As filed with the Securities and Exchange Commission on June ___, 2000
Registration No. 333-_______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under the
Securities Act of 1933
EuroGas, Inc.
(Exact name of registrant as specified in its charter)
Utah 87-0427676
(State of other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
Copies to:
Bryan T. Allen, Esq. Brian G. Lloyd, Esq
PARR WADDOUPS BROWN GEE & LOVELESS PARR WADDOUPS BROWN GEE & LOVELESS
185 South State Street, Suite 1300 185 South State Street, Suite 1300
Salt Lake City, Utah 84111 Salt Lake City, Utah 84111
(801) 532-7840 (801) 532-7844
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement
as determined by the Registrant.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [XX]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Title of each class Proposed maximum
of securities to be Amount to be maximum offering aggregate Amount of
registered registered price per share(1) offering price(1) registration fee
-------------------- ------------ ------------------ ----------------- ----------------
<S> <C> <C> <C> <C>
common stock, par value
$.001 per share 21,000,000 (2) $0.77 $ 16,170,000 $ 4,268.88
</TABLE>
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee, based upon the average of the high and low
sales prices for the shares of common stock as reported on the Nasdaq OTC
Bulletin Board on June 23, 2000.
(2) Pursuant to Rule 416 of the Securities Act of 1933, this Registration
Statement covers a presently indeterminate number of shares of
common stock issuable upon the occurrence of a stock split, stock dividend,
or other similar transaction.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the SEC, acting pursuant
to said Section 8(a), may determine.
<PAGE>
Prospectus
EUROGAS, INC.
21,000,000 Shares of Common Stock
__________________
EuroGas, Inc. is in the business of acquiring of rights to explore for
and exploit natural gas, coal bed methane gas, crude oil and other fuels
in various parts of the world. Our current projects include the
following:
. an approximately 50% interest in Canadian full-service oil and
gas producer;
. a minority interest in two planning-stage power plant projects
in Poland;
. a minority interest in an planning-stage talc deposit in Slovakia;
. a minority interest in an exploratory-stage natural gas project in
the Sakha Republic; and
. a minority interest in an exploratory-stage coal bed methane gas
project in Wales.
In addition, we have entered into an agreement to acquire Teton Petroleum
Company, a Delaware corporation that has a 70% interest in an operating oil
concession in western Siberia. As used in this prospectus, the terms "we,"
"EuroGas" and the "Company" refer to EuroGas, Inc. and its subsidiaries.
We may use the prospectus from time to time to offer up to 12,000,000
shares of our common stock (the "EuroGas Shares"). In addition, the persons
designated as selling shareholders in the section of this prospectus entitled
"selling shareholders" may use this prospectus from time to time to offer up
to 9,000,000 shares of our common stock (the "Selling Shareholder Shares";
collectively with the EuroGas Shares, the "Shares"), which shares are either
(i) expected to be issued to them pursuant to existing agreements between us
and the selling shareholders, or (ii) issuable to them upon exercise of
options to purchase shares of EuroGas common stock. In addition, pursuant to
Rule 416 of the Securities Act of 1933, as amended, this prospectus and the
registration statement of which it is a part cover a presently indeterminate
number of shares of our common stock issuable upon the occurrence of a stock
split, stock dividend, or other similar transaction.
EuroGas and the selling shareholders may sell the Shares through
underwriters, agents, brokers, or dealers or directly to investors. The
price at which the Shares are offered and sold may be a fixed price,
the market price prevailing at the time of sale, a price based on the
prevailing market price, a negotiated price or the cancellation of debt
or settlement of claims against us. EuroGas or the selling shareholders
may pay commissions to persons assisting them with the offer and sale of
their Shares.
Shares of our common stock are listed for trading on the NASDAQ OTC
Bulletin Board under the symbol "EUGS" and on the Frankfurt Exchange under
the symbol "EUGS.F." On June 23, 2000, the last reported sales price of
shares of our common stock on the NASDAQ OTC Bulletin Board was
$0.77 per share.
Consider carefully the Risk Factors beginning on page 7 of this prospectus
before investing in the securities being sold with this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed on
the adequacy or accuracy of this Prospectus. Any representation to the
contrary is a criminal offense.
Dated June 27, 2000
<PAGE>
1
TABLE OF CONTENTS
TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . 2
ABOUT THIS PROSPECTUS. . . . . . . . . . . . . . . . . . . . . 3
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . 3
EuroGas, Inc.. . . . . . . . . . . . . . . . . . . . . . . . 3
The Offering . . . . . . . . . . . . . . . . . . . . . . . . 5
Plan of Distribution . . . . . . . . . . . . . . . . . . . . 6
The Selling Shareholders . . . . . . . . . . . . . . . . . . 6
Subsequent Events. . . . . . . . . . . . . . . . . . . . . . 6
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . 7
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . 7
Risks Related To General Activities. . . . . . . . . . . . . 7
Risk Factors Related To The Oil And Gas Industry . . . . . . 11
Other Risks Relating To The Common Stock . . . . . . . . . . 13
Risks Related To Proposed Teton Transactions . . . . . . . . 14
THE COMMON STOCK AND SHAREHOLDERS. . . . . . . . . . . . . . . 15
Price Range Of Shares Of common stock. . . . . . . . . . . . 15
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . 16
Outstanding Shares and Number of Shareholders. . . . . . . . 16
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 16
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SELLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . 18
Beneficial Ownership of Selling Shareholders . . . . . . . . 18
Mr. Jeu and Ms. Calvo. . . . . . . . . . . . . . . . . . . . 20
KUKUI, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . 20
Finance & Credit Development Corporation, Ltd. . . . . . . . 21
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . 22
The EuroGas Shares . . . . . . . . . . . . . . . . . . . . . 22
The Selling Shareholder Shares . . . . . . . . . . . . . . . 23
DESCRIPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . 25
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 25
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SUBSEQUENT EVENTS. . . . . . . . . . . . . . . . . . . . . . . 26
Proposed Beaver River Sale . . . . . . . . . . . . . . . . . 26
Memorandum of Understanding Settling FCDC Judgment . . . . . 26
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . 27
WHERE YOU CAN FIND MORE INFORMATION. . . . . . . . . . . . . . 27
<PAGE>
2
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC utilizing a "shelf" registration process. Under this shelf process,
we and the selling shareholders may, over the next two years, sell any or all
of the Shares in one or more offerings. This prospectus provides you with a
general description of EuroGas, certain risk factors associated with
investment in the Shares, and a limited description of the contemplated
offering(s). If required by the rules promulgated under the Securities
Act in connection with any specific offering of Shares, we or the selling
shareholders will provide a prospectus supplement that containing specific
information about the terms of that offering. The prospectus supplement may
also add, update or change information contained in this prospectus. You
should read both this prospectus and any prospectus supplement, together with
additional information described under the heading "Incorporation of Certain
Documents by Reference" on page 27 of this prospectus.
PROSPECTUS SUMMARY
This summary highlights some information from this prospectus. Because
it is a summary, it necessarily does not contain all of the information
necessary to your investment decision. To understand this offering fully,
you should read carefully the entire prospectus and any prospectus supplement
provided by us.
EuroGas, Inc.
We are primarily engaged in the acquisition of rights to explore for and
exploit natural gas, coal bed methane gas, crude oil and other hydrocarbons.
We have acquired interests in several large exploration concessions and are
in various stages of identifying industry partners, farming out exploration
rights, undertaking exploration drilling, and seeking to develop production.
We are also involved in co-generation and several mineral reclamation
projects. Unless otherwise indicated, all dollar amounts in this prospectus
are reflected in United States dollars.
ACTIVITIES IN CANADA. We hold an equity interest of slightly more than
50% of the capital stock of Big Horn Resources Ltd., a Canadian full-service
oil and gas producer. Big Horn's business is conducted primarily in western
Canada, particularly in the provinces of Alberta and Saskatchewan, and
its stock is currently traded on the Toronto Stock Exchange.
ACTIVITIES IN POLAND. EuroGas Polska, our wholly-owned subsidiary, has
created a consortium with two European utility companies to develop a power
project in Zielona Gora (Western Poland). As an initial step, we created
and registered "Energetyka Lubuska." Energetyka Lubuska intends to submit
a proposal to the Ministry of Treasury of Poland to acquire the existing
EC Zielona Gora power plant through privatization. We expect the Ministry
of Treasury to make a final decision on this matter sometime during 2000.
If privatization is approved, the multi-year process of obtaining financing
for and updating the proposed power plant can commence. If acquired, the
power plant is expected to deliver 180 Mega Watts of electricity and 180
Mega Watt Thermal (generated heat to be used for district heating system).
<PAGE>
3
Separately, Energetyka Lubuska executed a letter of intent with the
Polish Oil and Gas Company to develop a new power plant near Gorzow in north
-western Poland. The proposed project involves the construction of a 5
Megawatt power plant that uses gas produced by a nearby oilfield to produce
electricity that will be marketed to a nearby de-sulfurisation plant owned
by Polish Oil and Gas Company. The project is at a conceptual stage, and
we must enter into a final agreement with the Polish Oil and Gas Company,
complete design of the plant and obtain financing before the 12-24 month
construction process can commence. We expect to enter into a final
agreement by the end of 2000.
