SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
November 11, 1997
Date of Report
(Date of Earliest Event Reported)
UNITED STATES MINING & EXPLORATION, INC.
(Exact Name of Registrant as Specified in its Charter)
Utah 0-22851 87-0401942B
(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
13212 N.E. 16th Street, #311
Bellevue, Washington 98005
(Address of Principal Executive Offices)
Registrant's Telephone Number
(425) 643-0777
5525 South 900 East, Suite 110
Salt Lake City, Utah 84117
(Former Name or Former Address if changed Since Last Report)
<PAGE>
Item 1. Changes in Control of Registrant.
(a) Pursuant to a Reorganization Agreement (the "Plan") dated
October 31, 1997, and deemed to have been closed as of November 11, 1997,
between the Registrant; Global Digital Information, Inc., a Washington
corporation ("GDI"), and certain stockholders (all but four of these
stockholders were "accredited investors" as that term is defined under
applicable securities laws, rules and regulations) and an option holder of GDI
(sometimes collectively called the "GDI Stockholders"), the GDI Stockholders
became the controlling stockholders of the Registrant in a transaction viewed
as a reverse acquisition, and the Registrant became a 96.3%-owned subsidiary
of GDI. The Plan was treated as a recapitalization of the Registrant for
accounting purposes.
The Plan was adopted, ratified and approved by the Board of
Directors of the Registrant at a special meeting held on October 31, 1997, and
adjourned to November 3, 1997.
The former principal stockholders of the Registrant and their
percentage of ownership of the outstanding voting securities of the Registrant
prior to the completion of the Plan were: Sheryl Ross, former President and
Director, owned no shares of the Registrant; Wayne R. Bassham, former
Secretary/Treasurer and Director, owned 240 pre-split shares; Jenson Services,
Inc., a financial consultant and principal stockholder of the Registrant,
owned 249,188 pre-split shares or 50.7%; and Hubert and Sharon Lambert,
principal stockholders of the Registrant, owned 198,569 pre-split shares or
40.4%
The source of the consideration used by GDI and the GDI Stockholders
to acquire their respective interests in the Registrant was the exchange of
93.7% of the outstanding common stock (or an option to acquire common stock as
regards the option holder) of GDI pursuant to the Plan.
The basis of the "control" by the GDI Stockholders is stock
ownership. See the table below under Paragraph (b) of this Item.
Pursuant to the Plan, the Registrant was required:
1. To exchange 8,500,000 "unregistered" and "restricted"
post-split shares of the Registrant, pro rata, in exchange for all of the
outstanding shares of common stock of GDI (only 96.3% of the GDI stockholders
have currently executed and delivered a copy of the Plan); and to exchange an
option to acquire 50,000 shares of common stock of the Registrant for an
option to acquire 50,000 shares of common stock of GDI, on like terms and
conditions;
2. To effect a forward split of the outstanding common stock of
the Registrant on the basis of two shares for each one share owned, increasing
the 491,314 pre-Plan outstanding shares of the Registrant to 982,628 shares;
3. To issue 440,962 "unregistered" and "restricted" shares
pursuant to Regulation S in consideration of $52,500 (Schedule D to the Plan);
4. To adopt a written compensation agreement (the Consultant's
Compensation Agreement No. 1 [the "Plan"]) pursuant to which two individual
consultants, including one of its attorneys (collectively, the Consultants),
were granted options to acquire an aggregate total of 276,410 shares of common
stock of the Registrant at an exercise price of $0.01 per share as outlined in
Schedule D to the Plan. The Registrant filed an S-8 Registration Statement
covering the shares underlying these options on or about November 5, 1997. A
copy of the Plan was filed as an exhibit to the Registration Statement. Such
Registration Statement shall be deemed to have been incorporated herein by
reference; and
5. Following resignations, in seriatim, of the directors and
executive officers of the Registrant, the designation and election, in
seriatim, of Jeffery Beneson, Jose-Luis Riesco, Morris Gorelick and David D.
Meunier, as directors and executive officers of the Registrant, to serve until
the next annual meeting of stockholders and until their respective successors
are elected and qualified or until their prior resignation or termination.
These persons served in these same capacities for GDI prior to the completion
of the Plan. Resumes of these persons are included below under the caption
"Management" of Item 2.
96.3% of the GDI Stockholders and the option holder have adopted,
ratified and approved the Plan; however, the Registrant anticipates receiving
the approval of 100% of the GDI stockholders and will continue to accept
ratification by the remaining stockholders under the same terms and
conditions.
Taking into account the shares issued to the GDI Stockholders, the
shares issued pursuant to Schedule D to the Plan and the two for one forward
split, there were 10,200,000 outstanding shares of common stock of the
Registrant on the completion of the Plan.
A copy of the Plan, including any material exhibits and related
instruments, accompanies this Report, which, by this reference, is
incorporated herein; the foregoing summary is modified in its entirety by such
reference. See Item 7.
(b) The following table contains information regarding
shareholdings of the Company's directors and executive officers and those
persons or entities who beneficially own more than 5% of the Company's common
stock, after taking into account the completion of the Plan:
Amount and Nature Percent
of Beneficial of
Name Title Ownership Class
Jeffrey Beneson President and 675,000 6.6%
Director
Jose-Luis Riesco Director -0- -0-
Morris Gorelick Director 285,000 2.8%
David D. Meunier Director 289,618 2.8%
Technologie Information Shareholder 1,000,000 9.8%
Systems, Ltd.
All directors and executive 1,249,618 12.3%
officers as a group (4)
Item 2. Acquisition or Disposition of Assets.
(a) See Item 1 of this Report. The consideration exchanged under
the Plan was negotiated at "arms length" between the directors and executive
officers of the Registrant, the Board of Directors of GDI and the GDI
Stockholders, and the Board of Directors of the Registrant used criteria used
in similar proposals involving the Registrant in the past, including the
relative value of the assets of the Registrant; its present and past business
operations; future potential of GDI; its management; and the potential benefit
to the stockholders of the Registrant. The members of the Board of Directors
determined in their good faith that the consideration for the exchange was
reasonable, under these circumstances.
No director, executive officer or person who may be deemed to be an
affiliate of the Registrant had any direct or indirect interest in GDI prior
to the completion of the Plan.
(b) The Registrant intends to continue the business operations
formerly conducted by GDI, which are described below under the caption
Business. Also see the financial statements of GDI accompanying this Report,
which are described in Item 7, for a description of any assets of GDI and a
description of its facilities.
Business
The Registrant designs, develops, markets and supports medical
document management systems and personal productivity software which
facilitates the recording, imaging, manipulation, distribution and storage of
paper-based medical information on personal network computers. GDI acquired
"CaduSys Medical Record," a client/server clinical information software
package that collects and stores patient data during the creation of the
clinical narrative. It is sold to health care organizations including, but not
limited to, single and multi-doctor practices, clinics, health care
organizations and small hospitals. Some of the Registrant's other products
include office adaptations which use the personal computer to eliminate paper
in the office filing system.
Management
Names Title or Position* Age
Jeffrey Beneson President and Director 52
Jose-Luis Riesco Director 37
Morris Gorelick Director 76
David D. Meunier Director 36
Jeffrey Beneson, Founder, has served as President and a director
since inception. Mr. Beneson has an extensive background in business
development and merchant banking, serving as a Manager for Emmett Larkin Co.,
(NASD member firm) of San Francisco. Formerly, Mr. Beneson worked in top
management with various national advertising and manufacturing concerns
including Careff Paint & Chemical and Stewart Oxygen Service. Mr. Beneson
attended San Fernando Valley College majoring in Marketing.
Jose-Luis Riesco has acted as a director of the Company since
August, 1996. Mr. Riesco works for Microsoft Corporation as International
Vendor Development Manager, responsible for localization of software and
manuals published in Spanish, German, Italian, French and Portuguese. Mr.
Riesco attended the Universidad de Oviedo, Spain, where he received his
Bachelor's Degree in 1984 and his Master's in Spanish Linguistics in 1986.
Morris Gorelick serves the Company as a director. Mr. Gorelick
brings over 50 years experience in business and finance to the Company. After
attending the University of Washington School of Pharmacology, Mr. Gorelick
founded and continues to operate Thrifty Plumbing Supply of Seattle for over
40 years. Additionally, he is a co-founding financier in Starbucks, Triadd
Software (document storage), Transwest Communications (telephone
interconnection, Ultra Vection International (home electronics), and Medical
Research and Marketing.
David D. Meunier serves as a director and as President of CaduSys
Software, the Company's wholly-owned subsidiary. Mr. Meunier brings software
design experience and business leadership qualities to the Company. Mr.
Meunier's background includes clinical observation reporting, medical legacy
system integration, medical client/server application design, and database
design, on a variety of operating systems. Mr. Meunier has managed design
teams engineering systems for the University of Nebraska Medical Center and
formerly worked as Vice-President for Reliable Services and President of
Cascade Computer Technologies. Mr. Meunier founded CaduSys Software in 1994.
Item 3. Bankruptcy or Receivership.
None; not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
None; not applicable.
Item 5. Other Events.
See Item 1.
Item 6. Resignations of Directors and Executive Officers.
As a result of the completion of the Plan, Sheryl Ross resigned as
President and Director; and Wayne R. Bassham resigned as Secretary/Treasurer
and Director. See Item 1(a).
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Audited Financial Statements of Global Digital Information, Inc.
for the period ended July 31, 1997
----------------------------------
Accountant's Report
Balance Sheet
Statement of Earnings (Deficit) and Retained Deficit
Statement of Shareholders' Equity
Statement of Cash Flows
Notes to Financial Statements
Unaudited Financial Statements of Global Digital Information, Inc.
for the period ended September 30, 1997
---------------------------------------
Accountant's Report
Balance Sheet
Statement of Earnings (Deficit) and Retained Deficit
Statement of Shareholders' Equity
Statement of Cash Flows
Notes to Financial Statements
(b) Pro Forma Financial Information.
Combined Balance Sheets, Statements of Operations and Statements
of Cash Flows of United States Mining & Exploration, Inc. and
Global Digital Information, Inc. as of September 30, 1997.
----------------------------------------------------------
Report of Independent Certified Public Accountant.
Combined Balance Sheets
Combined Statements of Operations
Combined Statements of Cash Flows
Notes to Financial Statements
(c) Exhibits.
Exhibit
Description of Exhibit* Number
Reorganization Agreement 2
Documents Incorporated by Reference*
Form 10-SB
Form 10-SB-A1
Form 10-SB-A2
S-8 Registration Statement filed on
or about November 5, 1997
* Summaries of any exhibit are modified in their
entirety by this reference to each exhibit.
