<PAGE> 1
==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: November 26, 1997
(Date of earliest event reported)
-----------------------
GREEN OASIS ENVIRONMENTAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
FLORIDA 33-68304 57-0970282
(State or other jurisdiction of (Commission file number) (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
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184 EAST BAY STREET, SUITE 302
CHARLESTON, SOUTH CAROLINA 29401
(Address of principal executive office)
(803) 722-5771
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On November 26, 1997, the Securities Division of the Office of the
Attorney General for the State of South Carolina (the "Securities Division")
entered an Administrative Consent Order with respect to William D. Carraway,
President and Chief Executive officer of the Registrant (the "Consent Order").
As reported in the Registrant's Quarterly Report on Form 10-QSB for the Quarter
ended September 30, 1997, Mr. Carraway had previously remained subject to that
certain Amended Order to Cease and Desist from Offering, Issuing or Selling
Unregistered Securities and Notice of Right to a Hearing (the "Cease and Desist
Order"), dated October 27, 1997. In the Consent Order, the Securities Division
agreed to terminate the Cease and Desist Order, and Mr. Carraway agreed to the
following:
1. In his capacity as Chairman of the Board of the
Registrant or as a director or officer of the Registrant,
Mr. Carraway will ensure that the Registrant will register
any future offerings of securities to South Carolina
residents and make offerings to non-South Carolina residents
only in states in which exemptions from registration are
available (and in accordance with such exemptions) and only
to investors who are accredited under the standards of the
offeree state (if such standards exist). Mr. Carraway must
also ensure that the Registrant or its related entities will
not offer any of their respective securities without the
unanimous written approval of the Board of Directors of
Registrant;
2. In his capacity as Chairman of the Board of the
Registrant or as a director or officer of the Registrant,
Mr. Carraway will ensure that the Registrant discloses in
any such offering that the Company's Quarterly Report on
Form 10-QSB for the Quarter Ended June 30, 1997 (the "2nd
Quarter 10-QSB") and any subsequent filings with the
Securities and Exchange Commission (the "Commission") are
available and are given to all such offerees as well as any
creditors offered securities in exchange for cancellation or
reduction of debts owed by the Registrant. Mr. Carraway also
agreed not to disclose or communicate any information
concerning the Registrant, either directly or indirectly, or
to the public or any potential investor, that is
inconsistent with the Registrant's periodic reports or other
documents filed with the Commission, any state securities
commission or credit reporting entities. Mr. Carraway also
agreed that he will provide no information to the public or
any potential investor that contains an untrue statement of
a material fact or omits to state a material fact necessary
in order to make
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a statement made, in light of the circumstances under which
it was made, not misleading;
3. In his capacity as Chairman of the Board of the
Registrant or as a director or officer of the Registrant,
Mr. Carraway will ensure that any offering of the
Registrant's securities made over the Internet is in
compliance with the Securities Division's Policy Statement
Number 96-3 regarding Internet offerings;
4. In his capacity as Chairman of the Board of the
Registrant or as a director or officer of the Registrant,
Mr. Carraway will ensure that if the Registrant sponsors a
web site on the Internet's World Wide Web (the "Registrant's
Web Site") that refers to the Registrant's securities,
funding sources, status as a publicly held company or any
aspect of investing in the Registrant, it will advise the
public and potential investors that, as with any company,
investors should not make an investment in the Registrant
without reviewing all available information, including the
2nd Quarter 10-QSB and will provide a method on such web
site for potential investors to obtain such information;
5. In his capacity as Chairman of the Board of the
Registrant or as a director or officer of the Registrant,
Mr. Carraway will ensure that the Registrant abides by all
federal and state securities laws in any securities-related
activities in which it engages in the future;
6. If Mr. Carraway is no longer Chairman of the Board
or a director or officer of the Registrant or any of its
related entities, but is an agent, advisor, partner or
shareholder of the Registrant or any of its related
entities, he will comply with the Consent Order to the
extent practicable, and, if applicable, will exercise any
and all shareholder rights he may have to demand full
compliance with the Consent Order;
7. For so long as Mr. Carraway is associated with the
Registrant or related entities, whether as a director or
officer or otherwise involved, directly or indirectly, in
the preparation or dissemination of any press release of the
Registrant, he will take personal responsibility for the
accuracy of (a) any such release issued by or on behalf of
the Company, whether through conventional media or through
the Internet and (b) any information posted on the
Registrant's Web Site, and compliance
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by the Registrant with its letter agreement dated November
10, 1997 with the Securities Division; and
8. Mr. Carraway agrees not to sell, exchange or
transfer any securities or interests of the Registrant or
any related entities that he owns or controls as of November
20, 1997 without complying in all material respect with all
applicable laws.
A copy of the Consent Order is attached as Exhibit 99.1 hereto.
On December 3, 1997, the Registrant issued a press release reporting
that pumps for the unit owned by GOE Plant Partnership I, L.P., of which the
Registrant is the General Partner, had been received and installed, thus
permitting continuous operation of the unit for converting waste oils into
diesel fuel. A copy of this press release is attached as Exhibit 99.2 hereto.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 99.1 In the Matter of: William D. Carraway,
Administrative Consent Order file Number
97062, State of South Carolina, Office of
the Attorney General, Securities Division.
Exhibit 99.2 Press Release by Green Oasis Environmental,
Inc., dated December 3, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 4, 1997
GREEN OASIS ENVIRONMENTAL, INC.