ACTIVITIES IN SLOVAKIA. We are pursuing four projects in Slovakia,
including the development of the Gemerska-Poloma talc deposit located near
Roznava. We own a 24.5% indirect interest in this talc deposit, operated
by Rozmin s.r.o., with the remaining interest being held by Belmont
Resources, Ltd, a Vancouver British Columbia entity and an affiliate of a
significant shareholder of EuroGas. Our work schedule for the talc mine
calls for an accelerated drive to commercial production in 2001, subject
to our being able to obtain financing for the development of the deposit.
Our remaining three Slovakian projects involve the exploration for
oil or natural gas in the Trebisov gas field in eastern Slovakia, the
Maseva (Kralovsky-Chlmec) concession in eastern Slovakia and the Evigeo
(Medzilaborce) in the northeastern corner of Slovakia. Each of these
projects is at an early exploratory or appraisal stage.
ACTIVITIES IN SAKHA REPUBLIC. In 1997, we acquired OMV (Jakutien)
GmbH, which holds a 50% interest in the TAKT Joint Venture, an entity based
in Yakutsk, Sakha Republic, Russia. The TAKT Joint Venture held two oil
and gas exploration licenses. We participated in a work program of seismic
reprocessing of over 1,700km of data and its interpretation prior to the
expiry of the licenses in October 1998. Recently, we have been negotiating
to have the licenses renewed to allow us to move forward towards choosing a
drilling location for a future well.
ACTIVITIES IN THE UNITED KINGDOM. We have entered into an agreement
with Slovgold GesmbH, an Austrian company with headquarters in Vienna, to
conduct a six-well pilot program on a 500 sq. kilometer (125,000 sq. acre)
concession in South Wales held by UK Gas Limited to test for coalbed
methane gas. In order to minimize the amount of capital we need to
contribute to conduct the pilot program, we have entered into discussions
with UK Gas in order to permit us to participate in the pilot program by
utilizing drilling equipment owned by our Polish subsidiary.
PROPOSED MERGER WITH TETON PETROLEUM COMPANY. On April 5, 2000, we
entered into a Master Transaction Agreement with Teton Petroleum Company,
a Delaware corporation, and Goltech Petroleum, LLC, a Texas limited liability
company and wholly-owned subsidiary of Teton. The Master Transaction
Agreement and accompanying documents describe and contemplate the following
three interrelated transactions:
. the merger of Teton with and into a wholly-owned subsidiary of
EuroGas in exchange for (based on current capitalization) 14,981,744
shares of common stock and warrants to purchase an additional
2,599,249 shares of common stock,
. the purchase by EuroGas of a 35% membership interest in Goltech for
$2,300,000, and
. our providing an up to $4,000,000 credit facility for Goltech.
<PAGE>
4
To date, we have loaned $1,000,000 to Goltech under the credit facility and
are conducting due diligence with respect to the proposed merger. Until
the end of the due diligence period, the Master Transaction Agreement
(and related merger agreement) is terminable at will by either party.
Teton's primary asset is its 100% ownership interest in Goltech, and
Goltech's primary asset is its ownership of 70.59% of a Russian closed joint
stock company known as Goloil. Teton has represented to EuroGas that Goloil
is the operator of the Eguryakhskiy License Territory, also referred to
as the Goloil Project, a 187 sq. kilometer (46,200 acre) oil field centrally
located in the southern half of the West Siberian basin in Russia. Goltech
is in the early stages of constructing an approximately 20 mile-long pipeline
from the Eguryakhskiy license area to an existing pipeline in order to
increase the volume of oil extracted from the Eguryakhskiy license area.
Our principal executive offices are located at 942 East 7145 South, #101A,
Midvale, Utah 84047. Our telephone number at that location is (801) 255-0862.
The Offering
Shares offered by EuroGas 12,000,000
Shares offered by the selling shareholders 9,000,000
Shares of common stock outstanding prior
to this offering 100,936,979(1)
Shares of common stock outstanding
following this offering, if all Shares
are sold 121,936,979(1)
Use of Proceeds Working capital, capital
expenditures, and other
general corporate purposes.
Risk Factors You should read the "Risk
Factors," beginning on
page 7, as well as
other cautionary statements
throughout this prospectus,
before investing in the
Shares.
____________________
(1) Excludes 3,750,000 shares of common stock subject to outstanding options
granted to employees and directors of EuroGas, 24,892,858 shares of common
stock subject to outstanding warrants, debentures and similar rights granted
to persons other than employees and directors of EuroGas, and up to 9,000,000
shares of our common stock issuable to the selling shareholders pursuant to
governing agreements.
Pursuant to Rule 416 of the Securities Act, this prospectus and the
registration statement of which it is a part cover a presently indeterminate
number of shares of our common stock issuable upon the occurrence of a stock
split, stock dividend, or other similar transaction.
<PAGE>
5
Plan of Distribution
The 21,000,000 Shares will be offered and sold by EuroGas and the selling
shareholders. Each of EuroGas and the selling shareholders may sell the
Shares through one of various methods, which may involve the engagement or
underwriters, agents, brokers, or dealers or may be directly to purchasers.
The price at which the Shares are offered and sold may be a fixed price,
the market price prevailing at the time of sale, a price based on the
prevailing market price, a negotiated price or other consideration.
EuroGas and the selling shareholders may pay commissions to persons assisting
them with the offer and sale of the Shares.
The Selling Shareholders
Of the Shares, the 12,000,000 EuroGas Shares will be offered and sold by
EuroGas. The remaining 9,000,000 Selling Shareholder Shares are to be sold by
persons who have been issued or are expected to be issued common stock
pursuant to the terms of existing litigation settlement agreements.
Subsequent Events
PROPOSED BEAVER RIVER SALE. We hold a 15% interest in the "Beaver River"
natural gas project, which is an attempt to reestablish commercial production
in an old Amoco field; however, we are presently negotiating an agreement
pursuant to which we expect to return such 15% interest to the former
owners in exchange for the return of the shares of our common stock issued
to purchase such interest.
MEMORANDUM OF UNDERSTANDING SETTLING FCDC JUDGEMENT On March 16, 2000,
the United States District Court, District of Utah, Central Division entered
a default judgment against EuroGas, and in favor of Finance & Credit
Development Corporation, Ltd., in the amount of $19,773,113, in a case styled
Finance & Credit Development Corporation Ltd., an Ireland Corporation vs.
EuroGas, Inc., a Utah corporation, Case No. 2:00VC-1024K. On or about June
16, 2000, we entered into a memorandum of understanding, with FCDC in
satisfaction of default judgment. In consideration for FCDC's stipulation
to vacate the default judgment, we agreed, among other things, to issue to
FCDC $3,700,000 shares of common stock, to grant FCDC an option exercisable
for the 30-day period following June 30, 2001 to purchase an additional
3,000,000 shares of common stock at an exercise price of $.65, and to pay
to FCDC in cash or shares of common stock the difference between $3.00 per
share and the market value of the shares of common stock received upon
exercise of the option.
<PAGE>
6
FORWARD-LOOKING STATEMENTS
This prospectus contains various forward-looking statements. Such
statements can be identified by the use of the forward-looking words
"anticipate," "estimate," "project," "likely," "believe," "intend,"
"expect," or similar words. These statements discuss future expectations,
contain projections regarding future developments, operations, or financial
conditions, or state other forward-looking information. When considering
such forward-looking statements, you should keep in mind the risk noted in
"Risk Factors" below and other cautionary statements throughout this
prospectus, any prospectus supplement, and our periodic filings with the
SEC that are incorporated herein by reference. You should also keep in mind
that all forward-looking statements are based on management's existing
beliefs about present and future events outside of management's control and
on assumptions that may prove to be incorrect. If one or more risks
identified in this prospectus, a prospectus supplement, or any applicable
filings materializes, or any other underlying assumptions prove incorrect,
our actual results may vary materially from those anticipated, estimated,
projected, or intended.
RISK FACTORS
Risks Related To General Activities
WE HAVE A WORKING CAPITAL DEFICIT AND WILL CONTINUE TO NEED SIGNIFICANT FUNDS
EuroGas has historically been undercapitalized. We had a working capital
deficit of approximately $19.1 million on March 31, 2000, and most of our
partially- or wholly-owned projects require significantly more capital than
is currently available to us. Although we are unable to determine at this
time the additional amount of outside capital we will need or be able to
raise in the future, the interest of our shareholders will continue to be
diluted as we seek funding through the sale of additional securities or
through joint venture or industry partnering arrangements.
WE ARE DEPENDENT UPON FINANCING ACTIVITIES TO FUND OUR OPERATIONS
Prior to our acquisition of an approximately 50% interest in a Canadian
gas production entity (Big Horn) in 1998, we had not earned any cash revenues
since our incorporation, other than a one-time $500,000 payment received in
1997 in connection with transferring certain interests to Texaco. Because
revenues earned by Big Horn will probably not be distributed to EuroGas in
the immediate future, we do not currently have a source of revenues, do not
anticipate any revenues in the near term and expect to continue to incur
operating losses in the foreseeable future. As a result, we are entirely
dependent on our existing working capital, financing from the sale of
securities or loans in the future, and/or amounts made available by industry
partners in the future. We expect to continue to incur significant costs as
part of our ongoing and planned projects and do not anticipate that these
costs will be offset fully, if at all, by revenues for the foreseeable future.
If we are unable to raise capital from the sale of securities, loans, or
industry partnerships in the future, we will have to scale back our
operations and may, at some point, become insolvent.