Item 8. Change in Fiscal Year.
None; not applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
The Registrant adopted resolutions to issue 440,962 "unregistered"
and "restricted" shares of its common stock in consideration of cash in the
amount of $52,500, as outlined in Schedule D to the Plan, and all subject to
the execution and delivery of Regulation S Subscription Agreements which
provided, among other things, for a "restrictive legend" to be imprinted on
each such stock certificate, the receipt of an acceptable opinion from counsel
satisfactory to the Company that such legend may be removed and after such
removal, that such shares may be resold in compliance with Section 5 of the
Securities Act of 1933, as amended, or an exemption from such registration
provisions and that any resales be effected in compliance with the terms and
provisions of Rule 144, save for the holding period and the "Notice" filing
requirements; and the Registrant has verified that the respective subscribers
are non-U.S. residents, that the subscribers were offshore at the time of the
purchase and that payment was made from offshore.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
UNITED STATES MINING & EXPLORATION, INC.
Date: 12/2/97 By /s/ Jeffrey Beneson
President and Director
<PAGE>
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JULY 31, 1997
<PAGE>
Thomas J. Harris [letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
GLOBAL DIGITAL INFORMATION, INC
(A DEVELOPMENT STAGE COMPANY)
Bellevue, Wa.
We have audited the accompanying balance sheet of GLOBAL DIGITAL
INFORMATION, INC. (A DEVELOPMENT STAGE COMPANY) as of JULY 31, 1997 and
the related abatements cf earnings (deficit) and retained deficit and
cash flows for the period from inception June 25, 1997 to JULY 31, 1997.
These financial statements are the responsibility of 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 audit
provides 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 GLOBAL
DIGITAL INFORMATION, INC., as of JULY 31, 1597, and the results of its
operations and cash flows for the period then ended, in conformity with
generally accepted accounting principles.
/s/Thomas J. Harris
SEPTEMBER 29, 1997
Seattle, Washington
<TABLE>
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY)
<CAPTION>
BALANCE SHEET
JULY 31, 1997
Assets
<S> <C>
CURRENT ASSETS:
Cash in bank $ 39,265
Accounts Receivable 4,500
TOTAL CURRENT ASSETS $ 43,765
PROPERTY & EQUIPMENT:
Office Equipment $ 1,028
TOTAL FIXED ASSETS $ 1,028
OTHER ASSETS
CaduSys Software $ 8,151
TOTAL ASSETS $ 52,944
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
TOTAL CURRENT LIABILITIES $ -0-
TOTAL LIABILITIES $ -0-
STOCKHOLDER'S EQUITY:
Common Stock, $. 001 par value;
10,000,000 shares authorized and
8,287,500 shares issued $ 8,288
Paid in Surplus 63,023
Deficit accumulated during the development stage (18,367)
TOTAL STOCKHOLDER'S EQUITY $ 52,944
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 52,944
</TABLE>
See accompanying notes and accountants' report
<TABLE>
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Earnings(Deficit) and Retained Deficit
For the Period From Inception JUNE 25, 1997
to JULY 31, 1997 and Accumulated during the Development Stage
<CAPTION>
JULY 31 Accumulated
1997 during the
development
stage
<S> <C> <C>
REVENUE $ 4,500 $ 4,500
EXPENSES:
Payroll $ 11,700 $ 11,700
Consultants 250 250
Insurance 1,033 1,033
Office 414 414
Postage & Delivery 207 207
Printing & Reproduction 1,400 1,400
Professional fees 1,119 1,119
Rent 860 860
Repairs 18 18
Supplies 1,318 1,318
Telephone 2,643 2,643
Trade Shows 1,300 1,300
Travel & Entertainment $ 607 $ 605
Total Expenses $ 22,867 $ 22,867
NET LOSS FOR THE PERIOD $(18,367) $(18,367)
Retained Deficit
Balance beginning of period $ -0- $ -0-
Balance end of period $(18,367) $(18,367)
</TABLE>
See accompanying notes and accountants' report
<TABLE>
GLOBAL DIGITAL INFORMATION, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION JUNE 25, 1997 TO JULY 31, 1997
COMMON STOCK PAID IN SURPLUS ACCUM
SHARES AMOUNT AMOUNT DEFICIT TOTAL
<S> <C> <C> <C> <C> <C>
Shares issued at par
June, 1997 to Founders
for acquisition rights 8,150,650 $8,151 $ 8,151
Shares issued for cash
June, 1997 to July, 1997
to investors 136,850 $ 137 $ 76,613 $ 76,750
Less expenses of issuing
the Common stock (13,590) $(13,590)
Net Loss $(18,367)$(18,367)
Balance, July 31, 1997 8,287,500 $8,288 $ 63,023 $(18,367)$ 52,944
</TABLE>
<TABLE>
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows
For the Period From Inception JUNE 25, 1997
to JULY 31, 1997 and Accumulated during the Development Stage
<CAPTION>
July 31 Accumulated
1997 During the
Development
Stage
<S> <C> <C>
Operating Activities
Net Income (Loss) $ (18,367) $ (18,367)
Accounts Receivable (4,500) (4,500)
Cash Provided (used) $ (22,867) $ (22,867)
Investing Activities
Investment in Office Equipment $ (1,028) $ (1,028)
Net Cash Provided (used) by investing
Activities $ (1,028) $ (1,028)
Financing Activities
Sale of Common Stock $ 76,750 $ 76,750
Costs of Issuing Common Stock (13,590) (13,590)
Net Cash provided (used) by Financing
Activities $ 63,160 $ 63,160
Increase (Decrease) in Cash $ 39,265 $ 39,265
Cash Balance Beginning $ -0- $ -0-
Cash Balance Ending $ 39,265 $ 39,265
</TABLE>
See accompanying notes and accountants' report
<TABLE>
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 and Accumulated during the Development Stage
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITY
GLOBAL DIGITAL INFORMATION, INC. was incorporated June 25, 1997 in the
State of Washington. The Company designs, develops, markets and supports
medical document management systems and personal productivity software
which facilitates the recording, imaging, manipulation, distribution and
storage of paper-based medical information on personal network computers.
The Company has acquired "CaduSys Medical Record" a client/server
clinical information software package that collects and stores patient
data during the creation of the clinical narrative. It is sold to health
care organizations including, but not limited to, single and multi-doctor
practices, clinics, health care organizations and small hospitals. Some
of the Company's other products include office adaptations which use the
personal computer to eliminate paper in the office filing system.
NOTE B - RELATED PARTY TRANSACTIONS
The Company has acquired its rights to most of its software programs from
its shareholders who are also shareholders in previous corporations which
had these rights or had developed the programs. The company purchased
these rights through the issuance of common stock. Although the value of
these rights may be substantial because of the lack of a proper valuation
method, they have been recorded at the par value of the stock issued. ie,
8,150,160 shares were issued to the founders and they have been valued at
$.001 per share or $8,151.
NOTE C - INCOME TAXES
The company may have an unused net operating loss carry forward to use in
future years assuming it will have profitable operations in those years,
if not used these loss carry forward will expire in 2012. No deferred tax
assets have been computed because the valuation allowance would eliminate
the amount accrued.
NOTE D - ISSUANCE OF COMMON STOCK
Effective July 1, 1997, the Company offered shares of its common stock to
a limited number of investors pursuant to a Regulation D exemption up to
a maximum of 100,000 shares at $5.00 per share or $500,000. At July 31,
1997, as a result of this offering, 136,850 Common Shares of stock were
sold to individual investors for $1.00 per unit, netting the company
$76,750. The placement is being offered on a "best efforts" basis by
various employees and officers of the company. Fees and expenses were
paid in conjunction with the offering amounting to $13,590 at July 31,
1997, including commissions. The offering as of September 29, 1997 has
total shares sold of 338,350 for $221,250 and expenses of $32,240 for a
net total of $189,010.
NOTE E - CASH TRANSACTIONS
Since no cash was actually paid by the company for the acquisition of
the CaduSys software no cash disbursements have been shown on these
financial statements for that transaction.
<PAGE>
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY )
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
<PAGE>
Board of Directors
GLOBAL DIGITAL INFORMATION, INC
Seattle, Washington
We have compiled the accompanying balance sheet of GLOBAL DIGITAL INFORMATION,
INC, as of SEPTEMBER 30, 1997, and the related statement of income and
retained earnings for the period then ended, in accordance with Statements on
Standards for Accounting and Review Services issued by the American Institute
of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
that which is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not
express an opinion or any form of assurance on them.
