U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB-A1
First Amended Registration Statement on Form 10-SB-A1
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
UNITED STATES MINING & EXPLORATION, INC.
(Name of Small Business Issuer as specified in its charter)
UTAH 87-0401942B
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) ID. No.)
0-22851
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(SEC File No.)
5525 South 900 East, Suite #110
Salt Lake City, Utah 84117
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(Address of Principal Executive Office)
Issuer's Telephone Number, including Area Code: (801) 262-8844
Securities to be registered pursuant to Section 12(b) of the Exchange Act: None
Securities to be registered pursuant to Section 12(g) of the Exchange Act:
$0.001 par value common stock
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Title of Class
DOCUMENTS INCORPORATED BY REFERENCE: See the Exhibit Index herein.
<PAGE>
PART I
Item 1. Description of Business.
Business Development.
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United States Mining & Exploration, Inc. (the "Company") was organized
under the laws of the State of Utah on November 30, 1983, under the name
"Forward Electronics Corporation". The Company was formed to engage principally
in all aspects of manufacturing related to consumer and other electronic items
and to deal in and with property of all kinds necessary to, expedient to or
desirable for such manufacturing.
The Company was initially authorized to issue a total of 50,000,000 shares
of common stock, having a par value of one mill ($0.001) per share, with
fully-paid stock not to be liable for further call or assessment. Copies of the
Company's initial Articles of Incorporation and Bylaws are attached as exhibits
to this Registration Statement and incorporated herein by this reference. See
the Exhibit Index, Part III.
At the Company's inception, November 30, 1983, the Board of Directors
authorized the issuance of 1,250,000 "unregistered" and "restricted" shares of
its common stock to directors and executive officers of the Company for the
total consideration of $4,000. Thereafter, on February 9, 1984, the Company
commenced a public offering, pursuant to Rule 142b of the Utah Securities
Commission, offering 2,500,000 shares of its common stock for sale to the
public. As a result of the sale, less than maximum was sold and, Utah law
required the insiders to transfer back to the Company for cancellation, all but
684,800 of the 1,250,000 shares which had been issued at the time of the
organization of the Company. On February 17,1987, an additional 5,000,000 shares
of common stock were offered for sale, under the terms of a private offering. A
copy of the Offering Circular that the Company used in connection with this
offering is attached as an exhibit to this Registration Statement on Form 10-SB
- -A1, and is incorporated herein by this reference. See the Exhibit Index, Part
III.
On April 25, 1987, the Board of Directors resolved to reverse split the
issued and outstanding shares, consisting of 7,054,400 shares, on a basis of 1
for 10, leaving a total of 705,442 shares issued and outstanding after the
reverse split of the Company's common stock with no change to authorized
capital. All subsequent calculation reflect the aforementioned reverse split. On
July 5, 1988, at the annual meeting of the shareholders, the acquisition of
United States Mining and Exploration, Inc. (a Delaware corporation), was
ratified by the shareholders. As a result of that acquisition, all the assets
and proprietary technology of United States Mining and Exploration, Inc. were
acquired in exchange for the issuance of 19,289,333 shares of common stock. The
name of the Company was changed to United States Mining and Exploration, Inc. A
copy of the Articles of Amendment affecting the name change is attached as an
exhibit to this Registration Statement on Form 10-SB-A1, and is incorporated he
rein by this reference. See the Exhibit Index, Part III.
<PAGE>
On July 6, 1988, by resolution of the Board of Directors, 500,000 shares of
common stock were issued to members of the Board of Directors in payment of
services rendered. On July 1, 1988, the Company issued 300,000 shares of common
stock in return for all of the issued and outstanding stock of Ridge Rock Mining
Corporation (a Utah corporation), pursuant to an Agreement and Plan for
Reorganization between the Company and Ridge Rock Mining Corporation. This
wholly-owned subsidiary was involuntarily dissolved by the Division of Corporat
ions and Commercial Code of the State of Utah (the "Division") on November 1,
1990, for failure to file an annual report.
On January 20, 1989, 1,528,933 shares were returned to the Company for
cancellation to facilitate a future acquisition by the Company. On April 30,
1989, 1,528,933 shares of common stock were issued in return for all of the
issued and outstanding shares of Rocky Mountain Process Components, Inc. (a Utah
corporation). This wholly-owned subsidiary was involuntarily dissolved by the
Division on April 1, 1993, for failure to file an annual report.
After the merger with United States Mining and Exploration, Inc., the
Company became engaged in all aspects of designing, manufacturing, marketing and
dealing in and with gold placer mining equipment. The Company's operations were
unsuccessful and the Company has had no business operations since approximately
1990. Due to the substantial lapse of time since the occurrence of these events,
management does not anticipate that they will have any adverse impact on any
future operations in which the Company may engage.
On October 20, 1995, the Board of Directors, acting pursuant to Section
16-10a-821 of the Utah Revised Business Corporation Act, unanimously resolved
(i) to issue 3,385,000 "unregistered" and "restricted" shares of common stock to
Jenson Services, Inc., ("Jenson Services") a consultant to the Company,
in consideration of the sum f $3,385.00, which funds were to be used to pay
costs associated with legal fees and accounting costs.
On May 28, 1996, the Board of Directors, acting pursuant to Section
16-10a-821 of the Utah Revised Business Corporation Act, unanimously resolved
(i) to issue 8,103,380 "unregistered" and "restricted" shares of common stock to
Jenson Services, a consultant to he Company, in consideration of the sum of
$8,103.38, which funds were to be used to pay costs associated with settling
Company liabilities.
On February 13, 1997, the Board of Directors, acting pursuant to Section
16-10a-821 of the Utah Revised Business Corporation Act, unanimously resolved
(i) to issue 10,021,790 "unregistered" and "restricted" shares of common stock
to Jenson Services, in consideration of the sum of $10,021.79, which funds were
to be used to pay costs associated with legal fees and accounting costs.
Pursuant to the provisions of Section 16-10a-1006 of the Utah Revised
Business Corporation Act, on April 11, 1997 at a Special Meeting of
Stockholders, the corporation adopted Articles of Amendment to its Articles of
Incorporation: (i) to effect a 1 share for 86.321665 reverse split of the
Company's 42,404,945 then-outstanding shares of common stock, made effective on
June 2, 1997 when the Company's transfer agent posted the change, retaining the
authorized capital at 50,000,000 shares and the par value at one mill ($0.001)
per share, with appropriate adjustments being made in the additional paid in
capital and stated capital accounts of the Company and with fractional shares to
be rounded to the nearest whole share. A copy of the Articles of Amendment
effecting these changes is attached as an exhibit to this Registration
Statement, and is incorporated herein by this reference. See Exhibit Index, Part
III.
<PAGE>
There are 491,314 shares of common stock currently issued and outstanding.
On June 24, 1996, acting without a meeting pursuant to Section 16-10a-821
of the Utah Revised Business Corporation Act, the Board of Directors of the
Company unanimously resolved to adopt new Bylaws. The Board members approving
this resolution were Hubert I. Lambert, Sharon Lambert and Jeffrey I. Lambert. A
copy of the adopted Bylaws of the Company are attached as an exhibit to this
Registration Statement on Form 10-SB-A1, and is incorporated herein by
this reference. See the Exhibit Index, Part III.
At a meeting of the Board of Directors held on February 22, 1997, each of
the Company's then-existing directors and executive officers(Hubert I. Lambert,
Sharon Lambert and Jeffrey Lambert) resigned these positions in seriatim and
appointed the following persons to serve in the capacities indicated: Jeffrey D.
Jenson (President and director); Sheryl Ross (Vice President and director)and
Thomas J. Howells (Secretary and director). These appointments were made in
accordance with Sections 16-10a-810 and Section 16-10a-830 of the Utah Revised
Business Corporation Act.
On June 3, 1997, acting pursuant to Section 16-10a-821 of the Utah Revised
Business Corporation Act, the Board of Directors of the Company unanimously
resolved to amend the Company's Bylaws to exempt the Company from the provisions
of the Utah Control Shares Acquisitions Act (Section 61-6-2 et seq., Utah Code
Annotated) (the "Acquisitions Act"). The Board members approving this resolution
were Jeffrey D. Jenson, Thomas J. Howells and Sheryl Ross, each of whom was
appointed to the Board of Directors on February 22, 1997. A copy of the
amendment to the Bylaws of the Company are attached as an exhibit to this
Registration Statement on Form 10-SB-A1, and is incorporated herein by
this reference. See the Exhibit Index, Part III.
The Acquisitions Act, which applies only to certain types of publicly-held
corporations, provides that "control shares" acquired under certain
circumstances shall have the same voting rights as they had before the
acquisition only to the extent that the stockholders of the corporation have
approved such rights. The Acquisitions Act also gives dissenter's rights to the
stockholders in the event that full voting rights are accorded to shares
acquired in a "control share acquisition" and the acquiring person has acquired
"control shares" with at least a majority of all voting power. Section 61-6-6
permits a corporation's articles of incorporation or bylaws to provide for an
exemption from the Acquisitions Act. The net effect of the Company's exemption
from the Acquisitions Act is to remove the need for stockholder approval of
acquisitions of controlling interests in the Company. The Company will still be
subject to the provisions of Regulation 14A of the Securities and Exchange
Commission, regarding proxy solicitations. However, these provisions deal with
the nature and extent of disclosure required when a matter is to be voted on,
but not whether a matter is to be voted on; accordingly, Regulation 14A in no
way negates the effect of the exemption from the Acquisitions Act. See the
heading "Need for any Governmental Approval of Principal Products or Services"
under the caption "Business," herein.
The Company is filing a Form 10-SB pursuant to Regulation S-B for the
purpose of becoming a "fully reporting issuer" under Section 12(g) of Securities
Act of 1933 and the Securities Exchange Act of 1934. The Company filed the Form
10-SB, on a voluntarily basis, for the purpose of registering its securities
under Section 12(g).
<PAGE>
Business.
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The Company has had no business operations since approximately 1990. To the
extent that the Company intends to continue to seek the acquisition of assets,
property or business that may benefit the Company and its stockholders, the
Company is essentially a "blank check" company. The Company does not plan to use
any supplemental information, notices or advertisements in its search for
business opportunities. The Company plans to rely on the consulting services of
Jenson Services, the principal shareholder, for potential acquisitions or
mergers. Because the Company has virtually no assets, conducts no business and
has no employees, management anticipates that any such acquisition would require
the Company to issue shares of its common stock as the sole consideration for
the acquisition. This may result in substantial dilution of the shares of
current stockholders. The Company's Board of Directors shall make the final
determination whether to complete any such acquisition; the approval of
stockholders will not be sought unless required by applicable laws, rules and
regulations, the Company's Articles of Incorporation or Bylaws, as amended, or
contract. Even if stockholder approval is sought, Jenson Services, a consultant
to the Company, beneficially owns approximately 50.7% percent of the outstanding
shares of common stock of the Company, and could approve any acquisition,
reorganization or merger it deemed acceptable. The Company makes no assurance
that any future enterprise will be profitable or successful.
The Company is not currently engaging in any substantive business activity
and has no plans to engage in any such activity in the foreseeable future. In
its present form, the Company may be deemed to be a vehicle to acquire or merge
with a business or company. The Company does not intend to restrict its search
to any particular business or industry, and the areas in which it will seek out
acquisitions, reorganizations or mergers may include, but will not be limited
to, the fields of high technology, manufacturing, natural resources, service,
research and development, communications, transportation, insurance, brokerage,
finance and all medically related fields, among others. The Company recognizes
that because of its total lack of resources, the number of suitable potential
business ventures which may be available to it will be extremely limited, and
may be restricted to entities who desire to avoid what these entities may deem
to be the adverse factors related to an initial public offering ("IPO"). The
most prevalent of these factors include substantial time requirements, legal and
accounting costs, the inability to obtain an underwriter who is willing to
publicly offer and sell shares, the lack of or the inability to obtain the
required financial statements for such an undertaking, limitations on the amount
of dilution public investors will suffer to the benefit of the stockholders of
any such entities, along with other conditions or requirements imposed by
various federal and state securities laws, rules and regulations. Any of these
types of entities, regardless of their prospects, would require the Company to
issue a substantial number of shares of its common stock to complete any such
acquisition, reorganization or merger, usually amounting to between 80 and 95
percent of the outstanding shares of the Company following the completion of any
such transaction; accordingly, investments in any such private entity, if
available, would be much more favorable than any investment in the Company.
Management believes that there will be a change in control upon consummation of
an acquisition or merger. Past experience of Jenson Services has produced
a change in control universally with all companies Jenson Services has
consulted.
Over the past several years, Jenson Services has consulted with numerous
corporations in merger and acquisition transactions of the type being sought by
the Company. Services provided by Jenson Services typically include assisting
with corporate maintenance prior to reorganization, including maintaining the
corporation's good standing in its state of incorporation, assisting with the
preparation and filing of periodic reports with the Securities and Exchange
Commission (when applicable), assisting with the preparation and submission of
the documents and information required to be maintained by brokers and dealers
under Rule 15c2-11 of the Securities and Exchange Commission, as necessary,
gathering and reviewing information relating to potential transaction candidates
and reviewing such information with the Board of Directors of the consulting
corporation, and paying costs and expenses related to these matters. Jenson
Services also assists corporations in structuring reorganization
transactions. Corporations with which Jenson Services has consulted in these
regards include, for example: Miller Petroleum, Inc., a Tennessee
corporation (formerly known as "Triple Chip Systems, Inc.," a Delaware
corporation); Entertainment Technologies & Programs, Inc., a
Delaware corporation (formerly known as "Westcott Financial Corporation");
Jungle Street, Inc., a Utah corporation; Phoenix Associates Land Syndicate, a
Nevada corporation (formerly known as "Ro-Mac Gold, Ltd."); Tengasco, Inc., a
Tennessee corporation (formerly known as "Onasco Companies, Inc.," a Utah
corporation); and Applied Voice Recognition, Inc., a Utah corporation (formerly
known as "Summa Vest, Inc."). Each of these corporations was a publicly-held
entity at the time of its reorganization; each of these reorganizations resulted
in a change of control of the publicly-held corporations to the former
stockholders of the privately-held corporations with which the
reorganizations were consummated.
There is no written agreement for the rendering of services by Jenson
Services to the Company. In the prior experience of Jenson Services,
compensation has generally been agreed upon prior to the completion of any
reorganization transaction. Such compensation may include cash or securities in
consideration of services rendered and reimbursement for costs and expenses
incurred by Jenson Services. Cash compensation has ranged from a nominal
amount to over $100,000.
<PAGE>
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none of
which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly analyze without
referring to any objective criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of changing
market strategies, plant or product expansion, changes in product emphasis,
future management personnel and changes in innumerable other factors. Further,
in the case of a new business venture or one that is in a research and
development mode, the risks will be substantial, and there will be no objective
criteria to examine the effectiveness or the abilities of its management or its
business objectives. Also, a firm market for its products or services may yet
need to be established, and with no past track record, the profitability of any
such entity will be unproven and cannot be predicted with any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, since the Company has virtually no current assets or cash
reserves, these activities may be limited, and if undertaken, the cost and
expense thereof will be advanced by management, and may further dilute the
interest of the stockholders of the Company.
The Company is unable to predict the time as to when and if it may actually
participate in any specific business endeavor. The Company anticipates that
proposed business ventures will be made available to it through personal
contacts of directors, executive officers and principal stockholders,
professional advisors, broker dealers in securities, venture capital personnel,
members of the financial community and others who may present unsolicited
proposals. In certain cases, the Company may agree to pay a finder's fee or to
otherwise compensate the persons who submit a potential business endeavor in
which the Company eventually participates. Such persons may include the
Company's directors, executive officers, beneficial owners or their affiliates.
In this event, such fees may become a factor in negotiations regarding a
potential acquisition and, accordingly, may present a conflict of interest for
such individuals. See the caption "Conflicts of Interest; Related Party
Transactions," below.
<PAGE>
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business or
company in which the Company's executive officers, directors, beneficial owners
or their affiliates may have an ownership interest. Current Company policy does
not prohibit such transactions. Because no such transaction is currently
contemplated, it is impossible to estimate the potential pecuniary benefits to
these persons.
Although it currently has no plans to do so, depending on the nature and
extent of services rendered, the Company may compensate members of management in
the future for services that they may perform for the Company. Because the
Company currently has virtually no resources, and is unlikely to have any
appreciable resources until it has completed a merger or acquisition, management
expects that any such compensation would take the form of an issuance of the
Company's stock to these persons; this would have the effect of further diluting
the holdings of the Company's other stockholders.
Further, substantial fees are often paid in connection with the completion
of these types of acquisitions, reorganizations or mergers, ranging from a small
amount to as much as $250,000. These fees are usually divided among promoters or
founders, after deduction of legal, accounting and other related expenses, and
it is not unusual for a portion of these fees to be paid to members of
management or to principal stockholders as consideration for their agreement to
retire a portion of the shares of common stock owned by them. Such fees may
become a factor in negotiations regarding any potential acquisition by the
Company and, accordingly, may present a conflict of interest for such
individuals. See the caption "Conflicts of Interest; Related Party
Transactions."
Involvement in Other "Blank Check" Companies.
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Sheryl Ross, who is a director and the President of the Company, was
formerly a director, Secretary and Treasurer of Globesat Holding Corp., a Utah
corporation that may have been deemed to be a "blank check" company.
Wayne R. Bassham is a director and Vice President of the Company. Mr.
Bassham has never been involved with any other "blank check" companies.