<PAGE>
8
WE HAVE SIGNIFICANT FUTURE OBLIGATIONS UNDER A SETTLEMENT AGREEMENT
On March 16, 2000, the United States District Court, District of Utah,
Central Division entered a default judgment against EuroGas in the amount of
$19,773,113 in a case styled Finance & Credit Development Corporation, Ltd.,
an Ireland Corporation vs. EuroGas, Inc., a Utah corporation, Case No. 2:00VC-
1024K. We entered into a memorandum of understanding with Finance & Credit
Development Corporation, Ltd. on June 16, 2000. We agreed, among other
Things, to issue to FCDC 3,700,000 shares of common stock, to grant FCDC an
option exercisable for the 30-day period following June 30, 2001 to purchase
an additional 3,000,000 shares of common stock at an exercise price of $.65,
and to pay to FCDC in cash or shares of common stock the difference between
$3.00 per share and the market value of the shares of common stock received
upon exercise of the option. If the option would have been exercise on
June 16, 2000, we would have been obligated to issue 3,000,000 shares of
common stock and pay FCDC an aggregate of $6,570,000 in cash or additional
shares of common stock. This settlement and the consideration given to
FCDC in the Settlement Agreement are more fully described in "Subsequent
Events."
OUR PROJECTS ARE HIGHLY SPECULATIVE AND GENERALLY ONLY AT THE EXPLORATION STAGE
Our assets and interests are primarily in methane gas, natural gas, and
crude oil exploration and development projects. All such projects are highly
speculative, whether we are still at the exploratory stage or have commenced
development. We can provide no assurance that any drilling, testing, or
other exploration project will locate recoverable gases or other fuels in
sufficient quantities to be economically extracted. Several test wells are
typically required to explore each concession or field. We may continue
to incur significant exploration costs in specific fields, even if initial
test wells are plugged and abandoned or, if completed for production, do not
result in production of commercial quantities of natural gas or other fuel.
MANY OF OUR PROJECTS ARE IN LOCATIONS WHERE THE INFRASTRUCTURE IS INADEQUATE TO
SUPPORT OUR NEEDS
Many of the projects in which we have invested are located in areas of the
world, primarily eastern Europe and the former Soviet Union, in which the
necessary infrastructure for transporting, delivering, and marketing any
natural gas, methane gas or other fuels that may be recovered is significantly
underdeveloped or, in some cases, nonexistent. Even if we are able to
locate natural gas, methane gas, or other valuable fuels in commercial
quantities, we may be required to invest significant amounts in developing
the infrastructure necessary to support the transportation and delivery of
such fuels. We do not currently have a source of funding available to meet
these costs.
<PAGE>
8
MANY OF OUR PROJECTS ARE IN COUNTRIES THAT HAVE FRAGILE AND UNPREDICTABLE
POLITICAL AND SOCIO-ECONOMIC SYSTEMS ECPNOMIC SYSTEMS
Our operations in Poland, Slovakia, Ukraine, and the Sakha Republic
carry with them certain risks in addition to the risks normally associated
with the exploration for, and development of, natural gas and other fuels.
Although recent political and socio-economic trends in these countries
have been toward the development of market economies that encourage foreign
investment, the risks of political instability, a change of government,
unilateral renegotiation of concessions or contracts, nationalization,
foreign exchange restrictions, and other uncertainties must be taken into
account when operating in these areas of the world. The terms of the
agreements governing our projects are subject to administration by
the various governments and are, therefore, subject to changes in the
government itself, changes in government personnel, the development of
new administrative policies or practices, the adoption of new laws,
and many other factors.
Moreover, we may be required to obtain and renew licenses and permits
on an ongoing basis in connection with further exploration, the drilling of
wells, the construction of transportation facilities and pipelines, the
marketing of any fuel that may be produced, and financial transactions
necessary for all of the foregoing. The rules, regulations, and laws
governing all such matters are subject to change by the various governmental
agencies involved. We can provide no assurance that the laws, regulations, and
policies applicable to our interests in various countries in which our projects
are located will not be radically and adversely altered at some future date.
THE CONTINUANCE, COMPLETION OR RENEWAL OF MANY OF OUR LICENSES ARE SUJBECT TO
OUR ABILITY TO OBTAIN ADDITIONAL PERMITS FROM GOVERNMENT AUTHORITIES
In general, we have the right to conduct basic exploration on all
concessions or fields in which we have an interest. However, in order to
drill for, recover, transport or sell any gas or other hydrocarbons, we
will generally be required to obtain additional licenses and permits and
enter into agreements with various land owners and/or government authorities.
The issuance of most such permits and licenses will be contingent upon the
consent of national and local governments having jurisdiction over the
production area, which entities have broad discretion in determining whether
or not to grant permits and licenses. Moreover, even if obtained, such
licenses, permits, and agreements will generally contain numerous restrictions
and require payment by us of a development/exploration fee, typically based on
the market value of the economically recoverable reserves. The amount of any
such fee and other terms of any such license, permit, or agreement will affect
the commercial viability of any extraction project. We can provide no
assurance that we will be able to obtain the necessary licenses, permits, and
agreements. Even if we do obtain such items, the associated costs, delays
and restrictions may significantly affect our ability to develop the affected
project.
WE ARE THE SUBJECT OF AN INACTIVE SEC INVESTIGATION AND A DEFENDANT IN VARIOUS
OTHER LAWSUITS
We are presently subject to a formal order of investigation issued by the
SEC on August 1, 1995 to investigate whether violations of applicable law may
have occurred. In connection with such investigation, we have produced
numerous documents for the SEC, and the SEC has questioned our current and
past officers, directors, former accountants, and other agents. We have not
been contacted by the SEC with respect to this matter for several years;
however, we cannot currently predict the duration or outcome of this
investigation.
<PAGE>
9
If the SEC concludes that we or our representatives have violated the
securities laws, it has available a large range of civil and criminal
remedies. Such remedies include the suspension of trading in the common
stock, the levying of substantial fines, and the exclusion of our current
officers and directors from participating in a public company. In addition,
we are subject to certain other pending or threatened legal claims. The
adverse resolution of the SEC investigation or any pending litigation
affecting us would have a material adverse effect on our operations and
proposed business.
OUR PROJECTS MAY NEVER BEGIN PRODUCING VALUABLE HYDROCARBONS
Other than the production of an average of approximately 1,000
barrels of oil equivalent per day by Big Horn Resources Ltd., a Canadian
company in which we have an approximate 50% ownership interest, none of
the projects in which we own an interest is presently producing gas or
other hydrocarbons. Texaco drilled and abandoned test wells on the
concession in Poland in which we own an interest, and we have drilled
test wells on our Slovakia concessions. None of these wells has been
developed or commenced production, and we can provide no assurance that
any of our projects will at any time commence production of any valuable
resource.
WE ARE DEPENDENT UPON CERTAIN OFFICERS, KEY EMPLOYEES, AND CONSULTANTS
We are dependent on the services of Mr. Karl Arleth, the President of
EuroGas, Inc. We are also dependent on certain key employees, including
andrew J. Andraczke in connection with our business activities. Mr.
Andraczke has been instrumental in establishing our operations in Poland.
The loss of one or more of these individuals could materially and adversely
impact our operations. We have not entered into employment agreements with
any of these individuals other than Mr. Arleth and do not maintain key-man
life insurance on any EuroGas officers or employees.
WE ARE THINLY STAFFED
We have numerous projects throughout the world, which we attempt to
direct and manage with only a few employees. In addition to our president and
chief financial officer (expected to commence employment on July 1, 2000),
e have 9 full-time equivalent employees, 3 significant consultants and a
contract with a geo-engineering firm. Unless and until additional employees
are hired, our attempt to manage our numerous projects and obligations with
such a limited staff could have serious adverse consequences, including
without limitation, a possible failure to meet a material contractual, court
or SEC deadline or a possible failure to consummate investment or acquisition
opportunities.
SUBSEQUENT EVALUATION MAY REVEAL THAT OUR UNPROVED PROPERTIES ARE NOT VALUABLE,
AND WE MAY NEED TO RECORD AN IMPAIRMENT OF THE VALUE OF SUCH PROPERTIES
We capitalize costs related to unproved gas properties and recognize the
expenses for drilling and other exploration costs that do not result in proved
reserves at the time the well is plugged and abandoned. We review our unproved
properties periodically to assess whether an impairment allowance should be
recorded. On March 31, 2000, we had capitalized costs related to the
acquisition of oil and gas properties not subject to amortization in the
amount of approximately $26,865,731. Should future events, such as the
drilling of dry holes, evidence that an impairment of recorded value has
taken place, we will be obligated to proportionate reduce the recorded value
of such respect asset on our balance sheet.
<PAGE>
10
SEVERY WEATHER WILL INTERRUPT, AND MAY ADVERSELY AFFECT, OUR ACTIVITIES IN
VARIOUS PART OF THE WORLD
Severe weather conditions frequently interrupt much of our exploratory and
testing work. Heavy precipitation sometimes makes travel to exploration sites
or drilling locations difficult or impossible. Extremely cold temperatures
may delay or interrupt drilling, well servicing, and production (if commenced,
of which we can give no assurance). The temperatures in all of the regions in
which we have exploratory or other operations are extremely cold, and the
temperatures in the Sakha Republic are especially extreme and include some of
the coldest areas of the northern hemisphere. The average temperature of the
entire region from October to April is below freezing with winter temperatures
dipping to minus 70 to 80 degrees Fahrenheit. Even if recoverable reserves are
discovered in the Sakha Republic or other regions prone to severe weather, the
above-described adverse weather conditions may limit production volumes,
increase production costs, or otherwise prohibit production during extended
portions of the year.
