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: May 22, 1996
Aloe Vera Naturel, Inc.
(Exact name of registrant as specified in its Charter)
Minnesota 0-23178 41-1309882
(State of Incorporation) (Commission file number) (IRS Employer Identification
Number)
527 Marquette, Suite 1800, Minneapolis, Minnesota 55402
(Address of principal executive office) (Zip Code)
Registrant's telephone number (612) 338-3738
Item 2: Acquisition or Disposition of Assets
There was a Plan of Exchange executed on May 10, 1996 between Aloe Vera
Naturel, Inc. and Equihot Delstoffen N.V. for all of the shares of Equihot
Herverzekering N.V. There was a meeting of the shareholders of Aloe Vera
Naturel, Inc. on May 10, 1996 that approved the Plan of Exchange, approved the
change of name to Equisure, Inc. and a new Board of Directors, consisting of P.
G. Uttley, Barrie Harding, Terrance Green, Gerda Elsen and David Sachman.
The Plan of Exchange, the Proxy Statement of Aloe Vera Naturel, Inc.,
the December 31, 1995 audit of Aloe Vera Naturel, Inc. and the December 31, 1995
audit of Equihot Herverzekering N.V. are attached as exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed by the President.
Aloe Vera Naturel, Inc.
/s/ D. Sackman
EXHIBIT INDEX
2.1 Plan of Exchange
2.2 Proxy Statement
2.3 December 31, 1995 audit of Aloe Vera Naturel, Inc.
2.4 December 31, 1995 audit of Equihot Herverzekering N.V.
AGREEMENT AND PLAN OF EXCHANGE
AGREEMENT AND PLAN OF EXCHANGE (hereinafter called this "Agreement")
dated this ______ day of April, 1996, between Equihot Delfstoffen N.V. for the
shares of Equihot Herverzekering N.V. (the "Company"), a Belgian corporation,
and Aloe Vera Naturel, Inc.
(the "Purchaser") a Minnesota corporation,
WHEREAS, the Purchaser desires to acquire all of the outstanding shares
of the Company in exchange for shares of the Purchaser, all upon the terms and
subject to the conditions of this Agreement and the Plan of Exchange attached as
Exhibit A (the "Plan of Exchange"); and
WHEREAS, the company and the purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Exchange of the company;
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, the parties agree as follows:
ARTICLE 1
THE EXCHANGE; CLOSING; EFFECTIVE TIME
1.1 THE EXCHANGE. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in section 1.4) all of the shares
of the company shall be exchanged for shares of the purchaser (the "Exchange").
The purchaser shall continue to be governed by the laws of the State of
Minnesota, and the separate corporate existence of the purchaser and the company
with all their rights, privileges, immunities and franchises shall continue
unaffected by the Exchange.
1.2 TERMS OF EXCHANGE. The shareholders of the company shall transfer
all of their stock in the company to the purchaser. The purchaser agrees to
issue 5,297,041 shares of its stock to the shareholder of the company, which
shall represent 95% of all shares of Purchaser outstanding at the time of the
Exchange. The Board of Directors shall be P. G. Uttley, B. Harding, T. G. Green,
Gerda Elsen and D. J. Sachman, the Board of Directors shall then elect the
officers of the company. The name of the Purchaser shall be changed to Equisure,
Inc., and the promissory note of the Company in the sum of $32,500,000 shall be
assigned to the Purchaser.
1.3 CLOSING. The closing of the Exchange (the "Closing") shall take
place (i) at the offices of Charles Clayton, Minneapolis, Minnesota on the first
business day on which the last to be fulfilled or waived of the conditions set
forth in Article VII shall be fulfilled or waived in accordance with this
Agreement, at such time as the company and purchaser may agree, or (ii) on such
other date and/or at such other place and time as the company and purchaser may
agree.
1.4 EFFECTIVE TIME. As soon as practicable following fulfillment or
waiver of the conditions specified in Article VII, and provided that this
Agreement has not been terminated or abandoned pursuant to Article VIII, the
Company and the Purchaser will cause the Articles of Exchange (the "Articles of
Exchange") to be executed and filed with the Secretary of State of Minnesota
(the "State Commission"). The Exchange shall become effective on the date on
which the Secretary of State issues a Certificate of Exchange, and such time is
referred to as the "Effective Time".
ARTICLE II
ARTICLES OF INCORPORATION AND BY-LAWS OF THE
PURCHASER
2.1 THE ARTICLES OF INCORPORATION. The Articles of Incorporation of the
Purchaser (the "Articles") in effect at the Effective Time shall remain in
effect in accordance with the Minnesota Statutes.
2.2 THE BY-LAWS. The By-Laws of the Purchaser in effect at the
Effective Time shall remain in effect unless duly amended in accordance with its
terms and the Minnesota Statutes.
ARTICLE III
OFFICERS AND DIRECTORS OF THE PURCHASING CORPORATION
3.1 OFFICERS AND DIRECTORS. The directors and officers of the purchaser
at the Effective Time shall, from and after the Effective Time, shall be
directors and officers until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Purchasing Corporation's Articles and By-Laws.