Thomas J. Howells is a director and Secretary of the Company. Mr. Howells
has served since July 1996 as director and Vice-President of Micro-Hydro Power,
Inc., a Utah corporation. Other than the Company, Mr. Howells was Secretary,
Treasurer and Director of Ro-Mac Gold, Ltd., a Nevada corporation, from January
1996 until its reorganization in October, 1996. Ro-Mac acquired all of the
outstanding securities of Phoenix Associates, Ltd., a Covington, Louisiana based
Louisiana corporation ("Phoenix Associates"). Phoenix Associates became a
wholly-owned subsidiary of the Company. Mr. Howells was also President and
Director of React Systems, Inc., a Nevada Corporation from April 1995 to
September 1995. Mr. Howells is currently an officer and director of
Intercontinental Strategic Minerals, a Utah corporation in good standing. During
the time that Mr. Howells was involved with these companies, they could be
considered "blank check" companies.
No current director or executive officer has been involved in any initial
public offering involving the securities of a "blank check" company in the
ten-year period immediately preceding the date of this Registration Statement.
None of the Officers, Directors, or employees of Jenson Services have
been involved in a "Blank Check Offering" in the ten year preceding the date of
this Registration Statement.
<PAGE>
Risk Factors.
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In any business venture, there are substantial risks specific to the
particular enterprise and which cannot be ascertained until a potential
acquisition, reorganization or merger candidate has been identified; however, at
a minimum, the Company's present and proposed business operations will be highly
speculative and subject to the same types of risks inherent in any new or
unproven venture, and will include those types of risk factors outlined below
and in the initial Offering Circular of the Company, a copy of which is attached
as an exhibit to this Registration Statement on Form 10-SB-A1. See the
Exhibit Index, Part III.
Limited Assets; No Source of Revenue. The Company has extremely limited
assets and has had no revenue in either of its two most recent calendar years or
to the date hereof. Nor will the Company receive any revenues until it completes
an acquisition, reorganization or merger, at the earliest. Jenson Services
intends to continue to loan the company money to pay for the costs of evaluating
potential merger candidates. The loans are due upon demand. There is presently
no agreement between the Company and Jenson Services with regard to any
such loan. The Company can provide no assurance that any acquired business will
produce any material revenues for the Company or its stockholders or that any
such business will operate on a profitable basis.
Discretionary Use of Proceeds; "Blank Check" Company. Because the Company
is not currently engaged in any substantive business activities, as well as
management's broad discretion with respect to the acquisition of assets,
property or business, the Company may be deemed to be a "blank check" company.
Although management intends to apply substantially all of the proceeds that it
may receive through the issuance of stock or debt to a suitable acquisition,
subject to the criteria identified above, such proceeds will not otherwise be
designated for any more specific purpose. The Company can provide no assurance
that any allocation of such proceeds will allow it to achieve its business
objectives.
Absence of Substantive Disclosure Relating to Prospective Acquisitions.
Because the Company has not yet identified any assets, property or business that
it may potentially acquire, potential investors in the Company will have
virtually no substantive information upon which to base a decision whether or
not to invest in the Company. Potential investors would have access to
significantly more information if the Company had already identified a potential
acquisition or if the acquisition target had made an offering of its securities
directly to the public. The Company can provide no assurance that any investment
in the Company will not ultimately prove to be less favorable than such a direct
investment.
Unspecified Industry and Acquired Business; Unascertainable Risks. To date,
the Company has not identified any particular industry or business in which to
concentrate its acquisition efforts. Accordingly, prospective investors
currently have no basis to evaluate the comparative risks and merits of
investing in the industry or business in which the Company may invest. To the
extent that the Company may acquire a business in a highly risky industry, the
Company will become subject to those risks. Similarly, if the Company acquires a
financially unstable business or a business that is in the early stages of
development, the Company will become subject to the numerous risks to which such
businesses are subject. Although management intends to consider the risks
inherent in any industry and business in which it may become involved, there can
be no assurance that it will correctly assess such risks.
Uncertain Structure of Acquisition. Management has had no preliminary
contact or discussions regarding, and there are no present plans, proposals or
arrangements to acquire any specific assets, property or business. Accordingly,
it is unclear whether such an acquisition would take the form of an exchange of
capital stock, a merger or an asset acquisition. However, because the Company
has extremely limited resources as of the date of this Registration Statement,
management expects that any such acquisition would take the form of an exchange
of capital stock. See Part I, Item 2 of this Registration Statement.
<PAGE>
State Restrictions on "Blank Check" Companies. A total of 36 states
prohibit or substantially restrict the registration and sale of "blank check"
companies within their borders. Additionally, 36 states use "merit review
powers" to exclude securities offerings from their borders in an effort to
screen out offerings of highly dubious quality. See Paragraph 8221, NASAA
Reports, CCH Topical Law Reports, 1990. The Company intends to comply fully with
all state securities laws, and plans to take the steps necessary to ensure that
any future offering of its securities is limited to those states in which such
offerings are allowed. However, these legal restrictions may have a material
adverse impact on the Company's ability to raise capital because potential
purchasers of the Company's securities must be residents of states that permit
the purchase of such securities. These restrictions may also limit or prohibit
stockholders from reselling shares of the Company's common stock within the
borders of regulating states.
By regulation or policy statement, eight states (Idaho, Maryland, Missouri,
Nevada, New Mexico, Pennsylvania, Utah and Washington), some of which are
included in the group of 36 states mentioned above, place various restrictions
on the sale or resale of equity securities of "blank check" or "blind pool"
companies. These restrictions include, but are not limited to, heightened
disclosure requirements, exclusion from "manual listing" registration exemptions
for secondary trading privileges and outright prohibition of public offerings of
such companies.
In most jurisdictions, "blank check" and "blind pool" companies are not
eligible for participation in the Small Corporate Offering Registration ("SCOR")
program, which permits an issuer to notify the Securities and Exchange
Commission of certain offerings registered in such states by filing a Form D
under Regulation D of the Securities and Exchange Commission. All states (with
the exception of Alabama, Delaware, Florida, Hawaii, Illinois, Minnesota,
Nebraska and New York) have adopted some form of SCOR. States participating in
the SCOR program also allow applications for registration of securities by
qualification by filing a Form U-7 with the states' securities commissions.
Nevertheless, the Company does not anticipate making any SCOR offering or other
public offering in the foreseeable future, even in any jurisdiction where it may
be eligible for participation in SCOR despite its status as a "blank check" or
"blind pool" company.
The net effect of the above-referenced laws, rules and regulations will be
to place significant restrictions on the Company's ability to register, offer
and sell and/or to develop a secondary market for shares of the Company's common
stock in virtually every jurisdiction in the United States.
Management to Devote Insignificant Time to Activities of the Company.
Members of the Company's management are not required to devote their full time
to the affairs of the Company and spend approximately ten hours per month
dealing with Company activities. Because of their time commitments, as well as
the fact that the Company has no business operations, the members of management
anticipate that they will devote an insignificant amount of time to the
activities of the Company, at least until such time as the Company has
identified a suitable acquisition target. There are no arrangements, agreements
or understandings between non-management shareholders and management under which
non-management shareholders may directly participate in or influence the
management of the Company's affairs. However, one of the officers and directors;
Thomas J. Howells, Secretary and Director, is employed by Jenson Services,
consultant and shareholder of the Company. Management exercises its independent
judgement in all rights and is strictly independent. Jenson Services, a
non-management shareholder, will exercise its voting rights to continue to elect
the current directors to the Company's board.
<PAGE>
Conflicts of Interest; Related Party Transactions.
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Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business or
company in which the Company's executive officers, directors, beneficial owners
or their affiliates may have an ownership interest. Such a transaction may occur
if management deems it to be in the best interests of the Company and its
stockholders, after consideration of the above referenced factors. A transaction
of this nature would present a conflict of interest to those parties with a
managerial position and/or an ownership interest in both the Company and the
acquired entity, and may compromise management's fiduciary duties to the
Company's stockholders. An independent appraisal of the acquired company may or
may not be obtained in the event a related party transaction is contemplated.
Furthermore, because management and/or beneficial owners of the Company's common
stock may be eligible for finder's fees or other compensation related to
potential acquisitions by the Company, such compensation may become a factor in
negotiations regarding such potential acquisitions. In regard to the order of
priority for the presentation of business opportunities to management and
shareholders of the Company and other "blank check" companies with which the
Company's Officers and Directors are affiliated; Thomas J. Howells, the
Company's Secretary and Director, is also an Officer and Director of Micro-Hydro
Power, Inc. and Intercontinental Strategic Minerals, Inc., which is not
presently a candidate for a business transaction. All other positions held in
blank check companies by Officers and Directors have been resigned. As a
consultant, Jenson Services, Inc., provides a checklist of material facts on
available companies for a merger and then leaves the ultimate decision up to the
private company.
Voting Control. Due to its ownership of a majority of the shares of the
Company's outstanding common stock, Jenson Services has the ability to
elect all of the Company's directors, who in turn elect all executive officers,
without regard to the votes of other stockholders.
No Established Market for Common Stock; No Market for Shares. The Company's
common stock is currently listed in the "pink sheets" of the National Quotation
Bureau, Inc. (the "NQB") and on the OTC Bulletin Board of the National
Association of Securities Dealers, Inc. (the "NASD"). However, there is
currently no "established trading market" for such shares; there can be no
assurance that such a market will ever develop or be maintained. Any market
price for shares of common stock of the Company is likely to be very volatile,
and numerous factors beyond the control of the Company may have a significant
effect. In addition, the stock markets generally have experienced, and continue
to experience, extreme price and volume fluctuations which have affected the
market price of many small capital companies and which have often been unrelated
to the operating performance of these companies. These broad market
fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Company's common stock in any market
that may develop.
Risks of "Penny Stock." The Company's common stock may be deemed to be
"penny stock" as that term is defined in Reg. Section 240.3a51-1 of the
Securities and Exchange Commission. Penny stocks are stocks (i) with a price of
less than five dollars per share; (ii) that are not traded on a "recognized"
national exchange; (iii) whose prices are not quoted on the NASDAQ automated
quotation system (NASDAQ-listed stocks must still meet requirement (i) above);
or (iv) is an issuer with net tangible assets less than $2,000,000 (if the
issuer has been in continuous operation for at least three years) or $5,000,000
(if in continuous operation for less than three years), or with average revenues
of less than $6,000,000 for the last three years.
<PAGE>
There has been no "established public market" for the Company's common
stock during the past five years. At such time as the Company completes a merger
or acquisition transaction, if at all, it may attempt to qualify for listing on
either NASDAQ or a national securities exchange. However, at least initially,
any trading in its common stock will most likely be conducted in the
over-the-counter market in the "pink sheets" or the "Electronic Bulletin Board"
of the National Association of Securities Dealers, Inc. (the "NASD").
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Reg.
Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange Commission
requires broker-dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
the Company's common stock to resell their shares to third parties or to
otherwise dispose of them.
Principal Products and Services.
- ----------------------------------------
The limited business operations of the Company, as now contemplated,
involve those of a "blank check" company. The only activity to be conducted by
the Company is to maintain its good standing in the State of Utah and to seek
out and investigate the acquisition of any viable business opportunity by
purchase and exchange for securities of the Company or pursuant to a
reorganization or merger through which securities of the Company will be issued
or exchanged.
Distribution Methods of the Products or Services.
- -------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts, professionals,
securities broker dealers, venture capital personnel, members of the financial
community and others who may present unsolicited proposals; the Company may also
advertise its availability as a vehicle to bring a company to the public market
through a "reverse" reorganization or merger.
<PAGE>
Status of any Publicly Announced New Product or Service.
- --------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
- ---------------------------------------
There are literally thousands of "blank check" companies engaged in
endeavors similar to those engaged in by the Company; many of these companies
have substantial current assets and cash reserves. Competitors also include
thousands of other publicly-held companies whose business operations have proven
unsuccessful, and whose only viable business opportunity is that of providing a
publicly-held vehicle through which a private entity may have access to the
public capital markets. There is no reasonable way to predict the competitive
position of the Company or any other entity in the strata of these endeavors;
however, the Company, having no assets and no cash reserves, will no doubt be at
a competitive disadvantage in competing with entities which have recently
completed IPO's, have cash resources and have limited operating histories when
compared with the history and past failures of the Company.
Sources and Availability of Raw Materials and Names of Principal Suppliers.
- -------------------------------------------------------------------------------
None; not applicable.
Dependence on One or a Few Major Customers.
- --------------------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions,
Royalty Agreements or Labor Contracts.
- -------------------------------------------------------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or Services.
- ------------------------------------------------------------------------------
On the effectiveness of the Company's Registration Statement on Form 10-SB,
the Company will be subject to Regulation 14A regarding proxy solicitations
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (the "1934 Act"). Section 14(a) of the 1934 Act
requires all companies with securities registered pursuant to Section 12(g)
thereof to comply with the rules and regulations of the Securities and Exchange
Commission regarding proxy solicitations outlined in Regulation 14A. Matters
submitted to stockholders of the Company at a special or annual meeting thereof
or pursuant to a written consent shall require the Company to provide its
stockholders with the information outlined in Schedules 14A or 14C of Regulation
14; preliminary copies of this information must be submitted to the Securities
and Exchange Commission at least 10 days prior to the date that definitive
copies of this information are forwarded to stockholders.
<PAGE>
Management intends to conduct a full evaluation of the worthiness of any
business proposal presented to it; nonetheless, it believes this process may
provide additional time within which to evaluate any business proposal presented
to it, and may eliminate proposals from entities not willing to undergo the
public and agency scrutiny involved in providing and filing information required
under Regulation 14. Management recognizes that this filing process may deter
other potential business venturers by reason of their inability to predict the
timeliness of their potential acquisition, reorganization or merger due to the
uncertainty related to the time involved in reviewing Regulation 14A filings by
the Securities and Exchange Commission; however, acquisitions or reorganizations
not requiring stockholder approval may be completed by management, in its sole
discretion, with the submission by management of an Information Statement
pursuant to Regulation 14C outlining any remedial proposals attendant to any
such acquisition or reorganization, including changing the name of the Company
or increasing or decreasing the number of authorized or outstanding shares of
the Company's common stock.
Costs associated with filings required by the Company under Section 12(g)
of the 1934 Act and Regulation 14A of the Securities and Exchange Commission
will have to be advanced by management, the Company's principal stockholders or
any potential business venturer, and may further dilute the interest of the
public stockholders. In the case of a merger requiring prior stockholder
approval and the submission of financial statements of the Company and other
party or parties to the merger, legal and accounting costs will be significantly
higher, even though the adoption, ratification and the approval of any such
merger will be virtually assured if recommended by Jenson Services, Inc., the
principal stockholder of the Company.
Effect of Existing or Probable Governmental Regulations on Business.
- -------------------------------------------------------------------------------
Since the Company was initially incorporated, federal and state securities
laws, rules and regulations have made the participation in or the conducting of
an IPO substantially easier for certain small and developmental stage companies,
reducing the time constraints previously involved, the legal and accounting
costs and the financial periods required to be included in the financial
statements. Rule 504 of Regulation D of the Securities and Exchange Commission
no longer requires the filing of a Registration Statement with any state or
territory as a condition to its use; however, this Rule is no longer available
to "blank check" companies. Accordingly, because the Company is presently deemed
to be a "blank check" company, this method of raising funds is foreclosed to it.
Rule 504 is also not available to "reporting issuers," which the Company will
become on the effectiveness of this Registration Statement.
<PAGE>
The integrated disclosure system for small business issuers adopted by the
Securities and Exchange Commission in Release No. 34-30968 and effective as of
August 13, 1992, substantially modified the information and financial
requirements of a "Small Business Issuer," defined to be an issuer that has
revenues of less than $25 million; is a U.S. or Canadian issuer; is not an
investment company; and if a majority owned subsidiary, the parent is also a
small business issuer; provided, however, an entity is not a small business
issuer if it has a public float (the aggregate market value of the issuer's
outstanding securities held by non-affiliates) of $25 million or more.
A number of state securities commissions have adopted the use of Form U-7
for SCOR, which also substantially simplifies the registration process for
IPO's; Form U-7 is primarily used in connection with offerings conducted
pursuant to Rule 504 of the Securities and Exchange Commission, but is not
limited to this use. To the extent that Rule 504 and the use of SCOR are
unavailable to the Company due to its status as a "blank check" company, the use
of Form U-7 will also be unavailable in this regard.
The Securities and Exchange Commission, state securities commissions and
the North American Securities Administrators Association, Inc., ("NASAA") have
expressed an interest in adopting policies that will streamline the registration
process and make it easier for a small business issuer to have access to the
public capital markets. The present laws, rules and regulations designed to
promote availability for the small business issuer to these capital markets and
similar laws, rules and regulations that may be adopted in the future will
substantially limit the demand for "blank check" companies like the Company, and
may make the use of these companies obsolete.
Research and Development.
- ----------------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
- -----------------------------------------------------------------------
None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on any business venture viewed by the Company as an
attractive acquisition, reorganization or merger candidate, and these factors
may further limit the number of potential candidates available to the Company
for acquisition, reorganization or merger.
Number of Employees.
- ----------------------------
None.
Item 2. Management's Discussion and Analysis or Plan of Operation.
- ------------------------------------------------------------------------------
<PAGE>
Plan of Operation.
- ----------------------
The Company has not engaged in any material operations or had any revenues
from operations during the last two calendar years. The Company's plan of
operation for the next 12 months is to maintain its good standing in the State
of Utah and to continue to seek the acquisition of assets, property or business
that may benefit the Company and its stockholders. Because the Company has
virtually no resources, management anticipates that to achieve any such
acquisition, the Company will be required to issue shares of its common stock as
the sole consideration for such acquisition.
During the next 12 months, the Company's only foreseeable cash requirements
will relate to maintaining the Company in good standing or the payment of
expenses associated with reviewing or investigating any potential business
venture, which may be advanced by management or principal stockholders as loans
to the Company. Because the Company has not identified any such venture as of
the date of this Registration Statement, it is impossible to predict the amount
of any such loan. However, any such loan will not exceed $25,000 and will be on
terms no less favorable to the Company than would be available from a commercial
lender in an arms length transaction. As of the date of this Registration
Statement, the Company has not begun seeking any specific acquisition.