/s/Thomas J. Harris
October 30, 1997
<PAGE>
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1997
UNAUDITED
<CAPTION>
Assets
<S> <C>
CURRENT ASSETS: $ 38,612
Accounts Receivable 4,500
TOTAL CURRENT ASSETS $ 43,112
PROPERTY & EQUIPMENT:
Office Equipment $ 19,403
TOTAL FIXED ASSETS $ 19,403
OTHER ASSETS
CaduSys Software $ 8,151
TOTAL ASSETS $ 70,666
LIABILITIES & STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Payroll taxes $ 6,639
TOTAL CURRENT LIABILITIES $ 6,639
TOTAL LIABILITIES $ 6,639
STOCKHOLDER'S EQUITY:
Common Stock, no par; $.001 stated value;
10,000,000 shares authorized and
8,489,000 shares issued $ 8,489
Paid in Surplus 181,379
Deficit accumulated during the development
stage (l25,841)
TOTAL STOCKHOLDER'S EQUITY $ 64,027
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 70,666
</TABLE>
See accompanying notes and accountants' report
<TABLE>
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Earnings(Deficit) and Retained Deficit
UNAUDITED
For the Period From Inception JUNE 25, l997
to SEPTEMBER 30, 1997 and Accumulated during the Development Stage
<CAPTION>
JULY 31 Accumulated
1997 during the
development
stage
<S> <C> <C>
REVENUE $ 7,750 $ 7,750
EXPENSES:
Payroll $ 81,987 $ 61,987
Consultants 250 250
Insurance 3,388 3,388
Miscellaneous 3,248 3,248
Office 3,419 3,419
Postage & Delivery 820 820
Printing & Reproduction 6,951 6,951
Professional fees 1,631 1,631
Rent 3,180 3,180
Repair 18 18
Supplies 2,597 2,597
Telephone 9,503 9,503
Trade Shows 6,922 6,922
Travel & Entertainment $ 9,677 $ 9,677
Total Expenses $ 133,591 $ 133,591
NET LOSS FOR THE PERIOD $(125,841) $(125,841)
Retained Deficit
Balance beginning of period $ -0- $ -0-
Balance end of period $(125,841) $(125,841)
</TABLE>
See accompanying notes and accountants' report
<TABLE>
GLOBAL DIGITAL INFORMATION, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION JUNE 25, 1997 TO SEPTEMBER 30, 1997
UNAUDITED
<CAPTION>
COMMON STOCK PAID IN SURPLUS ACCUM
SHARES AMOUNT AMOUNT DEFICIT TOTAL
<S> <C> <C> <C> <C> <C>
Shares issued at par
June, 1997 to Founders
for acquisition rights 8,150,650 $ 8,151 $ 8,151
Shares issued for cash
June, 1997 to September
1997 to investors 338,350 $ 338 $225,912 $ 226,250
Less expenses of issuing
the common stock (44,533) $ (44,533)
Net Loss $(125,841)$(125,841)
Balance, September
30, 1997 8,489,000 $ 8,489 $181,379 $(125,841)$ 64,027
</TABLE>
<TABLE>
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows
UNAUDITED
For the Period From Inception JUNE 25, 1997
to SEPTEMBER 30, 1997 and Accumulated during the Development Stage
<CAPTION>
September 31 Accumulated
1997 During the
Development
Stage
<S> <C> <C>
Operating Activities
Net Income (loss) $ (l25,841) $ (125,841)
Accounts Receivable (4,500) (4,500)
Payroll Taxes 6,639 6,639
Cash Provided (used)
by Operations $ (123,702) $ (123,702)
Investing Activities
Investment in Office Equipment $ (19,403) $ (19,403)
Net Cash Provided(used) by Investing
Activities $ (19,403) $ (19,403)
Financing Activities
Sale of Common Stock $ 226,250 $ 226,250
Costs of Issuing Common Stock (44,533) (44,533)
Net Cash provided (used) by Financing
Activities $ 181,717 $ 181,717
Increase (Decrease) in Cash $ 38,612 $ 38,612
Cash Balance Beginning $ -0- $ -0-
Cash Balance Ending $ 38,612 $ 33,612
</TABLE>
See accompanying notes and accountants' report
GLOBAL DIGITAL INFORMATION, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 and Accumulated during the Development Stage
UNAUDITED
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITY
GLOBAL DIGITAL INFORMATION, INC. was incorporated June 25, 1997 in the
State of Washington. The Company designs, develops, markets and supports
medical document management systems and personal productivity software
which facilitates the recording, imaging, manipulation, distribution and
storage of paper-based medical information on personal network computers.
The Company has acquired "CaduSys Medical Record" a client/server
clinical information software package that collects and stores patient
data during the creation of the clinical narrative. It is sold to health
care organizations including, but not limited to, single and multi-doctor
practices, clinics, health care organizations and small hospitals. Some
of the Company's other products include office adaptations which use the
personal computer to eliminate paper in the office filing system.
NOTE B - RELATED PARTY TRANSACTIONS
The Company has acquired its rights to most of its software programs from
its shareholders who are also shareholders in previous corporations which
had these rights or had developed the programs. The company purchased
these rights through the issuance of common stock. Although the value of
these rights may be substantial because of the lack of a proper valuation
method, they have been recorded at the par value of the stock issued. ie,
8,150,160 shares were issued to the founders and they have been valued at
$.001 per share or $8,151.
NOTE C - INCOME TAXES
The company may have an unused net operating loss carry forward to use in
future years assuming it will have profitable operations in those years,
if not used these loss carry forward will expire in 2012. No deferred tax
assets have been computed because the valuation allowance would eliminate
the amount accrued.
NOTE D - ISSUANCE OF COMMON STOCK
Effective July 1, 1997, the Company offered shares of its common stock to
a limited number of investors pursuant to a Regulation D exemption up to
a maximum of 100,000 shares at $5.00 per share or $500,000. At July 31,
1997, as a result of this offering, 136,850 Common Shares of stock were
sold to individual investors for $1.00 per unit, netting the company
$76,750. The placement is being offered on a "best efforts" basis by
various employees and officers of the company. Fees and expenses were
paid in conjunction with the offering amounting to $13,590 at July 31,
1997, including commissions. The offering as of September 29, 1997 has
total shares sold of 338,350 for $221,250 and expenses of $32,240 for a
net total of $189,010.
NOTE E - CASH TRANSACTIONS
Since no cash was actually paid by the company for the acquisition of
the CaduSys software no cash disbursements have been shown on these
financial statements for that transaction.
<PAGE>
UNITED STATES MINING & EXPLORATION, INC.
PRO FORMA FINANCIAL STATEMENTS
REFLECTING REORGANIZATION WITH
GLOBAL DIGITAL INFORMATION, INC.
September 30, 1997
<PAGE>
Independent Accountants' Report
To the Directors and Shareholders
United States Mining & Exploration, Inc.
The accompanying pro forma balance sheet of United States Mining &
Exploration, Inc., as of September 30, 1997, and the related statements of
operations for the period then ended were not audited by us and accordingly,
we do not express an opinion on them.
November 25, 1997
Mantyla, McReynolds and Associates<PAGE>
<TABLE>
UNITED STATES MINING & EXPLORATION, INC.
PRO FORMA BALANCE SHEET
REFLECTING REORGANIZATION WITH
GLOBAL DIGITAL INFORMATION, INC.
September 30, 1997
<CAPTION>
ASSETS
United States Global Digital Adjustments Pro Forma
Mining Information
<S> <C> <C> <C> <C>
Current Assets:
Cash in bank $ 0 $ 38,612 $ 0 $ 38,612
Accounts receivable 0 4,500 0 4,500
Total Current Assets 0 43,112 0 43,112
Property and Equipment 0 19,403 0 19,403
Other Assets 0 8,151 0 8,151
TOTAL ASSETS $ 0 $ 70,666 $ 0 $ 70,666
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Payroll taxes $ 0 $ 6,639 $ 0 $ 6,639
Total Current Liabilities 0 6,639 0 6,639
TOTAL LIABILITIES 0 6,639 0 6,639
STOCKHOLDERS' EQUITY
Common stock (Note 1) 491 8,489 1,220 10,200
Paid in capital 441,169 181,379 (1,220) 621,328
Accumulated deficit (441,660) (125,841) 0 (567,501)
Total Stockholders'
Equity 0 64,027 0 64,027
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 70,666 $ 0 $ 70,666
</TABLE>
See accompanying accountants' report and notes to pro forma financial
statements.
<TABLE>
UNITED STATES MINING & EXPLORATION, INC.
PRO FORMA STATEMENT OF OPERATIONS
REFLECTING REORGANIZATION WITH
GLOBAL DIGITAL INFORMATION, INC.
For the Three Month Period Ended September 30, 1997(Note 2)
<CAPTION>
United States Global Digital Adjustments Pro Forma
Mining Information
<S> <C> <C> <C> <C>
Revenue $ 0 $ 7,750 $ 0 $ 7,750
General and
Administrative Expenses 1,135 133,591 0 134,726
Net Loss From
Operations (1,135) (125,841) 0 (126,976)
Extraordinary Income:
Debt Forgiveness 5,531 0 0 5,531
Net Income/(Loss) $ 4,396 $ (125,841) $ 0 $(121,445)
Net Income/(Loss) per
Share $ .01 $ (.01) $ (.01) $ (.01)
Weighted Average Shares
Outstanding 491,314 8,489,000 1,219,686 10,200,000
</TABLE>
See accompanying accountants' report and notes to pro forma financial
statements.
<TABLE>
UNITED STATES MINING & EXPLORATION, INC.
PRO FORMA STATEMENT OF OPERATIONS
REFLECTING REORGANIZATION WITH
GLOBAL DIGITAL INFORMATION, INC.
For the Six Month Period Ended September 30, 1997(Note 2)
<CAPTION>
United States Global Digital Adjustments Pro Forma
Mining Information
<S> <C> <C> <C> <C>
Revenue $ 0 $ 7,750 $ 0 $ 7,750
General and Administrative
Expenses 3,629 133,591 0 137,220
Net Loss From
Operations (3,629) (125,841) 0 (129,470)
Extraordinary Income:
Debt Forgiveness 5,531 0 0 5,531
Net
Income/(Loss) $ 1,902 $(125,841) $ 0 $(123,939)
Net Income/(Loss) per
Share $ .01 $ (.01) $ (.01) $ (.01)
Weighted Average
Shares Outstanding 491,314 8,489,000 1,219,686 10,200,000
</TABLE>
See accompanying accountants' report and notes to pro forma financial
statements.
UNITED STATES MINING & EXPLORATION, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
REFLECTING REORGANIZATION WITH
GLOBAL DIGITAL INFORMATION, INC.
September 30, 1997
Note 1 STOCK SPLIT/REORGANIZATION AGREEMENT
Effective November 3, 1997, United States Mining & Exploration
("Company") resolved to forward split its then outstanding shares of
common stock on a two for one basis, while retaining the present
authorized capital of 50,000,000 shares and $ 0.001 par value. The
Company further resolved to issue 440,962 post-split shares for $52,500,
and 276,410 shares for services rendered by related parties. Prior to
the reorganization referred to below, the total shares outstanding as a
result of these events is 1,700,000.
On October 31, 1997, United States Mining & Exploration ("Company")
entered into an agreement with Global Digital Information, Inc. ("GDI"),
wherein the Company agreed to acquire all of the 8,500,000 outstanding
shares of GDI by issuing one common share of the Company's authorized
shares for each outstanding share of GDI. The name of the Company will
be changed to Global Digital Information, Inc. The reorganization is
reported as a purchase in the pro forma financial statements.
Note 2 PERIOD FOR STATEMENTS OF OPERATIONS
GDI was incorporated in the State of Washington on June 25, 1997. Due to
materiality issues, the pro forma statements of operations reflect
activity from June 25, 1997 through September 30, 1997 with respect to
the GDI portion, even though it is stated that the pro forma reports are
presented for the three and six month periods ended September 30, 1997.
REORGANIZATION AGREEMENT
This Reorganization Agreement ("Agreement") is made and entered into
this 31st day of October, 1997 between and among (i) United States Mining &
Exploration, Inc., a Utah corporation, which is referred to herein as the
"Company," (ii) Global Digital Information, Inc., a Washington corporation,
which is referred to herein as "GDI," and (iii) those persons identified in
Schedule A-1 attached hereto, who are the beneficial owners of shares of
common stock of GDI, no par value per share (the "GDI Shareholders" or the
"Shareholders"), and (iv) the person identified in Schedule A-2 hereto, who
is the holder of an option (the "Option") to purchase a total of 50,000
shares of GDI's common stock (the "Option Holder"). The GDI Shareholders, and
the Option Holder shall hereinafter be referred to collectively as the
"Shareholders."
