As filed with the Securities and Exchange Commission on July 30, 1999
File No.___________________ Commission file number: 0-17371
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
POST-EFFECTIVE AMENDMENT NO. 1
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HYTK Industries, Inc.
-----------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0182808
-------- ------------
(State or Other Jurisdiction (Employer Identification Number)
of Incorporation or Organization)
701 East Main Street, Benedict, KS 66714; (316) 698-2250
-----------------------------------------------------------
(Address and Telephone of Principal Executive Offices)
This Prospectus relates to Selling Security Holders, see "Selling Security
Holders." For information concerning certain risk factors that should be
considered by prospective investors, see "Risk Factors."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting discounts Proceeds to issuer or
Price to Public and commissions other persons
<S> <C> <C> <C>
Per Unit $5.06(1) $0.51(2) $4.56
Total Minimum 0(3) 0 0
Total Maximum $2,532,596.60(4) $253,259.66 $2,279,337.00
</TABLE>
(1) Based on the last sale price of the Company's common stock which
occurred, on July 9, 1999. The Selling Security Holders will be selling
the Shares at the then prevailing market price for the Company's common
stock, par value $0.001 ("Common Stock").
(2) Presumes a 10% broker's commission will be paid on each and every sale
of shares as described herein. However, the Selling Security Holders
will be selling the Shares with the broker of their choice involving
commission as they may individually negotiate.
(3) The Selling Security Holders are not committed to selling any specific
portion of the shares described herein, although they may sell all
500,244 shares hereby registered.
Expenses incurred in connection with this Prospectus, estimated not to exceed
$20,000, which include legal, printing and accounting fees (but do not include
sales commissions or fees), are being paid by the Company. See "Use of
Proceeds."
Total Number of Pages Contained Herein: 12
The date of this Prospectus is July 26, 1999
<PAGE>
SUMMARY
This is a Post Effective Amendment to the Company's registration statement
on form S-8 (the "Form S-8") filed with the Commission on January 12, 1999. It
relates to the reoffer of 500,266 shares (the "Shares") of the Company's common
stock, par value $0.001 ("Common Stock"), issued pursuant to the Company's 1999
Stock Option Plan as described and set forth in the Form S-8. The Shares were
collectively issued to five (5) people Henry F. Mogg, Douglas L. Lamb, Marsha
Lamb, John C. Garrison and Richard M. Cornell (the "Selling Security Holders").
A Prospectus has been prepared in accordance with the requirements of form S-3
under the Securities Act pursuant to General Instruction C of Form S-8 with
regard to the resale of the shares of Common Stock by the Selling Security
Holders.
AVAILABLE INFORMATION
HYTK Industries, Inc., a Nevada corporation (the "Company"), is subject to
the informational requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and in accordance therewith files reports and other information
with the Securities and Exchange Commission ("Commission"). Such reports, proxy
statements, registration statements and other information can be examined
without charge at the public reference section maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 and, upon payment of the fees
prescribed by the Commission, copies may be obtained therefrom and at certain of
the Commission's Regional Offices located at 7 World Trade Center, New York, New
York 10048; 5757 Wilshire Boulevard, Los Angeles, California 90024; and 500 West
Madison Street, Northeastern Atrium Center, Suite 1400, Chicago, Illinois
60661-2511.
The Company will provide, without charge, to each person to whom a copy of
this Prospectus is delivered, upon the oral or written request of such person, a
copy of any and all information incorporated by reference into this Prospectus.
Requests for such information may be directed to the Company's President,
Douglas L. Lamb, at 701 East Main Street, Benedict, Kansas 66714. The Company
intends to furnish to its stockholders annual reports, which will contain
financial statements audited by independent accountants, and such other reports
as it may determine to furnish or as may be required by law.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents that the Company filed with the Commission are
hereby incorporated by reference into this Prospectus:
1. The Company's annual report on Form 10-KSB for the fiscal year ended May
31, 1998, which contains financial statements of the Company for that fiscal
year;
2. The Company's quarterly reports on Form 10-QSB for the quarter ended
February 28, 1999; and
3. The description and specimen certificate of the Common Stock contained
in the Company's registration statement filed under the Exchange Act, including
any amendment or report filed for the purpose of updating such description.
<PAGE>
All documents that the Company subsequently files with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment indicating that all of the securities
offered hereunder have been sold or deregistering all securities then remaining
unsold, shall be deemed to be incorporated by reference into this Prospectus and
to be part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document that is also incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus. All information appearing in this Prospectus is qualified in
its entirety by the information and financial statements (including notes
thereto) appearing in the documents incorporated herein by reference, except to
the extent set forth in the immediately preceding statement.
