U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of the Securities Exchange Act of 1934
SICLONE INDUSTRIES, INC.
(Name of Small Business Issuer in its charter)
DELAWARE 87-042699
---------- -----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6269 Jamestown Court, Salt Lake City, Utah 84121
- ------------------------------------------ -------
(Address of principal executive Offices) (Zip Code)
Issuer's telephone number: 801-566-6627
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class to be registered
- ---------------------- ------------------------------
Securities to be registered under Section 12(g) of the Act:
COMMON
-------
(Title of Class)
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
This Form 10-SB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-SB that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe",
"anticipate," "estimate" or "continue" or comparable terminology are
intended to identify forward-looking statements. These statements by their
nature involve substantial risks and uncertainties, and actual results may
differ materially depending on a variety of factors, many of which are not
within the Company's control. These factors include but are not limited to
economic conditions generally and in the industries in which the Company
may participate; competition within the Company's chosen industry,
including competition from much larger competitors; technological advances
and failure by the Company to successfully develop business relationships.
PART I
Item 1. Description of Business.
Siclone Industries, Inc., ("Siclone" or the "Company") was originally
incorporated in Delaware on November 1, 1985 as McKinnely Investments, Inc.
The Company changed its name to Accoline Industries, Inc. on November 5,
1986 and again changed its name to Siclone Industries, Inc. on May 24,
1988.
The Company has not had active business operations since its
inception. In 1993, the Company entered into an agreement with Bradley S.
Shepherd in which Mr. Shepherd agreed to become an officer and director of
the Company and use his best efforts to organize and update the books and
records of the Corporation and seek business opportunities for acquisition
or participation by the Company. As of February 12, 1996, the Company has
been reinstated with the state of Delaware and is actively seeking a
business opportunity in which to participate.
The Company intends to seek, investigate, and if warranted, acquire an
interest in a business opportunity. The Company does not propose to
restrict its search for a business opportunity to any particular industry
or geographical area and may, therefore, engage in essentially any business
in any industry. The Company has unrestricted discretion in seeking and
participating in a business opportunity, subject to the availability of
such opportunities, economic conditions and other factors.
The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise
of its business judgment. There is no assurance that the Company will be
able to identify and acquire any business opportunity which will ultimately
prove to be beneficial to the Company and its shareholders.
2
<PAGE>
The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no
specific business and may acquire or participate in a business opportunity
based on the decision of management which will, in all probability, act
without the consent, vote, or approval of the Company's shareholders.
Reports to Security Holders
Prior to the filing of this registration statement on Form 10, the
Company was not subject to the reporting requirements of Section 13(a) or
15(d) of the Exchange Act. Upon effectiveness of this registration
statement, the Company will file annual and quarterly reports with the
Securities and Exchange Commission ("SEC"). The public may read and copy
any materials filed by the Company with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The Company is an electronic filer
and the SEC maintains an Internet site that contains reports and other
information regarding the Company which may be viewed at
http://www.sec.gov.
Sources of Opportunities
It is anticipated that business opportunities may be available to the
Company from various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited
proposals.
The Company will seek a potential business opportunity from all known
sources, but will rely principally on personal contacts of its officers and
directors as well as indirect associations between them and other business
and professional people. Although the Company does not anticipate engaging
professional firms specializing in business acquisitions or
reorganizations, if management deems it in the best interests of the
Company, such firms may be retained. In some instances, the Company may
publish notices or advertisements seeking a potential business opportunity
in financial or trade publications.
Criteria
The Company will not restrict its search to any particular business,
industry or geographical location. The Company may acquire a business
opportunity or enter into a business in any industry and in any stage of
development. The Company may enter into a business or opportunity
involving a "start up" or new company. The Company may acquire a business
opportunity in various stages of its operation.
In seeking a business venture, the decision of management of the
Company will not be controlled by an attempt to take advantage of an
anticipated or perceived appeal of a specific industry, management group,
or product or industry, but will be based upon the business objective of
seeking long-term capital appreciation in the real value of the Company.
3
<PAGE>
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; the history of
operations, if any; prospects for the future; the nature of present and
expected competition; the quality and experience of management services
which may be available and the depth of that management; the potential for
further research, development or exploration; the potential for growth and
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services, trade or service marks, name
identification; and other relevant factors.
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the
other firm's management and personnel, the anticipated acceptability of new
products or marketing concepts, the merit of technological changes, and
numerous other factors which are difficult, if not impossible to analyze
through the application of any objective criteria. In many instances, it
is anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future because of the
requirement to substantially shift marketing approaches, expand
significantly, change product emphasis, change or substantially augment
management, or other factors.
Generally, the Company will analyze all available factors in the
circumstances and make a determination based upon a composite of available
facts, without reliance upon any single factor as controlling.
Methods of Participation of Acquisition
Specific business opportunities will be reviewed and, on the basis of
that review, the legal structure or method of participation deemed by
management to be suitable will be selected. Such structures and methods
may include, but are not limited to, leases, purchase and sale agreements,
licenses, joint ventures, other contractual arrangements, and may involve a
reorganization, merger or consolidation transaction. The Company may act
directly or indirectly through an interest in a partnership, corporation,
or other form of organization.
Procedures
As part of the Company's investigation of business opportunities,
officers and directors may meet personally with management and key
personnel of the firm sponsoring the business opportunity, visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key
personnel, and conduct other reasonable measures.
The Company will generally request that it be provided with written
materials regarding the business opportunity containing such items as a
description of product, service and company history; management resumes;
financial information; available projections with related assumptions upon
which they are based; an explanation of proprietary products and services;
evidence of existing patents, trademarks or service marks or rights
thereto; present and proposed forms of compensation to management; a
description of transactions between the prospective entity and its
affiliates; relevant analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; and other
information deemed relevant.
4
<PAGE>
Competition
The Company expects to encounter substantial competition in its
efforts to acquire a business opportunity. The primary competition is from
other companies organized and funded for similar purposes, small venture
capital partnerships and corporations, small business investment companies
and wealthy individuals.
