<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB-A1
First Amended Registration Statement on Form 10-SB-A1
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
AMCI INTERNATIONAL, INC.
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(Name of Small Business Issuer as specified in its charter)
UTAH 59-2159271
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(State or other jurisdiction of (I.R.S. incorporation or
organization) Employer I.D. No.)
9005 Cobble Canyon Lane
Sandy, Utah 84093
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(Address of Principal Executive Office)
Issuer's Telephone Number, including Area Code: (801) 942-0555
Securities registered pursuant to Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Exchange Act:
$0.001 Par Value Common Voting Stock
------------------------------------
Title of Class
DOCUMENTS INCORPORATED BY REFERENCE: See the Exhibit Index herein.
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PART I
Item 1. Description of Business.
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Business Development.
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Organization and Charter Amendments
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AMCI International, Inc. (the "Company") was organized under the
laws of the State of Utah on July 26, 1983, under the name "H J K, Ltd." The
Company was formed to acquire and operate or lease natural resource properties
and engage in mining, milling, production, buying and developing natural
resource properties.
The Company's initial authorized capital consisted of 50,000,000
of one mill ($0.001) par value common voting stock. A copy of the Company's
initial Articles of Incorporation is attached hereto and is incorporated
herein by reference. See Part III, Item 1 of this Registration Statement.
At the first meeting of the Company's Board of Directors, an
aggregate of 954,300 pre-split shares of the Company's common stock were
issued to certain directors, executive officers and persons who may be deemed
to have been promoters or founders of the Company, in consideration of the sum
of $954.
The Company subsequently sold 2,500,000 pre-split shares of its
common stock to the public at a price of $0.01 per share, pursuant to an
exemption from registration under Regulation D, Rule 504 of the Securities and
Exchange Commission (the "Commission"). The Company received a Certificate of
Registration from the State of Utah, Department of Business Regulation, Utah
Securities Division, on June 18, 1984. The offering was completed in the
first half of 1985, with the Company receiving gross proceeds of $25,000.
On August 28, 1985, the Company filed Articles of Amendment to the
Articles of Incorporation changing the name of the Company to "AMCI
International, Inc." A copy of the Articles of Amendment is attached hereto
and is incorporated herein by reference. See Part III, Item 1 of this
Registration Statement.
The only business operations conducted by the Company from its
inception to the end of the period covered by this Registration Statement were
those of AMCI, which manufactured and sold lawn furniture. These operations
proved to be unsuccessful and operations ceased in 1987.
Other than maintaining and restoring its good standing status in
the State of Utah, seeking prospective businesses or assets to acquire and the
limited operations of the Company, the Company has had no material business
operations since that time.
Following the cessation of its business operations in 1989, the
Company's charter was revoked by the State of Utah for failure to file its
annual list of directors and executive officers. The Company was revived in
the State of Utah on October 8, 1996, under the name "AMCI International,
Inc."
At a special meeting of the Board of Directors held on November 1,
1996, the directors reverse split the outstanding common stock of the Company
on a 200 for one basis, while retaining the authorized capital and par value,
with appropriate adjustments to the capital surplus and stated capital
accounts of the Company. All computations herein below take into account this
reverse split.
Changes of Control During the Past Three Years
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Pursuant to the Company's Bylaws, on May 18, 1996, Luigi Brandi,
the Company's President and a director, appointed David C. Merrell to fill a
vacancy on the Board of Directors in contemplation of reviving the Company.
Mr. Brandi resigned immediately thereafter. Cheryl Brandi, the Company's Vice
President also resigned. Mr. Merrell then designated Michael C. Brown to
serve as a director of the Company. Messers. Merrell and Brown will serve in
these capacities until the next annual meeting of stockholders and until their
successors are elected and qualified or until their prior resignations or
terminations. On the same date, the Board of Directors unanimously consented
without a meeting and pursuant to applicable provisions of the Utah Revised
Business Corporation Act to elect the following persons to serve in the
capacities indicated: David C. Merrell, President; and Michael C. Brown,
Secretary/Treasurer.
See the caption "Security Ownership of Certain Beneficial Owners
and Management," Part I, Item 4, of this Registration Statement.
Sales of "Unregistered" and "Restricted" Securities Over the Past Three
Years
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At a special meeting of the Board of Directors held on June 15,
1996, the directors proposed and approved the issuance of 200,000 shares of
"unregistered" and "restricted" common stock to: David C. Merrell, 50,000
shares; Michael C. Brown, 50,000 shares; Leonard W. Burningham, Esq., 50,000
shares; and Corie Merrell, 50,000 shares, as payment in full for services
rendered to the Company.
Also, at a special meeting of the Board of Directors held on
November 5, 1996, the directors proposed and approved the issuance of
1,227,088 shares of "unregistered" and "restricted" common stock to: Jerry
Peterson, 50,000 shares; and Chiricahua Company, 1,177,088 shares, as payment
in full for services rendered to the Company.
See the caption "Recent Sales of Unregistered Securities," Part
II, Item 4, of this Registration Statement; and "Note 4 - Stock Transactions,"
of the financial statements of the Company, which accompanying this
Registration Statement.
Business.
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Other than the above-referenced matters and seeking and
investigating potential assets, property or businesses to acquire, the Company
has had no material business operations for over five years. To the extent
that the Company intends to continue to seek the acquisition of assets,
property or business that may benefit the Company and its stockholders, it is
essentially a "blank check" company. Because the Company has limited assets
and conducts no material business, management anticipates that any such
venture would require it to issue shares of its common stock as the sole
consideration to acquire the venture. This may result in substantial dilution
of the shares of current stockholders. The Company's Board of Directors shall
make the final determination whether to complete any such venture; the
approval of stockholders will not be sought unless required by applicable
laws, rules and regulations, its Articles of Incorporation or Bylaws, or
contract. The Company faces substantial competition from other "blank check"
companies in the search for a suitable merger or acquisition target, including
the 14 other "blank check" companies in which David C. Merrell, the Company's
President and director, is involved. Therefore, the Company makes no
assurance that it will be successful in locating a suitable target and makes
no assurance that any future enterprise will be profitable or successful. See
the Risk Factor "Competition" of this Registration Statement.
The Company is not currently engaging in any substantive business
activity and has no plans to engage in any such activity in the foreseeable
future. In its present form, the Company may be deemed to be a vehicle to
acquire or merge with a business or company. The Company does not intend to
restrict its search to any particular business or industry, and the areas in
which it will seek out acquisitions, reorganizations or mergers may include,
but will not be limited to, the fields of high technology, manufacturing,
natural resources, service, research and development, communications,
transportation, insurance, brokerage, finance and all medically related
fields, among others. The Company recognizes that the number of suitable
potential business ventures that may be available to it may be extremely
limited, and may be restricted to entities who desire to avoid what these
entities may deem to be the adverse factors related to an initial public
offering ("IPO"). The most prevalent of these factors include substantial time
requirements, legal and accounting costs, the inability to obtain an
underwriter who is willing to publicly offer and sell shares, the lack of or
the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other
conditions or requirements imposed by various federal and state securities
laws, rules and regulations. Any of these types of entities, regardless of
their prospects, would require the Company to issue a substantial number of
shares of its common stock to complete any such acquisition, reorganization or
merger, usually amounting to between 80% and 95% of the outstanding
shares of the Company following the completion of any such transaction;
accordingly, investments in any such private entity, if available, would be
much more favorable than any investment in the Company.
