UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
General Form for Registration of Securities
of Small Business Issuers under Section 12(b) or (g)
of the Securities Exchange Act of 1934
Idaho 83-0266517
----- ----------
(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
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Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Table of Contents
-----------------
Part I
Item 1. Description of Business..................................................................................3
Item 2. Management's Discussion and Analysis
or Plan of Operation.................................................................................8
Item 3. Description of Property..................................................................................9
Item 4. Security Ownership of Certain Beneficial
Owners and Management................................................................................9
Item 5. Directors, Executive Officers, Promoters
and Control Persons.................................................................................11
Item 6. Executive Compensation..................................................................................12
Item 7. Certain Relationships and Related Transactions..........................................................12
Item 8. Description of Securities...............................................................................13
Part II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters.........................................................15
Item 2. Legal Proceedings.......................................................................................16
Item 3. Changes in and Disagreements with Accountants...........................................................16
Item 4. Recent Sales of Unregistered Securities.................................................................16
Item 5. Indemnification of Directors and Officers...............................................................17
Part F/S
Financial Statements.............................................................................................19
Part III
Item 1. Index to Exhibits.......................................................................................20
Item 2. Description of Exhibits.................................................................................20
Signatures.......................................................................................................21
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THIS REGISTRATION STATEMENT CONTAINS CERTAIN FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES REFORM ACT OF 1995. THE REGISTRANT INTENDS THAT SUCH FORWARD LOOKING STATEMENTS BE SUBJECT TO THE SAFE HARBORS CREATED THEREBY. THESE FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS REGARDING (I) THE REGISTRANT'S RESEARCH AND DEVELOPMENT PLANS, MARKETING PLANS, CAPITAL AND OPERATIONS EXPENDITURES, AND RESULTS OF OPERATIONS; (II) POTENTIAL FINANCING ARRANGEMENTS; (III) POTENTIAL UTILITY AND ACCEPTANCE OF THE REGISTRANT'S EXISTING AND PROPOSED PRODUCTS; AND (IV) THE NEED FOR, AND AVAILABILITY OF, ADDITIONAL FINANCING.
THE FORWARD LOOKING STATEMENTS INCLUDED HEREIN ARE BASED ON CURRENT EXPECTATIONS AND INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES. THESE FORWARD LOOKING STATEMENTS ARE BASED ON ASSUMPTIONS REGARDING THE REGISTRANT'S BUSINESS AND TECHNOLOGY WHICH INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE SCIENTIFIC, ECONOMIC, REGULATORY AND COMPETITIVE CONDITIONS, AND FUTURE BUSINESS DECISIONS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE REGISTRANT. ALTHOUGH THE REGISTRANT BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD LOOKING STATEMENTS ARE REASONABLE, ANY OF THE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD LOOKING STATEMENTS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD LOOKING INFORMATION CONTAINED HEREIN, THE INCLUSION OF SUCH INFORMATION SHOULD NOT BE REGARDED AS ANY REPRESENTATION BY THE REGISTRANT OR ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE REGISTRANT WILL BE ACHIEVED.
PART I
To simplify the language in this Registration Statement, Enviro Voraxial Technology, Inc. and its subsidiary Florida Precision Aerospace, Inc. are referred to herein as "the Company" or "We."
Item 1. Description of Business
(a) Business Development.
We were incorporated in Idaho on October 19, 1964, under the name Idaho Silver, Inc. From our inception through 1994, we were engaged in acquiring mining claims and exploring for silver and lead in Idaho. In May of 1996, we entered into an agreement and plan of reorganization with Florida Precision Aerospace, Inc., a privately held Florida corporation incorporated on February 26, 1993 ("FPA"), and its shareholders.
Pursuant to the plan, we reverse split our common stock on a one (1) share for ten (10) share basis and amended our Articles of Incorporation to increase our authorized common stock to 50,000,000 shares, $.001 par value.
We exchanged 10,000,000 newly-issued post-split shares of our common stock, or approximately 97% of our shares then issued and outstanding for all of the issued and outstanding shares of FPA. As a result of this reorganization, the shareholders of FPA gained control of our Company and FPA became our wholly-owned subsidiary. Our then existing directors and executive officers resigned and were replaced by designees of FPA. At the close of the transaction we changed our name to Enviro Voraxial Technology, Inc.
We have not been involved in any bankruptcy, receivership or similar proceeding.
(b) Business of Issuer.
The following is a description of our business. We operate our business through FPA, our wholly owned subsidiary. References to our business and operations refer to that of FPA, unless otherwise specifically indicated.
Principal Products and Services and their Market.
We operate a high-precision engineering machine shop in Deerfield Beach,
Florida, which designs, manufactures and assembles specialized parts and
components for the aerospace and automotive industries. We perform contract
manufacturing services to both small and large customers. As of the date of this
registration statement, our revenues have depended entirely on contract
manufacturing.
We maintain no inventory of finished products (other than our voraxial separators; See New Products below) not under order by a customer. Our contract manufacturing is not initiated until corresponding specifications have been obtained from a customer. Typically, a customer seeking the manufacture of components will provide us with diagrams and specifications. We complete any remaining design services and begin manufacturing the components pursuant to the specific contract or purchase order.
We have previously been involved in projects involving the production of specialized space navigational and guidance components for Allied Signal Aerospace and The Department of Defense, gears for General Motors Corporation and New Venture Gear to be used in design and assembly of automotive transmissions for several automobile lines and speciality components for Hughes Electronics. We have also provided engineering services to the General Motors/Volvo Heavy Truck Division. We have machined and assembled components such as high precision castings, precision tools and fixtures, berillium and ceramics, deep brazing, Computer Numerical Control (CNC) machining and tuning and precision jig boring and assembly.
We are currently manufacturing automobile transmission parts for New Venture Gear pursuant to an existing purchase order which we anticipate completing by the end of 1999. We have no other purchase orders pending. We are attempting to obtain future purchase orders, however, there is no
assurance that we will obtain such orders. We have not developed any specific criteria to locate future contracts or purchase orders and we rely solely upon the contacts of our President, Alberto Dibella.
New Products.
The voraxial separator is a mechanical, non-clogging device capable of
simultaneously separating, two or more components having different specific
weights. The separator is designed to transfer any liquid at an average rate of
up to 5,000 gallons per minute using an eight-inch diameter separator, although
the separator can also be manufactured in two and four inch diameters. The
separator can transfer any liquid in either direction by reversing the machine's
rotation.
We currently maintain an inventory of one-hundred (100) 2" voraxial separators and ten (10) 10" voraxial separators. To date, we have delivered one unit to a waste facility in South Florida to be used on a trial basis for thirty days, after which, arrangements will be made for either payment or return of the product. We have not yet obtained purchase orders for this product.
Management believes that the separator offers a substantial number of applications on a cost-effective basis, including the following: flood control, farm irrigation, lake and river revitalization, cooling and aeration of thermally polluted waters, oil and water separation, sewage treatment, sludge removal, wood pulp removal for paper manufacturers, harbor clean-up, deballasting of ships, clean up of contaminated beaches and plasma separation. Our management also believes that the separator can be used to recycle water. As clean water becomes less available to the ever increasing world population, this technology may become more valuable.
We do not intend to sell or lease our separator as a stocked item, but instead intend to provide our customers with an entire separator system tailored to a specific end-use application.
Our separators are manufactured and assembled at our Deerfield Beach, Florida location.
Distribution.
After products are designed, manufactured or assembled by us, our customers
arrange for delivery or pickup of the items according to their particular
agreement with us. As such, distribution methods vary and are determined by the
specific agreement with the customer.
Competition.
We are subject to competition from a number of companies who have greater
experience, research abilities, engineering capability and financial resources
than we have. We compete with numerous small companies involved in engineering
parts for small and large businesses, including our customers. We believe that
our expertise in engineering precision parts will enable us to continue to
compete effectively with other engineering companies of various sizes. Although
we believe our separator offers applications which accomplish better or similar
results on a more cost-effective basis than existing products, such other
products have, in some instances, attained greater market and regulatory
acceptance. These include oil contamination baffles and disbursal agents. There
can be no assurance that we will be able to compete effectively in providing
engineering products and services to the
defense and space industries or to any other customer in the future, nor that our voraxial separator product will be able to compete with the existing product which may be developed in the future for similar applications.
We are also subject to an increasingly competitive environment in the automotive and aerospace industries which have competitive implications to our products. Moreover, the competitive market has grown in markets for our specific products. We are dependent upon the volume of automobiles sold in the United States which may fluctuate due to economic conditions, availability and changing consumer preferences. Moreover, to become competitive with larger companies, we may seek financing to expand our business; however, there can be no assurances that we will be able to obtain such financing due to changes in the interest rates or the lack of favorable financing terms available. Other foreign or domestic manufacturers may choose to enter the automotive and aerospace industries which may increase competition. Such competition may cause considerable price pressure. Under such circumstances, we cannot assure that we will be able to compete successfully.
The market for our aeronautical products is highly sensitive to risks associated with uncertain economic conditions, dependence upon Congressional and Executive approval of spending in the aeronautical industry area and whether the United States government awards contracts to specific aeronautical companies who are our customers.
Marketing.
We market our products and services through our existing staff. We obtain most
contracts primarily through personal contacts of our President, Alberto DiBella.
We anticipate that we will need additional marketing support for our voraxial
separator. There is no assurance that we will have sufficient funds available to
hire additional marketing personnel, or that, if hired, the efforts of such
personnel will be successful. As of the date of this registration, we have not
developed any specific marketing plan for our voraxial separator. Moreover,
there is no assurance that even if we develop such plan, we will be successful
in marketing our voraxial separator.
Sources and Availability of Raw Materials.
The materials for our manufacturing are obtained from various suppliers based on
individual project specifications. Our customers often provide the materials or
recommend the suppliers for their projects
The materials needed to manufacture our voraxial separators have been provided by Baldor Electric Co., Hughes Supply Inc. and SKF USA Inc. We do not anticipate any shortage of raw materials.
Dependence on One or a Few Major Customers.
In 1997, one customer compromised over 90% of our business. In 1998, we were
dependent upon one customer who comprised over 78% of our business. To date, our
purchase order with New Venture Gear has comprised over 20% of our revenues in
1999. It is likely that we will be dependent on one or a few customers in the
future.
Intellectual Property.
We currently hold two patents, United States Patent #5,904,840 and #5,084,189.
One patent is for Apparatus for Accurate Centrifugal Separation of Miscible and
Immiscible Media. The other is for the Method and Apparatus for Separating
Fluids having Different Specific Gravities. The method and apparatus for each of
these is applied in our voraxial separators.
Governmental Approvals and Regulations; Environmental Compliance.
Our operations are subject to extensive and frequently changing federal, state
and local laws and substantial regulation by government agencies, including the
United States Environmental Protection Agency ("EPA"), the United States
Occupational Safety and Health Administration ("OSHA") and the Federal Aviation
Administration ("FAA"). Among other matters these agencies impose requirements
that regulate the operation, handling, transportation and disposal of hazardous
materials generated or used by us during the normal course of our operations,
govern the health and safety of our employees and require us to meet certain
standards and licensing requirements for aerospace components. This extensive
regulatory framework imposes significant compliance burdens and risks on us and,
as a result, may substantially affect our operational costs.
In addition, we may become liable for the costs of removal or remediation of certain hazardous substances released on or in our facilities without regard to whether or not we knew of, or caused, the release of such substances. We believe that we are currently in material compliance with applicable laws and regulations and are not aware of any material environmental violations at any of our current or former facilities. We are unaware any handling by us of hazardous substances. There can be no assurance, however, that our prior activities did not create a material environmental situation for which we could be responsible or that future uses or conditions (including, without limitation, changes in applicable environmental laws and regulation, or an increase in the amount of hazardous substances generated or used by our operations) will not result in any material environmental liability to us or result in a material adverse effect to our financial condition and results of operations.
The aerospace industry is highly regulated in the U.S. by the FAA and is regulated in other countries by similar agencies to ensure that aviation products and services meet stringent safety and performance standards. The FAA prescribes standards and licensing requirements for aircraft components. Because we assemble to meet specifications and designs created by our customers, we are not required to obtain any licenses or approvals from the FAA.
We are subject to various federal, state, and local environmental requirements, including those relating to discharges to air, water and land. We believe that we have not previously and do not currently handle any hazardous waste. However, in the future we may be subject to regulation involving the handling and disposal of solid and hazardous waste, and the cleanup of properties affected by hazardous substances. In addition, certain environmental laws, such as The Comprehensive Response, Compensation and Liability Act (CERCLA) and similar state laws, impose strict, retroactive, and joint and several liability upon persons responsible for releases or potential releases of hazardous substances. We have not incurred, nor do we expect to incur,
significant costs to address any releases or potential releases. It is possible, however, given the retroactive nature of CERCLA liability, that we will, from time to time, receive notices of potential liability relating to current or former activities.
We have been and are in substantial compliance with environmental requirements and believe that we have no liabilities under environmental requirements. Further, we have not spent any funds specifically on compliance with environmental laws. However, some risk of environmental liability is inherent in the nature of our business, and we might incur material costs to meet current or more stringent compliance, cleanup or other obligations pursuant to environmental requirements in the future. This could result in a material adverse effect to our financial condition and results of operations.
Product Liability
Our business exposes us to possible claims of personal injury, death or property
damage which may result from the failure or malfunction of any component or
subassembly manufactured or assembled by us. We currently have do not have
products liability insurance. Any products liability claim made against us will
have a material adverse effect on our business, financial condition or results
of operations in light of our poor financial condition. We have no plans to
obtain products liability insurance in the future. In addition, there can be no
assurance that insurance coverages can be obtained in the future at a cost
acceptable to us. Moreover, even if such coverage is obtained, there is no
assurance that it will be sufficient to satisfy any claims made against us.
Research and Development.
In our past two fiscal years, we have spent an aggregate of approximately
$165,794 on product research and development. We do not anticipate that this
cost will be borne directly by our customers.
Employees.
As of the date of this registration statement, we have five (5) total and
full-time employees. One employee, Alberto DiBella, acts as our sole manager,
and the balance of our employees participate in the manufacturing of our
products. None of our employees are members of a union. We believe that our
relationship with our employees is favorable. We do not intend to add additional
employees in the foreseeable future, but additional employees may be added if
our voraxial separator is accepted by the market.
Item 2. Management's Discussion and Analysis
The following discussion and analysis should be read in conjunction with the
Financial Statements appearing elsewhere in this Registration Statement.
Twelve Months Ended December 31, 1998 and 1997.
