitments or restrictions relating to the issuance, sale, transfer or purchase
or obtaining of shares or other ownership interests in the Shares, except for
this Agreement.
SECTION 3. Incorporation, Authority and Qualification of The Company.
The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Nevada. The Company has all necessary
corporate power and authority to carry on the business now being conducted by
it. The Company is duly qualified to do business, and is in good standing, in
each jurisdiction, if any, where the character of its properties owned, operated
or leased or the nature of its activities makes such qualification necessary.
The Company is authorized to issue 100,000,000 common shares, par value $0.001
per share. The company has 17,240,489 common shares issued and outstanding. No
other classes of stock are authorized or issued. There are no outstanding
options, warrants, rights or otherwise, other than those disclosed in the
financial statements.
SECTION 4. No Conflict. The execution and delivery by the Company of
this Agreement and each Related Document to which the Company are parties have
been obtained and all filings and notifications required by law, agreement or
otherwise have been made, the performance by the Company of this Agreement and
each Related Document to which they are parties will not:
(a) Violate or conflict with any term or provision of the articles
or certificate of incorporation (or other charter documents)
of the Company;
(b) Conflict with or violate any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award
applicable to Company;
(c) Conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or
both, would become a default) under, give to others any rights
of termination, amendment, acceleration or cancellation of, or
result in the creation of any lien on any of the assets
pursuant to, any assigned contract or any licenses;
(d) Without limiting the generality of the foregoing, result in
the termination, denial or impairment of any material
contract, arrangement or benefit granted with respect to the
Company's business, or require the payment of any fees, taxes
or assessments, pursuant to any federal, state or local
program relating to minority-owned businesses.
16
<PAGE>
SECTION 5. Consents, Approvals and Notifications. The execution and
delivery by the Company of this Agreement and each Related Document to which it
is a party does not, and the performance by it of this Agreement and such
Related Documents will not, require any consent, approval, authorization or
other action by, or filing with or notification to, any Governmental Authority
or any other Person.
SECTION 6. Financial Statements.
6.1 The Company has furnished to Sellers copies of (a) audited
balance sheets of the Company and audited statements of income, changes in
shareholders' equity and statements of cash flow for the period ending December
31, 1999, together with the reports and notes thereon, independent certified
public accountants (collectively, the "Audited Financial Statements").
6.2 The Audited Financial Statements (a) have been prepared in
conformity with GAAP applied on a consistent basis from year to year (except as
noted otherwise therein); and (b) assuming the Company will continue as a going
concern, are true and correct and present fairly in all material respects the
financial condition of the Company and the results of operations and changes in
cash flow of the Company for the periods to which each relates.
6.3 To the knowledge of the Company, the Interim Financial
Statements, if prepared, (a) have been prepared in conformity with GAAP applied
on a consistent basis from year to year (except as noted otherwise therein),
subject to normal recurring year-end adjustments (the effect of which will not,
individually or in the aggregate, be material) and the absence of notes (which,
if presented, would not differ materially from those included in the Audited
Financial Statements), and (b) assuming the Company will continue as a going
concern, are true and correct and present fairly in all material respects the
financial condition of the Company and the results of operations and changes in
cash flow of the Company for the periods to which each relates.
SECTION 7. Litigation. There is no claim, action, investigation,
arbitration or proceeding pending or, threatened against the Company, or against
or relating to any of the assets or the ability of the Company to perform its
obligations hereunder, before any arbitrator, judge, court or governmental
authority. Company is not subject to any order, writ judgment, injunction,
decree, determination or award of any arbitrator, judge, court or governmental
authority.
SECTION 8. Contracts. To the extent applicable, Exhibit "A" contains an
accurate and complete list of all written and oral agreements and contracts in
effect on the date of this Agreement to which the Company is a party in
connection with the business operations or by which any of the Company's
properties or assets relating to the operation are bound. The are no contracts
in formation or which are capable of subsequent formation as a result of future
satisfied conditions. The Company has made available to Sellers true and
complete copies of the contracts (including any amendments or modifications
thereto).
SECTION 9. Environmental Matters. The Company has not used any
property, real or personal to generate, manufacture, refine, transport, treat,
store, handle, or dispose of any hazardous substances except in accordance with
all applicable federal and state environmental laws.
17
<PAGE>
SECTION 10. Taxes. The Company has or will duly file or caused to be
filed all federal income tax returns and all other federal, state, county, local
or city tax returns which are required to be filed, including, but not limited
to, income and employee withholding taxes, and the Company has paid or caused to
be paid all taxes shown on said returns or on any tax assessment received by it
to the extent that such taxes have become due, or has set aside on its books
reserves (segregated to the extent required by sound accounting practice)
reasonably deemed by the Company to be adequate with respect thereto. No events
have occurred which could impose upon Sellers, any transferee liability for any
taxes, penalties, or interest due or to become due from the Company.
SECTION 11. Absence of Changes. Since the date of the Audited Financial
Statements, the Company has operated its business in the ordinary course
consistent with past practices and there has not been, except as disclosed in
this Agreement or the Exhibits attached hereto:
i. any Material Adverse Effect;
ii. any damage, destruction or loss (whether or not covered by
insurance) affecting any tangible asset or property used or useful in the
business operations, normal wear and tear excepted;
iii. any payments, discharges or satisfactions by the Company of any
liens, claims, charges or liabilities (whether absolute, accrued, contingent or
otherwise and whether due or to become due) relating to the business operations,
other than in the ordinary course of the business and consistent with past
practice;
iv. any licenses, sales, transfers, pledges, mortgages or other
dispositions of any tangible or intangible assets having a value over $1,000 (in
the aggregate) used or held for use in connection with the operation of the
business, other than in the ordinary course of business and consistent with past
practice;
v. any write-offs as uncollectible of any accounts receivable or notes
receivable of the operations, or any portion thereof, not provided for in the
allowance for uncollectible accounts in the Interim Financial Statements;
vi. any cancellations of any material debts or claims of, or any
amendments, terminations or waivers of any rights of material value to, the
business operations;
vii. any general uniform increase in or change in the method of
computing the compensation of employees of the Company who perform services for
the benefit of the business operations;
viii. any material changes in the manner in which the Company extends
discount or credits to customers or otherwise deals with customers of its
business;
ix. any material changes in the accounting methods or practices
followed by the Company and or any changes in depreciation or amortization
policies or rates theretofore adopted;
x. any capital commitments by the Company and for additions to
property, plant or equipment of the business operations;
xi. any agreements or commitments to merge or consolidate with or
otherwise acquire any other corporation, association, firm or other business
organization or division thereof;
18
<PAGE>
xii. any declarations of dividend, payment of any dividend, issuance of
any securities, purchase or redemption of any securities, commitments or
authorizations for any changes to its Articles of Incorporation or amendments to
any by-laws, conversions of any options, warrants or otherwise into common
shares, and except as disclosed in paragraph B.3. relating to the total shares
issued and outstanding which resulted from a corporate reorganization;
xiii. any other material transaction relating to the Company other than
in the ordinary course of the business and consistent with past practice;
or
xiv. any agreements or understandings, whether in writing or otherwise,
for the Company to take any of the actions specified in items i. through xii.
above.