Employees
The Company does not currently have any employees but relies upon the
efforts of its officers and directors to conduct the business of the
Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL STATEMENTS
Plan of Operation
The Company has little cash and has experienced losses from inception.
As of December 31, 1998, the Company had cash of $4,241 on hand. As of
that date, the Company had no outstanding liabilities. The Company has no
material commitments for capital expenditures for the next twelve months.
As of the date of this Form 10-SB, the Company has yet to generate
positive cash flow. Since inception, the Company has primarily financed
its operations through the sale of common stock.
The Company believes that its current cash needs can be met with the
cash on hand for at least the next twelve months. However, should the
Company obtain a business opportunity, it may be necessary to raise
additional capital. This may be accomplished by selling common stock of
the Company.
Management of the Company intends to actively seek business
opportunities for the Company during the next twelve months.
The Year 2000 - Millennium Bug
This concern, known as "The Year 2000" problem or "The Millennium Bug"
is expected to effect a large number of computer systems and programs after
the year 1999. The concern is that any computer function that requires a
date calculation may produce errors or system failures. As a result,
5<PAGE>
computer systems and/or software used by many companies will need to be
upgraded to comply with "Year 2000" requirements. The Company is presently
evaluating the impact of the Year 2000 issue as it affects its business
operations and interfaces . To date, the Company is unaware of any
situation of noncompliance that would materially adversely effect its
operations or financial condition. There can be no assurance, however,
that instances of noncompliance which could have a material adverse effect
on the Company's operations or financial condition have been identified.
Additional, there can be no assurance that the systems of other companies
with which the Company transacts business will be corrected on a timely
basis, or that failure by such third party entities to correct a Year 2000
problem, or a correction which is incompatible with the Company's
information systems, would not have a material adverse effect on the
Company's operations or financial condition.
Item 3. Description of Property
The Company does not currently own any property. The Company utilizes
office space in the residence of Bradley S. Shepherd at no cost. Until
such time as the Company pursues a viable business opportunity and
recognizes income, it will not seek independent office space.
Item 4. Security Ownership of Certain Beneficial Owners and
Management; Changes in Control
The following table sets forth as of April 1, 1999, the name and the
number of shares of the Registrant's Common Stock, par value $0.001 per
share, held of record or beneficially by each person who held of record, or
was known by the Registrant to own beneficially, more than 5% of the
23,810,000 issued and outstanding shares of the Registrant's Common Stock,
and the name and shareholdings of each director and of all officers and
directors as a group.
<TABLE>
<CAPTION>
Title of Name and Address of Amount and Nature of
Class Beneficial Owner Beneficial Ownership Percentage of Class
- --------- ----------------------- ---------------------- --------------------
<S> <C> <C> <C>
Common Bradley S. Shepherd (1) 12,000,000 50.39
6269 Jamestown Court
Salt Lake City, UT 84121
____________________________________________________________________________________
Common Officers, Directors and 12,000,000 50.39
Nominees as a Group:
1 person
____________________________________________________________________________________
</TABLE>
(1) Officer and/or director
There are no contracts or other arrangements that could result in a
change of control of the Company.
6
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth as of April 1, 1999, the name, age, and
position of each executive officer and director and the term of office of
each director of the Corporation.
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR OR OFFICER SINCE
<S> <C> <C> <C>
Bradley S. Shepherd 38 Director, President April 15, 1993
Secretary/Treasurer
</TABLE>
All officers hold their positions at the will of the Board of
Directors. All directors hold their positions for one year or until their
successors are elected and qualified.
Set forth below is certain biographical information regarding each of
the Company's executive officers and directors:
Bradley S. Shepherd. Director, President, Secretary/Treasurer, age
38. Mr. Shepherd is the owner and manager of Shepherd's Allstar Lanes,
Inc., a bowling center, restaurant, and lounge located in West Jordan,
Utah. After managing the business for three years, Mr. Shepherd purchased
the business in June of 1993.
Mr. Shepherd also manages and is trustee for the Roger L. Shepherd
Family Trust which owns and leases commercial office and warehouse
buildings and residential properties in the Salt Lake City area.
Mr Shepherd also serves as Director, President, Secretary, and
Treasurer of Patriot Investment Corporation, a Nevada corporation. Patriot
Investment Corporation is a publicly held company seeking to acquire an
interest in a business opportunity. Mr. Shepherd was elected to these
offices in December of 1994 by shareholders holding a majority of the
issued and outstanding shares of the company.
Prior to his current business activities, Mr. Shepherd spent 10 years
working in the securities industry as an account representative and then
securities trader for R.A. Johnson Company, Inc., and then Olsen Payne and
Company, both Salt Lake City, brokerage firms.
To the knowledge of management, 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) filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer
appointed by a court for the business or property of such person, or any
partnership in which he was a general partner at or within two years before
the time of such filing, or any corporation or business association of
which he was an executive officer at or within two years before the time of
such filing;
(2) was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations or other minor
offenses);
7<PAGE>
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or otherwise
limiting, the following activities;
(I) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, associated person of any of the foregoing, or as an
investment advisor, underwriter, broker or dealer in securities, or as an
affiliate person, director or employee of any investment company, or
engaging in or continuing any conduct or practice in connection with such
activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase
or sale of any security or commodity or in connection with any violation of
federal or state securities laws or federal commodities laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or state
authority barring, suspending, or otherwise limiting for more than 60 days
the right of such person to engage in any activity described above under
this Item, or to be associated with persons engaged in any such activity;
(5) was found by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission to have violated any federal
or state securities law, and the judgment in such civil action or finding
by the Securities and Exchange Commission has not been subsequently
reversed, suspended, or vacated
(6) was found by a court of competent jurisdiction in a civil action
or by the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
Item 6. Executive Compensation.
