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As filed with the Securities and Exchange Commission on May 23, 1997
Registration No. 0-22597
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
WESTERN TECHNOLOGY & RESEARCH, INC.
(Name of Small Business Issuer in its Charter)
Wyoming 83-0273780
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
801 East "A" Street, Casper, Wyoming 82601
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (307) 234-5310
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, no par value per share
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(Title of Class)
==============================================================================
PAGE
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WESTERN TECHNOLOGY & RESEARCH, INC.
FORM 10-SB
TABLE OF CONTENTS
PART 1 Page
Item 1. Description of Business ..................................... 3
Item 2. Management's Discussion and Analysis or Plan of Operation ... 8
Item 3. Description of Property...................................... 9
Item 4. Security Ownership of Certain Beneficial Owners
and Management.............................................. 9
Item 5. Directors, Executive Officers, Promoters
and Control Persons......................................... 10
Item 6. Executive Compensation....................................... 12
Item 7. Certain Relationships and Related Transactions............... 12
Item 8. Description of Securities.................................... 12
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters................. 14
Item 2. Legal Proceedings............................................ 15
Item 3. Changes in and Disagreements with Accountants................ 16
Item 4. Recent Sales of Unregistered Securities...................... 16
Item 5. Indemnification of Directors and Officers.................... 16
PART F/S
Financial Statements......................................... 17
PART III
Item 1. Index to Exhibits............................................ 28
Item 2. Description of Exhibits...................................... 28
PAGE
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PART I
Item 1. Description of Business
Business Development
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WESTERN TECHNOLOGY & RESEARCH, INC. (the "Company") was organized on
September 19, 1984 under the laws of the State of Wyoming, having the stated
purpose of engaging in any lawful activities. The Company was formed with the
contemplated purpose to engage in investment and business development
operations related to mineral research and exploration. The primary area of
mineral exploration concerned small (less than 10 acres) jade mining
leaseholds in Wyoming, which were never brought to the development stage. The
Company also held options on both minor gold and minor oil & gas prospects,
which were never exercised, and the options were assigned to third-parties for
nominal consideration. All these activities had ceased before 1990. All jade
mine claims were allowed to expire in 1993, for non-payment of rental fees, as
approved by unanimous action of the Board of Directors on August 19, 1993.
The Company never engaged in an active trade or business throughout the
period from 1990, until just recently. In December of 1994, the prior
management, Mr. H. Jean Baker and Mrs. Phyllis L. Baker, expressed the desire
to wind up the Company because of the lack of any business and the burdens of
carrying on the entity without any apparent purpose. The Company had just lost
its last business asset, an interest in real property, through foreclosure.
The present management took over at that time, noting in 1994 that some new
mining prospects and potential claims were available for investigation by the
Company. However, despite additional investigation, no new claims were
staked. On October 15, 1996, the directors determined that the Company
should become active in seeking potential operating businesses and business
opportunities with the intent to acquire or merge with such businesses. The
Company then began to consider and investigate potential business
opportunities. The management of the Company commenced a proactive review
of all potential business opportunities by means of their personal contacts
and prior experience, consisting of over thirty combined years of management
of public companies in the mineral extraction business, and private business
operations including real estate. The Company is considered a development
stage company and, due to its status as a "shell" corporation, its principal
business purpose is to locate and consummate a merger or acquisition with a
private entity. Because of the Company's current status having no assets and
no recent operating history, in the event the Company does successfully
acquire or merge with an operating business opportunity, it is likely that the
Company's present shareholders will experience substantial dilution and there
will be a probable change in control of the Company.
The Company is voluntarily filing its registration statement on Form
10-SB in order to make information concerning itself more readily available to
the public. Management believes that being a reporting company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), could
provide a prospective merger or acquisition candidate with additional
information concerning the Company. In addition, management believes that
this might make the Company more attractive to an operating business
opportunity as a potential business combination candidate. As a result of
filing its registration statement, the Company is obligated to file with the
Commission certain interim and periodic reports including an annual report
containing audited financial statements. The Company intends to continue to
voluntarily file these periodic reports under the Exchange Act even if its
obligation to file such reports is suspended under applicable provisions of
the Exchange Act.
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Any target acquisition or merger candidate of the Company will become
subject to the same reporting requirements as the Company upon consummation of
any such business combination. Thus, in the event that the Company
successfully completes an acquisition or merger with another operating
business, the resulting combined business must provide audited financial
statements for at least the two most recent fiscal years or, in the event that
the combined operating business has been in business less than two years,
audited financial statements will be required from the period of inception of
the target acquisition or merger candidate.
The Company's principal executive offices are located at 801 East "A"
Street, Casper, Wyoming, 82601, and its telephone number is (307) 234-5310.
Business of Issuer
The Company has no recent operating history and no representation is
made, nor is any intended, that the Company will be able to carry on future
business activities successfully. Further, there can be no assurance that the
Company will have the ability to acquire or merge with an operating business,
business opportunity or property that will be of material value to the
Company.
Management plans to investigate, research and, if justified, potentially
acquire or merge with one or more businesses or business opportunities. The
Company currently has no commitment or arrangement, written or oral, to
participate in any business opportunity and management cannot predict the
nature of any potential business opportunity it may ultimately consider.
Management will have broad discretion in its search for and negotiations with
any potential business or business opportunity.