-------------------------------
(Registrant)
By: /s/ William D. Carraway
----------------------------
William D. Carraway
President and Chief Executive Officer
(authorized to sign on behalf of Registrant)
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EXHIBIT INDEX
Exhibit Page
Number Description Number
99.1 In the Matter of: William D. Carraway, Administrative Consent
Order File Number 97062, State of South Carolina, Office of
the Attorney General, Securities Division.
99.2 Press Release dated December 3, 1997
5
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EXHIBIT 99.1
STATE OF SOUTH CAROLINA
OFFICE OF THE ATTORNEY GENERAL
SECURITIES DIVISION
IN THE MATTER OF: ) ADMINISTRATIVE
) CONSENT ORDER
WILLIAM D. CARRAWAY )
) FILE NUMBER 97062
RESPONDENT. )
This Consent Order ("Order") between the Securities Commissioner
("Commissioner"), the Securities Division of the Commissioner's Office
("Division") and William C. Carraway ("Carraway") is entered into and made
effective as of the date fixed below.
WHEREAS, the Commissioner is charged with the responsibility of
administering the provisions of Chapter 1, Title 35, Code of Laws of South
Carolina, known as the South Carolina Uniform Securities Act ("Act"); and
WHEREAS, in July of 1995, in anticipation of the imposition of
administrative sanctions, Green Oasis Environmental, Inc. ("Company") and
Carraway, named Respondents in an issued Cease and Desist Order, entered into a
Consent Order (referenced as Exhibit "A") with the Division. Wherein, among
other undertakings, the Respondents agreed that they, their agents and
representatives, would Cease and Desist from issuing, offering or selling
securities issued by the Respondents, or any successor thereof, or any entity
directly or indirectly controlled by or thereafter organized by or on behalf of
them to persons in South Carolina until such securities were properly
registered; and
<PAGE> 2
WHEREAS, on or about October 27, 1997, the Division alleged that the
1995 Consent Order has been violated by the Company and Carraway and issued a
Cease and Desist Order (referenced as Exhibit "B") against both the Company and
Carraway, ordering them to Cease and Desist from issuing, offering or selling
securities in South Carolina; and
WHEREAS, the Company and Carraway, by and through their respective
counsel, Michael Rosenzweig and Walter Jospin, desired to resolve the
Division's 1997 Cease and Desist Order; and
WHEREAS, on November 10, 1997, the Company agreed by letter
(referenced as Exhibit "C") and through its counsel, Michael Rosenzweig, to a
number of substantive undertakings and conditions in exchange for the
Division's dismissal of the October 27, 1997 Consent Order; and
WHEREAS, on November 21, 1997, Carraway agreed by letter (referenced
as Exhibit "D") to a number of substantive undertakings, which are detailed in
the letter; and
WHEREAS, Carraway, by and through his counsel, Walter Jospin, has been
advised of and understands his responsibilities both as an individual and as an
officer and director of the Company; and
WHEREAS, during the time the Company has a corporate office in the
State of South Carolina or holds board meetings in South Carolina, Carraway
hereby acknowledges and agrees that he will be bound by the undertakings stated
in his November 21, 1997 letter and this Consent Order; and
WHEREAS, Carraway makes these representations with the full knowledge
and understanding that any violation of any agreement reached with the State
which contains
2
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these conditions, other than violations which can reasonably be proved to have
occurred due to oversight, negligence or error, will be deemed to be a willful
violation as that term is used in South Carolina Code Section 35-1-1590, and
may subject him to criminal prosecution and if convicted, imprisonment for up
to three years or a fine of up to $50,000, or both.
NOW, THEREFORE, the Commissioner and Carraway consent to the entry of
his Order, and the Commissioner finds that this order is appropriate and in the
public interest:
IT IS SO ORDERED THAT:
1. As Chairman of the Board of the Company or as a director or
officer of the Company, Carraway will ensure that the Company will register any
future offerings of securities to South Carolina residents, and will make
offerings to non-South Carolina residents only in states in which exemptions
are available (and pursuant to those exemptions) and to investors who are
accredited under the standards in these states if such standards exist. As
Chairman of the Board of the Company or as a director or officer of the
Company, he will also ensure that the company or its related entities will not
effect any offering of its securities without the unanimous written approval of
its Board of Directors.
2. As Chairman of the Board of the Company or as a director of the
Company, Carraway will ensure that prior to any issuance, offer, sale or
exchange of securities by the Company or its related entities, the Company's
Form 10-QSB report for the quarter ended June 30, 1997, as well as any
subsequent Securities and Exchange Commission (SEC) filings
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will be disclosed and given to potential investors as well as any creditors
offered securities in exchange for cancellation or reduction of debts owed by
the Company. Carraway also agrees not to disclose or communicate any
information with respect to the Company, either directly or indirectly to the
public or any potential investor, that is inconsistent with the Company's
periodic reports and other documents filed by the Company or himself with the
SEC, any state securities commission or credit reporting entities. Moreover, he
agrees that he will provide no information to the public or any potential
investor that contains an untrue statement of a material fact or omits to state
a material fact necessary in order to make the statement made, in light of the
circumstance under which it was made, not misleading.
3. As Chairman of the Board of the Company or as a director or
officer of the Company, Carraway will ensure that in making securities
offerings on the Internet, the Company will follow the Division's Policy
Statement Number 96-3 (referenced as Exhibit "E"), referring to Internet
Offerings.