ARTICLE IV
CONVERSION OR CANCELLATION OF SHARES IN THE EXCHANGE
4.1 At the Effective Time, all shares of common stock of the company
issued and outstanding immediately prior to the Effective Time shall be
exchanged for validly issued, fully paid and nonassessable shares of the
purchaser.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 CORPORATE ORGANIZATION AND QUALIFICATION. The company is a
corporation duly organized, validly existing and in good standing under the laws
of the Country of Belgium. The company has the corporate power and authority to
carry on its respective businesses as they are now being conducted. The company
has made available to purchaser a complete and correct copy of the company's
Articles, and the company's By-Laws. The company's Articles and By-Laws so
delivered are in full force and effect.
5.2 CORPORATE AUTHORITY. Subject only to approval of this Agreement and
the Plan of Exchange by the holders of a majority of the outstanding shares, the
company has the requisite corporate power and authority and has taken all
corporate action necessary in order to execute and deliver this Agreement and to
consummate the transactions contemplated. This Agreement is a valid and binding
agreement of the company.
5.3 COMPLIANCE. The execution and delivery of this Agreement by the
company does not, and the consummation of the transactions contemplated by the
company will not, constitute or result in (i) a breach or violation of, or a
default under, the Articles or By-Laws of the company or (ii) a breach or
violation of, a default under, the acceleration of, or the creation of a lien,
pledge, security interest or other encumbrance on assets pursuant to (with or
without the giving of notice or the lapse of time), any provision of any
agreement, lease, contract, note, mortgage, indenture, arrangement or other
obligation ("Contracts") of the company, or any law, rule, ordinance or
regulation or judgment, decree, order, award or governmental or non-governmental
permit or license to which the company is subject, except, in the case of clause
(ii) above, for such breaches, violations, defaults, or accelerations which,
alone or in the aggregate, will not have a material adverse effect on the
financial condition, properties, business or results of operations of the
company.
5.4 BROKERS AND FINDERS. Neither the company nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated, except as disclosed.
5.5 FINANCIAL STATEMENTS. The financial statements as of December 31,
1995, which have been delivered to Purchaser ("Company Financial Statements")
are complete, accurate, and fairly present the financial condition of the
company as of the date and the results of its operation for the periods covered.
To the best knowledge of the company, there are no liabilities, either fixed or
contingent, not reflected in the financial statements other than contracts or
obligations in the ordinary and usual course of business, constituting liens or
other liabilities which, if disclosed, would alter substantially the financial
condition of the company as reflected in the financial statements. These
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied.
5.6 LITIGATION AND PROCEEDINGS. To the best knowledge of the company,
it is not involved in any pending litigation or governmental investigation or
proceeding not reflected in the financial statements, or otherwise disclosed in
the Schedules and, to the best knowledge of the company, no litigation, claims,
assessments, or governmental investigation or proceeding is threatened against
the company.
5.7 TAX RETURNS. The company has filed all tax returns, forms, or
reports, which are due or required to be filed by it prior to this date and has
paid or made adequate provisions for the payment of all taxes, penalty fees, or
assessments which have or may become due pursuant to such returns or pursuant to
any assessments received.
5.8 TITLE AND RELATED MATTERS. The company has good and marketable
title to all of its licenses, copyrights, trademark, patents, patents pending,
properties, inventory, interests in properties, and other assets, real and
personal, free and clear of all mortgages, liens, pledges, charges, or
encumbrances except (i) statutory liens or claims not yet delinquent; (ii) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the assets or properties
subject thereto or affected thereby or otherwise materially impair present
business operations on such properties or in connection with such assets; and
(iii) as described in the financial statements or in company Schedules. The
company owns, free and clear of any liens, claims, encumbrances, royalty
interests, or other restrictions or limitations of any nature whatsoever, any
and all procedures, techniques, business plans, methods of management, or other
information utilized in the conduct of the company's business or operations,
whether or not the value thereof is reflected in the most recent balance sheet
included in the company Schedules. The plants, structures, and equipment of the
company that are necessary or used in the operations of the business of the
company are in good operating condition and repair, normal wear and tear
excepted.
5.9 COMPANY SCHEDULES. The company has delivered to Purchaser the
following schedules which are collectively referred to as the "Schedules" and
which consist of separate schedules dated as of the date of execution of this
Agreement and instruments and data as of the same date, all certified by the
chief executive officer of the company, as complete, true, and correct:
(A) A schedule containing complete and correct copies of the articles
of Incorporation and Bylaws of Company in effect as of the date of this
Agreement;
(B) A schedule containing a description of all real property owned or
leased by the company, together with a description of every mortgage,
deed of trust, pledge, lien, agreement, encumbrance, claim, or equity
interest of any nature whatsoever in real property with copies of the
underlying documentation;
(C) A schedule describing all material contracts, employee agreements,
licenses, agreements, or other instruments to which the company is a
party or by which it or its properties or assets are bound;
(D) A schedule describing all loans and mortgages for which Company is
obligated and the terms;
(E) A schedule setting forth a description of any material adverse
change in business, operations, property, inventory, assets, or
condition of the company since December 31, 1995;
(F) A schedule of all litigation or governmental investigation or
proceeding which is pending or which, to the best knowledge of
management, is threatened or contemplated;
(G) A schedule of all outstanding options and warrants to acquire
shares of common stock;
(H) A schedule describing all joint ventures, partnerships or
corporations in which the company owns an interest or a right to
acquire an interest;
(I) A schedule of all documents, disclosures, or representations
required to be disclosed by this Agreement or required to be disclosed
in order to set forth all material facts regarding the company.