Sources of Business Opportunities
The Company intends to use various sources in its search for potential
business opportunities including its officers and directors, consultants,
special advisors, securities broker-dealers, venture capitalists, members of
the financial community and others who may present management with unsolicited
proposals. Because of the Company's lack of capital, it may not be able to
retain on a fee basis professional firms specializing in business acquisitions
and reorganizations. Rather, the Company will most likely have to rely on
outside sources, not otherwise associated with the Company, that will accept
their compensation only after the Company has finalized a successful
acquisition or merger. To date, the Company has not engaged nor entered into
any definitive, agreements nor understandings regarding retention of any
consultant to assist the Company in its search for business opportunities, nor
is management presently in a position to actively seek or retain any
prospective consultants for these purposes.
The Company does not intend to restrict its search to any specific kind
of industry or business. The Company may investigate and ultimately acquire a
venture that is in its preliminary or development stage, is already in
operation, or in various stages of its corporate existence and development.
Management cannot predict at this time the status or nature of any venture in
which the Company may participate. A potential venture might need additional
capital or merely desire to have its shares publicly traded. The most likely
scenario for a possible business arrangement would involve the acquisition of,
or merger with, an operating business that does not need additional capital,
but which merely desires to establish a public trading market for its shares.
Management believes that the Company could provide a potential public vehicle
for a private entity interested in becoming a publicly held corporation
without the time and expense typically associated with an initial public
offering.
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Evaluation
Once the Company has identified a particular entity as a potential
acquisition or merger candidate, management will seek to determine whether
acquisition or merger is warranted or whether further investigation is
necessary. Such determination will generally be based on management's
knowledge and experience, or with the assistance of outside advisors and
consultants evaluating the preliminary information available to them.
Management may elect to engage outside independent consultants to perform
preliminary analysis of potential business opportunities. However, because of
the Company's lack of capital it may not have the necessary funds for a
complete and exhaustive investigation of any particular opportunity.
In evaluating such potential business opportunities, the Company will
consider, to the extent relevant to the specific opportunity, several factors
including potential benefits to the Company and its shareholders; working
capital, financial requirements and availability of additional financing;
history of operation, if any; nature of present and expected competition;
quality and experience of management; need for further research, development
or exploration; potential for growth and expansion; potential for profits; and
other factors deemed relevant to the specific opportunity.
Although some fruitless discussions regarding business opportunities
have occurred between management and other parties, none of the Company's
officers, directors, their affiliates or associates have had any preliminary
contact or discussions with, and there are no present plans, proposals,
arrangements or understandings with, any representatives of the owners of any
business or company regarding the possibility of an acquisition or merger
transaction. Because the Company has not located or identified any
specific business opportunity as of the date hereof, there are certain
unidentified risks that cannot be adequately expressed prior to the
identification of a specific business opportunity. There can be no assurance
following consummation of any acquisition or merger that the business venture
will develop into a going concern or, if the business is already operating,
that it will continue to operate successfully. Many of the potential business
opportunities available to the Company may involve new and untested products,
processes or market strategies which may not ultimately prove successful.
Form of Potential Acquisition or Merger
Presently, the Company cannot predict the manner in which it might
participate in a prospective business opportunity. Each separate potential
opportunity will be reviewed and, upon the basis of that review, a suitable
legal structure or method of participation will be chosen. The particular
manner in which the Company participates in a specific business opportunity
will depend upon the nature of that opportunity, the respective needs and
desires of the Company and management of the opportunity, and the relative
negotiating strength of the parties involved. Actual participation in a
business venture may take the form of an asset purchase, lease, joint venture,
license, partnership, stock purchase, reorganization, merger or consolidation.
The Company may act directly or indirectly through an interest in a
partnership, corporation, or other form of organization, however, the Company
does not intend to participate in opportunities through the purchase of
minority stock positions.
Because of the Company's current status and recent inactive status for
the prior eight years, and its concomitant lack of assets or relevant
operating history, it is likely that any potential merger or acquisition with
another operating business will require substantial dilution of the Company's
existing shareholders. There will probably be a change in control of the
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Company, with the incoming owners of the targeted merger or acquisition
candidate taking over control of the Company. Management has not established
any guidelines as to the amount of control it will offer to prospective
business opportunity candidates, since this issue will depend to a large
degree on the economic strength and desirability of each candidate, and
corresponding relative bargaining power of the parties. However, management
will endeavor to negotiate the best possible terms for the benefit of the
Company's shareholders as the case arises.
Management does not have any plans to borrow funds to compensate any
persons, consultants, promoters, or affiliates in conjunction with its efforts
to find and acquire or merge with another business opportunity. Management
does not have any plans to borrow funds to pay compensation to any prospective
business opportunity, or shareholders, management, creditors, or other
potential parties to the acquisition or merger. In either case, it is
unlikely that the Company would be able to borrow significant funds for such
purposes from any conventional lending sources. In all probability, a public
sale of the Company's securities would also be unfeasible, and management does
not contemplate any form of new public offering at this time. In the event
that the Company does need to raise capital, it would most likely have to rely
on the private sale of its securities. Private sales of the Company's
securities are severely restricted under both Federal and State Securities
Laws, such tha the ability of the Company to raise any capital from such
sources is uncertain, but it is unlikely that any significant capital could be
raised by private sales. This is particularly true while the Company remains
without a clear business direction. However, no private sales are
contemplated by the Company's management at this time. If a private sale of
the Company's securities is deemed appropriate in the future, management will
endeavor to acquire funds on the best terms available to the Company.