The following table sets forth certain summary information concerning
the compensation paid or accrued for each of the Registrant's last three
completed fiscal years to the Registrant's or its principal subsidiaries
chief executive officers and each of its other executive officers that
received compensation in excess of $100,000 during such period (as
determined at December 31, 1998, the end of the Registrant's last completed
fiscal year).
8
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Name &
Principal Bonus Compen- Stock Options/ LTIP Compen-
Position Year Salary $ sation Awards SARs Payout sation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Bradley S. Shepherd (1) 1998 -0- -0- -0- -0- -0- -0- -0-
President, Secretary/ 1997 -0- -0- -0- -0- -0- -0- -0-
Treasurer 1996 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
(1) Mr. Shepherd was granted a three year option to acquire up to
12,000,000 shares of the Company's restricted Common stock at an exercise
price of $.001 per share on April 15, 1993 as an inducement to become an
officer and director of the Company. In 1996, Mr. Shepherd exercised his
option to acquire all 12,000,000 shares of restricted Common stock.
Compensation of Directors
None.
Employment Contracts and Termination of Employment and Change in Control
Arrangement
There are no employment contracts between the Company and any of its
officers or directors.
There are no compensatory plans or arrangements, including payments to
be received from the Company, with respect to any person named in Cash
Compensation set out above which would in any way result in payments to any
such person because of his resignation, retirement, or other termination of
such person's employment with the company or its subsidiaries, or any
change in control of the Company, or a change in the person's
responsibilities following a changing in control of the Company.
Item 7. Certain Relationships and Related Transactions.
In 1993, the Company granted Bradley S. Shepherd an option to purchase
up to 12,000,000 shares of the Company's Common stock at an exercise price
of $0.001 as an inducement to become an officer and director of the
Company. In 1996 Mr. Shepherd exercised his option for all 12,000,000
shares.
The Company utilizes office space at the residence of Mr. Shepherd to
conducts its activities at no charge to the Company.
Item 8. Description of Securities.
The Company is presently authorized to issue 30,000,00 shares of $.001
par value Common Stock. All Shares, when issued, will be fully paid and
nonassessable. All shares are equal to each other with respect to
liquidation and dividend rights. Holders of voting shares are entitled to
one vote for each share they own at any Shareholders' meeting.
9
<PAGE>
Holders of Shares of Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors out of funds legally
available therefor, and upon liquidation are entitled to participate
pro-rata in a distribution of assets available for such a distribution to
Shareholders. There are no conversion, pre-emptive or other subscription
rights or privileges with respect to any Shares.
The Common Stock of the Company does not have cumulative voting rights
which means that the holders of more than 50% of the voting shares voting
for election of directors may elect all of the directors if they choose to
do so. In such event, the holders of the remaining Shares aggregating less
than 50% will not be able to elect any directors.
The Company is also authorized to issue 5,000,000 shares of preferred
stock, par value $.001 per share. The board of directors, without
shareholder action, and within the limits set forth in the Utah Revised
Business Corporation Act, have the authority to; (a) designate in whole or
in part, the preferences, limitations and relative rights of any class of
shares before the issuance of any shares of that class; (b) create one or
more series within a class of shares, fix the number of shares of each such
series, and designate, in whole or part, the preferences, limitations, and
relative rights of the series, all before the issuance of any shares of
that series; (c) alter or revoke the preferences, limitations, and relative
rights granted to or imposed upon any wholly unissued class of shares or
any wholly unissued series of any class of shares; or (d) increase or
decrease the number of shares constituting any series, the number of shares
of which was originally fixed by the board of directors, either before or
after the issuance of shares of the series; provided that, the number may
not be decreased below the number of shares of the series then outstanding,
or increased above the total number of authorized shares of the applicable
class of shares available for designation as a part of the series. The
allocation among the series of each class of unlimited voting rights and
the right to receive the net assets of the Corporation upon dissolution,
shall be as designated by the board of directors. Shares of any class of
stock may be issued, without shareholder action, in one or more series as
may from time to time be determined by the board of directors.
The Company has appointed OTC Stock Transfer as the transfer agent and
registrar for the Company's securities.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters.
The Company's common stock is listed on the Over the Counter Bulletin
Board ("OTCBB"), under the symbol "SICI". As of April 1, 1999, the Company
had 291 shareholders holding 23,810,000 shares of common stock. Of the
issued and outstanding common stock, 1,110,000 are free trading, the
balance are restricted stock as that term is used in Rule 144. The Company
has never declared a dividend on its Common Stock.
The last bid for the Company's common stock was in June, 1990 and the
stock has not actively traded since that time.
The Company has not paid, nor declared, any dividends since its
inception and does not intend to declare any such dividends in the
foreseeable future. The Company's ability to pay dividends is subject to
limitations imposed by Delaware law. Under Delaware law, dividends may be
paid to the extent that the corporation's assets exceed its liabilities and
it is able to pay its debts as they become due in the usual course of
business.
10
Item 2. Legal Proceedings.
No legal proceedings are threatened or pending against the Company or
any of its officers or directors. Further none of the Company's officers
or directors or affiliates of the Company are parties against the Company
or have any material interests in actions that are adverse to the Company's
interests.
Item 3. Changes in and Disagreements with Accountants.
None.
Item 4. Recent Sales of Unregistered Securities.
Shepherd Option Exercise
<TABLE>
<CAPTION>
(a) Date of Sale Title Amount of Securities Sold
------------ ----- -------------------------
<S> <C> <C> <C>
February 12, 1996 Common 12,000,000
</TABLE>
(b) The securities were not publicly offered. The securities were
issued to Bradley S. Shepherd in exchange for $12,000.
(c) The Company received cash consideration for the exercise of the
options. The cash was used as operating capital for the Company.
(d) The Company relied upon section 4(2) of the Securities Act of
1933 to effect the exchange of shares. All shares were exchanged in an
isolated private transaction not involving any public solicitation or
offering.
(f) All proceeds were used for working capital.
Item 5. Indemnification of Directors and Officers.