We had sales of $1,176,167 for the twelve months ended December 31, 1998
compared to $1,146,134 for the 1997 comparable period. Gross profit decreased
from $462,809 in 1997 to $138,219 in 1998. The decrease was due to a less
profitable mix of sales contracts in 1998 as
compared to 1997 and $50,000 write off of material costs. General and administrative expenses were $320,726 in 1998 as compared to $185,933 in 1997. The increase was due to increases in legal expenses, commissions and office expenses. Interest expenses were $19,040 in 1998 as compared to $8,340 in 1997. The increase was due to purchase of the building (See Item 3. Description of Property).
Six Months Ended June 30, 1999 and 1998.
We had sales of $106,367 for the six months ended June 30, 1999, compared to
$984,020 for the 1998 comparable period. Our gross profit decreased from
$555,925 in 1998 to $26,785 in 1999, primarily as a consequence of completion of
the allied signal contract in 1998. Research and development expenses increased
in 1999 to $93,894 as compared to $30,117 in 1998, which was due to the further
development of the voraxial separator as it relates to specific applications. In
1999, additionally, the majority of overhead expenses were allocable to specific
application development efforts as compared to 1998, in which the majority of
overhead expenses were allocable to the Allied Signal contract and completion of
sales contracts, interest expense of $25,379 in 1999 was due to building
mortgage interest and equipment financing. Rental expense for 1999 was zero as
compared to $22,288 for 1998.
Risk of Year 2000 Issues.
We believe that we do not utilize software within our business processes that
may be impacted by the Year 2000 issue. The Year 2000 issue exists because many
computer systems and applications currently use two digit fields to designate a
year. Data sensitive systems may recognize the Year 2000 as 1900, or not at all.
This inability to properly treat the Year 2000 could cause systems to process
critical financial and operational information incorrectly.
Liquidity and Capital Resources.
At June 30, 1999, we had working capital of approximately $288,016. We have no
material commitments for capital expenditures. Our major customer, Allied
Signal, has postponed purchase orders scheduled for late 1999 and no new
purchase orders will be available until early 2000, if ever. We believe that we
have sufficient liquidity to meet all of our cash requirements for the next 12
months and that subsequent contracts and separator sales would provide
sufficient cash flows to meet our operating needs. We believes, however, that
additional funding will be necessary to expand marketing programs for the
voraxial separator.
Item 3. Description of Property
In May of 1998, the Company acquired an 18,000 square foot building located at
98 Southeast 7th Street, Deerfield Beach, Florida, for a purchase price of
$575,000, of which $431,250 was paid by a mortgage note, amortized over twenty
years with a balloon payment at the end of ten years. The note bears interest at
an annual rate of 8.50%, which is subject to adjustment on June 1, 2003. The
Company believes that its newly acquired facility will adequately serve its
needs in the foreseeable future.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The table below sets forth information with respect to the beneficial ownership
of the Common Stock by: (a) each person known by the Company to be the
beneficial owner of five percent or more of the outstanding common stock, and
(b) executive officers and directors, individually and as a group, as of
September 1, 1999. Unless otherwise indicated, the Company believes that the
beneficial owner has sole voting and investment power over such shares.
(a) Security Ownership of Certain Beneficial Owners.
Name and Address of Number of Shares Percentage
Title of Class Beneficial Owner Beneficially Owned Ownership of Class
-------------- ---------------- ------------------ ------------------
Common Stock Alberto DiBella (1) 2,872,000 24.36%
3500 Bayview Drive
Ft. Lauderdale, FL 33308
Common Stock Howard J. Falcon, III, Ttee 1,860,000 15.78%
For Harvey E. Richter
Irrevocable Trust of 6/26/95
400 A North Flagler Drive #2
West Palm Beach, FL 33401
Preferred Stock Alberto DiBella (2) 6,000,000 100%
3500 Bayview Drive
Ft. Lauderdale, FL 33308
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(b) Security Ownership of Management.
Name and Address of Number of Shares Percentage
Title of Class Beneficial Owner Beneficially Owned Ownership of Class
-------------- ---------------- ------------------ ------------------
Common Stock Alberto DiBella (1) 2,872,000 24.36%
3500 Bayview Drive
Ft. Lauderdale, FL 33308
Preferred Stock Alberto DiBella (2) 6,000,000 100%
3500 Bayview Drive
Ft. Lauderdale, FL 33308
Common Stock All Executive Officers and
Directors as a group (1 person) 2,872,000 24.36%
Preferred Stock All Executive Officers and
Directors as a group (1 person) 6,000,000 100%
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(1) Alberto DiBella is the sole officer and director of the Company. His beneficial share ownership includes 10,000 shares of common stock owned by his wife, 10,000 shares of common stock owned by his daughter, and 22,000 shares of common stock owned by his son.
(2) On October 20, 1997, Alberto DiBella, the sole officer and director of the Company, agreed to contribute 5,000,000 shares of his common stock of the Company into the treasury of the Company. In consideration for this contribution, the Company issued 5,000,000 shares of voting convertible non-cumulative, 8% preferred stock, $0.001 par value to Mr. DiBella. These shares are convertible into one share of common stock of the Company based on certain incentive formulas. See Item 8. Description of Securities.
(c) There are no arrangements which may result in a change in control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons
(a) Directors and Executive Officers. The following sets forth the names and ages of our officers and directors. The directors of the Company are elected annually by the shareholders, and the officers are appointed annually by the board of directors.
Name Age Position Term of Service ---- --- -------- --------------- Alberto DiBella 69 President, Director June 1996 to present |
Alberto DiBella is a graduate of the Florence Technical Institute, Italy, where he obtained a degree in mechanical engineering in 1952. After immigrating to the United States in 1962, Mr. DiBella worked in New Jersey for a major tool manufacturer. From 1988 to 1993, he was the President of E.T.P., Inc, a machining business, where he was responsible for day to day operations of the company. In 1993, he relocated to Florida and founded FPA, our wholly owned subsidiary Since inception he has worked in the day to day operations of FPA He has been our President and Chairman since June 1996 and President and Chairman of our subsidiary, FPA, since its organization in February 1993. Mr. DiBella holds no directorships in any reporting companies.
(a) Significant Employees. Other than Mr. DiBella, there are no employees expected to make a significant contribution to the business.
(b) Family Relationships. There are no family relationships among directors, executive officers, or persons nominated for such positions.
(c) Involvement in Certain Legal Proceedings. During the past five years, there have been no bankruptcies, criminal proceedings, or other legal proceedings which would be material to the evaluation of the ability or integrity of any director, executive officer, or any person nominated for such positions in the Company.
Item 6. Executive Compensation
The following tables and notes present, for the two fiscal years ended December
31, 1998, the compensation paid by the Company to our chief executive officer .
SUMMARY COMPENSATION TABLE(1)
Name & Annual Compensation Long-Term Compensation
------------------- ---------------------- Other
Position Year Salary Bonus Other Stock SARs LTIP Comp
-------- ---- ------ ----- ----- ----- ---- ---- ----
Alberto DiBella, 1997 $50,000 $0 $0 $1,000,000(2) $0 $0 $0
President 1998 $25,000 $0 $0 $0 $0 $0 $0
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(1) As of December 31, 1998, Mr. DiBella, held 2,830,000 restricted shares
of our common stock and 6,000,000 restricted shares of our preferred
stock.
(2) In lieu of compensation for services rendered during 1997, Mr. DiBella
was issued 1,000,000 voting convertible, non-cumulative 8% preferred
shares, $0.001 par value. The fair market value of the preferred stock
was $1.00 per share, or an aggregate of $1,000,000 based upon the
offering price of common stock in the Company at that time. These
shares are convertible into an equal number of common shares of the
Company based on certain conditions being met. If these conditions are
met, there will be a change to operations for compensation. See Item 8.
Description of Securities.
Item 7. Certain Relationships and Related Transactions
Pursuant to the Agreement and Plan of Reorganization, between the Company and
FPA, we issued 10,000,000 shares of common stock to the Shareholders of FPA. At
the time of this transaction, Alberto DiBella, our President, was the majority
shareholder of FPA. Mr. DiBella received 7,830,000 of the 10,000,000 shares of
our common stock issued in this transaction.
From 1994 through 1998, we borrowed approximately $137,000 from our President, Mr. Alberto DiBella, at an annual rate of eight percent (8%) with principal payable on demand. No repayment of interest or loan has been made to date.
On October 20, 1997, our Chairman, Alberto DiBella, agreed to contribute 5,000,000 shares of common stock to our treasury in consideration for the issuance to him of 5,000,000 shares of our preferred stock. The preferred stock issued to Mr. DiBella is convertible into common stock, on a one share for one share basis, in an amount not greater than 1,200,000 shares per year commencing January 1, 1998, for each revenue increase of $10,000,000 over the revenues of the prior year. Any shares of preferred stock which have not been converted by Mr. DiBella before December 31, 2002, shall then be automatically converted into shares of common stock on a share-for-share basis.
On December 31, 1997, Mr. DiBella was issued 1,000,000 shares of preferred stock in lieu of compensation for his services to the Company during 1997. These shares are convertible into common stock on the same terms as the other shares of preferred stock, with the exception that these shares are not subject to automatic conversion upon any specified date.
Other than the aforementioned, we do not intend to enter into any transactions with our beneficial owners. We are not a subsidiary of any parent company. Since inception, we have not entered into any transactions with promoters.
Item 8. Description of Securities
Common Stock.
In General. We are authorized to issue 42,500,000 shares of common stock, par
value $.001 per share, of which 11,786,518 shares were issued and outstanding as
of September 1, 1999. All of the issued and outstanding common stock is fully
paid and non-assessable.
Voting. Each share of our common stock entitles the holder thereof to one vote
per share in the election of directors and in all other matters upon which
stockholders are entitled to vote. The holders of shares of common stock do not
have cumulative voting rights, which means that the holders of more than 50% of
the outstanding shares voting for the election of directors can elect all of the
directors to be elected, if they so choose. In such event, the holders of the
remaining shares will not be able to elect any of our directors. As of the date
of this registration statement, Alberto DiBella is the beneficial owner of
8,872,000 voting shares or approximately 50% of our outstanding voting stock. As
a majority shareholder of the Company, Mr.
DiBella may be able to elect all of the Directors of the Company.
Dividends. Each share of common stock entitles the holder thereof to receive cash dividends as the Board of Directors may declare from funds legally available therefor. However, we do not intend to declare any dividend on our common stock in the foreseeable future.
Rights. There are no preemptive rights with respect to the common stock. Upon liquidation, dissolution or winding up of the affairs of the Company, and after payment of creditors, the assets legally available for distribution will be divided ratably on a share-for-share basis among the holders of the outstanding shares of common stock, after giving preference to any preferred shares outstanding.
Preferred Stock.
In General. We have authorized 7,250,000 shares of preferred stock, par value
$.001. As of September 1, 1999, there were 6,000,000 preferred shares issued and
outstanding. All of the issued and outstanding preferred stock is fully paid and
non-assessable.
Voting. The preferred stock has voting rights equal to that of the shares of common stock. Holders of the preferred stock are entitled to be paid a non-cumulative dividend of eight percent (8%) per annum. Our Articles of Incorporation, as amended, provide that the preferred stock is convertible into common stock upon such conditions as the Board of Directors may determine. As of the date of this registration statement, Alberto DiBella is the beneficial owner of 8,872,000 voting shares or approximately 50% of our outstanding voting stock. As a majority shareholder of the Company, Mr. DiBella may be able to elect all of the Directors of the Company.
Dividends and Other Rights. The preferred stock outstanding is convertible, non-cumulative eight percent (8%) preferred stock. These shares are convertible into common stock on a share for share basis upon the
occurrence of certain events. If our revenues increase by $10,000,000 over the revenues of the prior year, the holder of these preferred shares will have the right to convert 1,200,000 shares of preferred stock. As of the date of this registration statement, none of the preferred shares were eligible for conversion under this formula. In addition, if 5,000,000 shares of the preferred stock is not converted before December 31, 2002, such amount shall be automatically converted as of that date. No change in operations is anticipated, if these levels are met or such shares are converted. The remaining 1,000,000 shares of preferred may only be converted pursuant to the revenue formula described above and will result in a change to compensation.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and Other Shareholder Matters
(a) Market Information. Our common stock is traded on the NASDAQ Over the Counter Bulletin Board ("OTCBB") under the symbol EVTN. There is no active trading market for the common stock. The following bid quotations have been reported for the period beginning January 1, 1997 and ended June 30, 1999:
Bid Quotations
--------------
Period High Low
------ ---- ---
Quarter Ended:
March 31, 1997 $1.75 $0.50
June 30, 1997 $1.22 $0.50
September 30, 1997 $6.00 $1.00
December 31, 1997 $6.31 $1.50
Quarter Ended:
March 31, 1998 $4.25 $0.94
June 30, 1998 $1.43 $0.56
September 30, 1998 $0.62 $0.25
December 31, 1998 $0.62 $0.12
Quarter Ended:
March 31, 1999 $0.19 $0.06
June 30, 1999 $0.84 $0.06
September 30, 1999 $.562 $1.375
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Such quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission. Such quotes are not necessarily representative of actual transactions or of the value of our securities, and are in all likelihood not based upon any recognized criteria of securities valuation as used in the investment banking community.
The Company has been advised that seven member firms of the NASD are currently acting as market makers for the common stock. There is no assurance that an active trading market will develop which will provide liquidity for our existing shareholders or for persons who may acquire common stock through the exercise of warrants.
(b) Holders. As of September 1, 1999, there were approximately 771 holders of record of our 11,786,518 shares of common stock outstanding. Of these 11,786,518 shares, 9,953,821 are restricted securities within the meaning of Rule 144(a)(3) promulgated under the Securities Act of 1933, as amended, because such shares were issued and sold by the Company in private transactions not involving a public offering. Certain of the
shares of common stock are held in "street" name and may, therefore, be held by several beneficial owners. Our transfer agent is Jersey Transfer & Trust Company, Inc., Post Office Box 36, Verona, New Jersey 07044.
No prediction can be made as to the effect, if any, that future sales of shares of common stock or the availability of common stock for future sale will have on the market price of the common stock prevailing from time-to-time. Sales of substantial amounts of common stock on the public market could adversely affect the prevailing market price of the common stock.
(c) Dividends. We have not paid a cash dividend on the common stock since current management joined the Company in 1996. The payment of dividends may be made at the discretion of our Board of Directors and will depend upon, among other things, our operations, our capital requirements and our overall financial condition. As of the date of this registration statement, we have no intention to declare dividends.