However, there can be no assurance that the Company will be able to obtain
funding when and if needed, or that such funding, if available, can be
obtained on terms reasonable or acceptable to the Company. The Company does
not anticipate using Regulation S promulgated under the Securities Act of 1933
to raise any funds any time within the next year, subject only to its
potential applicability after consummation of a merger or acquisition.
Although not presently anticipated by management, there is a remote
possibility that the Company might sell its securities to its management or
affiliates.
In the event of a successful acquisition or merger, a finder's fee, in
the form of cash or securities of the Company, may be paid to persons
instrumental in facilitating the transaction. The Company has not established
any criteria or limits for the determination of a finder's fee, although most
likely an appropriate finder's fee will be negotiated between the parties,
including the potential business opportunity candidate, based upon economic
considerations and reasonable value as estimated and mutually agreed at that
time. A finder's fee would only be payable upon completion of the proposed
acquisition or merger in the normal case, and management does not contemplate
any other arrangement at this time. Management has not actively undertaken a
search for, nor retention of, any finder's fee arrangement with any person.
It is possible that a potential merger or acquisition candidate would have its
own finder's fee arrangement, or other similar business brokerage or
investment banking arrangement, whereupon the terms may be governed by a
pre-existing contract; in such case, the Company may be limited in its ability
to affect the terms of compensation, but most likely the terms would be
disclosed and subject to approval pursuant to submission of the proposed
transaction to a vote of the Company's shareholders. Management cannot
predict any other terms of a finder's fee arrangement at this time. It would
be unlikely that a
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finder's fee payable to an affiliate of the Company would be proposed because
of the potential conflict of interest issues. If such a fee arrangement was
proposed, independent management and directors (meaning those officers and
directors not affiliated with the proposed finder and therefore not within the
domain of a conflict of interest under principals of Corporate Law) would
negotiate the best terms available to the Company so as not to compromise the
fiduciary duties of the affiliate in the proposed transaction, and the Company
would require that the proposed arrangement would be submitted to the
shareholders for prior rtification in an appropriate manner. Neither the
articles of incorporation nor bylaws of the Company, explicitly require a vote
of shareholders for such matters, but it is anticipated that the arrangement
would be part of an overall reorganization or recapitalization of the Company
which would require shareholder approval, such that any finder's fee
arrangement (however remote) would be submitted as part of the overall plan as
a matter of course.
Management does not contemplate that the Company would acquire or merge
with a business entity in which any affiliates of the Company have an
interest. Any such related party transaction, however remote, would be
submitted for approval by an independent quorum of the Board of Directors
(meaning those officers and directors not affiliated with the proposed merger
or acquisition candidate and therefore not within the domain of a conflict of
interest under principles of Corporate Law) and the proposed transaction
would be submitted to the shareholders for prior ratification in an
appropriate manner. None of the Company's managers, directors, or other
affiliated parties have had any contact, discussions, or other understandings
regarding any particular business opportunity at this time, regardless of any
potential conflict of interest issues. Accordingly, the potential conflict of
interest is merely a remote theoretical possibility at this time.
Neither the articles of incorporation nor bylaws of the Company explicitly
require a vote of shareholders for such matters, but it is anticipated that
the arrangement would be part of an overall reorganization or recapitalization
of the Company which would require shareholder approval under principles of
Wyoming Corporate Law.
Rights of Shareholders
It is presently anticipated by management that prior to consummating a
possible acquisition or merger, the Company will seek to have the transaction
ratified by shareholders in the appropriate manner. Most likely, this would
require a general or special shareholder's meeting called for such purpose,
wherein all shareholder's would be entitled to vote in person or by proxy. In
the notice of such a shareholder's meeting and proxy statement, the Company
will provide shareholders complete disclosure documentation concerning a
potential acquisition of merger candidate, including financial information
about the target and all material terms of the acquisition or merger
transaction. Neither the articles of incorporation nor bylaws of the
Company explicitly require a vote of shareholders for such matters, but it is
anticipated that the arrangement would be part of an overall reorganization or
recapitalization of the Company which would require shareholder approval under
principles of Wyoming Corporate Law.
Competition
Because the Company has not identified any potential acquisition or
merger candidate, it is unable to evaluate the type and extent of its likely
competition. The Company is aware that there are several other public
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companies with only nominal assets that are also searching for operating
businesses and other business opportunities as potential acquisition or merger
candidates. The Company will be in direct competition with these other public
companies in its search for business opportunities and, due to the Company's
lack of funds, it may be difficult to successfully compete with these other
companies.
Employees
As of the date hereof, the Company does not have any paid
employees and has no plans for retaining employees until such time as the
Company's business warrants the expense, or until the Company successfully
acquires or merges with an operating business. The Officers are
employees at-will working variable part-time hours as needed, but lack any
compensation agreements at this time, and are not being paid. The
Company may find it necessary to periodically hire part-time clerical help on
an as-needed basis.
