<PAGE> U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form SB-1/A-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EMPS Corporation
(Name of small business issuer in its charter)
Nevada 87-0617371
---------------------- ---------------------------- --------------------
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
136 E. South Temple, Suite 1700A, Salt Lake City, Utah 84111
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(Address and telephone number of principal executive offices)
136 E. South Temple, Suite 1700A, Salt Lake City, Utah 84111
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(Address of principal place of business or intended
principal place of business)
Ronald L. Poulton, 136 E. South Temple, Suite 1700A,
Salt Lake City, Utah 84111 (801) 355-1341
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(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable
from time to time after this registration statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ___________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]_________________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]__________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE><CAPTION> CALCULATION OF REGISTRATION FEE
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Title Proposed maximum
of each class Dollar amount offering price
of securities to be per aggregate Proposed maximum Registration
being registered registered offering share Amount of price fee
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<S> <C> <C> <C> <C>
Common $200,000 $1.00 $200,000 $55.60
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</TABLE>
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Disclosure alternative used (check one):
Alternative 1 ; Alternative 2 X
----- ------ 1 </Page>
<PAGE>
EMPS Corporation
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
Item Number and Heading Heading in Prospectus
<S> <C>
1. Front of the Registration Statement
and Outside Front Cover Page of
Prospectus. . . . . . . . . . . . . . . . . . . . . . . . . . . . Facing pages;
Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus . . . . . . . . . . . . . . . . . . Inside from and Outside
Back Cover Pages of Prospectus
3. Summary Information and Risk Factors. . . . . .Prospectus Summary; Risk Factors
4. Use of Proceeds . . . . . . . . . . . . . .Prospectus Summary; Use of Proceeds;
Description of Business
5. Determination of Offering Price . . . . . . . . Cover Page; Prospectus Summary;
Risk Factors; Determination of
Offering Price
6. Dilution. . . . . . . . . . . . . . . . . . . . . . .Dilution; Comparative Data
7. Selling Security Holders. . . . . . . . . . . . . . . . . . . . .Not applicable
8. Plan of Distribution. . . . . . . . . . . . . . . . . . . . . Front Cover Page;
Plan of Distribution
9. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . Legal Matters
10. Directors, Executive Officers,
Promoters and Control Persons . . . . . . . . . .Directors, Executive Officers;
Promoters and Control Persons
11. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . . Security Ownership of Certain
Beneficial Owners and Management
12. Description of the Securities . . . . . . . . . . . . Description of Securities
13. Interest of Named Experts and Counsel . . . . . . . . . . . . . .Not applicable
14. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . . Disclosure of Commission Position
Position on Indemnification for
Securities Act Liabilities
15. Organization Within Last Five Years . . . . Organization Within Last Five Years
16. Description of Business . . . . . . . . . . . . . . . . Description of Business
17. Management's Discussion and Analysis or
Plan of Operation . . . . . . . . . . . . . . . . . . . . . . Plan of Operations
18. Description of Property . . . . . . . . . . . . . . . . Description of Property
19. Certain Relationships and Related Transactions. . . . . . . . . .Not applicable
2</Page>
<PAGE>
20. Market for Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . Front Cover Page;
Risk Factors;
Shares Eligible for Future Sale;
Market for Common Equity and
Related Stockholder Matters
21. Executive Compensation. . . . . . . . . . . . . . . . . .Executive Compensation
22. Financial Statements. . . . . . . . . . . . . . . . . . . .Financial Statements
23. Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure. . . . . . . . . . . . . .Not Applicable
</TABLE>
3
</Page>
<PAGE>
EMPS CORPORATION
Maximum Offering: 200,000 shares of $.001 par value common stock
Offering Price: $1.00 per share
===========================================================================
EMPS Corporation We intend to market and license
136 E. South Temple, Suite 1700-A our patented technology for use in
Salt Lake City, UT 84111 nonmagnetic particle separation with
applications in mining, environmental
clean-up and other industries requiring
particle separation methods.
<TABLE>
<CAPTION>
The Offering
------------
Total
Per Share Maximum <C>
---------- -------- This is our initial public offering,
<S> . . . . . . . . .<C> <C> and no public market currently exists
Public Price. . . . .$1.00
. . . . . . . . . . . $200,000 for our shares. The offering price
Underwriting may not reflect the market price
Discounts . . . . . .-0- -0- of our shares after the offering.