Although the Company has not communicated with any other entity
with respect to any potential merger or acquisition transaction, management
has determined to file this Registration Statement on a voluntary basis. In
order to have stock quotations for its common stock on the National
Association of Securities Dealers' Automated Quotation System ("NASDAQ"), an
issuer must have such securities registered under the Securities and Exchange
Act of 1934, as amended (the "1934 Act"). Upon the effective date of this
Registration Statement, the Company's common stock became registered for
purposes of the 1934 Act. Management believes that this will make the Company
more desirable for entities that may be interested in engaging in a merger or
acquisition transaction. To the extent that management deems it advisable or
necessary to maintain a quotation of its common stock on any securities
market, the Company will voluntarily file periodic reports in the event its
obligation to file such reports is terminated under the 1934 Act. Further,
the National Association of Securities Dealers, Inc. (the "NASD") has proposed
that all "non-reporting" companies whose shares of common stock are quoted on
the NASD's OTC Bulletin Board be dropped. Management believes the filing of
this Registration Statement will be important to the Company if the NASD's
proposal in this respect is put into effect. See the heading "Risk Factors,"
specifically "No Market for Common Stock, No Market for Shares.," herein.
In the event that the Company engages in any transaction resulting
in a change of control of the Company and/or the acquisition of a business,
the Company will be required to file with the Commission a Current Report on
Form 8-K within 15 days of such transaction. A filing on Form 8-K also
requires the filing of audited financial statements of the business acquired,
as well as pro forma financial information consisting of a pro forma condensed
balance sheet, pro forma statements of income and accompanying explanatory
notes.
Management intends to consider a number of factors prior to making
any decision as to whether to participate in any specific business endeavor,
none of which may be determinative or provide any assurance of success. These
may include, but will not be limited to an analysis of the quality of the
entity's management personnel; the anticipated acceptability of any new
products or marketing concepts; the merit of technological changes; its
present financial condition, projected growth potential and available
technical, financial and managerial resources; its working capital, history of
operations and future prospects; the nature of its present and expected
competition; the quality and experience of its management services and the
depth of its management; its potential for further research, development or
exploration; risk factors specifically related to its business operations; its
potential for growth, expansion and profit; the perceived public recognition
or acceptance of its products, services, trademarks and name identification;
and numerous other factors which are difficult, if not impossible, to properly
or accurately analyze, let alone describe or identify, without referring to
specific objective criteria.
Mr. Merrell has substantial experience and expertise with
analyzing prospective business endeavors and will be the one to determine the
viability of a prospective business endeavor. Mr. Merrell has served as a
director and executive officer of three companies, Kara International, Inc.;
International Fire Prevention, Inc.; and Digital Power Holding Company, that
have completed merger or reorganization transactions with operating entities.
Mr. Brown has limited experience with analyzing the quality of a prospective
business endeavor. See the heading "Other Public Shell Activities," of Part
I, Item 5, of this Registration Statement.
Regardless, the results of operations of any specific entity may
not necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development mode, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products or
services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and principal
stockholders, professional advisors, broker dealers in securities, venture
capital personnel, members of the financial community and others who may
present unsolicited proposals. In certain cases, the Company may agree to pay
a finder's fee or to otherwise compensate the persons who submit a potential
business endeavor in which the Company eventually participates. Such persons
may include the Company's directors, executive officers, beneficial owners or
their affiliates. In this event, such fees may become a factor in negotiations
regarding a potential acquisition and, accordingly, may present a conflict of
interest for such individuals.
Although the Company has not identified any potential acquisition
target, the possibility exists that the Company may acquire or merge with a
business or company in which the Company's executive officers, directors,
beneficial owners or their affiliates may have an ownership interest; a
transaction of this type would create a conflict of interest for such a
person. Current Company policy does not prohibit such transactions. Because no
such transaction is currently contemplated, it is impossible to estimate the
potential pecuniary benefits to these persons.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $250,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. In the event that such fees are paid, they may become a factor in
negotiations regarding any potential acquisition by the Company and,
accordingly, may present a conflict of interest for such individuals.
None of the Company's directors, executive officers or promoters,
or their affiliates or associates, has had any negotiations with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger transaction with the Company. Nor are
there any present plans, proposals, arrangements or understandings with any
such persons regarding the possibility of any acquisition or merger involving
the Company.
Risk Factors.
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In any business venture, there are substantial risks specific to
the particular enterprise which cannot be ascertained until a potential
acquisition, reorganization or merger candidate has been identified; however,
at a minimum, the Company's present and proposed business operations will be
highly speculative and be subject to the same types of risks inherent in any
new or unproven venture, and will include those types of risk factors outlined
below.
Extremely Limited Assets; No Source of Revenue. The Company has
virtually no assets and has had no revenue for over five years or to the date
hereof. Nor will the Company receive any revenues until it completes an
acquisition, reorganization or merger, at the earliest. The Company can
provide no assurance that any acquired business will produce any material
revenues for the Company or its stockholders or that any such business will
operate on a profitable basis.
Discretionary Use of Proceeds; "Blank Check" Company. Because the
Company is not currently engaged in any substantive business activities, as
well as management's broad discretion with respect to the acquisition of
assets, property or business, the Company may be deemed to be a "blank check"
company. Although management intends to apply any proceeds it may receive
through the issuance of stock or debt to a suitable acquisition, subject to
the criteria identified above, such proceeds will not otherwise be designated
for any more specific purpose. The Company can provide no assurance that any
use or allocation of such proceeds will allow it to achieve its business
objectives.
Absence of Substantive Disclosure Relating to Prospective
Acquisitions. Because the Company has not yet identified any assets, property
or business that it may acquire, potential investors in the Company will have
virtually no substantive information upon which to base a decision whether to
invest in the Company. Potential investors would have access to significantly
more information if the Company had already identified a potential acquisition
or if the acquisition target had made an offering of its securities directly
to the public. The Company can provide no assurance that any investment in
the Company will not ultimately prove to be less favorable than such a direct
investment.
Unspecified Industry and Acquired Business; Unascertainable Risks.
