UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITY
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
Commission file Number 33-22142
REDOX TECHNOLOGY CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 55-0681106
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State or other jurisdiction of (IRS Employer
incorporation or organization Identification Number)
340 North Sam Houston Parkway East, Suite 250, Houston, Texas, 77060
Tel: (281) 445-0020
Securities registered pursuant to Section 12(b) of the act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $0.00005 PER SHARE
------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 Days. Yes [X] No[ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant based on the average bid and asked price of the stock on December 31,
1999 was $20,992,488.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of registrant's classes of
common stock, as of the latest practicable date.
CLASS NUMBER OF SHARES OUTSTANDING ON:
----- --------------------------------
March 28, 2001
Common Stock -----------------
par value $0.00005 49,626,339
PART I
ITEM 1. BUSINESS OF THE COMPANY
Organization
The Company initially was incorporated as DCUSA, Inc. under the laws of Delaware
on April 28, 1988. The Company was organized as a blind pool, meaning that it
had no business plan of its own but was organized to acquire or merge with an
active business. Initially the Company was a wholly-owned subsidiary of Family
Health Systems, Inc. which held 3,000,000 shares of the Company's Common Stock.
Pursuant to a Registration Statement which was declared effective on August 2,
1988, the 3,000,000 shares were distributed as a dividend to approximately 900
Family Health Systems, Inc. stockholders, effectively spinning-off the Company
as an independent entity.
In early 1993, the Company entered into a relationship with Richard Szymanski
who, on April 9, 1993 assigned his recently filed Patent Application for an
"Emergency Reserve Battery" to the Company in exchange for 15,000,000 shares of
the Company's Common Stock. As a result, Mr. Szymanski owned approximately 82%
of the Company's then issued and outstanding Common Stock. On June 1, 1993 the
name of the Company was changed to its present name, "ReDOX Technology
Corporation".
Business Operations
From 1993 until approximately 1996 the Company was engaged in developing the
"Emergency Reserve Battery". The product was, essentially, a single-use battery
which would be attached to a car battery as a reserve unit. In the event that
the regular battery was fully discharged and unable to start the car, the driver
would activate the reserve battery, releasing the electrolyte and charging
instantly the reserve battery which would then be used to start the car. The
Company built prototypes, attempted to market it to many battery manufacturers,
and attempted to secure financing to support manufacture of the product.
However, during the same period there were significant changes in battery
technology, especially the chemistry including new electro-chemical engineering
and processes (such as lithium metal batteries) which offered higher energy
densities (storage capacity)than the Company's product. As a result, the Company
became engaged in substantial research and development efforts in a search for
greater energy density and more flexibility, and the product was never produced
and sold.
As a result of his research and development efforts, Mr. Szymanski became aware
of the work being done by Professor Licht at Clark University in Worcester,
Massachusetts. At that time, the Company's battery was based on an alloy of
aluminum, magnesium and zinc as the anode with a carbon-based cathode. Professor
Licht was working with aluminum as the anode and sulfur and poly-sulfide as the
cathode. Mr. Szymanski began working with Clark University and in September,
1998, after about three years of investigation and negotiations, the Company
obtained a Patent License Agreement from Clark University. (see "Property of the
Company")
2
From 1998 to December 31, 1999 the Company has been engaged in seeking the
financing for the production of prototypes, beta testing of the prototypes,
completion of product development and establishment of manufacturing. However,
the Company has been unable to secure that financing on terms acceptable to it.
The Company continues to seek that financing.
During the year 2000, the company acquired the world wide exclusive licensing
agreement for two new computer software technologies that management feels will
make a substantial contribution to the company in the future.
Proposed Products
The Company's initial focus is on the use of the battery technology for the
Uninterrupted Power Supply ("UPS") market. A "UPS" is intended to provide power
in the event of a failure of the primary source of power so as to retain data
and/or continue operations. The market includes computers and
computer-controlled equipment. The Company is also looking into the manufacture
and sale of batteries for portable electronic equipment, such as cellular
telephones. Another potential market is the electric car battery since the
Company's product would provide power for a longer period on a single charge.