RISK FACTORS
An investment in the securities offered hereby are highly speculative.
Each prospective investor should carefully consider the following risk factors,
as well as all other information set forth elsewhere in this Prospectus.
Operational Risks
Future Capital Requirements; Uncertainty of Future Funding. One of the
Company's subsidiaries, Ponderosa Gas Pipeline Company, Inc., a Kansas
corporation ("PGPC"), does not currently have positive cash flow without
reliance upon outside capital infusions for operating costs in excess of income
and for capital improvements. There are insufficient funds to make amortized
payments against the PGPC debt until its pipeline assets become more profitable.
The Company has prepared a private placement memorandum relating to a proposed
offering of 500,000 shares of its Series A Convertible Preferred Stock. The
proposed structure of this offering involves a price of $10.00 per share with a
minimum purchase of 2,500 shares. No shares of the Company's preferred stock
have ever been issued or are outstanding. Any proceeds realized from this
proposed offering are scheduled to be used to develop new gas wells, improve
existing pipelines, and reduce debt. This Offering will close upon the earlier
of the sale of the 500,000th share of Series A Convertible Preferred Stock, on
March 1, 2000, or at such other time as the Company's Board of Directors may
deem appropriate. No minimum number of shares must be sold before the Company
receives any proceeds realized from the sale of shares of Series A Convertible
Preferred Stock. However, in the event an amount of shares the Company believes
is relatively nominal, for example 140,000 shares, is sold pursuant to this
Series A Convertible Preferred Stock offering, the Company believes it will have
adequate capital to execute its expansion plans which, it believes will
alleviate the cash flow problems of PGPC, although no such assurances can be
given. See "Need for Additional Development."
Operating Deficit. The sole source of revenue for the Company is the operations
of Quest Resource Corporation ("Quest") and its subsidiaries. Quest is currently
operating at a deficit level, as it reported a net loss for the nine month
period ended February 28, 1999 of $187,178.
<PAGE>
The Company was essentially dormant of operational activity until the merger
with Quest in December, 1998 so there are no previous periods with comparable
operations for the quarter and the nine months ended on February 28, 1999. The
only operational financial activity for the nine months ended February 28, 1998
was interest expense of $29 which resulted in a net loss of that amount for the
period since there was no income. Revenue from operations for the quarter and
the nine month period ended February 28, 1999 was $342,790 and $1,028,646
respectively which resulted in a net loss after provision for income taxes of
$82,867 and $187,178. Legal and professional fees related to the merger
contributed to higher expenses for the quarter ended February 28, 1999.
Depreciation, amortization and depletion expenses included in these net loss
amounts were $53,755 and $139,191 respectively.
Need for Additional Development and Future Acquisitions. The Company intends to
develop and expand its business, principally by developing its existing gas
properties and by acquiring additional oil and gas reserves in the vicinity of
the PGPC pipelines. Although the Company has selected several properties in
connection with its expansion plans, no assurances can be given that such
properties will undergo attempted commercial development, or if they are
developed, that any will be successful or have any material positive effect on
the Company.
Lack of Reserve Estimates & Uncertainty of Reserve Estimates. The Company has
obtained estimates of some, but not all, of its oil and gas reserves. However,
no such estimates have been filed with or included in reports to any Federal
authority or agency.
Oil and gas reserve estimates and the present value estimates associated
therewith are based on numerous engineering, geological and operational
assumptions that generally are derived from limited data. Common assumptions
include such matters as the extent and average thickness of a particular
reservoir, the average porosity and permeability of the reservoir, the
anticipated future production from existing and future wells, future development
and production costs and the ultimate hydrocarbon recovery percentage. As a
result, oil and gas reserve estimates and present value estimates are frequently
revised in subsequent periods to reflect production data obtained after the date
of the original estimate. If reserve estimates are inaccurate, production rates
may decline more rapidly than anticipated, and future production revenues may be
less than estimated. Moreover, significant downward revisions of reserve
estimates may adversely affect the Company's ability to borrow funds in the
future or have an adverse impact on other financing arrangements.