4. As Chairman of the Board of the Company or as a director or
officer of the Company, Carraway will ensure that if the Company's home page on
the Internet refers to the Company's securities, funding sources, status as a
publicly held company or any aspect of investing in the Company, it will also
advise the public and potential investors (in the section related to the above
topics) that, as with any company, potential investors should not invest
without reviewing disclosure documents (including the 10-QSB). He also agrees
that the Company must also provide a method to obtain them.
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5. As Chairman of the Board of the Company or as a director or
officer of the Company, Carraway will ensure that the Company will abide by all
state and federal securities laws in any securities related activities it
undertakes in the future.
6. In the event that Carraway is no longer Chairman of the Board or
a director or officer of the Company or any of its related entities, but is an
agent, advisor, partner or shareholder of the Company or any of its related
entities, he will comply with this agreement to the extent practicable, and if
applicable, will exercise any and all shareholder rights he may have to demand
compliance with this agreement to the fullest extent practicable.
7. As long as Carraway is associated with the Company or any of its
related entities, whether as a director or officer or he is otherwise involved,
directly or indirectly, in the preparation or dissemination of Company press
releases, he will take personal responsibility for (a) the accuracy of any
press releases issued by or on behalf of the Company, whether through
conventional media or the Internet and (b) the accuracy of the information
posted on the Company's Internet homepage, as well as the Company's compliance
with its November 10, 1997 agreement with the South Carolina Securities
Division of the Attorney General's Office.
8. Carraway agrees not to sell, exchange or transfer any of the
securities or interests he owns or controls in the Company or its related
entities as of November 20, 1997, without complying in all respects with all
applicable laws.
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9. This Consent Order is executed in the public interest and to
terminate the October 27, 1997 Cease and Desist Order.
Charles M. Condon
Securities Commissioner
Securities Division of the
Office of the Attorney General of
the State of South Carolina
Rembert Dennis Building
1000 Assembly Street
Columbia, South Carolina 29202
(803) 734-4731
By:
-----------------------------------
David N. Jonson
Deputy Attorney General
Columbia, South Carolina
, 1997
- --------------------
I, Respondent William D. Carraway, admit the Division's jurisdiction in this
matter, understand I have a right to a hearing and have knowingly waived such
right and agree and consent to entry of this Order.
- ---------------------------------- --------------------------------------
William D. Carraway Date
Approved as to form:
- ---------------------------------- ---------------------------------------
By: Walter E. Jospin, Esq. Date
Counsel for Respondent
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EXHIBIT "A"
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
SECURITIES DIVISION
IN THE MATTER OF: ADMINISTRATIVE PROCEEDING
GREEN OASIS ENVIRONMENTAL, )
INC. AND WILLIAM D. CARRAWAY )
) CONSENT ORDER
)
)
)
Respondents. ) CASE NO. 95-160
)
)
- ------------------------------------
On or about the date of this agreement, in anticipation of the
imposition of possible administrative sanctions, Green Oasis Environmental,
Inc. ("GOE") and William D. Carraway ("Carraway"), by and through their
counsel, Jon Lee Andersen of Gambrell and Stolz, have submitted a Proposed
Consent Order which the South Carolina Securities Division has determined, with
slight modifications, to accept.
FINDINGS OF FACT
1. Respondent GOE is a Florida corporation with corporate offices at 2
North Adgers Wharf, Charleston, SC 29401.
2. Respondent Carraway is the President and Chief Executive Officer of
GOE. Carraway's address is 2 North Adgers Wharf, Charleston, SC 29401.
3. From GOE's inception until on or about November 17, 1994, GOE engaged
in the offer and sale of securities in the form of stocks, specifically: Green
Oasis Common Stock, Green Oasis Cumulative Convertible Preferred Stock and
Green Oasis Series A Cumulative Convertible Preferred Stock.
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4. In or around April 1993, Respondent GOE solicited a South Carolina
investor, Mr. Jerry M. Crumpler, who purchased 5,000 shares of GOE Cumulative
Convertible Preferred Stock from GOE for the total purchase price of five
thousand dollars ($5000.00). The terms of the sale included an interest rate of
12% per annum, from the date of the stockholder's purchase until the date of
repurchase by GOE.
5. In or around May 1994, Respondent Carraway solicited a South Carolina
investor, Mr. Charles W. Brewer, who purchased 10,000 shares of GOE Common
Stock from Carraway for the total purchase price of twenty-five thousand
dollars ($25,000.00). The terms of the sale included an interest rate of 12%
per annum, from the date of the stockholder's purchase until the date of
repurchase by GOE.
6. In or around June 1994, Respondent GOE solicited a South Carolina
investor, Dr. James W. Kellet, who purchased 10,000 shares of GOE Common Stock
from GOE for the total purchase price of twenty-five thousand dollars
($25,000.00). The terms of the sale included an interest rate of 12% per annum,
from the date of the stockholder's purchase until the date of repurchase by
GOE.
7. On or about November 17, 1994, GOE instituted a rescission offer to all
South Carolina investors due to the fact the stocks in the above-referenced
transactions were sold in violation of certain securities and other
registration laws.
8. The terms of the rescission offer included the return of each investor's
full purchase price plus 12% interest thereon from the date of the original
purchase. In addition, the agreement provided that payment for the rescinded
shares would be made within five business days after the rescission expiration
date of December 22, 1994. As of April 12, 1995, the rescission payments have
not been made to the South Carolina investors who accepted the offer, namely:
Jerry M. Crumpler, Charles W. Brewer, Edward P. McCall, Jr., and James W. and
Gail J. Kellet.