SECTION 12. Undisclosed Liabilities. The Company does not have any
liabilities or obligations of any nature that would be required by GAAP to be
reflected in the Financial Statements (subject, in the case of unaudited
statements, to normal year-end audit adjustments), except: (a) such liabilities
and obligations which are reflected in the Financial Statements, or (b) such
liabilities or obligations which were incurred in the ordinary course of
business for normal trade or business obligations and are not individually or in
the aggregate in excess of $1,000.
SECTION 13. Compliance with Laws. Except as individually or in the
aggregate would not have a Material Adverse Effect, the Company has complied in
all respects with all laws of all Governmental Authorities (including all tariff
and reporting requirements) with respect to its business operations.
SECTION 14. Consents, Approvals and Notifications. The execution and
delivery by ABATO of this Agreement to which she is a party does not, and the
performance by her of this Agreement will not, require any consent, approval,
authorization or other action by, or filing with or notification to, any
Governmental Authority or any other Person.
B. Representations, Warranties Covenants of Sellers and Omni: Omni and
Sellers represent and warrant to the Company as of the date hereof and as of the
Closing Date:
SECTION 1. Enforceability of Agreement Against the Sellers and Omni.
Omni and Sellers have all necessary power and authority to enter into this
Agreement to which each is a party, to carry out the obligations hereunder and
to consummate the transactions contemplated hereby. This Agreement constitutes
the legal, valid and binding obligations of the Sellers and Omni enforceable
against it in accordance with the respective terms.
SECTION 2. Shares. Sellers' shares have been validly issued and are
free and clear of all liens, charges, demands or adverse claims or other
restrictions on the exercise of any of the attributes of ownership. There are no
contracts, arrangements, commitments or restrictions relating to the issuance,
sale, transfer or purchase or obtaining of shares or other ownership interests
in the Shares, except for this Agreement and the Lock-Up Agreements attached to
Omni's Form 10-SB registration statement.
SECTION 3. Incorporation, Authority and Qualification of Omni. Omni is
a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada. Omni has all necessary corporate power and
authority to carry on the business now being conducted by it. Omni is duly
qualified to do business, and is in good standing, in each jurisdiction, if any,
where the character of its properties owned, operated or leased or the nature of
its activities makes such qualification necessary. Omni is authorized to issue
25,000,000 common shares, par value $0.001 per share. The company has 5,000,000
common shares issued and outstanding. No other classes of stock are authorized
or issued. There are no outstanding options, warrants, rights or otherwise,
other than those disclosed in the financial statements.
19
<PAGE>
SECTION 4. No Conflict. The execution and delivery by the Sellers and
Omni of this Agreement and each Related Document to which the each is a party
have been obtained and all filings and notifications required by law, agreement
or otherwise have been made, the performance by the Sellers and Omni of this
Agreement and each Related Document to which each is a party will not:
(3) Violate or conflict with any term or provision of the articles
or certificate of incorporation (or other charter documents)
of Omni;
(4) Conflict with or violate any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award
applicable to Omni or Sellers;
(5) Conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or
both, would become a default) under, give to others any rights
of termination, amendment, acceleration or cancellation of, or
result in the creation of any lien on any of the assets
pursuant to, any assigned contract or any licenses;
(6) Without limiting the generality of the foregoing, result in
the termination, denial or impairment of any material
contract, arrangement or benefit granted with respect to Omni
or Sellers' business, or require the payment of any fees,
taxes or assessments, pursuant to any federal, state or local
program relating to minority-owned businesses.
SECTION 5. Consents, Approvals and Notifications. The execution and
delivery by the Sellers and Omni of this Agreement and each Related Document to
which each is a party does not, and the performance by it of this Agreement and
such Related Documents will not, require any consent, approval, authorization or
other action by, or filing with or notification to, any Governmental Authority
or any other Person.
SECTION 6. Financial Statements.
6.1 Sellers and Omni have furnished to the Company copies of
(a) audited balance sheets of the Company and audited statements of income,
changes in shareholders' equity and statements of cash flow for the period
ending February 5, 2000, together with the reports and notes thereon,
independent certified public accountants (collectively, the "Audited Financial
Statements").
6.2 The Audited Financial Statements (a) have been prepared in
conformity with GAAP applied on a consistent basis from year to year (except as
noted otherwise therein); and are true and correct and present fairly in all
material respects the financial condition of Omni and the results of operations
and changes in cash flow of Omni for the periods to which each relates.
6.3 To the knowledge of the Sellers and Omni , the Interim
Financial Statements, if prepared, (a) have been prepared in conformity with
GAAP applied on a consistent basis from year to year (except as noted otherwise
therein), subject to normal recurring year-end adjustments (the effect of which
will not, individually or in the aggregate, be material) and the absence of
notes (which, if presented, would not differ materially from those included in
the Audited Financial Statements), and are true and correct and present fairly
in all material respects the financial condition of the Company and the results
of operations and changes in cash flow of Omni for the periods to which each
relates.
20
<PAGE>
SECTION 7. Litigation. There is no claim, action, investigation,
arbitration or proceeding pending or, threatened against Omni, or against or
relating to any of the assets or the ability of it to perform its obligations
hereunder, before any arbitrator, judge, court or governmental authority. Omni
is not subject to any order, writ judgment, injunction, decree, determination or
award of any arbitrator, judge, court or governmental authority.
