SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Com-Tek Resources, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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COM-TEK RESOURCES, INC.
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual General Meeting of Shareholders of
Com-Tek Resources, Inc. (the "Company"), a Colorado corporation, will be
convened at 10:00 a.m. local London, England time, on Tuesday, August 1, 1995,
at 21 Knightbridge, First Floor, London SW1X 7LY, England for, for the following
purposes:
1. To elect a Board of Directors consisting of seven members;
2. To consider and act upon proposals to amend the Articles of
Incorporation of the Company which will:
(A) Change the name of the Company to Powerhouse Resources, Inc.; and
(B) Provide for an increase in the Company's authorized Common Stock,
$.01 par value, to 780,000,000 such shares. The total number of
authorized shares of Preferred Stock of the Company will not be
changed.
3. To ratify the appointment of KPMG Peat Marwick LLP as the independent
auditors of the Company for fiscal 1995; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on June 9, 1995, will be
entitled to vote at the meeting.
_________________________
SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. PLEASE FILL
IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE SO THAT
YOUR SHARES MAY BE VOTED AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY
REVOKE YOUR PROXY AND VOTE IN PERSON. YOUR VOTE IS IMPORTANT.
_________________________
By Order of the Board of Directors
Hunter S. Swanson, Secretary
June _____, 1995
COM-TEK RESOURCES, INC.
1624 MARKET STREET
SUITE 303
DENVER, COLORADO 80202
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 1, 1995
IN GENERAL
This statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Com-Tek Resources, Inc. (the "Company"), to be used
at the Annual General Meeting of Shareholders (the "Meeting") to be held at
10:00 a.m. local London, England time, on August 1, 1995 for the purposes set
forth in the accompanying Notice of Annual General Meeting of Shareholders. The
enclosed material was sent on or about June _____, 1995 to record shareholders
of the Company.
The shares covered by the enclosed proxy, if received by the Board of
Directors prior to the Meeting, will be voted in favor of the proposals to be
considered at the Meeting unless such proxy specifies otherwise. A proxy may be
revoked at any time before it is exercised by giving written notice to the
Secretary of the Company at its above address or by a subsequently executed
proxy. Shareholders may vote their shares in person if they attend the Meeting,
even if they have executed and returned a proxy.
The matters to be brought before the Meeting are set forth in the Notice of
Annual General Meeting attached hereto.
VOTING SECURITIES
Only shareholders of record at the close of business on June 9, 1995 will
be entitled to vote at the Meeting. On that date, there were issued and
outstanding 141,262,074 shares of the Company's $.01 par value Common Stock, and
3,396,560 shares of the Company's $1.00 par value Preferred Stock.
On matters to be acted upon at the Meeting, each share of Common Stock is
entitled to one vote per share, and each share of
Preferred Stock is entitled to twenty-two (22) votes per share (collectively
"the aggregate eligible votes").
A majority of the aggregate eligible votes, represented in person or by
proxy of the Common Stock and Preferred Stock, will constitute a quorum for the
transaction of business at the Meeting. A vote of the majority of the quorum
will be required to elect directors, change the Company's name, and ratify
appointment of the independent auditors. A majority vote of the outstanding
aggregate eligible votes and a majority of the outstanding Common Stock voting
separately as a class will be required to approve the proposal to increase the
number of the Company's authorized Common Stock. Shares which are present by
proxy or in person at the Meeting which indicate abstentions from voting or are
received from brokers as "non-votes" will be counted for purposes of determining
a quorum only. Such abstentions and broker non-votes will be, in effect, votes
against the proposals to increase its authorized Common Stock inasmuch as such
proposal requires the affirmative vote of a majority of all eligible votes and a
majority of all shares of Common Stock voting as a class.
PRINCIPAL SHAREHOLDERS AND SHAREHOLDINGS OF MANAGEMENT
The following table sets forth information as of May 31, 1995, regarding
the shares of the Company's Common Stock and Preferred Stock beneficially owned
by persons owning greater than 5% of the outstanding Common Stock or Preferred
Stock, by each of the executive officers and nominees for director of the
Company and similar information as to beneficial ownership by all nominees for
director and executive officers as a group. Unless otherwise indicated, all
ownership is direct.
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Equivalent
Common Stock Preferred Stock Common Stock(3)
------------ --------------- --------------
Name and Address Percent of Percent of Percent of
of Beneficial Owner Number Outstanding Number Outstanding Number Outstanding
- ------------------- ------ ----------- ------ ----------- ------ -----------
Directors and Nominees:
- ----------------------
Malcolm R. Stone 40,750,000(1) 25.95% 67,030(2) 1.97% 42,224,660 26.64%
17th Floor
LPN Tower
216/72 Nung Linchee Rd.