9. The GOE stock shares offered constitute securities under the laws of the
State of South Carolina.
10. Prior to the offer and sale of GOE stock, Respondents did not properly
register the securities for sale in South Carolina.
11. On April 20, 1995, the Securities Division of the State of South Carolina
issued a Cease and Desist Order against GOE and Carraway alleging certain
violations of the South Carolina Securities Act.
12. On May 19, 1995, GOE and Carraway requested a Hearing upon the Cease and
Desist Order.
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13. This Order, a Consent Order, is being entered into in lieu of a formal
Hearing on the matter.
14. This Consent Order is specifically found to be necessary in the matter and
in the public interest.
CONCLUSIONS OF LAW
Count 1. SALE OF UNREGISTERED SECURITIES
1. The stocks offered by Respondents GOE and Carraway constitute securities
under South Carolina Code Section 35-1-20(12).
2. These securities are not registered with the South Carolina Securities
Commission, nor do they fall under an exemption.
3. By offering and selling unregistered securities, the Respondents are in
violation of South Carolina Code Section 35-1-810.
Count 2. BREACH OF RESCISSION OFFER
1. On or about November 17, 1994, GOE instituted a rescission offer to all
South Carolina investors and promised rescission payments within five business
days of the December 22, 1994 expiration date to all of those who accepted the
offer.
2. Respondents failed to make rescission payments within five business days
of the December 22, 1994 expiration date to the South Carolina investors who
accepted the rescission offer.
ORDER
In order to arrive at an amicable settlement of the matter, it is agreed and:
IT IS ORDERED that the Respondents and their agents and representatives
are ordered to Cease and Desist from issuing, offering and selling securities
issued by Respondents, or any successor thereof, or any entity directly or
indirectly controlled by or hereafter organized by or on behalf of them to
persons in South Carolina until such securities and properly registered.
IT IS FURTHER ORDERED that the Respondents and every successor, affiliate,
controlling person, officer, agent and servant of each of them as may be, and
every entity and person directly and indirectly controlled or hereinafter
organized by or on behalf of
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them, are prohibited from making or causing to be made to any person or entity
in South Carolina any offers or sales of securities by any means of false or
fraudulent sales practices.
IT IS FURTHER ORDERED that GOE shall make a good faith effort to attempt
to honor the rescission offer made to all South Carolina investors on or about
November 17, 1994 and accepted by at least five investors, Charles W. Brewer,
Edward P. McCall, Jr., Jerry M. Crumpler, and James W. and Gail J. Kellet.
This Consent Agreement is executed in the public interest to terminate the
administrative proceeding.
By entering into this Consent Agreement, GOE and Carraway waive their
right to an administrative hearing.
Dated this 25th day of July 1995, at Columbia, South Carolina.
Jim Miles
Securities Commissioner for
the State of South Carolina
Edgar Brown Building
1205 Pendleton St., Suite 525
Columbia, South Carolina 29201
(803) 734-1093
By: /s/ Tracy A. Meyers
---------------------------------
TRACY A. MEYERS
Deputy Securities Commissioner
By: /s/ William D. Carraway By: /s/ Jon Lee Andersen
-------------------------------------- ---------------------------------
WILLIAM D. CARRAWAY, JON LEE ANDERSEN
on behalf of WILLIAM D. CARRAWAY Attorney for Respondents
and GREEN OASIS ENVIRONMENTAL, INC.
Date: July 24, 1995 Date: 7/21/95
------------------------------------ -------------------------------
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EXHIBIT "B"
STATE OF SOUTH CAROLINA
OFFICE OF THE ATTORNEY GENERAL
SECURITIES DIVISION
IN THE MATTER OF: ) ADMINISTRATIVE PROCEEDING
)
WILLIAM CARRAWAY AND ) AMENDED ORDER TO CEASE
) AND DESIST FROM OFFERING,
GREEN OASIS ENVIRONMENTAL, INC., ) ISSUING OR SELLING
) UNREGISTERED SECURITIES AND
) NOTICE OF RIGHT TO A HEARING
)
Respondents. ) Case Number 97062
- ------------------------------------
TO: William Carraway and Green Oasis Environmental, Inc.
The South Carolina Securities Division of the Office of the Attorney
General, under the authority of the South Carolina Uniform Securities Act,
South Carolina Code Section 35-1-10, et. seq., issues the following Order and
notice of right to a public hearing.
FINDINGS OF FACT
1. Green Oasis Environmental, Inc. is a Florida Corporation with its
executive offices and primary place of business at 184 East Bay Street, Suite
302, Charleston, SC 29401.
2. The Chief Executive Officer (as of October 15, 1997) is William D.
Carraway ("Carraway"). Carraway has held this position since at least January
1995.
3. The Board of Directors of the Company (as of October 1, 1997) consists of
Carraway, Mary Ann A. Carraway and Larry S. King.
4. On or around April 20, 1995, the Securities Division issued a Cease and
Desist Order against Respondents William Carraway and Green Oasis
Environmental, Inc. The April 20, 1995 Cease and Desist Order, a copy of which
is attached hereto and incorporated by reference, alleged the Respondents both
sold unregistered securities and committed fraud in the sale of securities in
connection with an offering made in this State.
<PAGE> 12
5. On or around July 25, 1995, the proceeding above was resolved by consent
order. A copy of the consent order resolving the proceedings is attached hereto
and incorporated by reference.
