SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended: March 31, 1999 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number: 0-17304
CNH Holdings Company
(Exact name of registrant as specified in its charter)
Nevada 11-2867201
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1420 N. Longview Street, Kilgore, TX 75662
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (903) 984-6425
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 Par Value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405
of Regulation S-K is not contained herein and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing: The
common stock of registrant is listed and traded on the "Bulletin Board"
maintained by the National Association of Securities Dealers, Inc. The quoted
inside bid and asked prices for the common stock on July 23, 1999, were $.68 and
$1.31, respectively. There were 7,611,415 common shares outstanding on that
date, of which 2,227,568 shares were held by non-affiliates. The aggregate
market value for the common stock on that date was, therefore, $2,216,430.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date: As of July 23, 1999, there were
7,611,415 common shares outstanding.
Registrant had revenues of $849,120 during the fiscal year ended March 31, 1999.
Documents Incorporated by Reference: List hereunder the documents, if any,
incorporated by reference and the part of this Form 10-KSB into which the
document is incorporated: None.
1
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Item 1. Description of Business: CNH Holdings Company, a Nevada corporation (the
"Company"), was incorporated in Delaware on April 15, 1987, under the name of
I.S.B.C. Corp. The Company subsequently changed its name first to Coral
Companies, Inc., and then to CNH Holdings Company. Domicile was changed to
Nevada in 1997.
On June 15, 1998, the Company entered into a reorganization agreement (the
"Southport Reorganization Agreement") with Southport Environmental and
Development, Inc., a Nevada corporation ("Southport Environmental" or "SEDI"),
and the shareholders of Southport Environmental pursuant to which the Company
acquired all of the outstanding proprietary interest of Southport Environmental
and 1/3rd of the outstanding proprietary interest of NORM Services, Group, Inc.
("NORM"), in a share for share exchange which resulted in Southport
Environmental becoming a wholly owned subsidiary of the Company, NORM becoming a
minority owned subsidiary of the Company and the shareholders of Southport
Environmental acquiring control of the Company through their share ownership.
The Company issued 6,000,000 common shares and 200,000 shares of the Class A:
10% Dividend Bearing Preferred Stock in the exchange. Pursuant to the
Reorganization Agreement, the existing director, Mr. Paul M. Lionti, resigned
and the Company appointed Messrs. Larry V. Tate, Gerald Pybas, H. Paul Estey, E.
Robert Barbee and Terry McFarland as directors. Mr. Tate was then appointed
Chief Executive Officer, Mr. Pybas President, and Ms. Helen Wallace Treasurer.
Southport Environmental was incorporated on June 1, 1998, and is involved in the
exploration for and development of oil and gas properties. It had acquired,
prior to the Southport Reorganization Agreement, oil and gas properties with a
remaining cost basis of $144,146 from two individuals, Messrs. Tate and Pybas,
solely in exchange for SEDI stock. Messrs. Tate and Pybas were the sole
shareholders of SEDI at June 15, 1998.
NORM was originally formed as a Texas limited liability company on February 26,
1997, and commenced operations in May, 1997. NORM is involved in the remediation
of naturally occurring radioactive and waste materials along the gulf coast of
Texas and Louisiana. NORM became a corporation on July 21, 1998.
On August 7, 1998, NORM acquired all of the partnership assets and liabilities
of NSG Rentals, a Texas general partnership in exchange for common stock. The
operations of NSG Rentals are now a division of NORM. NSG Rentals commenced
operations on March 4, 1998, renting and servicing oil field equipment. Two of
the three equal partners in NSG Rentals were Messrs. Tate and Pybas. Also on
August 7, 1998, the Company acquired the remaining outstanding interests of NORM
which it did not then own in a tax free reorganization, issuing 450,000 shares
of common stock in exchange.
Item 2. Description of Property: The Company, during the period covered by and
on the date of this report, owned no real property. On the date of this report,
the Company owned all of the outstanding shares of Southport Environmental, all
of which were acquired on June 15, 1998, and all of the shares of NORM, all of
which were acquired on June 15, 1998, and August 7, 1998. The executive offices
of the Company are now located at 1420 N. Longview Street, Kilgore, Texas 75662.
The telephone number at this address is (903) 984-6425.