In addition, any estimates of future net revenues and the present value thereof
are based on period ending prices and on cost assumptions made by the Company
which only represent its best estimate. If these estimates of quantities, prices
and costs prove inaccurate and the Company is unsuccessful in expanding its oil
and gas reserves base, and/or declines in and instability of oil and gas prices
occur, writedowns in the capitalized costs associated with the Company's oil and
gas assets may be required. The Company will also rely to a substantial degree
on reserve estimates in connection with the acquisition of producing properties.
If the Company overestimates the potential oil and gas reserves of a property to
be acquired, or if its subsequent operations on the property are not successful,
the acquisition of the property could result in substantial losses to the
Company.
<PAGE>
Need for the Replacement of Reserves. The Company believes its future success
will depend upon Quest's ability to find, acquire and develop additional oil and
gas reserves that are economically recoverable. The proved reserves of the
Company, as with all oil and gas entities, will generally decline as they are
produced, except to the extent that the Company conducts revitalization
activities, or acquires properties containing proved reserves, or both. To
increase reserves and production, the Company intends to (i) continue its
development drilling and recompletion programs, (ii) identify and produce
previously overlooked or bypassed zones in shut-in wells, and (iii) acquire
additional properties or undertake other replacement activities. The Company's
current strategy is to increase its reserve base, production and cash flow
through the development of its existing gas fields and through the selective
acquisition of other promising properties where the Company can utilize its
existing pipeline network. The Company can give no assurance that its planned
revitalization, development and acquisition activities will result in
significant additional reserves or that the Company will have success in
discovering and producing reserves at economical exploration and development
costs. Furthermore, while the Company's revenues may increase if prevailing oil
and gas prices increase significantly, the Company's exploration costs for
additional reserves may also increase.
Furthermore, drilling new wells and converting existing wells for gas production
is a speculative activity and the possibility always exists that newly drilled
or converted gas wells will be non-productive or fail to produce any revenue, or
enough to be commercially worthwhile.
Operating Hazards. Oil and gas operations involve a high degree of risk. Natural
hazards, such as excessive underground pressures, may cause costly and dangerous
blowouts or make further operations on a well financially or physically
impractical. Similarly, the testing and recompletion of oil and gas wells
involves a high degree of risk arising from operational failures, such as
blowouts, fires, pollution, collapsed casing, loss of equipment and numerous
other mechanical and technical problems. Any of the foregoing hazards may result
in substantial losses or liabilities to third parties, including, but not
limited to, claims for bodily injuries, reservoir damage, loss of reserves,
environmental damage and other damages to persons or property.
Product Liability. The Company currently does not carry product liability
insurance covering its products. The Company does intend to pursue such
insurance but it cannot be predicted whether the Company will be able to obtain
such insurance in amounts and coverages adequate to cover the risks inherent in
the oil and gas industry or that such insurance will be available at premiums
which can be economically justified. Lack of this insurance could expose the
Company to claims for substantial damages.
Competition. The Company's oil and gas exploration activities are centered in a
highly competitive field. In seeking any other suitable oil and gas properties
for acquisition and related personnel and equipment, the Company may be
competing with a number of other companies, including large oil and gas
companies and other independent operators who may have greater financial
resources.
Dependence on Key Employees and Technical Personnel. The Company is
substantially dependent upon the continued services of Douglas Lamb, its
president and one of its directors. This individual is in good health; however,
his disability or death would have a significant adverse impact on the Company's
business operations. To the extent that his services become unavailable, the
Company will be required to retain other qualified personnel; there can be no
assurance that it will be able to recruit and hire qualified persons upon
acceptable terms.
Similarly, the oil and gas exploration industry requires the use of personnel
with substantial technical expertise. In the event that the services of its
current technical personnel become unavailable, the Company will need to hire
qualified personnel to take their place; no assurance can be given that it will
be able to recruit and hire such persons on mutually acceptable terms.
Environmental Regulation. The Company is subject to numerous state and federal
environmental regulations. Internal procedures and policies exist within the
Company to ensure that its operations are conducted in full and substantial
regulatory compliance and the Company believes it is currently operating within
all such regulations. While the Company intends to fully comply with such
requirements, this compliance can be very complex, and therefore no assurances
can be given that such environmental regulations will not detrimentally affect
the Company in the future.
<PAGE>
General Risks of the Natural Gas Business. The price of natural gas is volatile
and subject to wide variation. The longevity of gas wells are affected by
numerous risk factors including: gas prices; mechanical failures of the well
production equipment and of pipeline equipment; unpredictable geological factors
affecting gas reserve life and gas flow rates; and, unpredictable operating
costs which eventually exceed well revenues from declining gas production. The
development of additional gas production is affected by numerous risk factors
including: the availability of risk capital for gas exploration; the subjective
interpretation of geological data; the availability of leases on prospective
acreage for gas exploration; and, the lack of certain results from well
completion activities.
