UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDED FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g)
of the Securities Exchange Act of 1934
NATIONAL FRUIT AND VEGETABLE TECHNOLOGY CORPORATION
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(Name of Small Business Issuer in its Charter)
Nevada 31-1194531
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(State of other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
210 Water Street, Baltimore, Ohio 43105
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(Address of principal executive offices) (Zip Code)
Issuer's Telephone number: (740) 862-6300
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Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $0.001 Per Share
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(Title of Class)
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ITEM 1. DESCRIPTION OF BUSINESS
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(a) Business Development
National Fruit and Vegetable Technology Corporation (the "Company" or
the "Registrant") is a Nevada corporation which was originally incorporated on
December 19, 1986. The Company was authorized to issue an aggregate of
500,000,000 shares of capital stock with a par value of $0.001 per share.
The Company is the successor to National Veg-Tec Corporation, a Nevada
corporation, incorporated in September of 1983. Extensive research and
development prior to the time National Veg-Tec Corporation was organized was
carried on by an unincorporated joint venture consisting primarily of National
Veg-Tech Corporation's original and majority shareholders. At the time National
Veg-Tec Corporation was formed, it exchanged 6,941,398 shares of its $0.01 par
value common stock valued at $3.00 per share for certain property, equipment and
related technology owned by the unincorporated joint venture.
During 1986, National Veg-Tec Corporation acquired all of the assets of
Veg-Tec Corporation, an Ohio corporation incorporated in March of 1985, which
was an affiliated entity under common control and similar ownership, by
exchanging 3,506,384 shares of its $0.001 par value common stock for all of the
issued and outstanding $0.01 par value common stock of Veg-Tec Corporation.
On March 2, 1987, the Company acquired National Veg-Tec Corporation, by
exchanging all of the outstanding shares of National Veg-Tec Corporation's
common stock on a one-for-one basis for 49,346,828 shares of National Fruit and
Vegetable Technology Corporation. As part of this transaction the company
increased the number of authorized shares to 10,000,000,000.
As of June 30, 2000, 97,802,900 shares of the Company's authorized
shares of common stock were issued and outstanding.
The majority of the Company's issued and outstanding shares of common
stock is owned by Emerald Industries Corp. Emerald Industries Corp. is owned by
Richard J. Cashman II the Company's Chairman of the Board, and Daniel K.
Cashman, the Company's President. Richard J. Cashman II and Daniel K. Cashman
also are directors of the Company. Emerald Industries Corp.'s only assets are
its shares of the Company's common stock. Emerald Industries Corp. is a small
business as defined in Item 10(a)(1)(iv) of Regulation S-B promulgated under the
Exchange Act of 1934, as amended.
To management's knowledge, the Company has not been subject to
bankruptcy, receivership or any similar proceedings.
The Company maintains offices at 210 Water Street, Baltimore, Ohio
43105. The Company owns substantially all of its equipment.
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(b) Business of the Issuer
During the last three years, and since its inception, the Company has
operated in a development stage. The Company was established to market a variety
of vegetables and fruits processed with a proprietary, state-of-the-art
industrial microwave oven system which the Company has developed. The Company's
operations to date have focused on the development of this oven and the food
processing facilities which accompany the oven. The Company currently uses a 684
foot oven system which represents the culmination of 22 years of research,
design and development efforts. This system is designed to operate continuously,
365 days a year, and has the capacity to process a wide variety of fruit and
vegetables into convenient, nutritional and economical products without the use
of any additives.
The Company's oven is used to heat and cook fruits and vegetables. The
oven uses microwave energy, a component of the electromagnetic spectrum which
includes gamma and x- rays, as well as ultraviolet, visible light, infrared and
sound wages. Microwaves are very short sound waves measuring from one to 100
centimeters. Radio waves, by contrast, are measured in lengths from three feet
to many miles. The oven uses a device known as a magnetron to create microwave
energy by transforming electrical energy into electromagnetic energy. This
microwave energy broadcast into a microwave oven is absorbed readily by the
water molecules in the food passing though the oven, causing the molecules to
vibrate rapidly. This rapid vibration generates friction which in turn generates
heat and cooks the food.
The Company's processing technology is intended to match the ever
increasing consumer demand for fresh, highly nutritious, healthful foods, free
of artificial additives and preservatives. The Company has undertaken numerous
taste tests of a variety of fruit and vegetable products processed in its oven
system for comparison with traditional processed food products, with favorable
results.
Initially, the Company will market potato products to restaurants,
fast-food restaurant chains, public school systems, hotels, colleges and
universities, airlines, the military and correctional institutions. The Company
intends to distribute its products through food distributors that supply
restaurants and small supermarkets, and directly to large supermarket chains as
well.
To date, the Company has spent all of its efforts on the research and
development of its processing systems. The Company has not operated as a
commercial producer of food products as of the date of this filing.
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(1) Principal Products
As stated above, the Company will market potato products to
restaurants, fast- food restaurant chains, public school systems, hotels,
colleges and universities, airlines, the military and correctional institutions.
The Company's principal products will be:
(a) Baked potatoes in two varieties--peeled and unpeeled;
(b) Mashed potatoes in three (3) varieties--with skins,
without skins and lumpy;
(c) French fries made from potatoes in two (2) varieties--with
skins and without skins;
(d) Baked sweet potatoes; and
(e) Sweet potato fries.
Potatoes will be purchased directly from potato growers. Semi-trailer
truckloads will be delivered to the Company's processing plant where the raw
material will be weighed and then dumped into a large vat of agitating water to
remove sand, soil and stones, which generally accounts for 3% to 4% of each load
of raw product delivered. The Company recovers the sand, soil and stones and
reuses those items rather than treating them as waste. Sand and soil is bagged
and will be sold to garden shops. The Company has sold such bagged sand and soil
generated during the testing of its processing facilities and will continue that
practice in the future during production. The Company uses the reclaimed stones
as gravel for the roads on the Company's property and will continue to do so.
Once the potatoes are initially washed, they are inspected for damage
and then washed again to remove any remaining dirt. Potatoes then are
roller-sized and inspected for damage, blemishes and irregular shape. Damaged
and blemished potatoes will be used for cattle feed. Misshapen potatoes will be
processed as mashed potatoes, small "B"-sized potatoes will be processed as
sliced potatoes, and jumbo-size potatoes will be analyzed electronically to
determine exact weight and size, and scanned internally for hollow-heart
defects. These potatoes will then be processed with the microwave oven system
into baked potatoes, or fresh packed in 5 or 10-pound consumer packs, or
50-pound cartons for the food service industry. Upon exiting the oven, products
will be refrigerated or frozen, bagged, boxed and placed on pallets for
shipment.
Appropriately sized potatoes will be made into french fries. The
Company has equipment in place which will produce french fries of relatively
uniform sizes as desired by buyers of the Company's products.
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(2) Distribution Methods
The Company initially intends to develop a major presence in the local
food industry market by offering convenient, high-quality, nutritious and
flavorful products at competitive prices. The Company intends that its sales
force, which is not yet in place, will initially target restaurants, fast-food
chains, hotels, public school systems, institutions of higher education,
airlines, the military and correctional institutions. Products will be shipped
in semi-truckload quantities. Also, the Company intends to use a brand name in
the marketing of its products. In this regard, products produced by the Company
in its testing operations have received favorable reviews from the American
Heart Association. The Company has received permission to use the American Heart
Association's logo on the packaging for the Company's potato products.
The Company has no experience in sales, marketing or distribution. The
Company intends to market and sell certain products directly in the United
States and Canada. To do so, the Company must develop a substantial sales force
with technical expertise. The Company has not yet developed a marketing
organization capable of attaining significant sales. Whether it can do so in the
future will depend upon the Company's ability to hire and retain skilled direct
sales personnel who have experience in the fruit and vegetable processing
industry.
(3) Status of Publicly Announced New Products or Services
To date, the Company has not announced the availability of its services
or products.
(4) Competition
The Company faces well-established and well-funded competition. The
food industry is highly competitive and is characterized by the frequent
introduction of new products accompanied by substantial promotional campaigns.
Among the Company's competitors are established, conventional fruit and
vegetable processors with extensive product development capacity, marketing
staffs and organizations, and financial resources greatly in excess of that
available to the Company. Conventional fruit and vegetable processors dominate
the market. Management is confident that the Company will be able to compete
effectively on the basis of superior product quality and relatively low
production costs attributable to the Company's highly efficient microwave oven
system. Competitors generally use traditional methods of heating fruits and
vegetables such as boiling the product in water, steaming the product, heating
it in convection ovens as in hot oil.
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Management has visited and studied the major growing regions in the
United States and considers the grower-packer their largest competitor.
Grower-packers are the main distributors and shippers of fresh produce in the
United States. Large grower-packers ship up to 5,000 truckloads of produce a
year, while smaller grower- packers ship between 100 to 500 truckloads per year.
The Company will compete directly with the grower-packers and add value for the
consumer by greatly reducing the preparation time associated with most fruit and
vegetable products.
Management believes that the Company's unique capability to offer large
volumes of prepared fruit and vegetable products that are fresh, nutritious,
economical and convenient to the consumer will make the Company a viable
competitor in the food processing industry. Company products will be
differentiated from those of the competition on the basis of taste, appearance
and quality at competitive price points.
(5) Sources of Raw Materials and Suppliers and Dependence on Major
Customers
The Company will specialize in the processing of fresh fruits and
vegetables. Therefore, the Company will be dependent upon a ready supply of
fruits and vegetables. Should the Company have any difficulty in obtaining fresh
fruits and vegetables as required in their operations, the Company could be
materially and adversely affected. While management believes that there are
numerous alternative suppliers (farmers) for the fruits and vegetables purchased
by the Company, the loss of a supplier could disrupt the Company's operations.
The Company will purchase a significant number of items from single
suppliers- -for example, packaging supplies. While the Company believes that
alternatives to these suppliers and manufacturers are readily available, the
time to effect a change could adversely impact the Company's business in the
short term should a change become necessary.
The Company will use in-house produce buyers to purchase potatoes
directly from growers at open-market prices, which historically range between
$4.00 to $8.00 per hundred weight. The size, weight, shape, quality and
appearance of raw materials will be determined upon delivery to the plant for
final determination of the purchase price.
Factors which determine the availability and price of potatoes, and most
agricultural products, include weather conditions, acreage under cultivation,
crop failures, plant diseases, floods, freezing and overall agricultural
conditions.
Potatoes are readily available year round due to large modern potato
storage facilities, of which there is an abundance within close proximity to the
Company's plant. This will obviate the necessity of the Company building storage
facilities and will minimize raw material inventory needs.
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(6) Patents, Trademarks, Licenses, etc.
The Company may apply for United States and International patents,
trademarks and copyrights in connection with certain of its products and
technology. The Company currently has no patents, trademarks or copyrights.
Although these types of intellectual property protection may have value, the
Company believes that other factors, such as product innovations, are of more
significance in the Company's industry. The Company attempts to avoid infringing
patents of others by monitoring on a regular basis patents issued with respect
to food processing equipment. The Company intends to license rights in
connection with the development and marketing of certain of its products. These
agreements generally require the Company licenser to pay a royalty based on
product sales.
The Company believes that its proprietary products and processes
provide it with a key competitive advantage, but patent protection generally
cannot be obtained for most of its products. The Company attempts to minimize
unauthorized copying of the Company's processes by a variety of methods,
however, there can be no assurance that unauthorized copying will not occur. The
Company attempts, and will continue to attempt, to protect its proprietary
materials and processes by relying on trade secret laws and non-disclosure and
confidentiality agreements with its employees and certain other persons who have
access to its proprietary materials and processes, or who have licensing or
research agreements with the Company.
The Company has not applied for any patents on its industrial microwave
technology to date. However, the Company has developed certain technologies
which it believes to be proprietary. Were feasible, management intends to make a
number of patent applications for protection on certain of the Company's rights
relating to its automated fruit and vegetable processing plant and to its
industrial microwave oven technology. The Company also intends to consider
application for additional patents relating to other food processing equipment.
The Company intends to continue to seek patent protection with respect
to those advances to its process resulting from its research and development
efforts.
The Company intends to rely on a combination of trade secrets, patents,
trademark laws, license agreements and technical measures to protect its rights
with respect to its industrial microwave oven technology. No assurance can be
given that these measure will protect the Company's rights.
(7) Governmental Approval, Effect of Governmental Regulation and Costs and
Effects of Compliance with Environmental Laws
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The Company is subject to regulation by federal, state and local
governmental authorities. These include: the EPA for environmental impact and,
in particular, sanitary discharge; OSHA for equipment and work area safety; FDA
for labeling, sanitary conditions and product contamination; USDA for grading a
food inspection; state government for building codes; and local government for
building codes and property zoning. The Company's operations are subject to a
variety of other federal, state and local laws, such as labor, insurance,
transportation and wage regulations. Compliance with all such regulations may be
time-consuming and expensive and may cause delays in the ability of the Company
to commence operation of the Company's fruit and vegetable processing plant.
The Company has been approved with all the necessary permits, including
all city, county, state and federal approval processes necessary to operate a
food facility in the State of Ohio.
The handling, transportation and disposal of potato wastes expose the
Company to certain risks under applicable environmental laws and regulations.
Although management of the Company believes its operations will be conducted in
substantial compliance with, and intends to minimize its liability risk under,
such laws and regulations, there can be no assurance that liability will not
attach in the future due to stricter laws and regulations, stricter enforcement
thereof or other currently unforeseen or unknown events. In addition, there can
be no assurance that substantial costs for compliance with such laws and
regulations will not be incurred in the future. Nonetheless, the Company has
made every effort to reduce wastes from its processing facilities. Sand, soil
and stones washed from raw product is collected and either sold or used at the
Company's facilities. Potato starch produced during processing is collected and
sold as well. Potato peelings and waste potatoes are disposed of as cattle feed
and/or as fertilizer.
Certain of the Company's operations are subject to federal, state and local
environmental laws and regulations which impose limitations on the discharge of
pollutants into the air and water and establish standards for the treatment,
storage and disposal of solid wastes. The Company cannot predict with any
certainty its future capital expenditure requirements for environmental
compliance because ofconstantly changing standards and technology. In addition,
the Company may incur liabilities in the future to regulatory agencies or
private individuals for alleged environmental damage associated with waste
disposal or waste material handling practices in operation of the Company's
business. The Company does not currently have any insurance coverage for
environmental liabilities and does not anticipate obtaining such coverage in the
future.