Chongnonsee, Yannawa
Bangkok 10120
Thailand
Samuel Leung 15,750,000(1) 10.03% 67,030(4) 1.97% 17,224,660 10.87%
B1754 New World Apartments
24, Salisbury Road, Nowloan
Hong Kong
Dennis C. Dowd 1,256,666(5) 0.88% -- -- 1,256,666 0.88%
1624 Market Street
Suite 303
Denver, CO 80202
Hunter S. Swanson 366,667(6) 0.26% -- -- 366,667 0.26%
1624 Market Street
Suite 303
Denver, CO 80202
Ian S. Fenn 375,000(7) 0.26% -- -- 375,000 0.26%
12, Pepper Street
London E14 9RP
England
Mark E. Chapman 13,479,743(8) 9.44% -- -- 13,479,743 9.44%
Chartfield Fund
Management plc
Brookfield House
44, Davies Street
London W1Y 1LD
England
Philip C. Doyle, Jr. --- 0% -- -- --- 0%
8134 Waltham Road
Charleston, SC 29406
Directors and Nominees 71,978,076 40.90% 134,060 3.95% 74,927,396 41.87%
as a group (seven persons)(9):
<FN>
__________________
-3-
(1) Represent shares underlying options and warrants which are presently
exercisable at $0.075 (U.S.) per share. See discussion under Proposal
Number Two below.
(2) Owned by Access Asia Consultants, Ltd., an affiliate of Mr. Stone. Such
shares will be automatically converted into shares of Common Stock on the
basis of 22 shares of Common Stock for each one share of Preferred Stock if
Proposal Number Two discussed below is approved by shareholders.
(3) Gives pro forma effect to conversion of the Preferred Stock and includes
presently exercisable options and warrants to acquire shares of Common
Stock held by such person.
(4) Owned by Access Far East, Ltd., an affiliate of Mr. Leung. Such shares
will be automatically converted into shares of Common Stock on the basis of
22 shares of Common Stock for each one share of Preferred Stock if Proposal
Number Two discussed below is approved by shareholders.
(5) Includes options to purchase 375,000 shares of Common Stock which are
presently exercisable at $0.05 (U.S.) per share.
(6) Represents options held by Mr. Swanson's wife to purchase shares. Such
options are presently exercisable at $0.075 (U.S.) per share.
(7) Represents shares of Common Stock underlying options which are presently
exercisable at $0.05 (U.S.) per share.
(8) Owned individually or by Cabinet Trust Company, Ltd. as trustee for Chapman
Family Trust, Fiona Rivers Chapman (wife) or Khamthai Limited, a company
controlled by Mrs. Chapman, and includes 1,499,400 shares underlying
options presently exercisable at $0.0375 (U.S.) per share.
(9) All percentages were calculated in accordance with Rule 13d-3 adopted under
the Securities Exchange Act of 1934.
-4-
PROPOSAL NUMBER ONE--
ELECTION OF DIRECTORS
The Company's Board of Directors has determined that the Board shall be
comprised of seven members for the forthcoming year. The seven nominees have
indicated that they will serve during the next year and until their resignation
or removal.
Certain information concerning the executive officers and nominees for
director of the Company is set forth below.
EXECUTIVE OFFICERS AND NOMINEES
The executive officers and nominees for director of the Company are as
follows:
Positions and
offices held with Period
Name Age the Company of Service
---- --- ----------------- ----------
Malcolm R. Stone 54 Executive Director November 11, 1994 - Present
and Chairman
Dennis C. Dowd 53 Executive Director, November 30, 1991 - Present
Chief Executive March 10, 1994 - Present
Officer and President
Hunter S. Swanson 51 Executive Director and March 18, 1994 - Present
Secretary/Treasurer June 8, 1994 - Present
Philip C. Doyle, Jr. 54 Executive Director and March 31, 1994 - Present
Vice President -
International Operations
Samuel Leung 61 Executive Director November 11, 1994 - Present
Ian S. Fenn 51 Non-Executive Director March 30, 1993 - Present
Mark E. Chapman 41 Non-Executive Director May 26, 1994 - Present
__________________
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Messrs. Stone and Leung were elected as directors in connection with the
agreements in principle to acquire Access Power, Ltd. There are no family
relationships among any of the directors and executive officers of the Company.
All directors hold office until the next Annual General Meeting of Shareholders
or until their successors are elected and qualified. A "non-executive" director
under United Kingdom law means generally the same as an "outside" or "indepen-
dent" director under United States law. Likewise, an "executive" director means
a director who is also an executive officer of the Company (i.e., the Chairman,
the President, etc.).
MALCOLM R. STONE (EXECUTIVE DIRECTOR AND CHAIRMAN). Mr. Stone who has dual
British and Thai nationality, was from 1963 to 1966 the manager of Mercantile
Bank, Rajawongse Branch in Bangkok. In 1966 he established his own group of
businesses in Thailand involved in printing and packaging, and subsequently
house building and property development, finance and mining. He was the
founder/owner of Thailand's first credit bureau, and is based in Asia, where he
has over 30 years experience. From August, 1993 to December, 1994 he was Vice
Chairman of Fortune Oil plc, a company listed on the London Stock Exchange
involved in oil and gas supply to the Peoples Republic of China. From 1985 to
November, 1993 Mr. Stone was the Managing Director of Mandarin Resources, Ltd.
He currently has no interest in any trading company and will be spending
substantially all of his time on the business of the Company.
DENNIS C. DOWD (PRESIDENT, CHIEF EXECUTIVE OFFICER AND EXECUTIVE DIRECTOR).
Mr. Dowd became a director and consultant to the Company on November 30, 1991.