The software of Divine Logic and Onslr e2000 will be thoroughly tested by
independent laboratories during the second quarter of 2001.
Availability of Raw Materials
The materials which would be used in the Company's products are common and
readily available from many sources. The Company does not foresee any
difficulties in acquiring raw materials or in facing any dramatic price
increases due to material shortages.
Competition
The battery market is highly competitive. There are numerous manufacturers both
in the United States and overseas (especially in Japan). Many of these
manufacturers have high brand recognition and established market shares with
customer-perceived quality. The Company believes, however, that it can enter
this market and establish a reasonable market share because:
o its raw materials are readily available and less costly than those used by
competitors, giving it cost advantages;
o its raw materials permit easier and less costly manufacturing, giving
further cost advantages;
o its finished products do not have explosion or other safety issues,
permitting easier transportation, giving further cost advantages;
o its raw materials are environmentally friendly and do not pose disposal
problems; giving it an advantage with consumers concerned about the
environment and waste disposal problems;
o the energy densities (i.e., the amount of stored power) offered by its
products are substantially higher (e.g., compared to a lithium-ion battery
offering 180 - 205 watt hours per kilogram, the Company's replacement
product would offer 680 watt hours per kilogram); and
o the Company's licensed electro-chemical process is a departure from current
technology and is expected to have a high profile.
3
ITEM 2. PROPERTY OF THE COMPANY
Offices
We maintain our principal office at 340 North Sam Houston Parkway East, Suite
250, Houston, Texas 77060, where our telephone number is (281) 445-0020 and our
facsimile number is (281) 445-0022. The offices are leased from a non-related
party under a three year lease which commenced April 1, 1998 at an annual rental
of $19,712.52 payable in monthly installments of $1,642.71. The office area is
1,577 square feet, divided into a reception area, a conference room, a
file/storage/utility room and three executive offices. The Company owns the
office furniture and equipment in the office. This space is adequate for current
needs, but as the Company expands, additional or alternative space will be
required.
Patents, Patent Applications and Licenses
Prior to his relationship with the Company in 1993, Mr. Szymanski had been
developing a battery with greater storage capacity ("density") using aluminum,
magnesium and zinc. On April 8, 1993 Mr. Szymanski filed a Patent Application
for an "Emergency Reserve Battery". On April 9, 1993 Mr. Szymanski assigned that
Patent Application to the Company in exchange for 15,000,000 shares of the
Company's Common Stock. That Patent Application is still pending in the United
States Patent and Trademark Office, while the Company's primary emphasis has
been on the technology under the License obtained from Clark University,
Worcester, Massachusetts.
On September 17, 1998 the Company entered into an exclusive License Agreement
with Clark University covering U.S. Patents 5,413,881 issued May 9, 1995 and
5,571,600 issued November 5, 1996. These patents relate to batteries using
aluminum and sulfur. Upon execution of the Patent License, the Company paid
Clark University the sum of $30,000 as a License Fee. In addition, at the end of
each year of the agreement, the Company pays a minimum royalty of $35,000. Upon
the commencement of sales of products under the Patent License, the Company will
pay a royalty of 5% of Gross Sales, against which the minimum royalty in that
year will be applicable. The License Agreement, subject to earlier termination
by Clark University in the event of the Company's default, will remain in effect
until the expiration of the last patent to have been issued (#5,571,600 issued
November 5, 1996).
4
ITEM 3. LEGAL PROCEEDINGS.
We are not engaged in any pending legal proceedings. We are not aware of any
legal proceedings pending, threatened or contemplated, against any of our
officers and directors, respectively, in their capacities as such.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of shareholders in the fourth quarter of
2000.