The Company's microwave oven system has been designed and constructed
to ensure the safety of those working with and around equipment. Devices
continuously monitor the system, and immediately shut it down and alert the
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operator in the unlikely event of a system malfunction. Management is confident
that its plant and technology will comply with all applicable OSHA and FCC
regulations. The Company's food products will comply with all relevant USDA and
FDA regulations. The entire plant facility has met all USDA, FDA, EPA, FDD and
Board of Health regulations with full approval for operation.
Management believes that it has taken into consideration all of the
regulatory requirements of the Health and Safety Act of 1968. However, there is
no assurance that in the future the plant may be shut down by various government
regulatory agencies due to the Company's inability to comply in a timely manner
to existing regulations.
In one area, governmental regulation may have a positive impact on the
Company's business. The Ohio Legislature enacted the "Buy Ohio Program", which
requires all 185 state agencies to give preferential treatment to manufacturers
of food products based in Ohio when making purchases. The State of Ohio annually
awards contracts for the purchase of food products totaling $400 million. There
are at present no potato processing plants located in Ohio. Educational and
correctional institutions, as well as the military will, therefore, constitute a
highly attractive initial client base. The state typically pays for food
products upon delivery or within 10 days.
(8) Research and Development in the Last Two Years
Management of the Company has spent the vast majority of its time and
efforts during the last two (2) years on the research and development of its
food processing systems and acquisition of facilities and equipment. Such
research and development has focused upon the development of the Company's
microwave oven, but also has included the development of conveyor systems and
automation which rapidly processes raw products with a minimum of damage and
loss of the products. Although research and development will be an ongoing
process, management believes that the Company's research and development since
the Company's inception has produced an effective fruit and vegetable processing
system. Management also believes that the efforts in acquiring facilities and
equipment have been successful and that the Company is ready to begin
production. Actual research and development costs in 1997 were $21,700. The
Company had no such costs in 1998 or 1999, though significant work was done on
the development of exactly how product is processed in the Company's facilities.
Cumulative research and development costs during the Company's development
stage, as reflected in the Company's financial statements, total $297,100, as of
December 31, 1998.
(9) Employees
As of March 31, 2000, the Company had eleven (11) full-time employees,
one (1) part- time employee and nine (9) contract consultants. None of the
Company's employees or independent contractors is subject to a collective
bargaining agreement and the Company believes its relations with its employees
and independent contractors are good.
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(c) Reports to Security Holders
Prior to filing its Form 10-SB, the Company had not been required to
deliver annual reports. To the extent that the Company is required to deliver
annual report to security holders thought its status as reporting company, the
Company shall deliver annual reports. Also, to the extent the Company is
required to deliver annual reports by the rules or regulations of any exchange
upon which the Company's shares are traded, the Company shall deliver annual
reports. If the Company is not required to deliver annual reports, the Company
will not go the expense of producing and delivering such reports. If the Company
is required to deliver annual reports, they will contain audited financial
statements as required.
Prior to the filing of its Form 10-SB, the Company had not filed
reports with the Securities and Exchange Commission. Now that the Company has
become a reporting company, management anticipates that Forms 10K-SB, 10Q-SB and
8-K along with appropriate proxy materials will have to be filed as they come
due. If the Company issues additional shares, the Company may file additional
registration statements for those shares.
The public may read and copy any materials the Company files with the
Securities and Exchange Commission at the Commission's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by call the Commission
at 1-800-SEC- 0330. The Commission maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission. The Internet address of
the Commission's site is (http://www.sec.gov).
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION OR PLAN OF OPERATION
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The Company has not received revenues from operation during the
two-year period immediately preceding the filing of this Amended Form 10-SB.
Plan of Operation
During the past year, the Company has focused on creating its potato
processing facility. During the last quarter of 1999, the Company concentrated
on enhancing the facility's automated weighing, bagging and packaging line. By
the end of December 1999, the Company's entire facility ran smoothly and was
able to process raw potatoes into cooked and packaged potato products.
Management focused on processing potatoes into french fries and has been able to
run the Company's facility all day long and process, cook, bag and store in
french fry product.
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During the first quarter of 2000, the Company's operations focused on
refining the packaging process. Hundreds of thousands of pounds of potatoes were
processed in order to refine the packaging process. The Company was able to test
different plastic bagging materials and selected the materials deemed most
compatible the Company's machinery.
During this same time, Management was able to test packaging materials
with a view to increasing the "shelf life" of the processed product. The Company
believes that most of its customers (restaurant chains) will desire a shelf life
of 30 days. Though its testing program, the Company has been able to extend the
shelf life of its products from 2 days to approximately 35 days. Optimally, the
Company would like to see a shelf life of 45 days for its products. Such a goal
may be limited, however, by limitations of available bagging materials. The
Company is attempting to reach its shelf life goal without the use of
preservatives or other chemicals which would complicate the Company's processing
line.
The Company also has been able to test boxing materials for the storage
and delivery of its bagged potato products. Once suitable boxing materials were
found, management designed artwork for its boxes and bags.
First quarter efforts also were focused on reducing the number of
defective fries created while processing potatoes. Management believes that by
the end of March 2000 the Company was able to process potatoes in fries with a
ratio of 10,000 usable fries to every 1 unusable fry. The Company hopes to
improve this ratio to 100,000 to 1. Management believes that such a ratio in
necessary to successfully market the Company's products.
One of byproducts of the Company's potato processing is starch in the waste
water created. The Company has created a de-starching equipment which has been
added to the Company's facilities. The Company recovers the starch from the
waste water and intends to sell that starch. The treated water is then reused in
the processing facility. This recycling process, along with attention to
recycling other wastes created, earned the Company certification by the Ohio EPA
as an environmentally friendly company.
The move to full production in 2000 has been hampered by problems with
the Company's well water system. In December 1999, management noticed that a
large amount of sand was coming from one of its high-volume industrial well
water systems. The Company hired a professional well-testing company which
determined that the sell had developed major holes in its casing and that part
of the well had collapsed. The Company contracted with a well-drilling company
to replace the casing and install a new deep-well filter and a new industrial
high-volume pumping system. Work on this problem was not completed until May of
2000.
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During the first quarter of 2000, the Company's sales staff gave
numerous tours to prospective customers. Some restaurant chains have expressed
interest in test marketing the Company's products. During the second and third
quarters of 2000, the Company's sales staff will attempt to enter into test
marketing agreements and complete such test marketing.
When the Company is in full operations, including a complete sales
staff, management anticipates that the Company will employ approximately 32
individuals to serve as clerical and operations staff and eight (8) individuals
to work as sales staff. Management expects to deliver and invoice product to
restaurant customers during the third quarter of 2000.
At the same time, management anticipates expanding processing
operations. Such operations will require additional personnel to work in the
Company's product control laboratory and operate the Company's processing and
storage facilities. Management anticipates operating its facilities with a total
of approximately 40 people, which includes sales, production and administrative
personnel.
Management of the Company has spent the vast majority of its time and
efforts during the last two (2) years on the research and development of its
food processing systems and acquisition of facilities and equipment. Such
research and development has focused upon the development of the Company's
microwave oven, but also has included the development of conveyor systems and
automation which rapidly processes raw products with a minimum of damage and
loss of the products. Although research and development will be an ongoing
process, management believes that the Company's research and development since
the Company's inception has produced an effective fruit and vegetable processing
system. Management also believes that the efforts in acquiring facilities and
equipment have been successful and that the Company is ready to begin
production. Actual research and development costs in 1997 were $21,700. The
Company had no such costs in 1998 or 1999, though significant work was done on
the development of exactly how product is processed in the Company's facilities.
Cumulative research and development costs during the Company's development
stage, as reflected in the Company's financial statements, total $297,100, as of
December 31, 1998.
Management intends to fund operations in the third and fourth quarters
of 2000 with cash on hand. If additional cash is required, the Company will
obtain such cash either through conventional financing or loans from existing
shareholders. Management intends to limit further private offerings of the
Company's securities. Given the fact that the Company's facilities and equipment
are unencumbered, management believes that continued financing will be
available. Indeed, on June 21, 2000, management obtained a line of credit in the
amount of $500,000 at the Fifth Third Bank in Columbus, Ohio. This line of
credit is secured by the Company's accounts receivable and its inventory of
processed goods. Management has the ability to draw down on this line of credit
as it deems necessary. Also, management believes that it has had strong
shareholder support for its operations and that any additional cash necessary to
commence operations will be available. With this line of credit and shareholder
support, management believes that it has the ability to fund operations during
the next twelve months.
Once operations are under way, management of the Company intends to add
staff, equipment and continued research and development with revenues generated
from sales. Once the Company's facilities are in full commercial production,
management believes that it can satisfy the Company's cash requirements for the
next 12 months with its revenues from sales.
Nonetheless, the Company's cash flow could be negatively impacted by
unforeseen events, such as the collapse of the chasing on one of Company's water
wells as described above. Such events may create cash needs beyond the Company's
current ability to meet such needs. In addition, the Company's ability to
generate sales could be impacted upon by such factors as availability of raw
potatoes and other supplies provided by third parties over which the Company has
no control. Delays or failures on the part of such third-party suppliers to meet
their obligations to the Company could cause the Company to fall behind in
meeting any obligations it may have to its customers. Given the fact that the
Company has not operated in full production with on going sales, it is difficult
for management to predict with any certainty the degree to which such problems
could exist and the magnitude of the impact of such problems upon the Company's
ability to operate.
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ITEM 3. DESCRIPTION OF PROPERTY
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(a) Principal Plants and Property and Description of Real Estate
and Operating Data.
The Company owns its 150,000 square foot plant situated on 13 acres of
land in Baltimore, Ohio. The Company owns the land in fee simple title. The
property is paid in full with no mortgages or liens The one-level, open-floor
system results in energy savings and reduced product damage and is easy to
expand, maintain and fireproof. The ceiling, floors and walls are being brought
to USDA and FDA standards for the processing of fruit and vegetables. The plant
will accommodate four complete microwave oven systems, has 15 loading docks, a
water system capable of delivering 2,000 gallons of water per minute, and an
8,000 square foot office space. The renovations and adaptations required to
bring the Company's plant into compliance with all necessary regulations and to
prepare it for production have been substantially completed.
The Company's plant is located approximately 19 miles southeast of
Columbus, Ohio in Baltimore, Ohio within an 8-hour drive of a market that
consumes over 26 million pounds of produce per day. The facility is just 6 miles
south of a major interstate highway, affording easy access for delivery and
shipment of raw materials and finished product by truck. The plant is also
centrally located to a large supply of raw fruit and vegetables and management
has close contacts with a significant number of growers in the region.
In addition to the Company's 150,000 square foot plant, it has a 150,000
cubic foot freezer. The processing plant is electrically new throughout with an
additional2,000 AMP service, new plumbing, air, steam well water and city water
line, all new drains and new floors. The entire facility has met all USDA, FDA,
EPA, FDD and Board of Health regulations with full approval for operation. The
plant is fully automated with the newest Allan Bradley Technology.
The 8,000 square foot office space has been remodeled with a conference
room, marketing and sales rooms, employee training room, new men's and women's
bathrooms, kitchen, break room and 12 offices.
It is management's opinion that the Company's property is adequately
covered by insurance.
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(b) Investment Policies
The Company's plan of operations is focused on the continued
development of the food processing systems described in Item 1 of this Part.
Accordingly, the Company has no particular policy regarding each of the
following types of investments:
1. Investments in real estate or interest in real estate;
2. Investments in real estate mortgages; or,
3. Securities of or interests in persons primarily engaged in
real estate activities.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
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(a) Security Ownership of Certain beneficial Owners:
The following information sets forth certain information as of June 30,
2000 about each person who is known to the Company to be the beneficial owner of
more than five percent (5%) of the Company's Common Stock:
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<TABLE>
<CAPTION>
(2)
(1) Name and Address (3) (4)
Title of Beneficial Amount and Nature of Percent of
of Class Owner Beneficial Ownership Class
-------- -------------------------- ------------------------------ --------------
<S> <C> <C> <C>
Common Emerald Industries Corporation1 (1) 51,216,880% 52.3%
210 Water Street
Baltimore, Ohio 43105
(b) Security Ownership of Management:
Common Richard J. Cashman 51,216,880% (2) 52.3%
210 Water Street
Baltimore, Ohio 43105
Common Daniel K. Cashman 51,216,880% (3) 52.3%
210 Water Street
Baltimore, Ohio 43105
Common Mitch Adams 70,000 Less than 1%
5607 Tara Hill Drive
Dublin, OH 43017
Common Lawrence Green 488,000 Less than 1%
120 Tuttle Rd.
Springfield, OH 45503
Common Tom Heilman 100,000 Less than 1%
130 So. Columbia
Columbus, OH 43209
Common Doug Katterhenry 140,000 Less than 1%
6464 Old Church Way
Reynoldsburg, OH 43068
Common Pat Maguire 65,000 Less than 1%
6043 Wilton House Ct.
New Alblany, OH 43054
Common Kip Merriam 97,500 Less than 1%
556 Oakwood Drive
Pickering, Ontario CANADA L1X 2M7
Common Frank Moauro 1,314,730 Less than 1%
377 Talbot Street
W. Leamington, Ontario CANADA N8H 4H3
Common Tom Rainier 210,000 Less than 1%
223 Via Napoli
Naples, FL 34105
Common Dr. Harold Rinehart 200,000 Less than 1%
1143 County Road 2256
Perrysville, OH 44875
Common Philip Risinger 100,2000 Less than 1%
Rt. 9, Box 406
Paris, TX 75462
All Directors and 54,002,310 55.2%
Officers as a Group
</TABLE>
----------------------------
1 Richard J. Cashman II, Chairman of the Board and a
Director; and Daniel K. Cashman, President and a Director are
the owners of the majority of shares of Emerald Industries
Corporation.
2 Such shares are beneficially owned by Richard J.
Cashman II through his ownership and control of Emerald
Industries Corporation. Emerald Industries Corporation is the
owner of record of all 51,216,880 shares.
3 Such shares are beneficially owned by Daniel K.
Cashman through his ownership and control of Emerald
Industries Corporation. Emerald Industries Corporation is the
owner of record of all 51,216,880 shares.
15
<PAGE>
(c) Changes in Control:
There is no arrangement which may result in a change in control.