Risk Factors Related To The Oil And Gas Industry
THE PRICE OF THE VARIOUS HYDROCARBONS WE PRODUCT OR MAY PRODUCT ARE VOLATILE
AND UNSTABLE
The prices of oil, natural gas, methane gas and other fuels have been,
and are likely to continue to be, volatile and subject to wide
fluctuations in response to numerous factors, including the following:
. changes in the supply and demand for such fuels;
. political conditions in oil, natural gas, and other fuel-
producing and fuel-consuming areas;
. the extent of domestic production and importation of such
fuels and substitute fuels in relevant markets;
. weather conditions;
. the competitive position of each such fuel as a source of
energy as compared to other energy sources;
. the refining capacity of crude purchasers;
. the effect of governmental regulation on the production,
transportation, and sale of oil, natural gas, and other fuels.
Low prices, and/or highly volatile prices, for any fuel being explored or
produced at one of our projects will adversely affect our ability to secure
financing or enter into suitable joint ventures or other arrangements with
industry participants. In addition, in the event we commence recovery of
fuel at any of our projects, a low or volatile price for the fuel being
recovered will adversely affect revenue and other operations.
<PAGE>
11
OUR OPERATIONS INVOLVE NUMEROUS HAZARDS, AND WE MAINTAIN NO INSURANCE AGAINST
SUCH RISKS
Exploring for fuel, drilling wells, and producing fuel involves numerous
hazards, including the following:
. fire,
. explosions,
. blowouts,
. pipe failures,
. casing collapses,
. unusual or unexpected formations and pressures, and
. environmental hazards such as spills, leaks, ruptures,
and discharges of toxic substances.
If any such event occurs, we may be forced to cease any or all of our
exploration, drilling, or production activities on a temporary or permanent
basis. In addition, such events may lead to environmental damage, personal
injury, and other harm resulting in substantial liabilities to third-parties.
We do not maintain insurance against these risks. Even if we obtain
insurance, we may not be insured against all losses or liabilities which
may arise from such hazards because such insurance may be unavailable at
economic rates, due to limitations in the insurance policies, or other
factors. Any uninsured loss may have a material adverse impact on our
business and operations.
THE OIL AND GAS INDUSTRY IS HIGHLY COMPETITIVE, AND WE ARE AT A COMPETITIVE
DISADVANTAGE
The oil and gas industry is highly competitive. Most of our current and
potential competitors have far greater financial resources and a greater number
of experienced and trained managerial and technical personnel than we do.
We can provide no assurance that we will be able to compete with, or enter
into cooperative relationships with, any such firms.
OUR OPERATIONS ARE SUBJECT TO NUMEROUS ENVIRONMENTAL LAWS, COMPLIANCE WITH
WHICH MAY BE EXTREMELY COSTLY
Our operations are subject to environmental laws and regulations in the
various countries in which they are conducted. Such laws and regulations
frequently require completion of a costly environmental impact assessment
and government review process prior to commencing exploratory and/or
development activities. In addition, such environmental laws and
regulations may restrict, prohibit, or impose significant liability in
connection with spills, releases, or emissions of various substances
produced in association with fuel exploration and development.
We can provide no assurance that we will be able to comply, with
applicable environmental laws and regulations or that those laws, regulations
or administrative policies or practices will not be changed by the various
governmental entities. The cost of compliance with current laws and
regulations or changes in environmental laws and regulations could require
significant expenditures. Moreover, if we breach any governing laws or
regulations, we may be compelled to pay significant fines, penalties, or
other payments. Costs associated with environmental compliance or
noncompliance may have a material adverse impact on our financial
condition or results of operations in the future.
<PAGE>
12
Other Risks Relating To The Common Stock
MOST OR OUR OUTSTANDING SHARES ARE FREE TRADING AND, IF SOLD IN LARGE
QUALTITIES, MAY ADVERSELY AFFECT THE MARKET PRICE FOR OUR COMMON STOCK
Most of the approximately 100,936,979 shares of the common stock
issued and outstanding as of June 27, 2000; (i) are free-trading; (ii) have
been held for in excess of one year and are eligible for resale
under Rule 144 promulgated under the Securities Act; or (iii) will be
registered for resale in a registration statement that we are contractually
obligated to file. Although the resale of certain of these shares may
be subject to the volume limitations and other restrictions under Rule 144,
the possible resale of the remaining shares may have an adverse effect on
the market price for the common stock.
WE HAVE A SUBSTANTIAL NUMBER OF WARRANTS, OPTIONS AND DEBENTURES OUTSTANDING
As of June 15, 2000, there are outstanding warrants and options to
purchase up to 28,642,858 shares of common stock at exercise prices
ranging from $0.35 to $11.79. This is in addition to the estimated
9,000,000 shares of our common stock we are obligated to issue to the
selling shareholders under governing agreements. The existence of such
warrants and options may hinder our future equity offerings, and the
exercise of such warrants and options may further dilute the interests
of all our shareholders. Future resale of the shares of common stock
issuable on the exercise of such warrants and options may have an
adverse effect on the prevailing market price of our common stock.
Furthermore, the holders of warrants and options may exercise them at a
time when we would otherwise be able to obtain additional equity capital
on terms more favorable to us.
WE HAVE THE RIGHT TO, AND EXPECT TO, ISSUE ADDITIONAL SHARES OF COMMON STOCK
WITHOUT SHAREHOLDER APPROVAL
EuroGas, Inc. has authorized capital of 325,000,000 shares of common
stock, par value $0.001 per share, and 3,661,968 shares of preferred stock,
par value $0.001 per share. As of June 25, 2000, 100,936,979 shares of
common stock and 2,392,228 shares of preferred stock were issued and
outstanding. In addition, there are 28,642,858 shares of common stock
reserved for issuance on the exercise or conversion of outstanding warrants,
options, and similar rights to acquire common stock and 9,000,000 shares of
stock issuable to the selling shareholders pursuant to contractual rights.
We have no means to control the timing of the conversion of convertible
securities. Our board of directors has authority, without action or vote
of our shareholders, to issue all or part of the authorized but unissued
shares. Any such issuance will dilute the percentage ownership of our
shareholders and may dilute the book value of the common stock.
WE HAVE NOT PAID ANY DIVIDENDS AND DO NOT EXPECT TO PAY DIVIDENDS IN THE NEAR
FUTURE
We have not paid, and do not plan to pay, dividends on our common stock
in the foreseeable future, even if we become profitable. Earnings, if any,
are expected to be used to advance our activities and for general corporate
purposes, rather than to make distributions to shareholders.
<PAGE>
13
Risks Related To Proposed Teton Transactions
THE PROPOSED MERGER WITH TETON MAY NOT BE CONSUMMATED
We have entered into an Agreement and Plan of Merger with Teton Petroleum
Company, pursuant to which Teton is expected to merge with and into one of
our wholly-owned subsidiaries. Teton is not obligated to consummate the
proposed merger unless numerous conditions precedent are satisfied, including,
without limitation, the following:
. neither Teton nor EuroGas having terminated the Teton Master Agreement or
the Teton Merger Agreement by the end of the due diligence period ending
approximately July 19, 2000;
. the proposed merger being approved by the shareholders of Teton and
EuroGas;
. neither Teton nor EuroGas having terminated the Teton Merger Agreement
or Teton Master Agreement as a result of a breach by the other party;
. the holders of no more than 10% of the outstanding shares of EuroGas
common stock or Teton common stock not having exercised appraisal rights
under governing corporate law, if available;
and
. The absence of a material adverse change in our business, operations,
properties or assets.
For the reasons set forth above, and other possible reasons, the proposed
merger of Teton into our subsidiary may not be consummated. In the event the
merger is not consummated, we will not realize any anticipated benefits of
the merger, particularly the acquisition of all of Teton's rights in the
Eguryakhskiy license area.
ISSUANCE OF SHARES IN THE MERGER WILL CREATE SUBSTANTIAL DILUTION
Each of the outstanding shares of Teton common stock shall be converted
into the right to receive one share of EuroGas common stock, and each
outstanding option, warrant or other right to purchase a share of Teton
common stock shall become the right to purchase one share of EuroGas common
stock (each subject to adjustment if the number of outstanding shares of
EuroGas common stock exceeds 136,000,000 at any time within 180 days of
closing). Teton presently has 14,981,744 outstanding shares of common stock
and 2,599,249 warrants, options and other outstanding rights to purchase
Teton common stock. In addition, it is anticipated that Teton will issue
approximately 500,000 shares of its common stock prior to consummation of
the Merger. The issuance of those numbers of shares of our common stock
in connection with the Merger may substantially dilute the interest of our
shareholders.