Item 3. Legal Proceedings: No material legal proceedings to which the Company
(or any officer or director of the Company, or any affiliate or owner of record
or beneficially of more than five percent of the Common Stock, to management's
knowledge) is a party or to which the property of the Company is subject is
pending, and no such material proceeding is known by management of the Company
to be contemplated.
Item 4. Submission of Matters to a Vote of Security Holders: There were no
meetings of security holders during the period covered by this report; thus,
this item is not applicable.
Item 5. Market for Common Equity and Related Shareholder Matters:
The Common Stock is presently traded in the over-the-counter market and is
listed on the Pink Sheets maintained by the National Quotation Bureau, Inc., and
on the Bulletin Board maintained by the National Association of Securities
Dealers, Inc. (NASD) under the symbol CNHH. The following table sets forth the
range of high and low bid and asked quotations for the common stock during each
calendar quarter beginning January 1, 1998, and ending June 30, 1999, each of
which has been rounded to the nearest whole cent.
2
<PAGE>
HIGH BID LOW BID HIGH ASKED LOW ASKED
March 31, 1998 2.125 0.25 2.625 0.50
June 30, 1998 1.75 0.75 2.00 0.9375
September 30, 1998 1.375 0.25 1.875 0.625
December 31, 1998 0.4375 0.3125 0.75 0.4375
March 31, 1999 1.625 0.3125 2.00 0.75
June 30, 1999 1.375 0.375 1.625 0.75
The above prices were obtained from the National Association of Securities
Dealers, Inc. The quotations represent inter-dealer quotations without retail
mark-up, mark-down or commission, and may not necessarily represent actual
transactions. On July 23, 1999, the closing inside bid and asked prices quoted
on the Bulletin Board for the common stock were $.68 and $1.31, respectively. On
that date, there were four broker-dealers in the market.
Outstanding Shares and Shareholders of Record: As of July 23, 1999, the transfer
ledgers maintained by the Company's stock transfer agent indicated that there
7,611,415 shares of common stock issued and outstanding, 6,309,410 of which were
restricted. On that date there were approximately 571 shareholders of record.
Dividends: The Company has not declared or paid any dividends on its Common
Stock from inception to the date of this report, although there are no
restrictions on the payment of dividends. Further, no dividends are contemplated
at any time in the foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations:
The following discussion has been prepared assuming the Company will continue as
a going concern; however, the audit report includes a caveat on this point. In
reading the following, one should first consult the audit report, financial
statements and footnotes, while keeping in mind the significant operating losses
generated by the Company on a consolidated basis with its subsidiaries.
Results of Operations:
Fiscal 1999 as compared to Fiscal 1998: The primary revenue sources for the
Company during the fiscal year ended March 31, 1999, were from oil field
services ($646,523), oil and gas sales ($145,511) and equipment rental income
($19,190), which resulted in gross revenues of $849,120. The Company had no
revenues in fiscal 1998. Operating costs during fiscal 1999 primarily consisted
of cost of sales ($841,218), administrative and general expenses ($529,932) and
depreciation, depletion and amortization ($44,614), a total of $1,415,764.
Operating costs during fiscal 1998 were solely administrative in nature and
aggregated $139,000 in amount. The foregoing resulted in a net loss from
operations of $566,644 during fiscal 1999 and $139,000 during fiscal 1998. This
loss was primarily the result of losses from the oil field services segment
aggregating $457,739 in amount, although equipment rentals also contributed
significantly since the loss generated by this segment exceeded the revenues
generated.
Management at present is devoting itself to increasing gross revenues and
reducing administrative and general expenses, and has implemented steps and
proceedures to better assure itself on the profitability of its services
contracts. There can be no assurance these efforts will be successful. The
Company, during fiscal 1999, had other expenses of $65,778. The net loss for the
fiscal year, then, was $632,422, or $.12 per share outstanding, as compared to a
loss of $139,000 and $.35 per share during fiscal 1998.
Cash flows from operating activities, however, were $95,355; thus, on an
operating basis the Company has sufficient cash to cover its day-to-day needs.
The Company, during 1999, expended $161,008 on plant, property and equipment so
as to better serve its customers and ramp up operations. Financing activities
during fiscal 1999 generated $94,756. The net result of the foregoing was an
increase in cash from fiscal 1998 of $29,103.