6. In the Consent Order, specific factual findings were agreed to by all
parties. These findings were: (1) unregistered securities had previously been
sold by Respondents in this State and (2) Respondents had breached certain
recision offers later made in connection with the sale of unregistered
securities.
7. Pursuant to the Consent Order, Respondents were not to, and had agreed not
to, issue, offer or sell securities to persons in South Carolina until any
securities offered were properly registered.
8. The Consent Order also prohibited Respondents or anyone acting on their
behalf from making or causing to be made to any person in South Carolina an
offer of securities made by use of a false statement or fraudulent sales
practice.
9. In or around September 1997, it came to the Division's attention that
shares of Green Oasis Environmental, Inc. had previously been traded on the
"Bulletin Board," such trading having occurred during the period March 1996
until at least May 1997.
10. The securities were offered pursuant to a request signed on behalf of
Respondent Company by Respondent Carraway.
11. Both Respondent Carraway and Respondent Green Oasis stood to benefit by
having company shares trade on the Bulletin Board.
12. The securities offered were not at the time of trading, registered for
offer or issuance in this State.
13. On or around September 24 , 1997, a representative of the Division
formally requested information of Carraway concerning the trading of Green
Oasis securities in this State. A date of Tuesday, September 30, 1997 was set
as a reply date to the Division's inquiry. The Division's name and address and
a contact person was provided Respondent by the letter. The letter was returned
by the United States Post Office and was stamped "Forwarding time expired
return to sender."
14. On or about October 8, 1997, a Cease and Desist Order was issued against
Respondent GOE and Carraway. The basis for the Order was sale of unregistered
securities by Respondents.
15. On or around October 10, 1997, GOE and Carraway's attorney, along with
Christopher Holmes, a Charleston attorney, contacted Division Staff. The
attorneys indicated the Division's earlier letter had not been received. The
attorneys further indicated the company's desire to answer questions and
quickly resolve the matter. Among the representations made in
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conversation with the attorneys and was that no stock continues to be issued by
the company, and the stock trades only in the pink sheets now. (The company
makes no market.)
16. Green Oasis noted the reason the firm wanted the matter resolved quickly
was to avoid having to amend a 10-Q filed the same day as the Division's Cease
and Desist Order issued October 10, 1997. The attorney further agreed to fax to
Division Staff a copy of the 10-Q filed.
17. The 10-Q received on October 10, 1997 disclosed at least eighteen
violations of the Division's previous consent order with Respondents.
18. The violations of the July 25, 1995 consent order include but may not be
limited to the following:
a. On or about June 28, 1996, Carraway, as chairman of GOE, and GOE, as
General Partner of the GOE Plant Partnership I L.P. ("the
Partnership"), commenced a purported private offering of "partnership
interests" in the Partnership. On or about August 13, 1996, Carraway
and GOE, sold the first partnership interest to an undisclosed
investor. The number of partnership interests subsequently sold by
Carraway and GOE has not been disclosed, but is believed to number
approximately thirty.
b. On or about March 31, 1997, GOE issued unregistered warrants to the
thirty limited partners of GOE Plant Partnership I L.P. Each warrant
was exercisable for the purchase of up to 15,000 shares of GOE common
stock at $3.00 per share, for thirty days.
c. During the period of December 31, 1996 to June 30, 1997, Carraway and
GOE issued $60,000 worth of common stock in exchange for "stockholder
relation services." Specifically, on or about March 15, 1997,
Carraway, and GOE issued 12,000 shares of unregistered common stock at
$5.00 per share to MicroCap [aka "MicroCorp"] Communications
Consulting, a public relations firm.
d. During the quarter ending March 31, 1997, Carraway and GOE satisfied a
$250,000 debt of the company by exchanging 100,000 shares of common
stock of the company at a value of $2.50 per share for the debt.
e. During the quarter ending March 31, 1997, Carraway and GOE satisfied a
$356,000 debt of the company by exchanging 71,108 shares of common
stock of the company at a value of $5.00 per share for the debt.
f. During the first quarter of 1997, Carraway and GOE sold approximately
37 "packages" of unregistered securities, each consisting of 8,000
shares of common stock, an "A" warrant and a "B" warrant. Each package
sold for $10,000, enabling the company to raise $370,000 for the
purpose of funding operations.
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The packages collectively involved 296,000 shares of unregistered
common stock being sold for $1.25 a share in an alleged private
placement. Warrants exercisable at $2.50 and $5.00 per share were also
issued in conjunction with the sale of the shares.
g. During the first quarter of 1997, GOE authorize the issuance of a two
year stock option for 48,000 shares to GOE's CEO, William Carraway,
in exchange for Carraway's waiving payment of his salary.
h. On or about April 1996, Carraway and GOE issued unregistered shares
of common stock to various creditors in order to satisfy debts of
approximately $187,000.
i. On or about June 27, 1996, Carraway and GOE issued unregistered common
stock for satisfaction of the following debts:
1. $476,000 to an undisclosed creditor;
2. $57,000 in liabilities for prepaid expenses; and
3. $16,000 incurred in the settlement of a lawsuit.
j. During the third quarter of 1996, Carraway and GOE issued $40,000
worth of GOE common stock to a creditor in exchange for the
satisfaction of a debt termed "trade payables".
k. On or about August 1996, GOE agreed to issue 448,000 shares of common
stock to Carraway upon his exercise of that option.
l. On or about September 1996, GOE agreed to issue 20,000 shares of
common stock to Carraway upon his exercise of that option.
m. On or about January 1997, GOE agreed to issue 48,000 shares of common
stock to Carraway upon his exercise of that option.
n. On or about September 1996, GOE agreed to issue 5,000 shares of
common stock to Mary Ann A. Carraway, a Director of GOE, upon her
exercise of that option.
o. On or about September 1996, GOE agreed to issue 5,000 shares of
common stock to Larry S. King, a director of GOE, upon his exercise
of that option.
p. On or about August 30, 1996, Carraway and GOE sold 35,000 shares of
common stock to Raymond C. O'Brien in a private transaction for
$52,500.
q. On or about December 1996, Carraway and GOE sold 120,000 shares of
common stock to Raymond C. O'Brien for $1.25 per share.