<PAGE>
14
PROPERTIES OBTAINED AS A RESULT OF THE MERGER MAY PROVE TO HAVE NO VALUE
Our primary motivation in entering into the Teton Master Agreement and
Teton Merger Agreement is to obtain all or part of the rights presently held
by Goltech in the Eguryakhskiy license area. Even if the proposed Teton
merger and transactions contemplated by the Teton Master Agreement are
consummated, the amount of extractable oil in the Eguryakhskiy license
area may be less than reserve estimates, and/or extracting or transporting
such oil may be economically or logistically impracticable. Even if the
Teton merger and Goltech purchase transaction are consummated, we can
provide no assurance that our interest in the Eguryakhskiy license area
will generate revenues in excess of costs, or otherwise prove valuable to us.
THE COMMON STOCK AND SHAREHOLDERS
Price Range Of Shares Of common stock
Our common stock is quoted on the NASDAQ OTC Bulletin Board under the
symbol "EUGS" and is traded under the symbol "EUGS.F" on the Frankfurt Stock
Exchange. The following table sets forth the approximate range of high and
low bids for common stock during the periods indicated, as quoted by the
NASDAQ OTC Bulletin Board. Such quotations reflect interdealer prices,
without retail markup, markdown, commissions, or other adjustments and
may not necessarily represent actual transactions in our common stock.
Quarter Ended High Bid Low Bid
------------------------------- -------- -------
Year Ended December 31, 1998
----------------------------
Quarter Ended March 31, 1998 6.8125 3.9375
Quarter Ended June 30, 1998 5.75 3.625
Quarter Ended September 30, 1998 4.97 2.0625
Quarter Ended December 31, 1998 2.25 1.1875
Year Ended December 31, 1999
----------------------------
Quarter Ended March 31, 1999 2.50 1.0312
Quarter Ended June 30, 1999 1.0938 0.5469
Quarter Ended September 30, 1999 0.9375 0.5469
Quarter Ended December 31, 1999 0.7969 0.4531
Year Ended December 31, 2000
----------------------------
Quarter Ended March 31, 2000 1.875 0.4219
Quarter Ended June 30, 2000
(through June 23, 2000) 1.09 0.75
The liquidity of our common stock may be limited, and the reported price
quotes may not be indicative of prices that could be obtained in actual
transactions. On June 23, 2000, the high and low sale prices for our
common stock was $0.77 on the NASDAQ OTC Bulletin Board.
<PAGE>
15
Dividends
No dividends have been paid on our common stock, and we do not have
retained earnings from which to pay dividends. We accrued cumulative preferred
dividends of $1,442,345, $2,861,301 and $423,350 in 1999, 1998 and 1997,
respectively. Of this amount, $39,502 was paid in 1999 and $165,008 was paid
in 1998 by the issuance of shares of common stock in connection with the
conversion of a portion of the preferred stock. All cumulative dividends with
respect to our preferred stock would be required to be paid prior to our
declaring or paying any dividend on our common stock. Even if we were able to
generate the necessary earnings, it is not anticipated that dividends will be
paid in the forseeable future, except to the extent required by the terms of
the cumulative preferred stock currently issued and outstanding.
Outstanding Shares and Number of Shareholders
As of June 15, 2000, the number of shares of common stock outstanding,
was 100,936,979, held by an estimated 2,000 beneficial owners. In addition,
as of the same date, we are obligated to issue approximately 9,000,000 shares
of common stock to the selling shareholders, have reserved 3,750,000 shares
of common stock for issuance upon exercise of options that have been, or may
be, granted under its employee stock option plans and have reserved 24,892,858
shares of common stock for issuance upon the exercise of outstanding warrants.
USE OF PROCEEDS
The EuroGas Shares
Unless the applicable prospectus supplement states otherwise, we intend to
use net proceeds from the sale of the Shares, following the payment of any
placement agent or underwriting fees, legal costs, and other offering
expenses, for each of the following:
Use Estimated Cost
--- --------------
Payment of Offering Expenses $40,000
Working capital, general corporation expenses and
possible future acquisitions $9,200,000(1)
(1) We have estimated the amount of proceeds we will receive by
assuming the sale of all 12,000,000 EuroGas Shares at $0.77 per Share,
the last reported sales price of a share of common stock on the
NASDAQ OTC Bulletin Board on June 23, 2000. The actual proceeds from
the offer and sale of the EuroGas Shares will vary, and may vary
materially, from such estimated amount.
Working capital, general, corporation and acquisition expenses may include the
use of up to $5,000,000 of proceeds to fund our conditional commitment to loan
Goltech $3,000,000 and to purchase a minority interest in Goltech. If EuroGas
determines that a material part of the proceeds are to be used to finance
the acquisition of another business, EuroGas will identify in a prospectus
supplement the identity of such businesses, the status of any negotiations
with respect to the acquisition and, if pro forma financial statements
reflecting such transaction are required by Regulation S-X promulgated under
the Securities Act, additional information about the business being acquired
and the terms of the proposed transaction.
16
<PAGE>
Pending utilization of the net proceeds of the offering, we intend to make
temporary investments in an interest-bearing demand account or short-term,
interest-bearing securities. We anticipate that we will incur costs of
approximately $40,000 in connection the offering, including filing fees,
transfer agent costs, printing costs, listing fees, and legal and accounting
fees, all of which will be paid by us.
The Selling Shareholder Shares
We will not receive any proceeds from the sale of the Selling
Shareholder Shares by the selling shareholders.
DILUTION
Our net tangible book value applicable to common stock as of March
31, 2000 was approximately $24,476,000, or $0.24 per share. Net tangible
book value applicable to common stock is the remaining tangible book value
after deducting the book value of the preferred stock outstanding.
Our pro forma net tangible book value applicable to common stock as
of March 31, 2000 was approximately $36,443,000, or $0.33 per common share.
Pro forma adjustments have been made to reflect the effects of the issuance
of 8,050,000 shares of common stock upon conversion of accrued liabilities
and settlement obligations under a default judgment for $11,667,000 and
the issuance of 250,000 shares of common stock upon the exercise of
options for $300,000. Pro forma net tangible book value per share is
determined by dividing the amount of our pro forma tangible assets less
total liabilities by the pro forma number of shares of common stock
outstanding.
After giving effect to the issuance of the shares of common stock
offered by us at an assumed public offering price of $0.77 per share
and after deducting estimated offering expenses payable by us, and the
application of the estimated net proceeds from this offering, our pro forma
as adjusted net tangible book value applicable to common stock as of March
31, 2000 would have been approximately $54,054,000 or $0.38 per share. This
represents an immediate increase in pro forma net tangible book value to our
existing common stockholders of $0.05 per share and an immediate dilution
to purchasers in this offering of $0.39 per share. Dilution in net tangible
book value per share represents the difference between the amount paid per
share by purchasers of shares of common stock in this offering and the pro
forma as adjusted net tangible book value per share of common stock
immediately after the completion of this offering. If the public offering
price is higher or lower, the dilution to purchasers in this offering will
be greater or less, respectively.
17
<PAGE>
The following table illustrates this per share dilution:
Assumed public offering price per share $0.77
Pro forma net tangible book value per common share
at March 31, 2000 $0.33
Increase in pro forma net tangible book value per
common share attributable to this offering $0.05
Pro forma as adjusted net tangible book value per
common share after this offering $0.38
Dilution per common share to new investors $0.39
SELLING SHAREHOLDERS
Of the Shares, the 12,000,000 EuroGas Shares will be offered and sold
by EuroGas. The remaining 9,000,000 Selling Shareholder Shares are to be
sold by persons who have filed claims against us and are expected to receive
common stock in partial settlement of such claims.
Beneficial Ownership of Selling Shareholders
The table on the page that follows sets forth, as of the date of this
prospectus:
. the name of each selling shareholder,
. certain beneficial ownership information with respect to the
selling shareholders,
. the number of Shares that may be sold from time to time by each
selling shareholder pursuant to this prospectus, and
. the amount (and, if one percent or more, the percentage) of
common stock to be owned by each selling shareholder if all
Shares are sold.
Beneficial ownership is determined in accordance with SEC rules and
generally includes voting or investment power with respect to securities.
Shares of common stock that are issuable upon the exercise of outstanding
options, warrants or other purchase rights, to the extent exercisable within
60 days of the date of this prospectus, are treated as outstanding for
purposes of computing each selling shareholder's percentage ownership of
outstanding common stock.
18
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially
Beneficial Ownership Owned upon Completion
Prior to Offering of the Offering(1)
---------------------------- --------------------
Number of Number
Number of Shares Being of
Beneficial Owner Shares Percent(2) Offered Shares Percent(2)
----------------------------- ------------- ------------- -------------- ------- -----------
<S> <C> <C> <C> <C> <C>
Finance & Credit 6,700,000 (3) 6.2% 6,700,000 (3) 0 --
Development Corporation, Ltd.
Stephen Jeu and Susanna Calvo 1,250,000 (4) 1.2% 1,250,000 (4) 0 --
Andrew Andraczke 350,000 (5) * 350,000 (5) 0 --
Armando Ulrich 350,000 (6) * 350,000 (6) 0 --
Dr. Gregory Fontana 250,000 (7) * 250,000 (7) 0 --
KUKUI, Inc. 100,000 (8) * 100,000 (8) 0 --
All Selling Shareholders as a
group 9,000,000 8.9% 9,000,000 0 --
</TABLE>
[FN]
* Represents less than one percent of the outstanding shares of common
stock.
(1) Assuming the sale by each selling shareholder of all of the Selling
Shareholder Shares offered hereunder by such selling shareholder.