To date, the Company has not identified any particular industry or business in
which to concentrate its acquisition efforts. Accordingly, prospective
investors currently have no basis to evaluate the comparative risks and
merits of investing in the industry or business in which the Company may
acquire. To the extent that the Company may acquire a business in a high
risk industry, the Company will become subject to those risks. Similarly, if
the Company acquires a financially unstable business or a business that is in
the early stages of development, the Company will become subject to
the numerous risks to which such businesses are subject. Although management
intends to consider the risks inherent in any industry and business in which
it may become involved, there can be no assurance that it will correctly
assess such risks.
Uncertain Structure of Acquisition. Management has had no
preliminary contact or discussions regarding, and there are no present plans,
proposals or arrangements to acquire any specific assets, property or
business. Accordingly, it is unclear whether such an acquisition would take
the form of an exchange of capital stock, a merger or an asset acquisition.
However, because the Company has virtually no resources as of the date of this
Registration Statement, management expects that any such acquisition would
take the form of an exchange of capital stock. See Part I, Item 2, of this
Registration Statement.
Shares Available for Future Issuance. The Company is authorized
to issued 50,000,000 shares of common stock. As of December 31, 1997, the end
of the Company's most recent calendar year, only 1,471,391 shares were issued
and outstanding. The issuance of additional shares in connection with any
reorganization transaction or the raising of capital may result in substantial
dilution of the holdings of current stockholders.
Limited Funds Available for Operating Expenses. The Company
currently has no assets. As a result, all funding necessary to meet the
Company's operating expenses in the next 12 months will likely be advanced by
management or principal stockholders as loans to the Company. See the heading
"Plan of Operation" of the caption "Management's Discussion and Analysis or
Plan of Operation," Part I, Item 2 of this Registration Statement.
Lack of Public Information. As of the date of this Registration
Statement, the Company has not identified any potential merger or acquisition
candidate. The Company does not intend to limit its search to any particular
business or industry. Stockholders will not have access to any information
about any such candidate until such time as a transaction is completed and the
Company files a Current Report on Form 8-K disclosing the nature of such
transaction.
State Restrictions on "Blank Check" Companies. A total of 36
states prohibit or substantially restrict the registration and sale of "blank
check" companies within their borders. Additionally, 36 states use "merit
review powers" to exclude securities offerings from their borders in an effort
to screen out offerings of highly dubious quality. See paragraph 8221, NASAA
Reports, CCH Topical Law Reports, 1990. The Company intends to comply fully
with all state securities laws, and plans to take the steps necessary to
ensure that any future offering of its securities is limited to those states
in which such offerings are allowed. However, while the Company has no
substantive business operations and is deemed to a "blank check" Company,
these legal restrictions may have a material adverse impact on the Company's
ability to raise capital because potential purchasers of the Company's
securities must be residents of states that permit the purchase of such
securities. These restrictions may also limit or prohibit stockholders from
reselling shares of the Company's common stock within the borders of
regulating states.
By regulation or policy statement, several states place various
restrictions on the sale or resale of equity securities of "blank check" or
"blind pool" companies. These restrictions include, but are not limited to,
heightened disclosure requirements, exclusion from "manual listing"
registration exemptions for secondary trading privileges and outright
prohibition of public offerings of such companies.
In most jurisdictions, "blank check" and "blind pool" companies
are not eligible for participation in the Small Corporate Offering
Registration ("SCOR") program, which permits an issuer to notify the
Securities and Exchange Commission of certain offerings registered in such
states by filing a Form D under Regulation D of the Commission. The majority
of states have adopted some form of SCOR. States participating in the SCOR
program also allow applications for registration of securities by
qualification by filing a Form U-7 with the states' securities commissions.
Nevertheless, the Company does not anticipate making any SCOR offering or
other public offering in the foreseeable future, even in any jurisdiction
where it may be eligible for participation in SCOR, despite its status as a
"blank check" or "blind pool" company.
The net effect of the above-referenced laws, rules and regulations
will be to place significant restrictions on the Company's ability to
register, offer and sell and/or to develop a secondary market for shares of
the Company's common stock in virtually every jurisdiction in the United
States. These restrictions should cease once and if the Company acquires a
venture by purchase, reorganization or merger, so long as the business
operations succeeded to involve sufficient activities of a specific nature.
Management to Devote Insignificant Time to Activities of the
Company. Members of the Company's management are not required to devote
their full time to the affairs of the Company. Because of their time
commitments, as well as the fact that the Company has no business operations,
the members of management anticipate that they will devote an insignificant
amount of time to the activities of the Company, at least until such time as
the Company has identified a suitable acquisition target.
Conflicts of Interest; Related Party Transactions. Although the
Company has not identified any potential acquisition target, the possibility
exists that the Company may acquire or merge with a business or company in
which the Company's executive officers, directors, beneficial owners or their
affiliates may have an ownership interest. Such a transaction may occur if
management deems it to be in the best interests of the Company and its
stockholders, after consideration of the above referenced factors. A
transaction of this nature would present a conflict of interest to those
parties with a managerial position and/or an ownership interest in both the
Company and the acquired entity, and may compromise management's fiduciary
duties to the Company's stockholders. An independent appraisal of the
acquired company may or may not be obtained in the event a related party
transaction is contemplated. Furthermore, because management and/or
beneficial owners of the Company's common stock may be eligible for finder's
fees or other compensation related to potential acquisitions by the Company,
such compensation may become a factor in negotiations regarding such potential
acquisitions. Members of management also serve in a similar capacities for
several other companies that may be deemed to be "blank check" companies. In
the event that a potential merger or acquisition candidate is brought to
management's attention, these other relationships may present a conflict of
interest. Management will attempt to minimize such conflict by presenting a
list of the various "blank check" companies that are available for such a
transaction and allowing management of the candidate entity to select the
company that best meets its needs. Factors that differentiate such "blank
check" companies from one another include, for example, the state of
incorporation (and, accordingly, the corporation laws to which such company is
subject); whether or not the company has filed a Registration Statement on
Form 10-SB and is subject to the periodic reporting, proxy and other
requirements of the 1934 Act; the authorized classes of stock and number of
shares; the number of shares issued and outstanding; the number of
stockholders; the amount and nature of any assets and liabilities; and whether
or not the company's securities are quoted on the OTC Bulletin Board of the
NASD. There are no current or proposed arrangements specifying the order in
which the Company and such other "blank check" companies will participate in
any business opportunity.
Competition. Management believes that there are thousands of "blank
check" companies that are also seeking merger or acquisition transactions.
Each of these entities will present competition to the Company in its search
for a suitable transaction candidate, and the Company makes no assurance that
it will be successful in that search. In addition, David C. Merrell, the
Company's President and director, also serves as President and director of 14
companies that may be deemed to be "blank check" companies, and each of these
entities may be regarded as a direct competitor of the Company in the search
for suitable business opportunities. Four of these companies are also subject
to the periodic reporting requirements of the Commission, as is Cookie Cup
International, Inc., a "blank check" company of which Mr. Merrell is the
beneficial owner of 38% of the outstanding common stock. Each of these
companies presents direct competition to the Company in identifying and
completing a merger or acquisition transaction with a suitable business. See
the heading "Other 'Public Shell' Activities" of the caption "Directors,
Executive Officers, Promoters and Control Persons," Part I, Item 5 of this
Registration Statement.