5
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The principal United States market in which the registrant's Common Stock has
been traded is the NASD Over the Counter (OTC) Bulletin Board under the symbol
"RDOX".
The range of our prices for the past two fiscal years is as follows:
Quarter High Ask Low Bid
- ------- -------- -------
1st Qtr,'00 $ 0.6562 $ 0.3438
2nd Qtr,'00 $ 0.6562 $ 0.375
3rd Qtr,'00 $ 0.5625 $ 0.25
4th Qtr '00 $ 0.4688 $ 0.125
Quarter High Ask Low Bid
- ------- -------- -------
1st Qtr,'99 $ 1.53125 $0.4375
2nd Qtr,'99 $ 1.945 $0.65625
3rd Qtr,'99 $ 2.0075 $0.5
4th Qtr '99 $ 0.59375 $0.26
ITEM 6. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
financial statements and summary of selected financial data for ReDOX Technology
Corp. This discussion should not be construed to imply that the results
discussed herein will necessarily continue into the future, or that any
conclusion reached herein will necessarily be indicative of actual operating
results in the future. Such discussion represents only the best present
assessment of the management of the Company.
As previously reported, this corporation is in development stage and has not yet
conducted any business so as to become an income producing entity. The Company
continues to utilize capital borrowed from it principal shareholder, said
capital's recognition as or equity contribution is being negotiated as required.
Management ordered financial statements audited at March 31, 1994 to include
results of a patent valuation report, as management felt that the "fair market
value" of its proprietary technology was appropriate to reflect as an asset of
the Company. The fair market value, as derived from that independent valuation
report was determined to be Five Million Two Hundred Thousand Dollars, and this
value was accordingly posted to Long-term Assets, and to Additional Paid-in
Capital on the Company's Balance Sheet at March 31, 1994. These values were then
carried to the compilations at June 30, 1994 and September 30, 1994.
Subsequently, in consultation with financial, legal and securities counsels on
the matter, management ordered its accountant to re-audit the financial
statements at March 31, 1994, removing the value of $5,200,000 placed on the
patent technology, and replacing it with $1,500 which was the aggregate par
value of the Common Stock which was transferred in consideration for that
technology having been transferred to the Company. This patent value is now
carried on the most recent audited financial statement of December 31, 1995.
Registrant's financial condition has not changed materially from December 31,
1999 to the date of the financial statements herewith provided. To the extent
that the Company has incurred continuing expenses without any revenues having
been generated, shareholder's equity would have suffered proportionately had it
not been for the continuing infusion of capital from the Company director
Richard Szymanski. The Notes to the Company's financial statements, as well as
the Independent Auditor's Report, indicate the doubt about the Company's ability
to continue as a going concern without the addition of financial capital.
Because of the absence of revenues and the inability thus far to raise the
capital necessary to commence operations, there are no assurances that the
Company will be able to fully carry out its plans, and continue as a going
concern. However, the principal continues to infuse capital necessary to
maintain the operations of the Company in a non-manufacturing status while
additional capital is being sought.
Management expects that the technologies will start generating revenues in the
third quarter of 2001.
SELECTED FINANCIAL DATA
Selected Summary Financial Data of ReDOX Technology Corporation
Year Ended:
Dec. 31, 2000 Dec. 31, 1999
Income Statement Data:
Sales -0- -0-
Selling, General and
Admin. Expenses 236,623 326,937
(Loss) Before Income 263,623 (326,937)
Taxes
Net Loss (326,937)
Unrealized (Loss)
On Securities -0- -0-
Balance Sheet Data:
Cash & Cash
Equivalents 633 3,233
Other Assets 120,387 121,837
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Total Assets 121,020 125,070
======= =======
Credit Payable 24,455 15,147
Other Liabilities 1,080,712 -0-
Total Stockholder Equity (984,147) 109,923
Operating Data:
There was no revenue from sales and ancillary income for the calendar years
ended December 31,1999 and December 31, 2000.