4
<PAGE> 15
r. On or about December 1996, Carraway and GOE issued warrants for the
purchase of 250.000 shares of common stock to Raymond C. O'Brien.
such warrants were exercisable at $1.375 per share, and were issued
in consideration of O'Brien's services to GOE.
19. The offers of securities above all originated from this State.
20. None of the shares of stock issued above, nor any of the warrants or
options, were registered in the State of South Carolina prior to offer.
21. Pursuant to South Carolina Code Sections 35-1-180 and 35-1-810 and the
July 25, 1995 Consent Order with the Division, all securities offered above
should have been registered prior to offer in this State.
22. Section 35-1-20(12) defines "security." Pursuant to the Act, "security"
means "any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, preorganization certificate of
subscription, transferable share, investment contract, voting-trust
certificate, certificate of deposit for a security, certificate of interest or
participation in an oil, gas or mining title or lease or in payments out of
production under such a title or lease or, in general, any interest or
instrument commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing."
23. The warrants, notes, options and shares of stock offered, sold or issued
(as detailed above) constitute securities under South Carolina law.
24. The warrants, notes, options, and shares of stock traded, to the extent
each was, constitute securities under South Carolina law.
25. Section 35-1-180 defines acts making the South Carolina Uniform Securities
Act applicable. Pursuant to Section 35-1-180(3), an offer to buy or to sell is
made in South Carolina "when the offer (a) originates from this State ..."
26. Section 35-1-810 makes it unlawful for any person to offer or sell any
security in South Carolina unless it is registered, is a federal covered
security, or meets certain limited exemptions, none of which apply to the
Carraway and Green Oasis transactions.
27. Pursuant to the July 25, 1997 Consent Order with the Division, no
exemption was available to Carraway or Green Oasis; the parties agreed to
register any future offerings prior to offer or sale in South Carolina.
5
<PAGE> 16
ORDER
IT IS ORDERED that Respondents, any successors thereof, or any person
or entity directly or indirectly controlled, influenced or compensated by or on
behalf of Respondents, Cease and Desist from issuing, offering or selling
securities in South Carolina.
South Carolina Code Section 35-1-1590 provides that any wilful
violation of this Order, upon conviction, may be punished by imprisonment of
not more than three (3) years and/or a fine not exceeding $50,000.00.
IT IS FURTHER ORDERED that Respondents are afforded an opportunity for
a hearing. If a written request for a hearing is filed with the Securities
Division within thirty (30) days of your receipt of this Order, then the matter
will be set for a hearing. After the hearing, a final Order may be entered.
This Order will stand as entered, unless amended by the Securities Division or
the Commissioner as to any Respondent who does not request a hearing within the
thirty (30) day period.
BY:
--------------------------------
Tracy A. Meyers
Assistant Attorney General
Post Office Box 11549
Rembert C. Dennis Building
Columbia, SC 29201
(803) 734-4731
Columbia, South Carolina
_________________, 1997
6
<PAGE> 17
EXHIBIT "C"
THE STATE OF SOUTH CAROLINA
OFFICE OF THE ATTORNEY GENERAL
November 10, 1997
VIA FACSIMILE/HARD COPY TO FOLLOW
(404) 525-2224
Mr. Michael Rosenzweig, Esquire
Rogers & Hardin
2700 International Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, GA 30303-1601
RE: Green Oasis Environmental, Inc.
Dear Michael:
In discussing the recent Orders the South Carolina Securities Division
had issued against Green Oasis, the question came up of what Green Oasis could
do to resolve the Orders. As we previously discussed, the original Cease and
Desist Order, dated October 7, 1997 was vacated October 31, 1997. The Amended
Cease and Desist Order, dated October 27, 1997 remains in effect. David and I
spoke with you last week to discuss the conditions under which we would be
willing to vacate the October 27, 1997 Order. These are:
1. The company must agree to register any future offering of
securities to South Carolina residents and would agree it
would make offerings to non-South Carolina residents only in
states in which exemptions are available (and pursuant to
those exemptions) and to investors who are accredited under
the standards in that state,
2. The availability of the company's 10-Q must be disclosed and
the 10-Q must be made available to potential investors,
3. In making offerings on the Internet, the company must agree
to follow the Division's Policy Statement, Number 96-3,
referring to Internet Offerings,
4. If the company's web site references investing, it must
advise potential investors that, as with any company, they
should not invest without reviewing disclosure documents
(including the 10-Q) and it must provide a method to obtain
them, and
<PAGE> 18
Mr. Michael Rosenzweig, Esquire
November 10, 1997
Page 2
5. The company must agree to abide by all state securities
laws in any securities related activities it engages in in the
future.