Voting Control. Due to their ownership of a majority of the
shares of the Company's outstanding common stock (approximately 90% of the
outstanding voting securities of the Company are owned by Chirichua Company,
David C. Merrell and Michael C. Brown), these stockholders have the ability to
elect all of the Company's directors, who in turn elect all executive
officers, without regard to the votes of other stockholders. Chirichua
Company is solely owned by Mr. Merrell. See the caption "Security Ownership of
Certain Beneficial Owners and Management," Part I, Item 4, of this
Registration Statement.
No Market for Common Stock; No Market for Shares. Although the
Company intends to submit for listing of its common stock on the OTC Bulletin
Board of the National Association of Securities Dealers, Inc. (the "NASD"),
there is currently no market for such shares; and there can be no assurance
that any such market will ever develop or be maintained. Any market price for
shares of common stock of the Company is likely to be very volatile, and
numerous factors beyond the control of the Company may have a significant
effect. In addition, the stock markets generally have experienced, and
continue to experience, extreme price and volume fluctuations which have
affected the market price of many small capital companies and which have often
been unrelated to the operating performance of these companies. These broad
market fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Company's common stock in any market
that may develop. Sales of "restricted securities" under Rule 144 may also
have an adverse effect on any market that may develop. See the caption
"Recent Sales of Unregistered Securities," Part II, Item 4, of this
Registration Statement.
In addition to the foregoing, in order to obtain a listing for its
securities on the OTC Bulletin Board, the Company will need to retain a
broker-dealer that is willing to act as a "market maker"
On or about December 11, 1997, the Board of Governors of the NASD
approved a proposal to allow only companies that report their current
financial information to the Commission to have their securities quoted on the
OTC Bulletin Board. Because the Company became subject to the periodic
reporting requirements of the Commission upon the effective date of this
Registration Statement, management believes that the Company will be in
compliance with this provision if it is approved by the Commission. However,
in the event that the Company loses this status as a "reporting issuer," any
future quotation of its common stock on the OTC Bulletin Board may be
jeopardized.
Risks of "Penny Stock." The Company's common stock may be deemed
to be "penny stock" as that term is defined in Reg. Section 240.3a51-1 of the
Commission. Penny stocks are stocks (i) with a price of less than five
dollars per share; (ii) that are not traded on a "recognized" national
exchange; (iii) whose prices are not quoted on the NASDAQ automated quotation
system (NASDAQ-listed stocks must still meet requirement (i) above); or (iv)
in issuers with net tangible assets less than $2,000,000 (if the issuer has
been in continuous operation for at least three years) or $5,000,000 (if in
continuous operation for less than three years), or with average revenues of
less than $6,000,000 for the last three years.
There has been no "established public market" for the Company's
common stock during the last five years. At such time as the Company
completes a merger or acquisition transaction, if at all, it may attempt to
qualify for listing on either NASDAQ or a national securities exchange.
However, at least initially, any trading in its common stock will most likely
be conducted in the over-the-counter market in the "pink sheets" or the OTC
Bulletin Board of the NASD.
Section 15(g) of the Securities Exchange Act of 1934, as amended,
and Reg. Section 240.15g-2 of the Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in
a penny stock for the investor's account. Potential investors in the
Company's common stock are urged to obtain and read such disclosure carefully
before purchasing any shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange
Commission requires broker-dealers in penny stocks to approve the account of
any investor for transactions in such stocks before selling any penny stock to
that investor. This procedure requires the broker-dealer to (i) obtain from
the investor information concerning his or her financial situation, investment
experience and investment objectives; (ii) reasonably determine, based on that
information, that transactions in penny stocks are suitable for the investor
and that the investor has sufficient knowledge and experience as to be
reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written statement setting forth the basis on which
the broker-dealer made the determination in (ii) above; and (iv) receive a
signed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it
more difficult for investors in the Company's common stock to resell their
shares to third parties or to otherwise dispose of them.
Year 2000.
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Because the Company is not presently engaged in any substantial
business operations, management does not believe that computer problems
associated with the change of year to the year 2000 will have any material
effect on its operations. However, the possibility exists that the Company
may merge with or acquire a business that will be negatively affected by the
"year 2000" problem. The effect of such problem or the Company in the future
can not be predicted with any accuracy until such time as the Company
identifies a merger or acquisition target.
Principal Products and Services.
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The limited business operations of the Company, as now
contemplated, involve those of a "blank check" company. The only activities to
be conducted by the Company are to manage its current limited assets and to
seek out and investigate the acquisition of any viable business opportunity by
purchase and exchange for securities of the Company or pursuant to a
reorganization or merger through which securities of the Company will be
issued or exchanged.
Distribution Methods of the Products or Services.
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Management will seek out and investigate business opportunities
through every reasonably available fashion, including personal contacts,
professionals, securities broker-dealers, venture capital personnel, members
of the financial community and others who may present unsolicited proposals;
the Company may also advertise its availability as a vehicle to bring a
company to the public market through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
- --------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
- --------------------------------
Management believes that there are literally thousands of "blank
check" companies engaged in endeavors similar to those engaged in by the
Company; many of these companies have substantial current assets and cash
reserves. Competitors also include thousands of other publicly-held companies
whose business operations have proven unsuccessful, and whose only viable
business opportunity is that of providing a publicly-held vehicle through
which a private entity may have access to the public capital markets. There is
no reasonable way to predict the competitive position of the Company or any
other entity in the strata of these endeavors; however, the Company, having
limited assets and cash reserves, will no doubt be at a competitive
disadvantage in competing with entities which have recently completed IPO's,
have significant cash resources and have recent operating histories when
compared with the complete lack of any substantive operations by the Company
for the past several years.
Sources and Availability of Raw Materials and Names of Principal
Suppliers.
- -----------
None; not applicable.
Dependence on One or a Few Major Customers.
- -------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements or Labor Contracts.
- ------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or
Services.
- ---------
Because the Company currently produces no products or services, it
is not presently subject to any governmental regulation in this regard.
However, in the event that the Company engages in a merger or acquisition
transaction with an entity that engages in such activities, it will become
subject to all governmental approval requirements to which the merged or
acquired entity is subject.
Effect of Existing or Probable Governmental Regulations on
Business.
- ---------
The integrated disclosure system for small business issuers
adopted by the Commission in Release No. 34-30968 and effective as of August
13, 1992, substantially modified the information and financial requirements of
a "Small Business Issuer," defined to be an issuer that has revenues of less
than $25 million; is a U.S. or Canadian issuer; is not an investment company;
and if a majority-owned subsidiary, the parent is also a small business
issuer; provided, however, an entity is not a small business issuer if it has
a public float (the aggregate market value of the issuer's outstanding
securities held by non-affiliates) of $25 million or more.