SECTION 8. Contracts. To the extent applicable, Exhibit "B" contains an
accurate and complete list of all written and oral agreements and contracts in
effect on the date of this Agreement to which Omni is a party in connection with
the business operations or by which any of its properties or assets relating to
the operation are bound. The are no contracts in formation or which are capable
of subsequent formation as a result of future satisfied conditions. Omni has
made available to the Company true and complete copies of the contracts
(including any amendments or modifications thereto).
SECTION 9. Environmental Matters. Omni has not used any property, real
or personal to generate, manufacture, refine, transport, treat, store, handle,
or dispose of any hazardous substances except in accordance with all applicable
federal and state environmental laws.
SECTION 10. Taxes. Omni has or will duly file or caused to be filed all
federal income tax returns and all other federal, state, county, local or city
tax returns which are required to be filed, including, but not limited to,
income and employee withholding taxes, and it has paid or caused to be paid all
taxes shown on said returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books reserves
(segregated to the extent required by sound accounting practice) reasonably
deemed by it to be adequate with respect thereto.
SECTION 11. Absence of Changes. Since the date of the Audited Financial
Statements, Omni has operated its business in the ordinary course consistent
with past practices and there has not been, except as disclosed in this
Agreement or the Exhibits attached hereto:
i. any Material Adverse Effect;
ii. any damage, destruction or loss (whether or not covered by
insurance) affecting any tangible asset or property used or useful in the
business operations, normal wear and tear excepted;
iii. any payments, discharges or satisfactions by it of any liens,
claims, charges or liabilities (whether absolute, accrued, contingent or
otherwise and whether due or to become due) relating to the business operations,
other than in the ordinary course of the business and consistent with past
practice;
iv. any licenses, sales, transfers, pledges, mortgages or other
dispositions of any tangible or intangible assets having a value over $1,000 (in
the aggregate) used or held for use in connection with the operation of the
business, other than in the ordinary course of business and consistent with past
practice;
21
<PAGE>
v. any write-offs as uncollectible of any accounts receivable or notes
receivable of the operations, or any portion thereof, not provided for in the
allowance for uncollectible accounts in the Interim Financial Statements;
vi. any cancellations of any material debts or claims of, or any
amendments, terminations or waivers of any rights of material value to, the
business operations;
vii. any general uniform increase in or change in the method of
computing the compensation of employees of it who perform services for the
benefit of the business operations;
viii. any material changes in the manner in which Omni extends discount
or credits to customers or otherwise deals with customers of its business;
ix. any material changes in the accounting methods or practices
followed by Omni and or any changes in depreciation or amortization policies or
rates theretofore adopted;
x. any capital commitments by Omni and for additions to property, plant
or equipment of the business operations;
xi. any agreements or commitments to merge or consolidate with or
otherwise acquire any other corporation, association, firm or other business
organization or division thereof;
xii. any declarations of dividend, payment of any dividend, issuance of
any securities, purchase or redemption of any securities, commitments or
authorizations for any changes to its Articles of Incorporation or amendments to
any by-laws, conversions of any options, warrants or otherwise into common
shares, and except as disclosed in paragraph B.1. relating to the total shares
issued and outstanding which resulted from a corporate reorganization;
xiii. any other material transaction relating to Omni other than in the
ordinary course of the business and consistent with past practice; or
xiv. any agreements or understandings, whether in writing or otherwise,
for Omni to take any of the actions specified in items i. through xii. above.
SECTION 12. Undisclosed Liabilities. Omni does not have any liabilities
or obligations of any nature that would be required by GAAP to be reflected in
the Financial Statements (subject, in the case of unaudited statements, to
normal year-end audit adjustments), except: (a) such liabilities and obligations
which are reflected in the Financial Statements, or (b) such liabilities or
obligations which were incurred in the ordinary course of business for normal
trade or business obligations and are not individually or in the aggregate in
excess of $1,000.
SECTION 13. Compliance with Laws. Except as individually or in the
aggregate would not have a Material Adverse Effect, Omni has complied in all
respects with all laws of all Governmental Authorities (including all tariff and
reporting requirements) with respect to its business operations.
SECTION 14. Consents, Approvals and Notifications. The execution and
delivery by Omni and Sellers of this Agreement to which each is a party does
not, and the performance by each of this Agreement will not, require any
consent, approval, authorization or other action by, or filing with or
notification to, any Governmental Authority or any other Person.
22
<PAGE>
C. Miscellaneous Provisions.
SECTION 1. Conditions to Closing
1.1 Conditions to Obligations of the Company. The obligations of
the Company to consummate the sale of the shares shall be subject to the
fulfillment, at or prior to the Closing, of each of the following conditions,
any one of which may be waived by the Sellers without waiver of any other rights
or remedies which Sellers may have under this Agreement:
i. The Company's Closing Documents. At the Closing, Sellers shall
have executed and/or delivered the following Related Documents to which they are
parties or for which each is responsible: (1) This Agreement, and (2) the
exchange share certificates delivered to Sellers.
1.2 Conditions to Obligations of Sellers. The obligations of
Sellers to consummate the purchase of the shares contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, any one of which may be waived by the Company without
waiver of any other rights or remedies which the Company may have under this
Agreement.
i. Closing Documents. At the Closing, Sellers shall have executed
and/or delivered this Agreement and delivered the Omni shares to the Company.
SECTION 2. Indemnification.
2.1 Survival. All representations and warranties and covenants and
agreements contained herein shall survive the execution of hereof and the
Closing Date. Any investigations by or on behalf of any party shall not
constitute a waiver as to enforcement of any representation, warranty or
covenant contained in this Agreement. No notice or information delivered by one
party shall affect the other party's right to rely on any representation or
warranty made by the party delivering the notice or information or relieve that
party of any obligations under this Agreement as the result of a breach of any
of its representations and warranties.
SECTION 3. General Provisions.
3.1 Headings and Interpretation. The headings used in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any term or provision of this Agreement.
3.2 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party.
3.3 Entire Agreement. This Agreement represents the entire
understanding of the parties with reference to the matters set forth herein.
This Agreement supersedes all prior negotiations, discussions, correspondence,
communications and prior agreements among the parties relating to the subject
matter herein.
23
<PAGE>
3.4 Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by the parties hereto.
3.5 Applicable Law. This Agreement shall be governed by the
substantive laws of the State of Nevada, without regard to its conflict of laws
provisions.