Fiscal 1998 as compared to Fiscal 1997: The Company had no revenues, operating
or otherwise, from 1991 through the fiscal year ended March 31, 1998.
Correspondingly, all expenses during these periods were administrative in nature
and immaterial in amount. The acquisition by the Company of SEDI and 1/3rd of
the outstanding interest of NORM did not occur until June 15, 1998, and the
acquisition by the Company of the remaining 2/3rds interest in NORM did not
occur until August 7, 1998. SEDI and NORM are in the development phase and did
not have significant operations during the fiscal year ended March 31, 1998;
thus, no meaningful comparison can be made between fiscal 1998 and fiscal 1997.
3
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Liquidity and Capital Resources: The Company had no liquidity sources from
fiscal 1990 through the calendar year ended 1997; however, a stock subscription
by a consultant provided a source of liquidity through 1998 and the first three
months of fiscal 1999. All administrative matters through June 15, 1998, were
provided for by the executive officer of and attorney for the Company in
exchange common stock issued to them on May 3, 1996. Cash flows from operations
provided liquidity to SEDI and NORM for fiscal 1998 and fiscal 1999; however,
each of these entities suffered a loss from operations in each of these years.
NORM has factored various of its accounts receivable to a financial institution,
paying a 3% fee to the financial institution, which requires a reserve where 10%
of the amount factored is deposited so as to cover any collection failures. The
reserve account is balanced out at the end of each month. At fiscal 1999 year
end $120,226 of accounts receivable had been factored and $19,794 established as
a reserve. On June 23, 1999, the Company received approximately $500,000 in
equity proceeds. The Company will use these proceeds in operations.
Compliance with Beneficial Ownership Reporting Rules: Section 16(a) of the
Securities Act of 1934, as amended ("Exchange Act"), requires the executive
officers and directors of the Company, and persons who beneficially own more
than 10% of the Common Stock, to file initial reports of ownership and reports
of changes in ownership with the Commission. These officers, directors and
shareholders are also required to furnish the Company with copies of certain of
these reports. Based solely on a review of copies of reports furnished to the
Company during its fiscal year ended March 31, 1999, and thereafter, or written
representations, if any, received by the Company from these persons that no
other reports were required, the Company believes that, during the fiscal years
ended March 31, 1996, 1997 and 1998, all applicable Section 16(a) filing
requirements were not satisfied.
Item 7. Financial Statements:
Halliburton, Hunter & Associates, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Stockholders
CNH Holdings Company
We have audited the balance sheets of CNH Holdings Company as of March 31, 1999,
and 1998, and the related statements of income (loss) and of stockholders'
equity for the three years ended March 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit 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 CNH Holdings Company as of
March 31, 1999, and 1998, and the results of its operations and shareholders'
equity for the three years ended March 31, 1999, 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 the notes to the
financial statements, the Company has suffered substantial losses from
operations and has a net capital deficiency that raises substantial doubt about
its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Littleton, Colorado
July 8, 1999
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CNH HOLDINGS COMPANY AND SUBSIDIARIES
BALANCE SHEETS
March 31,
1999 1998
---- ----
ASSETS
Current Assets:
Cash $ 9,309 $ --
Cash (restricted) 19,794 --
Total cash 29,103 --
-------- --------
Receivables:
Note 34,500 --
Trade accounts 80,736 --
Other 535 100,000
-------- --------
115,771 100,000
Less allowance for doubtful accounts 59,673 --
-------- --------
56,098 100,000
-------- --------
Total current assets 85,201 100,000
-------- --------
Property, Plant and Equipment
Land farm 70,000 --
Land farm improvements 13,009 --
Oil and gas producing properties 154,937 --
Disposal well 18,500 --
Machinery & equipment 150,610 --
Rental equipment 152,429 --
Vehicles 16,566 --
Office Equipment 20,905 --
-------- --------
596,956 --
Less accumulated depreciation 54,350 --
-------- --------
542,606 --
-------- --------
Other assets:
Organization costs 1,517 --
Deposits 3,650 --
-------- --------
5,167 --
-------- --------
Total Assets $632,974 $100,000
======== ========
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<PAGE>
1999 1998
---- ----
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ 42,000 --
Notes payable, bank 237,576 --
Notes payable, shareholders 118,600 --
Note payable, other 10,000 --
Accounts payable, trade 296,149 --
Payroll taxes payable 7,310 --
Accrued interest 13,516 --
Other payables 15,815 --
--------- ---------
Total current liabilities 740,966 --
--------- ---------
Long term debt:
Notes payable, bank 105,076 --
Less current portion 42,000 --
--------- ---------
Total long term debt 63,076 --
--------- ---------
Stockholders' Equity (Deficit)
Preferred Stock, $.01 par value,
1,000,000 shares authorized,
200,000 shares issued and
outstanding 2,000 --
Common Stock, $.001 par value,
10,000,000 shares authorized,
7,259,410 shares at March 31,
1999 and 950,000 at March 31,
1998 issued and outstanding 7,259 950
Additional paid-in capital 581,495 228,450
Deficit (761,822) (129,400)
--------- ---------
(171,068) 100,000
--------- ---------
Total Liabilities and
Stockholders' Equity $ 632,974 $ 100,000
========= =========
The Auditor's report and accompanying notes are
an integral part of these statements.