The Commission, state securities commissions and the North
American Securities Administrators Association, Inc. ("NASAA") have expressed
an interest in adopting policies that will streamline the registration process
and make it easier for a small business issuer to have access to the public
capital markets. The present laws, rules and regulations designed to promote
availability to the small business issuer of these capital markets and similar
laws, rules and regulations that may be adopted in the future will
substantially limit the demand for "blank check" companies like the Company,
and may make the use of these companies obsolete.
Research and Development.
- -------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
- -------------------------------------------------------
None; not applicable. However, environmental laws, rules and
regulations may have an adverse effect on any business venture viewed by the
Company as an attractive acquisition, reorganization or merger candidate, and
these factors may further limit the number of potential candidates available
to the Company for acquisition, reorganization or merger.
Number of Employees.
- --------------------
None.
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations or had any
revenues from operations during the last two fiscal years. The Company's plan
of operation for the next 12 months is to continue to seek the acquisition of
assets, property or business that may benefit the Company and its
stockholders. Because the Company has virtually no resources, management
anticipates that to achieve any such acquisition, the Company will be required
to issue shares of its common stock as the sole consideration for such
venture.
During the next 12 months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing or the
payment of expenses associated with reviewing or investigating any potential
business venture, which may be advanced by management or principal
stockholders as loans to the Company. Because the Company has not identified
any such venture as of the date of this Registration Statement, it is
impossible to predict the amount of any such loan. However, any such loan
will not exceed $25,000 and will be on terms no less favorable to the Company
than would be available from a commercial lender in an arm's length
transaction. As of the date of this Registration Statement, the Company has
not actively begun to seek any such venture.
Although the Company is not currently contemplating the borrowing of
any funds from members of management or principal stockholders, it is expected
that any such loan would be payable upon demand of the creditor and that
demand would not be made until such time (if ever) as the Company is able to
repay such debt. The Company does not anticipate that loan repayment by any
merger or acquisition target company will be a criterion in determining
whether to complete a transaction with such a company. In the event that the
Company is unable to repay any such loan in cash, it may arrange for repayment
in the form of common stock.
Results of Operations.
- ---------------------
The Company has had no material operations for over five years.
Losses of ($4,136) and ($42,746), for the years ended December 31, 1997 and
1996, respectively resulted from the issuance of stock as payment for services
rendered.
Liquidity.
- ---------
The Company had no liquidity during the years ended December 31,
1997 and 1996, and a capital contribution of $2,991 was made by a principal
stockholder during 1997, and a capital contribution of $1,920 was made by the
same stockholder in 1996.
Item 3. Description of Property.
- ---------------------------------
The Company has no assets, property or business; its principal
executive office address and telephone number are the home address and
telephone number of its President, David C. Merrell, and are provided at no
cost. Because the Company has no current business operations, its activities
have been limited to keeping itself in good standing in the State of Utah, and
with preparing this Registration Statement and the accompanying financial
statements. These activities have consumed an insignificant amount of
management's time; accordingly, the costs to Mr. Merrell of providing the use
of his home and telephone have been minimal.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- ------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the shareholdings of those persons
who own more than five percent of the Company's common stock as of the date
hereof, to wit:
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ --------
<S> <C> <C>
Chiricahua Company 1,177,088* 79.9%
9005 Cobble Canyon Ln.
Sandy, Utah 84093
* Chiricahua Company is a "doing business as" name of David C.
Merrell, a person who may be deemed to be a promoter of the Company.
Chiricahua Company is engaged in business consulting, particularly in the area
of mergers and acquisitions. Mr. Merrell also owns 50,000 shares personally
and Corie Merrell, Mr. Merrell's wife, owns 50,000 shares which are deemed to
be beneficially owned by Mr. Merrell, all of which are not included in the
above computation.
</TABLE>
Security Ownership of Management.
- ---------------------------------
The following table sets forth the shareholdings of the Company's
directors and executive officers as of the date hereof, to wit:
Number of Shares
Beneficially Owned Percentage of
Name and Address as of 12/31/96 of Class
- ---------------- ------------------ -------------
[S] [C] [C]
David C. Merrell (1) 1,277,088 86.7%
9005 Cobble Canyon Lane
Sandy, Utah 84093
Michael C. Brown 50,000 3.3%
4065 S. 510 E. No 1G
Salt Lake City, Utah 84017
(1) Includes 1,177,088 shares of common stock of the Company owned
by Chiricahua Company, and 50,000 shares owned by Corie Merrell, Mr. Merrell's
wife.
(2) See the caption "Directors, Executive Officers, Promoters and
Control Persons," below, Part I, Item 5, of this Registration Statement, for
information concerning the offices or other capacities in which the foregoing
persons serve with the Company.
Changes in Control.
- -------------------
There are no present arrangements or pledges of the Company's
securities which may result in a change in control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
- ----------------------------------------------------------------------
Identification of Directors and Executive Officers.
- ---------------------------------------------------
The following table sets forth the names of all current directors
and executive officers of the Company. These persons will serve until the
next annual meeting of the stockholders (held in June of each year) or until
their successors are elected or appointed and qualified, or their prior
resignations or terminations.
<TABLE>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ----------- --------------
<S> <C> <C> <C>
David C. Merrell Director and 5/96 *
President
Michael C. Brown Director and 5/96 *
Secretary/
Treasurer
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
- --------------------
David C. Merrell, President and a director. Since 1989, he has been
the owner of DCM Finance, a Salt Lake City based finance company which makes
and brokers real estate loans. Mr. Merrell received his Bachelor of Science
degree in Economics from the University of Utah in 1981.
Michael C. Brown, Secretary/Treasurer and a director. Mr. Brown
earned a Bachelor's Degree in accounting from the University of Utah. He has
been employed in the Food Industry for the past 10 years, and since 1993, he
has been employed by Albertsons Food Stores.
Other "Public Shell" Activities.
- -------------------------------
None of the directors and executive officers are or have ever been
involved in any blank check public offerings and have no plans to do such an
offering. Furthermore, none of the current directors or executive officers
were involved when the Company had operations. However, as indicated below,
David C. Merrell has been and is currently involved as a director and
executive officer of other companies that may be deemed to be "blank check"
companies and future involvement in other "blank check" companies is very
likely, but presently unplanned.
Mr. Merrell also serves as a director and executive officer of the
following public companies, (see the heading "Business," of Part I, Item 1,
and the risk factor "Conflicts of Interest; Related Party Transactions," of
the heading "Risk Factors," of Part I, Item 1) which may give rise to a
conflict of interest in seeking acquisition of any property, assets and
business, by reorganization, merger or otherwise. Mr. Merrell does not
believe that there will be any material conflict of interest in serving as a
director or executive officer in any of these companies because information
regarding these companies is usually provided to persons who are interested in
seeking to "go public" pursuant to a "reverse" reorganization, merger or
acquisition, and these persons generally make the determination as to which
company would better fit their requirements. Each of the following companies
may be deemed to be a "blank check" or "public shell" company and, as of the
date of this Registration Statement, none has been successful in locating a
significant business opportunity with which to merge or to acquire.