5.10 CORPORATE ORGANIZATION AND QUALIFICATION. The purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Minnesota. The purchaser has the corporate power and authority
to carry on its respective businesses as they are now being conducted. The
purchaser has made available to the company a complete and correct copy of the
purchaser's Articles, and the purchaser's By-Laws. The purchaser's Articles and
By-Laws so delivered are in full force and effect.
5.11 CORPORATE AUTHORITY. Subject only to approval of this Agreement
and the Plan of Exchange by the holders of a majority of the outstanding shares,
the purchaser has the requisite corporate power and authority and has taken all
corporate action necessary in order to execute and deliver this Agreement and to
consummate the transactions contemplated. This Agreement is a valid and binding
agreement of the purchaser.
5.12 COMPLIANCE. The execution and delivery of this Agreement by the
purchaser does not, and the consummation of the transactions contemplated by the
purchaser will not, constitute or result in (i) a breach or violation of, or a
default under, the Articles or By-Laws of the purchaser or (ii) a breach or
violation of, a default under, the acceleration of or the creation of a lien,
pledge, security interest or other encumbrance on assets pursuant to (with or
without the giving of notice or the lapse of time), any provision of any
agreement, lease, contract, note, mortgage, indenture, arrangement or other
obligation ("Contracts") of the purchaser or any law, rule, ordinance or
regulation or judgment, decree, order, award or governmental or non-governmental
permit or license to which the purchaser is subject, except, in the case of
clause (ii) above, for such breaches, violations, defaults, or accelerations
which, alone or in the aggregate, will not have a material adverse effect on the
financial condition, properties, business or results of operations of the
purchaser.
ARTICLE VI
COVENANTS
6.1 ACQUISITION PROPOSALS. The company will, and shall direct (and
shall use its best efforts to cause) all of its officers and directors and
employees and any investment banker, attorney, accountant or other agent
retained by the company not to, initiate or solicit any inquiries or the making
of any proposal with respect to, or, except to the extent required by fiduciary
obligations under applicable laws, as advised in writing by counsel, engage in
negotiations concerning, or provide any confidential information or data or to
have any discussions with, any person relating to, any acquisition, business
combination or purchase of all or any significant portion of the assets of, or
any equity interest in, the company. The company will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted with respect to any of the foregoing. The company will
notify purchaser immediately if any such inquiries or proposals are received by,
any such information is requested from, or any such negotiations or discussions
are sought to be initiated or continued with the company.
6.2 INTERIM OPERATIONS OF THE COMPANY. The company covenants and agrees
that after this date and prior to the Effective Time (unless purchaser shall
otherwise agree in writing and except as otherwise contemplated by this
Agreement):
(a) the business of the company shall be conducted only in the
ordinary and usual course and, to the extent consistent
therewith, the company shall use its reasonable best efforts
to preserve its business organization intact and maintain its
existing relations with customers, suppliers, employees and
business associates;
(b) the company shall not materially modify or amend or terminate
any of its material contracts or waive, release or assign any
material rights or claims, except in the ordinary and usual
course of business;
6.3 MEETINGS OF THE SHAREHOLDERS. As soon as practicable after this
date, purchaser and the company shall prepare a joint proxy/registration
statement (the "Registration Statement"), which shall comply as to form with all
applicable law and its governing instruments to convene a meeting of its
shareholders as promptly as practicable to consider and vote upon the approval
of this Agreement and the Plan of Exchange and the Exchange. Subject to
fiduciary requirements of applicable law, the respective boards of directors of
each of purchaser and the company shall recommend such approval and take all
lawful action to solicit such approval; provided, however, and notwithstanding
any other provision in this Agreement to the contrary, if either purchaser or
the company should experience any development or combination of developments
having a material adverse effect on the financial condition, properties,
business or results of operations of purchaser, taken as a whole, or the
company, taken as a whole, as the case may be, other than as a result of factors
affecting the industry or the economy generally, then the board of directors of
the other company may withdraw its recommendation of the Exchange and may
postpone the meeting of its shareholders to allow adequate time to disseminate
relevant disclosure material. The company agrees, as to information with respect
to the company, its officers, directors, and shareholders contained when the
Registration Statement becomes effective and at the date of the meeting of the
respective shareholders of purchaser and the company, will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated or necessary to make the statement not misleading.
ARTICLE VII
CONDITIONS
7.1 CONDITIONS TO OBLIGATIONS OF PURCHASER AND COMPANY. The respective
obligations of purchaser and the company to consummate the Exchange are subject
to the fulfillment of each of the following conditions, any or all of which may
be waived in whole or in part by purchaser or the company as the case may be, to
the extent permitted by applicable law:
(a) Shareholder Approval. This Agreement shall have been duly
approved by the holders of (i) at least a majority of the
voting power of the outstanding shares of the purchaser common
stock, voting together as a single class, in accordance with
applicable law and the Certificate of Incorporation and
By-Laws of purchaser and (ii) a majority of the outstanding
shares, in accordance with applicable law and the Articles and
By-Laws of the company.
