Filed On 6/26/00 9:25am ET · SEC File 0-09474 · Accession Number 912057-0-29649
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
6/26/00 Potomac Energy Corp 8-K{1,2,7} 6/09/00 2:27 Merrill Corp/FA
Document/Exhibit Description Pages Size
1: 8-K Current Report 7 25K
2: EX-2.1 Plan of Acquisition, Reorganization, Arrangement, 20 80K
Liquidation or Succession
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 9, 2000
POTOMAC ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
OKLAHOMA 000-09474 73-1088064
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2601 N.W. EXPRESSWAY, SUITE 1100W
OKLAHOMA CITY, OKLAHOMA 73112-4605
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (405)840-1427
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On May 19, 2000, a certificate of merger was filed with the Oklahoma
Secretary of State merging Butte, Coal, Inc., a Utah corporation ("BCI."), with
and into Potomac Energy Acquisition Corporation, an Oklahoma corporation
("Acquisition Corporation") and became a wholly-owned subsidiary of Potomac
Energy Corporation. Butte was the surviving constituent corporation (the
"Merger-Acquisition"). The Acquisition was completed in accordance with the
Agreement and Plan of Merger by and between Potomac Energy Corporation and
Butte Coal, Inc. dated March 31, 2000 (the "Merger Agreement"). Pursuant to
the Merger Agreement, Potomac Energy Corporation (the "Company") agreed to
issue and deliver 16,751,774 shares of the Company's common stock to the
shareholders of Butte thereby making the shareholders of Butte the controlling
shareholders of the Company. Furthermore, as of June 6th,2000, SunStar
Holdings, Inc. ("SunStar"), an original Butte Coal, Inc. shareholder, has
become the single largest shareholder of the Company. As a controlling
shareholder, SunStar exercised its right to appoint new directors to the
Company and some of the previous board members resigned.
As a result of the Merger-Acquisition, the Company's principal
offices will be relocated as of July 1, 2000 to 3168 Bel Air Drive, Las Vegas,
NV 89109 and the telephone number is 702-792-8404.
The following table presents certain information as to the beneficial
ownership of the Company's common stock as adjusted to give effect to the
Merger-Acquisition of (i) each person that beneficially owns more than five
(5%) percent thereof, (ii) each one of the Company's executive officers and
directors, and (iii) all executive officers and directors as a group. All
persons listed have sole voting and investment power with respect to their
shares, and there is no family relationship between the executive officers and
directors.
[Enlarge/Download Table]
SHARES PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY BENEFICIALLY
------------------------------------ OWNED OWNED SHARES
------------ -------------
Sun Star Holdings, Inc.(1)......................................... 11,474,965 61.6%
3168 Bel Air Drive
Las Vegas, Nevada 89109
Theolene D. Moon (1)............................................... 11,474,965 61.6%
3168 Bel Air Drive
Las Vegas, Nevada 89109
Winfield Moon, Sr. (1)............................................. 11,474,965 61.6%
3168 Bel Air Drive
Las Vegas, Nevada 89109
Carl W. Swan(2).................................................... 258,973 1.4%
Fred W. Young(3)................................................... 0 *
Tim Shelby(4)...................................................... 0 *
Joseph Michaud (5)................................................. 22,532 *
Charles Kim (6).................................................... 0 *
Patrick McCarrick(7)............................................... 0 *
Executive Officers and Directors
as a Group (Six persons)(8)...................................... 281,505 1.5%
------------------------------
* Less than 1%.
(1) The shares beneficially owned and the percentage include 11,443,617
shares owned by SunStar Holdings, Inc., a Nevada corporation wholly
owned by Theolene D. Moon. Theolene Moon is the wife of Winfield Moon,
Sr. the Chief Executive Officer of Butte Coal, Inc., a wholly owned
subsidiary of the Company. Mr. Moon is neither an officer nor a
shareholder of the Parent Company.
