SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 28, 2000
POTOMAC ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Oklahoma 000-09474 73-1088064
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
3168 Bel Air Dr.
Las Vegas, Nevada 89109
(Address of principal executive offices)
89109
(Zip Code)
Registrant's telephone number, including area code: (702) 792-8404
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Item 1. Merger -Acquisition.
On August 8, 2000 a certificate of merger was filed with the Oklahoma
Secretary of State merging Gayland Coal, Inc., a Utah corporation ("Gayland"),
into Potomac Energy Corporation, an Oklahoma corporation (Acquisition
Corporation) and became a wholly owned subsidiary of Potomac Energy
Corporation. Potomac was the surviving constituent corporation (the
Merger-Acquisition). The Acquisition was completed in accordance with the
Agreement and Plan of Reorganization and between Potomac Energy Corporation
and Gayland Coal, Inc. dated July 28, 2000 (the Merger Agreement). The
parties desire the transaction to qualify as a tax-free reorganization under
Section 368 (a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Pursuant to the Merger Agreement, (i) Potomac Energy Corporation (the Company)
agreed to issue and deliver 14,499,000 shares of the Company=s common stock to
the shareholders of Gayland.
As a result of the Merger-Acquisition, the Company's principal offices
will be relocated as of July 1, 2000 to 3168 Bel Air Drive, Las Vegas, NV
89109 and the telephone number is 702-792-9112.
The following table presents certain information as to the beneficial
ownership of the Company=s common stock as adjusted to give effect to the
Merger-Acquisition of (i) each person that beneficially owns more than five
(5%) percent thereof, (ii) each one of the Company=s executive officers and
directors, and (iii) all executive officers and directors as a group. All
persons listed have sole voting and investment power with respect to their
shares, and there is no family relationship between the executive officers and
directors.
Name and address of Beneficial Owner Shares Percentage of
------------------------------------- Beneficially Beneficially
Owned Owned Shares
------------- ---------------
Sun Star Holdings, Inc. (1)
3168 Bel Air Drive
Las Vegas, Nevada 89109 ................ 19,992,465 60.17%
Theolene D. Moon (1)
3168 Bel Air Drive
Las Vegas, Nevada 89109..................19,992,465 60.17%
Carl W. Swan (2)..............................258,973 0.78%
Fred W. Young (3)...................................0 *
Tim Shelby (4)......................................0 *
Joseph Michaud (6).............................22,532 0.07%
Charles Kim (7).....................................0 *
Patrick Mc Carrick (8)..............................0 *
Executive Officers and Directors
as a Group (Seven persons)(8).............281,505 .85%
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* Less than 1%.
(1) The shares beneficially owned and the percentage include 19,992,465
shares owned by SunStar Holdings, Inc., a Nevada corporation wholly
owned by Theolene D. Moon.
(2) The shares beneficially owned and the percentage includes 80,000
shares owned by Nona Swan, wife of Carl W. Swan, the Chairman of the
Board of the Company.
(3) Fred W. Young is the President, Chief Executive Officer, Treasurer and
Director of the Company.
(4) Tim Shelby is a Director for the Company.
(5) Joseph Michaud is a Director for the Company.
(6) Charles Kim is a Director for the Company.
(7) Patrick McCarrick is a Director for the Company.
(8) The shares beneficially owned and the percentage include the shares
beneficially owned by Messrs Swan, Young, Shelby, Michaud, Kim and
McCarrick, the Company=s officers and Directors.
Prior to the Acquisition and Merger, Alvaro Cyzedo was a director of the
company.
Background of Company Executive Officers and Directors:
The following is a brief description of the business background of the
executive officers and Directors of the Company:
Carl W. Swan is Chairman of the Board of Directors of the Company. Mr.
Swan has been actively involved in all facets of the oil and gas industry
since 1951. He co-founded and served as President and Chief Executive Officer
and a Director of Basin Petroleum Corporation, which was a publicly held
company that merged into Reserve Oil and Gas Corporation in 1976. Since 1976,
Mr. Swan has operated Swan Petroleum Corporation, a privately held oil and gas
exploration company involved in oil and gas drilling, exploration and
refining. Mr. Swan has extensive oil and gas drilling and production
experience in several foreign countries. Mr. Swan is a graduate of the
University of New Mexico.
Fred Young is President and Chief Executive Officer, and Treasure of the
Company. Mr. Young is a retired banker of 35 years and has significant
experience in Senior Management. He has served as president, CEO, and
director of banks, financial institutions and privately held companies.
Additionally, he has extensive consulting experience in Europe and the United
States.
Tim Shelby is Director of the Company. Mr. Shelby is currently President
and Chief Executive Officer of Paso Robles Tank, Inc., a private California
corporation. Mr. Shelby has founded several construction companies in
California including San Luis Piping Construction Co., Inc., West coast
Industrial Coatings, Inc., West Coast Tank, Piping and Construction Co., Inc.
and continues to operates those business in Southern California. Mr. Shelby is
a member of American Petroleum Institute, the American Water Works Association
and Paso Robles Vintners & Growers Association. Mr. Shelby is a graduated of
Fresno State University with a Bachelors of Science degree in business.
Joseph Edward Michaud is a Director of the Company and an independent
analyst of oil and gas properties and an investor in exploratory and
development prospects. Mr. Michaud has
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in excess of 40 years experience in the oil and gas business, including
extensive training as a petroleum engineer while employed by James A. Lewis
Engineering, a leading consulting firm in reservoir analysis and property
appraisals in the United States and Canada.