WHEREAS, the GDI Shareholders, as set forth in Schedule A-1, own and have
the right to sell, transfer and convey those shares of GDI's common stock, no
par value per share, set forth in Schedule A-1; and
WHEREAS, the Option Holder, as set forth in Schedule A-2 hereto, owns and
has the right to sell, transfer and convey the Option to purchase 50,000
shares of the common stock of GDI , which constitutes one hundred percent
(100%) of the issued and outstanding options of GDI; and
WHEREAS, the Company wishes to acquire one hundred percent (100%) of the
issued and outstanding common stock of GDI through exchanging for the shares
of GDI's common stock held by the Common Shareholders, shares of the Company's
$0.001 par value per share common stock as set forth in Schedule A-1 hereto;
and
WHEREAS, the Company also wishes to acquire one hundred percent (100%) of
the issued and outstanding option of GDI, from the Option Holder through
exchanging for the Option held by such Option Holder, the Company's options as
set forth in Schedule A-2 hereto, possessing identical rights, terms and
provisions as the GDI Option; and
WHEREAS, the GDI Shareholders have agreed to exchange their GDI common
shares for shares of the Company's common stock as set forth in Schedule A-1;
and
WHEREAS, the Option Holder has agreed to exchange his GDI Option for the
Company's newly issued options as set forth in Schedule A-2 hereto, possessing
identical rights, terms and conditions as the GDI Option; and
WHEREAS, the parties hereto wish to formalize the above mentioned
agreements and thereafter accomplish such exchange on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties hereto have agreed and by these
presents do hereby agree as follows:
1. Representations and Warranties by GDI and the GDI Shareholders. GDI
and those GDI Shareholders that shall execute and deliver their respective
counterpart signature pages to this Agreement, only to the extent that such
GDI Shareholders are expressly referred to herein, hereby jointly and
severally make the following express representations and warranties to the
Company:
A. GDI is a corporation duly organized, validly existing and in good
standing under the laws of the state of Washington and has the
corporate power to own its property and carry on its business in the
locations which its business is now conducted. Copies of GDI's
Articles of Incorporation and By-laws have heretofore been furnished
to the Company by GDI, and all such copies are true, correct and
complete copies of the original Articles of Incorporation and
By-laws including all amendments thereto.
B. GDI has the corporate authority to issue a total of 10,000,000
shares of common stock with no par value par value per share, of
which 8,500,000 shares of have been issued and are outstanding. In
addition, GDI has issued and outstanding that Option to purchase
shares of its common stock set forth in Schedule A-2 hereto.
C. Since inception, GDI has sold shares of its common stock to various
investors in transactions described in Schedule B hereto. Such sales
were conducted pursuant to exemptions from registration under the
Securities Act of 1933, as amended (the "Act") and state securities
laws applicable to the offer and sale of securities ("State Acts").
Schedule B hereto accurately identifies by asterisk those investors
in GDI'S common stock that are known by GDI of certainty as
qualified "Accredited Investors" as such term is defined in
Regulation D as promulgated under the Act. The offering documents
utilized by GDI in offering and selling its shares to those
investors identified in Schedule B hereto contained no misstatements
or omissions respecting any material facts and the GDI shares
offered and sold to such investors were offered and sold in
compliance with the Act and all State Acts. ").
D. Each of the GDI Shareholders has full power and authority to
exchange their respective shares of GDI upon the terms and
conditions provided for in this Agreement, and said shares have been
duly and validly issued and will be free and clear of any lien or
other encumbrance on the Closing Date specified herein.
E. The Option Holder has the full power and authority to exchange the
Option, which is held by him upon the terms and conditions provided
for in this Agreement, and said Option has been duly and validly
issued and will be free and clear of any lien or other encumbrance
on the Closing Date specified herein.
F. The GDI balance sheet dated July 31, 1997 (the "Balance Sheet")
attached hereto as Exhibit 1, contains substantially true and
correct statements concerning GDI and the financial condition of
GDI's assets and liabilities as of such date. Except as described
in the Balance Sheet or Exhibit 2 attached hereto, GDI has not:
(1) issued any additional shares of its capital stock, or
any additional options to acquire such stock, to any
person;
(2) paid or declared any dividends or distributions of
capital, surplus, or profits with respect to any of its
issued and outstanding shares of capital stock; or
(3) entered into any other transaction or agreement which
would, or might, materially impair the shareholder's
equity of GDI.
G. Since July 31, 1997, and except as provided in the Balance
Sheet or Exhibit 2 attached hereto, GDI has not engaged in any
material transactions other than transactions in the normal
course of the operation of its business, which would, or
might, materially impair the shareholder's equity of GDI as
reflected in the Balance Sheet.
H. GDI is not involved in any pending or threatened litigation
which would, or might, materially affect its financial
condition and which has not been:
(1) disclosed in the Balance Sheet, or
(2) disclosed to the Company in writing.
I. GDI has good and marketable title to all of its material
property and assets free and clear of any and all liens,
encumbrances or restrictions, except for:
(1) taxes and assessments which may become due and payable
in the ordinary course of business; and
(2) easements or other minor restrictions with respect to
its property which do not materially affect the present
use of such property.
J. Except as disclosed in the Balance Sheet, there are no unpaid
assessments or proposed assessments of taxes pending against
GDI and all liabilities for taxes, as shown on the tax returns
filed, or to be filed, by GDI, have been paid or the liability
therefor has been provided for and all taxes for periods
subsequent to the periods covered by said returns likewise
have been paid or adequately accrued; except where the failure
to pay would not have a material adverse effect on the
business of GDI.
K. The GDI Shareholders are acquiring the common stock of the
Company, and the Option Holder is acquiring the option of the
Company solely for their own accounts, for investment, and not
with a view to any subsequent "distribution" thereof within
the meaning of the Act. The GDI Shareholders understand that
the Company's common stock, and the Option Holder understands
that the Company's options and the shares of the Company's
common stock issuable upon exercise of its options have not
been registered under the Act or securities laws of any State
("State Act") by reason of the specific exemptions therefrom,
which exemptions depend in part upon their subjective
investment intent as expressed herein.
L. The GDI Shareholders and the Option Holder hereby acknowledge
that:
(1) They are an "Accredited Investor" as such term is
defined in Regulation D promulgated under the Act, or
they have such knowledge and experience in financial and
business matters that they are capable of evaluating the
merits and risks of the proposed exchange of GDI's
securities for securities of the Company, and
(2) They are able to bear the economic risks of the
investment in the Company's securities and they are
able to protect their own interests in an investment of
this nature.
M. GDI has those subsidiaries set forth in Schedule C hereto.
Each such Subsidiary is duly organized and is authorized to
conduct its business as now conducted.
N. Each of the GDI Shareholders, through execution and delivery
of their respective counterpart signature pages to this
Reorganization Agreement hereby waives any and all preemptive
rights that they may possess in the GDI shares issued to them
or to any other shareholder, it being understood that such
waiver shall apply nunc pro tunc.
GDI, the GDI Shareholders and the GDI Option Holder further represent and
warrant that all of the representations and warranties set forth above are
true as of the date of this Agreement, shall be true at the Closing Date and
shall survive the Closing for a period of one year from the Closing Date.
2. Representations and Warranties by The Company. The Company hereby
makes the following express representations and warranties to GDI and the GDI
Shareholders:
A. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Utah and
has the corporate power to own its properties and carry on its
business as now being conducted. Certified copies of the
Company's Articles of Incorporation and By-Laws have
heretofore been furnished to GDI and the GDI Shareholders by
the Company, and all such copies are true, correct and
complete copies of the original Articles of Incorporation and
By-Laws including all amendments thereto.
B. The Company has the corporate authority to issue a total of
50,000,000 shares of $0.001 par value per share common stock,
of which 491,314 shares are presently issued and outstanding.
As of the date of Closing, there are not any outstanding or
authorized options, warrants, rights, subscriptions, claims of
any character, agreements, obligations, convertible or
exchangeable securities, or other commitments, contingent or
otherwise, relating to the Company's capital stock, pursuant
to which the Company is or may become obligated to issue
shares of the Company's common stock, any other shares of its
capital stock or any securities convertible into, exchangeable
for., or evidencing the right to subscribe for any shares of
the capital stock of the Company. All of the shares of the
Company's common stock have the same voting and other rights.
Notwithstanding the foregoing, The Company will, on or before
closing, forward split its currently issued and outstanding
shares in the ratio of two for one (without changing the par
value thereof) thereby resulting in an increase in the total
number of issued and outstanding shares to 982,628.
C. Commencing February 9, 1984 and ending in January 15, 1985,
the Company offered and sold to the public, 1,369,600 shares
of its common stock for gross offering proceeds of $13,696.
Such offering was conducted by the Company pursuant to a
Registration by Qualification filed by the Company with the
State of Utah and Section 3 (a) (11) of the Securities Act of
1933, as amended and Rule 147 promulgated thereunder.
D. The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Company has prepared and filed with the Securities
and Exchange Commission ("SEC") a Form 10SB which became
effective on September 15, 1997. The Company's 10SB, as
amended is attached hereto as Exhibit 3. The Company has also
prepared and filed information to conform with the provisions
of Subparagraph (a)(5) of Rule 15c211 of the Securities
Exchange Commission and its shares of common stock were
previously qualified for trading on the NASD Electronic
Bulletin Board.
E. Subsequent to the Closing Date of this Reorganization
Agreement, the Company will file an amendment to its Articles
of Incorporation and adopt such resolutions as necessary for
the purpose of changing the name of the Company to "Global
Digital Information, Inc."
F. On or before the Closing Date of this Reorganization
Agreement, the Company shall issue a total of 717,372 shares
of its common stock to those entities set forth in Schedule D
hereto pursuant to those exemptions from registration also set
forth in Schedule D hereto Upon the completion of the above
stock issuance, the Company will have a total of 1,700,000
shares of common stock, with a par value of $0.001 per share,
which are fully paid, validly issued and outstanding.
G. The audited Financial Statements of the Company which are
attached hereto as Exhibit 4 (the "Financial Statements")
constitute substantially true and correct statements of the
financial condition of the Company and the Company's assets,
liabilities and income as of such date. Since the date of the
Balance Sheet contained in the Financial Statements, the
Company has not, except as provided in paragraph 2F herein
above:
(1) issued any additional shares of its common stock to any
person;
(2) paid or declared any dividends or distributions of
capital, surplus, or profits with respect to any of its
issued and outstanding shares of common stock;
(3) paid or agreed to pay any consideration in redemption of
any of its issued and outstanding shares of common
stock; or
(4) entered into any other transaction or agreement which
would, or might, materially impair the shareholder's
equity of the Company as reflected in such Balance
Sheet.