He became an employee of the Company on September 1, 1993. On March 10, 1994 he
was elected President and Chief Executive Officer of the Company. He has also
been registered as an independent securities broker with John G. Kinnard and
Company, since November, 1988 which was his employer for the five years before
joining the Company. Mr. Dowd served as President of the securities brokerage
firm of B.J. Leonard & Co. (1986-1988) and was Senior Vice President (1980-
1985). Mr. Dowd entered the securities business in 1966 with Bosworth Sullivan
and Company (Dain Bosworth). Mr. Dowd has served on the NASD Arbitration
Committee since 1986 and served as a member of the NASD District # 3 Business
Conduct Committee (1988-1991). Mr. Dowd attended Regis University, Denver,
Colorado where he received a B.S. Degree in Business in 1963.
-6-
HUNTER S. SWANSON (SECRETARY/TREASURER AND EXECUTIVE DIRECTOR). Dr.
Swanson has B.A. and M.A. Degrees in Mathematics and a PhD. in Operations
Research from the University of Texas at Austin. He was the Chief Executive and
Financial Officer and Director of TPEX Exploration, Inc., a small oil and gas
company, from 1984 to 1987 during its recovery, turn around and subsequent sale.
Dr. Swanson has experience in waste management and environmental remediation,
having managed a company from 1987-1993 which applied for and obtained a solid
waste landfill permit in South Dakota. Commencing in early 1993, he was self
employed as a consultant for in-situ oil recovery prior to joining the Company
in June, 1994. From 1970-1979, Dr. Swanson was an associate professor of Mineral
Economics/Operations Research at the Colorado School of Mines. In addition, he
has co-authored two text books and published numerous scientific papers.
SAMUEL LEUNG (EXECUTIVE DIRECTOR). Mr. Leung was born in Hong Kong and was
educated in Ottawa, Canada, where he obtained B.Sc Degrees in Chemistry and in
Chemical Engineering. Having worked in Canada for two years as a research
engineer, he returned to Hong Kong in 1960, and worked as a bank manager with
Hang Seng Bank Limited until 1968. In 1969 he qualified as a barrister at
Lincoln's Inn, London, and practiced as such between 1970 and 1983. In 1983 he
emigrated to Australia where he qualified and practiced as a solicitor until
1989. Prior to going to Australia, he maintained his interests in the securi-
ties industry in Hong Kong, his primary role from September, 1989 to July, 1994
being Group Legal Adviser to New World Development Co. Limited. Also since
1991, and until joining Access Power in August, 1994, he had been involved in
negotiating on behalf of western partners, power generation joint venture
projects in China. He will spend the majority of his time on business of the
Company.
PHILIP C. DOYLE, JR. (VICE PRESIDENT-INTERNATIONAL OPERATIONS AND EXECUTIVE
DIRECTOR). Mr. Doyle has over 30 years of diversified business experience
mostly derived from activities in Asia. An engineering graduate of Carnegie
Mellon University (1963), he served as an engineering officer in the U.S. Army
Corps of Engineers, including the management of the Corps' Electric Power
Generator Maintenance School at Fort Belvoir, Virginia. He subsequently managed
the engineering and construction activities of a large charter/cargo airline in
Thailand, Laos and Vietnam. Later he served as Chief of Finance and Accounting
for Northrop Worldwide
-7-
Aircraft Services, Inc. (Southeast Asia Division). In a subsequent assignment
with Morrison-Knudsen International, Inc. he performed as a business and
administrative trouble-shooter on $100 million projects in Indonesia and Zaire
(Inga-Shaba Powerline Project). From April, 1986 to present Mr. Doyle has owned
and managed TAW Company, Ltd., a Hong Kong registered company which provided
marketing and agency services to a large U.S. bulk tobacco supplier/processor
for accounts in Asia and Europe.
IAN S. FENN (NON-EXECUTIVE DIRECTOR). Mr. Fenn has been a partner in ARM
and Co. since September 1992. ARM and Co. specializes in mergers and acquisi-
tions in the U.K. He is also associated with Oakleigh Renown Limited which
provides corporate advisory services. From November 1986 through April 1991,
Mr. Fenn was head of Corporate Finance for Societe Generale Strauss Turnbull
Securities Limited in London. He was a self employed consultant to companies
desiring to raise capital from May, 1991 until September, 1992. Mr. Fenn was
also an associate partner in the Corporate Finance department of Grieveson Grant
and Co. (now part of Kleinwort Benson) from 1977 through March 1986. Mr. Fenn
attained a Banking diploma in 1971 and has been a member of the Chartered
Institute of Bankers since 1963.
MARK E. CHAPMAN (NON-EXECUTIVE DIRECTOR). Mr. Chapman is an investment
manager in London. Since July, 1990, he has been a director and shareholder in
Chartfield Financial Holdings, Ltd. Management plc and its affiliate which
manage funds on behalf of institutions and private individuals. He has wide
experience in a number of businesses and is a director of various private
corporations. Mr. Chapman graduated from Nottingham University in 1974 with a
degree in Agricultural Science and from Birmingham University in 1977 with a
post graduate certificate in Education. Since 1993 he has been a director and
minority shareholder of Britpower (UK) Ltd. which is involved in the provision
of Combined Heating Power facilities in the U.K.