Because the Company is not currently making any offering of its securities,
and does not anticipate making any such offering in the foreseeable future,
management does not believe that Rule 419 promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended, concerning
offerings by blank check companies, will have any effect on the Company or any
activities in which it may engage in the foreseeable future.
Item 3. Description of Property.
- -------------------------------------
The Company has no assets, property or business; its principal executive
office address and telephone number are the business office address and
telephone number of its consultant and principal stockholder, Jenson Services,
and are provided at no cost. Because the Company has no business, its
activities have been limited to keeping itself in good standing in the State of
Utah and, recently, with preparing this Registration Statement and the
accompanying financial statements. These activities have consumed an
insignificant amount of management's time; accordingly, the costs to Jenson
Services, Inc. of providing the use of its office and telephone have been
minimal.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- --------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- -------------------------------------------------------------
The following table sets forth the shareholdings of those persons who own
more than five percent of the Company's common stock as of May 31, 1997:
<PAGE>
<TABLE>
<CAPTION>
Number Percentage
Name and Address of Shares Beneficially Owned of Class
- ---------------------- ----------------------------------- --------
<S> <C> <C>
Jenson Services, Inc.* 249,188* 50.7%
5525 S. 900 E., Ste. 110
Salt Lake City, UT
84117
Hubert Lambert & 198,569 40.4%
Sharon Lambert
1670 E. Hidden Valley Club Cr.
Sandy, Utah 84092 --------- --------
* Jenson Services is beneficially owned by Duane S. Jenson and Jeffrey
D. Jenson, who are its directors and officers.
</TABLE>
Security Ownership of Management.
- ---------------------------------
The following table sets forth the shareholdings of the Company's directors
and executive officers as of May 31, 1996:
<TABLE>
<CAPTION>
Number Percentage
Name and Address of Shares Beneficially Owned of Class
- ---------------------- ------------------------------- ----------
<S> <C> <C>
Wayne R. Bassham 240* 0*
8867 S. Capella Way
Sandy, UT 84093
Sheryl Ross 0 0
455 E. 500 S., Ste.205
Salt Lake City, Utah
84117
Thomas J. Howells** 0 0
5525 S. 900 E., Ste. 110
Salt Lake City, UT
84117
All directors and executive 240* 0*
officers as a group (3)
* On or about June 30, 1997, Mr. Bassham purchased 240 shares of common
stock on the open market. Equating to less than one-tenth of one percent of the
issued and outstanding class.
** Thomas J. Howells, the Company's Secretary and a Director, is an employee
of Jenson Services.
</TABLE>
See Item 5, Part I, below, for information concerning the offices or other
capacities in which the foregoing persons serve with the Company.
Changes in Control.
- -------------------------
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- -----------------------------------------------------------------------
Identification of Directors and Executive Officers.
- -------------------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders (held in March of each year) or until their
successors are elected or appointed and qualified, or their prior resignation or
termination.
<TABLE>
<CAPTION>
Date of Date of
Positions Election Termination
Name Held or Designation or Resignation
- ------- ------------ -------------- -------------
<S> <C> <C> <C>
Sheryl Ross President 6/10/97 *
and Director
Wayne R. Bassham Vice President 6/10/97 *
and Director
Thomas J. Howells Secretary 6/22/97 *
and Director
</TABLE>
* These persons presently serve in the capacities indicated.
<PAGE>
Business Experience.
- --------------------
Wayne R. Bassham, Vice President and Director is 39 years of age. He has
been employed by Harley-Davidson of Salt Lake City for the past seven years.
Sheryl Ross, Director and President is 48 years of age. She has been
employed as a legal secretary and office manager for Leonard W. Burningham, Esq.
since 1970. She attended the University of Utah from 1985 to 1987. Ms. Ross has
been the President of the Company since June, 1997, and served as its Vice
President from February, 1997, to June, 1997.
Thomas J. Howells, Director and Secretary is 25 years old. Mr. Howells has
been working as an investment consultant with Jenson Services, which is a
consultant to and a majority stockholder in the Company, for the past year and a
half. Mr. Howells attended Westminster College of Salt Lake City from 1991 until
1995. Mr. Howells received a B.A. in Business from Westminster College 1993, at
which time he entered the M.B.A. program. He is also an Army Reserve Officer
serving as a Platoon Leader for a Combat Engineer unit.
Significant Employees.
- --------------------------
The Company has no employees who are not executive officers, but who are
expected to make a significant contribution to the Company's business.
Family Relationships.
- -----------------------------
There are no family relationships between any directors or executive
officers of the Company, either by blood or by marriage.
<PAGE>
Involvement in Certain Legal Proceedings.
- ---------------------------------------------
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of the
Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the bankruptcy or
two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or
(4) was found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.
<PAGE>
Item 6. Executive Compensation.
- --------------------------------
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Years or Other Restricted Option/ LTIP All
Principal Periods $ $ Annual Stock SAR's Payouts Other
Position Ended Salary Bonus Compen- Awards ($) (#) ($) Compen-
1995, sation($) sation
1996 & ($)
1997
Sheryl Ross 0 0 0 0 0 0 0 0
President,
Director
Wayne R.
Bassham, 0 0 0 0 0 0 0 0
Vice President
Director
Thomas J.
Howells* 0 0 0 0 0 0 0 0
Secretary,
Director
</TABLE>
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the fiscal
years ended March 31, 1997, or 1996, or the period ending on the date of this
Registration Statement. Further, no member of the Company's management has been
granted any option or stock appreciation right; accordingly, no tables relating
to such items have been included within this Item.
Although it currently has no plans to do so, depending on the nature and
extent of services rendered, the Company may compensate members of management in
the future for services that they may perform for the Company. Because the
Company currently has virtually no resources, and is unlikely to have any
appreciable resources until it has completed a merger or acquisition, management
expects that any such compensation would take the form of an issuance of the
Company's stock to these persons; this would have the effect of further diluting
the holdings of the Company's other stockholders. See the caption "Business of
this Registration Statement.
<PAGE>
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
There are no arrangements pursuant to which any of the Company's directors
was compensated during the Company's last completed calendar year for any
service provided as director.
Employment Contracts and Termination of Employment
and Change-in-Control Arrangements.
- ----------------------------------------------------------------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or its subsidiaries, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
Item 7. Certain Relationships and Related Transactions.
- ---------------------------------------------------------------------
<PAGE>
Transactions with Management and Others.
- -----------------------------------------------------
There have been no material transactions, series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.
However, see Part I, Item I of this Registration Statement.
Certain Business Relationships.
- ---------------------------------------
There have been no material transactions, series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.
However, see Part I, Item 1 of this Registration Statement.
Indebtedness of Management.
- ------------------------------------
There have been no material transactions, series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate, family of any of the foregoing persons, had a material interest.
However, see Part I, Item 1 of this Registration Statement.
Parents of the Issuer.
- -------------------------
Jenson Services, Inc. and the Lambert family are the principal
stockholders, may be deemed to be parents of the Company. See Part I, Item 1 of
this Registration Statement.
Transactions with Promoters.
- ------------------------------------
There have been no material transactions, series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any promoter or founder, or any member of
the immediate family of any of the foregoing persons, had a material interest.
<PAGE>
However, on, October 20, 1995, May 28, 1996, and February 13, 1997, the
Board of Directors of the Company resolved to issue, respectively; (3,385,000),
(8,103,380), and (10,021,790) pre-split "unregistered" and "restricted" shares
of common stock to, Jenson Services, who is a consultant to the Company, in
consideration of the sum of, also respectively; $3,385.00, $8,103.38, and
$10,021.79. Taking into account the reverse split, Jenson Services owns 249,188
shares of common stock. See Part I, Item 1 and Part II, Item 4 of this
Registration Statement.
Item 8. Description of Securities.
- -----------------------------------
The Company has only one class of securities authorized, issued and
outstanding, that being capital stock of the Company consisting of 50,000,000
authorized shares of one mill ($0.001) par value common stock, of which a total
of 491,314 post-split shares are presently issued and outstanding. The holders
of the Company's common stock are entitled to one vote per share on each matter
submitted to a vote at a meeting of stockholders. The shares of common stock do
not carry cumulative voting rights in the election of directors.
Stockholders of the Company have no pre-emptive rights to acquire
additional shares of common stock or other securities. The common stock is not
subject to redemption rights and carries no subscription or conversion rights.
In the event of liquidation of the Company, the shares of common stock are
entitled to share equally in corporate assets after satisfaction of all
liabilities. All shares of the common stock now outstanding are fully paid and
non-assessable.
There are no outstanding options, warrants or calls to purchase any of the
authorized securities of the Company.
There is no provision in the Company's Articles of Incorporation, as
amended, or Bylaws, as amended, that would delay, defer, or prevent a change in
control of the Company.
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and
Other Stockholder Matters.
- -------------------------------------------
Market Information.
- -----------------------
The Company's common stock is currently listed in the "pink sheets" of the
NQB and the OTC Bulletin Board of the NASD under the symbol "USME". However,
there has been no "established trading market" for shares of the Company's
common stock during the past five years and management does not expect any such
market to develop unless and until the Company completes an acquisition or
merger. In any event, no assurance can be given that any "established trading
market" for the Company's common stock will develop or be maintained. If such a
market ever develops in the future, the sale of "unregistered" and "restricted"
shares of common stock pursuant to Rule 144 of the Securities and Exchange
Commission by Jenson Services may have a substantial adverse impact on any
such public market. See the caption "Business" of Part I, Item 1 of this
Registration Statement
<PAGE>
No price data is available for the calendar year ended December 31, 1995 or
the first three fiscal quarters of 1997.
CLOSING BID CLOSING ASK
------------------- --------------------
1997 HIGH LOW HIGH LOW
- ------ -------- ------- -------- -------
JAN. 2
THRU .01 .01 .10 .08
MAR. 31
APR. 1
THRU .01 .01 .08 .08
APR. 23
COMMON NEW
- ---------------------
APR. 23
THRU UNPRICED
JUNE 2
These bid prices were obtained from the National Quotation Bureau, LLC
("NQB") and do not necessarily reflect actual transactions, retail markups, mark
downs or commissions.
There are no outstanding options, warrants or calls to purchase any of the
authorized securities of the Company.
Future sales of any of these securities or any securities of the Company
issued in any acquisition, reorganization or merger may have a future adverse
effect on any "public market" that may develop in the common stock of the
Company. See Part I, Item 1 of this Registration Statement.
Holders.
- -----------
The number of record holders of the Company's common stock as of the date
of this Registration Statement is approximately 124.
Dividends.
- -------------
The Company has not declared any cash dividends with respect to its common
stock or its previously authorized preferred stock, and does not intend to
declare dividends in the foreseeable future. The future dividend policy of the
Company cannot be ascertained with any certainty, and if and until the Company
completes any acquisition, reorganization or merger, no such policy will be
formulated. There are no material restrictions limiting, or that are likely to
limit, the Company's ability to pay dividends on its common stock.
<PAGE>
Item 2. Legal Proceedings.
- ---------------------------
The Company is not a party to any pending legal proceeding. No federal,
state or local governmental agency is presently contemplating any proceeding
against the Company. No director, executive officer or affiliate of the Company
or owner of record or beneficially of more than five percent of the Company's
common stock is a party adverse to the Company or has a material interest
adverse to the Company in any proceeding.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- -------------------------------------------------------------------------------
Not Applicable: Mantyla, McReynolds & Associates, Certified Public
Accountants, of Salt Lake City, Utah, is presently the Company's auditor and
audited the financial statements of the Company for the years ended March 31,
1997 and 1996.
Item 4. Recent Sales of Unregistered Securities.
- -------------------------------------------------
On October 20, 1995, May 28, 1996, and February 13, 1997 the Company's
Board of Directors unanimously voted to issue, respectively; (3,385,000),
(8,103,380), and (10,021,790) pre-split "unregistered" and "restricted" shares
of common stock to Jenson Services, Inc. in consideration of the sum of also
respectively; $3,385.00, $8,103.38, and $10,021.79. These shares are fully-paid
and were issued to Jenson Services, Inc. on or about their respective dates.
These shares represent 249,188 post-split shares. See Part I, Item 1 of this
Registration Statement.
Management believes that Jenson Services is an "accredited investor"
as that term is defined under applicable federal and state securities laws,
rules and regulations. Further, Jenson Services is a consultant to the
Company and had access to all material information regarding the Company prior
to the offer or sale of these securities. The offers and sales of these
securities are believed to have been exempt from the registration requirements
of Section 5 of the Securities
Act of 1933 pursuant to Section 4(2) thereof, and from similar states'
securities laws, rules and regulations requiring the offer and sale of
securities by available state exemptions from such registration.
Item 5. Indemnification of Directors and Officers.
- ----------------------------------------------------------
Section 16-10a-902(1) of the Utah Revised Business Corporation Act
authorizes a Utah corporation to indemnify any director against liability
incurred in any proceeding if he or she acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
Section 16-10a-902(4) prohibits a Utah corporation from indemnifying a
director in a proceeding by or in the right of the corporation in which the
director was adjudged liable to the corporation or in a proceeding in which the
director was adjudged liable on the basis that he or she improperly received a
personal benefit. Otherwise, Section 16-10a-902(5) allows indemnification for
reasonable expenses incurred in connection with a proceeding by or in the right
of a corporation.
Unless limited by the Articles of Incorporation, Section 16-10a-905
authorizes a director to apply for indemnification to the court conducting the
proceeding or another court of competent jurisdiction. Section 16-10a-907(1)
extends this right to officers of a corporation as well.
Unless limited by the Articles of Incorporation, Section 16-10a-903
requires that a corporation indemnify a director who was successful, on the
merits or otherwise, in defending any proceeding to which he or she was a party
against reasonable expenses incurred in connection therewith. Section
16-10a-907(1) extends this protection to officers of a corporation as well.
Pursuant to Section 16-10a-904(1), the corporation may advance a director's
expenses incurred in defending any proceeding upon receipt of an undertaking and
a written affirmation of his or her good faith belief that he or she has met the
standard of conduct specified in Section 16-10a-902. Unless limited by the
Articles of Incorporation, Section 16- 10a-907(2) extends this protection to
officers, employees, fiduciaries and agents of a corporation as well.
Regardless of whether a director, officer, employee, fiduciary or agent has
the right to indemnity under the Utah Revised Business Corporation Act, Section
16-10a-908 allows the corporation to purchase and maintain insurance on his or
her behalf against liability resulting from his or her corporate role.
Article VIII of the Company's Articles of Incorporation provides for the
mandatory indemnification and reimbursement of any director or executive officer
for actions or omissions in such capacity, except for claims or liabilities
arising out of his or her own negligence or willful misconduct.
PART F/S
Index to Financial Statements
Report of Certified Public Accountants
Financial Statements
- --------------------
(i) Audited Financial Statements
March 31, 1997 and 1996
--------------------------------
Balance Sheet, March 31, 1997
Statements of Stockholders' Deficit for the years ended March 31, 1997 and
1996
Statements of Operations for the years ended March 31, 1997 and 1996
Statements of Cash Flows for the years ended March 31, 1997 and 1996
Notes to Financial Statements
(ii) Unaudited Financial Statements
June 30, 1997 and 1996
---------------------------------
Balance Sheet, June 30, 1997
Statement of Operation for the Three-Month Periods Ended June 30, 1997 and
1996
Statements of Cash Flows for the Three-Month Periods Ended June 30, 1997
and 1996
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
United States Mining & Exploration, Inc.
We have audited the accompanying balance sheet of United States Mining & Explor
ation, Inc. as of March 31, 1997, and the related statements of operations,
stockholders' deficit, and cash flows for the years ended March 31, 1997 and
1996. 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 conducted our audit in accordance with generally accepted auditing standards.
Those 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 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 that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United States Mining &
Exploration, Inc. as of March 31, 1997, and the results of their operations
and their cash flows for the years ended March 31, 1997 and 1996, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that United
States Mining & Exploration, Inc. will continue as a going concern. As
discussed in note 5 to the financial statements, the Company has accumulated
losses from operations, has no assets, and has a net working capital
deficiency that raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
note 5. The financial statements do not include any adjustment that might
result from the outcome of this uncertainty.
Mantyla, McReynolds and Associates
Salt Lake City, Utah
May 10, 1997, except as to note 9, which is dated October 17, 1997.
<PAGE>
UNITED STATES MINING & EXPLORATION, INC.
Balance Sheet
March 31, 1997
ASSETS
Assets $ -0-
Total Assets $ -0-
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Payable to Stockholders - note 8 1,902
Total Liabilities 1,902
Stockholders' Deficit:
Capital Stock -- 50,000,000 shares authorized having a
par value of $.001 per share; 491,314 shares issued
and outstanding - note 9
491
Additional Paid-in Capital 441,169
Accumulated Deficit (443,562)
Total Stockholders' Deficit (1,902)
Total Liabilities and Stockholders' Deficit -0-
See accompanying notes to financial statements.
<PAGE>
UNITED STATES MINING & EXPLORATION, INC.
Statements of Operations
For the Years Ended March 31, 1997 and 1996
1997 1996
Revenues $ -0- $ -0-
General & Administrative Expenses 5,133 3,385
Operating Loss (5,133) (3,385)
Extraordinary item:
Income from Forgiveness of Debt - note 7 12,314 30,232
Provision for income tax on extraordinary
item -0- -0-
Net Income from Extraordinary Item 12,314 30,232
Net Income Before Income Taxes 7,181 26,847
Current Year Provision for Income Taxes -0- -0-
Net Income $ 7,181 $ 26,847
Loss per Share from operations $ (.01) $ (.01)
ncome per Share from extraordinary item .03 .11
Net Income per Share $ .02 $ .10
Weighted Average Shares Outstanding 390,095 262,599
See accompanying notes to financial statements.