I understand you have now had a chance to review the terms above with
your client, Green Oasis, and Green Oasis agrees to abide by each of the
conditions above. If this is correct, please have an appropriate representative
of the company sign below binding the company to the conditions. Upon my
acceptance of the company's undertaking, Green Oasis will be dismissed from the
October 27, 1997 Cease and Desist Order currently outstanding.
Sincerely,
Tracy A. Meyers
Assistant Attorney General
I, __________________, holding the position of ______________, and
being an appropriate person to execute this document on behalf of Green Oasis
Environmental, Inc., agree Green Oasis will abide by each and every one of the
five conditions above. I and Green Oasis understand that the five conditions
specifically are conditions precedent to Green Oasis' dismissal from the
Division's October 27, 1997 Cease and Desist Order.
Signed
--------------------------
Date
--------------------------
On behalf of the Division, I accept the representations of Green Oasis
Environmental made above and agree to dismiss Green Oasis Environmental from
the Division's October 27, 1997 Cease and Desist Order.
---------------------------------
Tracy A. Meyers
Securities Division
TAM/tps
<PAGE> 19
EXHIBIT "D"
November 24, 1997
David N. Jonson, Esquire
Deputy Attorney General
Securities Division
State of South Carolina
1000 Assembly Street
Rembert Dennis bldg., suite 501
Columbia, SC 29201
Re: William D. Carraway ("Carraway")
Case No. 97602
Dear Mr. Jonson:
I have discussed the terms and conditions of this letter with Michael
Rosenzweig, counsel to the Company, and with my personal lawyer, Walter Jospin,
and I have been advised of my responsibilities both as an individual and as an
officer and director of the Company.
I am, of course, very interested in personally resolving this matter
with the State. Accordingly, during the time the Company has a corporate office
in the State of South Carolina or holds board meetings in South Carolina, I
hereby acknowledge and agree that I will be bound by the following
undertakings:
1. As Chairman of the Board or as a director or officer of the
Company, I will ensure that the Company will register any future offerings of
securities to South Carolina residents, and will make offerings to non-South
Carolina residents only in states in which exemptions are available (and
pursuant to those exemptions) and to investors who are accredited under the
standards in these states. As Chairman of the Board of the Company or as a
director or an officer of the Company, I will also ensure that the Company or
its related
<PAGE> 20
entities will not effect any offering of its securities without the unanimous
written approval of its Board of Directors.
2. As Chairman of the Board of the Company or as a director or
officer of the Company, I will ensure that prior to any issuance, offer, sale
or exchange of securities by the Company or its related entities, the Company's
Form 10-QSB report for the quarter ended June 30, 1997, as well as any
subsequent Securities and Exchange Commission (SEC) filings, will be disclosed
and given to potential investors as well as any creditors offered securities in
exchange for cancellation or reduction of debts owed by the Company. I also
agree not to disclose or communicate any information with respect to the
Company, directly or indirectly, to the public or any potential investor, that
is inconsistent with the Company's periodic reports and other documents filed
by the Company or myself, with the SEC, any state securities commission or
credit reporting entities. Moreover, I agree that I will provide no information
to the public or any potential investor that contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statement made, in light of the circumstance under which it was made, not
misleading.
3. As Chairman of the Board of the Company or as a director or
officer of the Company, I will ensure that in making securities offerings on
the Internet, the Company will follow the Division's Policy Statement 96-3,
referring to Internet Offerings.
4. As Chairman of the Board of the Company or as a director or
officer of the Company, I will ensure that if the Company's home page on the
Internet refers to the Company's securities, funding sources, status as a
publicly held company or any aspect of investing in the Company, it will also
advise the public and potential investors (in the section
2
<PAGE> 21
related to the above topics) that, as with any company, potential investors
should not invest without reviewing disclosure documents (including the
10-QSB). I also agree that the Company must also provide a method to obtain
them.
5. As Chairman of the Board of the Company or as a director or
officer of the Company, I will ensure that the Company will abide by all state
and federal securities laws in any securities related activities it undertakes
in the future.
6. In the event that I am no longer Chairman of the Board or a
director or officer of the Company or any of its related entities, but am an
agent, advisor, partner or shareholder of the Company or any of its related
entities, I will comply with this agreement to the extent practicable, and if
applicable, will exercise any and all shareholder rights I may have to demand
compliance with this agreement to the fullest extent practicable.
7. As long as I am associated with the Company or any of its
related entities, whether as a director or officer or I am otherwise involved
directly or indirectly in the preparation or dissemination of Company press
releases, I will take personal responsibility for: (a) the accuracy of any
press releases issued by or on behalf of the Company, whether through
conventional media or the Internet; and (b) the accuracy of the information
posted on the Company's Internet homepage, as well as the Company's compliance
with its November 10, 1997 agreement with the South Carolina Securities
Division of the Attorney General's Office.
8. I agree not to sell, exchange or transfer any of the securities
or interests I own or control in the Company or its related entities as of
November 20, 1997, without complying in all material respects with applicable
law.
3
<PAGE> 22
9. I make these representations with the full knowledge and
understanding that any violation of any agreement reached with the State which
contains these conditions, other than violations which can reasonably be proven
due to oversight, negligence or error, will be deemed to be a willful violation
as that term is used in South Carolina Code #35-1-1590, and may subject me to
criminal prosecution and if convicted, imprisonment for up to three years or a
fine of up to $50,000, or both.
10. I understand that the terms of this letter will be formalized in
a new Consent Order with the Division.