--------------------------------------------------------------------------------
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS
--------------------------------------------------------------------------------
(a) Directors and Executive Officers
As of June 30, 2000, the directors and executive officers of the
Company, their ages, positions in the Company, the dates of their initial
election or appointment as director or executive officer, and the expiration of
the terms as directors are as follows:
<TABLE>
<CAPTION>
Period Served As
Name Age Position Officer/Director
-------- --- -------------- ------------------
<S> <C> <C> <C>
Richard J. Cashman II 48 Chairman of the 9-15-83 to present
Board
Daniel K. Cashman 38 President and 9-15-83 to present
Director
Mitch Adams 40 Vice President 9-20-96 to present
Of Engineering
and Director
Tom Ranier 44 Secretary, 12-19-86 to present
Treasurer and
Director
Tom Heilman 44 Director 9-20-96 to present
Doug Katterhenry 56 Director 9-20-96 to present
Patrick D. Maguire 47 Director 1992 to present
Clifton K. Merriam 54 Director 1992 to present
Frank Moauro 75 Director 1986 to present
Dr. Harold Rinehart 58 Director 1986 to present
Philip Risinger 62 Director 9-20-96 to present
Lawrence Green 70 Director 9-20-96 to present
</TABLE>
16
<PAGE>
The Company's directors are elected at the annual meeting of
stockholders and hold office until their successors are elected and qualified.
The Company's officers are appointed annually by the Board of Directors and
serve at the pleasure of the Board.
(b) Business Experience:
Richard J. Cashman II, age 48, is the Chairman of the Board and a Director
of National Fruit and Vegetable Technology Corporation. Mr. Cashman attended
Ohio State University in English, accounting and food science engineering. Mr.
Cashman has been involved for the past 18 years in the research and development
of the Company's food processing plant. He is the C.E.O. of Platinum Industries,
Ltd., an industrial real estate holding company. He was a certified professional
plant manager in 1996. He is the former President of Steel Parts Manufacturing,
Inc., a manufacturer of U.S. Military parts from 1980 through 1985. He has
developed a solid foundation of knowledge and expertise in plant operation and
pioneered various new inventions for the newly emerging fresh potato processing
industry.
Daniel K. Cashman, age 38, is the President and a Director of National
Fruit and Vegetable Technology Corporation. He attended Florida State University
in Biological Science, University of Florida in Organic Chemistry, Ohio State in
Biochemistry and University of California in Electro Magnetic Engineering. Mr.
Cashman has been involved for the past ten (10) years in the research and
development in high powered microwave energy to develop a new cooking system,
using 915 MHz frequency, with the goal of producing fruits and vegetables of
superior taste, texture, color and higher in nutritional value. He has been
instrumental in the engineering, designing and building of the Company's food
processing plant with freezer and a 684 foot long microwave oven system. The
plant is fully automated with state-of-the-art food processing equipment. Mr.
Cashman is also the President and Director of Platinum Industries, Ltd., a real
estate holding company, manages 23 full- time employees and sub-contractors,
reviews all corporate and executive decisions made by the Company, including
those for construction, equipment, personnel and technology.
17
<PAGE>
Tom Ranier, age 45, is the Secretary, Treasurer and a Director of National
Fruit and Vegetable Technology Corporation. Mr. Ranier earned a B.A. in Business
Administration, Industrial Management and Management Science from Franklin
University in 1981. He is employed at Watkins Printing of Columbus, Ohio. From
1985 to the present, he was the co-owner and President of Vision Printing, Inc.
and Franklin Printing, Inc. also of Columbus, Ohio. Mr. Rainier is also the
President and owner of Unique Industries, Inc., a sales consulting firm. From
1981 to 1984, he was a Key Accounts Representative and Sales and Marketing
Director for Copco Papers, Inc. Of Columbus, Ohio.
Mitch Adams, age 40, is Vice President of Engineering and a Director of
National Fruit and Vegetable Technology Corporation. Mr. Adams attend O.I.T. in
electronics and Bliss College in business finance. In 1985 he was involved in
the process control for Pepsi and in 1998 he was involved in the process control
for Anheuser-Busch. He is the C.E.O. and C.F.O. of Adams & Lorimer dba World Gym
Health & Fitness, C.E.O. and C.F.O. for Adams & Ellison in the business of
industrial controls. He manages employees and sub-contractors and reviews
executive decisions, including equipment layout and process control for the
Company.
Lawrence Green, age 70, is a Director of National Fruit and Vegetable
Technology Corporation. Mr. Green has been in the development of land for
residential lots and is the owner of commercial buildings which he maintains.
Mr. Green is also a builder and maintained the storm sewer and drainage lines
for the Company. He is now retired except for his own maintenance work on his
buildings. Served on National Missionary Board of Church of God with offices in
Anderson, Indiana.
18
<PAGE>
Tom Heilman, age 44, is a Director of National Fruit and Vegetable
Technology Corporation. Mr. Heilman is currently President of Continental
Equities, Inc. He is a licensed broker/dealer. He owns and manages commercial
and residential properties through Columbus and Central Ohio. He also raises
equity for private placements, consulting, mergers and acquisitions.
Doug Katterhenry, age 52, is a Director of National Fruit and Vegetable
Technology Corporation. Mr. Katterhenry has a background in new production
introduction and was a product engineer for Lucent Technologies.
Patrick D. Maguire, age 47, is a Director of National Fruit and Vegetable
Technology Corporation. Mr. Maguire has a B.A. from Wittenberg University in
1973 and a J.D. from Ohio Northern University in 1976. Mr. Maguire serves as a
managing partner with the law firm of Maguire & Schneider in Columbus, Ohio.
Previously he worked as Assistant County Prosecutor of Franklin County and with
a number of Columbus law firms over the past 20 years.
Clifton K. Merriam, age 54, is a Director of National Fruit and Vegetable
Technology Corporation. Mr. Merriam has been involved with marketing and sales
during the past 26 years. He currently serves with Family Trust Real Estate in
Ontario, Canada.
Frank Moauro, age 75, is a Director of National Fruit and Vegetable
Technology Corporation. From 1970 to the present he has been co-owner of Moauro
Farms Limited of Leamington, Ontario, a fruit and vegetable farming enterprise.
He is also in the Standardbred horse business. From 1980 to the present, Mr.
Moauro has been President of Glenriver Investments, a vegetable greenhouse
plant. He has over 36 years experience in fruit and vegetable farming,
management and sales.
19
<PAGE>
Dr. Harold Rinehart, age 59, is a Director of National Fruit and Vegetable
Technology Corporation. Dr. Rinehart graduated from the National College of
Chiropractic on 1963. From 1963 to the present, Dr. Rinehart has been a
practicing chiropractor in Loudonville, Ohio. He is also the former President
and owner of the Weight Loss and Control Center in Loudonville and the former
owner and President of the H.G. Rinehart Company, a Columbus, Ohio brokerage
firm.
Philip Risinger, age 62, is a Director of National Fruit and Vegetable
Technology Corporation. Mr. Risinger is a Plant Manager for Oliver Rubber
Company's Paris, Texas plant.
(c) Directors of Other Reporting Companies:
None of the directors are directors of other reporting companies.
(d) Employees:
The officers and directors who are identified above are the significant
employees of the Company.
(e) Family Relationships:
Richard J. Cashman II, Chairman of the Board, is the brother of Daniel
K. Cashman, President and Director.
(f) Involvement in Certain Legal Proceedings:
None of the officers and directors of the Company have been involved in
the past five (5) years in any of the following:
(1) Bankruptcy proceedings;
(2) Subject to criminal proceedings or convicted of a criminal
act;
(3) Subject to any order, judgment or decree entered by any
Court for violating any laws relating to business,
securities or banking activities; or
(4) Subject to any order for violation of federal or state
securities laws or commodities laws.
20
<PAGE>
--------------------------------------------------------------------------------
ITEM 6. EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------
The following table sets forth information about compensation paid or
accrued by the Company during the years ended December 31, 1999, 1998 and 1997
to the Company's officers and directors. None of the Executive Officers of the
Company earned more than $100,000 during the years ended December 31, 1999, 1998
and 1997.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
--------------------- ------------ ---------
(e) (g)
Other (f) Securities (i)
(a) Annual Restricted Under- (h) Other
Name and (c) (d) Compen- Stock Lying LTIP Compen-
Principal (b) Salary Bonus sation Awards Options/ Payouts sation
Position Year $ ($) ($) ($) SARs(#) ($) ($)
-------- ------ ------ ----- ------ ----- -------- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard J. Cashman II
Chairman of 1999 $40,500 $ None $ None $ None None None None
the Board 1998 $29,000 $ None $ None $ None None None None
1997 $40,000 $ None $ None $ None None None None
Daniel K. Cashman
President and 1999 $24,000 $ None $ None $ None None None None
Director 1998 $20,500 $ None $ None $ None None None None
1997 $20,000 $ None $ None $ None None None None
Tom Ranier
Secretary,Asst. 1999 $None $ None $ None $ None None None None
Treasurer 1998 $ 4,470 $ None $ None $ None None None None
and Director 1997 $ 8,231 $ None $ None $ None None None None
Mitch Adams
Vice President 1999 $44,000 $ None $ None $ None None None None
Engineering 1998 $24,645 $ None $ None $ None None None None
and Director 1997 $18,245 $ None $ None $ None None None None
Lawrence Green
Director 1999 $ None $ None $ None $ None None None None
1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
Tom Heilman
Director 1999 $ None $ None $ None $ None None None None
1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
Doug Katterhenry
Director 1999 $ None $ None $ None $ None None None None
1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
Pat Maguire
Director 1999 $ None $ None $ None $ None None None None
1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
Clifton K. Merriam
Director 1999 $ None $ None $ None $ None None None None
1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
Frank Moauro
Director 1999 $ None $ None $ None $ None None None None
1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
Dr. Harold Rinehart
Director 1999 $ None $ None $ None $ None None None None
1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
Philip Risinger
Director 1999 $ None $ None $ None $ None None None None
1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
</TABLE>
21
<PAGE>
--------------------------------------------------------------------------------
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------------------------------
During the past two (2) years, the Company has not entered into a
transaction with a value in excess of $60,000 with a director, officer or
beneficial owner of 5% or more of the Company's capital stock, except as
follows:
The Company purchased food processing equipment salvaged from property
owned by a corporation owned by the officers and principal shareholders of the
Company, Richard J. Cashman II and Daniel K. Cashman. There were no purchases in
1998. Purchases were $122,500 in 1997. Management and the Company's Board of
Directors have determined that the equipment was sold to the Company at a price
that does not exceed fair market value.
The Company rents a storage facility owned by the officers and
principal beneficial shareholders of the Company, Richard J. Cashman II and
Daniel K. Cashman. The lease arrangement is renewable on an annual basis. Rent
expense for the facility was $200,000 in both 1999 and 1998. The outstanding
balance due on such was $488,000 as of December 31, 1999 No arrangement for the
payment the unpaid has been made. The Cashmans have deferred such payment
pending profitable operations of the Company's facilities. There is no written
lease agreement regarding the rental of the storage facility.
On August 15, 1998, Lawrence R. Green and Arretta M. Green loaned the
Company $50,000. Lawrence R. Green and Arretta M. Green are shareholders of the
Company. In exchange for the loan, the Company executed a Promissory Note in the
amount of $50,000 with an interest rate of 11% per annum, compounded semi-
annually. The Note was due on February 15, 2000. In addition, Lawrence R. Green
and Arretta M. Green have the option of accepting $25,000 plus 50,000 shares of
the Company's capital stock as payment of the Note. The terms of this note have
been extended for period of one year.
On October 9, 1998, Lawrence R. Green and Arretta M. Green loaned the
Company $50,000. Lawrence R. Green and Arretta M. Green are shareholders of the
Company. In exchange for the loan, the Company executed a Promissory Note in the
amount of $50,000 with an interest rate of 11% per annum, compounded semi-
annually. The Note is for a period of 12 months and was payable on October 9,
1999. In addition, Lawrence R. Green and Arretta M. Green have the option of
accepting $25,000 plus 50,000 shares of the Company's capital stock as payment
of the Note.
On November 3, 1998, Lawrence R. Green and Arretta M. Green loaned the
Company $100,000. Lawrence R. Green and Arretta M. Green are shareholders of the
Company. In exchange for the loan, the Company executed a Promissory Note in the
amount of $100,000 with an interest rate of 11% per annum, compounded semi-
annually. The Note was for a period of 24 months and is payable on November 3,
2000. In addition, Lawrence R. Green and Arretta M. Green have the option of
accepting $50,000 plus 100,000 shares of the Company's capital stock as payment
of the Note.
22
<PAGE>
As discussed in the notes to the Company's financial statements, the
promissory notes with the shareholders listed above are all unsecured and bear
interest at the rate of 11%. The $50,000 note due May, 1999 is personally
guaranteed by the officers of the Company. Interest on these notes totaled
$44,000 in 1999. Interest is to be paid to the shareholders with common stock of
the Company at the rate of $0.50 per share. Under the terms of each note, the
shareholders may choose to take principal payments in cash or 50% in cash and
50% in the Company's common stock. Assuming the stock payment was chosen for the
entire amount payable, the shareholders in question would receive payments of
$200,000 and 400,000 shares of common stock.
--------------------------------------------------------------------------------
ITEM 8. LEGAL PROCEEDINGS
--------------------------------------------------------------------------------
The Company is not a party to, and none of the Company's property is
subject to, any pending or threatened legal, governmental, administrative or
judicial proceedings.
--------------------------------------------------------------------------------
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON REGISTRANT'S
COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
------------------------------------------------------------------------------
Market Information:
The Company's common stock currently is not traded on any exchange.
Management anticipates that once the Company has cleared all comments the
Securities and Exchange Commission's staff has on the Company's Form10-SB
registration statement, and the amendments to that registration statement, that
the Company will ask a market maker member of the NASD to apply for quotation
privileges for the Company's shares on the OTC Bulletin Board system. It is the
Company's understanding that all such comments must be cleared and that the
Company must be current on its filings with the Commission prior to applying for
an OTCBB trading symbol. To date, the Company has not entered into any
negotiations or arrangements to make a market for its common stock.
23
<PAGE>
There has been no market for the Company's stock in the last two years.
Accordingly, the Company has no range of high and low bid prices for the
Company's common stock to report.
Holders:
There were approximately 1,447 holders of record of the Company's
common stock as of June 30, 2000.
Dividends:
The Company never has paid cash dividends on its stock and does not
intend to do so in the foreseeable future. The Company currently intends to
retain its earnings for the operation and expansion of its business. The
Company's continued need to retain earnings for operations and expansion are
likely to limit the Company's ability to pay dividends in the future.
Options and Warrants.
There are no outstanding options or warrants to purchase additional
stock of the Company.