Maximum
Proceeds to EMPS. . .$1.00 $200,000* There is no minimum offering amount
and no escrow of funds.
=====================================================================================
</TABLE>
THESE SHARES INVOLVE A HIGH DEGREE OF RISK. INVESTORS SHOULD EXPECT
IMMEDIATE SUBSTANTIAL DILUTION. EVEN IF WE SUCCEED IN RAISING THE MAXIMUM
AMOUNT IN THE OFFERING, IT MAY NOT BE SUFFICIENT TO ENABLE US TO FULLY
COMMENCE OUR PROPOSED BUSINESS OPERATIONS WITHOUT ADDITIONAL FUND RAISING.
(SEE "RISK FACTORS" PAGE 6). THE SHARES OFFERED SHOULD NOT BE PURCHASED BY
ANY INVESTOR WHO CANNOT AFFORD TO SUSTAIN THE TOTAL LOSS OF THEIR
INVESTMENT.
THESE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES AGENCY NOR HAS THE
COMMISSION OR ANY AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This offering is self underwritten and will be managed by us. The
shares will be offered and sold by our officers without any discounts or
other commissions.
The shares are being offered by EMPS subject to prior sale, receipt
and acceptance by EMPS, approval of certain matters by counsel, and certain
other conditions. We reserve the right to withdraw or cancel such offers
and reject any order, in whole or in part.
This offering will commence with the date of this prospectus and will
end 120 days from that date. There will be no extensions of time in which
to continue this offering.
THE DATE OF THIS PROSPECTUS IS ____________________, 2000.
* Proceeds to EMPS are shown before deducting estimated offering costs of
$20,000 including legal and accounting fees and printing costs payable by
EMPS.
4</Page>
<PAGE>
DELIVERY OF PROSPECTUS BY DEALERS
DEALERS MAY BE REQUIRED TO DELIVER A PROSPECTUS TO ANYONE WISHING TO
PURCHASE REGISTERED SHARES OF EMPS WITHIN 90 DAYS AFTER THEIR EFFECTIVE
DATE OF THIS PROSPECTUS REGARDLESS OF WHETHER THEY ARE PARTICIPATING IN
THIS DISTRIBUTION. THIS IS IN ADDITION TO THE DEALER'S OBLIGATION TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS TO THEIR UNSOLD ALLOTMENTS
OR SUBSCRIPTIONS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
PRIOR TO INVESTING, PROSPECTIVE INVESTORS SHOULD READ THE ENTIRE
PROSPECTUS.
5
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<PAGE>
PROSPECTUS SUMMARY
------------------
The Company
-----------
EMPS Corporation intends to engage in the business of marketing and
licensing the technology rights for a nonmagnetic particulate material
separation unit. We initially intend to design and construct a prototype
capable of separating one ton per hour of particles. This will enable us
to contract with numerous entities for either licensing EMPS technology for
third party use, participating in some form of joint venture activity with
outside companies or actual involvement of EMPS in the particle separation
business of various precious metals or assisting in environmental clean-up
operations through existing companies involved in governmental projects.
To date, we have not received any revenues from our intended
operations nor have we otherwise engaged in any business. Further, we do
not currently have any customers for our technology.
The Offering
------------
Securities Offered: 200,000 shares, consisting of common stock, $.001
par value.
Offering Price: $1.00 per share
Plan of Distribution: The offering will be managed by EMPS and the
shares will be offered and sold by officers of
EMPS, without any discounts or other commissions.
Because there is no escrow of the proceeds, money
will be available for use by EMPS as soon as it is
received.
Once the registration statement is effective, the
officers will deliver this prospectus to
individuals they believe may have interest in
purchasing part or all of this offering. In
particular, in the past persons who have
researched our technology and others in the
industry have expressed interest in purchasing
EMPS stock. The officers will initially focus
their efforts on these individuals.
Duration of Offering: The offering will commence with the date of this
prospectus and will end 120 days later. There
will be no extensions of time in which to continue
the offering.
6
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<PAGE>
Use of Proceeds: We will use the net proceeds from this offering
primarily to design and construct a prototype unit
capable of separating one ton per hour of
particles.
Transfer Agent: Interwest Transfer Company, Inc., 1981 East
Murray-Holladay Road, Salt Lake City, Utah 84117,
Telephone (801) 272-9294, has agreed to serve as
transfer agent upon completion of this offering.