Facilities
The Company is currently using as its principal place of business the
business offices of its President located in Casper, Wyoming. Although the
Company has no written agreement and pays no rent for the use of this
facility, it is contemplated that at such future time as an acquisition or
merger transaction may be completed, the Company will secure commercial office
space from which it will conduct its business. Until such an acquisition or
merger, the Company lacks any basis for determining the kinds of office space
or other facilities necessary for its future business. The Company has no
current plans to secure such commercial office space. It is also possible
that a merger or acquisition candidate would have adequate existing facilities
upon completion of such a transaction, and the Company's principal offices may
be transferred to such existing facilities.
Industry Segments
No information is presented regarding industry segments. The Company is
presently a development stage company seeking a potential acquisition of or
merger with a yet to be identified business opportunity. Reference is made to
the statements of income included herein in response to Part F/S of this Form
10-SB for a report of the Company's operating history for the past two fiscal
years.
<PAGE>Item 2. Management's Discussion and Analysis or Plan of Operation
The Company is considered a development stage company with no assets or
capital and with no operations or income since approximately 1990. The costs
and expenses associated with the preparation and filing of this registration
statement and other operations of the Company have been paid for by a
shareholder and a consultant of the Company, specifically Zenith S. Merritt
and H. DeWorth Williams (see Item 4, Security Ownership of Certain Beneficial
Owners and Management - Z.S. Merritt is the controlling shareholder). It
is anticipated that these persons will continue to advance moneys as needed to
pay for the Company's necessary expenses, including the filing of future
reports with the SEC. At this time, the only compensation arrangements
regarding these advances is that the persons advancing the funds are to be
reimbursed when the Company has funds available to repay these advances.
It is anticipated that the Company will require only nominal capital to
maintain the corporate viability of the Company and necessary funds will most
likely be provided by the Company's existing shareholders or its officers and
directors in the immediate future. However, unless the Company is able to
facilitate an acquisition of or merger with an operating business or is able
to obtain significant outside financing, there is substantial doubt about its
ability to continue as a going concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the
Company successfully completes an acquisition or merger. At that time,
management will evaluate the possible effects of inflation on the Company as
it relates to its business and operations following a successful acquisition
or merger.
Plan of Operation
During the next twelve months, the Company will actively seek out and
investigate possible business opportunities with the intent to acquire or
merge with one or more business ventures. In its search for business
opportunities, management will follow the procedures outlined in Item 1 above.
Because the Company lacks funds, it may be necessary for the officers
and directors to either advance funds to the Company or to accrue expenses
until such time as a successful business consolidation can be made. Management
intends to hold expenses to a minimum and to obtain services on a contingency
basis when possible. Further, the Company's directors will defer and not
accrue any compensation until such time as an acquisition or merger can
be accomplished and will strive to have the business opportunity provide their
remuneration. However, if the Company engages outside advisors or consultants
in its search for business opportunities, it may be necessary for the Company
to attempt to raise additional funds. As of the date hereof, the Company has
not made any arrangements or definitive agreements to use outside advisors or
consultants or to raise any capital. In the event the Company does need to
raise capital most likely the only method available to the Company would be
the private sale of its securities. Because of the nature of the Company as a
development stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a commercial
or private lender. There can be no assurance that the Company will be able to
obtain additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
PAGE
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The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is confident that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
Item 3. Description of Property
The information required by this Item 3 is not applicable to this Form
10-SB due to the fact that the Company does not own or control any material
property.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, to the best knowledge of the
Company as of April 30, 1997, with respect to each person known by the Company
to own beneficially more than 5% of the Company's outstanding common stock,
each director of the Company and all directors and officers of the Company as
a group.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
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Z.S. Merritt 253,400 50.7%
801 East A Street
Casper, Wyoming 82601
Sharon K. Fowler 42,500 8.5%
M13740 Box 1
Evansville, Wyoming 82636
Donn Douglas 40,000 8.0%
6445 East Ohio Avenue, Suite 350
Denver, Colorado 80226
Michael Ford 40,000 8.0%
1001 East Bayaud #1402
Denver, Colorado 80209
H. Jean Baker & Phyllis L. Baker 32,500 6.5%
P.O. Box 1314
Riverton, Wyoming 82501
Management:
Z.S. Merritt 253,400 50.7%
801 East A Street
Casper, Wyoming 82601
Thomas M. Hockaday 500 0.1%
1560 Nottingham
Casper, Wyoming 82609
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[Footnote continues on next page]PAGE
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Note: The Company has combined related parties for purposes of determining
beneficial ownership with regard to H. Jean Baker and Phyllis L. Baker
(combined with Jean R. Baker, Jon M. Baker, Kathleen K. Baker, and Phyllis L.
Baker) , Sharon K. Fowler (combined with Leslie J. Fowler, Michael D.
Fowler, Robert D. Fowler, and Robert G. Fowler) , and Z. S. Merritt
(combined with Aline Merritt, Dennis Merritt, and Dinah Merritt) , above,
to determine aggregate controlled shares. The Company has been advised that
each of the other persons listed above has sole voting power over the shares
indicated above. Percent of Class (third column above) is based on 500,000
shares of common stock outstanding on May 23, 1997.