There can be no assurance that any of the Selling Shareholder Shares
or other Shares offered hereby will be sold.
(2) The percentages set forth above have been computed assuming the number
of shares outstanding equals the sum of (a) 100,936,979, which is the
number of shares of common stock actually outstanding on June 26, 2000,
and (b) shares of common stock subject to options, warrants and other
purchase rights held by the person(s) with respect to which such
percentage is calculated.
(3) Includes 3,700,000 shares of common stock issuable directly to FCDC,
and the 3,000,000 shares of stock subject to the option to be granted
to FCDC, under our settlement agreement with FCDC.
(4) Includes 1,000,000 shares of common stock representing the Shares
issuable by us pursuant to a settlement agreement requiring us to
issue to Mr. Jeu and Ms. Calvo, a married couple, shares of our common
stock with a market value of $440,000 on the date of issuance. The
actual number of Shares that will be issued to Mr. Jeu and Ms. Calvo
pursuant to such agreement will vary, and may vary materially from
the 1,000,000 Shares registered under the Registration Statement. In
addition, such number includes 250,000 shares of common stock issuable
by us upon exercise of an option to purchase common stock held by Mr.
Calvo and Ms. Jeu.
(5) Includes shares subject to a presently exercisable option to purchase
350,000 shares of common stock.
(6) Includes shares subject to a presently exercisable option to purchase
350,000 shares of common stock.
(7) Includes shares subject to a presently exercisable option to purchase
250,000 shares of common stock.
(8) Includes 100,000 shares of common stock issuable by the Company in
partial satisfaction of claims held by KUKUI, Inc. against the
Company.
There can be no assurance that any of the Shares will be issued to
the selling shareholders in satisfaction of the claims they hold against the
Company or that any of the Shares offered hereby will be sold. We believe
the persons named in the table have sole voting and investment power with
respect to all Selling Shareholder Shares shown as beneficially owned by
them, subject to community property laws, where applicable.
19
<PAGE>
Pursuant to Rule 416 of the Securities Act, this prospectus and the
registration statement of which it is a part cover a presently indeterminate
number of shares of common stock issuable upon the occurrence of a stock
split, stock dividend, or other similar transaction.
Mr. Jeu and Ms. Calvo
In January 1999, Stephen Jeu and Susanna Calvo initiated an action in
District Court, Harris County, Texas, 55th Judicial District, asserting
claims against EuroGas stemming from an alleged breach of contract. On or
about November 1, 1999, we entered into a settlement agreement with Mr. Jeu
and Ms. Calvo pursuant to which we are required to make specified cash
payments to Mr. Jeu and Ms. Calvo and to issue to Mr. Jeu and Ms. Calvo, on
or before June 1, 2000, shares of common stock having a market value of
$440,000 on the date of issuance in a private placement exempt from the
registration under the Securities Act. The Selling Shareholder Shares
include any Shares that may be issued to Mr. Jeu and Ms. Calvo pursuant to
such settlement agreement.
For purpose of this prospectus, we have conservatively estimated
that 1,000,000 (approximately 185% of the amount that would be issuable were
such issuance to have occurred on June 16, 2000) Shares will be issued to
Mr. Jeu and Ms. Calvo Pursuant to such settlement agreement. The actual
number of shares of common stock issued to Mr. Jeu and Ms. Calvo in
satisfaction of our obligation to them will likely differ, and may differ
materially, from such estimated number.
In addition, pursuant to the settlement agreement, EuroGas agreed to
amend a Stock Option agreement dated March 20, 1995 granted to Mr. Calvo and
Ms. Jeu and to register for resale under the Securities Act the shares of
common stock issuable upon exercise of the option. As amended, the option
grants the holder the right to purchase 250,000 shares of common stock at an
exercise price of $1.00 on any date on or before December 31, 2004. The
option contains standard antidilution provisions providing for an adjustment
of the number of shares issuable upon exercise of such option upon the
occurrence of a stock split, stock dividend, or other similar transaction.
The Selling Shareholder Shares include the Shares issuable upon the exercise
of the option.
KUKUI, Inc.
Since 1996, KUKUI, Inc., the Unsecured Creditors Trust of the
Bankruptcy Estate of McKenzie Methane Corporation (McKenzie Methane
Corporation was an affiliate of the former owner of Pol-Tex), the Trustees
of the Estate of Bernice Pauahi Bishop and various related parties
(collectively "KUKUI") have initiated various actions against EuroGas
related to our purchase of the entities that hold our interest in the Pol-Tex
methane gas concession in Poland. On or about December 3, 1999, we signed
a settlement agreement with KUKUI settling such litigation. That settlement,
in part, requires us to make specified cash payments each month during the
2000 fiscal year and to issue 100,000 shares of common stock to KUKUI by
June 30, 2000.
Recently, one of the KUKUI parties declared that certain conditions
precedent set forth in the settlement agreement have not been met, and
therefore, significant portions of the settlement agreement are unenforceable.
Assuming the settlement agreement is determined to be binding and effective
and we issues 100,000 shares to KUKUI pursuant to the terms of such agreement,
the Selling Shareholder Shares will include the 100,000 Shares issuable
pursuant to such settlement agreement.
20
<PAGE>
Finance & Credit Development Corporation, Ltd.
On March 16, 2000, the United States District Court, District of
Utah, Central Division entered a default judgment against EuroGas, and in
favor of Finance & Credit Development Corporation, Ltd. ("FCDC"), in the
amount of $19,773,113, in a case styled Finance & Credit Development
Corporation Ltd., an Ireland Corporation vs. EuroGas, Inc., a Utah
corporation, Case No. 2:00VC-1024K. On June 16, 2000, we entered into a
memorandum of understanding, with FCDC in satisfaction of its default
judgment. In consideration for FCDC's stipulation to vacate its default
judgment, we agreed to do the following:
. issue to FCDC 3,700,000 shares of our common stock,
. grant FCDC an option to purchase 3,000,000 shares of our common stock
at an exercise price of $.65 during a 30 day period commencing June
30, 2001, and
. guarantee that the market price of the shares of our common stock
issuable upon exercise of the option would be $3.00 per share on the
date of exercise by compensating FCDC in cash or our common stock in
an amount equal to the difference between $3.00 and the market price
of our common stock on the date of exercise,
. guarantee that the value of the shares of our common stock issuable
upon exercise of the option will retain their value throughout the
period during which FCDC is permitted to liquidate the shares by
compensating FCDC in cash or our common stock, with respect to the
400,000 shares FCDC is permitted to sell and deemed to have sold
during every month, in an amount equal to the difference between
$3.00 per share and the sum of the market price of such share and
the per-share amount received pursuant to the above-described exercise
date top-up requirement,
. cause our subsidiary EuroGas GmbH to back up our guarantee by pledging
its stock in Rima Muran S.R.O., which indirectly holds a 24% interest
in a talc deposit in Slovakia,
. nominate a designee of FCDC to serve on our board of directors,
. register for resale all of the shares of our common stock issued to
FCDC pursuant to the settlement agreement.
The Selling Shareholder Shares include the 3,700,000 shares of our common
stock issuable pursuant to the memorandum of understanding and the 3,000,000
shares of our common stock issuable upon exercise of the option.
21
<PAGE>
Option Holder Shares
On October 22, 1999, we granted the following number of options to purchase
shares of our common stock to the following directors, employees and
consultants:
Name Relationship to Us No. of Options
------ ------------------- --------------
Andrew Andraczke Director and Employee 350,000
Dr. Gregory Fontana Director 250,000
Armando Ulrich Consultant 350,000
The strike price for each of these options is $0.45 per share, and
they expire on October 22, 2004. Mr. Ulrich received the options as
consideration for past consulting services he has provided to us.
Messrs. Andraczke and Fontana were granted their options in order to reward
their past service and in order to further align their interests with the
interests of our shareholders. These options contain standard antidilution
provisions providing for an adjustment of the number of shares issuable upon
exercise of the options upon the occurrence of a stock split, stock dividend
or similar transaction. The Selling Shareholder Shares include the Shares
issuable upon the exercise of these options.
PLAN OF DISTRIBUTION
The EuroGas Shares
We may sell the EuroGas Shares (a) through placement agents
(b) through underwriters or dealers, (c) through brokers or (d) directly to
one or more purchasers.
Placement Agents. The EuroGas Shares may be sold through placement agents
designated by us. The placement agents will agree to act in good faith to
assist us in soliciting purchases for the period of their appointment in
exchange for a commission that will be negotiated at the time of their
engagement.
Underwriters. If underwriters are used in the sale of the EuroGas Shares, we
anticipate that the EuroGas Shares will be acquired by underwriters for their
own account. The underwriters may resell the securities in one or more
transactions, including negotiated transactions, at a fixed public offering
price, or at varying prices determined at the time of sale. The obligations
of the underwriters to purchase the securities will be subject to certain
conditions. Any offering price and any discounts or concessions allowed or
paid to dealers may be changed from time to time.
Brokers. If brokers are used in the sale of the EuroGas Shares, we
anticipate that the EuroGas Shares will be sold by the brokers through market
makers and in directly negotiated transactions at the current market price
reported on the OTC Bulletin Board or Frankfurt Stock Exchange or at a discount
from the current market price. Such brokers will receive a commission that
will be negotiated at the time of their engagement.