3.6 Counterparts and Facsimile Transmission Copies of Originals.
This Agreement may be executed in several original or facsimile copy
counterparts and all so executed and transmitted shall constitute one Agreement,
binding on all the parties hereto even though all the parties are not
signatories to the original or the same counterpart. Facsimile transmitted
signatures shall be deemed valid as though they were originals and the parties
may perform any and all obligations and duties in reliance on the facsimile
copies.
3.7 Further Assurances, Additional Documents, Etc. The parties
will cooperate with each other to accommodate the intent of this agreement.
IN WITNESS WHEREOF, the parties hereto have executed, or caused
their duly authorized representatives to execute, this Stock Purchase Agreement
as of the date first written above.
LONG LANE CAPITAL, INC. TIDELANDS OIL & GAS CORPORATION
/s/ Gregory M. Wilson /s/ Michael Ward
- ----------------------- ----------------
By: Gregory M. Wilson By: Michael Ward
Title:President Title: President
/s/ Gregory M. Wilson
- ----------------------
Gregory M. Wilson,
Individually
24
Filed in the Office of the Secretary
of State of the State of Nevada
February 25, 1997
C 3888-97
/s/ Dean Heller,
- ----------------
Secretary of State
ARTICLES OF INCORPORATION
OF
C2 TECHNOLOGIES, INC.
The undersigned, acting as incorporator, pursuant to the provisions of
the laws of the State of Nevada relating to private corporations, hereby adopts
the following Articles of Incorporation:
ARTICLE ONE. [Name]. The name of the corporation is:
C2 TECHNOLOGIES, INC.
ARTICLE TWO. [RESIDENT AGENT]. The initial agent for service of process
is Nevada Agency and Trust Company, 50 West Liberty Street, Suite 880, city of
Reno, County of Washoe, State of Nevada 89501.
ARTICLE THREE. [PURPOSES]. The purposes for which the corporation is
organized are to engage in any activity or business not in conflict with the
laws of the State of Nevada or of the United States of America, and without
limiting the generality of the foregoing, specifically:
I. (OMNIBUS]. To have to exercise all the powers now or
hereafter conferred by the laws of the State of Nevada upon
corporations organized pursuant to the laws under which the
corporation is organized and any and all acts amendatory
thereof and supplemental thereto.
II. (CARRYING ON BUSINESS OUTSIDE STATE]. To conduct and carry
on its business or any branch thereof in any state or
territory of the United States or in any foreign country in
conformity with the laws of such state, territory, or foreign
country, and to have and maintain in any state, territory, or
foreign country a business office, plant, store or other
facility.
III. (PURPOSES TO BE CONSTRUED AS POWERS]. The purposes
specified herein shall be construed both as purposes and
powers and shall be in no wise limited or restricted by
reference to, or inference from, the terms of any other clause
in this or any other article, but the purposes and powers
specified in each of the clauses herein shall be regarded as
independent purposes and powers, and the enumeration of
specific purposes and powers shall not be construed to limit
or restrict in any manner the meaning of general terms or of
the general powers of the corporation; nor shall the
expression of one thing be deemed to exclude another, although
it be of like nature not expressed.
25
<PAGE>
ARTICLE FOUR. [CAPITAL STOCK]. The corporation shall have authority to
issue an aggregate of TWENTY-FIVE MILLION (25,000,000) shares of Capital Stock,
PAR VALUE ONE MILL ($O.001) per share, for a total capitalization of TWENTY-FIVE
THOUSAND DOLLARS ($25,000).
The holders of shares of capital stock of the corporation shall not be
entitled to pre-emptive or preferential rights to subscribe to any unissued
stock or any other securities which the corporation may now or hereafter be
authorized to issue.
The corporations capital stock may be issued and sold from time to time
for such consideration as may be fixed by the Board of Directors, provided that
the consideration so fixed is not less than par value.
The stockholders shall not possess cumulative voting rights at all
shareholders meetings called for the purpose of electing a Board of Directors.
ARTICLE FIVE. [DIRECTORS]. The affairs of the corporation shall be
governed by a Board of Directors of no more than six (6) nor less than one (1)
person. The name and address of the first Board of Directors is:
NAME
Gordon McDougall 1820--1095 West Pender Street
Vancouver, British Columbia
Canada V6E 2M6
ARTICLE SIX. [ASSESSMENT OF STOCK]. The capital stock of the
corporation, after the amount of the subscription price or par value has been
paid in, shall not be subject to pay debts of the corporation, and no paid up
stock and no stock issued as fully paid up shall ever be assessable or assessed.
ARTICLE SEVEN. [INCORPORATOR]. The name and address of the incorporator
of the corporation is as follows:
NAME:
Amanda W. Cardinalli 50 West Liberty Street, Suite 880
Reno, Nevada 89501
ARTICLE EIGHT. [PERIOD OF EXISTENCE]. The period of existence of the
corporation shall be perpetual.
ARTICLE NINE. [BY-LAWS]. The initial By-laws of the corporation shall
be adopted by its Board of Directors. The power to alter, amend, or repeal the
By-laws, or to adopt new By-laws, shall be vested in the Board of Directors,
except as otherwise may be specifically provided in the By-laws.
ARTICLE TEN. [STOCKHOLDERS' MEETINGS]. Meetings of stockholders shall
be held at such place within or without the State of Nevada as may be provided
by the By-laws of the corporation. Special meetings of the stockholders may be
called by the president or any other executive officer of the corporation, the
Board of Directors, or any member thereof, or by the record holder or holders of
at least ten percent (10%) of all shares entitled to vote at the meeting. Any
action otherwise required to be taken at a meeting of the stockholders, except
election of directors, may be taken without a meeting if a consent in writing,
setting forth the action So taken, shall be signed by stockholders having at
least a majority of the voting power.
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ARTICLE ELEVEN. (CONTRACTS OF CORPORATION]. No contract or other
transaction between the corporation and any other corporation, whether or not a
majority of the shares of the capital stock of such other corporation is owned
by this corporation, and no act of this corporation shall in any way be affected
or invalidated by the fact that any of the directors of this corporation are
pecuniarily or otherwise interested in, or are directors or officers of such
other corporation. Any director of this corporation, individually, or any firm
of which such director may be a member, may be a party to, or may be pecuniarily
or otherwise interested in any contract or transaction of the corporation;
provided, however, that the fact that he or such firm is so interested shall be
disclosed or shall have been known to the Board of Directors of this
corporation, or a majority thereof; and any director of this corporation who is
also a director or officer of such other corporation, or who is so interested,
may be counted in determining the existence of a quorum at any meeting of the
Board of Directors of this corporation that shall authorize such contract or
transaction, and may vote thereat to authorize such contract or transaction,
with like force and effect as if he were not such director or officer of such
other corporation or not so interested.