6
<PAGE>
CNH HOLDINGS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Year ended March 31,
1999 1998 1997
---- ---- ----
Operating revenues:
Oil field services $ 646,523 $ -- $--
Oil and gas sales 145,511 -- --
Equipment rental income 19,190 -- --
All other income 37,896 -- --
----------- ----------- -----
Gross revenue 849,120 -- --
----------- ----------- -----
Operational costs
Cost of sales 841,218 -- --
Administrative and general expenses 529,932 139,000 --
Depreciation, depletion and amortization 44,614 -- --
----------- ----------- -----
Total operating costs 1,415,764 139,000 --
----------- ----------- -----
Net loss from operations (566,644) (139,000) --
Other income (expenses)
Interest income 332 -- --
Interest expense (66,110) -- --
Net income (loss) $ (632,422) $ (139,000) --
=========== =========== =====
(Loss) per common share $ (.12) $ (.35) --
The Auditor's report and accompanying notes are
an integral part of these statements.
7
<PAGE>
CNH HOLDINGS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities:
Net (loss) $(632,422) --
Add non-cash items:
Depreciation, depletion and amoritization 44,614 --
Decrease in accounts receivable, net 337,462 --
(Increase) in deposits (3,650) --
Increase in notes payable 291,176 --
Increase in accounts payable 31,579 --
Increase in other liabilities 26,596 --
--------- ---
Net cash flows from operating activities 95,355 --
--------- ---
Cash flows from investing activities:
Purchase of plant, property & equipment (161,008) --
--------- ---
Net cash flows used in investing activities (161,008) --
--------- ---
Cash flows from financing activities:
Cash received in purchase of subsidiaries 74,745 --
Payments on long term debt (45,092) --
Sale of common stock 65,103 --
--------- ---
Net cash flows from financing activities 94,756 --
--------- ---
Net increase in cash 29,103 --
Cash at beginning of year -- --
--------- ---
Cash at end of year $ 29,103 --
========= ===
The Auditor's report and accompanying notes are
an integral part of these statements.
8
<PAGE>
<TABLE>
<CAPTION>
CNH HOLDINGS COMPANY AND SUBSIDIARIES
STATEMENT OF STOCKHOLDERS' EQUITY
Preferred Common Total
Preferred Common Stock Stock Accumulated Equity
Shares Shares Amount Amount APIC Deficit (Deficit)
------ ------ ------ ------ ---- ------- ---------
Balance
<S> <C> <C> <C> <C> <C> <C> <C>
at March 31, 1997 400,000 400 -- (400) --
Issuance of common
shares for services
in December, 1997 100,000 100 3,900 -- 4,000
Issuance of common
shares for services
in December, 1997 450,000 450 224,550 -- 225,000
Net loss for
the year ended
March 31, 1998 -- -- -- -- (129,000) (129,000)
--------- --------- --------- --------- --------- --------- ---------
Balance at
March 31, 1998 950,000 950 228,450 (129,400) 100,000
Exchange and sale
of stock in
acquisition of
subsidiary 200,000 6,309,410 2,000 6,309 353,045 -- 361,354
Net loss for
year ended
March 31, 1999 -- -- -- -- -- (632,422)
--------- --------- --------- --------- --------- --------- ---------
Balance at
March 31, 1999 200,000 7,259,410 $ 2,000 7,259 581,495 (761,822) (171,068)
========= ========= ========= ========= ========= ========= =========
The Auditor's report and accompanying notes are
an integral part of these statements.