(b) Continuing Warranties, Certificate. The representations and
warranties of the company contained in this Agreement shall be
correct on and as of the Effective Time in all material
respects with the same effect as though made and as of such
date, except for the changes contemplated by this Agreement,
and the company shall have performed in all material respects
all of its obligations to be performed, and purchaser shall
have received at the Effective Time a certificate to that
effect, dated the Effective Time, and executed on behalf of
the company by an executive officer of the company.
Notwithstanding anything in the foregoing to the contrary,
this Section 7.1(b) shall be deemed to have been fulfilled
regardless of whether the representations contained in Section
5.1 shall not be so correct or the covenants in Sections 6.1
and 6.2 to the extent it is applied to these sections.
7.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
company to consummate the Exchange are subject to the fulfillment of each of the
following conditions, any or all of which may be waived in whole or in part by
the company to the extent permitted by applicable law:
(a) Shareholder Approval. This Agreement shall have been duly
approved by the holders of (i) at least a majority of the
voting power of the outstanding shares of the purchaser common
stock, voting together as a single class, in accordance with
applicable law and the Certificate of Incorporation and
By-Laws of purchaser and (ii) a majority of the outstanding
shares, in accordance with applicable law and the Articles and
By-Laws of the purchaser.
(b) Continuing Warranties, Certificate. The representations and
warranties of the purchaser contained in this Agreement shall
be correct on and as of the Effective Time in all material
respects with the same effect as though made and as of such
date, except for the changes contemplated by this Agreement,
and the purchaser shall have performed in all material
respects all of its obligations to be performed, and company
shall have received at the Effective Time a certificate to
that effect, dated the Effective Time, and executed on behalf
of the purchaser by an executive officer of the purchaser.
ARTICLE VIII
TERMINATION
8.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and
the Exchange may be abandoned at any time prior to the Effective Time, before or
after the approval by shareholders of the parties by the mutual consent of
purchaser and the company by action of their respective boards of directors.
8.2 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination
of this Agreement and abandonment of the Exchange pursuant to this Article VIII,
no party (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, except as provided in
Section 9.2 and except that nothing will relieve any party from liability for
any breach of this Agreement.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1 PAYMENT OF EXPENSES. Whether or not the Exchange shall be
consummated, each party hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation of the
Exchange.
9.2 SURVIVAL. The agreements shall survive the consummation of the
Exchange.
9.3 MODIFICATION OR AMENDMENT. Subject to the Minnesota Statutes, at
any time prior to the Effective Time, the parties may, by written agreement,
make any modification or amendment of this Agreement approved by their
respective boards of directors. This Agreement shall not be modified or amended
except pursuant to an instrument in writing executed and delivered on behalf of
each of the parties. After the Effective Time, none of the agreements may be
amended.
9.4 WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Exchange are for the sole benefit of such party
and may be waived by such party in whole or in part to the extent permitted by
applicable law.
9.5 COUNTERPARTS. For the convenience of the parties this Agreement may
be executed in any number of counterparts, each such counterpart being deemed to
be an original instrument, and all counterparts shall together constitute the
same agreement.
9.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota regardless of the laws that
might otherwise govern under applicable principles of conflicts of law.
9.7 NOTICES. Any notice, request, instruction, or other document to be
given by any party to the other, shall be in writing and delivered personally or
sent by a registered or certified mail, postage prepaid to the company to D. J.
Sachman, L'Astoria 26 Bis, 8D Princess Charlotte, Monte Carlo, Monaco, and to
the purchaser to George Berger, 600 Conklin Avenue, Sioux Falls, South Dakota,
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
9.8 ENTIRE AGREEMENT, ETC. This Agreement (a) constitutes the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, among the parties, with respect to the subject matter and (b)
shall not be assignable by operation of law or obligation to, or rights in
respect of, any persons other than the parties, it being expressly agreed that
all of the persons (and their successors and assigns) who are beneficiaries of
such sections or schedule (whether as individuals or as members of a class or
group) shall be entitled to enforce such sections and schedule against purchaser
or the surviving corporation or of the purchaser.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.
EQUIHOT DELFSTOFFEN N. V.
By: /s/ David Carter
Name: David Carter
Title: Director
ALOE VERA NATUREL, INC.
By: /s/ George N. Berger
Name: George N. Berger
Title: President
ALOE VERA NATUREL, INC.
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
May 10, 1996
PROXY SOLICITED BY THE BOARD OF DIRECTORS
This proxy statement is furnished to holders of the common stock of
Aloe Vera Naturel, Inc., (the "Company") in connection with the solicitation by
the Board of Directors of proxies for use at the special meeting of shareholders
to be held on the 10th day of May, 1996, and at all adjournments thereof, for
the purposes set forth in the attached Notice.
Management knows of no matters to be presented at the meeting other
than as mentioned below. However, if any matter not specifically set forth in
the attached Notice of Meeting properly comes before the meeting, it is intended
that the holder of the proxies will vote in their discretion.
Holders of outstanding stock of record at the close of business on
April 1, 1996, are entitled to vote at the meeting and to cast one vote for each
share held. The outstanding voting securities of the company, as of April 1,
1996, consists of 5,575,833 shares.