There are no provisions in the Delaware corporation law or the
Articles of Incorporation of the Registrant requiring the corporation to
indemnify any of the Registrant officers and directors. The by-laws of the
registrant provide for indemnification as follows:
The corporation shall indemnify its officers, directors,
employees and agents to the extent permitted by the General
Corporation Law of Delaware.
The Articles of Incorporation of the registrant provide for
indemnification as follows:
The Corporation shall indemnify any and all persons who may serve
or who have served at any time as director or officers, or who, at the
request of the Board of Directors of the corporation, may serve, or at
any time have served as directors or officers of another corporation
in which the Corporation at such time owned or may own shares of
stock, or which it was or may be a creditor, and the respective heirs,
administrators, successors, and assigns, against any and all expenses,
including amounts paid (before or after suite is commenced), actually
or necessarily by such persons in connection with the defense or
11
<PAGE>
settlement or any claim, action, suit, or proceeding in which they, or
any of them, are made parties, or a party, or which may be assessed
against them or any of them, by reason of being or having been
directors or officers of the Corporation, or such other corporation,
except in relation to matters as to which any such director or officer
of the Corporation, or such other corporation, or former director or
officer shall be adjudged in any action, suit or proceeding to be
liable for his own negligence of misconduct in the performance of his
duties. Such indemnification shall be in addition to any other rights
to which those indemnified may be entitled under any law, by-law,
agreement, vote of stockholders or otherwise.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to officers and directors of the
Company pursuant to the provisions of the Company's Certificate of
Incorporation, the Company has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is therefore
unenforceable.
12
<PAGE>
PART F/S
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
Report of Independent Accountants
Balance Sheet as of December 31, 1998
Statement of Operations from inception on November 1, 1985 through December
31, 1998
Statements of Stockholders' Equity for years ended December 31, 1987
through December 31, 1998
Statements of Cash Flows for the years ended December 31, 1997 and December
31, 1998 and for the Period from November 1, 1985 (Inception) through
December 31, 1998
Notes to the Financial Statements
13
<PAGE>
PART III
Item 1. Index and Description of Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Title of Document Location
- --------- ----------------------- -----------------
<S> <C> <C>
2.01 Articles of Incorporation, as amended See Attached
2.02 Bylaws See Attached
- ------------------------------------------------------------------------
</TABLE>
SIGNATURES
- ------------------------------------------------------------------------
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
Siclone Industries, Inc.
Date: By: /s/ Bradley S. Shepherd
---------------------------
Bradley S. Shepherd
President
Date: By: /s/ Bradley S. Shepherd
---------------------------
Bradley S. Shepherd
14
<PAGE>
PART III
Item 1. Index and Description of Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Title of Document Location
- --------- ----------------------- -----------------
<S> <C> <C>
2.01 Articles of Incorporation, as amended See Attached
2.02 Bylaws See Attached
- ------------------------------------------------------------------------
</TABLE>
SIGNATURES
- ------------------------------------------------------------------------
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
Siclone Industries, Inc.
Date: By: /s/ Bradley S. Shepherd
---------------------------
Bradley S. Shepherd
President
Date: By: /s/ Bradley S. Shepherd
---------------------------
Bradley S. Shepherd
14
<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Financial Statements
December 31, 1998 and 1997
<PAGE>
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . 3
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Stockholders' Equity . . . . . . . . . . . . . . . . . . . . 6
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . 10
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
/Letterhead/
McGladry Network
An independently Owned Member
Worldwide Services
Through RSM International
American Institute of Jones, Jensen& Company, LLC R. Gordon Jones, CPA
Certified Public ------------------------ Mark F. Jensen, CPA
Accountants Certified Public Accountant Franklin L. Hunt, CPA
Steve M. Hanni, CPA
Utah Association of
Certified Public
Accountants
SEC Practice Section
Private Companies
Practice Section
/End Letterhead/
INDEPENDENT AUDITORS' REPORT
Board of Directors
Siclone Industries, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Siclone Industries, Inc.
(a development stage company) as of December 31, 1998 and the related
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 1998 and 1997 and from inception on November 1, 1985
through December 31, 1998. 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 audits.
We conducted our audits 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 Siclone Industries,
Inc. (a development stage company) as of December 31, 1998, and the results
of its operations and its cash flows for the years ended December 31, 1998
and 1997 and from inception on November 1, 1985 through December 31, 1998,
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered recurring losses from
operations and has no operating capital that together 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 3. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
/S/ Jones, Jensen & Company
/Letterhead/ Jones, Jensen & Company
Salt Lake City, Utah
February 5, 1999
50 South Main Street, Suite 1450, Salt Lake City, Utah 84144
Telephone (801) 328-4408 Facsimile (801) 328-4461 /End of Letterhead/<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
ASSETS
-------
December 31,
1998
------------
<S> <C>
CURRENT ASSETS
Cash $ 4,241 ------------
Total Current Assets 4,241
------------
TOTAL ASSETS $ 4,241
============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ -
Total Liabilities -
------------
STOCKHOLDERS' EQUITY
Stock authorized 30,000,000 common shares and
5,000,000 preferred shares at $0.001 par value;
23,810,000 common shares issued and outstanding
and no preferred shares issued and outstanding 23,810
Additional paid-in capital 583,693
Deficit accumulated during the development stage (603,262)
------------
Total Stockholders' Equity 4,241