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<PAGE>
Direct Sales. We may directly sell the EuroGas Shares. In this case, no
underwriters, brokers or agents would be involved.
General Information. Underwriters, dealers, brokers and agents that
participate in the distribution of the Shares may be underwriters as defined
in the Securities Act, and any discounts or commissions received by them from
us and any profit on the resale of the EuroGas Shares by them may be treated
as underwriting discounts and commissions under the Securities Act. If we
enter into a material arrangement with an underwriter, dealer, broker or
agent for the sale of Shares, we will file a prospectus supplement, if
required pursuant to Rule 424 under the Securities Act of 1933, setting
forth:
- the name of each of the participating underwriters, dealers, brokers
and agents,
- the number and type of Shares involved,
- the price at which the Shares are to be offered and sold (or general
method by which such price will be determined),
- the commissions, discounts, or other fees allowed to the participating
underwriters, dealers, brokers and agents, where applicable,
- any other facts material to the transaction.
We may have agreements with the underwriters, brokers, dealers, or
agents to indemnify them against civil liabilities, including liabilities
under the Securities Act, or to contribute with respect to payment which the
underwriters, dealers or agents may be required to make. Underwriters,
brokers dealers, and agents may engage in transactions with, or perform
services for, us in the ordinary course of their businesses.
In order to comply with the securities laws of certain states, if
applicable, the EuroGas Shares will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the EuroGas Shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available.
The Selling Shareholder Shares
The Selling Shareholders Shares offered by this prospectus may be
sold from time to time by the selling shareholders, who consist of the
persons named as "selling shareholders" above and those persons' pledgees,
donees, transferees or other successors in interest. The selling shareholders
may sell the Selling Shareholder Shares on the NASDAQ OTC Bulletin Board,
Frankfurt Exchange, or otherwise, at market prices or at negotiated prices.
They may sell Selling Shareholder Shares by one or a combination of the
following:
- a block trade in which a broker or dealer so engaged will attempt
to sell the Selling Shareholder Shares as agent, but may position
and resell a portion of the block as principal to facilitate the
transaction;
- purchases by a broker or dealer as principal and resale by the broker
or dealer for its account pursuant to this prospectus;
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<PAGE>
- ordinary brokerage transactions and transactions in which a broker
solicits purchasers;
- an exchange distribution in accordance with the rules of such exchange;
- privately negotiated transactions;
- short sales;
- if such a sale qualifies, in accordance with Rule 144 promulgated
under the Securities Act rather than pursuant to this prospectus;
- any other method permitted pursuant to applicable law.
In making sales, brokers or dealers engaged by the selling share-
holders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from such selling shareholders
in amounts to be negotiated prior to the sale. Such selling shareholder
and any broker-dealers that participate in the distribution may be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities
Act of 1933, and any proceeds or commissions received by them, and any
profits on the resale of Selling Shareholder Shares sold by broker-dealers,
may be deemed to be underwriting discounts and commissions. If a selling
shareholder notifies us that a material arrangement has been entered into
with a broker-dealer for the sale of Selling Shareholder Shares through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, we will file a prospectus supplement,
if required pursuant to Rule 424 under the Securities Act, setting forth:
- the name of each of the participating broker-dealers,
- the number of Selling Shareholder Shares involved,
- the price at which the Selling Shareholder Shares were sold,
- the commissions paid or discounts or concessions allowed to the
broker-dealers, where applicable;
- a statement to the effect that the broker-dealers did not conduct
any investigation to verify the information set out or incorporated
by reference in this prospectus, and
- any other facts material to the transaction.
We have not retained any underwriter, broker or dealer to facilitate
the offer or sale of the Selling Shareholder Shares offered hereby. We will
pay no underwriting commissions or discounts in connection therewith, and we
will not receive any proceeds from the sale of the Selling Shareholder
Shares.
We are paying the expenses incurred in connection with preparing and
filing this prospectus and the registration statement to which it relates,
other than selling commissions of the selling shareholders. In addition, in
the event a selling shareholder effects a short sale of common stock, this
prospectus may be delivered in connection with such short sale and the
Selling Shareholder Shares offered by this prospectus may be used to cover
such short sale. To the extent, if any, that a selling shareholder may be
considered an "underwriter" within the meaning of the Securities Act, the
sale of the Selling Shareholder Shares by it shall be covered by this
prospectus. There can be no assurance that the selling shareholders
will receive, offer or sell the Selling Shareholder Shares.
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<PAGE>
DESCRIPTION OF SHARES
The Articles of Incorporation of EuroGas currently authorize the
issuance of up to 325,000,000 shares of common stock and 3,661,968 shares
of Preferred Stock. Our common stock is currently listed on the NASDAQ OTC
Bulletin Board. Our board of directors can authorize the issuance of
additional shares of any class of capital stock, up to the amount of the
authorized capital set forth in the articles of incorporation, without
further action by or approval of our shareholders.
The holders of our common stock are entitled to one vote per share
on each matter submitted to a vote at any meeting of shareholders. The
holders of our common stock do not have cumulative voting rights and,
therefore, a majority of the shares represented, in person or by proxy, at
a meeting of shareholders at which a quorum is present are able to elect all
members of the board of directors then standing for election, and if they
do so, minority shareholders would not be able to elect any members to
the board of directors.
The holders of our common stock have no preemptive rights to acquire
additional shares of common stock or other securities. Our common stock is
not subject to redemption and carries no subscription or conversion rights.
In the event of liquidation of EuroGas, the shares of common stock are
entitled to share equally in corporate assets after satisfaction of all
liabilities of EuroGas and the payment of any liquidation preferences.
Our common stock is subject to any voting, dividend, or liquidation
preferences that may be established by the board of directors of EuroGas in
designating a class of preferred stock. We currently have outstanding shares
of Preferred Stock with rights, privileges, and preferences superior to those
of the common stock.
The holders of our common stock are entitled to receive such dividends
as the board of directors may from time to time declare out of funds legally
available for the payment of dividends, subject to the preferential rights of
the holder of outstanding Preferred Stock. We have not paid dividends with
respect to common stock. Management anticipates retaining any potential
earnings for working capital and investment in growth and expansion of the
business of EuroGas and does not anticipate paying dividends on the common
stock in the foreseeable future.
LEGAL MATTERS
The validity of the shares of common stock being offered hereby is
being passed upon for us by Parr Waddoups Brown Gee & Loveless.
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<PAGE>
EXPERTS
The consolidated financial statements of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999 and
1998 and for each of the three years in the period ended December 31, 1999,
as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on May 1,
2000, and incorporated by reference in this prospectus have been audited by
Hansen, Barnett and Maxwell, independent certified public accountants, as
indicated in their report with respect thereto, and are incorporated herein
in reliance upon the authority of such firm as experts in accounting and
auditing.
SUBSEQUENT EVENTS
Proposed Beaver River Sale
We hold a 15% interest in the "Beaver River" natural gas project,
which is an attempt to reestablish commercial production in an old Amoco
field; however, we are presently negotiating an agreement pursuant to which
we expect to return such 15% interest to the former owners in exchange for
the return of the shares of common stock issued to purchase such interest.
Memorandum of Understanding Settling FCDC Judgment
On March 16, 2000, the United States District Court, District of Utah,
Central Division entered a default judgment against EuroGas, and in favor of
Finance & Credit Development Corporation, Ltd. ("FCDC"), in the amount of
$19,773,113, in a case styled Finance & Credit Development Corporation Ltd.,
an Ireland Corporation vs. EuroGas, Inc., a Utah corporation, Case
No. 2:00VC-1024K. On or about June 16, 2000, we entered into a memorandum
of understanding, with FCDC in satisfaction of its default judgment. The
material terms of such memorandum of understanding are set forth in "Selling
Shareholders - Finance of Credit Development Corporation, Ltd."
26
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
As permitted by SEC rules, this prospectus does not contain all of
the information that prospective investors can find in the Registration
Statement or the exhibits to the Registration Statement. The SEC permits us
to incorporate by reference into this prospectus information filed separately
with the SEC. The information incorporated by reference is deemed to be part
of this prospectus, except as superseded or modified by information contained
directly in this prospectus or in a subsequently filed document that also is
(or is deemed to be) incorporated herein by reference.
This prospectus incorporates by reference the documents set forth
below that the Company (File No. 33-1381-D) has previously filed with the
SEC pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). These documents contain important information about the
Company and its financial condition.
(a) Our Annual Report on Form 10-K for the year ended December 31,
1999, filed with the SEC on April 14, 2000, as amended by
Amendment No. 1 on Form 10-K/A filed with the SEC on May 1, 2000.
(b) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000, filed with the SEC on May 15, 2000.
(c) The description of our shares of common stock contained in the
Form 8-A we filed with the SEC on March 6, 1995, including any
amendment or report filed under the Exchange Act for the
purpose of updating such description.
We hereby incorporate by reference all reports and other documents we file
by pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this prospectus and prior to the termination of this offering.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and
other information with the SEC. You may read and copy any reports, statements,
or other information that the we file at the SEC's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the Public Reference Room. The SEC
also maintains an Internet site (http://www.sec.gov) that makes available
to the public reports, proxy statements, and other information regarding
issuers, such as Eurogas, that file electronically with the SEC.