"Penny Stock"
The Company's common stock is a "penny stock" as defined by the rules
and regulations promulgated by the Securities and Exchange Commission. Pursuant
to Section 3(a)(51)(A) of the Exchange Act of 1934, as amended, any equity
security is considered to be a "penny stock" unless that security is:
- Registered and traded on a national securities exchange
meeting specified SEC criteria;
- authorized for quotation on NASDAQ;
- issued by a registered investment company;
- excluded, on the basis of price of the issuer's net tangible
assets, from the definition of the term by SEC rule; or
- exempted from the definition by the SEC.
24
<PAGE>
Currently, the Company's common stock does not fall within any of these non-
penny stock categories.
The Commission's rules and regulations imposed disclosure, reporting
and other requirements on brokers-dealers in penny stock transactions. In
summary, these requirements are as follows:
Brokers and dealers, prior to effecting any penny stock transactions,
must provide customers with a document that discloses the risks of investing in
the penny stock market. Section 15(g)(2) requires such risk disclosure documents
to:
- contain a description of the nature and level of risk involved
in the penny stock market;
- fully describe the duties of the broker-dealer to the
customer, and the rights and remedies available;
- explain the nature of "bid" and "ask" prices in the penny
stock market;
- supply a toll-free telephone number to provide information on
disciplinary histories;
- describe all significant terms used in the risk disclosure
document.
Also, prior to the transaction the broker-dealer must obtain from the
customer a manually signed and dated written acknowledgment of receipt of the
disclosure document. The broker-dealers required to preserve a copy of the
acknowledgment as part of its records.
Brokers and dealers must disclose the bid and ask prices for penny
stocks, the number of shares to which the prices apply, and the amount and
description of any compensation received by the broker or dealer. Also, brokers
and dealers are to provide each customer whose account contains penny stocks
with a monthly statement indicating the market value of those stocks.
25
<PAGE>
--------------------------------------------------------------------------------
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
--------------------------------------------------------------------------------
In July of 1997, the Company issued 40,000 shares of its capital stock
to Tom Rainier in exchange for marketing services he rendered for the Company.
Such services were valued at $20,000 and the shares were issued at the rate of
$0.50 per share. Such shares were issued pursuant to the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended. This
shareholder had toured the Company's facilities and had available information
regarding the company's operations and financial status. He also had reviewed
and signed a questionnaire regarding the issuance of these shares. The
questionnaire indicated that the Corporation had not registered these shares,
that there is not a public market for the shares and that shares cannot be sold
unless there is adequate evidence that such sale will not violate federal
securities laws.
In July of 1997, the Company issued 3,900 shares of its capital stock
to Jodell Thomas in exchange for general labor at the Company's facilities. Such
services were valued at $1,950 and the shares were issued at the rate of $0.50
per share. Such shares were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended. This shareholder
had toured the Company's facilities and had available information regarding the
company's operations and financial status. This shareholder also had reviewed
and signed a questionnaire regarding the issuance of these shares. The
questionnaire indicated that the Corporation had not registered these shares,
that there is not a public market for the shares and that shares cannot be sold
unless there is adequate evidence that such sale will not violate federal
securities laws.
On or about November 18, 1997, the Company issued 48,417 shares of its
capital stock to Lawrence R. and Arretta M. Green in exchange for $24,209 of
accrued interest on promissory notes payable to the Greens. The Company also
issued 16,544 shares to the Greens in exchange for plumbing services performed
for the Company. Such services were valued at $8,272. All the shares issued to
the Greens on November 18, 1997 were issued at the rate of $0.50 per share. Such
shares were issued pursuant to the exemption form registration under Section
4(2) of the Securities Act of 1933, as amended. These shareholders had toured
the Company's facilities and had available information regarding the company's
operations and financial status. They also had reviewed and signed a
questionnaire regarding the issuance of these shares. The questionnaire
indicated that the Corporation had not registered these shares, that there is
not a public market for the shares and that shares cannot be sold unless there
is adequate evidence that such sale will not violate federal securities laws.
On or about December 3, 1997, the Company issued 48,295 shares of its
capital stock to Industrial Commercial Equipment Company in exchange for
services on the Company's refrigeration system. Such services were valued at
$24,147.50 and shares were issued at the rate of $0.50 per share. Such shares
were issued pursuant to the exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended. This shareholder had toured the
Company's facilities and had available information regarding the company's
operations and financial status. This shareholder also had reviewed and signed a
questionnaire regarding the issuance of these shares. The questionnaire
indicated that the Corporation had not registered these shares, that there is
not a public market for the shares and that shares cannot be sold unless there
is adequate evidence that such sale will not violate federal securities laws.
26
<PAGE>
On or about March 2, 1998, the Company issued 4,000 shares of its
capital stock to Richard Osler in exchange for machine shop services performed
by Bill Gregory. These shares were issued to Mr. Osler upon Mr. Gregory's
instruction. Such services were valued at $2,000 and shares were issued at the
rate of $0.50 per share. Such shares were issued pursuant to the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended. This
shareholder had toured the Company's facilities and had available information
regarding the company's operations and financial status. He also had reviewed
and signed a questionnaire regarding the issuance of these shares. The
questionnaire indicated that the Corporation had not registered these shares,
that there is not a public market for the shares and that shares cannot be sold
unless there is adequate evidence that such sale will not violate federal
securities laws.
On or about March 2, 1998, the Company issued 17,141 shares of its capital
stock to William Gregory in exchange for services he rendered in the Company's
machine shop. Such services were valued at $8,574 and the shares were issued at
the rate of $0.50 per share. Such shares were issued pursuant to the exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended.
This shareholder had toured the Company's facilities and had available
information regarding the company's operations and financial status. He also had
reviewed and signed a questionnaire regarding the issuance of these shares. The
questionnaire indicated that the Corporation had not registered these shares,
that there is not a public market for the shares and that shares cannot be sold
unless there is adequate evidence that such sale will not violate federal
securities laws.
On or about September 25, 1998, the Company issued 11,147 shares of its
capital stock to William Gregory in exchange for services he rendered at the
Company's machine shop. Such services were valued at $5,573.50 and shares were
issued at the rate of $0.50 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended. This shareholder had toured the Company's facilities and had available
information regarding the company's operations and financial status. He also had
reviewed and signed a questionnaire regarding the issuance of these shares. The
questionnaire indicated that the Corporation had not registered these shares,
that there is not a public market for the shares and that shares cannot be sold
unless there is adequate evidence that such sale will not violate federal
securities laws.
27
<PAGE>
On or about February 9, 1999, the Company issued 40,000 shares of its
common stock to Lawrence R. and Arretta M. Green in exchange for sewer
installation, catch basin, cement work, and well house services at the Company's
operating facility. Such services were valued at $19,511 and the shares were
issued at the rate of $0.50 per share. In this regard, the Green also gave the
gave the Company $489.00 as additional consideration for the issuance of these
shares. Such shares were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended. These shareholders
had toured the Company's facilities and had available information regarding the
company's operations and financial status. They also had reviewed and signed a
questionnaire regarding the issuance of these shares. The questionnaire
indicated that the Corporation had not registered these shares, that there is
not a public market for the shares and that shares cannot be sold unless there
is adequate evidence that such sale will not violate federal securities laws.
On February 9, 1999, the Company issued shares of its common stock in
exchange for cash the company had previously received. Such shares were issued
at the rate of $0.50 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended. Listed below are the names of the shareholders and the number of shares
each shareholder received in connection with the cash they gave the Company.
Each of these shareholders was a shareholder of the Company prior to the
issuance of these shares and each had
toured the Company's facilities and had available information regarding the
company's operations and financial condition. Each also had reviewed and signed
a questionnaire regarding the issuance of these shares. The questionnaire
indicated that the Corporation had not registered these shares, that there is
not a public market for the shares and that shares cannot be sold unless there
is adequate evidence that such sale will not violate federal securities laws.
Name Shares Consideration
---- ------ -------------
Norma Jean Crew 2,000 $ 1,000
Jack and Eleanor Crew 2,000 $ 1,000
Curtis and Linda Crew 4,000 $ 2,000
Tim Ashton 40,000 $20,000
Gerogia A. Fagan and
Leonard L. Fagan 4,000 $ 2,000
Agnes & Alfred Heydinger 23,600 $11,800
Gregory S. Freeman 2,000 $ 1,000
Marie T. Kebe 10,000 $ 5,000
Randall D. Powers 2,000 $ 1,000
Michael S. Powers 2,000 $ 1,000
James S. Pritt &
Kellie a. Pritt 2,000 $ 1,000
Paul & Eria Burkholder 7,000 $ 3,500
Merle L. Reich 5,000 $ 2,500
Roger A. Wolf 5,000 $ 2,500
28
<PAGE>
On or about February 9, 1999, the Company issued 10,000 shares of its
common stock to Henry J. Sapiano, a resident of Morriston, Ontario, Canada, in
exchange for $5,000 in cash. Such shares were issued at the rate of $0.50 per
share. Such shares were issued pursuant to the exemption from registration under
Regulation S promulgated under the Securities Act of 1933, as amended. This
shareholder had available to him information regarding the company's operations
and financial condition and reviewed and signed a questionnaire regarding the
issuance of these shares. The questionnaire indicated that the Corporation had
not registered these shares, that there is not a public market for the shares
and that shares cannot be sold unless there is adequate evidence that such sale
will not violate federal securities laws.
On February 9, 1999, the Company issued shares of its common stock in
exchange for cash the company had previously received. Such shares were issued
at the rate of $0.50 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended. Listed below are the names of the shareholders and the number of shares
each shareholder received in connection with the cash they gave the Company.
Each of these shareholders had toured the Company's facilities and had available
information regarding the company's operations and financial condition. Each
also had reviewed and signed a questionnaire regarding the issuance of these
shares. The questionnaire indicated that the Corporation had not registered
these shares, that there is not a public market for the shares and that shares
cannot be sold unless there is adequate evidence that such sale will not violate
federal securities laws.
Name Shares Consideration
---- ------ -------------
Robert E. Rausch 20,000 $10,000
Michael C. Miller 5,000 $ 2,500
Orla Fent 10,000 $ 5,000
Tracy & Suzanne Green 10,000 $ 5,000
Stephen W. Morris 11,000 $ 5,500
Hiram M. Thurmond 40,000 $20,000
Bryon & Betsy Townsend 20,000 $10,000
Paul B. Clark 10,000 $ 5,000
Lonnie & Natalie
Wellmaker 15,000 $ 7,500
Thomas G. Wagner 20,000 $10,000
Carl & Jane Powers 10,000 $ 5,000
Dorothy Cotman 10,000 $ 5,000
David L. Malone 10,000 $ 5,000
Cynthia M. Ryan 10,000 $ 5,000
Roosevelt Bouie, Jr. 40,000 $20,000
James R. Baise 10,000 $ 5,000
Harold W. Driscoll 20,000 $10,000
Brertt D. Stewart & Carolyn
Jo Stewart 40,000 $20,000
Steven D. Lentz & Christine
E. Lentz 15,000 $ 7,500
Boyce Eugene & Florence
Wellmaker 10,000 $ 5,000
Brooker Family Trust 10,000 $ 5,000
David P. Hilgefort 10,000 $ 5,000
Kyle Barrett & Amy M.
McKinnon 10,000 $ 5,000
William E. Headings 10,000 $ 5,000
Charles Brumsted, Jr. 20,000 $10,000
Delbert Edward Legg II 10,000 $ 5,000
Wayne & Judith Morgan 10,000 $ 5,000
29
<PAGE>
On or about March 26, 1999, the Company issued 8,000 shares of its
common stock to Davis J. Buffenbarger in exchange for $4,000 in cash. Such
shares were issued at the rate of $0.50 per share. Such shares were issued
pursuant to the exemption from registration under Section 4(2) of the Securities
Act of 1933, as amended. This shareholder already was a shareholders at the time
these shares were issued. He had available to him information regarding the
company's operations and
financial status and reviewed and signed a questionnaire regarding the issuance
of these shares. The questionnaire indicated that the Corporation had not
registered these shares, that there is not a public market for the shares and
that shares cannot be sold unless there is adequate evidence that such sale will
not violate federal securities laws.
On March 26, 1999, the Company issued shares of its common stock in
exchange for cash the company had previously received. Such shares were issued
at the rate of $0.50 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended. Listed below are the names of the shareholders and the number of shares
each shareholder received in connection with the cash they gave the Company.
Each of these shareholders had toured the Company's facilities and had available
information regarding the company's operations and financial status. Each also
had reviewed and signed a questionnaire regarding the issuance of these shares.
The questionnaire indicated that the Corporation had not registered these
shares, that there is not a public market for the shares and that shares cannot
be sold unless there is adequate evidence that such sale will not violate
federal securities laws.
Name Shares Consideration
---- ------ -------------
Terry Ziesmer 10,000 $ 5,000
Donald & Shirley Dietschler 10,000 $ 5,000
Christoper G. O'Leary 14,000 $ 7,000
Howard H. Saupp 10,000 $ 5,000
Jane M. Ulrich 10,000 $ 5,000
Bruce H. Waring 10,000 $ 5,000
Richard & Nancy Smothers 10,000 $ 5,000
Charles H. & Kaye
H. Stengel 10,000 $ 5,000
William F. Kraft &
Jane M. Kraft 25,000 $12,500
Krista & Mario Valdes
Zamora 10,000 $ 5,000
John S. McGranahan 10,000 $ 5,000
Heinz Thiemens, Werner
Thiemens & Daniel
Muzic 15,000 $7,5000
Andrew G. Hyde, G Andrew
Platt & Edwin T.
Hyde 15,000 $75,000
Anita Anne Lessard 10,000 $ 5,000
Joel E. Kaye, M.D. 50,000 $25,000
Sharon L. Buehrer 100,000 $50,000
30
<PAGE>
On August 24, 1999, the Company issued shares of its common stock in
exchange for cash the company had previously received. Such shares were issued
at the rate of $0.50 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended. Listed below are the names of the shareholders and the number of shares
each shareholder received in connection with the cash they gave the Company.
Each of these shareholders was a shareholder of the Company prior to the
issuance of these shares and each had toured the Company's facilities and had
available information regarding the company's operations and financial status.
Each also had reviewed and signed a questionnaire regarding the issuance of
these shares. The questionnaire indicated that the Corporation had not
registered these shares, that there is not a public market for the shares and
that shares cannot be sold unless there is adequate evidence that such sale will
not violate federal securities laws.
Name Shares Consideration
---- ------ -------------
George Ashe 8,000 $ 4,000
Robert P. & Mary G.