ARTICLE TWELVE. (LIABILITY OF DIRECTORS AND OFFICERS]. No director or
officer shall have any personal liability to the corporation or its stockholders
for damages for breach of fiduciary duty as a director or officer, except that
this Article Twelve shall not eliminate or limit the liability of a director or
officer for (I) acts or omissions which involve intentional misconduct, fraud or
a knowing violation of law, or (ii) the payment of dividends in violation of the
Nevada Revised Statutes.
IN WITNESS WHEREOF, the undersigned incorporator has hereunto affixed
his signature at Reno, Nevada this 19th day of February, 1997.
/s/ Amanda W. Cardinalli
-----------------------
AMANDA W. CARDINALLI
STATE OF NEVADA )
: ss.
COUNTY OF WASHOE )
On the 19th day of February, 1997, before me, the undersigned, a Notary
Public in and for the State of Nevada, personally appeared AMANDA W. CARDINALLI,
known to me to be the person described in and who executed the foregoing
instrument, and who acknowledged to me that she executed the same freely and
voluntarily for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ Margaret A. Oliver
-----------------------
NOTARY PUBLIC
Residing in Reno, Nevada
My Commission Expires:
October 10, 1998
27
Filed in the Office of the Secretary
of State of State of Nevada
November 19, 1998
C3888-97
Dean Heller, Secretary of State
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
of
C2 TECHNOLOGIES, INC.
(After Issuance of Stock)
We the undersigned, Michael Ward, President and Royis Ward, Secretary
of C2 Technologies, Inc. do hereby certify:
That the Board of Directors of C2 Technologies, Inc. by unanimous board
action, and on November 9, 1998, adopted the following resolution to amend the
original articles of incorporation as follows:
Article One [Name] is hereby amended to read as follows:
The name of the corporation is TIDELANDS OIL & GAS CORPORATION.
Article Four [Capital Stock] is hereby amended to read as follows:
The aggregate number of shares which this corporation shall have
authority to issue is 100,000,000 shares of stock, all of one class, each with a
par value of $0.001 per share, which shall be known as common stock. All of the
voting power of the capital stock of this corporation will reside in the common
stock. No capital stock of this corporation will be subject to assessment and no
holder of any share or shares will have preemptive rights to subscribe to any or
all issues of shares of securities of this corporation.
Article Five [Directors] is hereby added as follows:
The affairs of the corporation will be governed by a Board of Directors
of no more than seven (7) nor less than one (1) person.
This change and amendment have been consented to and approved by a
majority vote of the stockholders holding at least a majority of each class of
stock outstanding and entitled to vote thereon.
/s/ Michael R. Ward /s/ Royis Ward
---------------------------- -----------------
Michael Ward, President Royis Ward, Secretary
STATE OF TEXAS )
) ss:
County of Nueces )
On this 17th day of November, 1998, personally appeared before me, a
Notary Public, Michael Ward, President of C2 Technologies, Inc., who
acknowledged that he signed the above instrument.
/s/ Priscilla Castillo
-----------------------
NOTARY PUBLIC in and for the
State of Texas, residing at:
Comm. Expires: 7/30/00
STATE OF TEXAS )
) ss:
County of )
On this 17th day of November, 1998, personally appeared before me, a
Notary Public, Royis Ward, Secretary of C2 Technologies, Inc., who acknowledged
that he signed the above instrument.
/s/ Barbie Lopez
-------------------
NOTARY PUBLIC in and for the
28
State of Texas, residing at:
Comm. Expires: April 26,1999
BY-LAWS FOR THE REGULATION
EXCEPT AS OTHERWISE PROVIDED BY STATUTE
OR ITS ARTICLES OF INCORPORATION OF
C2 TECHNOLOGIES, INC.
ARTICLE I.
Offices
Section 1. PRINCIPAL OFFICE. The principal office for the transaction
of the business of the corporation is hereby fixed and located at Suite 880,
Bank of America Plaza, 50 West Liberty Street, Reno, Nevada 89501, being the
offices of THE NEVADA AGENCY AND TRUST COMPANY. The board of directors is hereby
granted full power and authority to change said principal office from one
location to another in the State of Nevada.
Section 2. OTHER OFFICES. Branch or subordinate offices may at any time
be established by the board of directors at any place or places where the
corporation is qualified to do business.
ARTICLE II.
Meetings of Shareholders
Section 1. MEETING PLACE. All annual meetings of shareholders and all
other meetings of shareholders shall be held either at the principal office or
at any other place within or without the State of Nevada which may be designated
either by the board of directors, pursuant to authority hereinafter granted to
said board, or by the written consent of all shareholders entitled to vote
thereat, given either before or after the meeting and filed with the Secretary
of the corporation.
Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on the ___________ day of each year, at the hour of :00 o'clock _.m. of
said day commencing with the year 19 , provided, however, that should said day
fall upon a legal holiday then any such annual meeting of shareholders shall be
held at the same time and place on the next day thereafter ensuing which is not
a legal holiday.
Written notice of each annual meeting signed by the president or a vice
president, or the secretary, or an assistant secretary, or by such other person
or persons as the directors shall designate, shall be given to each shareholder
entitled to vote thereat, either personally or by mail or other means of written
communication, charges prepaid, addressed to such shareholder at his address
appearing on the books of the corporation or given by him to the corporation for
the purpose of notice. If a shareholder gives no address, notice shall be deemed
to have been given to him, if sent by mail or other means of written
communication addressed to the place where the principal office of the
corporation is situated, or if published at least once in some newspaper of
general circulation in the county in which said office is located. All such
notices shall be sent to each shareholder entitled thereto not less than ten(10)
nor more than sixty (60) days before each annual meeting, and shall specify the
place, the day anti the hour of such meeting, and shall also state the purpose
or purposes for which the meeting is called.