Non-Operational Risks
Lack of Cash Dividends. The Company has never paid dividends on its Common Stock
and does not anticipate paying cash dividends on its Common Stock for the
foreseeable future. The Company is not required to pay dividends on the Common
Stock or to cumulate unpaid dividends thereon. However, quarterly cash dividends
on any Series A Convertible Preferred Stock sold are intended to be paid by the
Company as described herein.
Authorization of Undesignated Shares. The Company's Certificate of Incorporation
authorizes the issuance of up to 950 million undesignated shares of Common Stock
and 50 million shares of Preferred Stock with such rights and preferences as may
be determined from time to time by the Board of Directors. Accordingly, under
the Articles of Incorporation the Board of Directors may, without shareholder
approval, issue capital stock (common and/or preferred stock) with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of the Common Stock. In addition,
the issuance of such capital stock may have the effect of rendering more
difficult or discouraging an acquisition of the Company or changes in control of
the Company. Although the Company does not currently intend to issue any
undesignated shares, there can be no assurance that the Company will not do so
in the future. See "Description of Securities."
Indemnification of Directors, Officers, Employees and Agents. The Company's
organizational documents provide generally for the indemnification of members of
the board of directors, officers, employees, or persons controlling the Company.
The Company has been informed that in the opinion of the Securities and Exchange
Commission ("SEC") such indemnification is against public policy as expressed in
the Securities Act of 1933, as amended, and is, therefore, unenforceable.
Year 2000 Compliance. The Company has conducted a review of its computer systems
to identify any business functions or areas that could be affected by the "Year
2000" issue. As the millennium ("Year 2000") approaches, businesses may
experience problems as a result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. If not corrected, this could result in
extensive miscalculations or a major system failure. The Company relies on
industry standard software. Certain manufacturers have already provided the
Company with upgraded software to address the "Year 2000" issue and the Company
believes its operations will not experience material delays or expenses from
this issue, although no such assurances can be given.
USE OF PROCEEDS
The Company will not receive any proceeds from the Selling Security
Holder's sale of Shares, although the Company may receive proceeds from any
exercise of the Options.
<PAGE>
SELLING SECURITY HOLDERS
The Selling Security Holders acquired the Shares for services each had rendered
to the Company and for services each continue to render to the Company. The
services of one Selling Security Holder, Henry F. Mogg, were formalized pursuant
to a consulting agreement dated November 1, 1998. The remaining Selling Security
Holders received shares in recognition of the services they have rendered to the
Company. All Shares were issued pursuant to the Company's 1999 Stock Option
Plan, which was disclosed in the Form S-8 filed with the Commission on January
12, 1999. Douglas L. Lamb is a Director and President of the Company. Marsha
Lamb is the wife of Douglas L. Lamb and has served as an employee since 1985.
John C. Garrison is a Director and Treasurer of the Company, and Richard M.
Cornell serves as a Director and the Secretary of the Company.
On November 1, 1998, Quest Resource Corporation entered into an
Consulting Agreement (the "Agreement") with Henry F. Mogg ("Consultant"),
pursuant to which the Consultant agreed to provide services to the Company for a
term of two years from the date of the Agreement. Consultant had been providing
consulting services to Quest Resource Corporation for at least five years
previous to the date of the Agreement. Under the terms of the Agreement, the
Consultant is to provide general business consulting services in addition to
specific consulting and advice relating to gas pipeline construction and
operations. These services are to be rendered on a best efforts basis.
The following table sets forth (a) the name of each Selling Security
Holder, (b) the number of the Company's securities beneficially owned by each
Selling Security Holder as of July 9, 1999; (c) the number of Shares being
offered by each Selling Security Holder, and (d) the number of the Company's
securities outstanding to be beneficially owned by each Selling Security Holder
following this Offering, assuming the sale pursuant to this Offering or
otherwise of all of the Shares that are the subject of the Registration
Statement of which this Prospectus forms a part. There can be no assurance,
however, that the Selling Security Holders will sell any or all of the Shares
offered hereunder.