Item 2. Legal Proceedings
We are currently unaware of any pending legal proceeding or any proceeding
contemplated by a governmental authority in which we may be involved.
Item 3. Changes In and Disagreements With Accountants
We have not had any resignation or dismissal of our principal independent
accountants. As of the date of this registration statement, Millward & Co. CPAs
in Fort Lauderdale, Florida serve as our independent accountants and have
prepared the audited statements included as exhibits hereto.
Item 4. Recent Sales of Unregistered Securities.
Pursuant to the Agreement and Plan of Reorganization with FPA, we issued
10,000,000 shares of common stock to the ten shareholders of FPA in exchange for
their shares of FPA common stock. This transaction was effected pursuant to the
exemption provided by Section 4(2) of the Securities Act of 1933, as amended.
On June 16, 1996, we issued 200,000 shares of common stock to the Chief Financial Officer of the Company, as consideration for accounting services rendered. On December 31, 1997, we issued an additional 100,000 shares of common stock for accounting services rendered. These share issuances were effected in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended.
On December 31, 1997, we issued 5,000,000 shares of preferred stock to Alberto DiBella in exchange for 5,000,000 shares of our common stock then held by Mr. DiBella. The 5,000,000 common shares exchanged were put into the treasury of the Company. In addition, we issued 1,000,000 shares to Mr. DiBella in lieu of compensation for services in 1997. The Company relied upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, in issuing these preferred shares.
In July 1997, we sold 200,000 shares of our common stock for consideration of $40,000. Also in July 1997, the Company issued 25,000 shares of common stock as consideration for legal services rendered on behalf
of the Company. These issuance of these shares was effected in reliance on the exemption from registration provided in Section 4(2) of the Securities Act of 1933, as amended.
On July 23, 1997, we issued 200,000 shares of our common stock for Public
Relations Services. In November 1997, we issued 256,000 shares of our common
stock for in $256,000. The aforementioned issuances were made in reliance on
Regulation D, Rule 504, promulgated under Section 3(b) of the Securities Act of
1933, as amended. We relied upon the following facts in determining that Rule
504 was available: (a) We were not subject to the reporting requirements of
Section 13 or 15 (d) of the Exchange Act; (b) we were not a development stage
Company with no specific business plan nor a company whose business plan was to
merge with an unidentified private entity; and (c) the aggregate offering price
did not exceed $1,000,000 in twelve months.
From January 30, 1998 to April 2, 1998, we issued 50,000 shares of our common stock for $50,000. In addition, we issued 60,000 shares of our common stock for Legal Services. In September of 1998 we issued and 37,500 shares of our common stock for Public Relations Services. The aforementioned issuances were made in reliance on Regulation D, Rule 504, promulgated under Section 3(b) of the Securities Act of 1933, as amended. We relied upon the following facts in determining that Rule 504 was available: (a) We were not subject to the reporting requirements of Section 13 or 15 (d) of the Exchange Act; (b) we were not a development stage Company with no specific business plan nor a company whose business plan was to merge with an unidentified private entity; and (c) the aggregate offering price did not exceed $1,000,000 in twelve months .
On January 14, 1999, we issued 125,000 shares of our common stock for Legal Services and 50,000 shares of our common stock for Public Relations Services. The aforementioned issuances were made in reliance on Regulation D, Rule 504, promulgated under Section 3(b) of the Securities Act of 1933, as amended. We relied upon the following facts in determining that Rule 504 was available: (a) We were not subject to the reporting requirements of Section 13 or 15 (d) of the Exchange Act; (b) we were not a development stage Company with no specific business plan nor a company whose business plan was to merge with an unidentified private entity; and (c) the aggregate offering price did not exceed $1,000,000 in twelve months.
On September 1, 1999, we issued 55,000 shares in consideration for legal services rendered. The issuance of these shares was made in reliance on the exemption from registration provided in Section 4(2) of the Securities Act of 1933, as amended.
Item 5. Indemnification of Directors and Officers
Our Articles of Incorporation and Bylaws do not make any provision for
indemnification of directors and officers of the Company. Sections 30-1-851 and
30-1-856 of the Idaho Business Corporation Act contain provisions entitling
directors and officers of the Company to indemnification from judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees,
as a result of an action or proceeding in which they may be involved by reason
of being, or having been, a director or officer of the Company, provided said
officers or directors acted in good faith and reasonably believed that their
conduct was in the best interest of the Company or, in case of a criminal
proceeding, that an officer and director had no
reasonable cause to believe his conduct was unlawful. Notwithstanding the foregoing, an officer or director is not entitled to indemnification in connection with a proceeding by or in the right of the Company or liability arising out of conduct that constitutes receipt by such person of financial benefit to which he is not entitled, the intentional infliction of harm on the Company or the shareholders, or an intentional violation of criminal law.
PART F/S
ENVIRO Voraxial TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 1998 and 1997 Page
Report of Certified Public Accountants.................................................................F-2
Consolidated Financial Statements:
Consolidated Balance Sheet..........................................................................F-3
Consolidated Statement of Operations................................................................F-4
Consolidated Statement of Stockholders' Equity......................................................F-5
Consolidated Statement of Cash Flows..............................................................F-6-7
Notes to Consolidated Financial Statements..........................................................F-8-14
(UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1999 and 1998
Consolidated Financial Statements:
Consolidated Balance Sheet (Unaudited).............................................................F-15
Consolidated Statement of Operations (Unaudited)...................................................F-16
Consolidated Statement of Cash Flows (Unaudited)...................................................F-17
Notes to Consolidated Financial Statements (Unaudited)................................................F-18
|
See the index at "Item 2. Description of Exhibits."
Item 2. Description of Exhibits
EXHBIT # ITEM -------- ---- Ex. 2 Plan of Merger Ex. 3(i) Articles of Incorporation Ex. 3(ii) Bylaws Ex. 4 Share Certificate Ex. 10 Material Contracts - Mortgage Note Ex. 21 Subsidiaries of the Registrant Ex. 27 Financial Data Schedule |
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
ENVIRO Voraxial TECHNOLOGY, INC.
Dated: November 2, 1999 By:/s/ Alberto DiBella
----------------------
Alberto DiBella, President and Director
|
ENVIRO Voraxial TECHNOLOGY, INC.
AND SUBSIDIARY
CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 1998 and 1997 Page
Report of Certified Public Accountants.................................................................F-2
Consolidated Financial Statements:
Consolidated Balance Sheet..........................................................................F-3
Consolidated Statement of Operations................................................................F-4
Consolidated Statement of Stockholders' Equity......................................................F-5
Consolidated Statement of Cash Flows..............................................................F-6-7
Notes to Consolidated Financial Statements..........................................................F-8-14
(UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1999 and 1998
Consolidated Financial Statements:
Consolidated Balance Sheet (Unaudited).............................................................F-15
Consolidated Statement of Operations (Unaudited)...................................................F-16
Consolidated Statement of Cash Flows (Unaudited)...................................................F-17
Notes to Consolidated Financial Statements (Unaudited)................................................F-18
|
To the Board of Directors
Enviro Voraxial Technology, Inc.
and Subsidiary
We have audited the accompanying consolidated balance sheet of Enviro Voraxial Technology, Inc. and Subsidiary as of December 31, 1998 and the related consolidated statements of operations, stockholders' equity, and cash flows for the each of the two years in the period ended December 31, 1998. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Enviro Voraxial Technology, Inc. and Subsidiary as of December 31, 1998, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 1998, in conformity with generally accepted accounting principles.
/s/ Millward & Co. ------------------------- Millward & Co. CPAs Fort Lauderdale, Florida June 14, 1999 |
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
December 31, 1998
ASSETS
CURRENT ASSETS:
Cash $ 68,989
Accounts receivable 69,339
Inventory 212,000
----------
Total Current Assets 350,328
----------
PROPERTY AND EQUIPMENT (Net of accumulated depreciation of
$217,913 and $136,904 at December 31, 1998 and 1997, respectively) 1,118,926
----------
OTHER ASSETS
Deposits 1,576
----------
Total Assets $1,470,830
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 41,417
Current Maturities of Long-Term Debt 8,960
Accrued expenses 2,664
Deferred income taxes 34,100
----------
Total Current Liabilities 87,141
NON-CURRENT LIABILITIES:
Long-Term Debt 418,089
Notes Payable - Shareholder 192,401
----------
Total Non-Current Liabilities 610,490
Total Liabilities 697,631
----------
COMMITMENTS
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.001, par value,
7,250,000 shares authorized, 6,000,000 shares 6,000
issued and outstanding
Common stock, $.001 par value, 42,500,000 shares authorized;
6,510,418 shares issued and outstanding 6,511
Additional paid-in capital 620,090
Retained earnings 140,598
----------
773,199
----------
Total Liabilities and Stockholders' Equity
$1,470,830
==========
|
The accompanying notes are an integral part of these consolidated financial statements.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended
December 31,
-----------------------------------------
1998 1997
------------------ -----------------
NET SALES $ 1,176,167 $ 1,146,134
COST OF GOODS SOLD 1,037,948 683,325
------------ ------------
GROSS PROFIT 138,219 462,809
------------ ------------
COSTS AND EXPENSES:
General and Administrative 320,726 185,933
Interest Expenses 19,040 8,340
Other 5,309 --
------------ ------------
Total Cost and Expenses 345,075 194,273
------------ ------------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES (206,856) 268,536
INCOME TAXES
INCOME TAX PROVISION (BENEFIT) 70,000 (93,100)
------------ ------------
NET INCOME (LOSS) $ (136,856) $ 175,436
============ ============
NET INCOME (LOSS) PER COMMON SHARE
Basic $ (0.02) $ 0.02
============ ============
Diluted $ (0.02) $ 0.02
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
USED TO COMPUTE NET INCOME PER COMMON SHARE
Basic 6,454,168 10,904,936
============ ============
Diluted 6,454,168 10,904,936
============ ============
|
The accompanying notes are an integral part of these consolidated financial statements.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Common Stock Preferred Stock Additional
---------------------------- ---------------------------- Paid-in
Issued Amount Issued Amount Capital
--------------- ----------- --------------- ----------- -------------
Balance - December 31, 1996 10,883,018 10,883 -- -- 339,118
Issuance of common stock for services rendered 125,000 125 -- -- 24,875
Issuance of common stock from private placement 389,900 390 -- -- 229,510
Conversion of common stock to preferred stock (5,000,000) (5,000) 5,000,000 5,000 --
Issuance of preferred stock for services rendered -- -- 1,000,000 1,000 --
Net income for the year ended December 31, 1997 -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Balance - December 31, 1997 6,397,918 $ 6,398 6,000,000 $ 6,000 593,503
Issuance of common stock from private placement 15,000 15 -- -- 14,985
Issuance of common stock for services rendered 97,500 98 -- -- 11,602
Net loss for the year ended December 31, 1998 -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Balance - December 31, 1998 6,510,418 $ 6,511 6,000,000 $ 6,000 $ 620,090
=========== =========== =========== =========== ===========
(RESTUBBED TABLE)
Retained Shareholders
Earnings Equity
--------------- --------------
Balance - December 31, 1996 102,018 452,019
Issuance of common stock for services rendered -- 25,000
Issuance of common stock from private placement -- 229,900
Conversion of common stock to preferred stock -- --
Issuance of preferred stock for services rendered -- 1,000
Net income for the year ended December 31, 1997 175,436 175,436
----------- -----------
Balance - December 31, 1997 $ 277,454 $ 883,355
Issuance of common stock from private placement -- 15,000
Issuance of common stock for services rendered -- 11,700
Net loss for the year ended December 31, 1998 (136,856) (136,856)
----------- -----------
Balance - December 31, 1998 $ 140,598 $ 773,199
=========== ===========
|
The accompanying notes are an integral part of these consolidated financial statements.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended
December 31,
-----------------------------------------
1998 1997
------------------ -----------------
Net Income (Loss) $(136,856) $ 175,436
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation 84,376 53,438
Stock issued for services rendered 11,700 26,000
Preferred stock issued for services rendered -- 1,000
Loss on Leasehold Improvements 16,616 --
Changes in assets and liabilities:
Accounts receivable 244,777 (252,535)
Inventory 17,790 (95,727)
Other assets (1,077) (1,500)
Subscription receivable 83,900 (83,900)
Accounts payable (221,999) 248,756
Accrued interest -- (6,017)
Accrued expenses (1,233) (1,391)
Deferred income taxes (70,000) 93,100
--------- ---------
Net Cash Provided by Operating Activities 27,994 156,660
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (655,213) (242,241)
--------- ---------
Net Cash (Used in) Provided by Investing Activities (655,213) (242,241)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 15,000 229,900
Proceeds from Mortgagee Payable 431,250 --
Principal repayments of Mortgage Payable (4,201) --
Notes payable - shareholder 55,195 43,570
--------- ---------
Net Cash Provided by Financing Activities 497,244 273,470
--------- ---------
Net Increase (Decrease) in Cash (129,975) 187,889
Cash - Beginning of Year 198,964 11,075
--------- ---------
Cash - End of Year $ 68,989 $ 198,964
========= =========
|
The accompanying notes are an integral part of these consolidated financial statements.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For the Year Ended
December 31,
------------------------------
1998 1997
-------------- -------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ 18,560 $ --
======== ========
Taxes $ -- $ --
======== ========
|
The accompanying notes are an integral part of these consolidated financial statements.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Enviro Voraxial Technology, Inc. (the Company) was incorporated in the State of Idaho on October 19, 1964 under the name of Idaho Silver, Inc. for the primary purpose of acquiring mining claims and exploring for silver and lead in Idaho.
In 1996, the Company changed its name to Enviro Voraxial Technology, Inc. in connection with the acquisition in 1995 of its wholly-owned subsidiary, Florida Precision Aerospace, Inc.
Florida Precision Aerospace was organized under the laws of Florida on February 26, 1993 as N.A.P., Inc. and changed its name to Florida Precision Aerospace, Inc. on February 4, 1994. Florida Precision Aerospace, Inc. operates a high precision engineering machine shop located in Deerfield Beach, Florida. In addition, the Company has developed a new patented technology, the voraxial separator, which has a number of potential applications. The voraxial separator is a mechanical, non-clogging devise capable of separating two or more liquids and/or solids, having different specific weights. Potential commercial applications include oil/water separation, environmental cleanup and the separation of industrial chemicals.
In 1995 in connection with the acquisition of Florida Precision Aerospace, Inc., the shareholders of Enviro Voraxial Technology, Inc. amended the articles of incorporation for the name change, revised the authorized capital stock to 50,000,000 shares, and changed the par value of the stock from $.10 to $.001. The stockholders also approved a 1 for 10 reverse stock split.