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,241
============
</TABLE>
The accompanying notes are an integral part of these financial statements
4<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From
Inception on
November 1,
1985 Through
1998 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES (770) (1,373) (7,759)
LOSS FROM DISCONTINUED
OPERATIONS - - (595,503)
----------- ----------- -----------
NET LOSS $ (770) $ (1,373) $ (603,262)
=========== =========== ===========
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
----------------------- Paid-In Development
Shares Amount Capital Stage
------------ ---------- ------------ ------------
<S> <C> <C> <C> <C>
Balance,
November 1, 1985 - $ - $ - $ -
Issuance of 500,000 shares
of common stock to Officers
and Directors for cash on
November 1, 1985 at
$0.02 per share 500,000 500 9,500 -
Cancellation of 140,000
shares on February 7, 1986 (140,000) (140) 140 -
Cancellation of 300,000 shares
on October 1, 1986 (300,000) (300) 300 -
Issuance of 1,000,000 shares
of common stock to the public
offered March 26, 1986 at
$0.10 per share 1,000,000 1,000 99,000 -
Deferred offering costs
offset against additional
paid-in capital - - (18,678) -
Issuance of 10,700,000
shares of common stock
October 10, 1986 at $0.05
per share 10,700,000 10,700 483,251
Issuance of 50,000 shares
for promotional services at
$0.001 per share 50,000 50 - -
Accumulated losses from
formation on November 1, 1985
through December 31, 1987 - - - (502,196)
------------ ---------- ------------ ------------
Balance,
December 31, 1987 11,810,000 $ 11,810 $ 573,513 $ (502,196)
------------ ---------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional
During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------ ---------- ------------ ------------
<S> <C> <C> <C> <C>
Balance,
December 31, 1987 11,810,000 $ 11,810 $ 573,513 $ (502,196)
Net loss for the year ended
December 31, 1988 - - - (92,783)
------------ ---------- ------------ ------------
Balance,
December 31, 1988 11,810,000 11,810 573,513 (594,979)
Cash contributed to additional
paid-in capital - - 10,180 -
Net loss for the year ended
December 31, 1989 - - - (524)
------------ ---------- ------------ ------------
Balance,
December 31, 1989 11,810,000 11,810 583,693 (595,503)
Net loss for the year ended
December 31, 1990 - - - -
------------ ---------- ------------ ------------
Balance,
December 31, 1990 11,810,000 11,810 583,693 (595,503)
Net loss for the year ended
December 31, 1991 - - - (758)
------------ ---------- ------------ ------------
Balance,
December 31, 1991 11,810,000 $ 11,810 $ 583,693 $ (596,261)
------------ ---------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements
7<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------ ---------- ------------ ------------
<S> <C> <C> <C> <C>
Balance,
December 31, 1991 11,810,000 $ 11,810 $ 583,693 $ (596,261)
Net loss for the year ended
December 31, 1992 - - - (651)
------------ ---------- ------------ ------------
Balance,
December 31, 1992 11,810,000 11,810 583,693 (596,912)
Issuance of 1,000,000 shares
of common stock to officer for
cash June 7, 1993 at $0.001
per share 1,000,000 1,000 - -
Net loss for the year ended
December 31, 1993 - - - (2,513)
------------ ---------- ------------ ------------
Balance,
December 31, 1993 12,810,000 12,810 583,693 (599,425)
Net loss for the year ended
December 31, 1994 - - - -
------------ ---------- ------------ ------------
Balance,
December 31, 1994 12,810,000 12,810 583,693 (599,425)
Issuance of 11,000,000
shares of common stock to
officer for cash at $0.001
per share 11,000,000 11,000 - -
Net loss for the year ended
December 31, 1995 - - - (438)
------------ ---------- ------------ ------------
Balance,
December 31, 1995 23,810,000 $ 23,810 $ 583,693 $ (599,863)
------------ ---------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements
8
<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------ ---------- ------------ ------------
<S> <C> <C> <C> <C>
Balance,
December 31, 1995 23,810,000 $ 23,810 $ 583,693 $ (599,863)
Net loss for the year ended
December 31, 1996 - - - (1,256)
------------ ---------- ------------ ------------
Balance,
December 31, 1996 23,810,000 23,810 583,693 (601,119)
Net loss for the year ended
December 31, 1997 - - - (1,373)
------------ ---------- ------------ ------------
Balance,
December 31, 1997 23,810,000 23,810 583,693 (602,492)
Net loss for the year ended
December 31, 1998 - - - (770)
------------ ---------- ------------ ------------
Balance,
December 31, 1998 23,810,000 $ 23,810 $ 583,693 $ (603,262)
============ ========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
9
<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
November 1,
1985 Through
December 31, December 31,
1998 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (770) $ (1,373) $(603,262)
Increase (decrease) in accounts payable - (300) -
----------- ----------- -----------
Net Cash Used by Operating Activities (770) (1,673) (603,262)
----------- ----------- -----------
INVESTING ACTIVITIES: - - -
----------- ----------- -----------
FINANCING ACTIVITIES:
Issuance of common stock - - 607,503
----------- ----------- -----------
Net Cash Provided by
Financing Activities - - 607,503
----------- ----------- -----------
Increase (decrease) in Cash (770) (1,673) 4,241
CASH AT BEGINNING OF
PERIOD 5,011 6,684 -
----------- ----------- -----------
CASH AT END OF PERIOD $ 4,241 $ 5,011 $ 4,241
=========== =========== ===========
CASH PAID FOR
Interest $ - $ - $ -
Income taxes $ - $ - $ -
</TABLE>
The accompanying notes are an integral part of these financial statements
10<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The Company was incorporated in the State of Delaware on November 1,
1985 under the name McKinnely Investments, Inc. In November 1986, the
Company changed its name to Acculine Industries, Incorporated and in
May 1988 to Siclone Industries, Inc.
The Company was incorporated for the purpose of providing a vehicle,
which could be used to raise capital and seek business opportunities.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a calendar year end.
c. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
d. Basic Loss Per Share
The computations of basic loss per share of common stock are based on
the weighted average number of shares outstanding at the date of the
financial statements.
e. Provision for Taxes
At December 31, 1998, the Company has net operating loss carryforwards
totaling approximately $600,000 that may be offset against future
taxable income through 2012. No tax benefit has been reported in the
financial statements, because the Company believes there is a 50% or
greater chance the loss carryforwards will expire unused.