In addition, we will provide, without charge, to each person to whom
this prospectus is delivered, upon written or oral request of any such person,
a copy of any or all of the foregoing documents (other than exhibits to such
documents which are not specifically incorporated by reference in such
documents). Please direct written requests for such copies to our
shareholder relations firm at WPH Consultants, 80 Broad Street, New York,
New York 10004, Attention: Phillip Niemetz. Telephone requests may be
directed to such office at (212) 785-2626.
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We have not authorized any dealer,
salesperson or other person to give any _______________________
information or represent anything not
contained in this prospectus. This 21,000,000
prospectus does not offer to sell or buy any
securities in any jurisdiction where it is Shares of Common Stock
unlawful. The information in this
prospectus is current as of June 27, 2000. -----------------------
SUMMARY
TABLE OF CONTENTS
(For a more detailed Table of Contents, see EUROGAS, INC.
page 2)
COMMON STOCK
Heading Page
------- ----
Table of Contents 2
About this Prospectus 3
Prospectus Summary 3 Prospectus
Forward-Looking Statements 7
Risk Factors 7
The Common Stock and June 27, 2000
Shareholders 15
Use of Proceeds 16
Dilution 17
Selling Shareholders 18
Plan of Distribution 22
Description of Shares 24
Legal Matters 25
Experts 25
Subsequent Events 26
Incorporation of Certain
Documents by Reference 27
Where You Can Find More
Information 27
----------------------------------------
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses of the offering, sale and
distribution of the Shares being registered pursuant to this registration
statement (the "Registration Statement"). All of the expenses listed below
will be borne by the Company. All of the amounts shown are estimates except
the SEC registration fees.
Item Amount
---- -------
SEC Commission registration fees $ 4,269
Accounting fees and expenses $10,000
Legal fees and expenses $12,000
Blue Sky fees and expenses $ 5,000
Printing Expenses $ 5,000
Miscellaneous Expenses $ 3,731
Total: $40,000
Item 15. Indemnification of Directors and Officers
The Company's articles of incorporation provide that officers and
directors of the Company shall be indemnified to the maximum extent permitted
by law. The provisions of the Utah Revised Business Corporation Act (the
"Revised Act") are, and provide, as follows:
Section 16-10a-902 ("Section 902") of the Revised Act provides that
a corporation may indemnify any individual who was, is, or is threatened to
be made a named defendant or respondent (a "Party") in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal (a
"Proceeding"), because he is or was a director of the corporation or, while
a director of the corporation, is or was serving at its request as a director,
officer, partner, trustee, employee, fiduciary or agent of another corporation
or other person or of an employee benefit plan (an "Indemnifiable Director"),
against any obligation incurred with respect to a Proceeding, including any
judgment, settlement, penalty, fine or reasonable expenses (including
attorneys' fees), incurred in the Proceeding if his conduct was in good faith,
he reasonably believed that his conduct was in, or not opposed to, the best
interests of the corporation, and, in the case of any criminal Proceeding,
he had no reasonable cause to believe his conduct was unlawful; provided
however, that, pursuant to Subsection 902(4), (i) indemnification under
Section 902 in connection with a Proceeding by or in the right of the
corporation is limited to payment of reasonable expenses (including
attorneys' fees) incurred in connection with the Proceeding and (ii) the
corporation may not indemnify an Indemnifiable Director in connection with
a Proceeding by or in the right of the corporation in which the Indemnifiable
Director was adjudged liable to the corporation, or in connection with any
other Proceeding charging that the Indemnifiable Director derived an improper
personal benefit, whether or not involving action in his official capacity,
in which Proceeding he was adjudged liable on the basis that he derived an
improper personal benefit.
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Section 16-10a-903 ("Section 903") of the Revised Act provides that,
unless limited by its articles of incorporation, a corporation shall indemnify
an Indemnifiable Director who was successful, on the merits or otherwise, in
the defense of any Proceeding, or in the defense of any claim, issue or matter
in the Proceeding, to which he was a Party because he is or was an
Indemnifiable Director of the corporation, against reasonable expenses
(including attorneys' fees) incurred by him in connection with the Proceeding
or claim with respect to which he has been successful.
In addition to the indemnification provided by Sections 902 and 903,
Section 16-10a-905 ("Section 905") of the Revised Act provides that, unless
otherwise limited by a corporation's articles of incorporation, an
Indemnifiable Director may apply for indemnification to the court conducting
the Proceeding or to another court of competent jurisdiction. On receipt of
an application and after giving any notice the court considers necessary,
(i) the court may order mandatory indemnification under Section 903, in which
case the court shall also order the corporation to pay the director's
reasonable expenses to obtain court-ordered indemnification, or (ii) upon
the court's determination that the director is fairly and reasonably entitled
to indemnification in view of all the relevant circumstances and regardless
of whether the director met the applicable standard of conduct set forth in
Section 902 or was adjudged liable as described in Subsection 902(4), the
court may order indemnification as the court determines to be proper, except
that indemnification with respect to certain Proceedings resulting in a
director being found liable as described in Subsection 902(4) is limited to
reasonable expenses (including attorneys' fees) incurred by the director.
Section 16-10a-904 ("Section 904") of the Revised Act provides that
a corporation may pay for or reimburse the reasonable expenses (including
attorneys' fees) incurred by an Indemnifiable Director who is a Party to a
Proceeding in advance of the final disposition of the Proceeding if (i) the
director furnishes the corporation a written affirmation of his good faith
belief that he has met the applicable standard of conduct described in
Section 902, (ii) the director furnishes to the corporation a written
undertaking, executed personally or in his behalf, to repay the advance if
it is ultimately determined that he did not meet the required standard of
conduct, and (iii) a determination is made that the facts then known to
those making the determination would not preclude indemnification.
Section 16-10a-907 of the Revised Act provides that, unless a
corporation's articles of incorporation provide otherwise, (i) an officer of
the corporation is entitled to mandatory indemnification under Section 903
and is entitled to apply for court ordered indemnification under Section 905,
in each case to the same extent as an Indemnifiable Director, (ii) the
corporation may indemnify and advance expenses to an officer, employee,
fiduciary or agent of the corporation to the same extent as an Indemnifiable
Director, and (iii) a corporation may also indemnify and advance expenses to
an officer, employee, fiduciary or agent who is not an Indemnifiable Director
to a greater extent than the right of indemnification granted to Indemnifiable
Directors, if not inconsistent with public policy, and if provided for by its
articles of incorporation, bylaws, general or specific action of its board of
directors or contract.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling
persons pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is contrary to public policy as expressed in the Securities
Act and, therefore, is unenforceable.
Item 16. Exhibits.
The following exhibits required by Item 601 of Regulations S-K
promulgated under the Securities Act have been included herewith or have been
filed previously with the SEC as indicated below.
30
<PAGE>
Exhibit
Number Title of Document Location
------ ----------------- ----------------------
4.1 Articles of Incorporation Registration Statement
on Form S-18, File
No. 33-1381-D.*
4.2 Amended Bylaws Annual Report on
Form 10-K for the
fiscal year ended
September 30, 1990.*
5 Opinion Re Legality To be filed in pre-
effective amendment.
23.1 Consent of Hansen Barnett & Maxwell To be filed in pre-
effective amendment.
23.2 Consent of Parr Waddoups Brown Included in Exhibit
Gee & Loveless No. 5
24 Power of Attorney Included on Page II--33
of Registration Statement
*Incorporated by Reference.
Item 17. Undertakings.
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to
this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this Registration Statement; notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the change in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
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<PAGE>
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company, the Company has been informed that in the opinion of the SEC
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Salt Lake, State of
Utah, on June 26, 2000.
EUROGAS INC.
By /s/ Karl Arleth
-----------------------------
Karl Arleth, President &
Chief Executive Officer
POWER OF ATTORNEY AND ADDITIONAL SIGNATURES
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 dates indicated. Each person whose signature to this Registration
Statement appears below hereby constitutes and appoints Karl Arleth, as his
true and lawful attorney-in-fact and agent, with full power of substitution,
to sign on his behalf individually and in the capacity stated below and to
perform any acts necessary to be done in order to file all amendments and
post-effective amendments to this Registration Statement, and any and all
instruments or documents filed as part of or in connection with this
Registration Statement or the amendments thereto and each of the undersigned
does hereby ratify and confirm all that said attorney-in-fact and agent, or
his substitutes, shall do or cause to be done by virtue hereof.
Signature Title Date
--------- ----- ----
/s/ Karl Arleth President, Chief Executive Officer, June 26, 2000
------------------- Director, and Interim Chief Financial
Karl Arleth Officer (Principal Executive
Officer, Principal Financial and
Accounting Officer)
/s/ Gregory Fontana Director June 26, 2000
-------------------
Gregory Fontana
/s/ Andrew Andraczke Director June 26, 2000
--------------------
Andrew Andraczke
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Title of Document Location
------- --------------------------- ----------------------
4.1 Articles of Incorporation Registration Statement
on Form S-18, File
No. 33-1381-D.*
4.2 Amended Bylaws Annual Report on
Form 10-K for the
fiscal year ended
September 30, 1990.*
5 Opinion Re Legality To be filed in pre-
effective amendment.
23.1 Consent of Hansen Barnett & Maxwell To be filed in pre-
effective amendment.
23.2 Consent of Parr Waddoups Brown Included in Exhibit No. 5
Gee & Loveless
24 Power of Attorney Included on Page II-33
of Registration Statement
*Incorporated by Reference.
34