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Section 3. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes whatsoever, may be called at any time by the president
or by the board of directors, or by one or more shareholders holding not less
than 10% of the voting power of the corporation. Except in special cases where
other express provision is made by statute, notice of such special meetings
shall be given in the same manner as ,f or annual meetings of shareholders.
Notices of any special meeting shall specify in addition to the place, day and
hour of such meeting, the purpose or purposes for which the meeting is called.
Section 4. ADJOURNED MEETINGS AND NOTICE THEREOF. Any shareholders'
meeting, annual or special, whether or not a quorum is present, may be adjourned
from time to time by the vote of a majority of the shares, the holders of which
are either present in person or represented by proxy thereat, but in the absence
of a quorum, no other business may be transacted at any such meeting.
When any shareholders' meeting, either annual or special, is adjourned for
thirty (30) days or more, notice of the adjourned meeting shall be given as in
the case of an original meeting. Save as aforesaid, it shall not be necessary to
give any notice of an adjournment or of the business to be transacted at an
adjourned meeting, other than by announcement at the meeting at which such
adjournment is taken.
Section 5. ENTRY OF NOTICE. Whenever any shareholder entitled to vote
has been absent from any meeting of shareholders, whether annual or special, an
entry in the minutes to the effect that notice has been duly given shall be
conclusive and incontrovertible evidence that due notice of such meeting was
given to such shareholders, as required by law and the By-Laws of the
corporation.
Section 6. VOTING. At all annual and special meetings of stockholders
entitled to vote thereat, every holder of stock issued to a bona fide purchaser
of the same, represented by the holders thereof, either in person or by proxy in
writing, shall have one vote for each share of stock so held and represented at
such meetings, unless the Articles of Incorporation of the company shall
otherwise provide, in which event the voting rights, powers and privileges
prescribed in the said Articles of Incorporation shall prevail. Voting for
directors and, upon demand of any stockholder, upon any question at any meeting
shall be by ballot. Any director may be removed from office by the vote of
stockholders representing not less than two-thirds of the voting power of the
issued and outstanding stock entitled to voting power.
Section 7. QUORUM. The presence in person or by proxy of the holders of
a majority of the shares entitled to vote at any meeting shall constitute a
quorum for the transaction of business. The shareholders present at a duly
called or held meeting at which a quorum is present may continue to do business
until adjournment, notwithstanding the withdrawal of enough shareholders to
leave less than a quorum.
Section 8. CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, either annual or special, however called and noticed, shall be as
valid as though at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if either before or after
the meeting, each of the shareholders entitled to vote, not present in person or
by proxy, sign a written Waiver of Notice, or a consent to the holding of such
meeting, or an approval of the minutes thereof. All such waivers, consents or
30
<PAGE>
approvals shall be filed with the corporate records or made a part of the
minutes of this meeting.
Section 9. PROXIES. Every person entitled to vote or execute consents
shall have the right to do so either in person or by an agent or agents
authorized by a written proxy executed by such person or his duly authorized
agent and filed with the secretary of the corporation; provided that no such
proxy shall be valid after the expiration of eleven (11) months from the date of
its execution, unless the shareholder executing it specifies therein the length
of time for which such proxy is to continue in force, which in no case shall
exceed seven (7) years from the date of its execution.
ARTICLE III
Section 1. POWERS. Subject to the limitations of the Articles of
Incorporation or the By-Laws, and the provisions of the Nevada Revised Statutes
as to action to be authorized or approved by the shareholders, and subject to
the duties of directors as prescribed by the By-Laws, all corporate powers shall
be exercised by or under the authority of, and the business and affairs of the
corporation shall be controlled by the board of directors. Without prejudice to
such general powers, but subject to the same limitations, it is hereby expressly
declared that the directors shall have the following powers, to wit:
First - To select and remove all the other officers, agents and
employees of the corporation, prescribe such powers and duties for them as may
not be inconsistent with law, with the Articles of Incorporation or the By-Laws,
fix their compensation, and require from them security for faithful service.
Second - To conduct, manage and control the affairs and business of the
corporation, and to make such rules and regulations therefor not inconsistent
with law, with the Articles of incorporation or the By--Laws, as they may deem
best.
Third - To change the principal office for the transaction of the
business of the corporation from one location to another within the same county
as provided in Article I, Section 1, hereof; to fix and locate from time to time
one or more subsidiary offices of the corporation within or without the State of
Nevada, as provided in Article I, Section 2, hereof; to designate any place
within or without the State of Nevada for the holding of any shareholders'
meeting or meetings; and to adopt, make and use a corporate seal, and to
prescribe the forms of certificates of stock, and to alter the form of such seal
and of such certificates from time to time, as in their judgment they may deem
best, provided such seal and such certificates shall at all times comply with
the provisions of law.
Forth - To authorize the issue of shares of stock of the corporation
from time to time, upon such terms as may be lawful, in consideration of money
paid, labor done or services actually rendered, debts or securities canceled, or
tangible or intangible property actually received, or in the case of shares
issued as a dividend, against amounts transferred from surplus to stated
capital.
Fifth - To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefore.
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<PAGE>
Sixth - To appoint an executive committee and other committees and to
delegate to the executive committee any of the powers and authority of the board
in management of the business and affairs of the corporation, except the power
to declare dividends and to adopt, amend or repeal By-Laws. The executive
committee shall be composed of one or more directors.
Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number
of directors of the corporation shall be not less than one (1) and no more than
fifteen (15).
Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of shareholders, but if any such annual meeting is not
held, or the directors are not elected thereat, the directors may be elected at
any special meeting of shareholders. All directors shall hold office until their
respective successors are elected.
Section 4. VACANCIES. Vacancies in the board of directors may be filled
by a majority of the remaining directors, though less than a quorum, or by a
sole remaining director, and each director so elected shall hold off ice until
his successor is elected at an annual or a special meeting of the shareholders.
A vacancy or vacancies in the board of directors shall be deemed to exist in
case of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail at any annual or
special meeting of shareholders at which any director or directors are elected
to elect the full authorized number of directors to be voted for at that
meeting.
The shareholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors. If the board of directors
accept the resignation of a director tendered to take effect at a future time,
the board or the shareholders shall have the power to elect a successor to take
office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of his term of office.