Securities Outstanding: We currently have 800,000 shares issued and
outstanding. Upon completion of this offering, up
to 1,000,000 shares will be issued and
outstanding.
We are also authorized to issue up to 400,000
shares pursuant to the EMPS 1998 Stock Option
Plan. To date, no options have been granted under
the plan.
Risk Factors: We are a start-up company with no operating
history; consequently, an investment in EMPS is
highly speculative. Investors will suffer
substantial dilution in the book value per share
compared to the purchase price. In seeking to
implement our proposed business, we could incur
substantial losses during the development stage,
and require additional funding for which we have
no commitments. Management has other interests
which may conflict with our interests. Until such
time, if ever, that we generate sufficient revenue
to pay management salaries, members of management
will not be employed full time and will only
devote a minimal amount of time to our affairs.
No person should invest in EMPS who cannot afford
to risk loss of the entire investment.
Summary Selected
Financial Data: We are a development stage company and have no
revenues or earnings from operations. As of March
31, 2000, our financial data is as follows:
Total Assets $ 9,862
Total Liabilities 10,222
Shareholder Equity (360)
Net Tangible Book Value -0-
Net Tangible Book Value per Share -0-
7
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<PAGE>
RISK FACTORS
--------------
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS, IN ADDITION TO THE OTHER INFORMATION SET FORTH ELSEWHERE IN THIS
PROSPECTUS, INCLUDING THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES,
PRIOR TO MAKING AN INVESTMENT IN EMPS.
WE HAVE NO OPERATING HISTORY. We will not commence operations until
the proceeds of this offering are available, therefore, we have no
operating history. Because we are just starting-up and in our initial
stage of development, we may suffer significant losses from which we
cannot recover. We will face all of the challenges of a new business
enterprise, including but not limited to, locating suitable office space,
engaging the services of qualified support personnel and consultants,
establishing budgets, implementing appropriate financial controls and
internal operating policies and procedures. We do not have any significant
cash and have no significant operations since our inception. As noted in
the Independent Accountants opinion, there is substantial doubt about our
ability to continue as a going concern without the realization of
additional adequate financing.
WE NEED ADDITIONAL CAPITAL. We presently have no significant
operating capital and are totally dependent upon receipt of the proceeds of
the offering to continue development and marketing of our technology.
Start-up costs include design and construction of a pilot scale prototype
to determine whether our technology is feasible for commercial
applications. We also intend to continue research on the effects of our
technology. Should we raise the maximum offering, we will recognize a
gross amount of $200,000 and believe this amount will enable us to design
and construct needed equipment and cover the costs of research. The full
offering amount will enable us to continue operations for three years and
allow for the purchase of equipment that would enable us to set up a
commercial operation. If we raise less than the full offering amount, we
will scale back our research efforts. We believe that we can build our
prototype and perform testing for a period of one year with as little as
$50,000. Even if the entire offering amount is raised, the amount of
capital available to us will be extremely limited, and may not be
sufficient to enable us to fully commence our proposed business operations
without additional fund raising. We have no commitments for additional
cash funding beyond the proceeds expected to be received from this
offering.
OUR MANAGEMENT WILL NOT BE WORKING ON A FULL-TIME BASIS. Our success
may depend on the efforts and assistance of our management. Although the
officers and directors have experience in management, which may be critical
to our success, we lack a depth of managerial and technical personnel.
Accordingly, there is a greater likelihood that should our management leave
EMPS, we may be impaired in our ability to effectively carry out our
operations. We have no plans to obtain Key Man insurance for any of our
officers and directors. In view of the fact that our technology is
patented, we do not believe Key Man insurance is required. Our focus is on
licensing and marketing the patented technology. It is our belief that a
person experienced in technology sales would be able to carry on our
business should any of the current officers or directors resign or
terminate their relationship with us. Further, the directors and officers
will maintain part to full-time employment outside EMPS and may not be able
to devote sufficient attention to ensure our success. Such outside
employment may also create conflicts of interest. There is no assurance
such conflicts could be resolved favorably for EMPS. However, Nevada
corporate law requires all officers and directors to act according to their
fiduciary duties to the stockholders.