PRINCIPAL SHAREHOLDERS
The company knows of no person who is the beneficial owner of more than
5% of the company's voting securities except as follows:
Name of Beneficial Owner Number of Shares % of Ownership
- - ------------------------ ---------------- --------------
George N. Berger 2,625,000 47.0%
Donald E. Densmore 250,000 4.5%
Wayne E. Densmore 348,000 6.0%
John P. Porter 246,500 4.4%
All officers and
Directors as a group 3,469,500 62 %
OFFICERS AND DIRECTORS
The officers and directors of the company are as follows:
Name Age Position
- - ---- --- --------
George N. Berger 39 President and Director
Donald E. Densmore 60 Director
Wayne E. Densmore 65 Director
John P. Porter 69 Director
GEORGE N. BERGER, President, Chief Financial Officer, Secretary and
Director. Mr. Berger has a degree in Economics from Concordia College and an MBA
from the University of Minnesota. He has served as an officer and director of
the company since November, 1991.
DONALD E. DENSMORE, Director. Mr. Densmore has been a director of the
company since 1980, and was president from 1982 to 1991. From 1992 to 1995 he
was an executive of K. H. Watts Co. a manufacturers representative.
WAYNE E. DENSMORE, Director. Mr. Densmore has been a director of the
company since 1980, and was secretary from 1982 to 1991. Mr. Densmore was the
President of International Blending Company for 22 years until its sale in 1992,
and remained the general manager until his retirement in 1995.
JOHN P. PORTER, Director. Mr. Porter was been a director of the company
since 1980. He is now retired, before retirement he was National Sales Manager
for Heidelberg Eastern, Inc.
EXECUTIVE COMPENSATION
There are no officers or directors that received compensation in excess
of $60,000 or more during the last year. Mr. Berger has an employment contract
with the company, however, all pay has been suspended since October, 1992, and
he has agreed to waive all claims for salary as a result of the Agreement and
Plan of Exchange.
REVERSE STOCK SPLIT
There are now 5,575,833 shares of common stock outstanding. The Board
of Directors has decided that it is in the best interests ot the Company to
reverse split the shares so that there will be 1 share for each 20 shares.
This will mean that there will be 278,792 shares outstanding.
The Board of Directors recommends a vote for the proposal for the
reverse stock split.
PLAN OF EXCHANGE WITH EQUIHOT DELFSTOFFEN N.V.
The Board of Directors has entered into an agreement with Equihot
Delfstoffen, N.V.. a Belgian Corporation for an Agreement for Plan of Exchange
of Equihot Hervezekering N.V. A copy of the agreement is attached to this Proxy
Statement as Appendix A. Under the terms of the agreement Equihot Delfstoffen
N.V. will transfer all of the issued and outstanding shares of Equihot
Hervezekering N.V. to the Company in exchange for 5,297,041 shares.
Aloe Vera Naturel, Inc.
Aloe Vera Naturel, Inc. was started as a Minnesota corporation on
August 17, 1977, and 900,000 shares were issued to the founders. Beginning in
March, 1978 the company sold 895,000 shares in a public offering, and in 1981
there were an additional 133,333 shares sold. The company was formed to market
cosmetics and skin care products. The business was not successful, and in 1982
the business ceased.
There were 500,000 shares issued in 1982 to retire notes payable. Also
in 1982 there was an attempt to resurrect the business with an agreement with
Longhorn Energy Services, Inc. This was not successful. There were 60,000 shares
issued in settlement of legal and other fees in connection with a Longhorn
offering, and there was a reversal of the Longhorn merger in 1984 that resulted
in the issuance of 300,000 shares of the company, which was approved at a
shareholders meeting in 1992.
There were additional shares issued in 1991: 12,500 for referral fees,
150,000 to Donald E. Densmore for management fees, and 2,625,000 to George N.
Berger for consulting fees incurred before he became an officer and director of
the company.
The company filed a registration statement of Form 10-SB in January,
1994 to become a reporting company. In September, 1995 the registration
statement was cleared by the Securities and Exchange Commission.
The company has had no material assets and no business operation since
the discontinuance of the cosmetics and skin care marketing business in 1982.
Equihot Hervezekering N.V.
Equihot Hervezekering N.V. is a corporation, incorporated in Belgium,
and is a wholly owned subsidiary of Equihot Delfstoffen N.V., also a Belgian
corporation. The parent company is a metals trading company that trades in raw,
refined or constructed products of metal throughout the world. Equihot
Hervezekering N.V. was started as a reinsurance subsidiary of the parent
company.
Equihot Hervezekering N.V. principally does business with companies in
the metal trading business. It only writes reinsurance, not the primary
insurance. The reinsurance is limited principally to that of financial or
political risks associated with the delivery of metal products, usually defined
as raw, refined or constructed products, warehoused or in transit, as a result
of the risks of political insurrection, riots, strikes and other malicious acts,
including terrorism; and relating to the movement of cargo by land, sea or air,
including the ship's hulls and light aircraft.
The reinsurance account emanates mainly from southern Africa, and
specifically South Africa, Namibia, Botswana, Mozambique, Zimbabwe, Zambia,
Malawi and Angola.
Equihot Hervezekering N.V. also has a policy of entering into an
agreement with one specific producer on one geographical area. The reason is to
avoid conflict between producers, and also to maintain a desired rating
structure and any downward pressure from competing brokers in the same market.
The close association with the parent company has led to a desirable
risk structure, and there have been no losses from claims on an as if basis in
the past seven years. Equihot Hervezekering N.V. branched out in 1995 to write
reinsurance for other major international companies active in metal trading. In
keeping with the prior method of operation the company only enters into
arrangements with insurance companies with a proven risk management experience,
and an acceptable level of loss ratio.