(2) The shares beneficially owned and the percentage include 80,000 shares
owned by Nona Swan, wife of Carl W. Swan, the Chairman of the Board of
the Company.
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(3) Fred W. Young is the President, Chief Executive Officer, Treasurer and
Director of the Company.
(4) Tim Shelby is a Director for the Company.
(5) Joseph Michaud is a Director for the Company.
(6) Charles Kim is a Director for the Company.
(7) Patrick McCarrick is a Director for the Company.
(8) The shares beneficially owned and the percentage include the shares
beneficially owned by Messrs Swan, Young, Shelby, Michaud, Kim and
McCarrick, the Company's officers and Directors.
Prior to the Acquisition and Reverse Merger, Carl W. Swan was Chairman and
CEO of the Company. Gene Callaway was President and a Director of the Company,
James Frazier was Vice President and Chief Financial Officer, Secretary and
Director of the Company, Joseph Edward Michaud, Alvaro Cayzedo and Charles
Newman were Directors for the Company.
BACKGROUND OF COMPANY EXECUTIVE OFFICERS AND DIRECTORS:
The following is a brief description of the business background of the
executive officers and Directors of the Company:
CARL W. SWAN is Chairman of the Board of Directors of the Company.
Mr. Swan has been actively involved in all facets of the oil and gas industry
since 1951. He co-founded and served as President and Chief Executive Officer
and a Director of Basin Petroleum Corporation, which was a publicly held
company that merged into Reserve Oil and Gas Corporation in 1976. Since 1976,
Mr. Swan has operated Swan Petroleum Corporation, a privately held oil and gas
exploration company involved in oil and gas drilling, exploration and
refining. Mr. Swan has extensive oil and gas drilling and production
experience in several foreign countries. Mr. Swan is a graduate of the
University of New Mexico.
FRED YOUNG, is President and Chief Executive Officer, and Treasurer of
the Company. He has been the Secretary/Treasurer, Chief Financial Officer and
a Director of BCI since 1998. Mr. Young is a retired banker of 35 years and
has significant experience in Senior Management. He has served as president,
CEO, and director of numerous banks, financial institutions and privately held
companies. Additionally, he has extensive consulting experience in Europe and
the United States.
TIM SHELBY is a Director of the Company. Mr. Shelby is currently
President and Chief Executive Officer of Paso Robles Tank, Inc., a private
California corporation. Mr. Shelby has founded several construction companies
in California including San Luis Piping Construction Co., Inc., West Coast
Industrial Coatings, Inc., West Coast Tank, Piping and Construction Co., Inc.
and continues to operates those business in Southern California. Mr. Shelby is
a member of American Petroleum Institute, the American Water Works Association
and Paso Robles Vintners & Growers Association. Mr. Shelby is a graduate of
Fresno State University with a Bachelors of Science degree in business.
JOSEPH EDWARD MICHAUD is a Director of the Company and an independent
analyst of oil and gas properties and an investor in exploratory and
development prospects. Mr. Michaud has in excess of 40 years experience in the
oil and gas business, including extensive training as a petroleum engineer
while employed by James A. Lewis Engineering, a leading consulting firm in
reservoir analysis and property appraisals in the United States and Canada.
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CHARLES KIM is a Director of the Company. Mr. Kim has been and
continues to be an active leader in the Asian-American Community in Southern
California. Mr. Kim is a naturalized U.S. citizen originally from Korea. In
Korea, Mr. Kim served with the BLUE HOUSE. Mr. Kim is President of Sunny
Investment Management Company and Founder of E & H Technology, Inc., a U.S.
corporation focused on doing business in Korea.
PATRICK MCCARRICK is a Director of the Company. He Co-founded
Absolute Internet Marketing in 1997 and has served as CIO since inception.