In acquiring Florida Precision Aerospace, Inc., 10,000,000 shares of post-split Company stock were issued for all of the outstanding shares of Florida Precision Aerospace, Inc.
This acquisition is accounted for as a "reverse acquisition" whereby the owners of the private company are now in control of the public parent and is reported similarly to a pooling of interests method of accounting. The history of Florida Precision Aerospace, Inc. is included from its inception (1993).
The historical deficit balance of ($375,832) of Enviro, prior to the reverse acquisition, has been charged off to additional paid-in capital. In addition, in connection with the termination of the S election, the Company made a distribution to the shareholder in the amount of $112,293 that was charged to retained earnings.
In 1997 the Company divided the authorized stock of 50,000,000 shares into 42,500,000 shares of common stock with a par value of $.001 per share and 7,250,000 share of preferred stock with a par value of $.001. The preferred stock shall have voting rights equal to those of the common stock, have a noncumulative dividend of 8% per annum and be convertible into common stock upon certain conditions as determined from time to time by the board of directors.
Consolidation - The consolidated financial statements as of December 31, 1998 include the accounts of the parent company (Enviro Voraxial Technology, Inc.) and its wholly-owned subsidiary (Florida Precision Aerospace, Inc.). All significant intercompany transactions and accounts have been eliminated.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Property and Equipment - Property and equipment are stated at cost net of investment grants. Depreciation is computed by the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the term of the lease, including renewal options, or the useful lives of the assets, whichever is shortest. Management periodically assesses whether there has been an impairment in the carrying value of its long-lived assets by comparing current and projected annual and discounted cash flows with related carrying amounts.
Net Income (Loss) per Common Share - Effective December 31, 1998, the Company adopted the provisions of Statement of Financial Accounting Standards No. 128, Earning Per Share, which establishes the new standard for computation and presentation of net earnings per share. Under the new requirements, both basic and diluted net earnings per share are presented. All prior period net earnings per share information has been restated. Prior to the adoption of Statement 128, the Company presented primary and, if appropriate, fully diluted earnings per share. Primary and fully diluted earnings per share were calculated by dividing net income by the weighted average number of common shares outstanding plus the additional common shares that would have been outstanding assuming all potentially dilutive common shares were issued during the reporting period and the treasury stock method had been applied.
Basic net earnings (loss) per common share is calculated by dividing net income
(loss), less dividends on preferred shares, if any, by the weighted average
common shares outstanding during the period.
The calculation of diluted net earnings (loss) per share is similar to that of basic net earnings (loss) per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally those issuable upon exercise of stock options and warrants under the treasury stock method, were issued at the beginning of the reporting period. The conversion of preferred stock in 1998 is anti-dilutive. Such shares were issued at the end of 1997.
The following table sets forth the computation of the basic and diluted earnings
(loss) per share for the years ended December 31, 1998 and 1997.
1998 1997
-------------- ------------
Numerator:
Net Income (Loss) $ (136,856) $ 175,436
Less: Preferred stock dividend 480 480
-------------- ------------
$ (137,336) $ 174,956
============== ============
Denominator:
Denominator for net income (loss) per share
Weighted average shares 6,454,168 10,904,936
-------------- ------------
Net income (loss) per share $ (.02) $ .02
============== ============
|
Cash and Cash Equivalents - The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. As of December 31, 1998, the Company had no such equivalents.
Inventory - Inventory includes work-in-process at December 31, 1998 from job orders for specialized projects from third parties. These projects range from less than one week to six months in duration and are charged at time plus materials. In addition, the Company maintains an inventory of separators which it has currently modified to market in 1999. The inventory is priced at lower of cost or market.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
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.
Income Taxes - The Company utilizes the asset and liability method of accounting for deferred income taxes. Under this method, deferred tax assets and liabilities are established based on the differences between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Deferred income taxes reflecting the tax effect of temporary differences between tax bases of certain assets and liabilities are reflected on the consolidated balance sheet with a corresponding non-recurring expense in the consolidated statement of income.
The Company provides a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is likely that some or all of the deferred tax assets will not be realized.
Research and Development Costs - Research and development costs are expensed as incurred. Materials, equipment and intangibles purchased from others that have alternative future benefit in research and development activities are capitalized. Technologically feasible working models or products are inventoried at the lower of cost or net realizable value.
Comprehensive Income - In June 1997, the Financial Accounting Standards Board (the "FASB") issued Statement No. 130, Reporting Comprehensive Income. Statement 130 establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Statement 130 requires that all items that are required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company did not have transactions impacted by the adoption of Statement 130.
Financial Instruments and Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations of credit risk are primarily cash and temporary investments and accounts receivable. The Company invests its excess cash in bank accounts with major financial institutions and the carrying value approximates market value. The Company has significant trade receivables.
Loss of Major Customer - In the year ended December 31, 1998, one customer comprised over 78% of total revenue. In the year ended December 31, 1997, one customer comprised over 90% of total revenue. The contract with this customer has expired. The Company is planning to market its separator line of products to supplement or replace its contracting revenue and is seeking additional financing sources. The Company believes it has sufficient working capital to accommodate its 1999 operations, however there is no assurance that its marketing or financing efforts will be successful.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
NOTE 2 - INVENTORY
The major classes of inventory at December 31, 1998 are as follows:
Raw Materials $ 5,000
Work-in-Process 207,000
--------------
$ 212,000
==============
|
Work-in-process includes $50,000 (net of allowances) of costs to build voraxial separators.
NOTE 3 - PROPERTY AND EQUIPMENT
Machinery and equipment includes molds and dies to produce voraxial separators. Depreciation expense for the year ended December 31, 1998 and December 31, 1997 was $84,376 and $53,438, respectively.
Property and equipment at December 31, 1998 are as follows:
Machinery and Equipment $ 663,096
Furniture and Fixtures 9,005
Leasehold Improvements 43,158
Auto and Truck 11,630
Land and Building (See Note 4) 609,950
----------------
1,336,839
Less: Accumulated Depreciation (217,913)
----------------
Net Property and Equipment $ 1,118,926
================
|
NOTE 4 - LONG-TERM DEBT
The Company entered into an agreement with a bank for $431,250 on May 29,1998. The agreement provides for monthly payments of principal and interest at an initial interest rate of eight and one half (8.50%). The note is collateralized by the property. Interest shall be adjusted annually by adding one percent (1.00%) to the prime rate index as available four (4) days prior to the change Date, with the first such change date being June 1, 2003. Principle and interest payments are due monthly, the first payment commencing on July 1, 1998 and continuing monthly thereafter until June 2008, at which time the entire Principal balance ($303,653) plus accrued interest is due.
Following are maturities of long-term debt for each of the next 5 years:
1999 $ 8,960
2000 9,752
2001 10,614
2002 11,553
2003 12,574
Thereafter 373,596
-------------
Total $ 427,049
=============
|
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
NOTE 5 - RELATED PARTY TRANSACTIONS
Sublease of Office and Shop:
The Company subleased space from a company owned by the president and major shareholder. Total rent expense was $21,750 and $38,568 for the year ended December 31, 1998 and December 31, 1997, respectively.
NOTE 6 - STOCKHOLDERS' EQUITY
In 1998, the Company issued 97,500 shares of common stock for services with a fair value of $11,700.
The Company completed a private placement of 15,000 shares in 1998 of common stock for net proceeds of $15,000.
In 1997, the Company issued 125,000 shares of common stock for services with a fair value of $25,000.
The fair value of all shares issued for services in 1998 and 1997 is based on the quoted market value for traded shares.
The Company completed a private placement of 389,900 shares in 1997 of common stock for net proceeds of $229,900.
On October 20, 1997, the Company's president and chief operating officer agreed to contribute to the Company's treasury 5,000,000 common shares in consideration for the issuance to him of 5,000,000 shares of convertible non-cumulative, voting 8% preferred stock, $.001 par value (which is the stated and liquidating value). These shares are convertible into one of the common shares based on certain incentive formulas based on increases in gross revenues beginning in 1998. Revenue increases of $10,000,000 would allow conversion of 1,200,000 common shares. If such incentives are not met the preferred shares may be converted to common stock in 2002, accordingly, no compensation is expected to be incurred when these preferred shares are converted.
Other incentive preferred shares (1,000,000) with the same provisions and incentives have been issued. These shares may result in additional compensation if the incentives are met.
In addition, the Company's president may convert enough preferred shares to maintain ownership of 51% of the outstanding shares.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
NOTE 7 - INCOME TAXES
The provision for income taxes of the Company consists of the following:
December 31,
-----------------------------------------
1998 1997
-------------- ---------------
Current:
Federal $ - $ -
State - -
---------------- --------------
Total Current - -
---------------- --------------
Deferred:
Federal (63,910) 85,000
State (6,090) 8,100
---------------- --------------
Total Deferred (70,000) 93,100
---------------- --------------
Provision for income taxes $ (70,000) $ 93,100
================ ==============
|
The significant components of the net deferred tax liability were as follows:
December 31,
-----------------------------------------
1998 1997
--------------- ----------------
Deferred tax liability:
Depreciation $ 11,000 $ 11,000
Federal taxation 23,100 93,100
---------------- --------------
Total deferred tax liabilities 34,100 104,100
Deferred tax assets:
Total deferred tax assets - -
---------------- --------------
Net deferred tax liability $ 34,100 $ 104,100
================ ==============
|
The Company provides a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1998
NOTE 8 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimated the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash, trade accounts receivable, other receivables, accounts payable: The carrying amounts approximate fair value because of the short maturity of those instruments.
Notes payable: The carrying amounts approximate fair value due to the length of the maturities and the interest rates not being significantly different from the current market rates available to the Company.
The estimated fair values of the Company's financial instruments as of December 31, 1998 are as follows:
Carrying Fair
Amount Amount
------------------ ----------------
Cash and cash equivalents $ 68,989 $ 68,989
Trade accounts receivable $ 69,339 $ 69,339
Other receivables $ 1,577 $ 1,577
Note payable $ 192,401 $ 192,401
Accounts payable $ 41,417 $ 41,417
|
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS
June 30, 1999
-----------------
CURRENT ASSETS:
Cash $ 95,871
Accounts receivable 44,203
Payroll advances 4,750
Inventory 212,000
-----------
Total Current Assets 356,824
-----------
PROPERTY AND EQUIPMENT (Net of accumulated
depreciation of $257,913.) 1,166,926
-----------
OTHER ASSETS
Deposits 1,576
-----------
Total Assets $ 1,525,326
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 27,549
Current Maturities of Long-Term Debt 8,960
Accrued expenses 1,299
Deferred income taxes 31,000
-----------
Total Current Liabilities 68,808
-----------
NON-CURRENT LIABILITIES
Long-Term Debt 599,703
Notes Payable - Shareholder 192,401
-----------
Total Non-Current Liabilities 792,104
-----------
Total Liabilities 860,912
-----------
STOCKHOLDERS' EQUITY
Preferred stock, $.001, par value,
7,500,000 shares authorized, 6,000,000 6,000
shares issued and outstanding
Common stock, $.001, par value
42,500,000 shares authorized,
6,685,418 shares issued and outstanding 6,685
Additional paid-in capital 652,728
Retained earnings (Deficit) (999)
-----------
664,414
-----------
Total Liabilities and Stockholders' Equity $ 1,525,326
===========
|
The accompanying notes are an integral part of these consolidated financial statements.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For Six Months
Ended June 30,
-----------------------------------------------
1999 1998
----------------- ---------------
NET SALES $ 106,367 $ 984,021
COST OF GOODS SOLD 79,582 555,925
----------- -----------
GROSS PROFIT 26,785 428,096
----------- -----------
COSTS AND EXPENSES:
General and Administrative 147,162 139,216
Interest Expenses 25,379 0
----------- -----------
Total Cost and Expenses 172,541 139,216
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES (145,756) 288,880
PROVISION FOR INCOME TAXES 0 (90,000)
INTEREST INCOME 1,057 6,111
----------- -----------
NET INCOME (LOSS) $ (144,699) $ 204,991
=========== ===========
NET INCOME (LOSS) PER COMMON SHARE
Basic $ (0.02) $ 0.03
=========== ===========
Diluted $ (0.02) $ 0.03
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
USED TO COMPUTE NET INCOME PER COMMON SHARE
Basic 6,597,918 6,422,918
=========== ===========
Diluted 6,597,918 6,422,918
=========== ===========
|
The accompanying notes are an integral part of these consolidated financial statements.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For Six Months
Ended June 30,
---------------------------------------------------
1999 1998
----------------- ----------------
Net Income (Loss) $(144,698) $ 204,991
Adjustments to Reconcile Net Income to Net Cash Provided
by Operating Activities:
Depreciation 40,000 40,000
Stock issued for services rendered 32,813 0
Changes in assets and liabilities:
Accounts receivable 25,136 102,002
Inventory 0 74,790
Other assets (4,750) (1,097)
Subscription receivable 0 83,900
Accounts Payable (13,868) (223,932)
Accrued income tax 0 90,000
Accrued expenses (1,365) (2,677)
--------- ---------
Net Cash Provided by Operating Activities (66,732) 367,977
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (88,000) (634,594)
--------- ---------
Net Cash (Used in) Provided by investing Activities (88,000) (634,594)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 0 49,964
Proceeds from Mortgage Payable 186,000 431,250
Principal repayments of Mortgage Payable (4,386) 0
Notes payable - shareholder 0 (19,963)
--------- ---------
Net Cash Provided by (Used in) Financing Activities 181,614 461,251
--------- ---------
Net Increase (Decrease) in Cash 26,882 194,634
Cash - Beginning of Year 68,989 198,964
--------- ---------
Cash - End of Year $ 95,871 $ 393,598
========= =========
|
The accompanying notes are an integral part of these consolidated financial statements.
ENVIRO VORAXIAL TECHNOLOGY, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS
NOTES TO FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1999
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Enviro Voraxial Technologies, Inc., have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 1999, are not necessarily indicative of the results that may be expected for the year ending December 31, 1999. For further information refer to the financial statements and footnotes for the year ended December 31, 1998 included elsewhere herein.
NOTE 2 - STOCKHOLDERS' EQUITY
During the six months ended June 30, 1999. The company issued 175, 000 common shares for services. The services were charged to operations and have been recorded at the quoted market value at the date of issuance per an agreement, which aggregated $32,813.
NOTE 3 - NET INCOME (LOSS) PER COMMON SHARE
The following table sets forth the computation of the basic and diluted earnings
(loss) per share for the six months ended June 30, 1999 and 1998.