<TABLE>
Selling Beneficial Securities Securities Owned
Security Holder Ownership Offered Hereby After Offering
---------------- ---------- -------------- -----------------
<S> <C> <C> <C>
Henry F. Mogg(1) 1,162,050 400,000 15.5%
Douglas L. Lamb 1,579,293 67,266 30.8%
Marsha Lamb 1,579,293 2,000 32.2%
John Garrison 50,000 25,000 0.5%
Richard Cornell 17,500 6,000 0.2%
</TABLE>
(1) Henry F. Mogg beneficially owns 1,162,050 shares of Common Stock, all of
which are nominally held by The Henry F. Mogg M&M Trust (the "Trust"). Henry F.
Mogg is the settlor and trustee of the Trust and has full and exclusive personal
power of revocation and amendment over the Trust as long as he is alive.
<PAGE>
PLAN OF DISTRIBUTION
The Shares offered hereby are being sold by the Selling Security
Holders individually for their own accounts. The distribution of the Shares by
the Selling Security Holders may be effected from time to time in ordinary
brokerage transactions in the over-the-counter market at market prices
prevailing at the time of sale or in one or more negotiated transactions at
prices acceptable to the Selling Security Holders. The brokers or dealers
through or to whom the Shares may be sold may be deemed underwriters of the
Shares within the meaning of the Securities Act, in which event all brokerage
commissions or discounts and other compensation received by such brokers or
dealers may be deemed to be underwriting compensation. The Company will bear all
expenses of the offering, except that the Selling Security Holders will pay any
applicable brokerage fees or commissions and transfer taxes. In order to comply
with the securities laws of certain states, if applicable, the Shares will be
sold only through registered or licensed brokers or dealers. In addition, in
certain states, the Shares may not be sold unless they have been registered or
qualified for sale in such state or an exemption from such registration or
qualification requirement is available and is satisfied.
DESCRIPTION OF SECURITIES
The Company's Common Stock is traded and quoted on the over-the-counter
bulletin board under the symbol QRCP.
Common Stock
As of July 22, 1999, there were 4,903,343 shares of common stock, par
value $0.001 (the "Common Stock") issued and outstanding, held of record by
approximately 2,035 stockholders.
The holders of the Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Holders of
the Common Stock have no preemptive rights and no right to convert their Common
Stock into any other securities. There are no redemption or sinking fund
provisions applicable to the Common Stock.
Series A Convertible Preferred Stock
On March 2, 1999, the Board of Directors of the Company authorized and
established a series of preferred shares of the Company consisting of 500,000
shares of $0.001 par value, designated as "Series A Convertible Preferred
Stock," and determined the relative rights, privileges, preferences,
restrictions and other matters relating to the Series A Convertible Preferred
Stock (the "Preferred Stock".) The shares of Series A Convertible Preferred
Stock possess the following rights, privileges and preferences in that such
shares:
(1) Are convertible into four (4) shares of the Company's common
stock;
(2) Pay dividends of 10% per annum which are payable quarterly,
although no sinking fund exists to facilitate such dividends;
(3) Possess a priority over holders of Common Stock on liquidation
of the Company; and
(4) May be redeemed by the Company although no sinking fund exists
to facilitate such redemption.
As of the date of this Prospectus, no shares of Series A Convertible
Preferred Stock have been issued. The Company hopes to begin selling and issuing
such shares pursuant to the terms of the Private Placement Memorandum,
immediately.
<PAGE>
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert is named as preparing or certifying all or part of the
registration statement to which this prospectus pertains, and no counsel for the
Company who is named in this prospectus as having given an opinion on the
validity of the securities being offered hereby was hired on a contingent basis
or has or is to receive, in connection with this offering, a substantial
interest, direct or indirect, in the Company.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company shall, to the fullest extent permitted by the Nevada
Business Corporation Act, as the same may be amended and supplemented, indemnify
under said section from and against any and all expenses, liabilities or other
matters referred in or covered by said section, and the indemnification provided
for herein shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any By-Law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person. The Company will have the power to purchase and maintain officers' and
directors' liability insurance in order to insure against the liabilities for
which such officers and directors are indemnified pursuant to Article 6.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE
COMPANY PURSUANT TO THE FOREGOING PROVISION, OR OTHERWISE, THE COMPANY HAS BEEN
INFORMED THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE. IN THE EVENT THAT A CLAIM FOR INDEMNIFICATION AGAINST
SUCH LIABILITIES OTHER THAN THE PAYMENT BY THE COMPANY OR EXPENSES INCURRED OR
PAID BY A DIRECTOR, OFFICER OR CONTROLLING PERSON IN CONNECTION WITH THE
SECURITIES BEING REGISTERED, THE COMPANY WILL, UNLESS IN THE OPINION OF ITS
COUNSEL THE MATTER HAD BEEN SETTLED BY CONTROLLING PRECEDENT, SUBMIT TO A COURT
OF APPROPRIATE JURISDICTION THE QUESTION WHETHER SUCH INDEMNIFICATION IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE ACT AND WILL BE COVERED BY THE FINAL
ADJUDICATION OF SUCH ISSUE.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Benedict, State of Kansas, on this 23rd day of July
1999.