Item 5. Directors, Executive Officers, Promoters and Controll Persons
The directors and executive officers of the Company and their respective ages
are as follows:
Name Age Position
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Zenith S. Merritt 69 President and Director
Thomas M. Hockaday 62 Secretary-Treasurer and Director
Jo Juliano-Smith 55 Director
All directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors. The Company has not
compensated its directors for service on the Board of Directors or any
committee thereof. As of the date hereof, no director has accrued any
expenses or compensation. Officers are appointed annually by the Board of
Directors and each executive officer serves at the discretion of the Board of
Directors. The Company does not have any standing committees at this time.
No director, officer, affiliate or promoter of the Company has, within
the past five years, filed any bankruptcy petition, been convicted in or been
the subject of any pending criminal proceedings, or is any such person the
subject of any order, judgment or decree involving the violation of
any state or federal securities laws.
The business experience of each of the persons listed above during the
past five years is as follows:
Z.S. Merritt has been President and a director of the Company since
December 15, 1994. For the last five years (and previously), Mr. Merritt has
also provided independent consulting services as a geologist and landman, as
well as acting as the owner and real estate broker for Merit Realty in Casper,
Wyoming. Mr. Merritt studied geology at the University of Wyoming, where he
received both a bachelor's and master's degree in geology.
Thomas M. Hockaday has been Vice President and a director of the Company
since December 15, 1994. For the last five years (and previously), Mr.
Hockaday worked as a real estate sales representative and investment advisor
for Merit Realty in Casper, Wyoming. Mr. Hockaday attended the Community
College of Cedar Rapids, Iowa, for two years, and has eighteen years of
continuing professional education in banking and financial studies.
Jo Juliano Smith has been a director of the Company since April 1, 1997.
She has over fifteen years of experience as a paralegal, and in recent years
(including the last five years) hasalso worked as a substance abuse
counselor. She has attended the University of Utah.
<PAGE> 12
Item 6. Executive Compensation
The Company has not had a bonus, profit sharing, or deferred compensation
plan for the benefit of its employees, officers or directors. The Company has
not paid any salaries or other compensation to its officers, directors or
employees for the years ended December 31, 1995 and 1996, nor at any time
during 1997. Further, the Company has not entered into an employment agreement
with any of its officers, directors or any other persons and no such
agreements are anticipated in the immediate future. It is intended that the
Company's directors will forego any compensation until such time as
an acquisition or merger can be accomplished and will strive to have the
business opportunity provide their remuneration. As of the date hereof, no
person has accrued any compensation from the Company.
Item 7. Certain Relationships and Related Transactions
During the Company's last two fiscal years, there have not been any
transactions between the Company and any officer, director, nominee for
election as director, or any shareholder owning greater than five percent (5%)
of the Company's outstanding shares, nor any member of the above referenced
individuals' immediate family.
Item 8. Description of Securities
Common Stock
The Company is authorized to issue 50,000,000 shares of common stock, no
par value, of which 500,000 shares are issued and outstanding as of the date
hereof. All shares of common stock have equal rights and privileges with
respect to voting, liquidation and dividend rights. Each share of common stock
entitles the holder thereof to (i) one non-cumulative vote for each share held
of record on all matters submitted to a vote of the stockholders; (ii) to
participate equally and to receive any and all such dividends as may be
declared by the Board of Directors out of funds legally available therefor;
and (iii) to participate pro rata in any distribution of assets available for
distribution upon liquidation of the Company. Stockholders of the Company have
no pre-emptive rights to acquire additional shares of common stock or any
other securities. The common stock is not subject to redemption and carries no
subscription or conversion rights. All outstanding shares of common stock are
fully paid and non-assessable.
Preferred Stock
The Company does not have any preferred stock, authorized or issued.
PART II
Item 10. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
No shares of the Company's common stock have previously been registered
with the Securities and Exchange Commission (the "Commission") or any state
securities agency or authority. The Company has made an application to the
NASD for the Company's shares to be quoted on the OTC Bulletin Board. The
Company's application to the NASD consists of current corporate information,
<PAGE> 13
financial statements and other documents as required by Rule 15c2-11 of the
Securities Exchange Act of 1934, as amended. The Rule 15c2-11 and NASD
requirements for Bulletin Board quotation consist of either (1) that the
domestic issuer has registered its securities under the 1933 or 1934 Acts and
is current in filing the required reports under the 1934 Act; or (2) that the
broker-dealer has obtained, and made available to any person on request,
certain relevant financial information relating to the domestic issuer, and
lacks any reasonable basis to suspect that the financial information is not
true and correct. Inclusion on the OTC Bulletin Board permits price
quotations for the Company's shares to be published by such service. The
Company's common shares are currently quoted at one-eighth (1/8th), but there
has not been any reported trading activity at that price. The quoted
price is a default quote for inactive stock as reported on an internet
quotation service, and does not distinguish bid, ask, or closing prices, nor
report any mark-ups included in the price. The Company is not aware of
any established trading market for its common stock nor is there any record of
any reported trades in the public market in recent years. The Company's common
stock has never traded in a public market since 1988.