Operating expense were $137,371 for the year ending December 31,1999 and xxxxx
for the year ending December 31, 2000. Operating expenses primarily include
General and Administrative costs.
6
ITEM 7. FINANCIAL STATEMENTS
WANT &. ENDER
CPA, P.C.
Certified Public Accountants
MARTIN ENDER CPA
STANLEY Z. WANT CPA CFP
Independent Auditor's Report
To the Shareholders and Board of Directors:
REDOX TECHNOLOGY CORPORATION
We have audited the accompanying balance sheet of REDOX TECHNOLOGY CORPORATION
at December 31, 2000 and the related statements of income and retained earnings,
stockholders' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We have conducted our audit in accordance with generally accepted auditing
standards. These 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 also 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 our audit provides a reasonable basis for our opinion.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has not yet begun
operations, and as such, has sustained recurring losses. In our opinion, the
financial statements referred to above present fairly, in all material respects,
the financial position of REDOX TECHNOLOGY CORPORATION at December 31, 2000, and
the results of its operations and its cash flows for the year then ended in
accordance with generally accepted accounting principles.
/s/ Martin Ender
Martin Ender
Wan & Ender CPA, P.C.
Certified Public Accountants
New York, NY
March 22, 2001
386 PARK AVENUE SOUTH SUITE 1618 NEW YORK. NY 10016
TEL 212.684.2414 FAX 212.684.5433EMAIL WECPAPC@SPRYNET.COM
F-1
REDOX TECHNOLOGY CORPORATION
(Formerly Dcusa Corporation)
Balance Sheet
December 31, 2000
ASSETS
Current Assets
Cash on Hand $ 633
------------
Total Current Assets 633
Fixed Assets (See note 3)
Net Fixed Assets 17,478
------------
Total Fixed Assets 17,478
Other Assets
License Agreement (See note 12) 50,000
Patent (See notes 4 and 9) 1,500
Security Deposits 1,159
Goodwill (See note 5) 50,000
Organization Costs 250
------------
(Net of accumulated amortization $500)
Total Other Assets 102,909
TOTAL ASSETS $ 121,020
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts Payable 24,455
Morts,Notes,Bonds>1 Yr 1,080,712
Stockholders' Equity
Common Stock, par value $.00005 per share $ 2,480
100,000,000 authorized;49,350,478 issued and outstanding
(See note 6 and 11)
(See note 11)
Additional Paid in Capital (See note 6 and 11) 148,903
Accumulated Deficit (1,135,530)
------------
Total Stockholders' Equity (984,147)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 121,020
============
See accompanying notes to financial statements
F-2
REDOX TECHNOLOGY CORPORATION
(Formerly Dcusa Corporation)
Statement of Income and Retained Earnings
For the year Ended December 31, 2000
INCOME:
Total Revenues $ 0
EXPENSES:
Auto Expense 933
Office Expenses 11,428
Professional Fees 53,867
Rent 33,313
Telephone Expenses 16,394
Travel 0
Miscellaneous Tax 962
Public Relations 41,525
Dues and Subscriptions 1,338
Royalty Fee 35,000
Travel and Entertainment 62,563
Auto Leasing 0
Depreciation 6,300
-----------
Total Expenses ( 263,623)
-----------
NET INCOME/(LOSS) FOR THE YEAR ( 263,623)
ACCUMULATED DEFICIT JAN 1, 2000 ( 871,907)
-----------
ACCUMULATED DEFICIT DECEMBER 31,2000 ( 1,135,530)
===========
See accompanying notes to financial statements
F-3
REDOX TECHNOLOGY CORPORATION
(Formerly Dcusa Corporation)
Statement of Stockholders' Equity
December 31, 2000
Common Stock $.00005 par value
Authorized 100,000,000 Shares
Issued 49,600,478 Shares $ 3,285
Preferred Stock Issued 5,000,000 5,000
Additional paid in capital 973,545
Accumulated Deficit ( 871,907)
--------
Stockholders' Equity as of January 1, 2000 109,923
Adjustments of Common Stock ( 805)
Additional paid in capital (See note 6) ( 829,642)
Net profit/(loss) for the period
January 1, 2000 to December 31, 2000 ( 263,623)
--------
Stockholders' Equity as of December 31, 2000 $984,147
========
See accompanying notes to financial statements
F-4