Section 5. PLACE OF MEETING. Regular meetings of the board of directors
shall be held at any place within or without the State which has been designated
from time to time by resolution of the board or by written consent of all
members of the board. In the absence of such designation, a regular meeting
shall be held at the principal office of the corporation. Special meetings of
the board may be held either at a place so designated, or at the principal
office.
Section 6. ORGANIZATION MEETING. Immediately following each annual
meeting of shareholders, the board of directors shall hold a regular meeting for
the purpose of organization, election of officers, and the transaction of other
business. Notice of such meeting is hereby dispensed with.
Section 7. OTHER REGULAR MEETINGS. Other regular meetings of the board
of directors shall be held without call on the ___________day of each month at
the hour of __ :00 o'clock .m. of said day; provided, however, should said day
fall upon a legal holiday, then said meeting shall be held at the same time on
the next day thereafter ensuing which is not a legal holiday. Notice of all such
regular meetings of the board of directors is hereby dispensed with.
Section 8. SPECIAL MEETINGS. Special meetings of the board of directors
for any purpose or purposes shall be called at any time by the president, or, if
he is absent or unable or refuses to act, by any vice president or by any two
(2) directors.
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<PAGE>
Written notice of the time and place of special meetings shall be delivered
personally to the directors or sent to each director by mail or other form of
written communication, charges prepaid, addressed to him at his address as it is
shown upon the records of the corporation, or if it is not shown on such records
or is not readily ascertainable, at the place in which the meetings of the
directors are regularly held. In case such notice is mailed or telegraphed, it
shall be deposited in the United States mail or delivered to the telegraph
company in the place in which the principal office of the corporation is located
at least forty-eight (48) hours prior to the time of the holding of the meeting.
In case such notice is delivered as above provided, it shall be so delivered at
least twenty-four (24) hours prior to the time of the holding of the meeting.
Such mailing, telegraphing or delivery as above provided shall be due, legal and
personal notice to such director.
Section 9. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given to absent directors, if the time
and place be fixed at the meeting adjourned.
Section 10. ENTRY OF NOTICE. Whenever any director has been absent from
any special meeting of the board of directors, an entry in the minutes to the
effect that notice has been duly given shall be conclusive and incontrovertible
evidence that due notice of such special meeting was give to such director, as
required by law and the By-Laws of the corporation.
Section 11. WAIVER OF NOTICE. The transactions of any meeting of the
board of directors, however called and noticed or wherever held, shall be as
valid as though had a meeting duly held after regular call and notice, if a
quorum be present, and if, either before or after the meeting, each of the
directors not present sign a written waiver of notice or a consent to the
holding of such meeting or an approval of the minutes thereof. All such waivers,
consents or approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.
Section 12. QUORUM. A majority of the authorized number of directors
shall be necessary to constitute a quorum for the transaction of business,
except to adjourn as hereinafter provided. Every act or decision done or made by
a majority of the directors present at a meeting duly held at which a quorum is
present, shall be regarded as the act of the board of directors, unless a
greater number be required by law or by the Articles of Incorporation.
Section 13. ADJOURNMENT. A quorum of the directors may adjourn any
directors' meeting to meet again at a stated day and hour; provided, however,
that in the absence of a quorum, a majority of the directors present at any
directors' meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the board.
Section 14. FEES AND COMPENSATION. Directors shall not receive any
stated salary for their services as directors, but by resolution of the board, a
fixed fee, with or without expenses of attendance may be allowed for attendance
at each meeting. Nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise, and receiving compensation therefor.
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ARTICLE IV.
Officers
Section 1. OFFICERS. The officers of the corporation shall be a
president, a vice president and a secretary/treasurer. The corporation may also
have, at the discretion of the board of directors, a chairman of the board, one
or more vice presidents, one or more assistant secretaries, one or more
assistant treasurers, and such other officers as may be appointed in accordance
with the provisions of Section 3 of this Article. Officers other than president
and chairman of the board need not be directors. Any person may hold two or more
offices.
Section 2. ELECTION. The officers of the corporation, except such
officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article, shall be chosen annually by the board of directors,
and each shall hold his office until he shall resign or shall be removed or
otherwise disqualified to serve, or his successor shall be elected and
qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The board of directors may
appoint such other officers as the business of the corporation may require, each
of whom shall hold office for such period, have such authority and perform such
duties as are .provided in the By-Laws or as the board of directors may from
time to time determine.
Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by a majority of the directors at the time in office, at
any regular or special meeting of the board.
Any officer may resign at any time by giving written notice to the board of
directors or to the president, or to the secretary of the corporation. Any such
resignation shall take effect at the date of the receipt of such notice or at
any later time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in the By-Laws for regular appointments to such office.
Section 6. CHAIRMAN OF THE BOARD. The chairman of the board, if there
shall be such an officer, shall, if present, preside at all meetings of the
board of directors, and exercise and perform such other powers and duties as may
be from time to time assigned to him by the board of directors or prescribed by
the By- Laws.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as
may be given by the board of directors to the chairman of the board, if there be
such an officer, the president shall be the chief executive officer of the
corporation and shall, subject to the control of the board of directors, have
general supervision, direction and control of the business and officers of the
corporation. He shall preside at all meetings of the shareholders and in the
absence of the chairman of the board, or if there be none, at all meetings of
the board of directors. He shall be ex-officio a member of all the standing
committees, including the executive committee, if any, and shall have the
general powers and duties of management usually vested in the office of
president of a corporation, and shall have such other powers and duties as may
be prescribed by the board of directors or the By-Laws.
Section 8. VICE PRESIDENT. In the absence or disability of the
president, the vice presidents in order of their rank as fixed by the board of
directors, or if not ranked, the vice president designated by the board of
directors, shall perform all the duties of the president and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
president. The vice presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
board of directors or the By-Laws.
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Section 9. SECRETARY. The secretary shall keep, or cause to be kept, a
book of minutes at the principal office or such other place as the board of
directors may order, of all meetings of directors and shareholders, with the
time and place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at shareholders' meetings
and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal office, a share
register, or a duplicate share register, showing the names of the shareholders
and their addresses; the number and classes of shares held by each; the number
and date of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all the meetings of
the shareholders and of the board of directors required by the By-Laws or by law
to be given, and he shall keep the seal of the corporation in safe custody, and
shall have such other powers and perform such other duties as may be prescribed
by the board of directors or the By-Laws.