SEC
Name of Company File No. Positions held Appointed Resigned
- --------------- ------- -------------- --------- --------
New Environmental 002 76219-NY President and 7/20/95 *
Technologies, Inc. Director
Composite Design, Inc. 33 3358-NY President and 2/27/96 *
Director
A.X.R. Development, Inc. 2 99110-NY President and 9/23/96 *
Director
First Republic Capital, N/A (1) President and 7/31/96 *
Corporation Director
Saratoga Mint, Inc. 33 16271 President and 10/11/96 *
Director
The Theme Factory, Inc. 33 30158 President and 4/30/97 *
Director
Vibrosaun International,021-81053-4L President and 3/7/97 *
Inc. (formerly known as Director
"Morning Glory, Inc.")
E.R.C. Energy Recovery 021-13600-NY President and 6/7/96 *
Corporation Director
First Deltavision, Inc. 0-23511 President and 5/21/96 *
Director
Souvall-Page & Company,024-03765-D President and 6/23/97 *
Inc. Director
Alto Casino Corporation 33 1144-D President and 5/12/97 *
Director
Commercial Property, Inc. 0-4494 President and 11/19/97 *
Director
Northwest Silver N/A (2) President and 3/5/98 *
Corporation Director
Video Shopping Mall, Inc.002-96519-D President and 3/1/98 *
Director
Cherokee Minerals and Oil, 0 23729 President and 2/1/96 1/5/98
Inc. Director
*presently serving in these capacities.
(1) Mr. Merrell is informed and believes that this entity is a
"public shell" company, but has been unable to identify any SEC File No. as of
the date of this Report.
(2) This entity was incorporated in 1904 and made its initial public
offering of securities before the adoption of the 1934 Act. No filings have
ever been made with the Commission and, therefore, no SEC File No. has been
assigned.
First Deltavision, Inc.; Cherokee Minerals and Oil, Inc.; Composite
Design, Inc.; A.X.R. Development, Inc.; and Cookie Cup International, Inc. (an
entity of which Mr. Merrell is the beneficial owner of 38% of the issued and
outstanding shares )are subject to the periodic reporting requirements of the
Commission, and as such, present direct competition to the Company in
identifying and completing a merger or acquisition transaction with a suitable
business.
In addition to serving as director and executive officer of the above
companies, Mr. Merrell is the beneficial owner of the following percentages of
the issued and outstanding shares of common stock of these entities:
Name of Company Percentage Interest (1)
- --------------- -------------------
New Environmental Technologies, Inc. 81%
Composite Design, Inc. 80%
A.X.R. Development, Inc. 91%
First Republic Capital Corp. 86%
The Theme Factory, Inc. 94%
Vibrosaun, Inc. 90%
Cookie Cup International, Inc. 38%
E.R.C. Energy Recovery Corporation 63%
First Deltavision, Inc. 58%
Alto Casino Corporation 77%
Commercial Property 83%
Northwest Silver 77%
Cherokee Minerals and Oil, Inc. 21%
(1) These percentages take into account all shares owned by Mr.
Merrell; his wife, Corie Merrell; and Chiricahua Co. and Chiricahua
Investments LC, which are entities that may be deemed to be controlled by Mr.
Merrell. Neither Ms. Merrell, Chiricahua Co., nor Chiricahua Investments LC
is a stockholder of any "public shell" company that is not disclosed above.
Due to his substantial holdings in each of these companies, Mr. Merrell
may be deemed to be a promoter of each. None of these entities has engaged in
any merger or acquisition transaction as of the date of this Registration
Statement. However, it is anticipated that Mr. Merrell may receive
consideration for his retirement of all or a portion of his shares, as
discussed under the heading "Business" of this Registration Statement. Each
of these companies may be deemed to be a competitor to the Company in the
search for a suitable merger or acquisition target.
The following table summarizes the companies for which Mr. Merrell
has served as a director, executive officer or consultant and which have
completed a reorganization or merger or in which he sold his interest and the
consideration received by Mr. Merrell in connection with each reorganization
or sale:
<TABLE>
<CAPTION>
Reorg. or
Sales
Original Company Name New Company Name Symbol Date Consideration(1)
- --------------------- ---------------- ------ -------- -------------
<S> <C> <C> <C> <C>
Kara International, Inc. International IHIN 2/23/98 16,000 shares(2)
(SEC File No. 002 97690-D) Heritage $138,750
Incorporated
International Fire Trident Media TDNT 12/30/97 65,404 shares(3)
Prevention, Inc. Group, Inc. $31,209.06
(SEC File No. 2 98074-NY) Warrant(4)
Debenture(5)
Digital Power Holding same name DPWN 5/6/98 69,500 shares(6)
Company $40,628.76
(SEC File No. 2-93477-D)
Mr. Merrell received this consideration in exchange for his
relinquishment of a controlling interest (by stock holdings) in each of these
entities; and the number of shares represents shares he has owned and which he
retained. With the exception of Corie Merrell, as discussed below, no other
stockholder of any of these entities was compensated on the same basis as Mr.
Merrell.
(1) Mr. Merrell served as the President and as a director of Kara
International, Inc., now known as International Heritage Incorporated, from
May 9, 1994, to April 11, 1997. He also served as the President and as a
director of International Fire Prevention, Inc., now known as Trident Media
Group, Inc., from September, 1996, to January 1998; additionally, he served as
the President and a director of Digital Power Holding Company from January 16,
1996 to May 6, 1998. Mr. Merrell presently has no involvement with either
entity other than his status as a minority stockholder.
(2) During the year ended December 31, 1995, Mr. Merrell and his
wife, Corie Merrell, respectively were issued 6,556 and 321 shares of
"restricted securities" of Kara International, for services rendered; and on
February 28, 1997, an additional 50,000 shares of "restricted securities" of
Kara International were issued to Mr. Merrell for services rendered. These
proceeds resulted from the sale of a portion of the securities owned by Mr.
and Ms. Merrell prior to the date of the filing of this Registration Statement
and after the closing of the change of control of Kara. At that time, their
was a limited market for the shares of common stock of Kara International on
the OTC Bulletin Board, and any stockholder could presumably have sold
his/her/its shares for approximately the same price as that received by the
Merrells. The price for these shares varied and was negotiated at arms'
length with the respective purchasers, and was computed after the deduction of
$62,650 in legal and other costs paid by Mr. Merrell in connection with the
change of control.