9
</TABLE>
<PAGE>
CNH HOLDINGS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999, 1998, and 1997
1. Organization:
I.S.B.C. Corp. was incorporated in Delaware on April 15, 1987. On January 29,
1988, I.S.B.C. Corp. completed a public offering of 800,000 units at a price of
$.50 per unit, consisting of one share of common stock and three redeemable
warrants. All unexercised warrants have now expired.
On June 27, 1988, I.S.B.C. Corp. issued 21,000,000 shares of its common stock in
exchange for all of the outstanding shares of Coral Group, Inc. Subsequent to
the exchange of stock, I.S.B.C. Corp. changed its name to Coral Companies, Inc.
Coral Group, Inc. was incorporated on March 12, 1984, and commenced operations
in November 1984. Coral Group, Inc.'s primary business was the marketing of
computer hardware and software as well as providing consulting services,
installation support, training programs and software maintenance for its
customers. Since the shareholders of Coral Group, Inc. owned approximately 85%
of Coral Companies, Inc. immediately after the exchange, the stock exchanges was
accounted for as a reverse acquisition of Coral Companies, Inc. by Coral Group,
Inc. The Company, subsequent to the acquisition of the Coral Group, changed its
name to CNH Holdings Company and its domicile to Nevada.
The Company previously had outstanding a class of preferred stock which was
entitled to one vote per share, was not entitled to receive any dividends that
may have been declared and had a liquidation preference of $.02 per share. The
preferred stock was previously converted to common stock, and the liquidation
preference of $220,000 was reclassified from preferred stockholders' equity to
common stockholders' equity.
On May 30, 1996, the Company effected a reverse one-for-one thousand capital
share split. Concurrently, the authorized number of common shares was increased
to 10,000,000, $.001 par value per share and 1,000,000 preferred shares, $.01
par value. After the split, there were 19,228 common shares outstanding.
Subsequently, 380,772 shares of the $.001 par value shares were issued to
individuals in exchange for services rendered.
On December 9, 1997, the Company entered into a reorganization agreement (DRC
Reorganization Agreement) with GNC Corporation, a Nevada corporation (GNC), and
the sole shareholder of GNC, that being DRC, Inc., a Nevada corporation (DRC)
pursuant to which the Company agreed to acquire all of the outstanding
proprietary interest of GNC in a share-for-share exchange which subsequently
resulted in GNC becoming a wholly-owned subsidiary of the Company and DRC
acquiring control of the company through its share ownership. The accquisition
was rescinded due to the failure of GNC and DRC to deliver the required
financial statements.
During the fiscal year, on June 18, 1998, the Company acquired Southport
Environmental in a share for share exchange, which resulted in the Company
issuing 6,000,000 common shares and 200,000 preferred shares. Concurrent with
the acquisition, there was a change in control and the management of the
company.
The Company now operates under three divisions, Norm Services Group, Inc., an
oilfield services operation, Southport Environment and Design, Inc., a producing
and exploration oil and gas company, and NSG Rentals, an equipment leasing
company, primarily to the oil and gas industry.
2. Accounting principles:
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
Cash: For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
and money market funds to be cash equivalents.
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Loss Per Shares: Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS No. 128) - Earnings per Share.
Basic loss per share is computed by dividing losses available to common
shareholders by the weighted average number of common shares outstanding during
the period. Diluted loss per share reflects per share amounts that would have
resulted if diluted common stock equivalents had been converted to common stock.
The net losses per share calculatons reflect the effect of stock dividends and
stock splits.
Income Taxes: Income taxes provide for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus deferred
taxes related primarily to net operating loss carryforwards and differences
between the basis of various assets for financial and income tax reporting. The
deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized.