Prior to Absolute Internet, he was QA Coordinator for Memorial Sloan
Kettering Cancer Center MSKCC Dept Of Radiology NYC, where he was in charge
of a LAN system and Transcription QA Database Development. Prior to moving to
NYC from Ireland Laboratories in 1993, Mr. McCarrick was a programmer for
Abbott Pharmaceuticals (Ross Laborites (NYSE: ABT) head office in Ireland,
where he developed Abbotts First RPG Gui Based Debuggers with a team of
programmers from Abbott Plants World Wide. Mr. McCarrick has been one of the
early visionaries behind Ivenue.com, a web based E-commerce solution for the
SOHO (Small Office, Home Office) market. He co wrote the original business
plan and programmed several of the modules behind the system. He later took
on the role of creative direction, helping guide the Ivenue project to where
it is today. Mr. McCarrick has extensive Internet experience, both in
programming and business operations. Having designed both large and small Web
Based Applications since 1993. Mr. McCarrick holds a BSc (Hons) IT degree
from the University of Glamorgan, Wales, UK
BACKGROUND OF NON-OFFICER, NON-DIRECTOR CONTROL PERSONS:
The following is a brief description of the business background of
individuals who are neither officers nor directors, but through their
affiliation as shareholder act as "non-titled control persons" as defined by
the 1934 securities act:
THEOLENE D. MOON, AGE 71, is the sole shareholder of SunStar Holding, Inc.
the single largest shareholder of the Company. Mrs. Moon has been President
of Birmingham Terminal (a "REIT") for over 20 years and was involved in the
day-to-day operations of the business. The Trust manages over 40 properties
in Real Estate investments in Alabama, California, Utah and Nevada, leasing,
buying, selling and managing investments. Mrs. Moon is also the single
largest shareholder of World Wide E-Commerce, a Nevada public corporation
(NASDAQ: WEWC.OB). Theolene D. Moon is the wife of Winfield Moon, Sr.
WINFIELD MOON, SR., AGE 72, is spouse to Theolene D. Moon, the sole
shareholder of SunStar Holding, Inc. the single largest shareholder of the
Company. Mr. Moon started on his way to becoming an entrepreneur at the age
of 19. From 1952 to 1960 he served under Governor James E. Folsom, Sr. in the
Governor's Cabinet of Alabama, also served as the Governor's Campaign
Manager. He served on the Board of Directors of the American National Bank of
Birmingham, Alabama for 10 years. Mr. Moon owned and operated one of the
largest distribution centers in the Southeast, owner of Lanson Industries
Inc., Cullman Alabama, a manufacturer of federal munitions; a 25% ownership
with Coach Paul "Bear" Bryant in Zeigler Meat Packing Co. Inc., owned and
managed several Coal & Gas corporations in West Virginia including Alpha Coal
Co. Inc., Pocahontas Coal and Gas, Inc. and Central Coal & Gas Co. Inc.; and
was President and Chairman of the Board of several low sulfur coal
corporations located in Utah, including Green River Coal, Factory Butte Coal,
Horse Canyon Coal, Gayland Coal and Butte Coal. Coal production declined in
several major coal-producing states in the east due to the high sulfur
content. During the period of 1978 through 1981 Mr. Moon was active in real
estate investments. More specifically the purchase of large farms and ranches
in Central California and re-selling them after obtaining zoning changes to
industrial and commercial real estate investments. Today some of those
investments are now known as part of the Silicon Valley, California. In 1985,
Mr. Moon was convicted of Conspiracy to Supercede Indictment, Obstruction of
Justice and Failing to file income tax returns and was sentenced to six years
at a Federal Correctional Camp and fined $50,000. Mr. Moon served three years
for these felony convictions from June 14, 1986 to June 14, 1989 and was on
probation for five years. Mr. Moon has paid all taxes and fines related to
these felony charges and all tax liens have been released.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 19th, 2000, Butte Coal, Inc., a Utah Corporation.,("BCI")
merged into Potomac Exploration Acquisition Corporation, an Oklahoma
corporation ("Acquisition Corp."), and became a wholly-owned subsidiary of
Potomac Energy Corporation (the "Merger-Acquisition"). The Merger-Acquisition
was completed in accordance with
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the Agreement and Plan of Merger dated March 31st, 2000 (the "Merger
Agreement"). The Merger-Acquisition was accounted for as a reverse acquisition
resulting in the Company being acquired by BCI under the purchase method of
accounting. The Company and BCI are development stage enterprises. BCI is the
owner of certain undeveloped coal leases located in Garfield County, Utah,
otherwise known as the "Butte Properties". The Butte Properties cover 3,692.68
acres and have an estimated 71,736,000 tons of 12,480 BTU in-ground coal
reserves based on independent third party reports dated March 11, 2000.