REDOX TECHNOLOGY CORPORATION
Statement of Cash Flows
For the Period Ended December 31, 2000
Current Year
12-31-0
----------
Cash Flows from Operating Activities
Net Income ($ 263,623)
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 6,300
Increase (Decrease) in Accounts Payables 9,308
----------
Total Adjustments 15,608
----------
Net Cash Provided (Used) By Operating Activities ($ 248,015)
----------
Cash Flows from Investing Activities
Cash Payments for the Purchase of Property (4,850)
----------
Net Cash Provided (Used) By Investing Activities (4,850)
----------
Cash Flows from Financing Activities
Reclassify Additional Paid in Capital (830,447)
Net Borrowing on Notes Payable 1,080,712
----------
Net Cash Provided (Used) By Financing Activities 250,265
----------
Net Increase (Decrease) in Cash (2,600)
Cash at Beginning of Period 3,233
----------
Cash at End of Period
$ 633
==========
F-5
REDOX TECHNOLOGY CORPORATION
(Formerly Dcusa Corporation)
Notes to financial statements
December 31, 2000
Note 1. Nature of Business
Redox Technology Corporation, was incorporated on April 25, 1988, under the laws
of the State of Delaware. The original name of the corporation was Dcusa
Corporation. Dcusa Management referred to the company as a 'blind pool' or
'blank check' company. Its primary business was to obtain an acquisition and/or
merger transaction whereby its stockholders' would benefit. On June 1 ,1993 the
name of the corporation was changed to Redox Technology Corporation. During
1993, the Company acquired a pending patent and all rights thereto which Redox
management intends to develop for commercial purposes.
Note 2. Significant Accounting Policies
INCOME TAXES: The Company is currently operating at a loss. It has therefore not
provided for income taxes.
ORGANIZATION COSTS: The Company has capitalized the costs of organization and
registration of its securities. Amortization is computed on a straight-line
basis over sixty months commencing April 25, 1988. The company is no longer
amortizing its organizational costs. These costs will be written off at such
time that it may be determined that the company has been unsuccessful in its
efforts to attract a suitable partner.
Note 3. Fixed Assets
In January 1994, the Company received furniture and office equipment from Mr.
Richard Szymanski as part of a Sale Contract and Bulk Transfer Agreement between
Mr. Szymanski and the Company. The assets have been recorded in the books at
their fair market value of $25,000.
Note 4. Patent Acquisition
On April 9, 1993 the Company acquired all interest in a U.S. Patent Pending
application titled "Emergency Reserve Battery." It involves high density energy
technology to enhance battery cells. The rights to the patent pending were
acquired in exchange for fifteen million (15,000,000) shares of par value .0001
per share , with actual value of the intellectual of the intellectual property
so acquired to be determined by an independent agency. For purpose of financial
statements, the value is shown as $1,500. Management decided to record the
property on the books at the aggregate par value $1,500. The value of this
property is computed at $5,200,000. This value has been determined by Battelle
Memorial Institute which is an independent valuation agency. On August 18, 1997,
Redox executed an exclusive agreement with Clark University, an option to elect
a royalty bearing, limited terms, license to the Patent Rights in the novel
Aluminum Sulfur Battery developed by Stuart Licht at Clark University.
F-6
REDOX TECHNOLOGY CORPORATION
(Formerly Dcusa Corporation)
Notes to Financial Statements (Continued)
December 31, 2000
Such exclusivity to apply to the electronics industry and for space
applications. The company paid twenty thousand dollars ($20,000) for the
exclusive use of these patents for the electronics and space application. The
company will pay a royalty to Clark University on products sold as a result of
using the technology.