Martino 20,000 $10,000
Curtis Lowden 10,000 $ 5,000
Brooker Family Trust 10,000 $ 5,000
Richard A. Fraser 10,000 $ 5,000
Ryan & Ashley Lassiter 6,500 $ 3,250
Jim & Sandra Lassiter 20,000 $10,000
Stephen & Mendy Bush 2,500 $ 1,250
Steiner Hostetler 10,000 $ 5,000
Anita F. DeWeese 10,000 $ 5,000
Mark K. and & Bridgot K.
Sandvik 80,000 $40,000
Frank J. & Bonnie
Nelson 20,000 $10,000
Frank Nelson, Jr. &
Helene Nelson 10,000 $ 5,000
Ronald D. Snow 10,000 $ 5,000
Scott P. Held 5,000 2,500
Stephen A. Held, Jr. 5,000 $ 2,500
Carla D. Rice & John S.
Kiminki 10,000 $ 5,000
Roman Y. Yoder 13,000 $ 6,500
Dennis Allossery 10,000 $ 5,000
Frederic B. Allyn 10,000 $ 5,000
Paul & Gerd Christiansen 10,000 $ 5,000
Dennis W. Headings 10,000 $ 5,000
William J. Mitchell 10,000 $ 5,000
William E. Headings 10,000 $ 5,000
W. Frederic Yoder 10,000 $ 5,000
31
<PAGE>
Name Shares Consideration
---- ------ -------------
Larry R. Youdelman 10,000 $ 5,000
Justin Drummond 10,000 $ 5,000
James W. Mitchell 10,000 $ 5,000
William C. & Linda
Immerman Stoffers 10,000 $ 5,000
Richard E. & Bette A.
Barkdull 10,000 $ 5,000
Francis C. and Ida M.
Green 2,000 $ 1,000
Susan G. Drummond 50,000 $25,000
Linda A. Seeright 25,000 $12,500
Kristen D. Bake 2,000 $ 1,000
Robert Davis 2,000 $ 1,000
Paul & Eria Burkholder 12,700 $ 6,350
Daniel F. & Kathleen
Heagey 4,000 $ 2,000
Gregory S. Davis 20,000 $10,000
Robert S. & Marcia C.
Davis 34,000 $17,000
Roger E. Neff 10,000 $ 5,000
Orla E. Fent 10,000 $ 5,000
James L. Deagle 20,000 $10,000
LaVonne L. Deagle 20,000 $10,000
Christopher A. Tenaglia 5,000 $ 2,500
John Tipton 10,000 $ 5,000
Darrin D. Spitzer 10,000 $ 5,000
James E. Mears 10,000 $ 5,000
Carole A. Kerl 9,000 $ 4,500
32
<PAGE>
On August 24, 1999, the Company issued 200,000 shares of its common
stock to Stephen L. Kebe. Mr. Kebe had previously loaned the Company $100,000.
Pursuant to the Company's promissory note to Mr. Kebe in this regard, Mr. Kebe
had the option to accept payment under the note in shares of the Company issued
at $0.50 per share. Mr. Kebe chose to accept these shares as payment of the
Company's obligation to him. Such shares were issued pursuant to the exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended.
Mr. Kebe had toured the Company's facilities and had available information
regarding the company's operations and financial status prior to the issuance of
these shares. He had reviewed and signed a questionnaire regarding the issuance
of these shares. The questionnaire indicated that the Corporation had not
registered these shares, that there is not a public market for the shares and
that shares cannot be sold unless there is adequate evidence that such sale will
not violate federal securities laws.
On August 24, 1999, the Company issued shares of its common stock in
exchange for cash the company had previously received. Such shares were issued
at the rate of $0.50 per share. Such shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended. Listed below are the names of the shareholders and the number of shares
each shareholder received in connection with the cash they gave the Company.
Each of these shareholders had toured the Company's facilities and had available
information regarding the company's operations and financial status. Each also
had reviewed and signed a questionnaire regarding the issuance of these shares.
The questionnaire indicated that the Corporation had not registered these
shares, that there is not a public market for the shares and that shares cannot
be sold unless there is adequate evidence that such sale will not violate
federal securities laws.
Name Shares Consideration
---- ------ -------------
James G. Townsend 20,000 $10,000
Sandra West 30,000 $15,000
Raymond M. Rick
Family Trust 80,000 $40,000
Alan Oglvie 60,000 $30,000
Marion L. & Joannie
Veenendaal 30,000 $15,000
Paul Marchese &Sandra
Marchese 10,000 $ 5,000
David L. Malone 20,000 $10,000
Nathan E. Baderscher 20,000 $10,000
Robert P. Bedard &
Lori L. Bedard 10,000 $ 5,000
Brian R. and Suzanne E.
Tedeschi 10,000 $ 5,000
R. Charles Lowden &
Barbara J. Lowden 50,000 $25,000
Gerd & Paul Christiansen 10,000 $ 5,000
Mark K. And Bridgot K.
Sandvik 60,000 $30,000
Rachel K. Van Slooten 10,000 $ 5,000
James E. Drake III &
Carla E. Drake 20,000 $10,000
Joan F.B. Goras Living
Trust 10,000 $ 5,000
Thomas James Parry 10,000 $ 5,000
Brian D. Blakely & Elizabeth
A. Blakely 10,000 $ 5,000
Thomas M. Blum 30,000 $15,000
Curtis E. King & Helen
H. King 60,000 $30,000
Milton L. Little 25,000 $12,500
33
<PAGE>
Name Shares Consideration
---- ------ -------------
Peggy A. & R. Kent
Rutherford 10,000 $ 5,000
Howard Brensilver 10,000 $ 5,000
Jim Bob Pickrell &
Pamela G. Pickrell 12,000 $ 6,000
John R. & Sarah E. Smith 10,000 $ 5,000
Norman E. Slabaugh 40,000 $20,000
James Gordon & Janie L.
Haas 20,000 $10,000
Gary E. & Carolyn Sue
Brown 20,000 $10,000
Margaret S. Fulmer 20,000 $10,000
Nancy Featherstone
Buchanan 20,000 $10,000
John S. McGranahan 20,000 $10,000
Ron & Gail Gordon Ober 10,000 $ 5,000
Harold J. Ober & D'vorre
Ober Living Trust 20,000 $10,000
Philip L. & Josann Linhoss 13,000 $ 6,500
Donald E. & Louise Uhler 10,000 $ 5,000
Steven D. & Christine E.
Lentz 10,000 $ 5,000
Max C. Bashore 20,000 $10,000
A. Dean & Betty L. Stewart 10,000 $ 5,000
Carl & Amy Langorst 20,000 $10,000
Charles M. Seeright 25,000 $12,500
Gary L. & Sandy L.
Swearingen 10,000 $ 5,000
Charles H. & Kaye F.
Stengel 10,000 $ 5,000
Roger G. & Janet J. Ward 10,000 $ 5,000
David J. & Lisa M. Cecere 10,000 $ 5,000
Richard C. Sanzo 10,000 $ 5,000
Timothy & Myrna Shock 10,000 $ 5,000
George Conboy 10,000 $ 5,000
Joe Ryan 10,000 $ 5,000
William A. & Martha E.
Lacy 20,000 $10,000
Howard Brensilver 5,000 $ 2,500
Carl Fields 10,000 $ 5,000
Shirley M. McAuley 10,000 $ 5,000
Michael T. McAuley 10,000 $ 5,000
Elias N. Chotas 10,000 $ 5,000
Margaret S. Fulmer 20,000 $10,000
Charles R. Brumsted 30,000 $15,000
Melvin Fields 20,000 $10,000
Russell & Mark Williams 10,000 $ 5,000
Dennis W. Postel 10,000 $ 5,000
Salvatore & Theresa
Tinnirello 40,000 $20,000
Franklin S. Haney 10,000 $ 5,000
Carleton G. Castle 10,000 $ 5,000
John E. Crawford 20,000 $10,000
Rachel Van Slooten
& Brent Van Slooten 10,000 $ 5,000
Joe R. Charlton 12,000 $ 6,000
34
<PAGE>
On August 24, 1999, the Company issued shares of its common stock in
exchange for cash the company had previously received. Such shares were issued
at the rate of $0.50 per share and were issued to individuals who are not United
States citizens and do not reside in the United States. Such shares were issued
pursuant to the exemption from registration under Regulation S promulgated under
the Securities Act of 1933, as amended. Listed below are the names of the
shareholders and the number of shares each shareholder received in connection
with the cash they gave the Company. Each of these shareholders had toured the
Company's facilities and had available information regarding the company's
operations and financial status. Each also had reviewed and signed a
questionnaire regarding the issuance of these shares. The questionnaire
indicated that the Corporation had not registered these shares, that there is
not a public market for the shares and that shares cannot be sold unless there
is adequate evidence that such sale will not violate federal securities laws.
Name Shares Consideration
---- ------ -------------
C. K. Merriam 40,000 20,000
Eileen Dinning 10,000 $ 5,000
Harvey Moscoe 15,000 $ 7,500
Helge K. Sandvik &
Carol K. Sandvik 80,000 $ 40,000
Roy Kumbe Sadler & Ann
Wagner Sadler 50,000 $ 25,000
William & Noreen Botham 100,000 $ 50,000
Chuck & Mary J. Goddard 10,000 $ 5,000
Robert Boake 45,000 $ 22,500
Malcolm J. Poole 20,000 $ 10,000
Kristopher D. Horvath &
Bronwyn L. Davis 100,000 $ 50,000
Mark & Larisa Finkelstein 200,000 $100,000
Bruce E. Howie 16,000 $ 8,000
Murray Stroud 14,000 $ 7,000
Ron Bacchus 12,000 $ 6,000
Iraklis & Persefoni
Hostelidis 24,000 $ 12,000
Glen A. Reid 10,000 $ 5,000
George Adlam 10,000 $ 5,000
Gerald D. Cole 10,000 $ 5,000
Allan Teng 10,000 $ 5,000
Kevin Green 7,000 $ 3,500
Jeffery Wright 10,000 $ 5,000
Zoltan T. Szinessy 10,000 $ 5,000
Nili & Sara Stolarsky 10,000 $ 5,000
Fanny Shluper 11,600 $ 5,800
Aleksandr Kogan 10,000 $ 5,000
Diana Bykhovsky 20,000 $ 10,000
Evgeny Kostovetsky 10,000 $ 5,000
Krikor Artinian 10,000 $ 5,000
Alexander G. MacKay 22,000 $ 11,000
Paul E. Sedstrem 15,000 $ 7,500
Linda Caruso 10,000 $ 5,000
35
<PAGE>
Gordon E. Honsey 5,000 $ 2,500
Gerardo DiMario 5,000 $ 2,500
Demetrios Koumarelas 10,000 $ 5,000
Spiro & Fonda
Mikrogianakis 10,000 $ 5,000
Mun Yong Goh 10,000 $ 5,000
Shimkovich Mira &
M.S. Elmaleh
Shulamit 10,000 $ 5,000
Realest Marketing Corp. 10,000 $ 5,000
Joseph Tamburro 10,000 $ 5,000
George Koutrobis 10,000 $ 5,000
Nancy Jones 10,000 $ 5,000
William Sit 10,000 $ 5,000
Gabriel Fotiou 10,000 $ 5,000
Miryam & Alex Homutezki 12,000 $ 6,000
Peter Valjas 40,000 $ 20,00
Moon Gil Choi 10,000 $ 5,000
Douglas Clark 25,000 $ 12,500
Naman A. & Deborah Salibi
Family Trust 10,000 $ 5,000
Ernest & Janice Greenwood 30,000 $ 15,000
Jerry G. James 40,000 $ 20,000
On or about May 30, 2000, the Company, issued 12,756,900 shares of its
common stock to Richard Cashman and Daniel Cashman, the Company's Chairman of
the Board and President, respectively, for past services rendered to the Company
and to secure their future services. Richard Cashman and Daniel Cashman
abstained from the vote of the Board of Directors authorizing this issuance. The
issuance was approved by all other directors. Such shares were issued pursuant
to the exemption from registration under Section 4(2) of the Securities Act of
1933, as amended. As officers, directors and the personnel primarily responsible
for the day-to-day operations of the Company, these shareholders had available
information regarding the company's operations and financial status. They also
are aware that any resale of such shares is restricted and may occur only with
compliance with applicable securities laws, including Rule 144.
On or about May 31, 2000, the Company issued the following shares of
its common stock to the following individuals in exchange for cash previously
received. These shares were issued at the rate of $0.50 per share. Such shares
were issued in reliance on the exemption from registration contained in
Regulation S as each of the following individuals are citizens of countries
other than the United States and reside outside of the United States. Each of
these shareholders had toured the Company's facilities and had available
36
<PAGE>
information regarding the company's operations and financial status. Each also
had reviewed and signed a questionnaire regarding the issuance of these shares.
The questionnaire indicated that the Corporation had not registered these
shares, that there is not a public market for the shares and that shares cannot
be sold unless there is adequate evidence that such sale will not violate
federal securities laws.
<TABLE>
<CAPTION>
Name Address Shares Consideration
---- ------- ------ -------------
<S> <C> <C> <C>
Domenic DiMenna Leamington, Ontario Canada 10,000 $ 5,000
Jerome W. & Vicky Brannon Ras Tanura, Saudi Arabia 14,000 7,000
Lorenzo Merchant &
Frederick Dryden North York, Ontario, Canada 18,000 9,000
Vladimir and Raya Zehtser Thornhill, Ontario Canada 10,000 5,000
Malcolm John Poole Bishopton, Swansea UK 20,000 10,000
Lawrence Patrick and
Marilyn Achay Kirsch Ras Tanura, Saudi Arabia 20,000 10,000
R. W. & Darice Tiffany Ras Tanura, Saudi Arabia 30,000 15,000
Norman W. & Patricia B.
Smith Ras Tanura, Saudi Arabia 54,000 27,000
Billy Mark and
Gay Lynn Cowan Ras Tanura, Saudi Arabia 10,000 5,000
John David Featherstone Sheffield, England 10,000 5,000
Paul W. Galipeau St. Marys, Georgia 50,000 25,000
Walter E. and
Becky M. Chidsey Ras Tanura, Saudi Arabia 50,000 25,000
</TABLE>
On or about May 31, 2000, the Company issued 400,000 shares of its
common stock to James L. Deagle in exchange for $200,000 in cash. Such shares
were issued pursuant to the exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended. This shareholder had toured the
Company's facilities and had available information regarding the company's
operations and financial status. He also had reviewed and signed a questionnaire
regarding the issuance of these shares. The questionnaire indicated that the
Corporation had not registered these shares, that there is not a public market
for the shares and that shares cannot be sold unless there is adequate evidence
that such sale will not violate federal securities laws.