Very truly yours,
/s/ William D. Carraway
William D. Carraway
4
<PAGE> 23
EXHIBIT "E"
STATE OF SOUTH CAROLINA
OFFICE OF THE SECRETARY OF STATE
JIM MILES P.O. BOX 11350
SECRETARY OF STATE COLUMBIA, SC 29211
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
SECURITIES DIVISION
POLICY STATEMENT 96-3
ORDER EXEMPTING CERTAIN OFFERS OF SECURITIES MADE ON THE
INTERNET FROM SECURITIES REGISTRATION
WHEREAS the Securities Commissioner (the "Commissioner") is charged
with the administration of Chapter 1, Title 35, The South Carolina Uniform
Securities Act (the "Act") and all Rules and Regulations promulgated
thereunder;
WHEREAS Section 35-1-320 of the Act provides that certain enumerated
transactions are exempted from Sections 35-1-50 and 35-1-810 of the Act;
WHEREAS Section 35-1-320(9) gives the Commissioner authority to exempt
certain additional transactions from registration by imposing or withdrawing
conditions as necessary to protect the public interest and the securities
market of the State of South Carolina;
WHEREAS the Commissioner acknowledges Proprietary or "common carrier"
electronic delivery systems have facilitated the transmission of communications
to large numbers of people;
WHEREAS the Commissioner also acknowledges that use of the Internet
may be a legitimate means of raising capital, and that a communication made on
the Internet may at times be directed to a specified group of people such that
it is or might be received by not only the intended recipients but also by
anyone with access to the Internet;
WHEREAS the Commissioner acknowledges that an attempt or offer to
dispose of, or the solicitation of an offer to buy, a security or an interest
in a security for value, that is made on or through the Internet, the World
Wide Web or a similar proprietary or common carrier electronic system (such
systems hereinafter being referred to collectively as the "Internet") might
constitute an "offer" for purposes of Section 35-1-20(10) of the Act, and might
otherwise trigger the registration and sales literature filing requirements in
Section 35-1-50 and 35-1-810 of the Act;
<PAGE> 24
WHEREAS the Commissioner finds that the issuance of this Order is
necessary and appropriate in the public interest or for the protection of
investors and consistent with the purposes fairly intended by the policy and
provisions of the Act;
WHEREAS the Commissioner further finds that the registration of
certain Internet offers is not necessary or appropriate in the public interest
or for the protection of investors;
THE ADMINISTRATOR THEREFORE ORDERS THAT:
1) Pursuant to Section 35-1-320 of the Act, offers of securities made by, or
on behalf of, issuers on or through the Internet shall be exempt from Sections
25-1-50 and 35-1-810 of the Act if the following conditions are observed:
(A) The Internet offer indicates that the securities are not being
offered, directly or indirectly, to residents of South Carolina;
(B) The Internet offer is not specifically directed to any person in
South Carolina by, or on behalf of, the issuer of the securities or
any underwriter; and
(C) No sales of the issuer's securities are made in South Carolina as a
result of the Internet offering until such time as the securities
being offered have been properly registered for sale pursuant to the
Act and a final prospectus or Form U-7 has been delivered to any South
Carolina investor prior to any such sale.
2) Subsection (1)(A) of this Section is met by inclusion of any of the
following statements, or a substantially similar one, in an offer disseminated
through the Internet:
(1) "These securities are not being offered or sold in South Carolina.
No purchase of these securities by persons in South Carolina is
authorized."
(2) "These securities are being offered and sold only in [fill in names
of states other than South Carolina]. No purchase of these securities
by persons in South Carolina is authorized."
(3) "This is neither a solicitation of offers to buy nor an offer to sell
to persons in South Carolina. No purchase of these securities by
persons in South Carolina is authorized."
3) This Order shall remain in effect until amended or rescinded by the
Commissioner.
/s/ Tracy A. Meyers
So Ordered at Columbia, South Carolina -------------------------------
this 26 day of April, 1996. Tracy A. Meyers
Deputy Securities Commissioner
<PAGE> 1
Exhibit 99.2
For Immediate Release December 3, 1997
Green Oasis Environmental, Inc. Places Plant in Continuous Operation
Charleston, SC - December 3, 1997 - Green Oasis Environmental, Inc. (GRNO)
OTC-BB announced today that installation of the Ingersoll-Dresser pumps had
been completed for the waste oil processing unit located at the Company's
facilities in Charleston. The unit is owned by GOE Plant Partnership I, L.P.,
of which the Company is the General Partner.
As previously reported, operation of the unit commenced November 14, 1997, but
continuous operation could not occur until the pumps were received and
installed. Continuous operation of the unit to convert waste oil to diesel fuel
for sale in the local petroleum market may now commence at the current
permitted rate of 250 gallons per hour. The Company intends to seek amendments
to its current permits with the South Carolina Department of Health and
Environmental Control that would allow the Company to increase its permitted
operating capacity.
William D. Carraway, President of the Company, said "Now that the plant is
operating, our potential customers can visit the facility to determine the
viability of the technology as it relates to their economic and operating
needs, as well as the particular requirements of the countries in which they
are based."
Green Oasis Environmental, Inc.'s patent pending process is designed to produce
marketable fuels from waste oils in a closed-cycle, one-step process. The
Company manufactures equipment for its own use as well as markets to others.
For additional information contact:
William D. Carraway
Green Oasis Environmental, Inc.
Charleston, SC (803) 722-5771
E-Mail: [email protected]