Note 5. Goodwill
This represents amounts originally paid for the acquisition of Dcusa Corporation
by Richard Szymanski. This is reflected on the books as Additional Paid-in
Capital.
Note 6.Common Stock
On April 9, 1993, the number of outstanding shares of the Company's Common Stock
was increased by fifteen million (15,000,000) shares. These fifteen million
(15,000,000) shares were issued to Richard A. Szymanski in exchange for
assignment of all rights to the pending patent application (see note 4 above).
On July 1, 1996, the Board of Directors approved issued a stock option to
purchase 1,000,000 shares to C.D. Douglas, said option to be exercised by July
1, 1998. Said option was exercised by Mr. Douglas.
Note 7. Additional Paid In Capital
The following is a recap of capital borrowed from its principal shareholder,
Richard Szymanski:
Period Amount
12-31-93 88,358
12-31-94 186,023
12-31-95 67,633
12-31-96 130,636
12-31-97 89,457
12-31-98 173,662
12-31-99 238,581
12-31-00 255,265
Total 1,229,615
Less Amount converted to Notes
Payable-Richard Szymanski
(1,080,712)
Balance Additional Paid In Capital 148,903
Note 8. Change of Fiscal Year
On June 16, 1993, the Board of Directors approved the change of fiscal year of
the corporation from beginning on June 1 and ending on May 31, to beginning on
January 1 and ending December 31.
F-7
REDOX TECHNOLOGY CORPORATION
(Formerly Dcusa Corporation)
Notes to Financial Statements (Continued)
December 31, 2000
Note 9. Alterations to Previous Financial Statements for the same period
The original audited balance sheet as at March 31,1994 recognized the patent at
its fair market value of $5,200,000 (see Note 4), with the corresponding value
assigned to Additional Paid-in Capital. Management decided to revise the March
31, 1994 financial statement to recognize the patent's value at $1,500, with
corresponding value assigned to Additional Paid-in Capital.
Note 10. Going Concern
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. Because the Company has not yet
commenced operations, it is entirely dependent upon the continued contributions
of capital and other resources provided by its principals until such time as
sufficient capital can be raised from other sources (e.g. from the sale of the
Company's authorized but unissued Common stock) to commence production for sale
of its products. Therefore, the assumption that the Company is a going concern,
is entirely determined upon the uncertain ability of the Company to raise
capital in such an amount as would be necessary to commence operations and
produce sufficient cashflow therefrom to survive.
Note 11. Adjustments to Stockholders' Equity Entries
The sum of Two Hundred and Fifty-five Dollars ($225.00) has been transferred
from Additional Paid-In Capital to Common Stock at Par Value. This has been done
to reflect the par value of all of the Company's Common Stock outstanding.As of
June 30, 2000 an adjustment of $805 was made to common stock to reflect the
shares outstanding per audit by Transfer Agent. This was transferred to
paid-in-capital.
The sum of six thousand dollars ($5,000) has been transferred from Additional
Paid-in Capital to Preferred Stock. This has been done to reflect the par value
of all of the Company's Preferred Stock outstanding.
Note 12. LICENSE AGREEMENT
The company executed a license agreement with Clark University for the exclusive
use of their patented technology in certain industries. The Company paid fifty
thousand dollars ($50,000) for the use of this technology and will pay a royalty
to Clark University on products sold as a result of using the technology.
F-8
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company does not have any market risk sensitive instruments, commodity risk
or any foreign currency exchange rate risk.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth certain information with respect to the Officers
and Directors of the company.
Name Age Position
Richard Szymanski 58 President/Director
Clifton D. Douglas 71 Secretary/Treasurer/Director
James R. Schuler 61 Director
The members of the Board of Directors of the Company are elected by the
shareholders at each annual meeting for a one year term. Officers are elected by
the Directors at each annual meeting for a one year term, or until otherwise
replaced by the Board of Directors.