1999 1998
--------------- ---------------
Numerator:
Net income (loss) $ (144,699) $ 204,991
Less: Preferred stock dividend 240 240
$ (144,459) $ 205,231
Denominator:
Denominator for net income (loss) per share
Weighted average shares 6,597,918 6,422,918
Net income (loss) per share $ (0.02) $ 0.03
|
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT (the "Plan") is made this_______day of may, 1996, between Idaho Silver, Inc., an Idaho corporation ("ISI"), Florida Precision Aerospace, Inc., a Florida corporation ("FPAI"), and the persons listed in Exhibit A hereof (the "Stockholders"), being the owners of record of all of the issued and outstanding stock of FPAI.
ISI wishes to acquire all of the issued and outstanding stock of FPAI in exchange for stock of ISI in a transaction qualifying as a tax-free exchange pursuant to Section 368(a)(I)(B) of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, IT IS AGREED.
Section 1
Exchange of Stock
1.1 Number of Shares. The Stockholders agree to transfer to ISI at the Closing 100% of the outstanding shares of FPAI listed in Exhibit A attached hereto and incorporated herein by reference (the "FPAI Shares") in exchange for an aggregate total of 10,000,000 post-split shares of $0.001 par value "unregistered" and "restricted" common voting stock of ISI (to represent approximately 97% of the outstanding voting securities of ISI at the time of Closing), all of such shares of common voting stock to be issued as follows, to-wit:
(a) At the Closing, ISI shall deliver to the Stockholders' representative designated in Section 10 hereof one stock certificate representing 5,631,584 "unregistered" and "restricted" pre-split shares of ISI common stock, in trust for the Stockholders, pending the reverse split of ISI's common stock and the increase in the authorized capital of ISI in accordance with Section 1.4 herein.
(b) Promptly following the above-referenced reverse split and increase in the authorized capital of ISI, the Stockholders' Representative shall tender the certificate issued to him in accordance with Section 1.1(a) to ISI's transfer agent for reissuance and ISI shall direct its transfer agent to transfer such stock certificate and issue an additional 9,436,841 "unregistered" and "restricted" post-split shares of common stock of ISI, all to be transferred or issued to the Stockholders on a pro rata basis in accordance with the numbers shown opposite their respective names in Exhibit A;
Provided, however, the Closing of the Plan may take place if less than 100% of the Stockholders adopt, ratify and approve the Plan, so long as Stockholders owning not less than 80% of the FPAI Shares adopt, ratify and approve the Plan.
1.2 Delivery of Certificates by Stockholders. The transfer of the FPAI Shares by the Stockholders shall be effected by the delivery to ISI at the Closing of stock certificates representing the transferred shares endorsed in blank or accompanied by stock powers executed in blank, with all signatures witnessed or guaranteed to the satisfaction of ISI and FPAI and with all necessary transfer taxes and other revenue stamps affixed and acquired at the Stockholders' expense.
1.3 Further assurances. At the Closing and from time to time thereafter, the Stockholders shall execute such additional instruments and take such other action as ISI may request in order to exchange and transfer clear title and ownership in the FPAI Shares to ISI.
1.4 Changes in Capitalization and name. As soon after the Closing as is practicable, the stockholders of ISI shall have adopted all resolutions required or necessary to effect a reverse split of the pre-Plan outstanding shares of common stock of ISI so that the post-split pre-Plan outstanding shares of common stock of ISI shall amount to 436,842 shares, more or less, depending upon rounding resulting from the reverse split, and increasing the authorized capital of ISI to 50,000,000 shares and reducing the par value of the ISI common voting stock from $0.10 to $0.001 per share, with appropriate adjustments in the stated capital and additional paid in capital accounts of ISI; and to change the name of ISI to "Enviro Voraxial Technology, Inc." The prompt adoption of such resolutions shall be a condition subsequent to the obligations of FPAI and the Stockholders under this Plan, and a special meeting of the stockholders of ISI shall be called and held for these purposes on or before May 24, 1996, at such time and place as the newly designated directors of ISI shall agree.
1.5 Resignations of Present Directors and Executive Officers and Designation of New Directors and Executive Officers. On Closing, the present directors and executive officers of ISI shall resign, in seriatim, and designate the directors and executive officers of FPAI to serve in their place and stead, until the next respective annual meetings of the stockholders and the Board of Directors of ISI, and until their respective successors shall be elected and qualified or until their respective prior resignations or terminations.
1.6 Assets and Liabilities of ISI at Closing. ISI shall have no liabilities at Closing, and all costs incurred by ISI incident to the plan shall have been paid or satisfied.
Section 2
The Closing contemplated by Section 1.1 shall be held at the Deerfield Beach Hilton, 100 Fairway Drive, Deerfield Beach, Florida, on May 7, 1996, unless another place or time is agreed upon in writing by the parties. The Closing may be accomplished by wire, express mail or other courier service, conference telephone communications or as otherwise agreed by the respective parties or their duly authorized representatives.
Section 3
ISI represents and warrants to, and covenants with, the Stockholders and FPAI as follows:
3.1 Corporate Status. ISI is a corporation duly organized, validly existing and in good standing under the laws of the State of Idaho and is licensed or qualified as a foreign corporation in all states in which the nature of its business or the character or ownership of its properties makes such licensing or qualification necessary (Idaho only). ISI is a publicly company, having lawfully offered and sold a portion of its securities in accordance with applicable federal and state securities laws, rules and regulations (Idaho and Washington), through an Offering Circular dated October 15, 1966, and revised on July 25, 1967. There is presently no "established trading market" for these or any other securities of ISI; however, ISI has obtained a listing on the OTC Bulleting Board of the National Association of Securities Dealers, Inc., under the symbol "IHOS".
3.2 Capitalization. The authorized capital stock of ISI consists of 10,000,000 shares of common voting stock, having a par value of $0.10 per share, of which 4,368,416 shares are issued and outstanding, all fully paid and non-assessable; there are no outstanding options, warrants or calls pursuant to which any person has the right to purchase any authorized and unissued capital stock of ISI.
3.3 Financial Statements. The financial statements of ISI furnished to the Stockholders and FPAI, consisting of a balance sheet dated December 31, 1995, and 1994 and 1993, and a related statement of income for the periods then ended, attached hereto as Exhibit B and incorporated herein by reference, are correct and fairly present the financial condition of ISI at such dates and for the periods involved; such statements were prepared in accordance with generally accepted accounting principles consistently applied, and no material change has occurred in the matters disclosed therein, except as indicated in Exhibit C, which is attached hereto and incorporated herein by reference.
3.4 Undisclosed Liabilities. ISI has no liabilities of any nature except to the extent reflected or reserved against in its balance sheet, whether accrued, absolute, contingent or otherwise, including without limitation, tax liabilities and interest due or to become due, except as set forth in Exhibit C.
3.5 Interim Changes. Since the date of its balance sheet, except as set forth in Exhibit C, there have been no (1) changes in financial condition, assets, liabilities or business or ISI which, in the aggregate, have been materially adverse; (2) damages, destruction or losses of or to property of ISI, payments of any dividend or other distribution in respect of any class of stock of ISI, or any direct or indirect redemption, purchase or other
acquisition of any class of any such stock; or (3) increases paid or agreed to in the compensation, retirement benefits or other commitments to employees.
3.6 Title to Property. ISI has good and marketable title to all properties and assets, real and personal, reflected in its balance sheet, and the properties and assets of ISI are subject to no mortgage, pledge, lien, or encumbrance, except for liens shown therein or in Exhibit C, with respect to which no default exists.
3.7 Litigation. There is no limitation or proceeding pending, or to the knowledge of ISI, threatened, against or relating to ISI, its properties or business, except as set forth in Exhibit C. Further, no officer, director or person who may be deemed to be an affiliate of ISI is party to any material legal proceeding which could have an adverse effect on ISI (financial or otherwise), and none is party to any action or proceeding wherein and has an interest adverse to ISI.
3.8 Books and Records. From the date of this Plan to the Closing, ISI will (1) give to the Stockholders and FPAI or their respective representatives full access during normal business hours to all of its offices, books, records contracts and other corporate documents and properties so that Stockholders and FPAI or their representatives may inspect and audit them; and (2) furnish such information concerning the properties and affairs of ISI as the Stockholders and FPAI or their respective representatives may reasonably request.
3.9 Tax Returns. ISI has filed all federal and state income or franchise tax returns required to be filed or has received currently effective extentions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter if there is no closing), ISI and its representatives will keep confidential any information which they obtain from the Stockholders or from FPAI concerning the properties, assets and business of FPAI. if the transactions contemplated by this Plan are not consummated by May 7, 1996, ISI will return to FPAI all written matter with respect to FPAI obtained by ISI in connection with the negotiation or consummation of this Plan.
3.11 Investment intent. ISI is acquiring the FPAI Shares to be transferred to it under this Plan for investment and not with a view to the sale of distribution thereof, and ISI has no commitment or present intention to liquidate FPAI or to sell or otherwise dispose of the FPAI Shares.
3.12 Corporate Authority. ISI has full corporate power and authority to enter into this Plan and to carry out its obligations hereunder and will deliver to the Stockholders and FPAI or their representatives at the Closing a certified copy of resolutions of its Board of Directors authorizing execution of this Plan by its officers and performance.
thereunder, and the directors adopting and delivering such resolutions are the duly elected and incumbent directors of ISI.
3.13 Due Authorization. Execution of this Plan and performance by ISI hereunder has been duly authorized by all requisite corporate action on the part of ISI, and this Plan constitutes a valid and binding obligation of ISI and performance hereunder will not violate any provision of the Articles of Incorporation, Bylaws, agreements, mortgages or other commitments of ISI.
3.14 Environmental Matters. ISI has no knowledge of any assertion by any governmental agency of other regulatory authority of any environmental lien or action, or of any cause for any such lien or action.
Section 4
Representations, warranties and Covenants of FPAI and Stockholders
FPAI and Stockholders represent and warrant to, and covenant with ISI as follows:
4.1 FPAI Shares. The Stockholders are the record and beneficial owners of the FPAI Shares, free and clear of adverse claims of third parties; and Exhibit A correctly sets forth the names, addresses and number of shares of FPAI owned by each of the Stockholders.
4.2 Corporate Status. FPAI is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and is licensed or qualified as a foreign corporation in all states in which the nature of its business or the character or ownership of its properties makes such licensing or qualification necessary.
4.3 Capitalization. The authorized capital stock of FPAI consists of 10,000,000 shares of common voting stock, having no par value, of which all 10,000,000 shares are issued and outstanding, all fully paid and non-assessable; there are no outstanding options, warrants or calls pursuant to which any person has the right to purchase any authorized and unissued capital stock of FPAI.
4.4 Financial Statements. The financial statements of FPAI furnished to ISI, consisting of balance sheets for the calendar years ended December 31, 1994 and 1995, and related statements operations, stockholders' equity and cash flows for the periods then ended, attached hereto as Exhibit D and incorporated herein by reference, are correct and fairly present the financial condition of FPAI as of that date and for the periods involved, and such statements were prepared in accordance with generally accepted accounting principles consistently applied.
4.5 Undisclosed Liabilities. FPAI has no material liabilities of any nature except to the extent reflected or reserved against in the balance sheet, whether accrued, absolute, contingent or otherwise, including, without limitation, tax liabilities and interest due or to become due, except as set forth in Exhibit E attached hereto and incorporated herein by reference.
4.6 Interim Changes. Since the date of its balance sheet, except as set forth in Exhibit E, there have been no (1) changes in the financial condition, assets, liabilities or business of FPAI which, in the aggregate, have been materially adverse; (2) damages, destruction or loss of or to the property of FPAI, payment of any dividend or other distribution in respect of the capital stock of FPAI, or any direct or indirect redemption, purchase or other acquisition of any such stock; or (3) increases paid or agreed to in the compensation, retirement benefits or other commitments to employees.
4.7 Title to property. FPAI has good and marketable title to all properties and assets, real and personal, proprietary or otherwise, reflected in its balance sheet, and the properties and assets of FPAI are subject to no mortgage, pledge, lien or encumbrance, except for liens shown therein or in Exhibit E, with respect to which no default exists.
4.8 Litigation. There is no litigation or proceeding pending, or to the knowledge of FPAI, threatened, against or relating to FPAI, its properties or business, except as set forth in Exhibit E. Further, no officer, director or person who may deemed to be an affiliate of FPAI is party to any material legal proceeding which could have an adverse affect on FPAI (financial or otherwise), and none is party to any action or proceeding wherein any has an interest adverse to FPAI.
4.9 Books and Records. From the date of this Plan to the Closing, the Stockholders will cause FPAI to (1) give to ISI and its representatives full access during normal business hours to all of its offices, books records, contracts and other corporate documents and properties so that ISI may inspect and audit them; and (2) furnish such information concerning the properties and affairs of FPAI as ISI may reasonably request.
4.10 Tax returns. FPAI has filed all federal and state income or franchise tax returns required to be filed or has received currently effective extentions of the required filing dates.
4.11 Confidentiality. Until the Closing (and continuously if there is no Closing), the Stockholders and their representatives will keep confidential any information which they obtain from ISI concerning its properties, assets and business. If the transactions contemplated by this Plan are not consummated by may 7, 1996, the Stockholders will return to ISI all written matter with respect to ISI obtained by them in connection with the negotiation or consummation of this Plan.
4.12 Investment Intent. The stockholders are acquiring the shares to be delivered to them under this Plan for investment and not with a view to the sale or distribution thereof, and the Stockholders have no commitment or present intention to liquidate the Company or to sell or otherwise dispose of the ISI stock. The Stockholders shall execute and deliver to ISI on the Closing an Investment Letter attached hereto as Exhibit F and incorporated herein by reference, acknowledging the "unregistered" and "restricted" nature of the securities of the ISI being received under the Plan in exchange for the FPAI Shares, and receipt of certain material information regarding ISI.
4.13 Corporate Authority. FPAI has full corporate power and authority to enter into this Plan and to carry out its obligations hereunder and will deliver to ISI or its representative at the Closing a certified copy of resolutions of its Board of Directors authorizing execution of this Plan by its officers and performance thereunder.
4.14 Due Authorization. Execution of this plan and performance by FPAI hereunder has been duly authorized by all requisite corporate action on the part of FPAI, and this Plan constitutes a valid and binding obligation of FPAI and performance hereunder will not violate any provision of the Articles of Incorporation, Bylaws, agreements, mortgages or other commitments of FPAI.
4.15 Environmental Matters. FPAI has no knowledge of any assertion by any governmental agency of other regulatory authority of any environmental lien or action, or of any cause for any such lien or action.