Accordingly, the potential tax benefits of the loss carryforwards are
offset by a valuation allowance of the same amount.
f. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
11
<PAGE>
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 2 - RELATED PARTY TRANSACTIONS
During 1993, the Company's president purchased 1,000,000 shares of
common stock for $1,000. During 1995, the Company's president
purchased 11,000,000 shares of common stock for $11,000.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company has little
cash and has experienced losses from inception. Without realization
of additional adequate financing, it would be unlikely for the Company
to pursue and realize its objectives. The Company intends to seek a
merger with an existing operating company. In the interim an officer
of the Company has committed to meeting its operating expenses.
12
<PAGE>
CERTIFICATE OF INCORPORATION
OF
MCKINNELY INVESTMENTS, INC.
ARTICLE I
NAME
------
The name of the corporation hereby created shall be McKinnely
Investments, Inc.
ARTICLE II
DURATION
--------
The Corporation shall continue in existence perpetually unless sooner
dissolved according to law.
ARTICLE III
PURPOSES
----------
The purposes for which this Corporation is organized are:
(a) To acquire by purchase or otherwise, own, hold, lease, rent,
mortgage or otherwise, to trade with and deal in real estate, lands and
interests in lands and all other property of every kind and nature;
(b) To manufacture, use, work, sell, and deal in chemicals,
biologicals, pharmaceuticals, electronics and products of all types and
also to privileges or rights, owned or hereafter owned by it for
manufacturing, using and vending any device or devices, machine or machines
or manufacturing, working or producing any or all products.
(c) To borrow money and to execute notes and obligations and security
contracts therefore, to lend any of the monies or funds of the Corporation
and to take evidence of indebtedness therefore; and to negotiate loans; to
carry on a general mercantile and merchandise business and to purchase,
sell and deal in such goods, supplies, and merchandise of every kind and
nature;
(d) To guarantee the payment of dividends or interest on any other
contract or obligation of any corporation whenever proper or necessary for
the business of the Corporation in the judgment of its directors;
(e) To do all and everything necessary, suitable, convenient, or
proper for the accomplishment of any of the purposes or the attainment of
any one or more of the objects herein enumerated or incidental to the
powers therein named or which shall at any time appear conclusive or
expedient for the protection or benefit of the Corporation, with all of the
powers hereafter conferred by the laws under which this Corporation is
organized; and
1<PAGE>
(f) To engage in any and all other lawful purposes, activities and
pursuits, whether similar or dissimilar to the foregoing, and the
Corporation shall have all the powers allowed or permitted by the laws of
the state of Delaware.
ARTICLE IV
CAPITALIZATION
1. ---------------
The Corporation shall have authority to issue an aggregate of
35,000,000 shares, of which 30,000,000 shares shall be Common Stock having
a one-tenth (1/10) of one cent ($.001) par value each, and 5,000,000 share
shall be Preferred Stock having a one-tenth (1/10) of one cent ($.001) par
value each.
ARTICLE V
CLASSES OF STOCK
- ------------------
A statement of the designations and the powers, preferences, and
rights, and the qualifications, limitations, or restrictions thereof, of
the shares of stock of each class which the Corporation shall be authorized
to issue, is as follows:
(a) Preferred Stock. Shares of preferred stock may be issued from
time to time in one or more series as may from time to time be determined
by the Board of Directors. Each series shall be distinctly designated.
All shares of any one series of the preferred stock shall be alike in every
particular, except, that there may be different dates from which dividends
thereon, if any, shall be cumulative, if made cumulative. The powers,
preferences, participating, optional and other rights of each such series
and qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at the time outstanding. Subject to
the provisions of subparagraph (i) of Paragraph (c) of this Article V, the
Board of Directors of this Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the issuance
of any shares of a particular series of preferred stock, the designation,
powers, preferences and relative, participating, optional and other rights
and the qualifications, limitations and restrictions thereof, if any, of
such series, including, without limiting the generality of the following:
(i) The distinctive designation of, and the number of shares of the
preferred stock which shall constitute, the series, which number may be
increased (except at otherwise fixed by the Board of Directors) or
decreased (but not below the number of shares thereof outstanding) from
time to time by action of the Board of Directors;
(ii) The rate and times at which, and the terms and conditions upon
which, dividends, if any on shares of the series shall be paid, the extent
of preferences or relation, if any, of such dividends to the dividends
payable on any other class or classes of stock of this Corporation, or on
any series of preferred stock, and whether such dividends shall be
cumulative or noncumulative;
2<PAGE>
(iii) The right, if any, of the holders of shares of the series to
convert the same into, or exchange the same for any other series, or any
other class or classes of stock of this Corporation, and the terms and
conditions of such conversion or exchange.
(iv) Whether shares of the series shall be subject to redemption, and
the redemption price or prices, including, without limitation, a redemption
price or prices payable in shares of the Common Stock, cash or other
property and the time or times at which, and the terms and conditions upon
which, shares of the series may be redeemed;
(v) The rights, if any, of the holders of shares of the series upon
voluntary or involuntary liquidation or merger, consolidation, distribution
or sale of assets, dissolution or winding up of this Corporation;
(vi) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for shares of the series; and
(vii) The voting powers, if any, of the holders of shares of the
series which may, without limiting the generality of the foregoing, include
(A) the right to more or less than one vote per share on any or all matters
voted upon by the shareholders and (B) the right to vote as a series by
itself or together with out preferred stock as a class, upon such matters,
under such circumstances and upon such conditions as the Board of Directors
may fix, including without limitation, the right, voting as a series by
itself or together with other series of preferred stock or together with
all series of preferred stock as a class, to elect one or more directors of
this Corporation in the event there shall have been a default in the
payment of dividends on any one or more series of preferred stock or under
such other circumstances and upon such conditions as the Board may
determine.