<PAGE>
UNITED STATES MINING & EXPLORATION, INC.
Statements of Stockholders' Deficit
For the Years Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
Additional Net
Common Common Paid in Accumulated Stockholders'
Shares Stock Capital Deficit Deficit
<S> <C> <C> <C> <C> <C>
Balance, March 31,
1995 242,057 $ 242 $ 419,908 $ (477,590) $ (57,440)
Issued 11,488,380
shares of common
stock as repayment
of stockholder loans 133,088 133 11,355 11,488
Net Income for the
Year Ended
March 31, 1996 26,847 26,847
Balance, March 31,
1996 375,145 375 431,263 (450,743) (19,105)
Issued 10,021,790
shares of common
stock as repayment
of stockholder loans 116,169 116 9,906 10,022
Net Income for the
Year Ended
March 31, 1997 7,181 7,181
Balance, March 31,
1997 491,314 491 441,169 (443,562) (1,902)
</TABLE>
See accompanying notes to financial statements.
<PAGE>
UNITED STATES MINING & EXPLORATION, INC.
Statements of Cash Flows
For the Years Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Cash Flows Provided by/(Used for)
Operating Activities
Net Income $ 7,181 $ 26,847
Adjustments to reconcile net income to net
cash provided by operating activities:
Decrease in accounts payable (19,105) (38,335)
Net Cash Used for Operating Activities (11,924) (11,488)
Cash Flows Provided by/(Used for) Financing
Activities
Proceeds from stockholder loans 11,924 11,488
Net Cash Provided by Financing Activities 11,924 11,488
Net Increase/(Decrease)in Cash -0- -0-
Beginning Cash Balance -0- -0-
Ending Cash Balance $ -0- $ -0-
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest $ -0- $ -0-
Cash paid during the year for income taxes $ -0- $ -0-
Noncash Financing Activities:
Common stock issued in repayment of
stockholder loan $ 10,022 $ 11,488
</TABLE>
See accompanying notes to financial statements.<PAGE>
UNITED STATES MINING & EXPLORATION, INC.
Notes to Financial Statements
March 31, 1997
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
United States Mining & Exploration, Inc. [formerly known as Forward
Electronics Corporation] was formerly in the business of exploring,
acquiring, developing and exploiting mineral and mining rights, and
developing mining technology and equipment for sale. The Company
incorporated under the laws of the State of Utah in 1983. The
Company has not engaged in significant operations since 1990.
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles. The
following summarizes the more significant of such policies.
(b) Income Taxes
Effective April 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109 [the Statement],
Accounting for Income Taxes. The Statement requires an asset and
liability approach for financial accounting and reporting for
income taxes, and the recognition of deferred tax assets and
liabilities for the temporary differences between the financial
reporting bases and tax bases of the Company's assets and
liabilities at enacted tax rates expected to be in effect when such
amounts are realized or settled. The cumulative effect of this
change in accounting for income taxes as of March 31, 1997 is $0
due to the valuation allowance established as described below.
(c) Net Income Per Common Share
Net income per common share is based on the weighted-average number of
shares outstanding.
<PAGE>
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[continued]
(d) Statement of Cash Flows
For purposes of the statements of cash flows, the Company considers
cash on deposit in the bank to be cash. The Company had $0 cash at
March 31, 1997.
NOTE 2 ACQUISITION OF UNITED STATES MINING & EXPLORATION, INC.
Forward Electronics Corporation incorporated under the laws of the
State of Utah in 1983. In 1988, Forward Electronics Corporation
entered into an agreement and plan of reorganization with United
States Mining & Exploration, Inc., incorporated in 1987 under the
laws of the State of Delaware. Provisions of the agreement
included the acquisition of all 1,000 issued and outstanding common
shares of United States Mining & Exploration, Inc. in exchange for
19,289,333 common shares of Forward Electronics Corporation. The
transaction closed with the exchange of shares provided for in the
agreement. Subsequent to the closing date, Forward Electronics
Corporation filed "Articles of Amendment to Forward Electronics
Corporation" with the Division of Corporations of the State of Utah
changing the Corporate Name to "United States Mining & Exploration,
Inc." The Division of Corporations and Commercial Code of the Utah
State Department of Business Regulation approved and recorded the
amendment, resulting in a parent company and a wholly-owned
subsidiary company with the same name. The subsidiary corporation
was dissolved.
NOTE 3 ACQUISITION OF RIDGE ROCK MINING CORPORATION
In 1988, United States Mining & Exploration, Inc. [parent] entered
into an agreement and plan of reorganization with Ridge Rock Mining
Corporation, incorporated in 1987 under the laws of the State of
Utah. Provisions of the agreement included the acquisition of all
49,998 issued and outstanding common shares of Ridge Rock Mining
Corporation in exchange for 300,000 common shares of United States
Mining & Exploration, Inc. At closing, Ridge Rock Mining
Corporation became a wholly-owned subsidiary of United States Mining
& Exploration, Inc. The subsidiary corporation was dissolved.<PAGE>
NOTE 4 ACQUISITION OF ROCKY MOUNTAIN-PROCESS COMPONENTS
During 1989, United States Mining & Exploration, Inc. [parent] entered
into an agreement and plan of reorganization with Rocky Mountain-
Process Components. Provisions of the agreement included the
acquisition of all 2,000 issued and outstanding common shares of
Rocky Mountain-Process Components in exchange for 1,528,933 common
shares of United States Mining & Exploration, Inc. At closing,
Rocky Mountain-Process Components became a wholly-owned subsidiary of
United States Mining & Explorations, Inc. The subsidiary corporation
was dissolved.
NOTE 5 LIQUIDITY
The Company has accumulated losses since inception through March 31,
1997 amounting to $443,562, has no assets, and has a net working
capital deficiency at March 31, 1997. These factors raise
substantial doubt about the Company's ability to continue as a going
concern.
Management plans include finding a well-capitalized merger candidate
to recommence its operations. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
NOTE 6 INCOME TAXES
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], Accounting for Income
Taxes, as of April 1, 1993. Prior years' financial statements have
not been restated to apply the provisions of the Statement. No
provision has been made for income taxes in the financial
statements because the Company has accumulated substantial losses
since inception.
The tax effects of temporary differences that give rise to significant
portions of the deferred tax asset at March 31, 1997 have no impact on
the financial position of the Company. A valuation allowance is
provided when it is more likely than not that some portion of the
deferred tax asset will not be realized. Because of the lack of
taxable earnings history, the Company has established a valuation
allowance for all future deductible temporary differences.
NOTE 7 INCOME FROM FORGIVENESS OF DEBT
During the year, management successfully negotiated the settlement of
all outstanding debts to outside creditors. As a result of these
successful negotiations, the Company benefitted with $12,314 and
$30,232 of forgiveness of debt income for the fiscal years ended
March 31, 1997, and 1996, respectively.
NOTE 8 RELATED-PARTY TRANSACTIONS
During the fiscal year ended March 31, 1996, a shareholder and
consultant advanced funds totaling $11,488 for payment of operating
expenses and settlement of certain of the Company's existing debts.
The Board of Directors authorized the issuance of 11,488,380 shares
of common stock as reimbursement for the advances.
During the fiscal year ended March 31, 1997, a shareholder and
consultant advanced funds totaling $11,924 for payment of operating
expenses and settlement of certain of the Company's existing debts.
The Board of Directors authorized the issuance of 10,021,790 shares of
common stock as reimbursement for a portion of the advances, leaving a
remaining balance payable to stockholders of $1,902 at March
31, 1997.
NOTE 9 REVERSE STOCK SPLIT
On June 2, 1997, the Company effected a 1 for 86.322 reverse stock
split. The par value and authorized number of shares remain
unchanged. At the time of the reverse stock split, the Company had
42,404,945 shares issued and outstanding. The resulting number of
shares, subsequent to the reverse stock split, was 491,314, adjusted
for rounding for fractional shares. All share amounts in the
financial statements have been restated to reflect the post-split
denominations.
<PAGE>
UNAUDITED FINANCIALS
UNITED STATES MINING & EXPLORATION, INC.
Condensed Balance Sheet
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
6/30/97
<S> <C>
Assets -0-
Total Assets -0-
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Payable to Stockholders 4,396
Total Liabilities 4,396
Stockholders' Deficit:
Common Stock 491
Additional Paid-in Capital 441,169
Accumulated Deficit (446,056)
Total Stockholders' Deficit (4,396)
Total Liabilities and Stockholders' Deficit -0-
NOTE TO FINANCIAL STATEMENTS:
Interim financial statements reflect all adjustments which are, in the opinion
of management, necessary to a fair statement of the results for the periods.
These interim financial statements conform with the requirements for interim
financial statements and consequently do not include all the disclosures
normally required by generally accepted accounting principles.
UNITED STATES MINING & EXPLORATION, INC.
Condensed Statements of Operations
For the Three Month Periods Ended June 30, 1997 and 1996
1997 1996
Revenues $ -0- $ -0-
General & Administrative
Expenses 2,494 5,112
Operating Loss (2,494) (5,112)
Net Loss $(2,494) $(5,112)
Net Loss Per Share (.01) (.02)
Weighted Average Shares
Outstanding 491,314 312,561
<PAGE>
UNITED STATES MINING & EXPLORATION, INC.
Condensed Statements of Cash Flows
For the Three Month Periods Ended June 30, 1997 and 1996
1997 1996
Cash Flows Provided by/
(Used for) Operating
Activities
Net loss $ (2,494) $ (5,112)
Adjustments to reconcile net
income to net cash provided
by operating activities:
Increase in loans from
shareholder 2,494 5,112
Net Cash Provided by/(Used for)
Operating Activities $ -0- $ -0-
<PAGE>
PART III
Item 1. Index to Exhibits.
- -------------------------------
The following exhibits are filed as a part of this Registration Statement:
Exhibit
Number Description*
- ------ ---------------
3.1 Articles of Incorporation, filed on November 30, 1983*
3.2(i) Articles of Amendment to Articles of
Incorporation, filed on July 7, 1988*
3.2(ii) Articles of Amendment to Articles of
Incorporation, filed on April 14, 1997*
3.3 Bylaws, dated June 24, 1996*
3.3(i) Amendment to Bylaws, dated June 3, 1997*
27 Financial Data Schedule
99 Offering Circular*
* Summaries of all exhibits contained within this Registration Statement
are modified in their entirety by reference to these Exhibits.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
UNITED STATES MINING
& EXPLORATION, INC.
Date: 10-20-97 /s/ Sheryl Ross
----------------- ---------------------------------------
Sheryl Ross, Director and President
Date: 10/28/97 /s/ Wayne R. Bassham
----------------- ---------------------------------------
Wayne R. Bassham, Director
and Vice President
Date: 10-27-97 /s/ Thomas J. Howells
----------------- ---------------------------------------
Thomas J. Howells, Director
and Secretary
</TABLE>
ARTICLES OF INCORPORATION
OF
FORWARD ELECTRONICS CORPORATION
The undersigned individuals, age 21 or older, as incorporators under the
Utah Business Corporation Act, adopt the following Articles of Incorporation.
ARTICLE I: CORPORATE NAME
The name of the corporation; is: FORWARD ELECTRONICS CORPORATION
ARTICLE II: DURATION
The duration of the corporation is perpetual.
ARTICLE III: PURPOSES
The purposes for which the corporation is organized are:
A. To engage in all aspects of designing, manufacturing, marketing, and in
all other mariners dealing in and with electric, electronic and related items of
all kinds and natures, and to acquire., develop,, hold, manage and dispose of
and to deal in and with all types of personal and real property necessary or
incidental to or desirable for such purposes; and to engage in all other lawful
businesses and purposes; and
B. To acquire by contract, purchase, exchange or otherwise and to own,
manage, assign,, transfer,, exchange and otherwise dispose of or deal in or with
its own securities and other securities, obligations, assets and instruments of
all kinds issued by other associations, firms,, corporations or entities of all
kinds wherever situate; to make payment therefor in any lawful manner, including
exchanging its own securities and assets therefor and to exercise as owner or
holder any such properties listed herein all rights and privileges with respect
thereto; and
C. To do each and every thing necessary, conducive, suitable and/or
desirable to accomplish any of the purposes or to protect the interests of the
corporation as fully and to the same extent as natural persons might or could do
in any part of the world as principals, agents, partners, trustees or otherwise,
alone or in conjunction with any other person, firm, association or corporation.
D. The foregoing enumerated items shall be construed as both as independent
purposes and powers and shall not be held to limit in any manner the powers of
the corporation and exercise and enjoyment thereof as conferred by Utah law.
1
<PAGE>
ARTICLE IV: CAPITAL STOCK
The aggregate number of shares which the corporation may issue is
50,000,000 shares of common stock, $.OO1 par value. Fully paid stock shall not
be subject to further call or assessment. The Board of Directors may, by
majority vote and without shareholder approval, amend this Article IV to
authorize and issue preferred stock and fix relative rights and preferences
thereof. Otherwise, This Article IV may not be amended without the affirmative
vote of at least two-thirds of the shares entitled to vote on such amendment.
The Board may establish series and fix and determine relative rights and
preferences.
ARTICLE V: CAPITAL
The corporation shall not commence business until consideration in money or
property of at least $1,000 has been received in return for capital stock.
ARTICLE VI: PREEMPTIVE AND CUMULATIVE VOTING RIGHTS
Shareholders shall not have preemptive rights. No shareholder shall have
right to accumulate votes at any meeting of shareholders.
ARTICLE VII: INITIAL OFFICE AND AGENT
The name and address of the initial agent are Mark V. Pay
1680 East 787 South, Pleasant Grove, Utah 84062
ARTICLE VIII: DIRECTORS
There shall be three directors on the initial Board of Directors who shall
serve until their successors qualify. Their names and addresses are:
NAME(S) ADDRESS(ES)
Mark V. Pay 680 E. 787 So. Pleasant Grove, UT 84062
Kent Gilson 895 N. 200 W. Pleasant Grove, UT 84062
James D. Lawrence, Jr. 631 W. 1975 N. Provo, UT 84601
The Directors shall have authority to do any act on behalf of the
Corporation by law in each instance where the Business Corporation Act provides
that Directors may act, without enumerating such authority in these Articles.
Furthermore the Directors are hereby empowered to mortgage or pledge any or all
assets of the Corporation without shareholder approval.
ARTICLE X: INCORPORATORS
The name and address of each incorporator are:
James D. Lawrence, Jr., 631 West 1975 North, Provo, Utah 84601
Paul V. Pay, 1680 East 787 South, Pleasant Grove, Utah 84062
Dorothy Pay, same address
2
<PAGE>
ARTICLE XI: TRANSACTIONS BY INTERESTED PARTIES
No transaction by a shareholder, director, officer or other employee of the
corporation shall be voidable by reason of such director or officer being an
interested party or an employee, director or shareholder of any other
association, firm, corporation or partnership if: (a) the fact of such interest
or relationship is disclosed or known to the Board of Directors or committee
thereof which ratifies or approves any such transaction, or (b) the fact of such
interest or relationship is disclosed to or known to the shareholders entitled
to and who authorize any such transaction by written consent or vote at a
meeting or shareholders, or (c) the transaction is, in the judgement of the
Board of Directors, fair and reasonable to the corporation.
Common or interested Directors or shareholders may be counted in
determining the presence of a quorum at any meeting of the Board of Directors or
committee thereof or meeting of shareholders.
ARTICLE XII: AMENDMENT
These Articles of Incorporation may be amended by the affirmative vote of a
majority of the shares entitled to vote on each such amendment, except as noted
in Article IV.
Under penalty of perjury, we declare that these Articles of Incorporation
have been examined by us and are, to the best of our knowledge and belief, true,
correct and complete.
ARTICLE XIII: SHAREHOLDER MEETINGS
One-third (33 1/3%) of shares outstanding entitled to vote a shareholder
meetings shall be necessary to constitute a quorum at shareholder meetings. Such
shares may be represented by proxy or personally. The act of a majority of such
a quorum shall be the act of the shareholders at any annual or special
shareholder meeting unless otherwise required by law or these Articles.
Dated this 30th of November 1983.
/S/ JAMES LAWRENCE
/S/ PAUL V. PAY
/S/ DOROTHY L. PAY
3
ARTICLES OF AMENDMENT
OF
FORWARD ELECTRONICS CORPORATION
Pursuant to a resolution of the shareholders, and in accordance with
16-10-57 of the Utah Business Corporation Act, the undersigned corporation
hereby adopts the following Articles of Amendment.
<PAGE>
Article I
Name of the Corporation
The name of the corporation is Forward Electronics Corporation.
Article II
Adopted Amendments
The following sections of the Articles of Incorporation are hereby amended
to read as follows:
1. Article I: Corporate Name:
Article I: Corporate Name
The name of the corporation is United States Mining & Exploration, Inc.
2. Article III: Purposes, Section A:
A. To engage in all aspects of designing, manufacturing, marketing, and in
all other manners dealing in and with gold placer mining equipment and related
items of all kinds and natures, and to acquire, develop, hold, manage and
dispose of and to deal in and with all types of personal and real property
necessary or incidental to or desirable for such purposes; to engage in the
mining of gold and other precious metals and/or gemstones; and to engage in all
other lawful businesses and purposes; and
3. Article VII: Initial Office and Agent:
Article VII: Registered Agent and Office Location
A. The name and address of the Registered Agent of the Corporation
is:
Michael S. Eldredge
2880 Cochise Court
Park City, Utah 84068
/S/ MICHAEL S. ELDREDGE
Michael S. Eldredge
<PAGE>
B. The principal office of the corporation is located at 2200 West 2300
South, Salt Lake City, Utah 84119
4. Article VII: Directors. The first sentence is amended to read as follows:
There shall be not less than three, nor more than nine directors on the
Board of Directors as may be determined by a resolution of shareholders at any
meeting called for the election of directors; such directors shall serve until
their successors qualify.