Section 5
Conditions Precedent to Obligations of Stockholders and FPAI
All obligations of the Stockholders and FPAI under this Plan are subject, at their opinion, to the fullfillment, before or a the Closing, of each of the following conditions:
5.1 Representations and warranties true at Closing. The representations and warranties of ISI contained in this plan shall be deemed to have been made again at and as of the Closing and shall then be true in all material respects and shall service the Closing.
5.2 Due performance. ISI shall have performed and complied with all the terms and conditions required by this Plan to be performed or complied with by it before the Closing.
5.3 Officers' Certificate. The Stockholders shall have been furnished
with a certificate signed by the president of ISI, in his capacity as President
and personally, attached hereto as Exhibit G attached hereto and incorporated
herein by reference, dated as of the Closing, certifying (1) that all
representations and warranties of ISI contained herein are true and correct; and
(2) that since the date of the financial statements (Exhibit B hereto) there has
been no material adverse change in the financial condition, business or properties of ISI taken as a whole.
5.4 Opinion of Counsel of ISI. The Stockholders shall have received an opinion of counsel for ISI, dated as of the Closing, to the effect that (1) the representations of Section 3.1, 3.2 and 3.12 are correct; (2) except as specified in the opinion, counsel knows of no inaccuracy in the representations in 3.5, 3.6 or 3.7; and (3) the shares of ISI to be issued to the Stockholders under this Plan will, when so issued, validly issued, fully paid and non-assessable.
5.5. Changes in Capitalization. As soon after the Closing as is practicable, the stockholders of ISI shall adopt all resolutions required or necessary to (1) effect a reverse split of the pre-Plan outstanding shares of common stock of ISI so that the post-split pre-Plan outstanding shares of common stock of ISI shall amount to 436,842 shares, more or less, depending upon rounding resulting from the reverse split; (2) increase the authorized capital of ISI from 10,000,000 shares to 50,000,000 shares; (3) decrease the par value of the ISI commons stock from $0.10 per share to $0.001 per share, with appropriate adjustments in the stated capital and additional capital accounts of ISI; and (4) change the name of ISI to "Enviro Voraxial Technology." The prompt adoption of such resolutions shall be a condition. Subsequent to the obliagtions of FPAI and the Stockholders under this Plan.
5.6 Assets and Liabilities of ISI. ISI shall have no assets and liabilities at Closing, and all costs, expenses and fees incident to the Plan shall have been paid.
5.7 Resignations of Present Directors and Executive Officers and Designation of new Directors and Executive Officers. The present directors and executive officers of ISI shall have resigned, in seriatim, and shall have designated the directors and executive officers of FPAI to serve in their place and stead, and until their respective successors shall be elected and qualified or until their respective prior resignations or terminations.
Section 6
Conditions Precedent to Obligations of ISI
All obligations of ISI under this Plan are subject, at its option, to the fulfillment, before or at the Closing, of each of the following conditions:
6.1 Representations and warranties True at Closing. The Stockholders' and FPAI's representations and warranties contained in this Plan shall be deemed to have been made again at and as of the Closing and shall then be true in all material respects and shall service the Closing.
6.2 Due Performance. The Stockholders and FPAI shall have performed and complied with all the terms and conditions required by this Plan to be performed or complied with by them before the Closing.
6.3 Officer's and Stockholders' Certificate. ISI shall have been furnished with a certificate signed by the President of FPAI, in his capacity as President and Personally, attached hereto as Exhibit H and incorporated herein by reference, dated as of the Closing, certifying (1) that all representations and warranties of FPAI contained herein are true and correct; and (2) that since the date of the financial statements (Exhibit G) there has been no material adverse change in the financial condition, business or properties of FPAI taken as a whole.
6.4 Opinion of Counsel of FPAI. ISI shall have received an opinion of counsel for FPAI, dated as of the Closing, to the effect that (1) the representations of Sections 4.2 and 4.13 are correct; (2) except as specified in the opinion, counsel knows of no inaccuracy in the representations in 4.6, 4.7 or 4.8; and (3) the FPAI Shares to be delivered to ISI under this Plan will, when so delivered, have been validly issued, fully paid and non-assessable, and will be free and clear of any liens or encumbrances.
6.5 Books and Records. The Stockholders or the Board of Directors of FPAI shall have caused FPAI to make available all books and records of FPAI, including minute books and stock transfer records; provided, however, only to the extent requested in writing by ISI at Closing.
6.6 Acceptance by Stockholders. The terms of this Plan shall have been accepted by the Stockholders of FPAI who own not less than 80% of the outstanding voting securities of FPAI as evidenced by their signatures on Exhibit F and each such Stockholder specifically waives any preemptive right each or any may have with respect to any FPAI Shares ever authorized or issued by FPAI, past, present, future or for any reason whatsoever. Any Stockholder accepting the terms of this Plan within 30 days of the date hereof shall be included herein.
Section 7
Termination
Prior to Closing, this Plan may be terminated (1) by mutual consent in
writing; (2) by either the Directors of ISI or the Stockholders and FPAI if
there has been a material misrepresentation or material breach of any warranty
or covenant by the other party; or (3) by either the Directors of ISI or the
Stockholders and FPAI if the Closing shall not have taken place, unless
adjourned to a later date by mutual consent in writing, by the date fixed in
Section 2.
Section 8
Stockholders' Representative
The Stockholders hereby irrevocably designate and appoint Alberto Di Bella as their agent and attorney in fact ("Stockholders' Representative") with full power and authority until the Closing to execute, deliver and receive on their behalf all notices, requests and other communications hereunder; to fix and alter on their behalf the date, time and place of the Closing; to waive, amend or modify any provisions of this Plan and to take such other action on their behalf in connection with this Plan, the Closing and the transactions contemplated hereby as such agent deems appropriate; provided, however, that no such waiver, amendment or modification may be made if it would decrease the number of shares to be issued to the Stockholders under Section 1.1 hereof or increase the extent of their obligation to ISI hereunder, unless agreed in writing by the Stockholders of FPAI.
Section 9
General Provisions
9.1 Further Assurances. At any time, and from time to time, after the Closing, each party will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to any property transferred hereunder or otherwise to carry out the intent and purposes of this Plan.
9.2 Waiver. Any failure on the part of any party hereto to comply with any of its obligations, agreements or conditions hereunder may be waived in writing by the party to whom such compliance is owed.
9.3 Brokers. Each party represents to the other parties hereunder that no broker or finder has acted for it in connection with this Plan, and agrees to indemnify and hold harmless the other parties against any fee, loss or expense arising out of claims by brokers or finders employed or alleged to have been employed by it.
9.4 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given if delivered in person or sent by prepaid first-class registered or certified mail, return receipt requested, as follows:
If to ISI: Idaho Silver, Inc.
106 Cedar Street
Wallace, Idaho 83873
With a copy to: James E. Scott, Esq. (Consultant)
315 East Leland Road
Pittsburg, California 94565-4981
If to FPAI: Florida Precision Aerospace, Inc.
720 South Deerfield Ave.; Suite 4-5
Deerfield Beach, Florida 33441
With a copy to: Leonard W. Burningham, Esq.
455 East 500 South, Suite 205
Salt Lake City, Utah 84111
If to the Stockholders: To the addresses listed on Exhibit A
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9.5 Entire Agreement. This Plan constitutes the entire agreement between the parties and supersedes and cancels any other agreement, representation, or communication, whether oral or written, between the parties hereto relating to the transactions contemplated herein or the subject matter hereof.
9.6 Headings. The section and subsection headings in this Plan are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Plan.
9.7 Governing Law. This Plan shall be governed by and construed and enforced in accordance with the laws of the State of Idaho, except to the extent pre-empted by federal law, in which event (and to that extent only), federal law shall govern.
9.8 Assignment. This Plan shall inure to the benefit of, and be binding upon, the parties hereto and their successors and assigns; provided however, that any assignment by any party of its rights under this Plan without the prior written consent of the other parties shall be void.
9.9 Counterparts. This Plan may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement and Plan of Reorganization effective the day and year first above written.
IDAHO SILVER, INC.
By /s/ Robert E. Anderson ------------------------ Its President ------------------------ |
FLORIDA PRECISION AEROSPACE, INC.
By /s/ Alberto Di Bella ------------------------ Its President ------------------------ |
EXHIBIT A
Number of Shares of
Number of Shares Stock of ISI
Owned of to be
Name and Address FPAI Received in Exchange
---------------- ---- --------------------
Alberto Di Bella 7,830,000 7,830,000
3500 Bayview Drive
Ft. Lauderdale, Florida 33308
Harvey E. Richter 2,000,000 2,000,000
720 S. Deerfield Ave.
Deerfield Beach, Florida 33441
Agostino Di Bella 100,000 100,000
703 North Ave.
Westfield, New Jersey 07090
John A. Di Bella 10,000 10,000
703 North Ave.
Westfield, New Jersey 07090
Joseph R. Di Bella 10,000 10,000
10 Sandy Hill Rd.
Westfield, New Jersey 07090
Christopher J. Rotante 10,000 10,000
22 Ladik Place
Montvale, New Jersey 07645
Albert M. Di Bella, Jr. 10,000 10,000
3500 Bayview Drive
Ft. Lauderdale, Florida 33308
Laura M. Di Bella 10,000 10,000
3500 Bayview Drive
Ft. Lauderdale, Florida 33308
Adele Di Bella 10,000 10,000
3500 Bayview Drive
Ft. Lauderdale, Florida 33308
Nancy Van Winkle 10,000 10,000
1619 Lake Lorine Drive ------ ------
Orlando, Florida 32808
TOTALS 10,000,000 10,000,000
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ARTICLES OF INCORPORATION
OF
IDAHO SILVER, INC.
KNOW ALL MEN BY THESE PRESENTS That we, the undersigned, citizens of the United States of America, each over the age of twenty-one years, do hereby voluntarily associate ourselves together for the purpose of forming a domestic corporation under and by virtue of the laws of the State of Idaho, and we do hereby make, sign, acknowledge and file these Articles of Incorporation, as follows:
The name of this corporation is, and shall be IDAHO SILVER, INC.
The objects and purposes for which this Corporation is formed are as principals, agents, or otherwise, to do in any part of the world any and every of the things therein set forth or permitted by law to the same extent as natural persons might and could do. In furtherance and not in limitation of the general powers conferred by the laws of the State of Idaho, we do expressly provide that the Corporation shall have power;
(a) To purchase, sell, option, own, locate, lease, or otherwise acquire, mortgage and dispose of lands, mines, mining claims and mineral rights; to own, handle and control letters patent and inventions; to use and to own, enter, apply for patents for mines, millsites, mills, water-rights, tunnels, and rights of way; to work, prospect, explore, exploit and develop mines and mineral lands of every kind and nature and wherever the same may be situated,
and to carry on every operation of the business of mining, milling and producing zinc, lead, gold, silver and any and all other metals and minerals of every kind and character and to sell and dispose of the same and the by-products thereof, and to do everything that may be necessary or proper in the conduct of the business of working such mines and mineral lands and the production of ores and to buy, sell, contract for, own, erect, and operate all mills, smelting and other ore reduction works, sawmills, machinery, roads, tramways, ditches, flumes, water rights, power plants of any and all kinds whatsoever, and to develop and use electicity for power and light purposes, and to file upon water rights for any and all purposes.
(b) To take, hold, lease, mortgage, own, purchase, or acquire by operation of the law or otherwise, real property or any interest therein or appurtenant thereto, including storerooms, sawmills, store buildings and any part thereof, or any interest therein, or to sell, lease, exchange, mortgage or hypothecate real estate or any interest therein and to engage in any and all undertakings and business necessary and proper to the improvement and betterment of any of the land or real property or interest therein, owned or otherwise acquired, or to be owned or otherwise acquired by said corporation, or in any other lands in which the said corporation may have any interest, and to handle and deal in any land, interest in land, or other property or interest therein, of said corporation in any manner it may desire.
(c) To enter into, make, perform and carry out any and all contracts or agreements of every kind, amount and character with any person, firm, association, corporation, Federal or State government or any political subdivision, or corporation or agency thereof.
(d) To purchase, own, sell, convey, mortgage, pledge, exchange, acquire by operation of law or otherwise, personal property of every kind and character, debts, dues and demands or causes of action, and each and every kind of personal property, evidence of debts, bonds, stocks of this and other corporations, both public and private, which the Corporation may deem necessary and convenient for its business or otherwise.
(e) To borrow and lend money from and to any person, firm, corporation, association, or federal or state government or any political subdivision, or corporation or agency thereof, and to make, take and execute notes, mortgages, bonds, deeds of trust, or other evidence of indebtedness to secure payment thereof, or by any other lawful manner or means, and to take and receive notes, bonds, mortgages, deeds of trust, or any evidence of indebtedness for the use and benefit of said corporation, or otherwise.
(f) To own, hold, lease, or sublet, or to conduct on its own account, or for any person, firm association, corporation, or federal or state government of any political subdivision, or corporation or agency thereof, all and every kind of merchandise, business or property necessary or proper to carry on an account of the business of said corporation.
(g) To build any and all necessary shops, buildings, storerooms, boarding houses, sleeping quarters, sawmills and structures at any place proper and convenient to carry on any or all of the business of said Corporation.
(h) To do and perform every act and thing necessary to carry out the above enumerated purposes, or calculated directly or indirectly to the advancement of the interest of the Corporation, or to the enhancement of the value of its stock, holdings and property of any kind or character.
The corporate existence of this corporation shall be perpetual.
The location and post office address of the corporation's registered office in the State of Idaho shall be Wallace, Idaho.
This company shall be capitalized for $1,000,000.00. The total authorized stock of this corporation shall be divided into 10,000,000 shares, all of which shall be common stock with a par value of 10 cents per share. Said shares shall be non-assessable and shall all be of the same class and every share of said stock shall be equal in all respects to every other of said shares.
The said shares may be issued and sold from time to time by the corporation for such consideration and upon such terms as may, from time to time, be fixed by the Board of Directors without action by the stockholders.
Notwithstanding the provisions of Section 30-120, Idaho Code, the Board of Directors of this corporation shall have power and authority from time to time to authorize the sale of, and to sell for cash or otherwise, all or any portion of the unissued and/or of the treasury stock of this corporation without said stock, or any thereof, being first offered to the shareholders of this corporation.
The corporate powers of the corporation shall be vested in a Board of Directors of not less than three, and no more than seven members, who shall be elected annually by the shareholders, and who shall serve until the election and qualification of their successors. No person shall serve as a director or this corporation who is not a shareholder therein. Directors who are to serve
for the first corporate year shall be selected by the incorporators. Unless otherwise determined by the shareholders, the Board of Directors, by resolution, shall from time to time fix the number of directors within the limit herein provided.