EXECUTIVE COMPENSATION
CASH COMPENSATION
The following table sets forth all cash compensation paid or distributed
to, or accrued for the account of each officer of the Company and to all
executive officers of the Company as a group,
-8-
for services in all capacities to the Company during the fiscal year ended
September 30, 1994:
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------------
Annual Compensation(1) Long-Term Compensation
------------------------------- -------------------------------------
Awards Payouts
-------------------------------------
Other
Year- Annual Restricted All Other
end Earned Compen- Stock Options/ LTIP Compen-
Name and Sept. Salary Bonus sation Award(s) SAR's Payouts sation
Principal 30 ($) ($) ($) ($) (#) ($) ($)
Position (b) (c) (d) (e) (f) (g) (h) (i)
- ------------------ --------- ------------------------------- ------------------------------------- --------------
Dennis C. Dowd 1994 75,833(2) -- -- -- -- -- --
President/Chief
Executive Officer
-----------------------------------------------------------------------------------------------------
1993 61,500 -- -- -- 375,000 -- --
-----------------------------------------------------------------------------------------------------
1992 N/A -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------
Hunter S. Swanson 1994 36,666(3) -- -- -- -- -- --
Secretary/
Treasurer
-----------------------------------------------------------------------------------------------------
1993 N/A -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------
1992 N/A -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------
<FN>
(1) Cash or cash-equivalent forms of remuneration, including insurance
benefits or reimbursements and personal benefits are generally
available to all employees of the Company. After reasonable inquiry,
the Company has concluded that the aggregate amounts of such "personal
benefits" cannot be reasonably determined, but do not in any event
exceed $10,000 for any individual in the group, and are not included
in the table above.
(2) Includes $59,850 salary accrued but paid after September 30, 1994.
(3) Includes $35,000 salary accrued but paid after September 30, 1994.
-9-
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
- -------------------------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised In-The-Money
Options/SAR's Options/SARs
Shares at Fiscal at Fiscal
Acquired Year-end Year-end
on Value Exercisable/ Exercisable/
Exercise Realized Unexercis- Unexercis-
Name (#) ($) able able ($)
(a) (b) (c) (d) (e)
- -------------------------------------------------------------------------------------
Dennis C. Dowd -0- -0- 375,000/0(1) 4,688/0(2)
- -------------------------------------------------------------------------------------
Hunter S. Swanson -0- -0- -0- -0-
- -------------------------------------------------------------------------------------
<FN>
(1) These options have an exercise price of $0.05 (U.S.) per share and expire
on April 30, 1998.
(2) Based upon closing U.S. bid price of 1/16 on September 30, 1994.
COMPENSATION OF DIRECTORS
Non-executive directors are compensated for serving as such and for
attending meetings (in addition to being reimbursed for actual expenditures
incurred in such capacity) and receive compensation as follows:
(i) $6,000 per year for being a Non-Executive Director. This amount is
to be paid in quarterly installments of $1,500; and
(ii) An additional $500 per meeting personally attended by each Non-
Executive Director.
EMPLOYMENT AGREEMENTS
The Company has employment agreements with four of its officers and
Executive Directors. In addition to customary provisions as to expense
reimbursements, health and accident insurance, automobile allowances and
vacations, the agreements provide as follows:
-10-
(i) Malcolm Stone's three year employment agreement is dated December 1,
1994 and provides for an annual salary of $24,000 (U.S.).
(ii) Dennis C. Dowd's three year employment agreement is dated November
14, 1994 and provides for an annual salary of $85,000 (U.S.) in year
one, $89,250 (U.S.) in year two and $93,712 (U.S.) in year three.
(iii) Hunter S. Swanson's three year employment agreement is dated
November 14, 1994 and provides for an annual salary of $80,000
(U.S.) in year one, $84,000 (U.S.) in year two and $88,200 (U.S.) in
year three.
(iv) Samuel Leung's three year employment agreement is dated November 14,
1994 and provides for an annual salary of $12,000 (U.S.).
CONSULTING AGREEMENTS
The Company has entered into two consulting agreements with two companies
owned and controlled by Malcolm Stone and Samuel Leung, respectively. Each
consultant has informed the Company that the services of Messrs. Stone and
Leung, respectively, will be available to the Company on a full time basis.
Other employees or associates of the consultants will be available to the
Company on an "as requested" basis.
Access Asia Consultants, Ltd., a British Virgin Islands corporation owned
and controlled by Malcolm Stone, has agreed to provide consulting and other
services to the Company with respect to all aspects of the power industry during
the two year term of the agreement which commenced December 1, 1994 in
consideration for $101,000 (U.S.) per year, payable monthly. The agreement may
be terminated upon the occurrence of any of the following:
(i) Mutual agreement of the parties to terminate;
(ii) Death, or disability for a period of six (6) consecutive months in
any twelve (12) month period of Malcolm Stone;
-11-
(iii) Termination of Malcolm Stone's employment by Access Asia
Consultants, Ltd.;
(iv) Either the Company or Access Asia Consultants, Ltd. is dissolved,
liquidated, merged, consolidated, adjudicated bankrupt or insolvent,
or substantially all of its assets are sold or transferred; or
(v) In the opinion of the Company, Access Asia Consultants, Ltd. has
failed fully and faithfully to perform its duties and obligations
under the agreement, or is otherwise in breach thereof, or has
demonstrated negligence in the performance of its duties and
obligations.