(b) Common Stock. The Common Stock shall be non-assessable, and
shall not have cumulative voting rights or pre-emptive rights. In
addition, the Common Stock shall have the following powers, preferences,
rights, qualifications, limitations and restrictions.:
(i) After the requirements with respect to preferential
dividends of preferred stock (fixed in accordance with the provisions
of Paragraph (a) of this Article V), if any, shall have been met and
after this Corporation shall comply with all the requirements, if any,
with respect to setting aside of funds as sinking funds or redemption
or purchase accounts, (fixed in accordance with the provisions of
Paragraph (a) of this Article V) and subject further to any other
conditions which may be fixed in accordance with the provisions of
Paragraph (a) of this Article V, the, but not otherwise, the holders
of Common Stock shall be entitled to receive such dividends, if any,
as may be declared from time to time by the Board of Directors;
(ii) After the distribution in full of the preferential amount,
(fixed in accordance with the provisions of Paragraph (a) of this
Article V), if any, to be distributed to the holders of preferred
stock in the event of a voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding up of this
Corporation, the holders of the remaining assets of this Corporation,
tangible and intangible, of whatever kind available for distribution
to stockholders, ratibly in proportion to the number of shares of the
Common Stock held by each;
3<PAGE>
(iii) Shares of the Commons Stock may be issued from time to time
as the Board of Directors shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors;
(iv) No holder of any of the shares of any class or series of
stock or of options, warrants or other rights to purchase shares of
any class or series of stock or of other securities of the Corporation
shall have any pre-emptive right to purchase or subscribe for any
unissued stock of any class or series of any additional shares of any
class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series, or
bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of the Corporation of any
class or series, or carrying any rights to purchase stock of any class
or series, but any such unissued stock, additional authorized issue of
shares of any class or series of stock or securities convertible into
or exchangeable for stock, or carrying any right to purchase stock,
may be issued and disposed of pursuant to resolution of the Board of
Directors to such person, firms corporation or associations, whether
such holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(c) Other Provisions
The relative powers, preferences and rights of each series of
preferred stock in relation to the powers, preferences and rights of each
other series of preferred shock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or resolutions adopted
pursuant to authority granted in Paragraph (a) of this Article V, and the
consent by class or series vote or otherwise, of the holders of the
preferred stock of such of the series of the preferred stock as are from
time to time outstanding shall not be required for the issuance by the
Board of Directors of any other series of preferred stock whether the
powers, preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with the powers,
preferences, and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in such
resolution or resolutions adopted with respect to any series of preferred
stock that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed ) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or all
other series of preferred stock.
(ii) Subject to the provisions of subparagraph (i) of this Paragraph,
shares of any series of preferred stock may be issued from time to time as
the Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(iii) Shares of the Common Stock may be issued from time to time as
the Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(iv) No holder of any of the shares of any class or series of stock or
of options, warrants or other securities of the Corporation shall have any
pre-emptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
4<PAGE>
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for stock
of the Corporation of any class or series, or carrying any rights to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of stock or
securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations
or associations, whether such holders or others, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
ARTICLE VI
BYLAWS
------
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter or
repeal the Bylaws of this Corporation.
ARTICLE VII
MEETINGS AND RECORDS
---------------------
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be
kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or in such places as may be designated from time
to time by the Board of Directors or in the Bylaws of the Corporation.
Elections of directors need not be by written ballot unless the Bylaws of
the Corporation so provide.
ARTICLE VIII
REGISTERED OFFICE AND AGENT
----------------------------
The address of its registered office in the State of Delaware is:
Corporation Trust Company
1209 Orange Street
City of Wilmington
County of New Castle, 19801
ARTICLE IX
REMOVAL OF DIRECTORS
---------------------
Any director of the Corporation may be removed for cause at any annual
or special meeting of the shareholders by the same vote required to elect a
director provided, that such director prior to his removal shall receive a
copy of the charges against him, delivered to him personally or by mail at
his address appearing on the records of the Corporation, at least thirty
(30) days prior to the meeting at which such removal is to be considered,
and such director has an opportunity to be heard on such charges at the
meeting of shareholders of the Corporation at which the question of his
removal is to be considered.
5<PAGE>
ARTICLE X
INDEMNIFICATION OF OFFICERS AND DIRECTORS
-----------------------------------------
The Corporation shall indemnify any and all persons who may serve or
who have served at any time as directors or officers, or who, at the
request of the Board of Directors of the corporation, may serve, or at any
time have served as directors or officers of another corporation in which
the Corporation at such time owned or may own shares of stock, or which it
was or may be a creditor, and the respective heirs, administrators,
successors, and assigns, against any and all expenses, including amounts
paid upon judgment, counsel fees, and amounts paid in settlement (before or
after suit is commenced), actually or necessarily by such persons in
connection with the defense or settlement or any claim, action, suit, or
proceeding in which they, or any of them, are made parties, or a party, or
which may be assessed against them or any of them, by reason of being or
having been directors or officers of the Corporation, or such other
corporation, except in relation to matters as to which any such director or
officer of the Corporation, or such other corporation, or former director
of officer shall be adjudged in any action, suit or proceeding to be liable
for his own negligence of misconduct in the performance of his duties.
Such indemnification shall be in addition to any other rights to which
those indemnified may be entitled under any law, by-law, agreement, vote of
stockholders or otherwise.
ARTICLE XI
AMENDMENT
---------
Except as set forth herein and in the General Corporation Law of the
state of Delaware, the Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and
all rights conferred upon stockholders are granted subject to this
reservation.
ARTICLE XII
OFFICERS' AND DIRECTORS' CONTRACTS
-----------------------------------
No contract or other transactions between this Corporation and any
other firm or corporation shall be affected by the fact that a director or
officer of this Corporation has an interest in, or is a director or officer
of such firm or other corporation. Any officer or director, individually
or with others, may be a party to, or may have an interest in, any
transaction of this Corporation or any transaction in which this
Corporation is a party or has an interest. Each person who is now or may
become an officer or director of this Corporation is hereby relieved from
liability that he might otherwise obtain in the event such officer or
director contracts with this Corporation for the benefit of himself or any
other firm or corporation in which he may have an interest, provided such
officer or director acts in good faith.
6
<PAGE>
ARTICLE XIII
DIRECTORS
----------
The Corporation shall have not less than three (3) nor more than nine
(9) directors as determined from time to time by the Board of Directors.