H. The Company, subject to obtaining shareholder approval of the
proposed amendments to its Articles of Incorporation, as
contemplated hereby, which the Company hereby agrees to
faithfully undertake and complete, has the corporate power and
authority to execute and perform all of its duties and
obligations under the terms of this Agreement and to issue and
deliver to the GDI Shareholders those shares of its $0.001
par value per share common stock that are required to be
issued and delivered under the terms of this Agreement and to
issue and deliver to the GDI Option Holder, that option that
is required to be issued and delivered under the terms of this
Agreement.
.
I. The execution and delivery of this Agreement, and the issuance
of the Company's $0.001 par value per share common and options
required to be issued hereunder, will have been duly
authorized by all necessary corporate action and neither the
execution nor delivery of this Agreement nor the issuance of
the Company's $0.001 par value per share common stock and
options, nor the performance, observance or compliance with
the terms and provisions of this Agreement will violate any
provision of law, any order of any court or other governmental
agency, the Articles of Incorporation or By-Laws of the
Company or any indenture, agreement or other instrument to
which the Company is a party, or by which it is bound or by
which any of its property is bound.
J. The Company is not involved in any pending or threatened
litigation which would, or might, materially affect its
financial condition and which has not been:
(1) provided for in the Financial Statements attached hereto
as Exhibit 4, or
(2) disclosed to GDI, the GDI Shareholders and the Option
Holder in writing.
K. The Company has duly and timely filed or prior to Closing will
file with any federal, state, local or foreign governmental
taxing authority, body or agency, all federal, state, local
and foreign tax returns, declarations, reports estimates,
informational returns and statements (collectively ("Returns")
required to be filed or sent by or on behalf of the Company,
at or prior to the date of Closing, and all such Returns are
or will be true, correct and complete. There are no unpaid
assessments or proposed assessments of State or Federal income
taxes pending against the Company. All liabilities for
Federal and State income or franchise taxes, as shown on the
tax returns filed, or to be filed, by the Company, have been
paid or the liability therefor has been provided for in the
attached Balance Sheet and all Federal and State income or
franchise taxes for periods subsequent to the periods covered
by said returns likewise have been paid or adequately accrued;
except where the failure to pay would not have a material
adverse effect on the business of the Company.
L. The shares of the Company's $0.001 par value per share common
stock which will be delivered to the GDI Shareholders pursuant
to the terms of this Agreement will, on delivery in accordance
with the terms hereof, be duly authorized, validly issued and
fully paid and non assessable. The Company's option issuable
to the Option Holder and the shares of common stock issuable
upon exercise of the Company's option have been duly and
validly authorized and, when issued and delivered against
payment as provided herein, will be validly issued, fully paid
and non assessable. The shares of common stock issuable upon
exercise of the Company's option upon issuance, will not be
subject to the preemptive rights of any shareholders of the
Company or any restrictions upon voting or transfer pursuant
to the Company's Articles of Incorporation, Bylaws, or any
agreement to which the Company is a party. The Company's
option issued to the Option Holder, when delivered, will
constitute valid and binding obligations of the Company
enforceable in accordance with their terms. A sufficient
number of shares of the Company's $0.001 par value per share
common stock have been or shall be reserved, for issuance upon
exercise if the Company's option deliverable to the Option
Holder. Upon delivery of and payment for the shares of common
stock issuable upon exercise of the Company's option issued
to the Option Holder, the holder of the Company's option will
receive good and marketable title thereto, free and clear of
all liens, encumbrances, charges and claims except those
created by, through or under the Company's option and except
restrictions on transfer arising under federal and state
securities laws and their rules and regulations. The Company
will have on the at the time of delivery of its option to the
Option Holder the, full legal corporate right and power and
all authorization and approval required by corporate law to
sell, transfer and deliver such option in the manner provided
hereunder, except for applicable restrictions on transfer
arising under federal and state securities laws and their
rules and regulations respecting the offer and sale of
securities.
M. On the Closing Date, the Company will cause those individuals
set forth in Schedule E to be elected to the Company's Board
of Directors.
N. The consummation of the transaction contemplated hereby will
not: (i) violate any provision of the charter, By-laws or
other organizational documents of the Company, (2) violate in
any material respect any statute, ordinance, rule,
regulations, order or decree of any court of any governmental
or regulatory body, agency or authority applicable to the
Company, (3) require the filing with, or obtaining any permit,
consent or approval of, or the giving of any notice to, any
governmental or regulatory body, agency or authority; or (4)
result in a material violation, termination or breach of,
conflict with, constitute (with or without the giving of
notice or lapse of time or both ) a default (or give rise to
any right of termination, cancellation, payment or
acceleration) under, result in the creation of any lien,
security interest, charge or encumbrance upon any of the
properties or assets of the Company, result in the forfeiture
of any rights, entitlements or privileges under, create any
right or entitlement including without limitation, to
employment or compensation) not expressly provided for herein,
or require the consent or approval of any party under, any of
the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, franchise, permit agreement,
lure, agreement or other instrument or obligation to which the
Company is a party, except for such violations, filings,
consents, approvals, notices, terminations, breaches,
conflicts, defaults, liens, security interests, charges,
encumbrances, forfeitures, rights and entitlements that would
not, individually or in the aggregate, have a materially
adverse effect on the condition of the Company taken as a
whole.
O. Except as set forth in the audited Balance sheet of the
Company attached hereto as Exhibit 4, the Company has no
material claims against it, liabilities or indebtedness,
contingent or otherwise. The Company does not know or have
reason to know of any basis for the assertion against the
Company of any liability of any material nature or in any
material amount not fully reflected or reserved against in the
Company's audited Balance sheet.
P. There is no legal, administrative, arbitral or other
proceedings claim, action, cause of action or governmental
investigation of any nature seeking to impose, or that could
result in the imposition, on the Company of any liability
easing under any local, state or federal environmental
statute, regulation or ordinance, including, without
limitation, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, pending or
threatened against the Company, which would be required to be
disclosed pursuant to Item 103 or 303 of Regulation SK (17 CFR
229). To the best knowledge of the Company there is no
reasonable basis for any such proceeding, claim action, or
governmental investigation that would impose any such
liability; and the Company is not subject to any agreement
order, judgment, decree or memorandum by or with any court,
governmental authority, regulatory agency third party imposing
any such liability.
Q. The Company has not established, maintained or contributed to
any employee benefit plans. As used herein, the term
"Employee Benefit Plans" means all employee benefit plans
within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). As of the
date of Closing all other plans, including but not limited to,
programs and arrangements providing profit sharing,
retirement, pension, savings, thrift, deferred compensation,
stock option, stock purchase, group insurance, accident,
sickness, medical, dental, disability, have been terminated
and there are no continuing obligations by the Company
pursuant to said plans. All vacation pay, severance pay,
incentive compensation and bonuses have been paid, and there
are no continuing obligations by the Company.
The Company further represents and warrants that all of the
representations and warranties set forth above are true as of the date of this
Agreement, shall be true at the Closing Date and shall survive the closing for
a period of one year from the Closing Date.
3. Conditions to the Obligations of The Company. The obligations of the
Company hereunder shall be subject to the following conditions:
A. The Company shall not have discovered any material error,
misstatement or omission in any of the representations and
warranties made by GDI, and/or the Shareholders herein and all
the terms and conditions of this Agreement to be performed and
complied with have been performed and complied with.
B. There shall have been no substantial adverse changes in the
financial condition, business or operations of GDI from the
date of this Reorganization Agreement, until the Closing Date,
except for changes resulting from operations in the usual and
ordinary course of its business, and between such dates no
business and assets of GDI shall have been materially
adversely affected as the result of any fire, explosion,
earthquake, flood, accident, strike, lockout, combination of
the workmen, taking over of any such assets by any
governmental authorities, riot, activities of armed forces, or
Acts of God or of the public enemies.
4. Conditions to the Obligations of The Shareholders and GDI. The
obligations of the GDI Shareholders and GDI hereunder are subject to the
following conditions:
A. The Shareholders and GDI shall not have discovered any
material error or misstatement in any of the representations
and warranties made by the Company herein and all the terms
and conditions of this Agreement to be performed and complied
with by the Company have been performed and complied with.
B. There shall have been no substantial adverse changes in the
financial condition, business or operations of the Company,
except for changes resulting from those operations in the
usual ordinary course of the business, and no business and
assets of the Company shall have been materially adversely
affected as the result of any fire, explosion, earthquake,
flood, accident, strike, lockout, combination of the workmen,
taking over of any such assets by any governmental
authorities, riot, activities of armed forces, or Acts of God
or of the public enemies.
5. Closing Date. The Closing of this Agreement ("Closing Date") shall
take place on or before November 15, 1997.
6. Exchange of Securities. Subject to the terms and conditions set
forth herein,
A. At the time of the Closing referred to in Section 5 hereof the
Company will issue and deliver, or cause to be issued and
delivered to the GDI Shareholders identified in Schedule A-1
hereto certificates evidencing the ownership of the securities
as designated therein and concurrently therewith the GDI
Shareholders identified in Schedule A-1 hereto shall directly
or through their agent deliver or cause to be delivered to the
Company, certificates evidencing the ownership of securities
as designated therein, all duly endorsed to the Company, and
B. At the time of the Closing referred to in Section 5 hereof the
Company will issue and deliver, or cause to be issued and
delivered to the GDI Option Holder identified in Schedule A-2
hereto it option instrument evidencing the ownership of the
Company's option as designated therein and concurrently
therewith the GDI Option Holder identified in Schedule A-2
hereto shall directly or through their agent deliver or cause
to be delivered to the Company, the GDI Option instrument
evidencing the ownership of the GDI Option as designated
therein, all duly endorsed to the Company.
7. Actions at the Closing. At the Closing of this Agreement, the
Company and the GDI Shareholders and the GDI Option Holder will each deliver,
or cause to be delivered to the other, the securities to be exchanged in
accordance with Section 6 of this Agreement and each party shall pay any and
all Federal and State taxes required to be paid in connection with the
issuance and the delivery of their own securities. All stock certificates
shall be in the name of the party to which the same are deliverable. In
addition to the above mentioned exchange of certificates, the following
transactions will take place at the initial and any subsequent Closings.