If and when the Company's common stock is traded in the over-the-counter
market, most likely the shares will be subject to the provisions of Section
15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), commonly referred to as the "penny stock" rule. Section 15(g)
sets forth certain requirements for transactions in penny stocks and Rule
15g-9(d)(l) incorporates the definition of penny stock as that used in Rule
3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security
that has a market price less than $5.00 per share, subject to certain
exceptions. Rule 3a51-1 provides that any equity security is considered to be
a penny stock unless that security is: registered and traded on a national
securities exchange meeting specified criteria set by the Commission;
authorized for quotation on The NASDAQ Stock Market; issued by a registered
investment company; excluded from the definition on the basis of price (at
least $5.00 per share) or the issuer's net tangible assets; or exempted from
the definition by the Commission. If the Company's shares are deemed to be a
penny stock, trading in the shares will be subject to additional sales
practice requirements on broker-dealers who sell penny stocks to persons other
than established customers and accredited investors, generally persons with
assets in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of such securities and must
have received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in
penny stocks. Consequently, these rules may restrict the ability of broker
dealers to trade and/or maintain a market in the Company's common stock and
may affect the ability of shareholders to sell their shares.
PAGE
<PAGE> 14
As of May 23, 1997 there were 43 holders of record of the Company's
common stock.
As of the date hereof, the Company has issued and outstanding 500,000
shares of common stock. Of this total, all shares were issued in transactions
more than three years ago. ( For purposes of adjusting share ownership in
proportion to the contemporaneous increase in authorized stock, a forward
5-for-1 stock split occurred on January 19, 1996, increasing the number of
shares held by existing shareholders, which is not deemed a "new" issuance
; the stock was not quoted as of the date of this forward stock split.
) Thus, all shares are deemed to have been issued more than three years
ago and may be sold or otherwise transferred without restriction pursuant to
the terms of Rule 144 ("Rule 144") of the Securities Act of 1933, as amended
(the "Act"), unless held by an affiliate or controlling shareholder of the
Company. Of these shares, the Company has identified 253,900 shares as being
held by affiliates of the Company. The remaining 246,100 shares are deemed
free from restrictions and may be sold and/or transferred without further
registration under the Act.
As a shell company, the resale of the Company's stock may be limited
in certain states. The Company has not yet designated any states in which it
plans to seek registration, qualification, or exemption for its common stock,
so all shareholders are advised to seek local legal counsel regarding any
resale limitations in their state of residence. This matter will depend in
large part on considerations stemming from a potential merger or acquisition
candidate, which may vary to a large degree. However, it is likely that at
least Wyoming will be considered, due to the preponderance of the existing
shareholder base residing in that state. Wyoming exempts isolated or limited
offerings by nonissuers and certain other transactions; however, all
stockholders are again admonished to seek local legal counsel before entering
into any subsequent resale of their stock in the Company.
Pursuant to a special meeting of shareholders held on January 19,
1997, at which 100% of shareholders appeared, constituting a quorum, and a
unanimous majority voted for a resolution calling for the increase of the
authorized common stock by amendment of the article of incorporation of the
Company, authorized shares of common were so increased from 100,000 to
50,000,000 on January 19, 1997.
The 253,900 shares presently held by affiliates or controlling
shareholders of the Company may be sold pursuant to Rule 144, subject to the
volume and other limitations set forth under Rule 144. In general, under Rule
144 as currently in effect, a person (or persons whose shares are aggregated)
who has beneficially owned restricted shares of the Company for at least
one year , including any person who may be deemed to be an "affiliate" of
the Company (as the term "affiliate" is defined under the Act), is entitled to
sell, within any three-month period, an amount of shares that does not exceed
the greater of (i) the average weekly trading volume in the Company's common
stock during the four calendar weeks preceding such sale, or (ii) 1% of the
shares then outstanding. A person who is not deemed to be an "affiliate" of
the Company and who has held restricted shares for at least two years
would be entitled to sell such shares without regard to the resale limitations
of Rule 144.
PAGE
<PAGE> 15
Dividend Policy
The Company has not declared or paid cash dividends or made distributions
in the past, and the Company does not anticipate that it will pay cash
dividends or make distributions in the foreseeable future. The Company
currently intends to retain and reinvest future earnings, if any, to finance
its operations.
Item 2. Legal Proceedings
The Company is currently not a party to any material pending legal
proceedings and no such action by, or to the best of its knowledge, against
the Company has been threatened. The Company was inactive from 1990 through
the present date of this Form 10-SB. A small prior judgment, as reported in
the balance sheet for 1996 (See Part F/S - notes payable of $16,047), has
since been settled and released in full. In the absence of any other known
litigation matters pending or threatened, the Company believes that all
litigation matters are currently resolved.
Item 3. Changes in and Disagreements with Accountants
Item 3 is not applicable to this Form 10-SB.
Item 4.Recent Sales of Unregistered Securities
All issues of securities by the Company were made more than three years
ago.
Item 5. Indemnification of Directors and Officers
The Company has not made any provision for the indemnification of its
officers or directors. The Articles of Incorporation and by-laws do not have
any provisions for indemnification. Neither the Company's Articles of
Incorporation nor by-laws makes provisions for the purchase of liability
insurance on behalf of its officers or directors. The Company does not
maintain any such liability insurance.
Transfer Agent
The Company has designated Interstate Transfer Company, 56 West 400
South, Suite 260, Salt Lake City, Utah, 84101, as its transfer agent.