The second consulting agreement is with Access Far East, Ltd., a British
Virgin Islands corporation affiliated with Samuel Leung. It is similar in all
material respects to the Access Asia consulting agreement discussed above except
that the annual consulting fee thereunder is $68,000 (U.S.).
MEETINGS AND COMMITTEES
The full Board of Directors held 3 meetings during fiscal 1994. Each
director attended at least 75% of the meetings. At present, the Company has not
established executive, compensation, nominating or audit committees of its Board
of Directors.
In addition, the Board held 5 meetings by means of telephone conference
call during fiscal 1994; additional Board of Directors actions have been taken
by unanimous written consents.
CERTAIN TRANSACTIONS
In January 1994, Mr. Dowd was issued 300,000 shares of Common Stock for
satisfaction of a $15,000 outstanding debt owed to him. The indebtedness to Mr.
Dowd was comprised of his salary which had accrued but which the Company was
unable to pay. The shares issued were unregistered and not readily saleable but
nonetheless taxable to Mr. Dowd. The shares of the Company's Common Stock were
quoted during this period at $.0325 bid, compared to Mr. Dowd's effective price
of $0.05 per share.
-12-
Two directors, Messrs. Stone and Leung were parties to the Access Power
Agreement described in detail under Proposal No. 2(B) which is hereby
incorporated by reference. The transaction referred to was negotiated at arm's-
length prior to Messrs. Stone and Leung being elected to the Company's Board of
Directors.
On December 21, 1994, the Company borrowed $50,000 from an affiliate of Mr.
Malcolm Stone, an officer and director of the Company, in order to pay accounts
incurred in the U.K. offer and placing described above. On February 16, 1995
this amount, plus $12,500 in fees and commissions, were repaid to Mr. Stone's
affiliate.
On March 31, 1995, the Board of Directors authorized and on or about May
17, 1995 the transfer agent issued, common stock of the Company in the amounts
specified in the table below. These shares were issued for cancellation of
accrued, unpaid directors fees for directors and/or officers serving in a
nonexecutive capacity at the time such fees were earned. The shares were
unregistered and not readily saleable and reflected a modest premium to the then
prevailing market price of the stock, approximately $0.065 per share.
Number of
Accrued Effective Shares
Fees Price Issued
------- --------- ---------
Dennis C. Dowd $15,000.00 $0.075 per share 200,000
Hunter S. Swanson $ 5,000.00 $0.075 per share 66,667
Mark E. Chapman $ 6,000.00 $0.075 per share 80,000
Except as described or referred elsewhere in this Proxy Statement, there
was no transaction during the Company's last fiscal year or presently proposed
transaction to which the Company was or is to be a party, in which any officer,
director or nominee named herein had or is to have any direct or indirect
material interest.
-13-
PROPOSAL NUMBER TWO--PROPOSAL
TO AMEND THE ARTICLES OF
INCORPORATION OF THE COMPANY
The discussion below sets forth the background and reasons for the Board of
Directors unanimous recommendation that shareholders vote FOR each of the
proposals to amend the Company's Articles of Incorporation.
THE PROPOSALS
(A) CHANGE OF NAME. The Board is recommending that the name of the
Company be changed to "Powerhouse Resources, Inc." This name change is more
descriptive of its expanded business activities. See below.
(B) INCREASE THE COMPANY'S SHARES OF AUTHORIZED COMMON STOCK. Pursuant
to the recent financing and acquisition transactions described below, the
Company issued shares of its Preferred Stock which are convertible into its
Common Stock. However, at present, the Company has an insufficient number of
shares of authorized Common Stock to accommodate such conversions. Approval of
this proposal will allow for the conversion of the Company's Preferred Stock and
provide additional authorized Common Stock for future financing and/or
acquisition transactions, although there are no agreements, plans, arrangements
or understandings with respect thereto at present except as described herein.
BACKGROUND OF PROPOSALS (A) AND (B) ABOVE
Reference is made to the Company's Annual Report to Shareholders which
accompanies this Proxy Statement and in particular to the financial statements
contained therein. The Company's precarious financial position was reflected in
the financial statements and in the independent auditor's report which
highlighted, in an explanatory paragraph, the Company's ability to continue as a
going concern.
In its previous communications to shareholders and reports filed under the
Securities Exchange Act of 1934, the Company stressed its intentions to: (i)
seek capital funding; and (ii) pursue various opportunities to expand the
Company's business activities. The Board of Directors has succeeded in
accomplishing
-14-
both goals and each required the issuance of, or the commitment to issue, its
equity securities including all of its presently authorized Common Stock. To
meet certain conversion and exercise rights under the transactions described
below, and to provide additional authorized shares of its Common Stock for
possible corporate use in the future, the Board of Directors unanimously
recommends that shareholders authorize the increase in the Company's
capitalization.
SUMMARY OF RECENT FINANCING
In February, 1995, English Trust Company Limited completed a placing and
underwriting in the United Kingdom of 61,000,000 shares of the Company's Common
Stock (at 4 pence per share) and an open offer and placing of 3,262,500 shares
of its Preferred Stock (at 80 pence per share) (collectively, the "offer and
placing") resulting in gross offering proceeds of L5,050,000 (approximately
$8,080,000 U.S. at then current exchange rates). All shares were qualified for
dealing on the Unlisted Securities Market ("USM"), a facility of the
International Stock Exchange of the United Kingdom and Republic of Ireland, Ltd.