Article III
Date of Adoption
These Articles of Amendment were adopted at a meeting of Shareholders held
on July 5, 1988 in Salt Lake City, Utah.
Article IV
Shares Outstanding
As of July 5, 1988 the number of shares outstanding and entitled to vote on
these Articles of Amendment was 705,442. The Articles of Incorporation provide
that the Articles of Incorporation may be amended by a majority of shareholders
entitled to vote on each such amendment, and that at least 1/3 of all shares
outstanding and entitled to vote (235,148) must be present, in person or by
proxy, to constitute a quorum sufficient to adopt any such Amendment.
Article V
Shares Voted
There were 503,000 shares present, in person or by proxy, at the meeting
held on July 5, 1988. on each of the amendments set forth above, 503,000 votes
were cast in favor of the amendment, and no votes were cast against the
amendment.
Article VI
Exchange, Reclassification or Cancellation of Stock
The amendments adopted herein do not provide for any exchange,
reclassification or cancellation of any shares of the capital stock of the
corporation.
Article VII
Stated Capital
The amendments adopted herein do not alter the stated capital of the
corporation.
<PAGE>
IN WITNESS WHEREOF, these Articles of Amendment are adopted this 5th day of
July, 1988.
/S/ Wm. EDWARD SKOKOS
Wm. Edward Skokos, President
Attest:
/S/ MICHAEL S. ELDREDGE
Michael S. Eldredge, Secretary
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
I, the undersigned, a Notary Public duly commissioned to take
acknowledgements and administer oaths in the State of Utah, do hereby certify
that on this day, personally appeared before me Wm. Edward Skokos and Michael S.
Eldredge, who by me first duly sworn, declare that they are the officers
authorized to execute the foregoing Articles of Amendment, and that they signed
the articles as such and that the statements contained therein are true. WITNESS
MY HAND AND NOTARIAL SEAL this /S/ 7th day of /S/ July, 1988.
/S/ L. KAY THORSEN
NOTARY PUBLIC
Residing at:
My Commission Expires:
/S/ MAY 20, 1989
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
UNITED STATES MINING & EXPLORATION, INC.
Pursuant to the provisions of Section 16-1Oa-1006 of the Utah Revised
Business Corporation Act, the undersigned corporation hereby adopts the
following Articles of Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is United States Mining & Exploration,
Inc. (the "Corporation").
SECOND: The following amendments to the Articles of Incorporation of the
Corporation were duly adopted by the stockholders of the Corporation at a
meeting held March 17, 1997, in the manner prescribed by the Utah Revised
Business Corporation Act, to-wit:
ARTICLE XIV
This Corporation shall be entitled to take advantage of any and all
provisions of the Utah Revised Business Corporation Act which was effective on
July 1, 1992, including the right to take action by written consent of fewer
than all of the stockholders of the Corporation, provided that any action taken
by such written consent is approved by the same percentage of stockholders of
each voting group as would be required by such Act.
THIRD: Other amendments adopted provide for a reclassification pursuant to
a reverse split of the outstanding securities of the Corporation; pursuant to an
additional resolution adopted by the stockholders of the Corporation at the
meeting held March 17, 1997, the 42,404,945 one mill ($0.001) par value
outstanding common voting shares were reverse split on a basis of 86.321665 for
one, while retaining the authorized shares at 50,000,000 and the par value at
one mill ($0.001) per share, with appropriate adjustments being made in the
additional paid in capital and stated capital accounts of the Corporation, and
resulting in a total of approximately 491,243 post-split shares of one mill
($0.001) par value common voting stock being then issued and outstanding,
subject to adjustments resulting from rounding up to the nearest whole share.
FOURTH: The amendments adopting Article XIV to the Articles of
Incorporation and the reverse split of the Corporation's common voting stock
were adopted by the stockholders at the meeting held March 17, 1997, in
accordance with the Utah Revised Business Corporation Act.
FIFTH: These amendments were not adopted by the incorporators or the Board
of Directors without stockholder action.
<PAGE>
SIXTH: (a) The designation and number of outstanding shares of each class
entitled to vote thereon as a class were as follows, to wit.
CLASS NUMBER OF SHARES
Common 42,404,945
(b) The number of shares voted for the amendment to add Article XIV to the
Articles of Incorporation was 39,377,870, with none opposing and none
abstaining. The number of shares voted for the reverse split was 39,892,870,
with 485,000 opposing and none abstaining.
IN WITNESS WHEREOF, the undersigned President and Vice President, having
been there into duly authorized, have executed the foregoing Articles of
Amendment for the Corporation under the penalties of perjury this, /S/ 11 day of
April, 1997.
UNITED STATES MINING &
EXPLORATION, INC.
By /S/ JEFF JENSON
Jeffrey D. Jenson
President
Attest:
/S/ SHERYL ROSS
Sheryl Ross, Vice President
2
BYLAWS
OF
UNITED STATES MINING AND EXPLORATION, INC.
ARTICLE I
OFFICES
Section 1.01 Location of Offices. The corporation may maintain such offices
within or without the State of Utah as the Board of Directors may from time to
time designate or require.
Section 1.02 Principal Office. The address of the principal office of the
corporation shall be at the address of the registered office of the corporation
as so designated in the office of the Lieutenant Governor/Secretary of State of
the state of incorporation, or at such other address as the Board of Directors
shall from time to time determine.
ARTICLE II
SHAREHOLDERS
Section 2.0 Annual Meeting. The annual meeting of the shareholders shall be
held in May of each year or at such other time designated by the Board of
Directors and as is provided for in the notice of the meeting, for the purpose
of electing directors and for the transaction of such other business as may come
before the meeting. If the election of directors shall not be held on the day
designated for the annual meeting of the shareholders, or at any adjournment
thereof, the Board of Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as may be convenient.
Section 2.02 Special Meetings. Special meetings of the shareholders may be
called at any time by the chairman of the board, the president, or by the Board
of Directors, or in their absence or disability, by any vice president, and
shall be called by the president or, in his or her absence or disability, by a
vice president or by the secretary on the written request of the holders of not
less than one-tenth of all the shares entitled to vote at the meeting, such
written request to state the purpose or purposes of the meeting and to be
delivered to the president, each vice- president, or secretary. In case of
failure to call such meeting within 60 (60) days after such request, such
shareholder or shareholders may call the same.
Section 2.03 Place of Meetings. The Board of Directors may designate any
place, either within or without the state of incorporation, as the place of
meeting for any annual meeting or for any special meeting called by the Board of
Directors. A waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within or without the state of
incorporation, as the place for the holding of such meeting. If no designation
is made, or if a special meeting be otherwise called, the place of meeting shall
be at the principal office of the corporation.
Section 2.04 Notice of Meetings. The secretary or assistant secretary, if
any, shall cause notice of the time, place, and purpose or purposes of all
meetings of the shareholders (whether annual or special), to be mailed at least
ten (10) days, but not more than 50 (50) days, prior to the meeting, to each
shareholder of record entitled to vote.
Section 2.05 Waiver of Notice. Any shareholder may waive notice of any
meeting of shareholders (however called or noticed, whether or not called or
noticed and whether before, during, or after the meeting), by signing a written
waiver of notice or a consent to the holding of such meeting, or an approval of
the minutes thereof. Attendance at a meeting, in person or by proxy, shall
constitute waiver of
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all, defects of call or notice regardless of whether waiver, consent, or
approval is signed or any objections are made. All such waivers, consents, or
approvals shall be made a part of the minutes of the meeting.
Section 2.06 Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any annual meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of any dividend or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the corporation may provide
that the share transfer books shall be closed, for the purpose of determining
shareholders entitled to notice of or to vote at such meeting, but not for a
period exceeding fifty (50) days. If the share transfer books are closed for the
purpose of determining shareholders entitled to notice of or to vote at such
meeting, such books shall be closed for at least ten (10) days immediately
preceding such meeting.
In lieu of closing the share transfer books, the Board of Directors may fix
in advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than fifty (50) and, in case of a meeting
of shareholders, not less than ten (10) days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the share transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting or
to receive payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this Section,
such determination shall apply to any adjournment thereof. Failure to comply
with this Section shall not affect the validity of any action taken at a meeting
of shareholders.
Section 2.07 Voting Lists. The officer or agent of the corporation having
charge of the share transfer books for shares of the corporation shall make, at
least ten (10) days before each meeting of the shareholders, a complete list of
the shareholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of, and the number of shares
held by each, which list, for a period of ten (10) days prior to such meeting,
shall be kept on file at the registered office of the corporation and shall be
subject to inspection by any shareholder during the whole time of the meeting.
The original share transfer book shall be prima facia evidence as to the
shareholders who are entitled to examine such list or transfer books, or to vote
at any meeting of shareholders.
Section 2.08 Quorum. One-half of the total voting power of the outstanding
shares of the corporation entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of the shareholders. If a quorum is
present, the affirmative vote of the majority of the voting power represented by
shares at the meeting and entitled to vote on the subject shall constitute
action by the shareholders, unless the vote of a greater number or voting by
classes is required by the laws of the state of incorporation of the corporation
or the Articles of Incorporation. If less than one-half of the outstanding
voting power is represented at a meeting, a majority of the voting power
represented by shares so present may adjourn the meeting from time to time
without further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed.
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Section 2.09 Voting of Shares. Each outstanding share of the corporation
entitled to vote shall be entitled to one vote on each matter submitted to vote
at a meeting of shareholders, except to the extent that the voting rights of the
shares of any class or series of stock are determined and specified as greater
or lesser than one vote per share in the manner provided by the Articles of
Incorporation.
Section 2.10 Proxies. At each meeting of the shareholders, each shareholder
entitled to vote shall be entitled to vote in person or by proxy; provided,
however, that the right to vote by proxy shall exist only in case the instrument
authorizing such proxy to act shall have been executed in writing by the
registered holder or holders of such shares, as the case may be, as shown on the
share transfer of the corporation or by his or her or her attorney thereunto
duly authorized in writing. Such instrument authorizing a proxy to act shall be
delivered at the beginning of such meeting to the secretary of the corporation
or to such other officer or person who may, in the absence of the secretary, be
acting as secretary of the meeting. In the event that any such instrument shall
designate two or more persons to act as proxies, a majority of such persons
present at the meeting, or if only one be present, that one shall (unless the
instrument shall otherwise provide) have all of the powers conferred by the
instrument on all persons so designated. Persons holding stock in a fiduciary
capacity shall be entitled to vote the shares so held and the persons whose
shares are pledged shall be entitled to vote, unless in the transfer by the
pledge or on the books of the corporation he or she shall have expressly
empowered the pledgee to vote thereon, in which case the pledgee, or his or her
proxy, may represent such shares and vote thereon.
Section 2.11 Written Consent to Action by Shareholders. Any action required
to be taken at a meeting of the shareholders, or any other action which may be
taken at a meeting of the shareholders, may be taken without a meeting, if a
consent in writing, setting forth the action so taken, shall be signed by all of
the shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE III
DIRECTORS
Section 3.01 General Powers. The property, affairs, and business of the
corporation shall be managed by its Board of Directors. The Board of Directors
may exercise all the powers of the corporation whether derived from law or the
Articles of Incorporation, except such powers as are by statute, by the Articles
of Incorporation or by these Bylaws, vested solely in the shareholders of the
corporation.
Section 3.02 Number, Term, and Qualifications. The Board of Directors shall
consist of three to nine persons. Increases or decreases to said number may be
made, within the numbers authorized by the Articles of Incorporation, as the
Board of Directors shall from time to time determine by amendment to these
Bylaws. An increase or a decrease in the number of the members of the Board of
Directors may also be had upon amendment to these Bylaws by a majority vote of
all of the shareholders, and the number of directors to be so increased or
decreased shall be fixed upon a majority vote of all of the shareholders of the
corporation. Each director shall hold office until the next annual meeting of
shareholders of the corporation and until his or her successor shall have been
elected and shall have qualified. Directors need not be residents of the state
of incorporation or shareholders of the corporation.
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Section 3.03 Classification of Directors. In lieu of electing the entire
number of directors annually, the Board of Directors may provide that the
directors be divided into either two or three classes, each class to be as
nearly equal in number as possible, the term of office of the directors of the
first class to expire at the first annual meeting of shareholders after their
election, that of the second class to expire at the second annual meeting after
their election, and that of the third class, if any, to expire at the third
annual meeting after their election. At each annual meeting after such
classification, the number of directors equal to the number of the class whose
term expires at the time of such meeting shall be elected to hold office until
the second succeeding annual meeting, if there be two classes, or until the
third succeeding annual meeting, if there be three classes.
Section 3.04 Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately following, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide by resolution the time and place, either within or without the state
of incorporation, for the holding of additional regular meetings without other
notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the president, vice president, or any two
directors. The person or persons authorized to call special meetings of the
Board of Directors may fix any place, either within or without the state of
incorporation, as the place for holding any special meeting of the Board of
Directors called by them.
Section 3.06 Meetings by Telephone Conference Call. Members of the Board of
Directors may participate in a meeting of the Board of Directors or a committee
of the Board of Directors by means of conference telephone or similar
communication equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
Section 3.07 Notice. Notice of any special meeting shall be given at least
ten (10) days prior thereto by written notice delivered personally or mailed to
each director at his or her regular business address or residence, or by
telegram. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may waive notice of
any meeting. Attendance of a director at a meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting solely for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 3.08 Quorum. A majority of the number of directors shall constitute
a quorum for the transaction of business or any meeting of the Board of
Directors, but if less than a majority is present at a meeting, a majority of
the directors present may adjourn the meeting from time to time without further
notice.
Section 3.09 Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, and the individual directors shall have no power as such.
Section 3.10 Vacancies and Newly Created Directorship. If any vacancies
shall occur in the Board of Directors by reason of death, resignation or
otherwise,
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or if the number of directors shall be increased, the directors then in
office shall continue to act and such vacancies or newly created directorships
shall be filled by a vote of the directors then in office, though less than a
quorum, in any way approved by the meeting. Any directorship to be filled by
reason of removal of one or more directors by the shareholders may be filled by
election by the shareholders at the meeting at which the director or directors
are removed.
Section 3.11 Compensation. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 3.12 Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his or her dissent shall be entered in the minutes of the meeting, unless he or
she shall file his or her written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof, or shall forward
such dissent by registered or certified mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
Section 3.13 Resignations. A director may resign at any time by delivering
a written resignation to either the president, a vice president, the secretary,
or assistant secretary, if any. The resignation shall become effective on its
acceptance by the Board of Directors; provided, that if the board has not acted
thereon within ten days (10) from the date presented, the resignation shall be
deemed accepted.
Section 3.14 Written Consent to Action by Directors. Any action required to
be taken at a meeting of the directors of the corporation or an other action
which may be taken at a meeting of the directors or of a committee, may be taken
without a meeting, if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors, or all of the members of the committee,
as the case may be. Such consent shall have the same legal effect as a unanimous
vote of all the directors or members of the committee.
Section 3.15 Removal. At a meeting expressly called for that purpose, one
or more directors may be removed by a vote of a majority of the shares of
outstanding stock of the corporation entitled to vote at an election of
directors.
ARTICLE IV
OFFICERS
Section 4.01 Number. The officers of the corporation shall be a president,
one or more vice-presidents, as shall be determined by resolution of the Board
of Directors, a secretary, a treasurer, and such other officers as may be
appointed by the Board of Directors. The Board of Directors may elect, but shall
not be required to elect, a chairman of the board and the Board of Directors may
appoint a general manager.
Section 4.02 Election, Term of Office, and Qualifications. The officers
shall be chosen by the Board of Directors annually at its annual meeting. In the
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event of failure to choose officers at an annual meeting of the Board of
Directors, officers may be chosen at any regular or special meeting of the Board
of Directors. Each such officer (whether chosen at an annual meeting of the
Board of Directors to fill a vacancy or otherwise) shall hold his or her office
until the next ensuing annual meeting of the Board of Directors and until his or
her successor shall have been chosen and qualified, or until his or her death,
or until his or her resignation or removal in the manner provided in these
Bylaws. Any one person may hold any two or more of such offices, except that the
president shall not also be the secretary. No person holding two or more offices
shall act in or execute any instrument in the capacity of more than one office.
The chairman of the board, if any, shall be and remain a director of the
corporation during the term of his or her office. No other officer need be a
director.
Section 4.03 Subordinate Officers, Etc. The Board of Directors from time to
time may appoint such other officers or agents as it may deem advisable, each of
whom shall have such title, hold office for such period, have such authority,
and perform such duties as the Board of Directors from time to time may
determine. The Board of Directors from time to time may delegate to any officer
or agent the power to appoint any such subordinate officer or agents and to
prescribe their respective titles, terms of office, authorities, and duties.
Subordinate officers need not be shareholders or directors.
Section 4.04 Resignations. Any officer may resign at any time by delivering
a written resignation to the Board of Directors, the president, or the
secretary. Unless otherwise specified therein, such resignation shall take
effect on delivery.
Section 4.05 Removal. Any officer may be removed from office at any special
meeting of the Board of Directors called for that purpose or at a regular
meeting, by vote of a majority of the directors, with or without cause. Any
officer or agent appointed in accordance with the provisions of Section 4.03
hereof may also be removed, either with or without cause, by any officer on whom
such power of removal shall have been conferred by the Board of Directors.
Section 4.06 Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal, disqualification,
or any other cause, or if a new office shall be created, then such vacancies or
newly created offices may be filled by the Board of Directors at a regular or
special meeting.
Section 4.07 The Chairman of the Board. The Chairman of the Board, if there
be such an officer, shall have the following powers and duties:
(a) He or she shall preside at all shareholders' meetings;
(b) He or she shall preside at all meetings of the Board of Directors; and
(c) He or she shall be a member of the executive committee, if any.