PART F/S
Financial Statements and Supplementary Data
The Company's financial statements for the years ended December 31, 1994,
1995, 1996 and June 30, 1997, have been examined to the extent indicated in
their reports by Jones, Jensen & Company, independent certified accountants,
and have been prepared in accordance with generally accepted accounting
principles and pursuant to Regulation S-B as promulgated by the Securities and
Exchange Commission and are included herein, on the following twenty-seven
(27) pages, in response to Part F/S of this Form 10-SB.
<PAGE> 16
PART III
Item 1. Index to Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
- ----------- ------------
2(I) Articles of Incorporation and all amendments pertaining thereto
2(ii) By-laws
4 Specimen Stock Certificate
27 Financial Data Schedule
Item 2. Description of Exhibits
See Item 1 above.
PAGE
<PAGE> 17
CONTENTS
WESTERN TECHNOLOGY & RESEARCH, INC.
FINANCIAL STATEMENTS
June 30, 1997 and December 31, 1996
Balance Sheets..............................................................18
Statements of Operations....................................................19
Statements of Stockholders' Equity (Deficit)................................20
Statements of Cash Flows....................................................21
Notes to the Financial Statements...........................................22
PAGE
<PAGE> 18
WESTERN TECHNOLOGY & RESEARCH, INC.
(A Development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1997 1996
------------- -------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash...................... $ - -
------------- -------------
Total Current Assets - -
------------- -------------
TOTAL ASSETS $ - $ -
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable.......... $ 75 $ 143
Current portion of notes
payable (Note 4) - 16,047
------------- -------------
Total Current Liabilities 75 16,190
------------- -------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 50,000,000 shares
authorized at no par value,
500,000 shares issued
and outstanding 97,212 92,960
Deficit accumulated during
the development stage (97,287) (109,150)
------------- -------------
Total Stockholders'
Equity (Deficit) (75) (16,190)
------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQITY (DEFICIT) $ - -
============= =============
</TABLE>
[The accompanying notes are an integral part of these financial statements.]
PAGE
<PAGE> 19
WESTERN TECHNOLOGY & RESEARCH, INC.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From Inception
September 19,
For the Three Months Ended For the Six Months
Ended 1984 through
June 30, June 30, June 30, June
30, June 30,
1997 1996 1997
1997 1997
---------- ----------- ------------
- ------------ ------------
<S> <C> <C> <C>
<C> <C>
SALES........................$ - $ - $ - $
- - $ -
----------- ----------- ------------
- ------------ ------------
EXPENSES..................... - - -
- - -
----------- ----------- ------------ ----------
- -- ------------
GAIN (LOSS) ON DISCONTINUED
OPERATIONS.................. - (411) 11,863
34,122 (97,287)
----------- ----------- ------------
- ------------ ------------
INCOME (LOSS) PRIOR TO
INCOME TAXES................ - (411) 11,863
34,122 (97,287)
PROVISION FORM INCOME TAXES
(NOTE 1).................... - - -
- - -
----------- ----------- ------------
- ------------ ------------
NET INCOME (LOSS) $ - $ (411) $ 11,863 $
34,122 $ (97,287)
=========== =========== ============
============ ============
NET EARNINGS (LOSS)
PER SHARE...................$ 0.00 $ (0.00) $ 0.02 $
0.07
========== =========== ============
============
</TABLE>
[The accompanying notes are an integral part of these financial statements.]
PAGE
<PAGE> 20
WESTERN TECHNOLOGY & RESEARCH, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common
Stock During the
- ---------------------------- Development
Shares
Amount Stage
-----------
- ------------ ------------
<S> <C> <C>
<C>
Balance at inception, September 19, 1984 - $
- - $ -
Net income for the period ended December 31, 1984 -
- - -
-----------
- ------------ ------------
Balance, December 31, 1984 -
- - -
Common stock issued for cash at $0.10 per share 110,400
11,040 -
Common stock issued for cash at $0.20 per share 105,000
21,000 -
Common stock issued for debt at $0.20 per share 500
100 -
Net income the year ended December 31, 1985 -
- - 3,644
-----------
- ------------ ------------
Balance, December 31, 1985 215,900
32,140 3,644
Common stock issued for cash at $0.20 per share 40,000
8,000 -
Net loss for the year ended December 31, 1986 -
- - (5,461)
-----------
- ------------ ------------
Balance, December 31, 1986 255,900
40,140 (1,817)
Net loss for the year ended December 31, 1987 -
- - (10,815)
-----------
- ------------ ------------
Balance, December 31, 1987 255,900
40,140 (12,632)
Common stock issued for cash at $0.20 per share 15,000
3,000 -
Common stock issued for property at $0.20 per share 30,000
6,000 -
Net loss for year ended December 31, 1988 - -
(20,494)
-----------
- ------------ ------------
Balance, December 31, 1988 300,900
49,140 (33,126)
Net loss for the year ended December 31, 1989 -
- - (30,603)
-----------
- ------------ ------------
Balance, December 31, 1989 300,900
49,140 (63,729)
Common stock issued for cash at $0.20 per share 5,000
1,000 -
Common stock issued in lieu of salary at $0.20
per share 10,000
2,000 -
Common stock issued for services at $0.20 per share 160,000
32,000 -