The names and addresses of the persons who are to serve as the directors
until the first annual meeting of shareholders and the class to which each
shall belong are as follows:
Name Address
- ----------- --------------------------
Ron Johnson 3156 West 6620 South
West Jordan, Utah 84084
LaForrest Twitchell 194 North 2700 East
Layton, Utah 84041
Roger L. Shepherd 2680 South West Temple
Salt Lake City, Utah 84115
ARTICLE XIV
INCORPORATORS
--------------
The names and addresses of the incorporators for this Corporation are
as follows:
Name Address
- ---------------- -----------------------
Ron Johnson 3156 West 6620 South
West Jordan, Utah 84084
LaForrest Twitchell 194 North 2700 East
Layton, Utah 84041
Roger L. Shepherd 2680 South West Temple
Salt Lake City, Utah 84115
7 <PAGE>
WE, THE UNDERSIGNED, being each of the incorporators herein before
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the state of Delaware, make this certificate, hereby
declaring and certifying that this is our act and deed and the facts herein
stated are true, and accordingly have hereunto set our hands this 29th day
of October 1985.
/s/ Ron Johnson
---------------------
Ron Johnson
/s/ LaForrest Twitchell
-----------------------
LaForrest Twitchell
/s/ Roger L. Shepherd
----------------------
Roger L. Shepherd
STATE OF UTAH )
: ss
COUNTY OF SALT LAKE )
I, Lark L. Jackson, a notary public, hereby certify that on the 29th
day of October, 1985, personally appeared before me Ron Johnson, LaForrest
Twitchell, and Roger L. Shepherd, who being by me first duly sworn,
severally declared that they are the persons who signed the foregoing
documents as incorporators of McKinnely Investments, Inc., and that the
statements therein contained are true.
WITNESS MY HAND AND OFFICIAL SEAL.
/s/ Lark L. Jackson
-------------------
Notary Public
Residing in Bountiful, Utah
My Commission Expires:
August 13, 1989
- ---------------
8
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
Acculine Industries, Incorporated, a corporation of the State of
Delaware, whose registered office is located at Corporation Trust Company,
1209 Orange Street, City of Wilmington, County of New Castle, 19801,
certifies pursuant to the provisions of Section 242 of the General
Corporation Law of the State of Delaware, as amended, that at a meeting of
the stockholders of said corporation called for the purposes of amending
the articles of incorporation, and held on May 21, 1988, it was resolved by
the vote of the holders of a majority of the shares of each class entitled
to vote that Article I of the Articles of Incorporation is amended to read
as follows:
ARTICLE I
NAME
-----
The name of the corporation hereby created shall be SiCLONE
Industries, Incorporated.
WE, THE UNDERSIGNED, being the President and Secretary of Acculine
Industries, Incorporated, make this certificate, hereby declaring and
certifying that this is our act and deed and the facts herein stated are
true, and accordingly have hereunto set our hands this 23rd day of May,
1988.
/s/ A.J. Miller
------------------------
A.J. Miller, President
/s/ Morton MacLeod
------------------------
Morton MacLeod, Secretary
CORPORATE ACKNOWLEDGMENT
STATE OF California )
:ss
COUNTY OF Santa Clara )
On this the 23rd day of May 1988, before me, D. Elaine Belardi, the
undersigned Notary Public, personally appeared A.J. Miller and Morton
MacLeod [X] personally known to me [ ] proved to me on the basis of
satisfactory evidence to be the person(s) who executed the within
instrument as President and Secretary or on behalf of the corporation
therein named, and acknowledged to me that the corporation executed it.
WITNESS my hand and official seal.
/s/ D. Elaine Belardi
------------------
Notary Signature
My Commission Expires: March 27, 1991
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
McKinnely Investments, Inc., a corporation of the State of Delaware,
whose registered office is located at Corporation Trust Co., 1209 Orange
Street, City of Wilmington, County of New Castle, 19801, certifies pursuant
to the provisions of Section 242 of the General Corporation Law of the Sate
of Delaware, as amended, that at a meeting of the stockholders of said
corporations called for the purpose of amending the articles of
incorporation, and held on October 10, 1986, it was resolved by the vote of
the holders of a majority of the shares of each class entitled to vote that
Article I of the Articles of Incorporation be amended to read as follows:
ARTICLE I
NAME
-----
The name of the corporation hereby created shall be Acculine
Industries, Incorporated.
WE, THE UNDERSIGNED, being the President and Secretary of McKinnely
Investments, Inc., make this certificate, hereby declaring and certifying
that this is our act and deed and the facts herein stated are true, and
accordingly have hereunto set our hands this 30th day of October 1986.
/s/ Edward Mevi
-----------
Edward Mevi, President
/s/ Morton P. MacLeod
-----------------
Morton P. MacLeod, Secretary
CORPORATE ACKNOWLEDGMENT
State of California )
:ss
County of Santa Clara )
On this the 30th day of October, 1986, before me, D. Elaine Belardi,
the undersigned Notary Public, personally appeared Edward Mevi and Morton
P. MacLeod [X] personally known to me [X] proved to me on the basis of
satisfactory evidence to be the person(s) who executed the within
instrument as President and Secretary or on behalf of the corporation
herein named, and acknowledged to me that the corporation executed it.
WITNESS my hand and official seal.
/s/ D. Elaine Belardi
------------------
Notary's Signature
My Commission Expires: March 27, 1987
/Letterhead/
Jones, Jensen & Company, LLC
Certified Public Accountants
/End of Letterhead/
CONSENT OF INDEPENDENT AUDITOR
-------------------------------
Board of Directors
Siclone Industries, Inc.
Salt Lake City, Utah
We hereby consent to the use of our audit report dated February
5, 1999, in this Form 10SB of Siclone Industries, Inc., for the
year ended December 31, 1998, which is part of this Form 10SB and
all reference to our firm included in this Form 10SB.
/S/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
April 12, 1999
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