Charles Kim is a Director for the Company. Mr. Kim has been and
continues to be an active leader in the Asian-American Community in Southern
California. Mr. Kim is a naturalized U.S. citizen organically from Korea. In
Korea, Mr. Kim served with the BLUE HOUSE. Mr. Kim is President of Sunny
Investment Management Company and Founder of E & H Technology, Inc. a U.S.
corporation focused on doing business in Korea.
Patrick McCarrick is a Director for the Company. He Co-founded Absolute
Internet Marketing in 1997 and has served as CIO since inception. Prior to
Absolute Internet, he was QA Coordinator for Memorial Sloan Kettering Cancer
Center MSKCC Dept Of Radiology NYC, where he was in charge of a LAN system and
Transcription QA Database Development. Prior to Moving to NYC from Ireland In
1993, Mr. Mc Carrick was a programmer for Abbott Pharmaceuticals (Ross
Laborites (NYSE: ABT) head office In Ireland, where he developed Abbots First
RPG Guy Based Debuggers with a team of programmers from Abbott Plants World
Wide. Mr. Mc Carrick has been one of the early visionaries behind Ivenue.com,
a web based E-commerce solution for the SOHO (Small Office, Home Office)
market. He co wrote the original business plan and programmed several of the
modules behind the system. He later took on the role of creative direction,
helping guide the Ivenue project to where it is today. Mr. Mc Carrick has
extensive Internet experience, both in programming and business operations.
Having designed both large and small Web Based Applications since 1993. Mr. Mc
Carrick holds a BS (Hons) IT degree from the University of Glamorgan, Wales,
UK.
Background of Non- Officer, Non-Director Control Persons:
The following is a brief description of the business background of individuals
who are neither officers nor directors, but thorough their affiliation as
shareholder act as Anon-titled control persons@ as defined by the 1934
securities act:
Theolene D. Moon, age 71, is the sole shareholder of SunStar Holding,
Inc. the single largest shareholder of the Company. Mrs. Moon has been
President of Birmingham Terminal (a "REIT") for over 20 years and was involved
in the day-to-day operations of the business. The Trust manages over 40
properties in Real Estate investments in Alabama, California, Utah and Nevada,
leasing, buying, selling and managing investments. Mrs. Moon is also the
single largest shareholder of World Wide E-Commerce, a Nevada public
corporation (NASDAQ: WEWC.OB).
Item 2. Acquisition or Disposition of Assets
On July 28th, 2000, Gayland Coal, Inc., a Utah Corporation. (Gayland)
merged into Potomac Energy Corporation, an Oklahoma corporation (Acquisition
Corp.). The Merger-Acquisition was completed in accordance with the Agreement
and Plan of Merger dated July 28, 2000 (the Merger Agreement). The Company and
Gayland are development stage enterprises. Gayland is the owner of 120 MW
Electrical Generating Plant and is interested in developing and installing
electric generating facility in Northern Nevada or Central Oklahoma. The
Project will supply reliable and more efficient electrical energy. Most of
today's existing electrical generating plants are about 30% efficient and
require a higher level of maintenance. This installation will be at or more
than 50% (a 66% improvement). A typical installation would consist of a
combustion turbine, a generator, and ductwork to connect the turbine exhaust
to heat recovery boiler to produce additional electricity by using the steam
from the heat recovery boiler.
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Pursuant to the Merger Agreement, the Company issued and deliver
14,499,000 shares of the Company=s common stock to the shareholders of
Gayland. The shares of common stock to be issued in connection with the
Merger-Acquisition will be issued without registration pursuant to Rule 506 of
Regulation D promulgated under the Securities Act of 1933, as amended, and
applicable state securities acts.
The Company, through its subsidiary Gayland intends to complete the
Project by utilizing the existing Steam Plant and equipment and material for
the Project. In addition, the Company intends to divest its other energy
based assets including its 25% working interest in the Rosa Blanca and
Montecristo Association Contracts with Seven Seas Petroleum, Inc., (AMEX: SEV)
as well as its net 9% working interest in the Thomas Oil Refinery owned and
operated by Dolphin Industries, Inc., an Oklahoma corporation. From the sale
of its assets, the Company hopes to be able to invest in emerging growth
companies which will ultimately benefit all shareholders. There is no
assurance that the Company will be able to sell its assets or to invest in
emerging growth companies or, if successful, generate any revenue from the
investment in such companies. As a result of the Merger-Acquisition, the
Company's principal offices will be relocated as of July 1, 2000 to 3168 Bel
Air Drive, Las Vegas, NV 89109 and the telephone number is 702-792-8404.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements and Exhibits.
As of the date of this filing with the Commission, it is impracticable to
provide the required financial statements and pro forma financial information
related to the acquisition of Gayland by the Company, and there are no
financial statements available for filing. It is anticipated that the
financial statements and pro forma financial information will be filed with
the Commission within approximately 60 days of this filing or as soon as
practicable, but not later than October 13, 2000 (60 days after the date on
which this report must be filed with the Commission).
(b) Pro Forma Financial Information.
The pro forma financial information related to the acquisition of Gayland
by the Company will be filed with the Commission at such time that the
financial statements are filed. See "(a) Financial Statements and Exhibits,"
above.
(c) Exhibits.
1.1 Agreement and Plan of Merger, amongst Registrant, Gayland Coal,
Inc. and Potomac Energy Corporation, Fred Young, Winfield Moon,
Jr. dated July 28, 2000.
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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.
Potomac Energy.
(Registrant)
Dated: 8/11/00 /s/ Fred W. Young
-------------------------
Fred W. Young
President and Chief
Executive Officer