("London Stock Exchange").
Upon completion of the offer and placing, the Company had approximately 140
million of its authorized 150 million shares of Common Stock outstanding.
The Preferred Stock was issued with the attendant terms and conditions:
(i) Each share of Preferred Stock is convertible into 22 shares of
Common Stock. Such conversion will automatically occur upon the
passing of the resolution increasing the number of shares of
authorized Common Stock at the Meeting.
(ii) If the shareholders fail to pass the resolution increasing the
authorized Common Stock or the Company fails to present the
resolution to the shareholders by June 30, 1995, the Company is
obligated to file a registration statement under the Securities Act
of 1933 (the "Act") in respect of the Preferred Stock by September
30, 1995. Such registration will enable the Preferred Stock to be
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traded on NASDAQ, subject to NASDAQ's acceptance thereof.
(iii) Each share of Preferred Stock is entitled, until converted, to 22
votes at any shareholders' meeting and to 22 times the dividend or
other distribution, in cash or kind, made to the Common Stock.
(iv) Holders of Preferred Stock are entitled to receive reports and
quarterly statements delivered by the Company to holders of Common
Stock.
Hence, if the proposed increase in the Company's authorized Common Stock is
approved by shareholders, the 3,262,500 shares of Preferred Stock issued in the
recent open offer and placing will be automatically converted into 71,775,000
shares of Common Stock and all preferences will be extinguished.
ACCESS POWER AGREEMENT
In November, 1994, the Company reached an agreement in principle, which was
subsequently executed in definitive form on January 17, 1995, to acquire the
entire issued share capital of Access Power, Ltd., along with Access Power's
interests in certain joint ventures. Access Power is currently in the
development stage, seeking to develop, or participate in the development of,
small scale power projects, principally in the Peoples Republic of China and
elsewhere in the Far East. The Company acquired Access Power concurrent with
the closing of the offer and placing described above on February 14, 1995.
Under the terms of the Access Power agreement the Company is required to
issue 30,303 shares of Preferred Stock and 8,250,000 Warrants to purchase the
Company's Common Stock (at $0.075 per share), for each one of three power
generating projects which Access Power has presently entered into joint venture
agreements for and for which the joint ventures have received licenses to
construct the power plants. The Preferred Stock and Warrants are to be issued
in three installments as certain benchmarks are achieved related to the
development of each project. The first 1/3 of such Preferred Stock and Warrants
are to be issued upon execution of all appropriate contracts and receipt of the
business license for each project. The second 1/3 of such Preferred Stock
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and Warrants are to be issued upon issuance of the completion certificate for
each project. The last 1/3 of such Preferred Stock and Warrants are to be
issued upon receipt of revenue from each project. A total of 90,909 shares of
Preferred Stock (convertible into approximately 2,000,000 shares of Common
Stock) and 24,750,000 Warrants are to be issued in connection with the initial
three power plant projects.
Also under the terms of the Access Power agreement, the Company has agreed
to issue an additional 30,303 shares of Preferred Stock and an additional
8,250,000 Warrants to purchase Common Stock at $0.075 per share, for each of up
to nine additional projects in Guangdong Province, China, that the principals
may introduce to the Company. A total of 272,727 shares of Preferred Stock
(convertible into approximately 6,000,000 shares of Common Stock) and 74,250,000
Warrants may be issued in connection with up to nine subsequent power plants.
The principals have also been issued a total of 30,303 shares of Preferred
Stock plus 8,250,000 Warrants to purchase the Company's Common Stock (at $0.075
per share) and have received reimbursement of expenses of $25,000 in
consideration for Access Power's 10% interest in a western joint venture partner
which has a 54% interest in a 50 megawatt power plant project in China.
The acquisition of Access Power has been accounted for as a purchase. The
Preferred Stock to be issued attributable to the first three power plants and
the Preferred Stock to be issued attributable to the interest in the 50 megawatt
power plant project, has been recorded at its aggregate market value, determined
by reference to the price of the Preferred Stock issued in the offer and placing
that closed concurrent with the Access Power agreement. No value has been
attributed to the Warrants that are to be issued along with the Preferred Stock.
The Company believes that the value of such Warrants is nominal, since the
exercise of the Warrants was more than 20% above the then market price of the
Common Stock. Access Power had no assets or liabilities at the time of the
acquisition; accordingly, the entire amount of the consideration for the
acquisition has been recorded as an intangible asset (Power Plant Licenses), to
be amortized over the 15 year term of the associated power purchase agreements.
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Under the terms of separate agreements, the principals received 72,454
shares of Preferred Stock in connection with services provided by them relating
to the offer and placing. The value of the shares issued was recorded as a cost
of the offering and placing. The principals are also entitled to a commission
of 1-1/2% (payable in Preferred Stock) for arranging multi-project financing
packages of up to $20 million for the proposed power projects.
Additionally, the agreement requires the Company to pay to the principals
consideration of up to 10% of the gross projected cost of other projects
introduced, with certain limitations. The consideration is payable in Preferred
or Common Stock of the Company.