Pursuant to the Merger Agreement, the Company issued and delivered
16,751,774 shares of the Company's common stock to the shareholders of BCI.
The shares of common stock to be issued in connection with the
Merger-Acquisition will be issued without registration pursuant to Rule 506 of
Regulation D promulgated under the Securities Act of 1933, as amended, and
applicable state securities acts.
The Company, through its subsidiary BCI intends to sell its coal
properties to foreign markets which are in need of the relatively high BTU
coal reserves to meet current clean air standards. In addition, the Company
intends to divest its other energy based assets including its 25% working
interest in the Rosablanca and Montecristo Association Contracts with Seven
Seas Petroleum, Inc., (AMEX: SEV) as well as its net 9% interest in the
Thomas Oil Refinery owned and operated by Dolphin Industries, Inc., an
Oklahoma corporation. From the sale of its assets, the Company hopes to be
able to invest in emerging growth companies which will ultimately benefit all
shareholders. There is no assurance that the Company will be able to sell its
assets or to invest in emerging growth companies or, if successful, generate
any revenue from the investment in such companies. As a result of the
Merger-Acquisition, the Company's principal offices will be relocated as of
July 1, 2000 to 3168 Bel Air Drive, Las Vegas, NV 89109 and the telephone
number is 702-792-8404.
In connection with the Merger-Acquisition and because of the nature
of the assets of BCI, it is anticipated that the Merger-Acquisition will be
accounted for on the basis of a reverse merger. If the facts and circumstances
suggest that the value of the asset be adjusted an immediate expense or
charge will be made and reported. Once adjusted, there can be no assurance
that there will not be further adjustments for value and recoverability in
future periods of such assets. Of the various factors to be considered by
management of the Company in determining adjustments for value and
recoverablity, the most significant will be (i) the market price of coal on
the world markets, (ii) the ability or inability to mine reserves if not
first sold to third parties, (iii) both foreign and U.S. competition, and
(iv) imposition of regulatory and or environmental requirements. In the event
management of the Company determines that the assets have changed value or
recoverability, the adjustments for value and recoverability may occur during
a period of operations in which the Company has sustained losses or has only
marginal profitability from operations, and the change in value and
recoverability may increase such losses from operations or reduce profitability.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS AND EXHIBITS.
As of the date of this filing with the Commission, it is impracticable
to provide the required financial statements and pro forma financial
information related to the acquisition of BCI by the Company, and
there are no financial statements available for filing. It is
anticipated that the financial statements and pro forma financial
information will be filed with the Commission within approximately 60
days of this filing or as soon as practicable, but not later than
August 10, 2000 (60 days after the date on which this report must be
filed with the Commission).
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(b) PRO FORMA FINANCIAL INFORMATION.
The pro forma financial information related to the acquisition of BCI
by the Company will be filed with the Commission at such time that the
financial statements are filed. See "(a) Financial Statements and
Exhibits," above.
(c) EXHIBITS.
2.1 Agreement and Plan of Merger, amongst Registrant, Potomac
Exploration Acquisition Corporation, Butte Coal, Inc. and
Potomac Energy Corporation, Carl W. Swan, Winfield Moon, Sr.
dated March 31st, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Potomac Energy.
(Registrant)
By: /s/ Fred W. Young
--------------------------------------
Fred W. Young
President and Chief Executive Officer
Date: June 9, 2000
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