CHANGE OF NAME
The Company intends to change its name after the shareholders meeting
to Equisure, Inc. It will retain the name Equihot Hervezekering N.V. for its
wholly owned subsidiary for the reason that it has many insurance contracts
throughout the world in that name. As a result it would create numerous problems
to cease doing business as Equihot Hervezekering N.V., and it will continue to
do business in that name. It is intended that all accounting will be on a
consolidated basis, so that the income of the subsidiary will be the income of
the parent company.
The Board of Directors recommends a vote to change the name to
Equisure, Inc.
OFFICERS AND DIRECTORS OF THE NEW COMPANY
The following information sets for information as to the persons who
are expected to serve as Officers and Directors of the new Equisure, Inc.
following the merger:
Name Age Position
- - ---- --- --------
P. G. Uttley 65 Chairman and a Director
B. Harding 47 President and a Director
T. G. Green 49 Director
Gerda Elsen 36 Director
D. J. Sachman 51 Director
P. G. UTTLEY, Chairman and a Director. Mr. Uttley is British, and has
been in the insurance business since 1959. At this time he is Chairman of Owen &
Wilby, Chairman of Owl Holdings Limited, Fonde de Pouvoir of Equihot Societe
Anonyme Monegasque, Director of Equihot Verzekering N.V., Director of Equihot
Hervezekering N.V. and Chairman of P & B Limited.
BARRIE HARDING, President and a Director. Mr. Harding is British and
has been in the insurance business since 1965. From 1989 to 1993 he was Managing
Director of Hull & Co., Ltd., during 1994 he was a member of the board of Hogg
Insurance Brokers, Ltd., from January, 1995 to February, 1996 he was with
Harding Associates, and from February, 1996 to the present he has been a
director of Equihot insurance companies.
TERRANCE GEORGE GREEN, Director - Underwriting. Mr. Green is British,
and has been in the insurance business since 1965. From 1992 to 1995 he was with
City Commercial Services Group, Ltd., and since November, 1995 has been
Underwriting Manager of Equihot Hervezekering N.V.
GERDA ELSEN, Director - Actuarial/Insurance Accounts. Mrs. Elsen is
Belgian, and has been in the insurance business since 1987. From 1987 to 1995
she was with Area Benefits Network International Services S.G., a Professor of
mathematics at E.H.S.A.L., and an Actuary at Hewitt CBC S.A. From January, 1996
she has been a Director of Equihot Hervezekering N.V.
DAVID SACHMAN, Director - Finance. Mr. Sachman is a citizen of South
Africa. He has been employed since 1988 as Director of Equihot Finance Trust and
the Equihot companies.
The Board of Directors recommends a vote for the slate of new
directors.
SECURITY OWNERSHIP OF THE NEW COMPANY
The following table sets forth information as to the owners of 5% or
more of the voting securities, and officers and directors of the new company
following the merger:
Name of Beneficial Owner Number of Shares % of Ownership
- - ------------------------ ---------------- --------------
Equihot Delfstoffen N.V. 5,297,041 95%
All officers and
Directors as a group 5,297,041 95%
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
The following is the unaudited pro forma condensed balance sheet, as of
December 31, 1995 for both Aloe Vera and Equihot, showing the condensed balance
sheet items, and the total for both combined.
<TABLE>
<CAPTION>
Historical Pro forma
---------- ---------
Aloe Vera Equihot
--------- -------
<S> <C> <C> <C>
Assets
Current Assets $ -- $43,124,788 $43,124,788
Fixed Assets $ -- $16,201,338 $16,201,338
Other Assets $ -- $ -- $ --
----------- -----------
$ -- $59,326,126 $59,326,126
----------- -----------
Liabilities and Stockholders Equity
Current Liabilities $ 68,693 $ 8,217,326 $ 8,286,019
Long Term Liabilities $ -- $16,909,846 $16,909,846
Stockholders Equity $ (68,693) $34,198,954 $34,130,261
---------- ----------- -----------
$ -- $59,326,126 $59,326,126
---------- ----------- -----------
</TABLE>
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
The following is the unaudited pro forma condensed income statement, as
of December 31, 1995 for both Aloe Vera and Equihot, showing the condensed
income statement items, and the total for both combined.
Historical Pro forma
---------- ---------
Aloe Vera Equihot
--------- -------
Total Revenues $ -- $27,371,605 $27,371,605
Cost of Goods Sold $ -- $14,003,778 $14,003,778
Investment Income $ -- $ 1,272,547 $ 1,272,547
Expenses $ 4,062 $ 5,013,745 $ 5,017,807
Transfer to insurance fund $ -- $ 8,413,506 $ 8,413,506
---------- -----------
Income (Loss) $ (4,062) $ 1,213,123 $ 1,209,061
FUTURE DEVELOPMENT
Equihot Hervezekering N.V. has shown growth of about 7% in the first
quarter of 1996 compared with the first quarter of 1995. The first quarter is
traditionally the best performing quarter, and, as a result, the growth for the
remainder of the year may slow.
The Company is looking for new areas of expansion, presently under
review is South America and Australia. The Company is looking for growth with a
profit, short term growth without known profit will be avoided.
