SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report: August 27, 1996
CITADEL ENVIRONMENTAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Colorado 0-16423 84-0907969
(State or other (Commission (I.R.S. Employer
jurisdiction of Incorporation) File Number) Identification No.)
1601 Dove Street, Suite 120, Newport Beach, CA 92660
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (714) 475-1115
Citadel Asset Management, Ltd., 2055 Anglo Drive, Suite 105,
Colorado Springs, CO 80918
(Former name or former address, if changed since last report.)
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Item 1. Change in Control of Registrant.
Acquisition of all the outstanding shares of Tonopah Resources
International, Inc., ("Tonopah") was approved at a special meeting of
shareholders of Citadel Asset Management, Ltd., ("Citadel"), on August
12, 1996. The shareholders also approved the name change to Citadel
Environmental Group, Inc. The acquisition terms include the exchange by
the shareholders of Tonopah of 100% percent of the common stock of
Tonopah for 1,050,000 shares of newly issued common stock of Citadel,
and 1,500,000 shares of Citadel's Series A Preferred, 1,500,000 shares
of Citadel's Series B Preferred, and 2,000,000 shares of Citadel's
Series C Preferred.
Upon Citadel's completion of the acquisition of Tonopah,
following the special shareholders' meeting, the following three new
directors were elected: David L. Norris, Robert R. Barber and Horst
Engel. The Board was expanded to four positions and David J.
D'Appolonia was appointed to fill the new directorship and elected
Chairman of the Board. All four are directors of Tonopah. Following the
meeting, the officers of Citadel are, David L Norris, President and
Treasuser and Raquel Morales is secretary.
After the acquisition, the shareholders of Tonopah owned
approximately 56% of the outstanding shares of Citadel's common stock
and 100% of Citadel's preferred shares. If the preferred shares become
convertible and are converted, their ownership of the outstanding
common shares would increase to approximately 88.5%. The Tonopah
shareholders have given to Citadel's board of directors an irrevocable
proxy to vote their common stock shares. As such the board of directors
may vote for more than 50% of the common stock of Citadel and will
control the company.
Prior to the acquisition, Citadel's officers and directors,
Philip J. Halseide, Peter
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D. Weickgenant, and Wayne Boss, as a group beneficially owned 403,620
shares or 55.08% of the common stock. All three resigned their
positions as part of the acquisition. Following the acquisition, these
former officers and directors owned approximately 22.6% of the common
stock, prior to any effect of the convertibility of the Citadel's
preferred shares.
Item 2. Acquisition or Disposition of Assets
On August 12, 1996, Citadel acquired all the outstanding
common stock of Tonopah Resources International, Inc., ("Tonopah").
Tonopah is a holding company which owns an interest in companies
involved in various aspects of the environmental industry.
Since formation in 1995, Tonopah has acquire interests in two
operating environmental companies, acquired the assets of a third
company, formed a wholly owned subsidiary and has entered into two
joint ventures for environmental projects in the United States and
Mexico. In 1995, Tonopah acquired 51% of Allen/Moore Diversified
Services, Inc., which owns and operates a waste oil/water treatment
facilities in Arizona, and 49% of GEC Construction & Management, Inc.,
which specializes in environmental construction projects mainly in
Arizona. The third company is Arizona Hazardous Waste, Inc., which is
owned 100% by Tonopah and specialized in pickup and deliver of
hazardous waste mainly in the Tucson area of Arizona. Arizona Hazardous
Waste commenced operations in March of 1996. Additionally Tonopah
formed and owns 100% interest in a company to develop and operate a
medical waste disposal facility in New Mexico, which is currently in
the permitting stage. Tonopah has also signed two joint ventures with a
Company located in Mexico. The first is to develop and operate
waste-water treatment equipment in Mexico and the second is to develop
bio- remediation projects in the United States. Neither of these joint
ventures are currently producing revenues.
As part of the acquisition, Citadel exchanged 1,050,000 share
of newly issued common stock of Citadel, and 1,500,000 shares of
Citadel's Series A preferred, 1,500,000 shares of Citadel's Series B
preferred, and 2,000,000 shares of Citadel's Series C preferred for
100% of Tonopah's common stock. Series A, B & C of the Preferred Stock
may be convertible into shares of Common Stock of Citadel, if at any
time prior to August 12, 1997, the shares of Common Stock trade at
$3.00 or higher on the over the counter market for a period of ten
trading days. In such event, each share of Series A Preferred shares
may be converted into one share of Common Stock upon payment of $.50;
each share of Series B Preferred shares may be converted into one share
of Common Stock upon payment of $.75; and each share of Series C
Preferred shares may be converted into one share of Common Stock upon
payment of $1.50. The payment prices per share are subject to
adjustment for stock splits and stock dividends of the Common Stock.
The Preferred shares have no voting rights or preference in
liquidation. The Company may, but is not obligated to, redeem each
series upon payment of $5,000, in the aggregate, to the holders for
each series of preferred redeemed, if the convertibility price is not
reached by August 12, 1997. Each share of Preferred Stock Series A, B,
and C will be entitled to an annual dividend of $0.025, $0.0375 and
$0.075 per share respectively, payable semi-annually in shares of
Common Stock of the Company. The number of shares delivered will be
determined by dividing the dividend by the average bid price of the
common stock during the ten Trading Days immediately preceding the
dividend payment date. The term "Trade Day" is defined to be a day that
a bid price for the Company's Common Stock is published.
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Item 7. Financial Statements and Exhibits
(a) Audited financial statements of Tonopah Resources
International, Inc. December
31, 1995
(b) Pro forma combined statements
(c) Exhibits
1. Agreement to Exchange Capital Stock between Citadel Asset
Management, Ltd. and Tonopah Resources International, Inc.
dated August 12, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: August 27, 1996 CITADEL ENVIRONMENTAL GROUP, INC.
By: /s/ Joel J. Thomas
Joel J. Thomas
Principal Financial Officer
By: /s/ Raquel Morales
Raquel Morales
Secretary