The Company will deliver to the Shareholders and GDI:
A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by the Company to authorize the
execution, delivery and performance of this Agreement;
B. A certificate executed by a principal officer of the Company
attesting to the fact that all of the foregoing
representations and warranties of the Company are true and
correct as of the Closing Date and that all of the conditions
to the obligations of the GDI Shareholders, and the GDI
Option Holder which are to be performed by the Company have
been performed as of the Closing Date; and
C. A certificate of corporate good standing for the Company from
the State of Utah which shall be dated no more than 60 days
prior to the Closing Date; and
The GDI Shareholders and GDI will deliver to the Company:
A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by GDI to authorize the execution,
delivery and performance of this Agreement;
B. A certificate of corporate good standing for GDI from
Washington which shall be dated no more than 60 days prior to
the Closing Date; and
C. A certificate by a principal officer of GDI that each of the
representations and warranties of GDI are true and correct as
of the Closing Date and that all of the conditions to the
obligations of the Company which are to be performed by GDI
and the GDI Shareholders have been performed as of the Closing
Date.
8. Conduct of Business. Between the date hereof and the Closing Date,
GDI shall conduct its business in the same manner in which it has heretofore
been conducted and the Shareholders will not permit GDI to (1) enter into any
contract, other than in the ordinary course of business, or (2) declare or
make any distribution in the nature of a dividend or return of capital to the
GDI Shareholders, without first obtaining the written consent of the Company.
9. Board of Directors. Immediately after the Closing, the Board of
Directors of the Company shall have a meeting, at which all of the present
directors of the Company shall resign, and they shall fill the vacancies
created by their respective resignations, as members of the Company's Board of
Directors, in accordance with the By-Laws of the Company, with such
individuals as set forth in Schedule E hereto.
10. Future Registration. The GDI Shareholders and the GDI Option Holder
understand that because the Company's common stock and the Company's option
(and the Company's common stock issuable upon exercise of the Company's
option) have not been registered under the Act or any State Act, they must
hold the Company's common stock and the Company's option (and the Company's
common stock issuable upon exercise of the Company's option) indefinitely,
and cannot dispose of any or all of them unless such they are subsequently
registered under the Act and any applicable State Act, or exemptions from
registration are available. The GDI Shareholders and Option Holder
acknowledge and understand that they have no independent right to require the
Company to register the securities held by them. The GDI Shareholders and
Option Holder further understand and the subscription agreement to be executed
by them contain representations evidencing the fact that the Company may, as a
condition to the transfer of any of the shares of the Company's common stock
or the Company's option (or the Company's common stock issuable upon exercise
of the Company's option), require that the request for transfer be accompanied
by an opinion of counsel, in form and substance satisfactory to the Company,
provided at such GDI Shareholders or Option Holders expense, to the effect
that the proposed transfer does not result in violation of the Act or any
applicable State Act, unless such transfer is covered by an effective
registration statement under the Act and is in compliance with all applicable
State Acts.
11. Transferability. All shares of the Company's common stock and its
option which are issued to the GDI Shareholders and Option Holder pursuant to
the terms of this Agreement (and the Company's common stock issuable upon
exercise of the Company's option) shall be "restricted securities" within the
meaning of Regulation D of the Act. The Company shall issue stop transfer
instructions to the transfer agent for its common stock and shall place the
following legend on the certificates representing such stock and option:
"The securities represented by this certificate have been acquired
pursuant to a transaction effected in reliance upon an exemption
under the Securities Act of 1933, as amended (the "Act"), and have
not been the subject to a Registration Statement under the Act or
any state securities act. The securities may not be sold or
otherwise transferred in the absence of such registration or
applicable exemption therefrom under the Act or any applicable State
securities act."
12. Access to Information. Concurrently herewith, the Company has
delivered to the GDI Shareholders and the Option Holder correct and complete
copies of all documents and records requested by the Shareholders including.
but not limited to a copy of this Agreement with a copy of the most recent
Form 10SB, as amended (attached hereto as Exhibit 3) filed by the Company with
the SEC. In addition, the GDI Shareholders and Option Holder have had the
opportunity to ask questions of, and received answers from, officers and
directors of the Company, and persons acting on its behalf concerning such
information and the terms and conditions of the Agreement, and have received
sufficient information relating to the Company to enable them to make an
informed decision with respect to the acquisition of the common stock, and the
option.
13. No Solicitation. At no time were the GDI Shareholders, or Option
Holder presented with or solicited by any leaflet, public promotion meeting,
circular, newspaper or magazine article, radio or television advertisement, or
any other form of general advertising in connection with their acquisition of
the common stock or the Company's option.
14. Expenses. The GDI Shareholders and Option Holder, GDI and the
Company shall each pay their respective expenses incident to this Agreement
and the transactions contemplated hereby, including all fees of their counsel
and accountants, whether or not such transactions shall be consummated.
15. Finders. The GDI Shareholders and Option Holder and GDI shall
indemnify and hold the Company harmless against and with respect to all claims
or brokerage or other commissions relative to this Agreement or the
transactions contemplated hereby, based on any agreements, arrangements, or
understandings claimed to have been made by the Shareholders and/or GDI with
any third party. The Company shall indemnify and hold the GDI Shareholders and
Option Holder and GDI harmless against and with respect to all claims for
brokerage or other commissions relative to this Agreement or the transactions
contemplated hereby, based in any agreements, arrangements, or understandings
claimed to have been made by the Company with any third party. Except as
provided in Exhibit 5, each party to this Agreement represents and warrants to
each other party that it has not dealt with and does not know of any person,
firm or corporation asserting a brokerage, finder's or similar claim in
connection with the making or negotiation of this Agreement or the
transactions contemplated hereby.
16. Attorney's Fees. In the event of any litigation among the parties
related to this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees and costs to be fixed by the court, said fees to
include appeal and collection of judgment.
17. Miscellaneous.
A. This Agreement shall be controlled, construed and enforced in
accordance with the laws of Utah.
B. This Agreement shall not be assignable by either party without
prior written consent of the other.
C. All paragraph headings herein are inserted for convenience
only. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, which together
shall constitute one and the same instrument.
D. This Agreement sets forth the entire understanding between the
parties, there being no terms, conditions, warranties or
representations other than those contained herein, and no
amendments hereto shall be valid unless made in writing and
signed by the parties hereto.
E. This Agreement shall be binding upon and shall inure to the
benefit of the heirs, executors, administrators and assigns of
the GDI Shareholders, the and Option Holder and GDI and upon
the successors and assigns of the Company.
F. All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered
mail:
If to GDI Shareholders, the GDI Warrant Holders or GDI:
Global Digital Information, Inc.
13212 N.E. 16th Street #311
Bellevue, Washington 98005
With Copies to:
James B. Parsons, Esq.
10655 N.E. 4th St.
Bellevue, Washington 98004
If to the Company:
United States Mining & Exploration, Inc.
c/o Leonard W. Burningham
Hermes Building Suite 200
455 East Fifth South
Salt Lake City, Utah 84111-3323
G. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall
constitute the same instrument.
<PAGE>
REORGANIZATION AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
Global Digital Information, Inc. a
Washington corporation
By: /s/ Jeffrey Beneson
<PAGE>
REORGANIZATION AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
United States Mining & Exploration, Inc.,
a Utah corporation
By: /s/ Sheryl Ross
<PAGE>
COUNTERPART
REORGANIZATION AGREEMENT SIGNATURE PAGE
GDI SHAREHOLDERS
All GDI Shareholders are accredited with the exception of the four (4) marked
with an asterisk.
October 29, 1997 /s/ Jeffrey Beneson
October 24, 1997 /s/ Jose-Luis Riesco
October 17, 1997 /s/ William Wenner
October 27, 1997 /s/ Daniel Lee Arensmeir
October 21, 1997 /s/ David L. Hartman
October 22, 1997 /s/ J. Paul Fallon
October 22, 1997 /s/ Stephen J. Scheer
/s/ James D. Kellogg
November 3, 1997 /s/ David M. Hunter
/s/ William H. O'Grady
/s/ Brian Gorelick
/s/ Charles W. Gay
October 23, 1997 /s/ Darlene H. Hascoolidge
October 21, 1997 /s/ Gary W. Oldham
October 16, 1997 /s/ William C. Scheatzel
October 24, 1997 /s/ Rainbow Trading, Inc.
October 26, 1997 /s/ Janice Eichinger
October 24, 1997 /s/ Addington Corporation
October 24, 1997 /s/ Martin Hagenson
/s/ Debra Ayers
October 25, 1997 /s/ James B. Parsons, P.S.
October 24, 1997 /s/ Gerald E. Koch
October 28, 1997 /s/ Kenneth G. Koch
October 23, 1997 /s/ Kenneth Gorelick
October 23, 1997 /s/ Brian Gorelick
October 23, 1997 /s/ Paula Gorelick
October 23, 1997 /s/ Lisa Garrett
October 23, 1997 /s/ Andrew Caraker
October 23, 1997 /s/ Morris Gorelick
October 21, 1997 /s/ Brian Potts
October 28, 1997 /s/ Paul Gonnella
October 22, 1997 /s/ Michael J. Donahue
October 21, 1997 /s/ Arnold E. and Barbara S. Shute
October 24, 1997 /s/ Lloyd Freitas
October 27, 1997 /s/ Paul J. Cammarata
October 22, 1997 /s/ Peter A. Wathen
October 29, 1997 /s/ Robert E. McGarvey
November 6, 1997 /s/ Dee Jay Cooley
October 21, 1997 /s/ Leonard E. Little
October 22, 1997 /s/ Stephen J. Scheer
October 21, 1997 /s/ James Brouwer
October 22, 1997 /s/ Donald Stephenson
October 27, 1997 /s/ William M. and Nancy C. Coyne
October 27, 1997 /s/ Scott A. Broullett
October 24, 1997 /s/ Vern J. Essenberg, Jr.
October 22, 1997 * /s/ Vern J. Essenberg
October 22, 1997 /s/ David L. Evans
November 3, 1997 /s/ Richland Medical Group
October 23, 1997 /s/ Paul J. Song
/s/ Thomas E. Legas
/s/ John Paulson
/s/ J. W. Loucks and Tillie Loucks
October 27, 1997 /s/ Daniel Rivera
October 24, 1997 /s/ James C. Smith
October 21, 1997 /s/ Troy J. Whistman
October 27, 1997 /s/ John A. and Deanne L. Nelson
October 27, 1997 /s/ Henning V. Nelson
October 21, 1997 /s/ David D. Meunier
October 21, 1997 /s/ Antony Dyke
November 3, 1997 /s/ Clarence Meunier
October 22, 1997 /s/ Stephen J. Scheer
October 24, 1997 /s/ Technologie Finance Ltd.
October 23, 1997 /s/ Ryan Beneson
October 24, 1997 /s/ Addington Corp.
October 24, 1997 /s/ Rainbow Trading, Inc.