Upon becoming directors of the Company, each of the principals became
entitled to participate in the Company's Stock option plan. Each principal can
receive options to purchase up to 22,500,000 shares of Common Stock at $0.075
per share. Options for 2,500,000 shares of Common Stock are to be issued to
each of the principals upon Access Power entering into a joint venture agreement
for the construction and operation of 4 megawatt power plants in China, up to a
maximum of 9 projects. All options will become exercisable in equal
installments as the benchmarks described above for the Warrants are achieved.
Options for 15,000,000 shares of Common Stock have been issued in connection
with the three initial power plant projects. The options expire three years
from date of issue.
Additional shares, if any, of Preferred Stock (or equivalent shares of
Common Stock) that are issued to the principals of Access Power in connection
with future power plant projects will be recorded at then market value of the
shares issued. Any additional Warrants and Options that are issued in
connection with such power plant projects will be accounted for in accordance
with the provisions of Accounting Principles Board Opinion No. 25, and compensa-
tion expenses will be recorded as the Warrants and Options are issued and become
exercisable, to the extent that the then market price of the Common Stock
exceeds the exercise price of the Warrants and Options.
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INFORMATION CONCERNING ACCESS POWER, LTD.
As noted above, Messrs. Stone and Leung have many years of experience in
various business activities in the Far East, including China. Since the early
1990's these persons sought out power generation opportunities in China. They
identified the opportunity to construct small power stations in China in joint
ventures with local power bureaux and local authorities and have negotiated
agreements for the construction and operation of certain power stations.
Access Power was incorporated under the laws of the British Virgin Islands
in May, 1994 by Messrs. Stone and Leung who became equal 50% owners. All of
their rights, title and interest in all agreements, pending agreements and
agreements being negotiated were assigned to Access Power on its formation.
Except for entering into the joint ventures and assisting in the establishment
of a 50 megawatt power project, Access Power had no obligations except those
arising from the joint venture contracts and has had no revenue, appreciable
expenses or income since incorporation. Therefore, Access Power has no history
of operations, operating financial statements or per share earnings. Because
Messrs. Stone and Leung had no material identifiable cash cost in the assets
assigned to Access Power, it has no assets, liabilities or stockholders' equity
and no book value per share. The accounting treatment for the acquisition is
set forth under Pro Forma Financial Information below.
The Company was introduced to Messrs. Stone and Leung in the fall of 1994.
Prior to entering into negotiations with the Company, there were no transactions
or agreements between the Company and Access Power and/or Messrs. Stone and
Leung.
The Access Power Agreement, described in detail above, was structured
through extensive negotiations between the Company and Messrs. Stone and Leung
on behalf of Access Power. First, a total consideration was determined with
payment to be contingent on Access Power meeting certain benchmarks as described
above. Secondly, additional consideration was negotiated dependent, as was the
entire Access Power Agreement, on the successful completion of the offer and
placing in the United Kingdom also discussed above. Finally, additional
consideration was agreed if Access Power were
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able to secure certain credit facilities from European institutional lenders.
The following table sets forth the aggregate consideration earned by Messrs.
Stone and Leung and the consideration which is contingent on completion of the
events described above:
Earned as of May 31, 1995
---------------------------------------------------
Transaction Preferred Stock Warrants Options
- ----------- --------------- -------- -------
Power Plants(1) 60,606(2) 16,500,000(3) 15,000,000(3)
Financing 73,454(4) --- ---
Contingent as of May 31, 1995
---------------------------------------------------
Transaction Preferred Stock Warrants Options
- ----------- --------------- -------- -------
Power Plants(5) 333,333 82,500,000 30,000,000
Credit Facility(6) 181,818 --- ---
<FN>
________________
(1) Shares, warrants and options are earned in phases as described above under
"Access Power Agreement."
(2) Represents preferred shares (each convertible into 22 common shares) earned
with respect to the first phase of three power projects and consideration
assigned to Access Power's interest in the 50 megawatt facility described
above.
(3) Represents warrants and options earned with respect to the projects
mentioned in (2) above; all are exercisable at $0.075 (U.S.) per share
until _______________, 199___.
(4) Represents preferred shares earned as a result of the successful offer and
placing in the United Kingdom as described above under "Summary of Recent
Financing."
(5) Represents preferred shares or equivalent common shares, warrants and
options which may be earned with respect to completion of phases two and
three of the first three power projects and with respect to completion of
all three phases of the next nine power projects.
(6) Represents preferred shares or equivalent common shares which may be earned
if the Company completes negotiations with respect to an assumed $20
million (U.S.) credit facility.
-20-
Information with respect to each of the first three power projects referred
to above is as follows:
(1) Fengshun Fengang Power Plant
Construction Start Date: April 1995
Construction Completion Date: February 1996
Commissioning of Plant: March 1996
Power Purchaser: Fengshun Electricity Supply Bureau
Terms: 19,000,000 kwh/year minimum,
RMB 0.68/kwh
(2) Huilai Kuicheng Power Plant
Construction Start Date: April 1995
Construction Completion Date: February 1996
Commissioning of Plant: March 1996
Power Purchaser: Huilai Electricity Supply Bureau
Terms: 19,000,000 kwh/year minimum,
RMB 0.73/kwh
(3) Huilai Shenquan Power Plant
Construction Start Date: October 1996
Construction Completion Date: August 1997
Commissioning of Plant: September 1997
Power Purchaser: Huilai Electricity Supply Bureau
Terms: 19,000,000 kwh/year minimum,
RMB 0.73/kwh
PROPOSAL NUMBER THREE--RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, subject to ratification by the shareholders at the
Meeting, has appointed KPMG Peat Marwick LLP as independent auditors of the
Company for the year ending September 30, 1995. KPMG Peat Marwick LLP was
recently selected as the Company's independent auditing firm. The Company has
been advised that neither KPMG Peat Marwick LLP, nor any member thereof has any
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direct financial interest or any material indirect interest in the Company.