Richard A. Szymanski is President, Chairman of the Board of Directors and CEO of
our Company, serving in these capacities since our incorporation in April 1993.
Mr. Szymanski is involved in research, development and improvement of high
density power batteries. Mr. Szymanski previously served as Vice President and
Technical Director of World Book Encyclopedia Science Service for several years
where he maintained a staff of professional science writers and photographers
for the purpose of writing and illustrating major scientific events, including:
exclusive coverage of the seven original astronauts, organizing all photo
coverage including space launchers at Cape Kennedy, and the initial heart
transplants performed in Houston, Texas.
Clifton D. Douglas has served as Secretary/Treasurer and Director since July
1996, overseeing and managing all of the accounting and financial affairs of the
Company. From 1990 though 1995, Mr. Douglas was Vice President of Tiger Oil and
Gas, Inc., Latin America Trading Company and Petrorental Internacionales, S.A.,
where he was responsible for operations in Mexico and Latin America. Previously,
Mr. Douglas was a financial consultant in the areas of oil, gas and real estate
construction.
In 1953, Mr. Douglas received a Bachelor of Science in Accounting from Arizona
State University.
James R. Schuler has served as a Director of our Company since August 4, 1998.
Presently, Mr. Schuler is the President and CEO of Trans United Partners, Inc.
of Pacifica, California, having been with that company since 1998. Also since
1998 through the present, Mr. Schuler is CEO to S-Cube Investments, LLC, where
he has been forming a technology cooperative among new technology companies.
Previously, Mr. Schuler co-founded a research and development company in 1994
called Add-Vision, Inc., which produced a new illumination technology made up of
a revolutionary thin, flat, programmable display product with multiple uses
(called Intelligent Illumination). He remained with Add-Vision until 1998. Prior
to that, Mr. Schuler served as President and CEO to a transportation relocation
company called Relocation Controls Corporation, and to a petroleum refining
administrative company which he founded called Transatlantic Petroleum.
Mr. Schuler received a Bachelor of Science Degree in Finance and Business
Administration from the University of North Carolina.
ITEM 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
7
ITEM 11. EXECUTIVE COMPENSATION.
Currently, our Officers are not compensated for their services. They do not
receive any salary, wages or other cash remuneration. They receive no
performance-based stock or options, no non-performance-based stock or options
and they receive no SAR grants or deferred compensation of any kind.
Annual Compensation including wages, cash remuneration of any kind, performance-
based stock and options and non-performance based stock and options, SAR grants
and deferred compensation of any kind for the past three years is as follows:
Name Title 2000 1999 1998
- ---- ----- ----- ------ ----
Richard Szymanski President -0- -0- -0-
Clifton D. Douglas Secretary/Treasurer -0- -0- -0-
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since his association with the Company in 1993, Mr. Szymanski has provided
substantially all of the funding which the Company has received. From 1993 to
June 30, 2000, Mr. Szymanski has advanced a total of $1,080,712 to the Company.
In addition, Mr. Szymanski has served as Chairman of the Board, Vice President
or President, and as the primary employee during that same period without
compensation. In 1996, in an effort to recognize Mr. Szymanski's contributions,
the Board of Directors authorized the issuance of 6,000,000 shares of a series
of Convertible Preferred Stock which was designated for that purpose. This
issuance was based upon a then recent Amendment to the Certificate of
Incorporation which had authorized 10,000,000 shares of undesignated Preferred
Stock having a par value of $.001 per share. In reliance upon that issuance, the
advances made by Mr. Szymanski prior to that date were booked as "Additional
Paid In Capital". Furthermore, Mr. Szymanski continued to make all necessary
cash advances and in reliance upon the issuance of the Convertible Preferred
Stock those were also booked as "Additional Paid In Capital". In essence, Mr.