The principle source of reinsurance business is from Africa, in the
mining sector. This has not been maximized, and the company will look for
continued expansion.
The shareholders of Equihot Herverzekering N.V. paid into the company
(in addition to stock) the sum of $32,500,000 by way of a contributed surplus.
This takes the form of a subordinated loan, paying an annual coupon of 6% on
December 12th to the shareholders of Equihot Hervezekering N.V. This loan is not
repayable and will be converted to common stock of Equihot Herverzekering N.V.
at par on December 12, 1999. The title of lender to this subordinated loan is to
be assigned in its entirety to Equisure Inc., the new shareholder of Equihot
Herverzekering N.V.
The Board of Directors recommends a vote for the proposal to exchange
with Equihot Hervezekering N.V.
MCGLADREY & PULLEN, LLP
Certified Public Accountants and Consultants
INDEPENDENT AUDlTOR'S REPORT
To the Board of Directors
Aloe Vera Naturel, Inc.
Sioux Falls, South Dakota
We have audited the accompanying balance sheets of Aloe Vera Naturel, Inc. as of
December 31, 1995 and 1994, and the related statements of operations,
accumulated (deficit), and cash flows for the years then ended. 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 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 Aloe Vera Naturel, Inc. as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
/s/ McGLADREY & PULLEN, LLP
McGLADREY & PULLEN, LLP
Sioux Falls, South Dakota
January 26, 1996
ALOE VERA NATUREL, INC.
BALANCE SHEETS
December 31, 1995 and 1994
<TABLE>
<CAPTION>
ASSETS 1995 1994
--------- ---------
<S> <C> <C>
Assets $ -- $ --
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accrued compensation to stockholder/officer (Note 2) $ 51,667 $ 51,667
Due to stockholder/officer (Note 2) 17,026 12,964
--------- ---------
68,693 64,631
--------- ---------
Stockholders' Equity (Deficit)
Common stock, par value $.001 per share; authorized
10,000,000 shares; issued 5,575,833 shares 5,576 5,576
Additional paid-in capital 314,751 314,751
Accumulated (deficit) (389,020) (384,958)
--------- ---------
(68,693) (64,631)
--------- ---------
$ -- $ --
========= =========
</TABLE>
See Notes to Financial Statements.
ALOE VERA NATUREL, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED (DEFICIT)
Years Ended December 31, 1995 and 1994
OPERATIONS 1995 1994
--------- ---------
Revenue $ -- $ --
Expenses (Note 2):
Office and other expenses 1,607 l,200
Accounting fees 1,579 3,005
Travel and entertainment 581 --
Legal fees 295 --
--------- ---------
4,062 4,205
--------- ---------
(LOSS) BEFORE INCOME TAXES (4,062) (4,205)
Income taxes (Note 3) -- --
--------- ---------
NET (LOSS) $ (4,062) $ (4,205)
========= =========
(Loss) per common share $ (0.001) $ (0.001)
========= =========
ACCUMULATED (DEF1CIT)
Balance, beginning $(384,958) $(380,753)
Net (loss) (4,062) (4,205)
--------- ---------
Balance, ending $(389,020) $(384,958)
========= =========
See Notes to Financial Statements.
ALOE VERA NATUREL, INC.
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1995 and 1994
1995 1994
------- -------
Cash Flows From Operating Activities
Net (loss) $(4,062) $(4,205)
Adjustment to reconcile net (loss) to net cash
provided by (used in) operating activities:
Change in assets and liabilities:
Increase in due to stockholder/officer 4,062 4,205
------- -------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES -- --
------- -------
NET INCREASE IN CASH AND CASH
EQUIVALENTS -- --
Cash and Cash Equivalents
Beginning -- --
------- -------
Ending $ -- $ --
======= =======
See Notes to Financial Statements.
ALOE VERA NATUREL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of business: At December 31, 1995 and for several years preceding, the
Company was not engaged in any business activity. The only activity of the
Company in the years ended December 31, 1995 and 1994 was work done by a
stockholder/officer to maintain Company records, file required reports and
statements, and search for business opportunities. The future of the Company is
dependent upon its engaging in successful business ventures.
The following is a summary of the Company's significant accounting policies.
Income taxes: The Company follows FASB Statement No. 109, "Accounting for
Income Taxes", which requires an asset and liability approach to financial
accounting and reporting for income taxes. Deferred income tax assets and
liabilities are computed annually for differences between the financial
statement and tax bases of assets and liabilities that will result in taxable or
deductible amounts in the future based on enacted tax laws and rates applicable
to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized. Income tax expense is the tax
payable or refundable for the period plus or minus the change during the period
in deferred tax assets and liabilities.
(Loss) per common share: (Loss) per common share is computed based on the
Company's net (loss) and the weighted average number of outstanding shares of
common stock. For the years ended December 31, 1995 and 1994, the weighted
average number of common stock shares outstanding was 5,575,833 shares.
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 amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
ALOE VERA NATUREL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2. RELATED PARTY TRANSACTIONS
In order to simplify accounting of office expenses incurred by the president in
connection with services performed for the Company, the Company agreed to pay
its president, beginning October 1992, $100 per month for office expenses. Such
expenses include the use of office machines and normal day-to-day expenditures
for postage and telephone usage. Since the Company has no capital, the amounts
due are being accrued.