Common stock issued for note extension at $0.20
per share 5,000
1,000 -
Common stock issued for debt at $0.20 per share 6,600
1,320 -
Net loss for year ended December 31, 1990 -
- - (29,601)
-----------
- ------------ ------------
Balance, December 31, 1990 487,500
86,460 (93,330)
Net income for the year ended December 31, 1991 -
- - 1,504
-----------
- ------------ ------------
Balance, December 31, 1991 487,500
86,460 (91,826)
Net loss for the year ended December 31, 1992 -
- - (3,579)
-----------
- ------------ ------------
Balance, December 31, 1992 487,500
86,460 (95,405)
Net loss for the year ended December 31, 1993 -
- - (46,710)
-----------
- ------------ ------------
Balance, December 31, 1993 487,500
86,460 (142,115)
Common stock issued for cash payments made on
behalf of the Company at $0.20 per share 12,500
2,500 -
Net income for the year ended December 31, 1994 -
- - 2,918
-----------
- ------------ ------------
Balance, December 31, 1994 500,000
88,960 (139,197)
Net loss for the year ended December 31, 1995 -
- - (3,253)
-----------
- ------------ ------------
Balance, December 31, 1995 500,000
88,960 (142,450)
Services paid on the Company's behalf contributed
to capital -
4,000 -
Net income for the year ended December 31, 1996 -
- - 33,300
-----------
- ------------ ------------
Balance, December 31, 1996 500,000
92,960 (109,150)
Services paid on the Company's behalf contributed
to capital (Unaudited) -
4,252 -
Net income for the six months ended June 30, 1997
(Unaudited) -
- - 11,863
-----------
- ------------ ------------
Balance, June 30, 1997 (Unaudited) 500,000 $
92,960 $ (93,103)
===========
============ ============
</TABLE>
[The accompanying notes are an integral part of these financial statements.]
<PAGE> 21
WESTERN TECHNOLOGY & RESEARCH, INC.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From Inception
September 19,
For the Three Months Ended For the Six Months
Ended 1984 through
June 30, June 30, June 30, June
30, June 30,
1997 1996 1997
1997 1997
---------- ----------- ------------
- ------------ ------------
<S> <C> <C> <C>
<C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ - $ (411) $ 11,863 $
34,122 $ 97,287
Adjustments to reconcile
net income to cash flows:
Depreciation - - -
- - 36,988
(Gain) loss on disposal
of assets - - -
- - 35,779
Common stock issued for
services - - 4,252
- - 60,632
Interest accrued on note
payable - - 411
822 12,720
Income from debt release - - (16,142)
(37,654) (64,909) Changes in operating assets
and Liabilities:
(Increase) decrease in
accounts receivable and
related receivables - - -
- - (9,599)
(Increase) decrease in
inventory - - -
- - (2,745)
(Increase) decrease in
other assets - - -
- - (105)
Increase (decrease) in
accounts payable - - 27
2,710 249
---------- ----------- -----------
- ----------- -----------
Net cash provided (used)
By Operating Activities - - -
- - (28,277)
---------- ----------- -----------
- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of fixed assets - - -
- - (63,617)
Sale of fixed assets - - -
- - 3,300
---------- ----------- -----------
- ----------- -----------
Net cash provided (used)
By Investing Activities - - -
- - (60,317)
---------- ----------- -----------
- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayment of note payable - - -
- - (42,390)
Issuance of stock for cash - -
- - 36,580
Proceeds from note payable - - -
- - 94,404
---------- ----------- -----------
- ----------- -----------
Net cash provided (used)
By Financing Activities - - -
- - 88,594
---------- ----------- -----------
- ----------- -----------
NET INCREASE (DECREASE) IN CASH - - -
- - -
CASH AT BEGINNING OF PERIOD - - -
- - -
---------- ----------- -----------
- ------------ -----------
CASH AT END OF PERIOD $ - $ - $ - $
- - $ -
========== =========== ===========
============ ===========
CASH PAID DURING THE YEAR FOR:
Interest $ - $ - $ - $
- - $ -
Income taxes $ - $ - $ - $
- - $ -
NON CASH FINANCING ACTIVITIES
Issuance of stock for
Services $ - $ - $ 4,252 $
- - $ 60,632
</TABLE>
[The accompanying notes are an integral part of these financial statements.]
PAGE
<PAGE> 22
WESTERN TECHNOLOGY & RESEARCH, INC.
(A Development Stage Company)
Notes to Unaudited Financial Statements
NOTE 1 - CONDENSED CONSOLIDARTED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at June 30, 1997 and
for all periods presented have been made.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with general accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's December 31,
1996 audited consolidated financial statements. The results of operations for
the periods ended June 30, 1997 and 1996 are not necessarily indicative of the
operating results for the full year.
PAGE
<PAGE> 23
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
WESTERN TECHNOLOGY & RESEARCH, INC.
(Registrant)
By: /s/ Zenith S. Merritt
-----------------------------------
Date: September 5, 1997 ZENITH S. MERRITT, President
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001035901
<NAME> WESTERN TECHNOLOGY & RESEARCH, INC.
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-END> JUN-30-1997 DEC-31-1996
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 0
<CURRENT-LIABILITIES> 75 16,190
<BONDS> 0 0
0 0
0 0
<COMMON> 97,212 92,960
<OTHER-SE> (97,287) (109,150)
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 11,863 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 11,863 0
<EPS-PRIMARY> 0.02 0
<EPS-DILUTED> 0.02 0
</TABLE>