8 </Page>
<PAGE>
<PAGE>
WE ARE NOT CERTAIN OUR TECHNOLOGY WILL BE ACCEPTED IN THE MARKET. Our
proposed business is based on our belief of the need for a method of
commercially separating nonmagnetic particulate material from other
materials without chemicals, heat or water. Acceptance of our technology
will be dependent on a number of factors including:
- response from the industry;
- advertising and promotion;
- availability of competing products and technologies;
- pricing factors;
- other intangible factors.
These things change rapidly and cannot be predicted with certainty. Our
business will be subject to all the risks associated with introducing a new
technology. There is substantial risk that our technology may not be
commercially successful, resulting in costs not being recouped or
anticipated profits not being realized. We have not undertaken any
independent market studies to determine the feasibility of our technology
or its potential market acceptance.
OUR TECHNOLOGY MAY NOT PROVE TO BE SUCCESSFUL ON A COMMERCIAL SCALE.
Our technology is in an early stage of development, and no revenues have
been generated from the sale of the technology. The development of novel
technology is highly uncertain and subject to a number of significant
risks. Technology that appears to be promising at early stages of
development may not reach the market for a number of reasons. Such
technology may be found to be ineffective, may be uneconomical, may fail to
achieve market acceptance or may be precluded from commercialization by
proprietary rights of third parties.
OUR PATENTS DO NOT INSURE OUR SUCCESS. Our success will depend in
large part on our ability to protect our patents, maintain trade secrets
and operate without infringing on the proprietary rights of others, both in
the United States and in other countries. The patent positions of high
technology companies can be highly uncertain and involve complex legal and
factual questions, and therefore the breadth of claims allowed in high
technology patents or their enforceability cannot be predicted. There can
be no assurance that any of our patents will not be challenged, invalidated
or circumvented, or that the rights granted thereunder will provide
proprietary protection or competitive advantages to EMPS.
Our commercial success also will depend, in part, on our not
infringing patents issued to others. Our competitors may file for patents
similar to those of EMPS. Some of these applications or patents may limit
or preclude our applications, or conflict in certain respects with claims
made under our patents. Furthermore, we may from time to time in the
future, be notified of claims that we may be infringing on patents or other
intellectual property rights owned by third parties. Litigation, which
could result in substantial costs to EMPS, may be necessary to enforce any
patents issued to us or to determine the scope and validity of third-party
proprietary rights. If our competitors prepare and file patent
applications in the United States that claim technology also claimed by us,
we may have to participate in interference proceedings declared by the
Patent and Trademark Office to determine priority of invention, which could
result in substantial cost to us, even if the eventual outcome is favorable
to us. An adverse outcome could subject us to significant liabilities to
third parties.
9
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<PAGE>
We also rely on trade secrets to protect our technology, especially
where patent protection is not believed to be appropriate or obtainable.
We protect our proprietary technology and processes, in part, by
confidentiality agreements with our employees, consultants and certain
contractors. There can be no assurance that these agreements will not be
breached, that we would have adequate remedies for any breach, or that our
trade secrets will not otherwise become known or be independently
discovered by competitors.
We lack extensive marketing experience and will rely heavily on third
parties We currently have no sales, marketing or distribution
capability. We will rely, in part, on collaborative relationships, such as
licensing agreements, to market our technology. To market our technology
directly, we must develop a marketing and sales force with technical
expertise. There can be no assurance that we will be able to establish in-
house sales and marketing capabilities or relationships with third parties,
or that we will be successful in gaining market acceptance for our
technology. To the extent we enter into co-promotion or other licensing
arrangements, any revenues received by us under those collaborations will
depend upon the efforts of third parties, and there can be no assurance
that such efforts will be successful.
THESE SHARES ARE OFFERED BY EMPS ON A "SELF UNDERWRITTEN" BASIS.
There is no underwriter and no firm commitment from anyone to purchase all
or any of the shares. No assurance can be given that all or any of the
shares will be sold. If we are unable to sell the shares we will have no
funds available for operations and if we sell less than the full 200,000
shares, we will have to scale back and revise our plan of operations or
seek other means of financing. We have no commitments for any financing
and are dependent upon this offering to implement our operation.