The names, post office addresses, and number of shares subscribed by each of the incorporators, are as follows:
Name Address No. of Shares
---- ------- ------------
Jack Scott Box 1088
Wallace, Idaho 1
F. E. Scott Box 1088
Wallace, Idaho 1
Alden Hull Box 709
Wallace, Idaho 1
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In addition to the power conferred upon the shareholders by law, to make, amend or repeal By-Laws and adopt new By-Laws, but such powers may be executed only by a majority of the whole Board of Directors.
A director or officer of the corporation shall not, in the absence of actual fraud, be disqualified by his office from dealing or contracting with the corporation, either as vendor, purchaser, or otherwise; and in the absence of actual fraud no transaction or contract of the corporation shall be void or voidable by reason of the fact that any director or officer, or firm of which any director or officer is a member, or any other corporation of which any director or officer is a shareholder, officer or director, is in any way interested in such transaction or contract; provided, that such transaction or
contract is, or shall be, authorized, ratified or approved (1) by a vote of a majority of a quorum of the Board of Directors, or of the Executive Committee, if any, counting for the purpose of determining the existence of such majority or quorum, any Director, when present, who is so interested, or who is a member of a firm so interested; or (2) at a stockholders' meeting by a vote of a majority of the outstanding shares of stock of the corporation represented at such meeting and then entitled to vote, or by writing or writings signed by a majority of such holders of stock which shall have the same force and effect as though such authorization, ratification or approval were made by the stockholders; and no director or officer shall be liable to account to the corporation for any profits realized by him through any such transaction or contract of the corporation authorized, ratified, or approved, as aforesaid, by reason of the fact that he may be, or any firm of which he is a member, or any corporation of which he is a shareholder, officer or director, was interested in such transaction. Nothing in this paragraph contained shall create any liability in the events above mentioned, or prevent the authorization, ratification or approval of such contracts or transactions in any other manner than permitted by law, or invalidate of made voidable any contract or transaction which would be valid without reference to the provisions of this paragraph.
IN WITNESS WHEREOF, we have hereunto set our hands and seals in quadruplicate this 13th day of October, 1964.
/s/ R. E. Scott --------------- /s/ Jack E. Scott ----------------- /s/ Alden Hull -------------- |
STATE OF IDAHO )
) ss.
County of Shoshone )
On this 13th day of October, 1963, before me, the undersigned, a Notary Public in and for the State of Idaho, personally appeared JACK SCOTT, F. E. SCOTT and ALDEN HULL, know to me to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year in this certificate first above written.
/s/ W. J. Hull -------------------------------------------- Notary Public in and for the State of Idaho, Residing at Wallace, Idaho. |
[stamp]
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
IDAHO SILVER, INC.
Pursuant to the provisions of Section 30-61 of the Idaho Business Corporation Act, the undersigned corporation hereby adopts the following Articles of Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is "Idaho Silver, Inc."
SECOND: The following amendments to the Articles of Incorporation of Idaho Silver, Inc. were duly adopted by the stockholders of the corporation at a meeting held May 28, 1996, in the manner prescribed by the Idaho Business Corporation Act.
(i) Article I of the corporation's Articles of Incorporation shall be amended to read:
The name of this corporation is "Enviro Voraxial Technology, Inc."
(ii) The second sentence of Article V of the corporation's Articles of Incorporation shall be amended to read:
The total authorized stock of this corporation shall be divided into 50,000,000 shares, all of which shall be common stock with a par value of one mill ($0.001) per share.
THIRD; (a) The designation and number of shares outstanding and entitled to vote on the above-referenced amendments were as follows:
CLASS NUMBER OF SHARES ----- ---------------- Common 10,000,000 |
(b) The number of shares voted for such amendments was 5,631,584, with none opposing and none abstaining.
FOURTH: Such amendments do not provide for any exchange, reclassification or cancellation of issued shares.
FIFTH: The amendment designating a par value of one mill ($0.001) per share for the corporation's common stock effects a reduction in the amount of stated capital from $1,000,000 to $10,000.
[stamp]
IN WITNESS WHEREOF, the undersigned executive officers of the corporation, having been thereunto duly authorized, have executed the foregoing Articles of Amendment for the corporation under the penalties of perjury this 4th day of June, 1996.
IDAHO SILVER, INC.
By /s/ Alberto Di Bella ----------------------- Alberto Di Bella, President By /s/ Harvey E. Richter ------------------------ Harvey E. Richter, Executive Vice President By /s/ Thomas J. Barone ----------------------- Thomas J. Barone, Secretary/Treasurer |
[stamp]
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
ENVIRO VORAXIAL TECHNOLOGY, INC.
To the Secretary of State of the State of Idaho:
Pursuant to Title 30, Chapter 1, Idaho Code, the undersigned corporation amends its Articles of Incorporation as follows:
FIRST: The name of the corporation is "Enviro Voraxial Technology, Inc."
SECOND: The following amendment to the Articles of Incorporation of Enviro Voraxial Technology, Inc. were adopted by the stockholders of the corporation at a meeting held October 20, 1997.
(i) The second sentence of Article V of the corporation's Articles of Incorporation shall be amended to read:
The total authorized stock of this corporation shall be divided into 50,000,000 shares, 42,4000,000 of which shall be common stock with a par value of one mill ($0.001) per share, and 7,250,000 of which shall be preferred stock with a par value of one mill ($0.001). The preferred stock shall have voting rights equal to those of the common stock, have a noncumulative dividend of 8% per annum and be convertible into common stock upon certain conditions as determined from time to time by the board of directors.
THIRD: (a) The designation and number of shares outstanding and entitled to vote on the above referenced amendment were as follows:
CLASS NUMBER OF SHARES ----- ---------------- Common 11,083,018 |
(b) The number of shares voted for such amendment was 8,010,000, with none opposing and none abstaining.
FOURTH: Such amendment does not provide for any exchange reclassification or cancellation of issued shares.
[stamp]
IN WITNESS WHEREOF, the undersigned executive officers of the corporation, having been thereunto authorized, have executed penalty of perjury this 20th day of October, 1997.
ENVIRO VORAXIAL TECHNOLOGY, INC.
By: /s/ Alberto DiBella
-----------------------------
Alberto DiBella, President
By: /s/ Thomas J. Barone
-----------------------------
Thomas J. Barone, Sec./Treas.
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ARTICLES OF AMENDMENT
To the Secretary of State of the State of Idaho [seal] Pursuant to Title 30, Chapter 1, Idaho Code, the undersigned corporation amends its articles of incorporation as follows:
2. The text of each amendment is as follows:
Article VI.
The corporate powers of the corporation shall be vested in a Board of Directors of not less than one, and no more than seven members, who shall be elected annually by the shareholders, and who shall serve until the election and qualification of the successors. No person shall serves as a director of the corporation who is not a shareholder therein. Directors who are to serve for the first corporate year shall be elected by the incorporators. Unless otherwise determined by the shareholders, the Board of Directors, by resolution, shall from time to time fix the number of directors within the limit herein provided.
4. Manner of adoption (check one):
[ ] The amendment consists exclusively of matters which do not require shareholder action pursuant to section 30-1-1002, Idaho Code, and was, therefore, adopted by the board of directors.
Dated: August 30, 1999
Signed by:_____________________
Its Albert Dibella, Majority Shareholder
BY-LAWS
OF
IDAHO SILVER, INC.
ARTICLE I. NAME, SEAL AND OFFICES, ETC.
Section 1. Name: The name of the Corporation is IDAHO SILVER, INC.
Section 2. Seal: The seal of the corporation shall be in such form as the Board of Directors shall from time to time prescribe.
Section 3. Offices: The registered office of the corporation shall be in the city of Wallace, State of Idaho. The corporation may also have offices at such other places within or without the State of Idaho as the Board of Directors may from time to time establish.
Section 4. Book of By-Laws: These By-Laws shall be recorded in a book kept in the registered office of the corporation, to be known as the Book of By-Laws, and no By-Laws, or repeal or amendment thereof, shall take effect until so recorded. Said book may be inspected at said office by the public during office hours of each day except holidays.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meetings of Shareholders: The annual meeting of the Shareholders for the election of Directors and for such other business as may be laid before such meeting shall be held in the registered office of the corporation, or at such other place within or without the State of Idaho as the Board of Directors may from time to time appoint, at 2:00 P.M. (Mountain Standard Time) on the Third Tuesday of April, unless that day shall be a legal holiday, in which event it shall be held on the next following day which shall not be a legal holiday whether or not mentioned in the notice. Any corporate
business may be transacted at such meeting.
Section 2. Special Meetings of Shareholders: Special meetings of the Shareholders may be called at any time by the Board of Directors, and the Shareholders may meet at any convenient place, within or without the State of Idaho, designated in the call for such meeting. If more than eighteen months are allowed to elapse without the annual Shareholders' meeting being held, any Shareholder may call such meeting to be held at the registered office of the corporation. At any time, upon written request of any Director or any Shareholder or Shareholders holding in the aggregate one-fifth of the voting power of all Shareholders, it shall be the duty of the Secretary to call a special meeting of Shareholders to be held at the registered office at such time as the Secretary may fix, not less than fifteen nor more than thirty-five days after the receipt of said request, and if the Secretary shall neglect or refuse to issue such call, the Director or Shareholder or Shareholders making the request may do so.
Section 3. Adjourned Meetings: An adjournment or adjournments of any annual or special meeting may be taken without a new notice being given.
Section 4. Notice of meetings: A written notice of the time, place and purpose of meetings, including annual meetings, shall be given by the Secretary or other person authorized to do so, to all stockholders entitled to vote at such meeting, at least ten days prior to the day named for the meeting. If such written notice is placed in the United States mail, postage prepaid, addressed to a Shareholder at his last known post office address, notice shall be deemed to have been given him.
Section 5. Waiver of Notice: Notice of time, place and purpose of any meeting of Shareholders may be waived by the written assent of a Shareholder
entitled to notice, filed with or entered upon the records of the meeting before or after the holding thereof.
Section 6. Action Without Formal Meeting. Any action which, under any provision of the laws of Idaho, or the Articles or By-Laws, may be taken at a writing signed by all of the holders of shares who would be entitled to notice of a meeting for such purpose. Whenever a certificate in respect to any such action is required by the laws of Idaho to be filed in the office of the County Recorder or in the office of the Secretary of State, the officers signing the same shall therein state that the action was authorized in the manner aforesaid.
Section 7. Waiver of Invalid Call or Notice: When all the Shareholders of this corporation are present at nay meeting, however called or notified, and sign a written consent thereto on the record of such meeting, the doings of such meeting are as valid as if had a meeting legally called and notified.
Section 8. Voting: Every Shareholder shall have the right at every Shareholders' meeting to one vote for every share of stock standing in his or her name on the books of the Corporation on the record date fixed as hereinafter provided, or, if no such date has been fixed, ten days prior to the time of the meeting, and in voting for Directors, but not otherwise, he may cumulate his votes in the manner and to the extent permitted by the laws of the State of Idaho.
The Board of Directors may fix a time not more than forty days prior to the date of any meeting of the stockholders as the record date as of which stockholders entitled to notice of and to vote at such meeting shall be determined.
At each meeting of the stockholders a full, true and complete list, in alphabetical order, of all the stockholders entitled to vote at such meeting and indicating the number of shares held by each, certified by the Secretary or
transfer agent, shall be furnished, which list shall be open to the inspection of the stockholders.
Shareholders may vote at all meetings, either in person or by proxy appointed by instrument in writing, subscribed by the Shareholder or his duly authorized attorney in fact, executed and filed with the Secretary not less than one day before the meeting which shall be named therein. Shareholders may also be represented at all meetings by persons holding general powers of attorney.
At least twenty-four hours prior to any meeting, powers of attorney or proxies shall be submitted to the Secretary for examination. The certificate of the Secretary as to the regularity of such powers of attorney or proxies and as to the number of shares held by the persons who severally and respectively executed such powers of attorney or proxies shall be received as prima facie evidence of the number of shares held by the holder of such powers of attorney or proxies for the purpose of establishing the presence of a quorum at such meeting or for organizing the same, and for all other purposes.
Section 9. Quorum: Except as otherwise provided in the Articles of Incorporation at any meeting of the Shareholders, the presence, in person or by proxy, of the holders of a majority of the voting power of all Shareholders shall constitute a quorum. The Shareholders present at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough Shareholders to leave less than a quorum. If a Shareholders' meeting cannot be organized because a quorum has not attended, those Shareholders present may adjourn the meeting to such time and place as they may determine, but in case of any meeting called for the election of Directors,
those who attend the second of such adjourned meetings, although less than a majority of the voting power of all shareholders, shall nevertheless, constitute a quorum for the purpose of electing Directors.
Whenever all Shareholders entitled to vote at any meeting consent, either by writing on the records of the meeting or filed with the Secretary of the Corporation, or by presence at such meeting, an oral consent entered on the minutes, or by taking part in the deliberations at such meeting without objection, the doings of such meeting shall be as valid as if had at a meeting regularly called and noticed and at such meeting any business may be transacted which is not expected from the written consent or to the consideration of which no objection from want of notice is made at the time, and if any meeting be irregular for want of notice or of such consent provided a quorum was present at such meeting, the proceedings of said meeting may be ratified and approved and rendered likewise valid and the irregularity or defect therein waived by a writing signed by all the Shareholders having the right to vote at such meeting and such consent or approval of Shareholders may be by proxy or power of attorney in writing.
ARTICLE III. DIRECTORS
Section 1. Number and election: The business of the corporation shall be managed by a Board of at least three Directors or of such other number (which shall not be less than three nor more than seven) as may be determined from time to time by the Board of Directors. A Director shall hold office for the term for which he was named or elected and until his successor is elected and qualified, except as hereinafter otherwise provided. Directors shall be chosen by ballot.
Section 2. Annual Meeting: The Board of Directors may hold its first annual meeting and all subsequent annual meetings after its election by the Shareholders, without notice and at such place within or without the State of Idaho as the Board of Directors may from time to time appoint, for the purpose of organization, the election of officers, and the transaction of other business. At such meetings the Board shall elect a President, a Secretary and a Treasurer, and may elect one or more Vice-Presidents, an Assistant Secretary and an Assistant Treasurer.
Section3. Special Meetings: Special meeting of the Board of Directors may be called by the President or any Vice-president or by any two members of the Board of Directors.