On or about May 31, 2000, the Company issued 200,000 shares of its
common stock to R. Charles Lowden in exchange for $100,000 in cash. Such shares
were issued pursuant to the exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended. This shareholder had toured the
Company's facilities and had available information regarding the company's
37
<PAGE>
operations and financial status. He also had reviewed and signed a questionnaire
regarding the issuance of these shares. The questionnaire indicated that the
Corporation had not registered these shares, that there is not a public market
for the shares and that shares cannot be sold unless there is adequate evidence
that such sale will not violate federal securities laws.
On or about May 31, 2000, the Company issued 12,600 shares of its
capital stock to Dov Hellenbrand in exchange for engineering design consulting
services at the Company's operating facility. Such services were valued at
$6,300 and shares were issued at the rate of $0.50 per share. Such shares were
issued pursuant to the exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended. This shareholder had toured the Company's
facilities and had available information regarding the company's operations and
financial status. He also had reviewed and signed a questionnaire regarding the
issuance of these shares. The questionnaire indicated that the Corporation had
not registered these shares, that there is not a public market for the shares
and that shares cannot be sold unless there is adequate evidence that such sale
will not violate federal securities laws.
On or about May 31, 2000, the Company issued 12,600 shares of its
capital stock to Frank Occhipinti in exchange for engineering design consulting
services at the Company's operating facility. Such services were valued at
$6,300 and shares were issued at the rate of $0.50 per share. Such shares were
issued pursuant to the exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended. This shareholder had toured the Company's
facilities and had available information regarding the company's operations and
financial status. He also had reviewed and signed a questionnaire regarding the
issuance of these shares. The questionnaire indicated that the Corporation had
not registered these shares, that there is not a public market for the shares
and that shares cannot be sold unless there is adequate evidence that such sale
will not violate federal securities laws.
--------------------------------------------------------------------------------
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
--------------------------------------------------------------------------------
The Company is registering all of its issued and outstanding shares of
its capital stock with a par value of One Mill ($0.001) per share. On June 30,
2000, there were 97,802,900 shares of stock issued and outstanding.
38
<PAGE>
Capital Stock
Each of the holders of record of stock is entitled to one (1) vote per
share thereof at all shareholder meetings for all purposes, including the
election of the Company's directors and all other matters submitted to such
holders for a vote of stockholders; to share ratably in all dividends, when, as,
and if declared by the Company's Board of Directors from funds legally available
therefor; and to share ratably in all assets available for distribution to
holders of record of capital stock upon liquidation or dissolution after the
payment of all debts and other liabilities. Shares of common stock are not
redeemable and the holders have no conversion rights, pre-emptive or other
rights to subscribe to or purchase additional shares in the event of a
subsequent offering. The common stock does not carry cumulative voting rights.
All issued and outstanding shares of common stock are fully-paid and
non-assessable.
There are no limitations or restrictions upon the rights of the Board
of Directors to declare dividends out of any funds legally available therefor.
The Company has not paid dividends to date and it is not anticipated that any
dividends will be paid in the foreseeable future. The Board of Directors
initially may follow a policy of retaining earnings, if any, to finance the
future growth of the Company. Accordingly, future dividends, if any, will depend
upon, among other considerations, the Company's need for working capital and its
financial condition at the time.
The Company may, if approved at the general meeting of shareholders,
resolve to authorize the Board of Directors to declare and pay dividends to the
Company's shareholders in the form of bonus shares. The shareholders would
receive bonus shares in lieu of cash dividends, if any, declared and paid by the
Company.
"Anti-Takeover" Provisions. Although the Board of Directors is not
presently aware of any takeover attempts, the Company's Certificate of
Incorporation and By-laws contain certain provisions which may be deemed to be
"anti-takeover" in nature in that such provisions may deter, discourage, or make
more difficult the assumption of control of the Company by another corporation
or person through a tender offer, merger, proxy contest or similar transaction
or series of transactions. These provisions were adopted unanimously by the
Board of Directors and approved by the stockholders of the Company.
Authorized but Unissued Shares. The Company has authorized
10,000,000,000 shares of common stock. These shares were authorized for the
purpose of providing the Board of Directors of the Company with as much
flexibility as possible to issue additional shares for proper corporate purposes
including equity financing, acquisitions, mergers, stock dividends, stock
splits, stock options and other purposes. The Company has no agreements,
commitments or plans at this time for the sale or use of its shares of common
stock except as described herein. Through June 30, 2000, the Company had issued
97,802,900 shares of stock.
39
<PAGE>
No Cumulative Voting. The Company's Certificate of Incorporation and
By- laws do not contain any provisions for cumulative voting. Cumulative voting
entitles stockholders to as many votes as equal the number of shares owned by
such holder multiplied by the number of directors to be elected. A stockholder
may cast all these votes for one candidate or distribute them among any two or
more candidates. Thus, cumulative voting for the election of directors allows a
stockholder or group of stockholders who hold less than fifty percent (50%) of
the outstanding shares voting to elect one or more members of a Board of
Directors. Without cumulative voting for the election of directors, the vote of
holders of a plurality of the shares voting is required to elect any member of a
Board of Directors and would be sufficient to elect all the members of the Board
of Directors being elected.
General Effect of Anti-Takeover Provisions. The overall effect of these
provisions may be to deter a future tender offer or other takeover attempt that
some stockholders might view to be in their best interest as the offer might
include a premium over the market price of the Company's capital stock at that
time. In addition, these provisions may have the effect of assisting the
Company's current management in retaining its position and place it in a better
position to resist changes which some stockholders may want to make if
dissatisfied with the
Voting Rights. Except as set forth below, every holder of shares
present in person or by proxy or by representative, attorney or proxy appointed
under the Company's By-laws at a meeting of shareholders has one vote on a vote
taken by a show of hands, and on a poll every holder of shares who is present in
person or by proxy or representative has one vote for every fully paid share
held by him, registered in each shareholder's name on the Company's stockholder
list. Unless a poll is demanded, every question submitted to a meeting of
holders of shares shall be decided by a show of hands of the shareholders
present and entitled to vote. In the case of an equality of votes, in either a
poll or a show of hands, the chairman shall have a second or casting vote.
Notwithstanding the above, restrictions are imposed on voting rights in the
following circumstances: (a) if two or more persons are registered as the holder
of the share, the only one of the holders entitled to vote is the senior who
tenders a vote, seniority being determined by the order of names in the
company's list of stockholders; (b) if the terms upon which the shares was
issued restrict the voting rights attaching to that share, the holder is
entitled to vote only in accordance with the terms upon which that share was
issued (neither any shares currently outstanding nor the common shares have
restricted voting rights).
40
<PAGE>
Article II Section 5 of the Company's By-laws allows that the holders
of a majority of the issued and outstanding shares of the common stock of the
Company entitled to vote thereat, present in person or represented by proxy,
shall constitute a quorum for the transaction of business at all meetings of the
stockholders. All resolutions (e.g. resolutions for the election of directors,
the approval of increase in authorized capital, approval of financial
statements, amending the Articles of Incorporation and By-laws; authorizing
liquidation or a going private transaction) require the affirmative vote of the
holders of a majority of the issued and outstanding shares of the common stock
of the Company entitled to vote.
Not less than ten days' notice of any general shareholders meeting,
specifying the place, day and hour of the meeting, specifying the general nature
of the business, shall be given to the shareholders.
Article III Section 4 of the Company's By-laws allows that any director
or the entire Board of Directors may be removed, at any time, with or without
cause, by the holders of a majority of the shares then entitled to vote with or
without a stockholders meeting.
Certain Voting Requirements. The affirmative vote of the holders of a
majority of the shares present at a shareholders meeting and entitled to vote
generally constitutes shareholder approval or authorization of matters for which
such approval or authorization is required. A sale or transfer of substantially
all of the Company's assets, liquidation, merger, consolidation, reorganization
or similar extraordinary corporate action generally requires the affirmative
vote of a majority of the shares outstanding and entitled to vote thereon.
Offerings of Shares. On February 15, 1992, the Company offered for sale
25,000 shares (minimum) and 2,500,000 shares (maximum) at $2.00 per share in
accordance with Rule 506 of the Securities Act of 1933, as amended. Prior to
this offering, there was no other offering of the Company's stock and there was
no public market for the stock of the Company. The price to the public for the
stock was determined after careful analysis by management of the Company and was
based on, among other things, the Company's financial condition, its future
prospects and the prospects for its industry in general, the management of the
Company and the market prices of securities for companies in businesses similar
to that of the Company. The offering was unsuccessful and all funds collected
were returned to the prospective purchasers and no shares were issued.
Restricted Shares. Restricted shares may not be sold unless they are
registered or are sold pursuant to an applicable exemption from registration,
including pursuant to Rule 144.
41
<PAGE>
Reports to Shareholders. The Company intends to furnish its
shareholders with annual reports containing financial statements for each fiscal
year containing unaudited summary financial information and such other periodic
reports as it may deem appropriate or as required by law.
--------------------------------------------------------------------------------
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
--------------------------------------------------------------------------------
Section 78.751 of the Nevada General Corporation Law allows the Company
to indemnify any person who was or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that he or she is or was a director, officer, employee or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of any corporation, partnership, joint venture, trust
or other enterprise. The Company may advance expenses in connection with
defending any such proceeding, provided the indemnitee undertakes to pay any
such amounts if it is later determined that such person was not
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
--------------------------------------------------------------------------------
ITEM 13. Financial Statements
--------------------------------------------------------------------------------
The following audited financial statements for the years ended December
31, 1998 and 1999 and unaudited financials statements for the first quarter of
2000 are filed with this Amended Form 10-SB:
42
<PAGE>
[ICKERT & COMPANY LLC LETTERHEAD]
To the Board of Directors
National Fruit and Vegetable Technology Corporation:
We have audited the accompanying balance sheets of National Fruit and Vegetable
Technology Corporation (a Nevada Development Stage Corporation) as of December
31, 1999 and 1998, and the related statements of loss and accumulated deficit,
shareholders' equity, and cash flows for the years then ended and for the period
from September 14, 1983 (date of inception) through December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of National Fruit and Vegetable
Technology Corporation as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the periods then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 11 to the
financial statements, the Company has been in the development stage since its
inception on September 14, 1983. Realization of a major portion of the assets is
dependent on the Company's ability to obtain adequate funding and commence
operations on a profitable basis. These uncertainties raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 11. To date, the Company
has been able to raise equity capital to continue construction. The financial
statements do not include any adjustments that might result from the outcome of
these uncertainties.
March 21, 2000
Columbus, Ohio. /s/Ickert & Company LLC
-----------------------
Ickert & Company LLC
<TABLE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Balance Sheets
As of December 31, 1999 and 1998
<CAPTION>
1999 1998
----------------------------------------------------------------------------------------------------------------
Assets
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets
Cash $ 717,900 $ 349,700
Prepaid expenses 3,800 3,800
----------------------------------------------------------------------------------------------------------------
721,700 353,500
----------------------------------------------------------------------------------------------------------------
Property & equipment 14,181,500 13,170,600
Accumulated depreciation -809,900 -695,800
----------------------------------------------------------------------------------------------------------------
13,371,600 12,474,800
----------------------------------------------------------------------------------------------------------------
Total assets $ 14,093,300 $ 12,828,300
================================================================================================================
----------------------------------------------------------------------------------------------------------------
Liabilities & Shareholders' Equity
----------------------------------------------------------------------------------------------------------------
Current liabilities
Current portion of long-term debt $ 26,900 $ 57,900
Current portion of notes payable to shareholder 400,000 250,000
Accounts payable 99,900 130,700
Accounts payable - related party 488,000 332,500
Accrued expenses 256,400 134,200
----------------------------------------------------------------------------------------------------------------
1,271,200 905,300
----------------------------------------------------------------------------------------------------------------
Long-term obligations
Long-term debt 0 3,000
Capital leases 35,100 67,900
Notes payable to shareholder 0 150,000
----------------------------------------------------------------------------------------------------------------
35,100 220,900
----------------------------------------------------------------------------------------------------------------
Shareholders' equity
Common stock 83,500 79,200
Additional paid-in capital 20,485,100 18,370,900
Deficit accumulated during the development stage -7,781,600 -6,748,000
----------------------------------------------------------------------------------------------------------------
12,787,000 11,702,100
----------------------------------------------------------------------------------------------------------------
Total liabilities & shareholders' equity $ 14,093,300 $ 12,828,300
================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
<TABLE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Statements of Loss and Accumulated Deficit
For the periods ended December 31, 1999 and 1998
<CAPTION>
Cumulative
During
Development
1999 1998 Stage
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Costs and expenses
General and administrative $ 847,100 $ 509,300 $5,209,800
Depreciation and amortization 114,100 132,900 1,325,700
Research and development -- -- 297,100
Loss on property disposal -- -- 717,800
-----------------------------------------------------------------------------------------------
Loss from operations 961,200 642,200 7,550,400
-----------------------------------------------------------------------------------------------
Other income (expense)
Interest income -- -- 83,900
Interest expense -72,400 -33,600 -309,100
Gain (loss) on sale of assets -- -13,400 -6,000
-----------------------------------------------------------------------------------------------
Net loss 1,033,600 689,200 7,781,600
-----------------------------------------------------------------------------------------------
Accumulated deficit -- Beginning of period 6,748,000 6,058,800 --
-----------------------------------------------------------------------------------------------
Accumulated deficit -- End of period $7,781,600 $6,748,000 $7,781,600
===============================================================================================
Loss per common share
(Basic and fully diluted) $ 0.013 $ 0.009 $ 0.17
======= ======= ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
<TABLE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Statements of Shareholders' Equity
For the periods ended December 31, 1999 and 1998
<CAPTION>
Common Stock
(par value $ .001 per share) Additional Accumulated
Shares Amount Paid-in Capital Deficit Total
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock issued at inception (September 14, 1983) 6,941,400 $ 69,400 $ 847,200 $ 0 $ 916,600
Stock issued in exchange for cash, other assets
or expenses through November 17, 1986
at $3.00 per share 709,900 7,100 2,122,700 -- 2,129,800
Stock issued November 17, 1986
six-for-one split to adjust share price
to $ .50 per share 38,255,500 82,600 -382,600 -- 0
Adjustment to reflect change in par value
to $ .001 per share -- 13,200 413,200 -- 0
Stock issued to acquire assets of
Veg-Tec Corporation during 1986 3,506,400 3,500 499,700 503,200
Stockissued in exchange for cash,
other assets or expenses from November
18, 1986 through December 31,
1997 at $ .50 per share
(net of redemptions) 26,588,400 26,600 13,267,000 -- 13,293,600
Net loss through December 31, 1997 -- -- -- -6,058,800 -6,058,800
-----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1996 76,001,600 76,000 16,767,200 -6,058,800 10,784,400
-----------------------------------------------------------------------------------------------------------------------------------
Stock issued in exchange for cash, other assets
or expenses during 1998
at $ .50 per share (net of redemptions) 3,213,900 3,200 1,603,700 -- 1,606,900
Net loss for the year ended December 31, 1997 -- -- -- -689,200 -689,200
-----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1997 79,215,500 79,200 18,370,900 -6,748,000 11,702,100
-----------------------------------------------------------------------------------------------------------------------------------
Stock issued in exchange for cash, other assets
or expenses during 1999
at $ .50 per share (net of redemptions) 4,236,900 4,300 2,114,200 -- 2,118,500
Net loss for the year ended December 31, 1999 -- -- -- -1,033,600 -1,033,600
Balance December 31, 1998 83,452,400 $ 83,500 $20,485,100 $ -7,781,600 $12,787,000
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Statements of Cash Flows
For the periods ended December 31, 1999 and 1998
<CAPTION>
Cumulative
During
Development
1999 1998 Stage
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ -1,033,600 $ -689,200 $ -7,781,600
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 114,100 132,900 1,325,700
Loss on sale of equipment - 13,400 6,000
Loss on property disposal - - 717,800
Common stock issued for operating expenses 25,000 2,000 311,100
Sources (uses) of cash from change in:
Deposits - 9,500 -3,800
Accounts payable -30,800 2,700 99,900
Accounts payable - related party 155,500 132,900 488,000
Accrued expenses 53,200 -1,400 187,200
Other 1,700 - 53,500
------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities -714,900 -397,200 -4,596,200
------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Purchases of property and equipment -979,400 -1,480,800 -12,027,400
Sale of property and equipment - - 219,200
------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities -979,400 -1,480,800 -11,808,200
------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Proceeds from issuance of long-term debt - - 1,112,100
Principal payments on long-term debt -9,000 -131,000 -690,000
Proceeds from notes payable to shareholder 125,000 200,000 650,000
Principal payments on notes payable to shareholder -50,000 - -175,000
Proceeds from capital leases - - 90,700
Principal payments on capital leases -22,000 -67,000 -164,100
Proceeds from issuance of common stock 2,058,500 1,606,900 16,585,100
Redemption of common stock -40,000 -14,500 -286,500
------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 2,062,500 1,594,400 17,122,300
------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash 368,200 -283,600 717,900
Cash -- Beginning of period 349,700 633,300 -
------------------------------------------------------------------------------------------------------------------
Cash -- End of period $ 717,900 $ 349,700 $ 717,900
==================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
As of December 31, 1999 and 1998
Note 1. Business Organization
National Fruit and Vegetable Technology Corporation (Company) was
incorporated in Nevada in December, 1986. The Company was formed to
develop a high-speed, high-powered microwave oven capable of processing
fruits and vegetables. The Company's products will be sold to customers
in both wholesale food processing and the food service industries.