(3) Mr. Merrell and his wife each acquired 226,402 shares of
"restricted securities" of International Fire in a foreclosure proceeding of
certain promissory notes executed by certain former principal stockholders on
or about April 22, 1997; and each was issued an additional 500,000 shares of
"restricted securities" on or about July 31, 1997. All of these latter
1,000,000 shares were canceled on the closing of the reorganization for
nominal consideration. These proceeds resulted from the sale of a portion of
the securities owned by Mr. and Ms. Merrell prior to the date of the filing of
this Registration Statement and after the closing of the change of control of
International Fire. At that time, their was a limited market for the shares
of common stock of International Fire on the OTC Bulletin Board, and any
stockholder could presumably have sold his/her/its shares for approximately
the same price as that received by the Merrells. The price for these shares
was negotiated at arms' length with the respective purchasers, and this amount
was computed after the deduction of legal, accounting and other expenses paid
by Mr. Merrell in connection with the reorganization amounting to
approximately $43,790.94.
(4) In connection with the completion of the reorganization
transaction with Trident Media Group, Inc. ("Trident"), Mr. Merrell was
granted a warrant to purchase up to 80,000 "unregistered" and "restricted"
shares of common stock of International Fire. These warrants are exercisable
at a price of (i) 125% of the opening bid price if the shares are listed on
the NASDAQ Small Cap Exchange on or before December 30, 197; or (ii) if the
shares are not listed on the NASDAQ Small Cap Exchange on or before December
30, 1997, 125% of the average bid price of such shares on the OTC Bulletin
Board for the 30-day period immediately preceding December 30, 1997. The
warrants are exercisable for a period of two years from the date that the
exercise price is determined as set forth above.
(5) Also in connection with the Trident reorganization,
International Fire issued to Mr. Merrell a debenture in the principal amount
of $75,000, payable on December 30, 1998. The debenture bears interest at a
rate of 7% per annum, on the first days of April, June, September and
December, 1998.
(6) On April 8, 1998, Digital Power Holding Corporation authorized
the issuance of 410,436 shares to Chiricahua Company, which is wholly owned by
David C. Merrell. Of the 410,436 shares owned by Chiricahua, Mr. Merrell sold
300,000 or 30% of to I-Storm Acquisition Corp. on May 6, 1998. Of the
remaining 110,436 shares, 38,067 were canceled on closing of this sale,
leaving a balance of 72,369; 2,869 shares were given to Mark Van Wagoner, Esq.
as payment for fees leaving a total of 69,500 shares which Mr. Merrell
currently owns. Of the 69,500 shares, I-Storm has an option to purchase
34,750 shares (or half of 69,500) shares at $2.00 per share until May 6, 1999,
which is when the option expires. Mr. Merrell received $75,000 for the
300,000 shares I-Storm purchased. After paying Digital Power Holding
Company's attorneys fees and costs, he netted approximately $40,628.76.
Significant Employees.
- ----------------------
The Company has no employees who are not executive officers.
Family Relationships.
- ---------------------
There are no family relationships between any director or executive
officer.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
During the past five years, no present or former director,
executive officer or person nominated to become a director or an executive
officer of the Company:
(1) was a general partner or executive officer of any business
against which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or vacated.
Item 6. Executive Compensation.
- --------------------------------
The following table sets forth the aggregate compensation paid
by the Company for services rendered during the periods indicated:
</TABLE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David C.
Merrell, 12/31/95 0 0 0 0 0 0 0
President, 12/31/96 0 0 0 (1)(2) 0 0 0
V.P. and 12/31/97 0 0 0 0 0 0 0
Director
Michael C.
Brown 12/31/95 0 0 0 0 0 0 0
Secretary/ 12/31/96 0 0 0 (1) 0 0 0
Treasurer, 12/31/97 0 0 0 0 0 0 0
Director
</TABLE>
(1) On June 15, 1996, 50,000 "unregistered" and
"restricted" shares of the Company's common stock were
issued to each of these persons in consideration of
services rendered. See the caption "Recent Sales of Unregistered
Securities," Part II, Item 4, of this Registration Statement.
(2) On November 5, 1996, 1,177,088 "unregistered" and "restricted"
shares of the Company's common stock was issued to
Chiricahua Company which is wholly owned by David C. Merrell, a
director and executive officer of the Company, in consideration of
services rendered. See the caption "Recent Sales of Unregistered
Securities," Part II, Item 4, of this Registration Statement.
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to the Company's management during the
fiscal years ended December 31, 1997 or 1996, or the period ending on the date
of this Registration Statement. Further, no member of the Company's
management has been granted any option or stock appreciation rights;
accordingly, no tables relating to such items have been included within this
Item.
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No
additional amounts are payable to the Company's directors for committee
participation or special assignments.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
- -------------
There are no employment contracts, compensatory plans or
arrangements, including payments to be received from the Company, with respect
to any director or executive officer of the Company which would in any way
result in payments to any such person because of his or her resignation,
retirement or other termination of employment with the Company or its
subsidiaries, any change in control of the Company, or a change in the
person's responsibilities following a change in control of the Company.
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than five percent of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, had a material interest. However, each of the current
directors and executive officers have received "unregistered" and "restricted"
shares of the Company's common stock in consideration of services rendered.
See the captions "Business Development" and "Executive Compensation" Part I,
Item 1 and 6, respectively, of this Registration Statement.
Certain Business Relationships.
- -------------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than five percent of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, had a material interest. However, each of the current
directors and executive officers have received "unregistered" and "restricted"
shares of the Company's common stock in consideration of services rendered.
See the captions "Business Development" and "Executive Compensation" Part I,
Item 1 and 6, respectively, of this Registration Statement.
Indebtedness of Management.
- ---------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than five percent of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, had a material interest. However, each of the current
directors and executive officers have received "unregistered" and "restricted"
shares of the Company's common stock in consideration of services rendered.
See the captions "Business Development" and "Executive Compensation" Part I,
Item 1 and 6, respectively, of this Registration Statement.
Parents of the Issuer.
- ----------------------
The Company has no parents. See the caption "Business
Development," Part I, Item 1, of this Registration Statement.
Transactions with Promoters.
- ----------------------------
There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
promoter or founder, or any member of the immediate family of any of the
foregoing persons, had a material interest. However, each of the current
directors and executive officers have received "unregistered" and "restricted"
shares of the Company's common stock in consideration of services rendered.
See the captions "Business Development" and "Executive Compensation" Part I,
Item 1 and 6, respectively, of this Registration Statement.
Item 8. Description of Securities.
- -----------------------------------
The Company has one class of securities authorized, consisting of
50,000,000 shares of $0.001 par value common voting stock. The holders of the
Company's common stock are entitled to one vote per share on each matter
submitted to a vote at a meeting of stockholders. The shares of common stock
do not carry cumulative voting rights in the election of directors.
Stockholders of the Company have no pre-emptive rights to acquire
additional shares of common stock or other securities. The common stock is
not subject to redemption rights and carries no subscription or conversion
rights. All shares of the common stock now outstanding are fully paid and
non-assessable.