HYTK Industries, Inc.
By: /s/ Douglas L. Lamb
Douglas L. Lamb, President and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
- -------------------- ----- ----
/s/ Douglas L. Lamb President and Director July 26, 1999
Douglas L. Lamb
/s/ John C. Garrion Treasurer and Director July 26, 1999
John C. Garrison
/s/ Richard M. Cornell Secretary and Director July 26, 1999
Richard M. Cornell
<PAGE>
EXHIBITS
Item Number Description
10.1 Consulting Agreement dated November 1, 1998, by and
between Quest Resource Corporation and Henry F. Mogg.
EXHIBIT A
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is entered into this 15th day of
February, 1999 by and between, Henry F. Mogg ("Consultant") at 26933 Eckel Road,
Perrysburg, Ohio 43551 and HYTK Industries, Inc. ("Company"), a Nevada
corporation, at P. O. Box 100, 701 East Main Street, Benedict, KS 66714:
RECITALS
WHEREAS, Consultant has been providing to Quest Resource Corporation and
its subsidiaries general business consulting services in addition to specific
consulting and advice related to gas pipeline construction and operations all
during a period of at least the previous five years; and
WHEREAS, on September 30, 1998, Quest Resource Corporation executed a
Reorganization Agreement and Plan of Merger with HYTK Holding Co., Inc., a
wholly owned subsidiary of the Company.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Consultant and the
Company hereby agree as follows:
<PAGE>
(4) Engagement of Consultant. Consultant and the Company hereby confirm
that during the past five years, Consultant has provided the Company
with valuable advice and consulting services which included general
business consulting on such matters as: equipment suitability,
acquisition and maintenance; recommended business aspects for emphasis;
recommendations on certain business activities to reduce or eliminate;
and advice on recent and proposed business consolidation and merger
transactions. Consultant has also provided valuable advice and counsel
on specific aspects of natural gas pipeline operations and construction
activities.
All of the foregoing services collectively are referred to herein as
the "Consulting Services."
(5) Compensation. In consideration of the Consulting Services rendered in
the past in accordance with this Agreement, the Company shall
compensate Consultant by issuance of 400,000 shares of its Common Stock
which shall be registered on Form S-8 under the Securities Act of 1933,
as amended ("Act").
(6) Securities Compliance.
In the course of the performance of its duties, Consultant may become
aware of information which may be considered "inside information"
within the meaning of the Federal Securities laws and regulations.
Consultant acknowledges that its use of such information to purchase or
sell securities of the Company or to transmit such information to any
other party with a view to buy, sell, or otherwise deal in the
securities is prohibited by law and would constitute a breach of this
Agreement.
(7) Miscellaneous
(1) The execution and performance of this Agreement has been duly
authorized by all requisite individual or corporate actions
and approvals and is free of conflict or violation of any
other individual or corporate actions and approvals entered
into jointly and severally by the parties hereto. This
Agreement represents the entire Agreement between the parties
hereto, and supersedes any prior agreements with regards to
the subject matter hereof. This Agreement may be executed in
any number of facsimile counterparts with the aggregate of the
counterparts together constituting one and the same
instrument. This Agreement constitutes a valid and binding
obligation of the parties hereto and their successors, heirs
and assigns and may only be assigned or amended by written
consent from the other party.
(2) No term of this Agreement shall be considered waived and no
breach excused by either party unless made in writing. In the
event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of
this Agreement, and this Agreement shall be constructed as if
it never contained any such invalid, illegal or unenforceable
provisions. From time to time, each party will execute
additional instruments and take such action as may be
reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to
carry out the intent and purposes of this Agreement.
(3) The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State of
Kansas. If any action is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees, court costs,
and other costs incurred in proceeding with the action from
the other party.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date herein above written.
Henry F. Mogg
/s/ Henry F. Mogg
Henry F. Mogg
HYTK Industries, Inc.
/s/ Douglas L. Lamb
Douglas L. Lamb, President