Deprectiation and Depletion: Depreciable property, plant and equipment are
depreciated over their estimated useful lives on the straight-line method, using
lives of three to seven years. Depletion of oil and gas properties is computed
on the units of production method. Organization costs are amortized evenly over
a period of 60 months.
3. Restricted cash: One of the Company subsidiaries factors its accounts
receivable at a rate of 12% per annum. At March 31, 1999, $120,226 of accounts
receivable had been factored and a cash balance reserved of $19,794 had been
restricted.
4. Notes payable: Notes payable currently due bear interest rates from 8.75% to
10.5% per annum.
5. Long term debt: Long term debt bears interest at 9% per annum. Following is
the long term debt schedule by years:
2000 $ 42,000
2001 43,339
2002 19,737
--------
$105,076
========
Segment accounting
The company operates in three segments.
<TABLE>
<CAPTION>
Oil field Oil & gas Equip.
Services Production Rentals Admin. Total
-------- ---------- ------- ------ -----
Revenue from external:
<S> <C> <C> <C> <C> <C>
Customers $ 684,419 145,511 19,190 -- 849,120
Interst revenue 332 -- -- -- 332
Interest expense 50,916 -- 12,279 2,915 66,110
Depreciation, depletion, amort 14,562 12,394 17,658 -- 44,614
Segment profit (loss) (457,739) (9,250) (62,810) (102,623) (632,422)
Segment assets 314,367 181,681 135,744 1,182 632,974
Expenditures for segment assets 147,470 10,791 2,474 -- 161,008
</TABLE>
7. 1999 Stock option plan: On January 25, 1999, the Company's Board of Directors
adopted a stock option plan in which all full-time employees of the Company and
its subsidiaries are eligible to participate. The plan will be administered by
the Board, which may subsequently appoint a committee for this purpose. The plan
sets aside up to 1,000,000 shares of common stock to cover options to be granted
over the term of the plan. The plan has a ten-year term commencing January 25,
1999. The company has filed a registration statement under the act to cover the
shares which are issued under the plan. At year end, no options had been
granted.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure: This item is not applicable to the period covered by this
report.
11
<PAGE>
PART III
Item 9. Directors and Executive Officers of the Company: The following table
sets forth all current directors and executive officers of the Company, as well
as their ages:
NAME AGE POSITION WITH COMPANY *
Larry V. Tate 64 Chairman of the Board of Directors
and Chief Executive Officer
Gerald W. Pybas 52 Director and President
Helen Wallace 43 Chief Financial and Accounting
Officer, Treasurer
H. Paul Estey 65 Director
E. Robert Barbee 58 Director
Terry L. McFarland 40 Director
* No current director has any arrangement or understanding whereby they are or
will be selected as a director or nominee.
The executive officers hold office until the next annual meeting of shareholders
and until their respective successors have been duly elected and qualified. The
officers are elected by the Board of Directors at its annual meeting immediately
following the shareholders' annual meeting and hold office until their death or
until they earlier resign or are removed from office. There are no written or
other contracts providing for the election of directors or term of employment of
executive officers, all of whom serve on an at will basis.
The Board of Directors currently consists of five members, Messrs. Larry V.
Tate, Gerald W. Pybas, H. Paul Estey, E. Robert Barbee and Terry McFarland. The
Company does not have any standing audit, nominating or compensation committees,
or any committees performing similar functions. The board will meet periodically
throughout the year as necessity dictates.
Executive Profiles: Mr. Larry V. Tate has been Chief Executive Officer and
Chairman of the Board of Directors since June 15, 1998. Prior to that date and
currently, he served and continues to serve in similar capacities for the
entities acquired by the Company. In these capacities, Mr. Tate has been
primarily responsible for the strategic direction and day-to-day operations of
these corporations. Mr. Tate has been actively involved in the oil and gas
industry for most of his adult life. Mr. Gerald W. Pybas has been President and
a director of the Company since June 15, 1998. Prior to that date and currently,
he served and continues to serve in similar capacities for the entities acquired
by the Company. In these capacities, Mr. Pybas has been primarily responsible
for field operations. He received a Bachelor of Science Degree in 1961 and a
Masters in Geology in 1962 from the University of Oklahoma, and has been a
member of the American Association of Petroleum Geologists since 1969. Helen
Wallace has been Chief Financial and Accounting Officer since June 15, 1998.