Section 4.08 The President. The president shall have the following powers
and duties:
(a) If no general manager has been appointed, he or she shall be the chief
executive officer of the corporation, and, subject to the direction of the Board
of Directors, shall have general charge of the business, affairs, and property
of the corporation and general supervision over its officers, employees, and
agents;
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(b) If no chairman of the board has been chosen, or if such officer is
absent or disabled, he or she shall preside at meetings of the shareholders and
Board of Directors;
(c) He or she shall be a member of the executive committee, if any;
(d) He or she shall be empowered to sign certificates representing shares
of the corporation, the issuance of which shall have been authorized by the
Board of Directors; and
(e) He or she shall have all power and shall perform all duties normally
incident to the office of a president of a corporation, and shall exercise such
other powers and preform such other duties as from time to time may be assigned
to him or her by the Board of Directors.
Section 4.10 The Secretary. The secretary shall have the following powers
and duties:
(a) He or she shall keep or cause to be kept a record of all of the
proceedings of the meetings of the shareholders and of the Board of Directors in
books provided for that purpose;
(b) He or she shall cause all notices to be duly given in accordance with
the provisions of these Bylaws and as required by statute;
(c) He or she shall be the custodian of the records and of the seal of the
corporation, and shall cause such seal (or a facsimile thereof) to be affixed to
all certificates representing shares of the corporation prior to the issuance
thereof and to all instruments, the execution of which on behalf of the
corporation under its seal shall have been duly authorized in accordance with
these Bylaws, and when so affixed, he or she may attest the same;
(d) He or she shall assume that the books, reports, statements,
certificates, and other documents and records required by statute are properly
kept and filed;
(e) He or she shall have charge of the share books of the corporation and
cause the share transfer books to be kept in such manner as to show at any time
the amount of the shares of the corporation of each class issued and
outstanding, the manner in which and the time when such stock was paid for, the
names alphabetically arranged and the addresses of the holders of record
thereof, the number of shares held by each holder and time when each became such
holder or record; and he or she shall exhibit at all reasonable times to any
director, upon application, the original or duplicate share register. He or she
shall cause the share book referred to in Section 6.04 hereof to be kept and
exhibited at the principal office of the corporation, or at such other place as
the Board of Directors shall determine, in the manner and for the purposes
provided in such Section:
(f) He or she shall be empowered to sign certificates representing shares
of the corporation, the issuance of which shall have been authorized by the
Board of Directors; and
(g) He or she shall perform in general all duties incident to the office of
secretary and such other duties as are given to him or her by these Bylaws or as
from time to time may e assigned to him or her by the Board of Directors or the
president.
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Section 4.11 The Treasurer. The treasurer shall have the following powers
and duties:
(a) He or she shall have charge and supervision over and be responsible for
the monies, securities, receipts, and disbursements of the corporation;
(b) He or she shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the corporation in
such banks or trust companies or with such banks or other depositories as shall
be selected in accordance with Section 5.03 hereof;
(c) He or she shall cause the monies of the corporation to be disbursed by
checks or drafts (signed as provided in Section 5.04 hereof) drawn on the
authorized depositories of the corporation, and cause to be taken and preserved
property vouchers for all monies disbursed;
(d) He or she shall render to the Board of Directors or the president,
whenever requested, a statement of the financial condition of the corporation
and of all of this transactions as treasurer, and render a full financial report
at the annual meeting of the shareholders,. if called upon to do so;
(e) He or she shall cause to be kept correct books of account of all the
business and transactions of the corporation and exhibit such books to any
director on request during business hours;
(f) He or she shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements given such
information as he or she may desire with respect to any and all financial
transactions of the corporation; and
(g) He or she shall perform in general all duties incident to the office of
treasurer and such other duties as are given to him or her by these Bylaws or as
from time to time may be assigned to him or her by the Board of Directors or the
president.
Section 4.12 General Manager. The Board of Directors may employ and appoint
a general manager who may, or may not, be one of the officers or directors of
the corporation. The general manager, if any, shall have the following powers
and duties;
(a) He or she shall be the chief executive officer of the corporation and,
subject to the directions of the Board of Directors, shall have general charge
of the business affairs and property of the corporation and general supervision
over its officers, employees, and agents;
(b) He or she shall be charged with the exclusive management of the
business of the corporation and of all of its dealings, but at all times be
subject to the control of the Board of Directors;
(c) Subject to the approval of the Board of Directors or the executive
committee, if any, he or she shall employ all employees of the corporation, or
delegate such employment to subordinate officers, and shall have authority to
discharge any person so employed; and
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(d) He or she shall make a report to the president and directors as often
as required, setting forth the results of the operations under his or her
charge, together with suggestions looking toward improvement and betterment of
the condition of the corporation, and shall perform such other duties as the
Board of Directors may require.
Section 4.13 Salaries. The salaries and other compensation of the officers
of the corporation shall be fixed from time to time by the Board of Directors,
except that the Board of Directors may delegate to any person or group of
persons the power to fix the salaries or other compensation of any subordinate
officers or agents appointed in accordance with the provisions of Section 4.03
hereof. No officer shall be prevented from receiving any such salary or
compensation by reason of the fact that he or she is also a director of the
corporation.
Section 4.14 Surety Bonds. In case the Board of Directors shall so require,
any officer or agent of the corporation shall execute to the corporation a bond
in such sums and with such surety or sureties as the Board of Directors may
direct, conditioned upon the faithful performance of his or her duties to the
corporation, including responsibility for negligence and for the accounting of
all property, monies, or securities of the corporation which may come into his
or her hands.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution of Instruments. Subject to any limitation contained
in the Articles of Incorporation or these Bylaws, the president or any vice
president or the general manager, if any, may, in the name and on behalf of the
corporation, execute and deliver any contract or other instrument authorized in
writing by the Board of Directors. The Board of Directors may, subject to any
limitation contained in the Articles of Incorporation or in these Bylaws,
authorize in writing any officer or agent to execute and deliver any contract or
other instrument in the name and on behalf of the corporation; any such
authorization may be general or confined to specific instances.
Section 5.02 Loans. No loans or advances shall be contracted on behalf of
the corporation, no negotiable paper or other evidence of its obligation under
any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred, or conveyed
as security for the payment of any loan, advance, indebtedness, or liability of
the corporation, unless and except as authorized by the Board of Directors. Any
such authorization may be general or confined to specific instances.
Section 5.03 Deposits. All monies of the corporation not otherwise employed
shall be deposited from time to time to its credit in such banks and or trust
companies or with such bankers or other depositories as the Board of Directors
may select, or as from time to time may be selected by any officer or agent
authorized to do so by the Board of Directors.
Section 5.04 Checks, Drafts, Etc. All notes, drafts, acceptances, checks,
endorsements, and, evidences of indebtedness of the corporation, subject to the
provisions of these Bylaws, shall be signed by such officer or officers or such
agent or agents of the corporation and in such manner as the Board of Directors
from time to time may determine. Endorsements for deposit to the credit of the
corporation in any of its duly authorized depositories shall be in such manner
as the Board of Directors from time to time may determine.
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Section 5.05 Bonds and Debentures. Every bond or debenture issued by the
corporation shall be evidenced by an appropriate instrument which shall be
signed by the president or vice president and by the secretary and sealed with
the seal of the corporation. The seal may be a facsimile, engraved or printed.
where such bond or debenture is authenticated with the manual signature of an
authorized officer of the corporation or other trustee designated by the
indenture of trust or other agreement under which such security is issued, the
signature of any of the corporation's officers named thereon may be a facsimile.
In case any officer who signed, or whose facsimile signature has been used on
any such bond or debenture, should cease to be an officer of the corporation for
any reason before the same has been delivered by the corporation, such bond or
debenture may nevertheless be adopted by the corporation and issued and
delivered as through the person who signed it or whose facsimile signature has
been used thereon had not ceased to be such officer.
Section 5.06 Sale, transfer, Etc. of Securities. Sales, transfers,
endorsements, and assignments of stocks, bonds, and other securities owned by or
standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to any
such sale, transfer, endorsement, or assignment, shall be effected by the
president, or by any vice president, together with the secretary, or by an
officer or agent thereunto authorized by the Board of Directors.
Section 5.07 Proxies. Proxies to vote with respect to shares of other
corporations owned by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the president or any vice
president and the secretary or assistant secretary of the corporation, or by any
officer or agent thereunder authorized by the Board of Directors.
ARTICLE VI
CAPITAL SHARES
Section 6.01 Share Certificates. Every holder of shares in the corporation
shall be entitled to have a certificate, signed by the president or any vice
president and the secretary or assistant secretary, and sealed with the seal
(which may be a facsimile, engraved or printed) of the corporation, certifying
the number and kind, class or series of shares owned by him or her in the
corporation; provided, however, that where such a certificate is countersigned
by (a) a transfer agent or an assistant transfer agent, or (b) registered by a
registrar, the signature of any such president, vice president, secretary, or
assistant secretary may be a facsimile. In case any officer who shall have
signed, or whose facsimile signature or signatures shall have been used on any
such certificate, shall cease to be officer of the corporation, for any reason,
before the delivery of such certificate by the corporation, such certificate may
nevertheless be adopted by the corporation and be issued and delivered as though
the person who signed it, or whose facsimile signature or signatures shall have
been used thereon, has not ceased to be such officer. Certificates representing
shares of the corporation shall be in such form as provided by the statutes of
the state of incorporation. There shall be entered on the share books of the
corporation at the time of issuance of each share, the number of the certificate
issued, the name and address of the person owning the shares represented
thereby, the number and kind, class or series of such shares, and the date of
issuance thereof. Every certificate exchanged or returned to the corporation
shall be marked "Canceled" with the date of cancellation.
Section 6.02 Transfer of Shares. Transfers of shares of the corporation
shall be made on the books of the corporation by the holder of record thereof,
or by his or her attorney thereunto duly authorized by a power of attorney duly
executed in writing and filed with the secretary of the corporation or any of
its transfer
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agents, and on surrender of the certificate or certificates, properly
endorsed or accompanied by proper instruments or transfer, representing such
shares. Except as provided by law, the corporation and transfer agents and
registrars, if any, shall be entitled to treat the holder of record of any stock
as the absolute owner thereof for all purposes, and accordingly, shall not be
bound to recognize any legal, equitable, or other claim to or interest in such
shares on the part of any other person whether or not it or they shall have
express or other notice thereof.
Section 6.03 Regulations. Subject to the provisions of this Article VI and
of the Articles of Incorporation, the Board of Directors may make such rules and
regulations as they may deem expedient concerning the issuance, transfer,
redemption, and registration of certificates for shares of the corporation.
Section 6.04 Maintenance of Stock Ledger at Principal Place of Business. A
share book (or books where more than one kind, class, or series or stock is
outstanding) shall be kept at the principal place of business of the
corporation, or at such other place as the Board of Directors shall determine,
containing the names, alphabetically arranged, of original shareholders of the
corporation, their addresses, their interest, the amount paid on their shares,
and all transfers thereof and the number and class of shares held by each. Such
share books shall at all reasonable hours be subject to inspection by persons
entitled by law to inspect the same.
Section 6.05 Transfer Agents and Registrars. The Board of Directors may
appoint one or more transfer agents and one or more registrars with respect to
the certificates representing shares of the corporation, and may require all
such certificates to bear the signature of either or both. The Board of
Directors may from time to time define the respective duties of such transfer
agents and registrars. No certificate for shares shall be valid until
countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such shares, and until registered by a
registrar, if at such date the corporation had a registrar for such shares.
Section 6.06 Closing of Transfer Books and Fixing of Record Date.
(a) The Board of Directors shall have power to close the share books of the
corporation for a period of not to exceed fifty (50) days preceding the date of
any meeting of shareholders, or the date for payment of any dividend, or the
date for the allotment of rights, or capital shares shall go into effect, or a
date in connection with obtaining the consent of shareholder for any purpose.
(b) In lieu of closing the share transfer books as aforesaid, the Board of
Directors may fix in advance a date, not exceeding fifty (50) days preceding the
date of any meeting of shareholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital shares shall go into effect, or a date in
connection with obtaining any such consent, as a record date for the
determination of the shareholders entitled to a notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or exercise the rights in
respect of any such change, conversion or exchange of capital stock, or to give
such consent.
(c) If the share transfer books shall be closed or a record date set for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for, or such record date
shall be, at least ten (10) days immediately preceding such meeting.
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Section 6.07 Lost or Destroyed Certificates. The corporation may issue a
new certificate for shares of the corporation in place of any certificate
theretofore issued by it, alleged to have been lost or destroyed, and the Board
of Directors may, in its discretion, require the owner of the lost or destroyed
certificate or his or her legal representatives, to give the corporation a bond
in such form and amount as the Board of Directors may direct, and with such
surety or sureties as may be satisfactory to the board, to indemnify the
corporation and its transfer agents and registrars, if any, against any claims
that may be made against it or any such transfer agent or registrar on account
of the issuance of such new certificate. A new certificate may be issued without
requiring any bond when, in the judgement of the Board of Directors, it is
proper to do so.
Section 6.08 No Limitation on Voting Rights; Limitation on Dissenter's
Rights. To the extent permissible under the applicable law of any jurisdiction
to which the corporation may become subject by reason of the conduct of
business, the ownership of assets, the residence of shareholders, the location
of offices or facilities, or any other item, the corporation elects not to be
governed by the provisions of any statute that (I) limits, restricts, modifies,
suspends, terminates, or otherwise affects the rights of any shareholder to cast
one vote for each share of common stock registered in the name of such
shareholder on the books of the corporation, without regard to whether such
shares were acquired directly from the corporation or from any other person and
without regard to whether such shareholder has the power to exercise or direct
the exercise of voting power over any specific fraction of the shares of the
corporation or from any other person and without regard to whether such
shareholder has the power to exercise or direct the exercise of voting power
over any specific fraction of the shares of common stock of the corporation
issued and outstanding or (ii) grants to any shareholder the right to have his
or her stock redeemed or purchased by the corporation or any other shareholder
on the acquisition by any person or group of persons of shares of the
corporation. In particular, to the extent permitted under the laws of the state
of incorporation, the corporation elects not to be governed by any such
provision, including the provisions of the Utah Control Shares Acquisition Act,
Section 61-6-1 et seq., of the Utah Code Annotated, as amended, or any statute
of similar effect or tenor.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted. The Board of Directors may designate an
executive committee and such other committees as the Board of Directors may deem
appropriate, each of which committees shall consist of two or more directors.
Members of the executive committee and of any such other committees shall be
designated annually at the annual meeting of the Board of Directors; provided,
however, that at any time the Board of Directors may abolish or reconstitute the
executive committee or any other committee. Each member of the executive
committee and of any other committee shall hold office until his or her
successor shall have been designated or until his or her resignation or removal
in the manner provided in these Bylaws.
Section 7.02 Powers. During the intervals between meetings of the Board of
Directors, the executive committee shall have and may exercise all powers of the
Board of Directors in the management of the business and affairs of the
corporation, except for the power to fill vacancies in the Board of Directors or
to amend these Bylaws, and except for such powers as by law may not be delegated
by the Board of Directors to an executive committee.
Section 7.03 Proceedings. The executive committee, and such other
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committees as may be designated hereunder by the Board of Directors, may
fix its own presiding and recording officer or officers, and may meet at such
place or places, at such time or times and on such notice (or without notice) as
it shall determine from time to time. It will keep a record of its proceedings
and shall report such proceedings to the Board of Directors at the meeting of
the Board of Directors next following.
Section 7.04 Quorum and Manner of Acting. At all meetings of the executive
committee, and of such other committees as may be designated hereunder by the
Board of Directors, the presence of members constituting a majority of the total
authorized membership of the committee shall be necessary and sufficient to
constitute a quorum for the transaction of business, and the act of a majority
of the members present at any meeting at which a quorum is present shall be the
act of such committee. The members of the executive committee, and of such other
committees as may be designated hereunder by the Board of Directors, shall act
only as a committee and the individual members thereof shall have not powers as
such.
Section 7.05 Resignations. Any member of the executive committee, and of
such other committees as may be designated hereunder by the Board of Directors,
may resign at any time by delivering a written resignation to either the
president, the secretary, or assistant secretary, or to the presiding officer of
the committee of which he or she is a member , if any shall have been appointed
and shall be in office. Unless otherwise specified herein, such resignation
shall take effect on delivery.
Section 7.06 Removal. The Board of Directors may at any time remove any
member of the executive committee or of any other committee designated by it
hereunder either for or without cause.
Section 7.07 Vacancies. If any vacancies shall occur in the executive
committee or any other committee designated by the Board of Directors hereunder,
by reason of disqualification, death, resignation, removal, or otherwise, the
remaining members shall, until the filling of such vacancy, constitute the then
total authorized membership of the committee and, provided that two or more
members are remaining, continue to act. Such vacancy may be filled at any
meeting of the Board of Directors.
Section 7.07 Compensation. The Board of Directors may allow a fixed sum and
expenses of attendance to any member of the executive committee, or of any other
committee designated by it hereunder, who is not an active salaried employee of
the corporation for attendance at each meeting of said committee.
ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND
OFFICER AND DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions. The corporation shall
have the power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action, or suit by or
in the right of the corporation to procure a judgement in its favor by reason of
the fact that he or she is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other
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enterprise, against expenses (including attorneys' fees) judgments, fines,
and amounts paid in settlement actually and reasonably incurred by him or her in
connection with any such action, suit or proceeding, if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interest of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, creation a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, he or she had reasonable cause to believe that
his or her conduct was unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation shall have
the power to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending, or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he or she is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection with the
defense or settlement of such action or suit, if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification shall be made
in respect of any claim, issue, or matter as to which such a person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his or her duty to the corporation, unless and only to the extent that the court
in which the action or suit was brought shall determine on application that,
despite the adjudication of liability but in view of all circumstances of the
case, the person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper.