Initially, the Company intends to process baked and french fried
potatoes. As the business develops, it intends to branch out into other
fruits and vegetables using the microwave technology developed in
processing potatoes. The Company has not begun food processing
operations as of the date of these financial statements and has not
generated any revenues from food processing operations.
National Fruit and Vegetable Technology Corporation is the successor to
National Veg-Tec Corporation (Veg-Tec). National Veg-Tec Corporation
was incorporated in 1983. On March 2, 1987, National Fruit and
Vegetable Technology Corporation acquired National Veg-Tec Corporation
by exchanging all of the common shares of National Fruit and Vegetable
Technology Corporation's stock (49,346,800 shares) on a one-for-one
basis for National Veg-Tec Corporation's stock. As a result of the
exchange, the financial statements are presented as if National Fruit
and Vegetable Technology Corporation had been in existence since the
inception of Veg-Tec, its predecessor. Veg-Tec was incorporated in
September, 1983.
Veg-Tec was formed by exchanging stock for property, equipment and
technology owned by an unincorporated joint venture. The joint venture
carried on extensive research and development in microwave technology
and was operated by the Company's majority shareholders. The assets
transferred to Veg-Tec were valued at the original shareholders'
historical cost, and consisted of:
Microwave oven technology and
related food processing equipment $ 297,000
Machinery & equipment 246,200
Vehicles 256,800
Other assets 116,600
---------------
$ 916,600
===============
F-6
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
Note 2. Acquisition
In 1986, the Company acquired Veg-Tec Corporation, an Ohio corporation,
by exchanging 3,506,400 shares of common stock for all the issued and
outstanding stock of Veg-Tec Corporation. The purchase price was
$503,200 for a note receivable and technology related to a browning
oven. The shareholders of Veg-Tec Corporation are also the principal
shareholders of the Company. The assets acquired were valued at the
shareholders' historical cost. The transaction was accounted for as a
combination of entities under common control.
Note 3. Summary of Significant Accounting Policies
Development Stage Corporation -- The Company has not started regular
operations and has no product sales to date. All noncapitalizable
expenses have been charged to operations in the period they were
incurred.
Employee Benefits -- The Company has no employee benefit or pension
plans.
Research and Development -- Research and development costs are
primarily related to oven testing and integration of related equipment.
These costs are charged to operations in the period incurred. Research
and development costs have totaled $297,100 since inception of the
Company.
Cash Equivalents -- For purposes of the statement of cash flows, the
Company considers all highly liquid instruments purchased with an
original maturity of three months or less to be cash equivalents.
Income Taxes -- Because the Company has not commenced planned food
processing operations, no federal or local income tax or county
property tax returns have been filed.
Concentration of Credit Risk -- The Company maintains bank accounts at
local banks. In some instances, the balances may exceed the federally
insured limit for an individual account.
Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
F-7
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
amount of assets, liabilities, revenues and expenses and disclosure of
contingent assets and liabilities. Actual results could differ from the
estimates and assumptions used.
Supplemental cash flow disclosures -- The Company paid $47,400 and
$33,600 for interest in 1999 and 1998, respectively.
The Company acquired $31,500 of property and equipment in 1999 and
$40,600 in 1998 in exchange for stock.
During 1999, the Company issued 50,000 common shares in payment of
interest on a loan from a shareholder. During 1998, 3,900 shares were
issued in lieu of cash in payment for certain administrative expenses.
The Company financed $72,900 of vehicles and equipment through capital
leases in 1998. No new lease transactions were entered into during
1999.
Note 4. Property and Equipment
As of December 31, 1999 and 1998, property and equipment can be
summarized as follows on a restated basis:
<TABLE>
<CAPTION>
Construction
In Service in Progress Total Total
at 12/31/99 at 12/31/99 at 12/31/99 at 12/31/98
---------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Land $ 222,800 $ -- $ 222,800 $ 191,300
Buildings 125,000 2,715,100 2,840,100 2,520,100
Microwave oven -- 1,020,900 1,020,900 924,000
Processing equipment -- 7,377,500 7,377,500 7,106,500
Machinery 882,800 1,126,300 2,009,100 1,713,300
Vehicles 157,400 553,700 711,100 715,400
---------------- ------------------ ------------------ ------------------
1,388,000 12,793,500 14,181,500 13,170,600
---------------- ------------------ ------------------ ------------------
Depreciation (809,900) -- (809,900) (695,800)
---------------- ------------------ ------------------ ------------------
$ 578,100 $ 12,793,500 $ 13,371,600 $ 12,474,800
================ ================== ================== ==================
</TABLE>
F-8
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
Amounts shown as construction in progress represent the Company's food
processing plant and the related food processing equipment. The plant
is located in Baltimore, Ohio, and is under construction at December
31, 1999. For financial reporting purposes depreciation is computed
using the straight-line method over the useful lives of the assets.
Useful lives generally range from three to ten years. For income tax
purposes depreciation will be provided using MACRS and straight-line
methods.
Note 5. Long-term Debt
Long-term debt consists of the following as of December 31, 1999:
Unsecured debt $ 3,000
Less: amounts due within one year (3,000)
--------------
Net long-term debt $ 0
==============
The unsecured debt is due in April, 2000. Payments are due monthly,
with no stated interest rate.
Note 6. Notes Payable to Shareholder
The Company had the following notes payable to a shareholder at
December 31, 1999:
Note payable due May, 1999 $ 50,000
Note payable due May, 1999 100,000
Note payable due October, 1999 50,000
Note payable due October, 1999 50,000
Note payable due February, 2000 50,000
Note payable due November, 2000 100,000
--------------
Total notes payable to shareholder $ 400,000
==============
F-9
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
The shareholder notes are all unsecured and bear interest at the rate
of 11%. The $50,000 note due May, 1999 is personally guaranteed by the
officers of the Company. Interest expense related to these notes
totaled $44,000 in 1999. Interest is to be paid to the shareholder with
common stock of the Company at the rate of $.50 per share. As of
December 31, 1999, interest expense has been accrued but the shares
have yet to be issued.
Under the terms of each note, the shareholder may choose to take
principal payments in cash or 50% in cash and 50% in the Company's
common stock. If the stock payment option were chosen for the entire
amount payable, the shareholder would receive $200,000 and 400,000
shares of common stock.
Note 7. Accounting for Income Taxes
The Company has incurred tax net operating losses during its
development period of approximately $7,800,000. No tax benefit for
those losses has been recorded in the accompanying financial
statements, as the Company's history of operating losses make it
uncertain that the benefit will ultimately be recognized. This method
of accounting for income taxes is in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes."
As the Company has not commenced planned food processing operations, no
federal or local income tax returns or county property tax returns have
been filed.ational Fruit and Vegetable Technology Corporation
Note 8. Operating Lease
The Company leases equipment under a non-cancelable operating lease
that expires in August, 2000. Rent expense under the agreement was
$8,700 for 1999 and 1998. Payments under the lease are guaranteed
personally by an officer of the Corporation.
Future minimum rental payments on the operating lease are as follows:
2000 $ 5,100
================
F-10
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
Note 9. Capital Leases
The Company leases equipment under lease agreements expiring on various
dates through 2002. The leases are capital leases with the Company
owning the assets outright at the end of the lease terms.
At December 31, 1999, future minimum lease payments for all leases, and
the minimum payments for those leases were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
2000 $ 27,700
2001 21,300
2002 12,100
2003 2,600
thereafter -
--------------
Total minimum lease payments 63,700
Less: interest portion (4,700)
--------------
Present value of net minimum lease payments 59,000
Less: current portion (23,900)
--------------
Net long-term lease liability $ 35,100
==============
At December 31, 1999, assets under capital leases were as follows:
Food processing equipment $ 54,400
Machinery and equipment 74,000
-------------
Less: Accumulated depreciation (47,600)
-------------
Net assets under capital lease $ 80,800
=============
</TABLE>
F-11
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
Note 10. Related Party Transactions
The Company rents a storage facility owned by an entitiy controlled by
the officers and principal shareholders of the Corporation. The lease
arrangement is renewable on an annual basis. Rent expense for the
facility was $200,000 in 1999 and 1998. Management has determined that
the rental rates charged do not exceed fair market rates for this
geographic area. As of December 31, 1999 and 1998, this related entity
has a balance due from the Company of $488,000 and $332,500,
respectively.
From time to time, the Company has borrowed funds from various
shareholders. At December 31, 1999 and 1998, a total of $403,000 and
$415,000 was due to various shareholders. Interest expense incurred on
this indebtedness amounted to $44,000 and $27,200 respectively in 1999
and 1998.
Note 11. Going Concern
The Company has been in the development stage since its inception on
September 14, 1983. To date, the Company has not begun food processing
operations and has not generated revenues. The accompanying financial
statements have been prepared assuming the Company will be able to
operate profitably. Realization of a major portion of the assets is
dependent on the Company's ability to place the microwave oven system
into operation on a profitable basis, the outcome of which cannot be
determined at this time. As of December 31, 1999, the Company needed to
raise additional funding to complete the construction of its Baltimore
plant and provide working capital to initiate operations. To date the
Company has been able to raise equity capital for construction.
Management's plans include an equity offering to raise additional
capital. Management is of the opinion that adequate equity funding can
be obtained to begin operations. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
Note 12. Reclassifications
Certain prior year amounts have been reclassified to conform with
current year presentation.
F-12
<PAGE>
ITEM 1. Financial Statements
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Balance Sheets
As of March 31, 2000 and 1999
<TABLE>
<CAPTION>
ASSETS
------
<S> <C> <C>
2000 1999
----------- -----------
Current assets
Cash $ 543,800 $ 325,400
Prepaid expenses 3,800 3,800
----------- -----------
547,600 329,200
----------- -----------
Property & equipment 14,565,000 13,403,300
Accumulated depreciation -839,800 -725,700
----------- -----------
13,725,200 12,677,600
----------- -----------
Total assets $14,272,800 $13,006,800
=========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
----------------------------------
Current liabilities
Current portion of long-term debt $ 19,300 $ 52,000
Current portion of notes payable to shareholder 400,000 250,000
Accounts payable 153,900 208,400
Accounts payable - related party 524,900 371,500
Accrued expenses 264,700 142,400
----------- -----------
1,362,800 1,024,300
----------- -----------
Long-term obligations
Long-term debt -- 3,000
Capital leases 24,800 28,400
Notes payable to shareholder -- 150,000
----------- -----------
24,800 181,400
----------- -----------
Shareholders' equity
Common stock 84,200 79,900
Additional paid-in capital 20,820,600 18,737,500
Deficit accumulated during the development stage -8,019,600 -7,016,300
----------- -----------
12,885,200 11,801,100
----------- -----------
Total liabilities & shareholders' equity $14,272,800 $13,006,800
=========== ===========
</TABLE>
The accompanying Accountants' Review Report and footnotes are an integral part
of these financial statements.