Prior to that date and currently, she served and continues to serve in similar
capacities for the entities acquired by the Company. Ms. Wallace, from 1990 to
1997, worked for an independent oil and gase lease operator, serving as the
production clerk responsible for all regulatory filings and office to field
coordination. Mr. H. Paul Estey has been a director of the Company since June
15, 1998. He is currently the Chief Executive Officer and Corporate Radiation
Safety Officer and a director of NORM Services Group, L.L.C., having held these
positions since formation in November, 1996. Prior to this, Mr. Estey provided
services to the NORM industry, including surveying, radiation safety/protection
and regulatory compliance, license applications, project supervision, expert
testimony and treatment/disposal evaluations. Mr. E. Robert Barbee has been a
director of the Company since June 15, 1998. He is self-employed in the oil
field supply business in Kilgore, Texas. Mr. Barbee attended Kilgore College in
12
<PAGE>
Kilgore from 1959 until 1961 and Stephen F. Austin State University from 1968
until receiving a Bachelors in Business Administration in 1970. Mr. Terry L.
McFarland has been a director of the Company since June 15, 1998. He is
self-employed as an independent oil producer and cattle rancher in Kilgore,
Texas.
Item 10. Executive Compensation: No compensation was paid to the Board of
Directors or executive officers of the Company in their capacities as such
during the fiscal years ended March 31, 1999, March 31, 1998, or March 31, 1997.
Item 11. Security Ownership of Management and Certain Others: Based on
information which has been made available to the Company by its stock transfer
agent, the following table sets forth, as of July 23, 1999, the shares of Common
Stock owned by each current director, by directors and executive officers as a
group and by each person known by the Company to own more than 5% of the
outstanding Common Stock:
Name and Address Number of Percent of
Title of Class of Beneficial Owner Shares Class (1)
- -------------- ------------------- ------ ---------
Common Stock Larry V. Tate 2,787,500 36.62% (2)
P.O. Box 464
Kilgore, TX 75663
Common Stock Gerald W. Pybas 2,312,500 30.38% (3)
P.O. Box 464
Kilgore, TX 75663
Common Stock E. Robert Barbee 225,000 2.96% (4)
P.O. Box 464
Kilgore, TX 75663
Common Stock H. Paul Estry 58,847 0.77%
P.O. Box 294
Wallisville, TX 75662
Directors and Executive 5,383,847 70.73%
Officers as a Group
(one in number):
- --------------------------------------------------------------------------------
(1) Based on 7,611,415 shares of common stock issued and outstanding on July
23, 1999.
(2) Does not include 109,100 shares of Series A Preferred Stock, none of which
is convertible into common stock.
(3) Does not include 74,900 shares of Series A Preferred Stock, none of which
is convertible into common stock.
(4) Does not include 4,000 shares of Series A Preferred Stock, none of which is
convertible into common stock.
- --------------------------------------------------------------------------------
Item 12. Certain Transactions:
None.
Item 13. Exhibits and Reports on Form 8-K:
(a) Exhibits: None
All required exhibits were previously filed with the Registration Statements on
Form S-18 (No. 33-17008-NY) and Form S-1 (No. 33-29899) and with the Forms
10-KSB for the fiscal year ended March 31, 1996, March 31, 1997, and March 31,
1998.
(b) Forms 8-K: None.
13
<PAGE>
SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Kilgore,
State of Texas on this 28th day of July, 1999.
CNH HOLDINGS COMPANY
(Registrant)
By: /s/ Larry V. Tate
- ---------------------
Larry V. Tate, Chief Executive Officer
By: /s/ Helen Wallace
- ---------------------
Helen Wallace, Chief Financial
and Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the registrant in the
capacity on this 28th day of July, 1999.
/s/ Larry V. Tate /s/ Gerald Pybas /s/ E. Robert Barbee
- ----------------- ---------------- --------------------
Larry V. Tate, Director Gerald Pybas, Director E. Robert Barbee
/s/ H. Paul Estey /s/ Terry McFarland
- ----------------- -------------------
H. Paul Estey, Director Terry McFarland, Director
14
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<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> MAR-31-1999
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<SECURITIES> 0
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