ZEUS ENERGY CORP. and US OIL & GAS
The following letter from Zeus Energy and US Oil & Gas was received by Tandem Capital Group September 22, 1997.
"Attention: Charles Desjardins
This letter is the Company's formal notice of termination of our contract dated April 2, 1997. This agreement is terminated forthwith by the Company without prior notice pursuant to section 9 of the contract based upon Tandem Capital's failure to perform as specified under section 2 of this agreement. This termination is effective immediately.
Yours Truly,
Owen Richman, President"
SECTION 2 of our contract reads as follows:
2. The Company agrees to engage Tandem and Tandem agrees to provide the following services to the Company on the terms and conditions set forth hereunder;
a) Communicating on a regular basis with investment dealers and registered representatives, respecting the ongoing activities of the Company for the purpose of increasing awareness of and interest in the Company;
b) Communicating with and making itself available to the shareholders of the Company for the purposes of keeping the Company's shareholders and prospective shareholders fully informed of the Company's ongoing affairs;
c) Compiling and maintaining a public relations book on the Company, containing all news releases, brochures and media articles on the Company and its product;
d) Providing such other public relations work that may be required by the Company from time to time;
e) Reporting to the Company's Board of Directors on a regular basis respecting the services provided;
f) Providing Internet exposure and communication between existing and potential shareholders of the company.
Tandem Capital has always disseminated information on ZUS/USO when the companies gave it to us and we have always made ourselves available for shareholders to call. In addition we have suggested additional marketing plans to management on numerous occasions.
Tandem Capital believes that we have performed our duties according to the guidelines of the contract and will be seeking restitution owed according to the contract.
Despite some reservations about management in certain areas of the companies, we at Tandem Capital do believe that they have an excellent man in Doug Humphries, President of Oak Hills Energy (the operating
company for ZUS/USO). He has not hit the home run for the companies yet, but he has had a number of smaller successes and we believe he will continue to find oil and gas as he has in the past year.
We have been told by management in the past and I am sure you have heard it from us, as well as other sources, that funds for working capital have been walking a tightrope for the last year. This we can
understand, but we do feel some of the money spent on operating the companies could be better directed.
According to the financials of both companies, Mr. Owen Richman, President of ZUS/USO, receives $3,000 from each company, as well as $2,500 from each company paid to his management company Richman Resources Inc. Mr. Richman also operates his own successful private kitchenware company which takes up some of his time as well.
In addition, it was noted in the information sent out for the US Oil & Gas AGM that Mr. Owen Richman received $89,577 as a bonus for his personal loan guarantee for the $2,000,000 US line of credit for
property acquisitions. He later amended this at the AGM saying he received around $65,000.
To our knowledge, less than $500,000 of the line of credit has been used and these funds can only be used for producing properties with a proven asset that can fund the payments through cash flow generated. In light of the above we feel some of these funds could be better directed to benefit all shareholders.
In a nutshell, overall production should continue to improve if Doug Humphries continues to perform as he has to date. The companies will be amalgamating soon, if approved by shareholders, which will
hopefully cut down on a lot of the overhead.
If you have any questions please contact us and we will try and answer them for you or point you in the right direction. You can email us at info@tandemcap.com or call us at 800-370-4412 Cdn, 800-831-2956 US, or 604-681-7210 direct. |