Szymanski's advances were treated as capital contributions. During the second
quarter of 2000, questions were raised about the validity of the 1996 Amendment
to the Certificate of Incorporation since the proxies used for the required vote
of the stockholders had been solicited without the use of a definitive Proxy
Statement filed in accordance with the Proxy Rules of the Securities and
Exchange Commission. To resolve the problem, the Board and Mr. Szymanski
rescinded the issuance with respect to the 5,000,000 shares of Convertible
Preferred Stock still held by his trust, issued him a Promissory Note for the
$1,080,712 in advances, and agreed to develop an alternative plan to recognize
his advances and convert the Promissory Note back to equity. The Board has
ordered the holding of a Special Meeting of Stockholders to authorize an
Amendment to the Certificate of Incorporation which would clear up the questions
surrounding the 1996 Amendment. If the stockholders approve the Amendment and
authorize an increase in the authorized shares of Common Stock, the Board
intends to issue Mr. Szymanski 11,937,311 shares of Common Stock in conversion
of the Promissory Note. The number of shares was arrived at by taking the
advances made to 1996 and dividing that total by one-half of the then market
price per share and by taking the further advances to June 30, 2000 and dividing
that total by $.20 per share, as follows:
Advances Shares
$379,379 to 6/30/96 8,430,644
$701,333 to 6/30/00 3,506,667
ITEM 13. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of March 29, 2000, information regarding the
beneficial ownership of shares of our Common Stock by each person known by us to
own five percent or more of the outstanding shares of Common Stock, by each of
our Officers, by each of our Directors, and by our Officers and Directors as a
group. On March 29, 2001 there were 49,850,478 shares issued and outstanding of
record.
Name and Address of Number of Percent
Beneficial Owner Shares As of 3/29/01(1)
- ------------------- --------------- ---------------
Richard Alan Szymanski 14,641,400(2) 29.3%
Trust #1
15 White Oak Manor
Conroe, Texas 77304
Clifton D. Douglas 500,000(3) 1.01%
14674 F. Perthshire
Houston, Texas 77079
James R. Schuler -0- -0-
1141 Harbor Bay Parkway
Alameda, CA 94502
All officers and
directors as a group(3) 15,141,000 30.31%
- ----------------------
(1) Based on 49,850,478 shares of Common Stock issued and outstanding as of
3/29/01.
(2) These shares were placed in a trust, The Richard Alan Szymanski Trust #1,
for the benefit of Patricia Szymanski, Wendy Szymanski, Jonathan Szymanski
and Holly Szymanski.
(3) These shares have been transferred by Mr Douglas to his wife. Mr. Douglas
may have a beneficial interest in these shares.
8
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
3.1* Certificate of Incorporation, filed April 25, 1988
3.2* By-laws
3.3* Certificate of Amendment, filed June 7, 1993
3.4* By-laws of June 1993
3.5* Certificate of Amendment, filed July 5, 1994
3.6* Certificate of Amendment, filed September 12, 1996
4.1* Designation of Convertible Preferred Stock
10.1* License Agreement with Clark University
10.2* Indemnification Agreement with Richard A. Szymanski
10.3* Indemnification Agreement with Clifton D. Douglas
10.4* Indemnification with James R. Schuler
10.5 License Agreement with Onsler e2000
10.5 License Agreement with Divine Logic
24.1 Consent of Auditors
* Previously filed
10
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Security Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
REDOX TECHNOLOGY CORPORATION
By: /s/ Richard A. Szymanski
-------------------------------------------
Richard A. Szymanski, President
Date: March 29,2001
By: /s/ Clifton D. Douglas
-----------------------------
Clifton D. Douglas, CFO
Date: March 29,2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the registrant in the
capacities and on the dates indicated.
/s/ Clifton D. Douglas
-----------------------------
Clifton D. Douglas, Director
Date: March 29, 2001
11