October 29, 1997 /s/ Thomas G. Koch
October 29, 1997 /s/ Eugene F. Huse
October 24, 1997 /s/ Paul John Axt
* /s/ Sandra Lynn Corley
October 20, 1997 * /s/ John Franklin
October 27, 1997 * /s/ George Miklos
October 29, 1997 /s/ Roger Wingerter
October 24, 1997 /s/ Miguel Rabay
October 22, 1997 /s/ Gordon B. Frazer
October 31, 1997 /s/ E. Joe Lovato
October 17, 1997 /s/ Arnold S. Farber
October 30, 1997 /s/ Corleen Longland
/s/ Tony Gable
October 28, 1997 /s/ Fawn Beneson
<PAGE>
COUNTERPART
REORGANIZATION AGREEMENT SIGNATURE PAGE
GDI OPTION HOLDER
November 24, 1997 /s/ Frank W. Wenner
<PAGE>
SCHEDULE A-1
Name & Address Cert. # Amount of Shares
Jeffrey Beneson 1 675,000 Founders
14753 NE 1st Pl. C-7
Bellevue, WA 98007
Jose-Luis Riesco 2 50,000 Founders
2673 231st Ave SE
Issaquah, WA 98029
William Wenner 3 200,000 Founders
6402 Eastside Dr
Tacoma, WA 98422
Dan Arensmeir 4 75,000 Founders
1665 Grant
Denver, Co. 80203
David Hartman 5 100,000 Founders
21 Poplar Ave.
New Brunswick, NJ 08902
J. Paul Fallon 6 100,000 Founders
51 Trapper Ln.
Levittown, NY 11756-5239
Stephen Scheer 7 100,000 Founders
2825 28th Ave. W
Seattle, WA 98199
Jim Kellogg 8 200,000 Founders
310 Marie Street
Wenatchee, WA 98001
David Hunter 9 10,000 Founders
18099 NW Varesa Ct.
Issaquah, WA 98027
William O'Grady 10 10,000 Founders
1214 Starling ST
Steilcoom, WA 98388
Brian Gorelick 11 25,000 Founders
13212 NE 16TH
Bellevue, WA 98005
Charlie Gay 12 25,000 Founders
7815 Rock Hill Lane
Cincinnati, OH 45243
Darlene Hascoolidge 13 100,000 Founders
8649 Island DR. S
Seattle, WA 98118
Gordie Siebring 14 50,000 Founders
2107 148TH ST
Albioa, IA 50005
Duncan Elliot 15 50,000 Founders
133 Codling Rd
Bury ST Edmund, Eng IP327HE
Gary Oldham 16 100,000 Founders
P.O Box 3012
Federal Way, WA 98063
Lloyd Freitas 17 35.000 Founders
4231 E 14TH
Oakland, CA 94601
Sharon Halfast 19 10,000 Founders
E. 18555 Hwy 3
Cataldo, ID 83810
Bill Scheatzel 20 25,000 Founders
1195 Brentwood St.
Gustine, CA 95322
Dallington Corporation 21 400,000 Founders
133 Codling Road
Bury St. Edmunds, Eng
IP327HE, UK
Janice Eichenger, TTE 22 400,000 Founders
1201 Lincoln Way
Coeur "d" Lane, ID 83814
Rainbow Trading, Inc. 23 300,000 Founders
133 Codling Street
Bury St. Edmunds, Eng.
IP327HE, UK
Addington Corporation 24 252,000 Founders
133 Codling Street
Bury St. Edmunds, Eng.
IP327HE, UK
Martin Hagenson 25 25,000 Founders
P.O. Box 1059
Poulsbo, WA 98370
Debbie Ayas 26 5,000 Founders
2115 244 Ave. SE
Issaquah, WA 98029
Cairo Development Technologies 27 25,000 Founders
3627 S. 261 St.
Kent, WA 98032
James B. Parsons, P.S. 28 25,000 Founders
10655 NE 4TH St. Suite 707
Bellevue, WA 98004
Gerald Koch 29 100,000 Founders
1720 Country Club Dr.
E. Wenatchee, WA 98802
Kenneth Koch 30 50,000 Founders
10091 Shelba Way
San Diego,CA 92129
Kenneth Gorelick 31 10,000 Founders
13212 NE 16TH
Bellevue, WA 98005
Brian Gorelick 32 10,000 Founders
13212 NE 16TH
Bellevue, WA 98005
Paula Gorelick 33 10,000 Founders
13212 NE 16TH
Bellevue, WA 98005
Lisa Garret 34 10,000 Founders
13212 NE 16TH
Bellevue, WA 98005
Andrew Caraker 35 10,000 Founders
13212 NE 16TH
Bellevue, WA 98005
Morris Gorelick 36 285,000 Founders
13212 NE 16TH
Bellevue, WA 98005
Brian Potts 37 18,000 Founders
2525 S. 316= Lane C-302
Federal Way, WA 98003
Gerry Hodgkiss 38 40,000 Founders
2923 56TH Ave. N.E.
Tacoma, WA 98422
Paul Gonnella 39 60,000 Founders
517 Rivershire PI.
Lincolnshire, IL 60069
Michael Donahue 40 20,000 Founders
2100 SW 356TH
Federal Way, WA 98003
Arnold and Barbara Shutz 41 10,000 Founders
23630 Mt Forest Blvd.
Monroe, WA 98272
Lloyd Freitas 42 15,000 Founders
4231 E 14TH
Oakland, CA 94601
Paul Cammarata 43 80,000 Founders
222 Andover Street
Wilmington, MA 01887
Peter Wathen 44 20,000 Founders
11415 Meath Ave.
Fairfax, VA 22030
Robert McGarvey 45 6,000 Founders
6010 S. Hwy. 33
6011 Guestine, CA 95322
S. Lasater 46 14,000 Founders
1313 Pointer Way
Newman, CA 95360
Dee Jay Cooley 47 15,000 Founders
8649 Island Dr S
Seattle, WA 98118
Leonard Little 48 13,600 Founders
8601 Amblecot Rd
Knoxville, TN 37923
Stephen Scheer 49 20,000 Founders
2825 28TH Ave W
Seattle, WA 98199
James Brouwer 50 7,250 Founders
5767 147TH Ave NE
Bellevue, WA 98007
Pamela Swaney 51 400 Founders
3824 S Park
Tacoma, WA 98408
Alliance Hyponotherapy 52 1,000 Founders
30640 Pacific Hwy S.
Federal Way, WA 98003
Larry Woods 53 10,000 Founders
25 Carmen Hill Road #1
New Milford, CN 96776
Donald Stephenson 54 34,000 WA Corp Fd
133 Fretz
Telford, PA 18969
William Coyne 55 10,000 Founders
1430 Holcomb St.
Port Townsend, WA 98368
Paul Vedmed 56 10,000 Founders
13451 SE 27TH St.
Bellevue, WA 98005
Christina McGary 57 Canceled Founders
Scott Broullett 58 5,000 Founders
6530 67TH Pl. NE
Marysville, WA 98270
Discovery Chiropractic Center 59 1,000 Founders
3655 34 AveW
Seattle, WA 98199
Vern and Beth Essenberg Jr. 60 10,000 $1.00
6916 97TH Ave. SW
Tacoma, WA 98498
Vern and Judith A Essenberg 61 3,000 $1.00
4624 Wyatt
Grandville,MI 49418
Law Office Of David L.
Evens, P.S., Inc. 62 250 $.50
30640 Pacific Hwy. S Suite E
Federal Way, WA 98003
Richland Medical Group 63 25,000 $1.00
800 Swift Blvd. Suite 200
Richland, WA 99352
Paul Song 64 1,000 Founders
C/O Ace Cleaners
26921 Maple Valley Hwy. SE
Maple Valley, WA 98038
Nola Wixom 65 500 $1.00
5103 S. 360TH St.
Auburn, WA 98001-9117
Leonard T. Antonio 66 2,000 $.50
11515 62nd. Ave E
Puyallup, WA 98373
Thomas E Legas 67 5,000 $1.00
822 Island Blvd.
Fox Island, WA 98333
Cy Yasuo Kawasaki 68 3,000 Founders
4323 NE 77TH
Renton, WA 98059
John Thomas Paulson 69 1,500 $1.00
32221 46Th Pl. S.W
Federal Way, WA 98023
Pamela J Swaney 70 200 Founders
3824 S. Park
Tacoma, WA 98408
Donald H Stephenson 71 Canceled Founders
133 Fretz Rd.
Telford, PA 18969
Karen A. Furuya 72 2,800 $.50
5611 Hazel Ave. SE
Auburn, WA 98092
E. Joe Lavato 73 Canceled $1.00
251 Jansen
Nordland, WA 98358
James W Loucks 74 50,000 $.50
27433 48TH Ave S
Kent, WA 98032
Daniel Rivera 75 10.000 $.50
P.O. Box 25278
Federal Way, WA 98003
James Smith 76 16,400 Founders
3627 S 261st St.
Kent, WA 98032
E. Joe Lovato 77 Canceled $1.00
251 Jansen
Norland, WA 98358
Donald Gorelick 81 20,000 Founders
13213 NE 16th
Bellevue, WA 98805
Troy Wistman 82 50,000 Founders
P.O. Box 23456
Federal Way, WA 98093-0456
John and Deanne Nelson 83 10,000 $.50
5071 Dorado Dr. No. 101
Huntington Beach, CA 92649
Henning and Shirly Nelson 84 2,000 $.50
1142 Vista Place
Edmunds, WA 98020
Nettie Cade 85 5,000 Founders
423 Church Street
Selma, AL 36701
Mary McMillion 86 5,000 Founders
423 Church Street
Selma, AL 36701
Addington Corporation 87 65,000 Founders
133 Codling Street
Bury St. Edmunds, Eng.
IP327HE, UK
GC Noah, MD, PSP 88 25,000 Founders
423 Church Street
Selma, AL 36701
David and Tracy Meunier 89 289,617.50 Founders
31601 32nd Ave SW
Federal Way, 98023
Antony & Stephanie Dyke 90 289,617.50 Founders
4615 36th Street N.E.