There are no outstanding options, warrants or calls to purchase
any of the authorized securities of the Company.
There is no provision in the Company's Articles of Incorporation,
as amended, or Bylaws, as amended, that would delay, defer, or prevent a
change in control of the Company.
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and
Other Stockholder Matters.
- --------------------------
Market Information.
- -------------------
There has never been any established "public market" for shares of
common stock of the Company. The Company intends to submit for quotation of
its common stock on the OTC Bulletin Board of the NASD; however, management
does not expect any public market to develop unless and until the Company
completes an acquisition, reorganization or merger. In any event, no
assurance can be given that any market for the Company's common stock will
develop or be maintained. If a public market ever develops in the future, the
sale of "unregistered" and "restricted" shares of common stock pursuant to
Rule 144 of the Commission by members of management may have a substantial
adverse impact on any such public market, and all of the current and former
members of management have already satisfied the "holding period" requirement
of Rule 144. See the caption "Recent Sales of Unregistered Securities," Part
II, Item 4, of this Registration Statement.
Holders.
- --------
The number of record holders of the Company's securities as of the
date of this Registration Statement is approximately 87.
Dividends.
- ----------
The Company has not declared any cash dividends with respect to
its common stock or its preferred stock, and does not intend to declare
dividends in the foreseeable future. The future dividend policy of the
Company cannot be ascertained with any certainty, and if and until the Company
completes any acquisition, reorganization or merger, no such policy will be
formulated. There are no material restrictions limiting, or that are likely
to limit, the Company's ability to pay dividends on its securities.
Item 2. Legal Proceedings.
- ---------------------------
The Company is not a party to any pending legal proceeding. No
federal, state or local governmental agency is presently contemplating any
proceeding against the Company. No director, executive officer or affiliate
of the Company or owner of record or beneficially of more than five percent of
the Company's common stock is a party adverse to the Company or has a
material interest adverse to the Company in any proceeding.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
There have been no changes in the Company's principal independent
accountant in the past two fiscal years or as of the date of this Registration
Statement. The current accountant for the Company audited its last financial
statements for the year ended December 31, 1997.
Item 4. Recent Sales of Unregistered Securities.
- -------------------------------------------------
Date Number of Aggregate
Name Acquired Shares Consideration
---- -------- --------- -------------
Michael C. Brown 6/15/96 50,000 Services
Leonard W. Burningham 6/15/96 50,000 Services
Chiricahua Corporation 11/5/96 1,177,088 Services
Corie Merrell 6/15/96 50,000 Services
David C. Merrell 6/15/96 50,000 Services
Jerry Peterson 11/5/96 50,000 Services
With the exception of Leonard W. Burningham, Esq. and Jerry Peterson
(persons believed to be an "accredited investors"), each of these persons is a
current or former director and executive officer of the Company and/or
controlled Chiricahua Company (David C. Merrell) or a family member of the
foregoing, and had access to all material information regarding the Company
prior to the offer or sale of these securities. The offers and sales of these
securities are believed to have been exempt from the registration requirements
of Section 5 of the Securities Act of 1933, as amended, pursuant to Section
4(2) thereof, and from similar states' securities laws, rules and regulations
requiring the offer and sale of securities by available state exemptions from
such registration.
Item 5. Indemnification of Directors and Officers.
- ---------------------------------------------------
Section 16-10a-902(1) of the Utah Revised Business Corporation Act
authorizes a Utah corporation to indemnify any director against liability
incurred in any proceeding if he or she acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his or her conduct was unlawful.
Section 16-10a-902(4) prohibits a Utah corporation from indemnifying
a director in a proceeding by or in the right of the corporation in which the
director was adjudged liable to the corporation or in a proceeding in which
the director was adjudged liable on the basis that he or she improperly
received a personal benefit. Otherwise, Section 16-10a-902(5) allows
indemnification for reasonable expenses incurred in connection with a
proceeding by or in the right of a corporation.
Unless limited by the Articles of Incorporation, Section 16-10a-905
authorizes a director to apply for indemnification to the court conducting the
proceeding or another court of competent jurisdiction. Section 16-10a-907(1)
extends this right to officers of a corporation as well.
Unless limited by the Articles of Incorporation, Section 16-10a-903
requires that a corporation indemnify a director who was successful, on the
merits or otherwise, in defending any proceeding to which he or she was a
party against reasonable expenses incurred in connection therewith. Section
16-10a-907(1) extends this protection to officers of a corporation as well.
Pursuant to Section 16-10a-904(1), the corporation may advance a
director's expenses incurred in defending any proceeding upon receipt of an
undertaking and a written affirmation of his or her good faith belief that he
or she has met the standard of conduct specified in Section 16-10a-902.
Unless limited by the Articles of Incorporation, Section 16-10a-907(2) extends
this protection to officers, employees, fiduciaries and agents of a
corporation as well.
Regardless of whether a director, officer, employee, fiduciary or
agent has the right to indemnity under the Utah Revised Business Corporation
Act, Section 16-10a-908 allows the corporation to purchase and maintain
insurance on his or her behalf against liability resulting from his or her
corporate role.
PART F/S
Index to Financial Statements
Report of Certified Public Accountants
Financial Statements
- --------------------
Audited Financial Statements for the year
December 31, 1997 and December 31, 1996*
---------------------------------------
Independent Auditors' Report
Balance Sheet
Statements of Operations
Statements of Stockholders' Equity
Statements of Cash Flows
Notes to the Financial Statements
Unaudited Financial Statements for the period
June 30, 1998*
--------------
Balance Sheet
Statement of Operations
Statements of Stockholders' Equity
Statements of Cash Flows
Notes to the Financial Statements
* These financial statements have been previously filed
with the Securities and Exchange Commission as exhibits
to the Company's initial Registration Statement on Form
10-SB, filed on June 12, 1998, and are incorporated
herein by reference.
PART III
Item 1. Index to Exhibits.
- ---------------------------
The following exhibits are filed as a part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description*
- ------ ------------
<S> <C>
3.1 Initial Articles of Incorporation dated July 26, 1983**
3.2 By-laws**
3.3 Certificate of Amendment to
Articles of Incorporation dated August 28, 1985
respecting name change**
27 Financial Data Schedule**
</TABLE>
* Summaries of all exhibits contained within this
Registration Statement are modified in their
entirety by reference to these Exhibits.
** Each of these documents was filed as an exhibit
to the Company's Registration Statement on Form
10-SB, filed on June 12, 1998, and is incorporated
herein by reference.
SIGNATURES
In accordance with Section 12 of the Securities
Exchange Act of 1934, the Registrant has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto
duly authorized.
AMCI INTERNATIONAL, INC.
Date: 9/29/98 By: /s/ David C. Merrell
-------- ------------------------
David C. Merrell, Director
and President
Date: 9/30/98 By: /s/ Michael C. Brown
-------- ------------------------
Michael C. Brown, Director
Secretary/Treasurer