Section 8.03 Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in Sections
8.01 and 8.02 hereof, or in defense of any claim, issue, or matter therein, he
or she shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith. Any
other indemnification under Sections 8.01 and 8.02 hereof, shall be made to the
corporation upon a determination that indemnification of the officer, director,
employee, or agent is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in Sections 8.01 and 8.02 hereof. Such
determination shall be made either (I) by the Board of Directors by a majority
of a quorum consisting of directors who were not parties to such action, suit,
or proceeding; or (ii) by independent legal counsel on a written opinion; or
(iii) by the shareholders by a majority vote of a quorum of shareholders at any
meeting duly called for such purpose.
Section 8.04 General Indemnification. The indemnification provided by this
Section shall not be deemed exclusive of any other indemnification granted under
any provision of any statute, in the corporation's Articles of Incorporation,
these Bylaws, agreement, vote of shareholders or disinterested directors, or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent, and shall inure to
the benefit of the heirs and legal representatives of such a person.
Section 8.05 Advances. Expenses incurred in defending a civil or criminal
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action, suit or proceeding as contemplated in this Section may be paid by
the corporation in advance of the final disposition of such action, suit, or
proceeding upon a majority vote of a quorum of the Board of Directors and upon
receipt of an undertaking by or on behalf of the director, officers, employee,
or agent to repay such amount or amounts unless if it is ultimately determined
that he or she is to be indemnified by the corporation as authorized by this
Section.
Section 8.06 Scope of Indemnification. The indemnification authorized by
this Section shall apply to all present and future directors, officers,
employees, and agents of the corporation and shall continue as to such persons
who cease to be directors, officers, employees, or agents of the corporation,
and shall inure to the benefit of the heirs, executors, and administrators of
all such persons and shall be in addition to all other indemnification permitted
by law.
8.07 Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against any liability asserted against him
or her and incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the corporation would have the power to
indemnify him or her against any such liability and under the laws of the state
of incorporation, as the same may hereafter be amended or modified.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE X
DIVIDENDS
The Board of Directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and on the terms and
conditions provided by the Articles of Incorporation and these Bylaws.
ARTICLE XI
AMENDMENTS
All Bylaws of the corporation, whether adopted by the Board of Directors or
the shareholders, shall be subject to amendment, alteration, or repeal, and new
Bylaws may be made, except that;
(a) No Bylaws adopted or amended by the shareholders shall be altered or
repealed by the Board of Directors;
(b) No Bylaws shall be adopted by the Board of Directors which shall
require more than a majority of the voting shares for a quorum at a meeting of
shareholders, or more than a majority of the votes cast to constitute action by
the shareholders, except where higher percentages are required by law; provided,
however that (I) if any Bylaw regulating an impending election of directors is
adopted or amended or repealed by the Board of Directors, there shall be set
forth in the notice of the next meeting of shareholders for the election of
directors, the Bylaws so adopted or amended or repealed, together with a concise
statement of the changes made; and (ii) no amendment, alteration or repeal of
this Article XI shall be made except by the
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shareholders.
CERTIFICATE OF SECRETARY
The undersigned does hereby certify that he or she is the secretary of
UNITED STATES MINING AND EXPLORATION, INC., a corporation duly organized and
existing under and by virtue of the laws of the State of Utah; that the above
and foregoing bylaws of said corporation were duly and regularly adopted as such
by the Board of Directors of the corporation at a meeting of the board of
Directors, which was duly and regularly held on the /S/ 24th day of /S/ June,
1996 and that the above and foregoing Bylaws are now in full force and effect.
DATED this 24 day of June, 1996.
/S/ Sharon Lambert
Secretary
36
ACTION BY UNANIMOUS CONSENT OF
THE BOARD OF DIRECTORS OF
UNITED STATES MINING & EXPLORATION, INC.
The undersigned, being all of the duly elected and incumbent directors of
United States Mining & Exploration, Inc., a Utah corporation (the "Company"),
acting pursuant to Section 16-10a-821 of the Utah Revised Business Corporation
Act, do hereby unanimously resolve to amend the Company's Bylaws to exempt the
Company from the provisions of the Utah Control Shares Acquisitions Act (Section
61-6-2 et seq., Utah Code Annotated) (the "Acquisitions Act"), effective the
latest date hereof:
/S/ JEFF JENSON Date:/S/ JUNE 3, 1997
Jeffrey D. Jenson, President and Director
/S/ SHERYL ROSS Date:/S/ JUNE 3, 1997
Sheryl Ross, Vice President and Director
/S/ THOMAS J. HOWELLS Date:/S/ JUNE 3, 1997
Thomas J. Howells, Secretary and Director
PROSPECTUS
FORWARD ELECTRONICS CORPORATION (Utah Corp., Incorp. Nov. 30, 1983)
1680 EAST 787 SOUTH, PLEASANT GROVE, UTAH 84062
<PAGE>
COMMON CAPITAL SHARES (Par Value $.001 Per Share)
FORWARD ELECTRONICS CORPORATION, the "Company," was formed to engage
principally in all sorts of manufacturing related to consumer and other
electronic items and to deal in and with property of all kinds necessary to,
expedient to or desirable for such manufacturing.
THE COMPANY HAS DESIGNED A PRODUCT, THE PEAK WATT INDICATOR, AND HAS A
PROTOTYPE AND PLANS FOR SETTING UP A MANUFACTURING SITE. (See "MANAGEMENT" page
8) THERE IS NO ASSURANCE THE COMPANY WILL HAVE SUCCESS IN ITS BUSINESS. THIS
OFFERING INVOLVES A HIGH DEGREE OF RISK, IS SPECULATIVE AND INVESTORS SHOULD
STUDY THE RISKS AS SHOWN HEREIN (SEE "RISK FACTORS" page 3)
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION BECAUSE THEY ARE BELIEVED TO BE EXEMPT FROM REGISTRATION
UNDER SECTION 3 (a) (11) OF THE SECURITIES ACT OF 1933, AS AMENDED, AS AN ISSUE
OFFERED AND SOLD ONLY TO BONA FIDE RESIDENTS WITHIN A SINGLE STATE BY A FIRM
ORGANIZED AND DOING BUSINESS WITHIN SUCH STATE. (See "Rule 147" page 5) THESE
SECURITIES HAVE BEEN REGISTERED WITH THE UTAH SECURITIES DIVISION PURSUANT TO
U.C.A. 61-1-10. SUCH REGISTRATION IN NO SENSE INDICATED RECOMMENDATION OR
ENDORSEMENT BY THE DIVISION OF ANY SECURITY, INDIVIDUAL, FIRM OR CORPORATION.
- -------------------------------------------------------------------------------
Offered Exclusively to Residents of Utah for cash only
Public Offering2,500,000 shares
Offering Prince $.01 Per Share
- -------------------------------------------------------------------------------
Offering to Sales Proceeds to
Public (1) Commissions (2) Company (3)
- --------------------------------------------------------------------------------
Per share $ .01 $ -0- $ .01
Total Minimum Offering (4) 9,000 -0- 9,000
(900,000 Shares)
Total Maximum Offering 25,000 -0- 25,000
2,500,000 Shares)
See Footnotes page 2
- --------------------------------------------------------------------------------
Prior to this offering, there has been no public market for Common Stock of
the Company; there is no assurance that one will develop.
- --------------------------------------------------------------------------------
Issuer Transfer Agent Sales Agent
FORWARD ELECTRONICS CORP THE ISSUER Mark V. Pay 785-9327
1680 EAST 787 SOUTH Kent Gilson 785-1002/6496
PLEASANT GROVE, UT 84062 Jim Lawrence 373-5820
- -------------------------------------------------------------------------------
The Escrow Agent is Utah Bank & Trust,778 South Main, Salt Lake City, Utah 84101
This Prospectus is dated FEBRUARY 9, 1984
F O O T N O T E S
1. The offering price has been arbitrarily established by the Company and
has no relationship to earnings, book value, assets or any other recognized
criteria of value.
2. The shares will be offered on a best-efforts basis and will be sold by
the Officers and Directors of the Company. No commission will be paid. There is
no assurance that any or all of the shares will be sold. The offering will
terminate one year after the effective date.
3. This amount is before deductions for legal and accounting fees, printing
and other offering expenses, which expenses will not exceed $2,750. The expenses
also include filing fees with the Utah Securities Division.
<PAGE>
4. The Company must sell a minimum of 900,000 shares, or $9,000 worth of
stock, in order to meet escrow requirements. If this amount is not obtained by
one year from the date of this prospectus, all monies will be refunded, without
deductions or interest, to prospective investors. (See "Underwriting" page 9,
and "Sales Provisions and Escrow Requirements" page 11)
OFFICERS, DIRECTORS, 10% SHAREHOLDERS AND OTHER INSIDERS MAY PARTICIPATE IN
THIS OFFERING. (See "Risk Factors," page 5, par. 16)
NO SALESMAN, DEALER, UNDERWRITER OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OR CIRCULAR IN CONNECTION
WITH THE DISTRIBUTION OF SECURITIES TO WHICH THIS PROSPECTUS RELATES EXCEPT AS
STATED IN THIS PROSPECTUS. PRACTICES TO THE CONTRARY ARE A CRIMINAL OFFENSE.
REPRESENTATIONS NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THE DELIVERY OF THIS PROSPECTUS SHALL NOT UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY TO OR FROM ANY NON-RESIDENT OF UTAH. THESE SECURITIES ARE OFFERED AND SOLD
ONLY TO RESIDENTS OF UTAH. IF ANY SALE IS MADE TO ANY NON-RESIDENT OF UTAH, THE
COMPANY RESERVES THE RIGHT TO RESCIND SUCH SALE(S). OTHERWISE A CONTINGENT
LIABILITY MAY BE CREATED.
THE SHARES OFFERED HEREBY ARE OFFERED FOR CASH ONLY, SUBJECT TO PRIOR SALE
AND WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFER WITHOUT PRIOR NOTICE.
REGISTRATION OF THESE SECURITIES EXISTS FOR ON YEAR IN UTAH. THEREAFTER
NONISSUER TRADING TRANSACTIONS REQUIRE AN EFFECTIVE REGISTRATION OR THE
AVAILABILITY OF AN APPROPRIATE EXEMPTION, SUCH AS LISTING ON A RESPONSIBLE STOCK
EXCHANGE RECOGNIZED BY THE UTAH SECURITIES DIVISION.
MATERIAL CHANGES IN THE COMPANY'S AFFAIRS WILL BE DISCLOSED AND APPENDED TO
THIS PROSPECTUS AND PROVIDED TO ALL SUBSCRIBERS AND TO THE UTAH SECURITIES
DIVISION. QUARTERLY REPORTS, AS REQUIRED BY THE UTAH SECURITIES DIVISION WILL
ALSO BE APPENDED TO THIS PROSPECTUS.
TABLE OF CONTENTS
Begins at
Page
The Company 3
Risk Factors 3
Dilution 6
Estimated Use of Proceeds 7
Proposed Corporate Objectives and Product Description 8
Capitalization 8
Management Resumes 8
Underwriting 9
Present Shareholders 10
Common Stock 10
Sales Provisions, Escrow Requirements 11
Accounting Matters 11
Legal and Related Matters 12
Additional Information 12
General Shareholder Information 12
Financial Statements 13
Subscription Agreement 16
<PAGE>
T H E C O M P A N Y
The Company was incorporated under the laws of the State of Utah on
November 30, 1983. Paul V. Pay and Dorothy Pay, incorporators are parents of the
President. They hold no interest in the company and were incorporators only to
hasten the incorporation process. They will not participate in any way in the
Company affairs. The third incorporator, James D. Lawrence, is an officer and
director of the Company. Since its inception the Company has worked on
developing a prototype with the intention of attempting to market the same. At
present the prototype is complete but no marketing has yet been attempted. The
Company has no offices or other facilities yet. At the time of printing this
prospectus, the Company was attempting to set up marketing and manufacturing
arrangements. The Company will be depending on the funds raised in this offering
to effect its marketing and manufacturing efforts. The Company has no patent
rights and does not intend to seek such.
R I S K F A C T O R S
Besides risks set forth elsewhere herein, investors should carefully
consider the following risks:
1. OPERATING HISTORY. This Company has no operating history. None of the
principals has ever run a public company prior to this attempt. It must be
remembered that all business decisions will rest within the discretion of the
Board of Directors of the Company, hereinafter called the "Board." Only those
willing to entrust all such decisions to the Board should purchase shares
offered by this Prospectus. (See "Proposed Corporate Objectives and Product
Description" page 8)
2. MANAGEMENT. Management will devote only as much time as they deem
appropriate based upon their other employment commitments. As needed, the
Company attorney will complete contracts with key employees and aid in setting
up dealers/distributors as well as counseling with the Board. Appropriate
compensation at a normal fee rate will be paid for legal services.
3. MANUFACTURING ACTIVITIES. As stated, none of management has run a public
company prior to this attempt. None of the principals has run a manufacturing
concern prior to this attempt. Since all business decisions of the Company will
be made by the Board, only those willing to entrust all decisions to the Board
should purchase shares of the Company. There can be no assurance that the
venture will be profitable. There can be no assurance that the venture will be
profitable. Investors should also remember that if the minimum amount is raised,
the Company may be dependent upon obtaining orders to finance the setting up of
manufacturing activities. This could severely hamper efforts toward a successful
business. (See "Competition" this page)
4. OFFERING PRICE. The price of the shares has been arbitrarily set and
bears no relationship to book value or any other established basis of a Company.
The book value of shares, even assuming all shares are sold, will be less than
the price paid by public shareholders, creating an immediate dilution to public
investors in the book value per share as opposed to the per share price of
shares offered by this offering. (See "Dilution" page 5)
5. COMPETITION. Due to the competitive nature of our economy, the Company
will be competing with other larger and stronger business entities. There are
many other larger and stronger companies engaged in the manufacture of
electronic items. The speculative nature of any new business will not allow
management to give assurance that a profit will be made. All businesses and
especially new businesses are vulnerable to the many forces of competition, many
forces of competition, many of which are beyond the control of management and
any one or combination of which forces can cause business failure. (See
"Proposed Corporate Objectives and Product Description" page 8)
6. RESTRICTED TRADING OF SHARES. The shares acquired pursuant to this
offering are limited to trading solely within the State of Utah for a period of
at least nine (9) months following the closing of this offering. ONLY bona fide
residents of Utah may be beneficial owners of these shares during this nine
month period.
7. CONFLICTS OF INTEREST. Officers and directors of the Company are
involved with other employment which may be competing with the Company for time
and perhaps business opportunities. (See "Management" page 8) Although each
officer and director has an obligation as a fiduciary of the Company to handle
the Company's affairs properly, no such person has any
<PAGE>
obligation to make the Company aware of any investment or business
opportunity. Each officer and director has agreed to disclose any conflict of
interest as it arises and/or to remove himself from active participation in any
area of Company affairs which would tend to create a conflict of interest and
result in a possible violation of such fiduciary responsibility to the Company.
8. INVESTMENT COMPANY ACT. The Company will at all times operate so as to
not be an investment company under the Investment Company Act of 1940.
9. MANUFACTURING PROPERTY. The Company may acquire real properties by lease
or purchase for its manufacturing activities, depending on the financial
condition at a given time. The Company may set up more than one manufacturing
site as the Company's position improves and depending the market for its
products.
10. GOVERNMENTAL REGULATION. This area of manufacturing regulated by State
and Federal Law, as are many others. The cost of complying may prove burdensome
to a small company such as this one.
11. NO UNDERWRITING CONTRACT. There is no firm underwriting contract on the
part of anyone to purchase all or any part of the shares offered hereby.
Consequently, the Company can give no assurance that all or any part of the
shares offered hereby will be sold. The escrow arrangements provide that unless
900,000 shares are sold within one year of the effective date hereof, the entire
amount of monies collected will be refunded without deductions or interest to
investors.
12. RULE 147 OFFERINGS. Under Rule 147 of the Securities Act of 1933, a
Company, at the time the offering is being made, must be and is doing business
within a single State only if at least (a) 80% of its income is derived in the
State; (b) 80% of its assets are within the State. Furthermore, 80% of the
proceeds of the Rule 147 Offering must be used within the State. Investors must
hold their stock for a period of at least 9 months after the close of this
offering; therefore, an investment in the stock offered hereby can only be
liquidated by sale to other Utah residents during such 9 month period. The Rule
147 exemption relied upon will be lost if all the requirements of the Rule are
not complied with and a contingent liability could result.
13. CUMULATIVE VOTING AND PREEMPTIVE RIGHTS. Shareholders have no
cumulative voting or peemptive rights. This means that holders of more than
one-third (33 1/3% of the outstanding shares eligible to vote can elect all the
directors, which directors then appoint officers of the Company. Lack of
preemptive rights means that shareholders have no first right of refusal to
purchase newly issued shares. Thus, present shareholders and/or investors who
purchase stock pursuant to this offering may have their percentage of stock
ownership diluted by future stock issuances, offerings or sales of Company
stock.
14. DEPRESSED MARKET. In view of the currently depressed market conditions,
the Company may experience difficulty in marketing its product and in obtaining
additional financing if needed.
15. WITHOUT ANY OF THE PRINCIPALS, the Company may not be able to survive;
therefore, in the event of death or injury, the Company might have to shut down
operations. In such an event, the liklihood is high that investors would lose
their investment in the stock purchased pursuant to this Prospectus.
16. OFFICERS, DIRECTORS, 10% SHAREHOLDERS AND OTHER INSIDERS MAY
PARTICIPATE IN THIS OFFERING. The principal risk to public shareholders is that
the control gained by insiders may effectively preclude control by the public
investors. Another risk to all investors revolves around the amount of stock
available for public trading. If insufficient stock is available for trading,
the price per share may be adversely affected and brokers may lose interest.