Section 10. TREASURER. The treasurer shall keep and maintain, or cause
to be kept and maintained, adequate and correct accounts of the properties and
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursement, gains, losses, capital, surplus and shares.
Any surplus, including earned surplus, paid-in surplus and surplus arising from
a reduction of stated capital, shall be classified according to source and shown
in a separate account. The books of account shall at all times be open to
inspection by any director.
The treasurer shall deposit all moneys and other valuables in the name and to
the credit of the corporation with such depositories as may be designated by the
board of directors. He shall disburse the funds of the corporation as may be
ordered by the board of directors, shall render to the president and directors,
whenever they request it, an account of all of his transactions as treasurer and
of the financial condition of the corporation, and shall have such other powers
and perform such other duties as may be prescribed by the board of directors or
the By-Laws.
ARTICLE V.
Miscellaneous
Section 1. RECORD DATE AND CLOSING STOCK BOOKS. The board of directors
may fix a time, in the future, not exceeding fifteen (15) days preceding the
date of any meeting of shareholders, and not exceeding thirty (30) days
preceding the date fixed for the payment of any dividend or distribution, or for
the allotment of rights, or when any change or conversion or exchange of shares
shall go into effect, as a record date for the determination of the shareholders
entitled to notice of and to vote at any such meeting, or entitled to receive
any such dividend or distribution, or any such allotment of rights, or to
exercise the rights in respect to any such change, conversion or exchange of
shares, and in such case only shareholders of record on the date so fixed shall
be entitled to notice of and to vote at such meetings, or to receive such
dividend, distribution or allotment of rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any shares on the books of the
corporation after any record date fixed as aforesaid. The board of directors may
close the books of the corporation against transfers of shares during the whole,
or any part of any such period.
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Section 2. INSPECTION OF CORPORATE RECORDS. The share register or
duplicate share register, the books of account, and minutes of proceedings of
the shareholders and directors shall be open to inspection upon the written
demand of any shareholder or the holder of a voting trust certificate, at any
reasonable time, and for a purpose reasonably related to his interests as a
shareholder, or as the holder of a voting trust certificate, and shall be
exhibited at any time when required by the demand of ten percent (10%) of the
shares represented at any shareholders' meeting. Such inspection may be made in
person or by an agent or attorney, and shall include the right to make extracts.
Demand of inspection other than at a shareholders' meeting shall be made in
writing upon the president, secretary or assistant secretary of the corporation.
Section 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the board of directors.
Section 4. ANNUAL REPORT. The board of directors of the corporation
shall cause to be sent to the shareholders not later than one hundred twenty
(120) days after the close of the fiscal or calendar year an annual report.
Section 5. CONTRACT, ETC., HOW EXECUTED. The board of directors, except
as in the By-Laws otherwise provided, may authorize any officer or officers,
agent or agents, to enter into any contract, deed or lease or execute any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances; and unless so authorized by
the board of directors, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit to render it liable for any purpose or to any amount.
Section 6. CERTIFICATES OF STOCK. A certificate or certificates for
shares of the capital stock of the corporation shall be issued to each
shareholder when any such shares are fully paid up. All such certificates shall
be signed by the president or a vice president and the secretary or an assistant
secretary, or be authenticated by facsimiles of the signature of the president
and secretary or by a facsimile of the signature of the president and the
written signature of the secretary or an assistant secretary. Every certificate
authenticated by a facsimile of a signature must be countersigned by a transfer
agent or transfer clerk.
Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the board of directors or the By-Laws may
provide; provided, however, that any such certificate so issued prior to full
payment shall state the amount remaining unpaid and the terms of payment
thereof.
Section 7. REPRESENTATIONS OF SHARES OF OTHER CORPORATIONS. The
president or any vice president and the secretary or assistant secretary of this
corporation are authorized to vote, represent and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority herein
granted to said officers to vote or represent on behalf of this corporation or
corporations may be exercised either by such officers in person or by any person
authorized so to do by proxy or power of attorney duly executed by said
officers.
36
<PAGE>
Section 8. INSPECTION OF BY-LAWS. The corporation shall keep in its
principal office for the transaction of business the original or a copy of the
By-Laws as amended, or otherwise altered to date, certified by the secretary,
which shall be open to inspection by the shareholders at all reasonable times
during office hours.
ARTICLE VI.
Amendments
Section 1. POWER OF SHAREHOLDERS. New By-Laws may be adopted or these
By- Laws may be amended or repealed by the vote of shareholders entitled to
exercise a majority of the voting power of the corporation or by the written
assent of such shareholders.
Section 2. POWER OF DIRECTORS. Subject to the right of shareholders as
provided in Section 1 of this Article VI to adopt, amend or repeal By-Laws, By-
Laws other than a By-Law or amendment thereof changing the authorized number of
directors may be adopted, amended or repealed by the board of directors.
Section 3. ACTION BY DIRECTORS THROUGH CONSENT IN LIEU OF MEETING. Any
action required or permitted to be taken at any meeting of the board of
directors or of any committee thereof, may be taken without a meeting, if a
written consent thereto is signed by all the members of the board or of such
committee. Such written consent shall be filed with the minutes of proceedings
of the board or committee.
/s/ G. McDougall
----------------
Secretary
Exhibit (21)
List of Subsidiaries
Tidelands Oil & Gas Corporation has two Texas corporation subsidiaries:
(1) Tidelands Oil Corporation
(2) Tidelands Gas Corporation
Exhibit (27) Financial Data Schedule
37
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE PERIOD ENDING DECEMBER 31, 1999AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001107104
<NAME> TIDELANDS OIL & GAS CORPORATION
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 51,065
<SECURITIES> 0
<RECEIVABLES> 14,365
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 77,281
<PP&E> 506,310
<DEPRECIATION> 18,830
<TOTAL-ASSETS> 4,204,067
<CURRENT-LIABILITIES> 460,570
<BONDS> 490,623
0
0
<COMMON> 17,420
<OTHER-SE> 3,235,454
<TOTAL-LIABILITY-AND-EQUITY> 4,204,067
<SALES> 45,299
<TOTAL-REVENUES> 45,299
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,127,604
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 34,870
<INCOME-PRETAX> (1,082,305)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,082,305)
<EPS-BASIC> (0.071)
<EPS-DILUTED> (0.067)
</TABLE>