FF-1
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Statements of Loss and Accumulated Deficit
For the periods ended March 31,
<TABLE>
<CAPTION>
Cumulative
Three Months Three Months During
Ended Ended Development
3/31/00 3/31/99 Stage
----------- ----------- -----------
<S> <C> <C> <C>
Costs and expenses
General and administrative $ 197,1$ 225000 $ 5,406,900
Depreciation and amortization 29,900 29,900 1,355,600
Research and development -- -- 297,100
Loss on property disposal -- -- 717,800
----------- ----------- -----------
Loss from operations 227,000 254,900 7,777,400
----------- ----------- -----------
Other income (expense)
Interest income -- -- 83,900
Interest expense -11,000 -13,400 -320,100
Gain (loss) on sale of assets -- -- -6,000
----------- ----------- -----------
Net loss (238,000) (268,300) (8,019,600)
----------- ----------- -----------
Accumulated deficit -- Beginning of period (7,781,600) (6,748,000) --
----------- ----------- -----------
Accumulated deficit -- End of period $(8,019,600) $(7,016,300) $(8,019,600)
=========== =========== ===========
Loss per common share
(Basic and Diluted) $ (0.003) $ (0.003) $ (0.173)
=========== =========== ===========
</TABLE>
The accompanying Accountants' Review Report and footnotes are an integral part
of these financial statements.
FF-2
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Statement of Shareholders' Equity
For the periods ended March 31, 2000 and 1999
<TABLE>
<CAPTION>
Common Stock
(par value $ .001 per share) Additional Accumulated
Shares Amount Paid-in Capital Deficit Total
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1999 83,452,400 $ 83,500 $20,485,100 $-7,781,600 $12,787,000
----------- ----------- ----------- ----------- -----------
Stock issued in exchange for
cash at $ .50 per share (net
of redemptions) 672,400 700 335,500 -- 336,200
Net loss for the period ended
March 31, 2000 -- -- -- -238,000 -238,000
----------- ----------- ----------- ----------- -----------
Balance March 31, 2000 84,124,800 $ 84,200 $20,820,600 $-8,019,600 $12,885,200
=========== =========== =========== =========== ===========
Balance December 31, 1998 79,215,500 $ 79,200 $18,370,900 $-6,748,000 $11,702,100
----------- ----------- ----------- ----------- -----------
Stock issued in exchange for
cash at $ .50 per share (net
of redemptions) 734,500 700 366,600 -- 367,300
Net loss for the period ended
March 31, 1999 -- -- -- -268,300 -268,300
Balance March 31, 1999 79,950,000 $ 79,900 $18,737,500 $-7,016,300 $11,801,100
=========== =========== =========== =========== ===========
</TABLE>
The accompanying Accountants' Review Report and footnotes are an integral part
of these financial statements.
FF-3
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Statements of Cash Flows
For the periods ended
<TABLE>
<CAPTION>
Cumulative
Three Months Three Months During
Ended Ended Development
3/31/00 3/31/99 Stage
-------------- ---------------- ----------------
Cash flows from operating activities
<S> <C> <C> <C>
Net loss $ -238,000 $ -268,300 $ -8,019,600
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 29,900 29,900 1,355,600
Loss on sale of equipment - - 6,000
Loss on property disposal - - 717,800
Common stock issued for operating expenses - - 311,100
Sources (uses) of cash from change in:
Other - - 53,500
Deposits - - -3,800
Accounts payable 54,000 77,500 153,000
Accounts payable - related party 36,900 39,100 524,900
Accrued expenses 8,300 8,300 195,500
-------------- ---------------- ----------------
Net cash used in operating activities -108,900 -113,500 -4,706,000
-------------- ---------------- ----------------
Cash flows from investing activities
Purchases of property and equipment -383,500 -232,700 -12,410,900
Sale of property and equipment - - 219,200
-------------- ---------------- ----------------
Net cash used in investing activities -383,500 -232,700 -12,191,700
-------------- ---------------- ----------------
Cash flows from financing activities
Proceeds from issuance of long-term debt - - 1,112,100
Principal payments on long-term debt -7,600 -5,900 -697,600
Proceeds from notes payable to shareholder - - 650,000
Principal payments on notes payable to shareholder - - -175,000
Proceeds from capital leases - - 90,700
Principal payments on capital leases -10,300 -39,500 -174,400
Proceeds from issuance of common stock 361,200 377,300 16,947,200
Redemption of common stock -25,000 -10,000 -311,500
-------------- ---------------- ----------------
Net cash provided by financing activities 318,300 321,900 17,441,500
-------------- ---------------- ----------------
Increase (decrease) in cash -174,100 -24,300 543,800
Cash -- Beginning of period 717,900 349,700 -
-------------- ---------------- ----------------
Cash -- End of period $ 543,800 $ 325,400 $ 543,800
============== ================ ================
</TABLE>
The accompanying Accountants' Review Report and footnotes are an integral part
of these financial statements.
FF-4
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
As of March 31, 2000 and 1999
Note 1. Business Organization
National Fruit and Vegetable Technology Corporation (Company) was
incorporated in Nevada in December, 1986. The Company was formed to
develop a high-speed, high-powered microwave oven capable of processing
fruits and vegetables. The Company's products will be sold to customers
in both wholesale food processing and the food service industries.
Initially, the Company intends to process baked and french fried
potatoes. As the business develops, it intends to branch out into other
fruits and vegetables using the microwave technology developed in
processing potatoes. The Company has not begun food processing
operations as of the date of these financial statements and has not
generated any revenues from food processing operations.
National Fruit and Vegetable Technology Corporation is the successor to
National Veg-Tec Corporation (Veg-Tec). National Veg-Tec Corporation
was incorporated in 1983. On March 2, 1987, National Fruit and
Vegetable Technology Corporation acquired National Veg-Tec Corporation
by exchanging all of the common shares of National Fruit and Vegetable
Technology Corporation's stock (49,346,800 shares) on a one-for-one
basis for National Veg-Tec Corporation's stock. As a result of the
exchange, the financial statements are presented as if National Fruit
and Vegetable Technology Corporation had been in existence since the
inception of Veg-Tec, its predecessor. Veg-Tec was incorporated in
September, 1983.
Veg-Tec was formed by exchanging stock for property, equipment and
technology owned by an unincorporated joint venture. The joint venture
carried on extensive research and development in microwave technology
and was operated by the Company's majority shareholders. The assets
transferred to Veg-Tec were valued at the original shareholders'
historical cost, and consisted of:
Microwave oven technology and
related food processing equipment $ 297,000
Machinery & equipment 246,200
Vehicles 256,800
Other assets 116,600
---------------
$ 916,600
===============
FF-5
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
Note 2. Acquisition
In 1986, the Company acquired Veg-Tec Corporation, an Ohio corporation,
by exchanging 3,506,400 shares of common stock for all the issued and
outstanding stock of Veg-Tec Corporation. The purchase price was
$503,200 for a note receivable and technology related to a browning
oven. The shareholders of Veg-Tec Corporation are also the principal
shareholders of the Company. The assets acquired were valued at the
shareholders' historical cost. The transaction was accounted for as a
combination of entities under common control.
Note 3. Summary of Significant Accounting Policies
Development Stage Corporation -- The Company has not started regular
operations and has no product sales to date. All noncapitalizable
expenses have been charged to operations in the period they were
incurred.
Employee Benefits -- The Company has no employee benefit or pension
plans.
Research and Development -- Research and development costs are
primarily related to oven testing and integration of related equipment.
These costs are charged to operations in the period incurred. Research
and development costs have totaled $297,100 since inception of the
Company.
Cash Equivalents -- For purposes of the statement of cash flows, the
Company considers all highly liquid instruments purchased with an
original maturity of three months or less to be cash equivalents.
Income Taxes -- Because the Company has not commenced planned food
processing operations, no federal or local income tax or county
property tax returns have been filed.
Concentration of Credit Risk -- The Company maintains bank accounts at
local banks. In some instances, the balances may exceed the federally
insured limit for an individual account.
Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amount of assets, liabilities, revenues and expenses and disclosure of
contingent assets and liabilities. Actual results could differ from the
estimates and assumptions used.
FF-6
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
Supplemental cash flow disclosures -- The Company made no cash payments
for interest during the first quarter of 2000. The Company paid taxes
in the amount of $5,500 during the three month period ended March 31,
2000.
Note 4. Property and Equipment
As of March 31, 2000 and 1999, property and equipment can be summarized
as follows on a restated basis:
<TABLE>
<CAPTION>
Construction
In Service in Progress Total Total
at 3/31/00 at 3/31/00 at 3/31/00 at 3/31/99
---------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Land $ 222,800 $ - $ 222,800 $ 191,300
Buildings 125,000 2,896,500 3,021,500 2,559,900
Microwave oven - 1,040,900 1,040,900 941,400
Processing equipment - 7,497,500 7,497,500 7,198,700
Machinery 882,800 1,187,500 2,070,300 1,796,600
Vehicles 157,400 553,700 711,100 715,400
---------------- ------------------ ------------------ ------------------
1,388,000 13,176,100 14,564,100 13,403,300
---------------- ------------------ ------------------ ------------------
Depreciation (839,800) - (838,900) (725,700)
---------------- ------------------ ------------------ ------------------
$ 548,200 $ 13,176,100 $ 13,725,200 $ 12,677,600
================ ================== ================== ==================
</TABLE>
FF-7
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
Amounts shown as construction in progress represent the Company's food
processing plant and the related food processing equipment. The plant
is located in Baltimore, Ohio, and is under construction at March 31,
2000 and 1999. For financial reporting purposes depreciation is
computed using the straight-line method over the useful lives of the
assets. Useful lives generally range from three to ten years. For
income tax purposes depreciation will be provided using MACRS and
straight-line methods.
Note 5. Long-term Debt
Long-term debt consists of the following as of March 31, 2000:
Unsecured debt $ 1,000
Less: amounts due within one year (1,000)
--------------
Net long-term debt $ 0
==============
The unsecured debt is due in April, 2000. Payments are due monthly,
with no stated interest rate.
Note 6. Notes Payable to Shareholder
The Company had the following notes payable to a shareholder at March
31, 2000:
Note payable due May, 1999 $ 50,000
Note payable due May, 1999 100,000
Note payable due October, 1999 50,000
Note payable due October, 1999 50,000
Note payable due February, 2000 50,000
Note payable due November, 2000 100,000
--------------
Total notes payable to shareholder $ 400,000
==============
FF-8
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
The shareholder notes are all unsecured and bear interest at the rate
of 11%. The $50,000 note due May, 1999 is personally guaranteed by the
officers of the Company. Interest expense related to these notes
totaled $11,000 during the first three months of 2000 Interest is to be
paid to the shareholder with common stock of the Company at the rate of
$.50 per share. As of March 31, 2000, interest expense has been accrued
but the shares have yet to be issued.
Under the terms of each note, the shareholder may choose to take
principal payments in cash or 50% in cash and 50% in the Company's
common stock. If the stock payment option were chosen for the entire
amount payable, the shareholder would receive $205,500 and 411,000
shares of common stock.
Note 7. Accounting for Income Taxes
The Company has incurred tax net operating losses during its
development period of approximately $7,800,000. No tax benefit for
those losses has been recorded in the accompanying financial
statements, as the Company's history of operating losses make it
uncertain that the benefit will ultimately be recognized. This method
of accounting for income taxes is in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes."
As the Company has not commenced planned food processing operations, no
federal or local income tax returns or county property tax returns have
been filed. National Fruit and Vegetable Technology Corporation
Note 8. Operating Lease
The Company leases equipment under a noncancelable operating lease that
expires in August, 2000. Rent expense under the agreement was $8,700
for 1999 and 1998. Payments under the lease are guaranteed personally
by an officer of the Corporation.
Future minimum rental payments on the operating lease are as follows:
2000 $ 5,100
================
FF-9
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
Note 9. Capital Leases
The Company leases equipment under lease agreements expiring on various
dates through 2002. The leases are capital leases with the Company
owning the assets outright at the end of the lease terms.
At March 31, 2000, future minimum lease payments for all leases, and
the minimum payments for those leases were as follows:
<TABLE>
<CAPTION>
<S> <C>
2000 $ 18,700
2001 17,400
2002 9,400
2003 2,600
thereafter -
--------------
--------------
Total minimum lease payments 48,100
Less: interest portion (4,000)
--------------
Present value of net minimum lease payments 44,100
Less: current portion (19,300)
--------------
Net long-term lease liability $ 24,800
==============
At March 31, 2000, assets under capital leases were as follows:
Food processing equipment $ 54,400
Machinery and equipment 74,000
-------------
Less: Accumulated depreciation (50,400)
-------------
Net assets under capital lease $ 78,000
=============
</TABLE>
FF-10
<PAGE>
National Fruit and Vegetable Technology Corporation
(A Development Stage Corporation)
Notes to Financial Statements
Note 10. Related Party Transactions
The Company rents a storage facility owned by an entity controlled by
the officers and principal shareholders of the Corporation. The lease
arrangement is renewable on an annual basis. Rent expense for the
facility was $200,000 in 1999 and 1998. Management has determined that
the rental rates charged do not exceed fair market rates for this
geographic area. As of March 31, 2000 and 1999, this related entity has
a balance due from the Company of $524,000 and $371,500, respectively.
From time to time, the Company has borrowed funds from various
shareholders. At March 31, 2000 and 1999, a total of $401,000 and
$43,000 was due to various shareholders. Interest expense incurred on
this indebtedness amounted to $44,000 and $27,200 respectively in 1999
and 1998.
Note 11. Going Concern
The Company has been in the development stage since its inception on
September 14, 1983. To date, the Company has not begun food processing
operations and has not generated revenues. The accompanying financial
statements have been prepared assuming the Company will be able to
operate profitably. Realization of a major portion of the assets is
dependent on the Company's ability to place the microwave oven system
into operation on a profitable basis, the outcome of which cannot be
determined at this time. As of March 31, 2000, the Company needed to
raise additional funding to complete the construction of its Baltimore
plant and provide working capital to initiate operations. To date the
Company has been able to raise equity capital for construction.
Management's plans include an equity offering to raise additional
capital. Management is of the opinion that adequate equity funding can
be obtained to begin operations. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
FF-11
<PAGE>
--------------------------------------------------------------------------------
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
--------------------------------------------------------------------------------
There have been no disagreements with the Company's independent
accountants over any item involving the Company's financial statements. The
Company's independent accountants are Ickert & Company LLC., Certified Public
Accountants, 42 East Gay Street, Suite 1515, Columbus, Ohio 43215.
--------------------------------------------------------------------------------
ITEM 15. Financial Statements and Exhibits
--------------------------------------------------------------------------------
The Company incorporates by this reference the text of Item 15 of the
Company's Form 10-SB filed on March 29, 1999, and the exhibits filed with that
Form 10-SB.
--------------------------------------------------------------------------------
SIGNATURES
--------------------------------------------------------------------------------
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: June 30, 2000.
NATIONAL FRUIT AND VEGETABLE
TECHNOLOGY CORPORATION
By: /s/ Daniel K. Cashmanr
--------------------------
Daniel K. Cashman
President
43