17. ONE-THIRD of outstanding shares may constitute a quorum under the
present articles of incorporation. The current insiders own one-third (33 1/3%)
of outstanding stock. This means that unless a majority of all public shares
outstanding take an active role in the elections and shareholder meetings, the
insiders will assume control of the Company's affairs.
<PAGE>
D I L U T I O N
If this offering is fully sold, all the public investors will own a total
of 2,500,000 shares (66.7%) of the Company's stock then issued and outstanding,
for which the public investors will have paid $25,000 (approx. 86% of capital
invested). The present stockholders will own 1,250,000 shares (33.33%) of the
company's stock then issued and outstanding for which they will have paid $4,000
in cash (approx. 14% of capital invested). (See "Management, p. 8, Present
Shareholders, page 10, and Common Stock," page 10)
As of December 1, 1983, the Company had issued 1,250,000 shares of its
stock with a book value of approximately $4,000 (average of $0.0032 per share).
If this offering is fully sold, the Company's stock will have a total book value
of approximately $26,250 or $0.007 per share. Thus, the present shareholders
will experience an increase in the book value of their stock of approximately
$0.0038, or about 118%. The public investors will suffer a substantial dilution
or lessening of the book value of their stock of approximately $0.003 per share
or about 30% from the public offering price of $0.01.
Pursuant to Rule 10.2-1 of the Utah Securities Division, the dilution to
public shareholders cannot exceed 33 1/3%; therefore, if more than the minimum
is sold but less than all of the shares are sold to the public ($25,000), the
present shareholders maybe required to transfer back to the Company sufficient
shares or property to insure that the dilution does not exceed 33 1/3%.
There are enough additional shares of Company stock authorized, but not yet
issued, that the Board will have authority to issue a number of shares in excess
of those that will be outstanding if all shares offered hereby are sold. The
issuance of any such shares to persons other than the public would reduce the
amount of control held by the public following this Offering. There are
presently no commitments or contracts to issue any additional shares to any
other persons; however, due to the limited financing, the Company may need to
issue shares for services in order to conserve cash reserves or other assets.
ILLUSTRATION OF DILUTION IN BOOK VALUE AND PERCENTAGE OWNERSHIP
BOOK VALUE: ---------------------- offering price of $0.01
| | ($0.003 or 30% decrease)
(if all | |
shares | | ------------------ (book value: $0.007 after
are sold) | | | | public purchases shares)
| | | $0.007 |
| | | | ($0.00380 or 118% increase)
| | | |
| | | | ---------price per
| | | | | |share paid by
| | | | | |inside
| | | | | | shareholders
- --------------------------------------------------------------------------------
<PAGE>
OWNERSHIP: ---------------------
(if all shares| |
are sold)| |
| public|
| owns |
| 66.7% | ---------------------
| | | Insider | insider shares are
| | | shares | owned by the present
| | | 33.33% | shareholders
- -------------------------------------------------------------------------------
ILLUSTRATION OF INVESTMENTS BY INSIDERS AND PUBLIC INVESTORS
If the minimum ----------------------
number of shares public|
is sold and for| will |
all shares sold| have |
thereafter | invested|
| 86% of|
| all cash|
| received|
| by the| investors will have
| Compan| --------------------- invested only 14%
| | | 14% | of cash invested
- -------------------------------------------------------------------------------
ESTIMATED USE OF PROCEEDS
These are estimates only and are subject to change. The Company will
provide annual reports stating use of proceeds upon request.
MAXIMUM OFFERING MINIMUM OFFERING
Expenses of Offering $ 2,750 2,750
Approximate expenses:
Utilities, incl. phone 600 600
Employees, insider (1) 2,200 570
Employees, non-insiders, 2,000 -0-
Lease of building and offices (3) 3,000 1,430
Leasehold improvements and Equipment 3,000 -0-
Travel, Promotion, Public Relations 3,000 800
Product Development incl. inventory 5,900 1,500
Accounting and Legal (4) 1,000 800
Unallocated Reserves (2) $ 1,550 550
TOTAL $25,000 $ 9,000
The foregoing are estimated to be adequate to run the Company for a period
of one year inasmuch as management will be devoting only as much time as deemed
appropriate in connection with other employment.
- -------------------------------------------------------------------------------
N O T E S
1. Compensation and salaries paid to insiders will be paid only to those
who devote all or a substantial portion of their time to the furtherance of the
business of the Company. Such compensation shall not exceed an aggregate of 10%
of the net proceeds received from this Offering, but may vary considerably from
the above-stated amounts depending on how soon a cash flow develops from
operations. 2. This amount represents the unallocated amounts available for
contingent expenses of the Company's business after listed expenses. 3. Other
than the President's residence, the Company currently has no offices or
facilities and pays no rent. It is anticipated
<PAGE>
that suitable offices and facilities will only be obtained after the
Company can reasonably support the same. The decision will be made exclusively
by the Board.
4. The Company intends to reserve this amount for accounting and legal.
Legal and accounting expenses will probably exceed this reserve. The Utah
Securities Division requires the Company to have a 13-month audited financial
showing use of offering proceeds.
That portion of the proceeds or other Company funds not required for
immediate expenditures may be deposited in interest- bearing accounts or
invested in government notes or treasury bills or into other investments deemed
appropriate by the Board.
PROPOSED CORPORATE OBJECTIVES AND PRODUCT DESCRIPTION
The proposed objectives of the corporation are to develop consumer
electronic products. One such product is the peak watt indicator. At present the
Company is not aware of any such product on the market. This product will
indicate how many watts are being fed into speakers, amps, etc. The Company
believes that persons with stereo systems (cars, homes, boats, offices, etc.)
would be interested in buying such an item. The cost will probably be under
$100. However, management may be incorrect in this assumption or another company
may market a similar product sooner or more effectively than this Company could
with its limited financing. In addition, the Company intends to seek to develop
other products as finances permit so as to afford a broader range of
opportunities, including possible joint venture of further developments,
acquisition of patents and other rights and interests and properties. In
general, the Company intends to base its operations as broadly as possible so as
to minimize the risks of failure; subject , however, to first establishing a
profitable operation of the present Company purposes. Although present
management feels proceeds from the sale of at least the minimum amount of stock
will be sufficient to put the Company into operation, there is no guaranty that
Company objectives can be met or that such capital will be sufficient to meet
the objectives of the Company.
C A P I T A L I Z A T I O N
The capitalization of the Company as of the date of this Prospectus and as
adjusted to reflect the issuance by the Company of this minimum and maximum
number of shares under this Offering is:
TITLE OF CLASS PRESENT TO BE OUTSTANDING
OUTSTANDING MINIMUM MAXIMUM
Common stock, $.001 value; 1,250,000 1,350,000 3,750,000
authorized: 50,000,000 shares
M A N A G E M E N T
The directors and officers of the Company are:
Mark V. Pay President and Director
1680 E. 787 So., Pl. Grove, UT 84062
Kent Gilson Vice President/Treasurer and Director
895 N. 200 W., Pl. Grove, UT 84062
James D. Lawrence, Jr. Secretary and Director
631 W. 1975 N., Provo, UT 84062
<PAGE>
M A N A G E M E N T R E S U M E S
Mark V. Pay, age 20, President and Director, graduated from North Sanpete
High School, Mount Pleasant, Utah, ikn May 1981. From June 1981 to December 1981
he worked at Shugart Associates, Sunnyvale, California, where he was trained to
be an assembler of the 801 disk drive; he also worked as a lead man on the
assembly line. From December 1981 to June 1982 he was under contract with IBM,
San Jose, California, where he worked as an engineer's assistant; he also worked
in quality control where he tested various products produced by IBM. From June
1982 to November 1982 he worked for AMLYN of San Jose, California, where he
learned assembly of their electronic product; he also worked in their quality
control, where he checked material, structure and function. From 1983 to the
present he has worked for both Golden West Computers, Inc., Provo, Utah, as
where he has worked as a salesman and salesman trainer.
Kent Gilson, age 18, Vice President over product development, Treasurer and
Director, will graduate from high school in May 1984. He began studying
computers at age 12. In high school he has emphasized mathematics, business,
physics and similar classes. He has worked with or on various systems including
the IBM 360, IBM PC, DEC 10, Apple, Commodore, IMSI 8080, HP 3000 and 9000. He
feels competent or fluent in various languages including C-basic, M-basic,
Fortran, Pascal, Cobol, 6502, 1802, Z-80, 6800, 68000, Forth, Pilot, Z-8000,
8088, 8086, 8089, and 1804. Operating systems include CP/M 1.0-2.2, DEC 7.01,
IBM 360, Commodore DOS. He is also familiar with digital logic and various
aspects of electronics. In December 1982 and January 1983, he contracted to do
and successfully completed a payroll package and other programming. He has also
designed a Z-80 based computer and digital synthesizer.
James D. Lawrence, Jr. age 29, Vice President over Marketing, Secretary and
Director, graduated in 1981 from Union College, Cranford, New Jersey, with an
associate degree in Business Management. In August 1984 he will receive he
bachelor degree in Administrative Management from Brigham Young University,
Provo, Utah. His work experiences have centered mainly in sales where he has
worked as a salesman, assistant manager and manager for various companies
described below. From May 1972 to February 1976 he worked at Eastman's Camera
Shop, Summit, New Jersey. From March 1976 to November 1978 he worked at Art's
Camera Shop, Summit, New Jersey. From December 1978 to December 1979 he worked
at Root's Clothier, Summit, New Jersey. From January 1980 to December 1980 he
was self-employed as a carpenter. From January 1981 to February 1982 he worked
at Maplewood Camera Shop, Maplewood, New Jersey. From 1982 to the present he has
been studying at Brigham Young University. Also during that time (August 1983 to
November 1983) he has worked at Radio Shack, University Mall, Orem, Utah.
U N D E R W R I T I N G
The Officer and Directors of Company will sell up to 2,500,000 shares at
$0.01 per share. The first 900,000 shares will be offered on an all-or-none
basis. If this many shares are not sold by one year from the date of this
Prospectus so that requirements of escrow can be met, all monies will be
promptly refunded upon order of the Utah Securities Division, without deductions
or interest. All proceeds from the sale of the first 900,000 shares will be
promptly transmitted to an escrow account with Utah Bank & Trust, 778 South
Main, Salt Lake City, Utah. After 900,000 shares have been sold, the funds will
be released to the Company upon order of the Utah Securities Division and the
offering will continue on a best-efforts basis and without any escrow or refund
provision until all 2,500,000 shares offered are sold or until on year after the
date of this Prospectus, whichever occurs first.
<PAGE>
<TABLE>
<CAPTION>
P R E S E N T S H A R E H O L D E R S
Present shareholders may purchase stock in this offering. Present
shareholders and consideration paid for stock are:
- --------------------------------------------------------------------------------
Percentages
Number Consideration Total Total if
<S> <C> <C> <C> <C> <C>
Shareholders of Shares Paid In Percent Max. sold
- ----------------------------------------------------------------------------------------------
Mark V. Pay 384,000 the product+ 30.72 10.24
Kent Gilson 383,000 $ 4,000 30.64 10.21
James D. Lawrence, Jr383,000 Promotion* 30.64 10.21
L. Douglas Monson 100,000 Legal^ 8.00 2.67
---------- ------------------ ------- -------
1,250,000 $ 4,000.00 100.00 33.33
</TABLE>
N O T E S T O P R E S E N T S H A R E H O L D E R S
+Mark V. Pay originally developed a model of the peak watt indicator for
his own private use and then began development with Kent Gilson of a possible
manufacturing prototype.
*James D. Lawrence, Jr. received stock as an incentive to sit on the Board
of Directors and to act as an officer of the Company.
^L. Douglas Monson, counsel to the Company, received stock as payment in
consideration of his reducing normal legal fee with respect only to the legal
work done in effecting this offering.
C O M M O N S T O C K
The presently outstanding shares were issued on December 1, 1983. These
shares are subject to restrictions on trading and generally must be held at
least two years. These shares may be traded or sold pursuant to Rule 144 or
other exemption or registration. The Company's authorized stock consists of
50,000,000 shares of $.001 par value. Shareholders have one vote per share with
respect to all matters considered at meetings of shareholders, including the
election of directors. This means that under the present articles of
incorporation, one-third of the outstanding shares can elect the Board of
Directors or determine action to be taken pursuant to shareholder approval or
vote, unless such action requires more than a majority of a quorum of one-third
under Utah Law. Stockholders are entitled to dividends if lawfully declared and
to participate prorata in other lawful distributions. The shares have no
preemptive rights, no cumulative voting rights, are not subject to redemption
and upon issuance are fully paid and non-assessable. The Company will, upon
request, furnish shareholders with annual reports containing audited financial
statements and may issue other unaudited reports if the Board deems it
advisable.
The Company has paid no dividends, but does intend to pay dividends as soon
as the profit of the Company is sufficiently strong to warrant dividends;
however, this lies within the Board's discretion.
S A L E S P R O V I S I O N S A N D E S C R O W R E Q U I R E M E N T S
Insiders including officers and directors may participate in the public
offering at the price of the Offering. (See "Risk Factors," par. 16 of page 5)
Such shares and purchase(s) are governed by the applicable rules and regulations
of the Utah Securities Division.
Unless the Company sells sufficient stock to raise $9,000, the Company will
receive no proceeds. Until that sum is reached, all proceeds from the Offering
will be deposited into escrow with Utah Bank & Trust, 778 South Main, Salt Lake
City, Utah 84101. After the minimum amount of stock has been sold and the
minimum proceeds deposited into escrow and clearance received from the Utah
Securities Division, the Company will receive the aforesaid sum and such other
amount over said sum as is then on deposit in the escrow account. If the minimum
is not sold or received within twelve months of the date of this Prospectus,
this Offering will terminate. In the event of such termination, the escrow agent
will refund to each purchaser the total amount paid without deductions of any
kind and without interest and any costs will be borne by the Company.
Purchasers will be required to execute the attached Subscription Agreement,
affirming Utah residency and agreeing to certain other provisions. Shares
purchased hereunder must not be sold, transferred or assigned for value to any
non-resident of Utah for at least nine months after the date upon which this
Offering closes.
For purposes of this Offering, a natural person is a Utah resident if he
regards Utah as his residence and his principal residence is in Utah. A
corporation, partnership or other legal entity must have its principal office
within Utah. A
<PAGE>
corporation, partnership or legal entity formed for the purpose of
acquiring stock of this Offering must have all its beneficial owners as
residents of Utah.
An appropriate legend noting ownership and transfer restrictions will be
placed on all certificates of the Company. Restrictions will be placed in the
Company's transfer books and in the books of the Company's Transfer Agent. All
transferees will have similar legends placed on their share certificates.
A C C O U N T I N G M A T T E R S
The Certified Public Accountant for the Company is Timothy, Smith &
Associates, 140 West 800 North, Orem, Utah 84057, who have prepared the
financial statements included in this Prospectus.
L E G A L A N D R E L A T E D M A T T E R S
Opinion of Counsel as required by the Utah Uniform Securities Act is on
file with the Utah Securities Division. Such opinion was rendered by L. Douglas
Monson, 60 North 300 West, Provo, Utah 84601. Mr. Monson is a shareholder. He
is, therefore, not totally independent counsel. It is the opinion of Counsel
that the securities offered pursuant to this Prospectus, when sold, will be
legally issued, fully paid and nonassessable.
Written consents, if required, for the use of names, reports or opinions,
have been filed with the Utah Securities Division. Use of other names or
references in this Prospectus is implied or given by virtue of documents or
agreements on file with such Division.
Directors and officers of the Company certify that to the best of their
knowledge: (1) neither the Company nor any of its officers and directors are
parties to any legal proceedings or litigation; (2) no such litigation is
threatened or contemplated; (3) none of the officers or directors has been
convicted of a felony and none has been convicted of any criminal offense,
felony or misdemeanor, relating to securities or performance in corporate
office; and (4) non investigations of such felonies, malfeasance in office or
securities investigations are either pending or threatened at the present.
A D D I T I O N A L I N F O R M A T I O N
The Company has filed a Registration Statement with the Utah Securities
Division, 160 East 300 South (Heber Wells Building), Salt Lake City, Utah 84110.
A copy of the Registration Statement is also available for inspection at the
Company's offices. Statements made in this Registration Statement are qualified
by actual reference to the exhibit for a complete statement of its contents.
<PAGE>
G E N E R A L S H A R E H O L D E R I N F O R M A T I O N
The Company's fiscal year ends on March 31 each year.
The Utah Securities Division, market maker, shareholders and subscribers
will be notified of material changes in the management, purpose and control of
the Company or of any adverse or material conditions affecting the Company.
The directors of the Company have certain liabilities by virtue of the Utah
Business Corporation Act, Title 16 Chapter 10. Subscribers should consult the
Business Corporation Act if further information is desired with respect to
responsibilities of officers and directors. The Utah Business Corporation Act,
Title 16-10-47 requires the Company to make books and records of the Company
available at its registered office or transfer agent to any shareholder of
record upon written request. Shareholders may, upon written request, either in
person or through their attorney or agent, examine the books and records of the
Company. The request shall state the purpose and shall be related to the
person's interest as a shareholder. Examination may be made during reasonable
business hours. The most recent financial statement shall be mailed to a
shareholder upon written request.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001041711
<NAME> UNITED STATES MINING & EXPLORATION, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> MAR-31-1997 MAR-31-1998
<PERIOD-START> APR-01-1996 APR-01-1997
<PERIOD-END> MAR-31-1997 JUN-30-1997
<EXCHANGE-RATE> 1 1
<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> 1,902 4,396
<BONDS> 0 0
0 0
0 0
<COMMON> 42,405 491
<OTHER-SE> (44,307) (4,887)
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 5,133 2,494
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 7,181 (2,494)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 12,314 0
<CHANGES> 0 0
<NET-INCOME> 7,181 (2,494)
<EPS-PRIMARY> 0.01 (0.01)
<EPS-DILUTED> 0.01 (0.01)
</TABLE>