The Company owes its president for funds he advanced in order to pay financial
statement audit and accounting fees and other general and administrative
expenses, which for the years ended December 31, 1995 and 1994 totaled $2,862
and $3,005, respectively.
The Company has an employment agreement with its president, for a period of
three years, beginning November 20, 1991, and thereafter from month to month
unless sooner terminated as therein provided. Under the agreement, the
president earned $5,000 per month from November 1991 to September 1992, all of
which was accrued since the Company has no capital. Beginning October 1992,
accruals of additional compensation were suspended pending further activity in
the Company. "Further activity" is understood between the parties to mean such
activity that is reasonably expected to result in the production of cash flows
within the three months following resumption of accruals, where such cash flows
are determined by the board of directors to be sufficient to justify a
resumption of accruals. No such activity has occurred since October 1992.
NOTE 3. INCOME TAXES
At December 31, 1995, the Company had net operating loss carryforwards for
federal income tax reporting purposes of approximately $142,800. The majority
of these carryforwards expire 1996. The income tax operating losses do not
include deductions for $68,693 (comprised of $51,667 of compensation to a
stockholder/officer and funds advanced by such stockholder/officer for $17,026
of expenses of the Company) which have been expensed on the Company's financial
statements. No income tax benefit is provided for these temporary differences
due to the uncertainty in realization of any future tax benefits. Tax
regulations provide restrictions and limitations on utilization of net operating
losses including limitations when a change in ownership occurs.
FREE TRANSLATION FROM DUTCH
REPORT OF THE STATUTORY AUDITOR
ANNUAL FINANCIAL STATEMENTS AT 31 DECEMBER 1995
to the directors of
EQUIHOT HERVERZEKERING N.V.
Louiza - Marialei 8 - 2018 Antwerpen
We report, in accordance with legal requirements and the company's statutes, on
our audit of the financial statements for the year ended 31 December 1995.
We carried out our examination according to the standards of the Institute of
Auditors. The administrative and accounting organization of the company and its
internal control procedures were found to be adequate for the purpose of our
task. Directors and managers of the company have always replied clearly to our
requests for information or clarification.
The records are maintained and the financial statements are drawn up in
accordance with Belgian legislation and regulations.
The Directors Report is in accordance with the financial statements. It also
contains the information required by law.
The appropriation proposed to the Annual General Meeting is in accord with legal
requirements and the company's statutes. We have no operations or transactions
to report which are contrary to the company's statutes or to company law.
In conclusion, we attest without qualification that the attached US$ translation
of the financial statements at 31 December 1995, whose balance sheet totals US$
34.198.954 (BEF 1.006.475.229) and which close on with neither profit nor loss,
taking into account applicable legal and management regulations, give a true and
fair view of the net assets, the financial position and the results of the
company and that a reasonable justification is given in the Directors Report.
Brussels, 19 April 1996,
/s/ John A. Geddes
John A. Geddes
Statutory-Auditor
EQUIHOT HERVERZEKERING N.V.
ANNUAL REPORT 1995
BALANCE SHEET AS AT 31ST DECEMBER 1995
US $ US $
1995 1994
(as restated)
Quoted investments 16,201,338 3,268,466
CURRENT ASSETS
Amount due from
shareholders 1,509,538 2,270,100
Reinsurance debtors 9,276,459 18,941,368
Sundry debtors 121,986 460
Cash at bank
- investment accounts 26,053,389 --
- current accounts 6,163,416 19,316,261
43,124,788 40,978,189
---------- ----------
CURRENT LIABILITIES
Amount due to associated
company 1,777,204 1,721,837
Insurance creditors 5,555,344 --
Sundry creditors 884,778 130,268
---------- ----------
8,217,326 1,852,105
---------- ----------
NET CURRENT ASSETS 34,907,462 39,126,084
---------- ----------
51,108,800 42,394,550
INSURANCE FUND (16,909,846) (8,323,697)
----------- ----------
US $ 34,198,954 US $ 34,070,853
========== ==========
SHAREHOLDERS FUNDS US $ 34,198,954 US $ 34,070,853
========== ==========
Approved by the Directors 18th April 1996
C. Gastaldi P. Uttley
C. Guignon D. Sachman
EQUIHOT HERVERZEKERING N.V.
ANNUAL REPORT 1995
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST DECEMBER 1995
US $ US $
1995 1994
(as restated)
Net premium income 27,371,605 18,941,368
Retrocession premiums (14,003,778) (10,617,671)
----------- -----------
13,367,827 8,323,697
Transfer to insurance fund (8,413,506) (8,323,697)
----------- -----------
Technical result 4,954,321 --
Investment income 1,272,547 --
Coupon paid (1,950,000) (101,507)
Operating & adminstrative expenses (3,063,745) (2,618,593)
----------- -----------
Net profit/loss for the year 1,213,123 (2,720,100)
Contribution (returned to)/received
from parent company re 1994 loss (1,213,123) 2,270,100
----------- -----------
NET RESULT FOR THE YEAR -- --
=========== ===========
The 1994 comparative figures have been restated to take account of the
shareholders contribution to the loss in that year.
In addition to a coupon payment of US $1,950,000 the company paid insurance
agent commissions of US $3,032,919 to the shareholders in respect of 1995.