The Company's financial statements were audited and reported upon by the
Denver, Colorado firm of Ehrhardt Keefe Steiner & Hottman, P.C. ("EKS&H") for
its two fiscal years ended September 30, 1993 and 1994. The Board of Directors
believes that an international accounting firm is necessary to service its needs
given its expanded business activities. There have been no material
disagreements between the Company and EKS&H as to any matter of accounting
principle, practice or financial statement disclosure.
Representatives of KPMG Peat Marwick LLP are expected to be available by
telephone at the Meeting and will be available to respond to appropriate
shareholder questions.
Shareholders are requested to vote for the ratification of the appointment
of KPMG Peat Marwick LLP as the Company's independent auditors for 1995. If
ratification is not received, the Board of Directors will use its best judgment
in the selection of an independent auditing firm.
A vote FOR this proposal is recommended by the Board of Directors.
PROPOSAL NUMBER FOUR--OTHER MATTERS
The Company knows of no other matters to be brought before the Meeting, but
if other matters come before the Meeting, it is the intention of the persons
named in the solicited proxy to vote such proxy in accordance with their
judgment.
MISCELLANEOUS
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and officers and persons who own more than ten
percent of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC").
Directors, officers and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) reports
filed.
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Based solely on its review of the copies of the reports it received from
persons required to file, the Company believes that during the period from
October 1, 1993 through September 30, 1994, all filing requirements applicable
to its officers, directors and greater than ten-percent shareholders were
complied with.
SOLICITATION
No compensation will be paid to any person in connection with solicitation
of proxies. Special solicitation of proxies may in certain instances be made
personally or by telephone by officers and employees of the Company and by
employees of certain banking and brokerage houses. All expenses, estimated to
be normal in connection with this solicitation, will be borne by the Company.
SHAREHOLDER PROPOSALS
To be considered for inclusion in the Company's Proxy Statement for the
1996 Annual General Meeting, proposals of shareholders must be received by the
Company no later than December 31, 1995. Such proposals should be directed to
the Secretary of the Company.
ADDITIONAL INFORMATION
Included as part of this Proxy Statement are the following:
(a) Pro forma financial information reflecting the Recent Financing
and initial issuances of consideration under the Access Power
Agreement both as described above under their respective
captions. See pages PF1 - PF6.
(b) A copy of the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1995. See pages F1 - F15.
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PROXY PROXY
COM-TEK RESOURCES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned shareholder of Com-Tek Resources, Inc. acknowledges receipt
of the notice of the Annual General Meeting of Shareholders, to be held August
1, 1995, at 10:00 a.m., local London, England time, at 21 Knightbridge, First
Floor, London, England, and hereby appoints Malcolm Stone or Dennis C. Dowd, or
either of them, each with the power of substitution, as attorneys and proxies to
vote all the shares of the undersigned at the Annual General Meeting and at all
adjournments thereof, hereby ratifying and confirming all that such attorneys
and proxies may do or cause to be done by virtue hereof. The above-named
attorneys and proxies are instructed to vote all of the undersigned's shares as
follows:
1. To elect a Board of Directors consisting of the following seven
nominees:
Malcolm R. Stone Philip C. Doyle
Samuel Leung Ian S. Fenn
Dennis C. Dowd Mark E. Chapman
Hunter S. Swanson
[ ] For [ ] Against [ ] Abstain
NOTE: To withhold your vote for any particular nominee, strike a line
through that nominee's name.
2. To approve amendments to the Company's Articles of Incorporation to
provide:
(A) That the Company's name be changed to "Powerhouse Resources,
Inc."
[ ] For [ ] Against [ ] Abstain
(B) That the number of the Company's shares of authorized Common
Stock $0.01 per value, be increased to 780,000,000 shares.
[ ] For [ ] Against [ ] Abstain
3. To ratify the selection of KPMG Peat Marwick LLP as independent
auditors of the Company for fiscal 1995.
[ ] For [ ] Against [ ] Abstain
4. In their discretion, the attorneys and proxies are authorized to vote
upon such other business as may properly come before the Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1, FOR EACH OF PROPOSALS 2 (A) AND (B) AND FOR PROPOSAL 3.
Dated this _____ day of _________________, 1995.
__________________________ _______________________________
Signature Class of Stock Held
__________________________
Signature
Please sign your name exactly as it appears on
your stock certificate and state the class of
stock held. If shares are held jointly, each
holder should sign. Executors, trustees, and
other fiduciaries should so indicate when signing.
Please sign, date and return this proxy
immediately.
NOTE: Securities dealers please state the number
and class of shares voted by this proxy.
No.:__________________
Class:________________