Tacoma, WA 98422
Daniel Rivera 91 92,870 Founders
P.O. Box 25278
Federal Way, WA 98003
William & Nancy Coyne 92 110,352.50 Founders
1430 Holcomb Street
Port Townsend, WA 98368
Clarence & Edith Meunier 93 27,565 Founders
P.O. Box 1649
Buckley, WA 98321
Gaylen B Payne 94 106,652.50 Founders
30640 Pacific Hwy, S.
Federal Way, WA 98003
Steven&Laura Scheer 95 8,325 Founders
2825 28~ Ave. W
Seattle, WA 98199
Danny Allison 96 1,500 $1.00
1701 Park Place Ave
Bedford, TX 76022
Dr. Kevin Doody 97 100,000 $1.00
1109 Somerset Blvd
Colluyville, TX 76034
Technologie Finance Ltd 98 1,000,000 Founders
133 Codling Street
Bury St. Edmunds
England, IP327HE, UK
Ryan Beneson 99 320,000 Founders
14753 NE 1~ Place C-7
Bellevue, Wa 98007
Addington Corp 100 100,000 Founders
133 Codling Street
Bury St. Edmunds
England, IP237HE
Rainbow Trading, Inc 101 100,000 Founders
133 Codling Street
Bury St. Edmunds
England, IP327HE, UK
Koch Family Gift Trust 103 400,000 Founders
41 148 Ave SW #2
Bellevue, WA 98007
Fawn Beneson 102 Cancelled
4753 NE 1st. Place C-7
Bellevue, WA 98007
John Tollefson 104 45,000 Founders
704 228th Ave. NE #382
Redmond, WA 98063
Jerry Huse 105 45,000 Founders
525 Norfolk Ave.
Norfolk, NE 68701
Jack Hale 106 47,100 Founders
P.O. Box 7038
Wenatchee, WA 98801
Paul Axt 107 5,000 $1.00
6109 Olinger Blvd.
City of Edina, MN 55436
Sandy Corley 108 20,000 $.50
12134 Wedgeway Place
Fairfax, VA 22030-2520
John Franklin 109 12,500 1.00
351 Broadmoor St.
Richland, WA 99352
George Miklos 110 3,000 $1.00
1500 N. Baltimore Ave.
Berby, KS 67037
Roger Wingerter 111 5,000 $1.00
4615 NE 248th Circle
Ringefield, WA 98642
Miguel Rabay 112 5,000 $1.00
19118 NE 51st Street
Redmond, WA 98053
Gordon Frazer 113 5,000 $1.00
32922 Military Road S.
Auburn, WA 98001
D. L. Jenrette (Lavato) 114 25,000 Replacement
251 Jansen
Norland, WA 98358
Anthony Novak 115 10,000 Founders
Ski and Sport
2028 S 272 St.
Kent, WA 98032
Arnold Farber, IRA 116 5,000 Founders
418 Washington Street
Brighton, MA 02135
Carol G Farber, IRA 117 5,000 Founders
418 Washington Street
Brighton, MA 02135
Arnold S Farber D.M.D. P.C. 118 60,000 Founders
418 Washington Street
Brighton, MA 02135
Arnold S. Farber 119 30,000 Founders
418 Washington Street
Brighton, MA 02135
William Coyne 120 99,000 Founders
1430 Holcomb St.
Port Townsend, WA 98368
Mona Bemired 121 1,000 Founders
1430 Holcomb St
Port Townsend, WA 98368
Corleen Longland 122 3,000 Founders
P.O. Box 3942
Kent, WA 98032
Nola Wixom 123 1,000 $1.00
5103 S. 360th
Auburn, WA 98001-0117
Charles Jackson 124 500 Founders
3245 36th Ave. S.
Seattle, WA 98144
Tony Gable 125 8,000 Founders
Gable Designs
1809 7th Ave Suite 90101
Fawn Beneson 126 233,500 Founders
SCHEDULE A-2
Options
Frank W. Wenner 50,000
<PAGE>
SCHEDULE B
GDI Investors
See Schedule A-1
<PAGE>
SCHEDULE C
GDI Subsidiaries
None
<PAGE>
SCHEDULE D
Schedule D-1 Shares issued by the Company pursuant to Regulation D
Name Number of Shares
Edgewater, Ltd. 101,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Chantilly Investments, Ltd. 101,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Folkstone, Ltd. 101,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Gordian Investments Ltd. 16,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Huggermugger, Ltd. 16,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Ken Lammance 102,319
Stephan Bandera Street
Apt. 32-A 2nd Floor
Lvov, Ukraine 290646
Schedule D-1 Shares issued by the Company pursuant to S-8
Name Number of Shares
Leonard W. Burningham, Esq 32,000
Jeffrey D. Jenson 244,410
<PAGE>
SCHEDULE E
Global Digital Information, Inc.
Designated Directors
Jeffery Beneson
Jose-Luis Riesco
Morris Gorelick
David D. Meunier
<PAGE>
REORGANIZATION AGREEMENT
EXHIBIT 1
GDI., Financial Statements
See Item 7 of this Report.
<PAGE>
REORGANIZATION AGREEMENT
EXHIBIT 2
Exceptions to GDI Balance Sheet
None.
<PAGE>
REORGANIZATION AGREEMENT
EXHIBIT 3
United States Mining & Exploration, Inc.
Form 10SB
This document has been previously filed with the Securities and Exchange
Commission and is incorporated herein by reference.
<PAGE>
REORGANIZATION AGREEMENT
EXHIBIT 4
United States Mining & Exploration, Inc.
Financial Statements
The Board of Directors and Shareholders
United States Mining & Exploration, Inc.
We have audited the accompanying balance sheet of United States Mining &
Exploration, 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>
<TABLE>
UNITED STATES MINING & EXPLORATION, INC.
Balance Sheet
March 31, 1997
<CAPTION>
ASSETS
<S> <C>
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-
</TABLE>
See accompanying notes to financial statements.
<TABLE>
UNITED STATES MINING & EXPLORATION, INC.
Statements of Operations
For the Years Ended March 31, 1997 and 1996
<CAPTION>
1997 1996
<S> <C> <C>
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)
Income per Share from extraordinary item .03 .11
Net Income per Share $ .02 $ .10
Weighted Average Shares Outstanding 390,095 262,599
</TABLE>
See accompanying notes to financial statements.
<TABLE>
UNITED STATES MINING & EXPLORATION, INC.
Statements of Stockholders' Deficit
For the Years Ended March 31, 1997 and 1996
<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 133,088
shares of common
stock as repayment
of stockholder loans 133,088 133 11,355 0 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 116,169
shares of common
stock as repayment
of stockholder loans 116,169 116 9,906 0 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
223,458 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 3,475 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.
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 17,712 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 133,088 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 116,169 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>
<TABLE>
UNITED STATES MINING & EXPLORATION, INC.
BALANCE SHEETS
September 30, 1997 and March 31, 1997
<CAPTION>
9/30/97 3/31/97
[Unaudited]
<S> <C> <C>
ASSETS
Total Current Assets $ 0 $ 0
TOTAL ASSETS $ 0 $ 0
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES:
Loans from stockholders $ 0 1,902
Total liabilities 0 1,902
TOTAL LIABILITIES 0 1,902
EQUITY
Common Stock 1,044 42,405
Paid-in Capital 446,147 399,255
Accumulated Deficit (447,191) (443,562)
TOTAL EQUITY 0 (1,902)
TOTAL LIABILITIES & EQUITY $ 0 $ 0
</TABLE>
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. The March 31, 1997 balance
sheet has been derived from the audited financial statements. 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.
<TABLE>
UNITED STATES MINING & EXPLORATION, INC
STATEMENTS OF OPERATIONS
For the Six-Month Periods Ended September 30, 1997 and 1996
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
9/30/97 9/30/96 9/30/97 9/30/96
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
REVENUE
Income $ O $ O $ O $ O
NET REVENUE 0 0 0 0
OPERATING EXPENSES
Office Expenses 0 1,028 191 1,103
Professional Fees 1,135 2,631 3,438 2,634
TOTAL OPERATING EXPENSES 1,135 3,659 3,629 3,737
OPERATING INCOME/(LOSS)$(1,135) $ (3,659) $ (3,629) $ (3,737)
OTHER INCOME/(EXPENSE)
Income from forgiveness
of debt 0 0 0 13,090
NET INCOME/(LOSS) $(1,135) $ (3,659) $ (3.629) $ 9,353
NET LOSS PER SHARE $ (0.01) $ (0.01) $ (0.01) $ 0.01
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 583,497 32,383,155 14,508,616 32,383,155
</TABLE>
<TABLE>
UNITED STATES MINING & EXPLORATION, INC.
STATEMENTS OF CASH FLOWS
For the Six-Month Periods Ended September 30, 1997 and 1996
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
9/30/97 9/30/96 9/30/97 9/30/96
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
Cash Flows Used For
Operating Activities
Net Loss $ (1,135) $ (3,659) $ (3,629) $ 9,354
Adjustments to
reconcile net loss
to net cash used in
operating activities:
Forgiveness of Debt 0 0 0 (13,090)
Issuance of common
stock in exchange for
expenses paid by a
shareholder 5,531 0 5,531 0
Increase/(Decrease) in
advance-shareholder (4,396) 3,659 (1,902) 3,736
Net Cash Used For
Operating Activities $ O $ O $ 0 $ O
</TABLE>
<PAGE>
REORGANIZATION AGREEMENT
EXHIBIT 5
Finders
NONE
<PAGE>
CLOSING CERTIFICATE
OF
UNITED STATES MINING & EXPLORATION, INC.
The undersigned, President of United States Mining & Exploration, Inc., a
corporation formed under the laws of Utah ("US Mining") pursuant to that
certain Reorganization Agreement dated October 31, 1997, among the Global
Digital Information, Inc. ("GDI"), the GDI Shareholders, the GDI Option
Holder, and US Mining (the "Agreement") hereby certifies that:
Each of the representations and warranties of US Mining are true and correct
as of October 31, 1997, and that all of the conditions to the obligations of
Global Digital Information, Inc., the GDI Shareholders and the GDI Option
Holder which are to be performed by US Mining pursuant to the Agreement have
been performed as of the Closing Date.
Dated: November 11, 1997
United States Mining & Exploration, Inc.
By /s/ Sheryl Ross
Its President
<PAGE>
CLOSING CERTIFICATE
OF
GLOBAL DIGITAL INFORMATION, INC.
The undersigned, the President of Global Digital Information, Inc., a
corporation formed under the laws of Washington ("GDI") pursuant to that
certain Reorganization Agreement dated October 31, 1997, among GDI, the GDI
Shareholders, the GDI Option Holder, and United States Mining & Exploration,
Inc., a Utah corporation (the "Agreement") hereby certifies that:
Each of the representations and warranties of GDI are true and correct as of
October 31, 1997, and that all of the conditions to the obligations of United
States Mining & Exploration which are to be performed by GDI the GDI
Shareholders and the GDI Option Holder pursuant to the Agreement have been
performed as of the Closing Date.
The Company has mailed to each of its shareholders, by U.S. mail, a copy of
the United States Mining & Exploration current Form 10SB, as amended.
Dated: October 31, 1997
Global Digital Information, Inc.
By /s/ Jeffrey Beneson
Its President