Section 4. Notice of Meetings: Notice of all Directors' meetings, except has herein otherwise provided, shall be given either by mail, telephone, telegraph, or personal service of notice, oral or written, at such time or times as the person or persons calling the meeting may deem reasonable, but in no event upon less than 3 day's notice. Special meetings of the Board may be held at such place within or without the State of Idaho as the Board of Directors may from time to time appoint. Notice of any meeting may be waived by any Director entitled to notice before or after the holding thereof by his written or oral assent and the presence of any Director at any meeting, even though without any notice, shall constitute a waiver of notice. Unless otherwise indicated in the notice thereof any and all business may be transacted at any Director's meeting.
Section 5. Quorum: At all meetings of the Board a majority of the Directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the acts of a majority of the Directors present at
any meeting at which a quorum is present shall be the acts of the Board of Directors, except as may be otherwise specifically provided for herein or by law.
If at any meeting there is less than a quorum present, a majority of those present may adjourn the meeting from time to time without further notice to any absent Director.
Section 6. Removal: A Director may be removed either with or without cause, by two-thirds of the vote of the Shareholders at a special meeting called for that purpose.
Section 7. Vacancies: Any vacancy in the Board of Directors occurring during the year may be filled for the unexpired portion of the term and until a successor is elected and qualified either
(a) at the next annual meeting of Shareholders or at any special meeting of Shareholders duly called for that purpose and held prior thereto, or
(b) by a majority of the remaining members of the Board
Section 8. Powers: All the corporate powers, except such as are otherwise provided for in the Articles of Incorporation, in these By-Laws and by the laws of the State of Idaho, shall be, and are, hereby vested in and shall be exercised by the Board of Directors.
Section 9. Executive Committee: The Board of Directors may, by resolution passed by a majority of the whole Board, designate two or more of their number to constitute an Executive Committee to serve during the pleasure of the Board, which Committee shall have and exercise the authority of the Board in the management of the business of the corporation to the extent authorized by said resolution. All action taken by the Executive Committee shall be reported to the Board of Directors at its meeting next succeeding such
action, and shall be subject to revision or alteration by the Board; providing, however, that no rights or acts of third parties shall be affected by any such revision or alteration.
A majority of the Executive Committee present at a meeting thereof shall constitute a quorum. Vacancies in the Executive Committee shall be filled by the Board of Directors. The Executive Committee shall fix its own rules of procedure including the time and place of and method or manner of calling meetings thereof.
ARTICLE IV. OFFICERS
Section 1. Officers: The officers of the Corporation shall be a President, Secretary and Treasurer, and, in the discretion of the Board of Directors, one or more Vice-President, and an Assistant Secretary, and an Assistant Treasurer, each of whom shall be elected at a meeting of and by the Board of Directors.
Any officer may resign by mailing a notice of resignation to the registered office of the Corporation or such other office as may be designated by the Board of Directors. To the extent permitted by law, the resignation shall become effective at the time designated in the notice of resignation, but in no event earlier than its receipt by the Secretary or Assistant Secretary of the corporation.
In case of a vacancy of any of said officers for any reason, the Board of Directors shall at any regular or special meeting elect a successor who shall hold office for the unexpired term of his predecessor. Any two of the offices of Vice -President, Secretary, Treasurer, Assistant Secretary and Assistant Treasurer may be combined in one person.
The Board of Directors may appoint such other officers and agents as a
may be necessary for the business of the corporation.
Any officer or agent may be removed by the Board of Directors whenever, in their judgment the interest of the corporation may be reserved thereby; such removal, however, shall be without prejudice to the contract rights of the person so removed.
Section 2. President: The president shall preside at all meetings of the Shareholders and Directors. He shall see that all orders and resolutions of the Board are carried into effect; shall execute all deeds, mortgages, bonds or documents authorized by the Board of Directors, and shall sign as President all certificates of stock, all contracts, and other instruments, in writing, excepting only those which are specifically provided to be signed by others. He shall from time to time as requested report to the Board all the matters within his knowledge of interest to the corporation, and shall also perform such duties as may be required by the State of Idaho, these By-Laws and by order of the Board of Directors.
Section 3. Vice-President: The Vice-President shall be vested with all the powers and shall perform all the duties of the President in the absence or disability of the latter.
Section 4. Treasurer: The Treasurer: The Treasurer shall be custodian of the corporation's moneys and securities, and shall deposit and withdraw the same in the corporation's name as directed by the Board of Directors; he shall keep a record of his accounts and report to the Board of Directors as requested.
Section 5. Secretary: The Secretary shall keep a record of the meetings of the Shareholders and Board of Directors. He shall keep the books of certificates of stock, fill out and sign all certificates of stock issued, and
make corresponding entries on the margin or stub of such book. He shall keep a debit and credit form, showing the number of shares issued to and transferred by the Shareholders, and the dates thereof. He shall keep the corporate seal and shall affix the same to certificates of stock and other corporate instruments, and shall make such acknowledgements as may be required on behalf of the corporation. He shall perform duties as may be prescribed by the Board of Directors. The Secretary shall give or cause to be given, notice of all meetings of Shareholders and Board of Directors, and all other notices required by the laws of the State of Idaho, or by these By-Laws.
Section 6. Assistant Treasurer and Assistant Secretary: The Assistant Treasurer and Assistant Secretary shall be vested with all the powers and shall perform all the duties of the Treasurer and Secretary, respectively, in the absence or disability of the Treasurer or Secretary as the case may be.
Section 7. Salary: The salaries of all officers shall be fixed by the Board of Directors and the fact that any officer is a Director shall not preclude him from receiving a salary or from voting on the resolution providing for the same.
ARTICLE V. STOCK
Section 1. Certificates of Stock: Each Shareholder shall be entitled to a certificate of stock signed by the President and the Secretary, or by such other officers as are authorized by these By-Laws or by the Board of Directors. when any certificate of stock is signed by a transfer agent or registrar, the signature of any such corporate officer and the corporate seal upon such certification may be facsimiles, engraved or printed.
Certificates of stock shall be numbered in the order of issuance thereof,
and, except as prescribed by law, shall be in such form as the Board of Directors may determine.
Section 2. Transfer of Shares: Transfer of shares of stock shall be made on the books of the corporation only by the holder in person or by written power of attorney duly executed and witnessed and upon surrender of the certificate or certificates of such shares.
Section 3. Transfer Agent and Registrar: The Board of Directors may appoint either a transfer agent or registrar, or both of them.
Section 4. Stock transfer Books: Stock transfer books may be closed for not exceeding forty days next preceding the meeting of shareholders and for the payment of dividends during such periods as may be fixed from time to time by the Board of Directors. During such periods no stock shall be transferable.
Section 5. Lost or Destroyed Certificates: In case of loss or destruction of a certificate of stock of this Corporation, another certificate may be issued in its place upon proof of such loss or destruction and the giving of a bond of indemnity or other security satisfactory to the Board of Directors.
ARTICLE VI. REPEAL OR AMENDMENT OF BY-LAWS
Section 1. By the Shareholders: The power to make, amend or repeal By-laws shall be in the Shareholders, and By-laws may be repealed or amended or new By-Laws may be adopted at any annual Shareholders' meeting, or at any special meeting of the Shareholders called for that purpose, by a vote representing a majority of the allotted shares, or by the written consent duly acknowledged in the same manner as conveyances of real estate required by law to be acknowledged of the holders of a majority of the allotted shares, which written consent may be in one or more instruments.
Section 2. By the Directors: Subject to the power of the Shareholders to make, amend or repeal any By-Laws made by the Board of Directors, a majority of the whole Board of Directors at any meeting thereof shall have the power to repeal and amend these By-Laws and to adopt new By-Laws.
The foregoing By-Laws were regularly adopted at the first meeting of the Shareholders of the corporation held on the ______ day of ______ 19___, at Wallace, Idaho, by a majority of the allotted capital stock.
We, the Shareholders of the above named corporation, representing holding more than a majority of the allotted shares thereof, do hereby adopt foregoing code of By-Laws.
We, the undersigned, constituting (a) a majority of the Board of Directors, and (b) the Secretary of the above named corporation, certify that the foregoing is a true and exact copy of the By-Laws of the Corporation, duly adopted at a meeting of the Shareholders of the Corporation held on the _____ day of ________________________, 19___.
INCORPORATED UNDER THE LAWS OF THE STATE OF IDAHO
"The shares represented by this certificate have not been registered under the Securities Act of 1933 (the "Act") and are "restricted securities" as that term is defined in Rule 144 under the act. The shares may not be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Act, or pursuant to an exemption from registration under the Act, the availability of which is to be established to the satisfaction of the Company."
NUMBER SHARES
________ _______
CUSIP NO. 29403v10 3
|
ENVIRO VORAXIAL TECHNOLOGY, INC.
50,000,000 AUTHORIZED SHARES $.001 PAR VALUE NON-ASSESSABLE
This Certifies that ____________________
is the record holder of *ONE HUNDRED THOUSAND*
shares of ENVIRO VORAXIAL TECHNOLOGY, INC. Common Stock
transferable on the books of the Corporation in person or by duly authorized
attorney upon surrender of this Certificate properly endorsed. This Certificate
is not valid until countersigned by the Transfer Agent and registered by the
Registrar.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
dated 6/13/96
/s/ illegible Alberto Di. Bella ------------- ----------------- SECRETARY PRESIDENT |
CORPORATE
SEAL
ENVIRO VORAXIAL TECHNOLOGY, INC.
IDAHO
COUNTERSIGNED AND REGISTERED
TRANSECURITIES INTERNATIONAL, INC.
SPOKANE, WA
By: /s/ illegible --------------------- AUTHORIZED SIGNATURE |
MORTGAGE NOTE
$431,250.00 May 29, 1998
Boca Raton, Florida
FOR VALUE RECEIVED, the undersigned promises to pay TRANSFLORIDA BANK, a Florida banking corporation, or order, the principal sum of FOUR HUNDRED THIRTY ONE THOUSAND TWO HUNDRED FIFTY AND NO/100 ($431,250.00) DOLLARS, with interest on the unpaid principal balance from the date of this Note, until paid, at the initial rate of EIGHT AND ONE HALF PERCENT (8.50%) per annum according to the terms of this note. The interest rate shall be adjusted annually by adding ONE PERCENT (1.00%) to the prime rate index as available four (4) days prior to the Change Date, with the first such change date being June 1, 2003, provided that the bank shall not charge interest on this obligation in excess of that allowed by law. The index is Suntrust Banks of Florida, Inc. Prime Rate. The Principal and interest shall be payable at 1489 W. Palmetto Park Road, Boca Raton, Florida 33486 or such other place as the holder hereof may designate in writing, and shall be payable as follows:
Principal and Interest payments on the outstanding Principal Balance shall be due and payable monthly, with the first such payment commencing on the 1st day of July, 1998, and continuing monthly thereafter until the 1st day of June, 2008, at which time the entire Principal balance plus accrued interest, if any, shall be due and payable in full. THIS NOTE IS AMORTIZED OVER TWENTY (20) YEARS AND BALLOONS AT THE END OF TEN (10) YEARS.
If any installment under this Note is not paid when due, the entire principal amount outstanding hereunder and accrued interest thereon shall at once become due and payable at the option of the holder thereof. Failure to exercise such option shall not constitute a waiver of the right to exercise such option of the undersigned if in default hereunder. In the event of any default in the payment of this Note and if suit is brought hereon, the holder hereof shall be entitled to collect in such proceedings all reasonable costs and expenses of suit, including but not limited to reasonable attorneys' fees.
AFTER ACCELERATION AND/OR MATURITY, INTEREST SHALL ACCRUE ON THE
OUTSTANDING PRINCIPAL BALANCE AT THE HIGHEST LAWFUL RATE OF INTEREST ALLOWED.
The undersigned shall pay to the holder hereof a late charge of five percent (5%) of any monthly installment not received by the holder hereof within fifteen (15) days after the installment is due.
Presentment, notice of dishonor and protest are hereby waived by all makers, sureties, guarantors and endorsers hereof. This Note shall be the joint and several obligations of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their heirs, personal representatives, successors and assigns.
This Note may be prepaid, in whole or in part, at any time without penalty.
The indebtedness evidenced by this Note is secured by a Mortgage, dated of even date herewith, and reference is made thereof for rights as to acceleration of the indebtedness evidenced by this Note.
THIS IS A BALLOON MORTGAGE SECURING A VARIABLE/ADJUSTABLE RATE OBLIGATION. ASSUMING THAT THE INITIAL RATE OF INTEREST WERE TO APPLY FOR THE ENTIRE TERM OF THE MORTGAGE, THE FINAL PRINCIPAL PAYMENT OR THE PRINCIPAL BALANCE DUE UPON MATURITY WOULD BE APPROXIMATELY $308,223.31, TOGETHER WITH ACCRUED INTEREST, IF ANY, AND ALL ADVANCEMENTS MADE BY THE MORTGAGEE UNDER THE
TERMS OF THE MORTGAGE. THE ACTUAL BALANCE DUE UPON MATURITY MAY VARY
DEPENDING ON CHANGES IN THE RATE OF INTEREST.
FLORIDA PRECISION AEROSPACE, INC.,
a Florida Corporation
By: /s/ Alberto DiBella ----------------------- ALBERTO DIBELLA, President Tax ID#: 65-0398210 |
SUBSIDIARIES OF THE REGISTRANT
Florida Precision Aerospace, a Florida Corporation
| ARTICLE 5 |
| PERIOD TYPE | 12 MOS |
| FISCAL YEAR END | DEC 31 1998 |
| PERIOD START | JAN 09 1998 |
| PERIOD END | DEC 31 1998 |
| CASH | 70,565 |
| SECURITIES | 0 |
| RECEIVABLES | 69,339 |
| ALLOWANCES | 0 |
| INVENTORY | 212,000 |
| CURRENT ASSETS | 351,904 |
| PP&E | 1,118,926 |
| DEPRECIATION | 0 |
| TOTAL ASSETS | 1,470,830 |
| CURRENT LIABILITIES | 87,141 |
| BONDS | 0 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 6,000 |
| COMMON | 6,511 |
| OTHER SE | 760,688 |
| TOTAL LIABILITY AND EQUITY | 1,470,830 |
| SALES | 1,176,167 |
| TOTAL REVENUES | 0 |
| CGS | 1,037,948 |
| TOTAL COSTS | 320,726 |
| OTHER EXPENSES | 5,309 |
| LOSS PROVISION | 70,000 |
| INTEREST EXPENSE | 19,040 |
| INCOME PRETAX | (206,856) |
| INCOME TAX | 0 |
| INCOME CONTINUING | 0 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | (136,856) |
| EPS BASIC | (0.02) |
| EPS DILUTED | (0.02) |