THERE IS NO PUBLIC MARKET FOR OUR SHARES. At present, our shares are
not traded publicly. There is no assurance that a trading market will
develop or, if developed, that it will be sustained. We will not list the
securities on any exchange or NASDAQ because we will not be able to meet
the financial criteria for any such listing. Therefore, any investment in
the shares will be very non-liquid. However, we do intend to apply for
listing on the Over-the-Counter Bulletin Board ("OTCBB"). A purchaser of
shares may, therefore, find it difficult to re-sell the shares should he
desire to do so. Furthermore, the shares are not marginable and it is
unlikely that a lending institution would accept the shares as collateral
for a loan.
THE PRICE FOR THE SHARES WAS ARBITRARILY DETERMINED BY OUR MANAGEMENT.
There is no relationship between the offering price of the shares and our
assets, earnings, book value, net worth or other economic or recognized
criteria or future value of our shares.
WE ARE NOT CERTAIN WE CAN IMPLEMENT OUR OPERATIONS IF LESS THAN THE
FULL OFFERING AMOUNT IS REALIZED. We believe that the net proceeds from
the sale of the shares, assuming that all shares are sold, will provide us
with sufficient capital to fund our initial marketing and operating costs.
If we receive less than the full offering amount, we will limit our initial
operations to designing and constructing basic equipment and research of
the effects of the technology. Many factors may, however, affect our cash
needs, including our possible failure to generate revenues from the sale of
our technology.
10
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<PAGE>
INVESTORS SHOULD EXPECT THEIR SHARES TO BE LESS LIQUID AND SUBJECT TO
HIGHER TRANSACTION COSTS THAN STOCKS WITH HIGHER PRICES. Currently the
shares are subject to Rule 15g-9, which provides, generally, that for as
long as the bid price for the shares is less than $5.00, they will be
considered low-priced securities under rules promulgated under the Exchange
Act. Under these rules, broker-dealers participating in transactions in
low priced shares must first deliver a risk disclosure document which
describes the risks associated with such stocks, the broker-dealer's
duties, the customer's rights and remedies, and certain market and other
information, and make a suitability determination approving the customer
for low-priced stock transactions based on the customer's financial
situation, investment experience and objectives.
Broker-dealers must also disclose these restrictions in writing to the
customer and obtain specific written consent of the customer, and provide
monthly account statements to the customer. The likely effect of these
restrictions will be a decrease in the willingness of broker-dealers to
make a market in the stock, decreased liquidity of the stock and increased
transaction costs for sales and purchases of the stock as compared to other
securities.
WE HAVE ONLY LIMITED SEC REPORTING REQUIREMENTS. Because we are only
subject to Section 15(d) of the Exchange Act, we will not be subject to the
proxy rules, short-swing profits regulations, beneficial ownership report
regulations and the bulk of the tender offer regulations. Therefore, we
may only be required to file periodic reports for a limited period of time.
We do intend to provide our shareholders with annual reports containing
audited financial statements from our independent accountants and other
periodic reports as we feel necessary. However, in view of the fact that
we may have limited reporting requirements, the investor will have less
information available with which to assess the status of EMPS.
THERE ARE DISPROPORTIONATE RISKS TO NEW INVESTORS. Collectively the
existing shareholders own 800,000 shares of our presently outstanding
shares, for which they transferred two (2) patents and paid $9,182 cash.
If the maximum number of shares offered hereby are sold, upon completion of
the offering present stockholders will own 80% of the then outstanding
shares, and investors in the offering will own the other 20%, for which
they will have paid $200,000 cash. Thus, investors in the offering will
contribute to the capital of EMPS a disproportionately greater percentage
than the ownership they receive. Present stockholders will benefit from a
greater share of EMPS if successful, while investors in the offering risk a
greater loss of cash invested if we are not successful.
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<PAGE>
AVAILABLE INFORMATION
---------------------
EMPS has filed with the United States Securities and Exchange
Commission (the "Commission") a registration statement on Form SB-1, under
the Securities Act of 1933, (the "Securities Act"), with respect to the
shares offered hereby. As permitted by the rules and regulations of the
Commission, this prospectus does not contain all of the information
contained in the registration statement. For further information regarding
both EMPS and the shares offered, reference is made to the registration
statement, including all exhibits and schedules thereto, which may be
inspected without charge at the public reference facilities of the
Commission's Washington, D.C. office, 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies may be obtained from the Washington, D.C. office upon
request and payment of the prescribed fee.
We will not file a Form 8-A or other registration statement under the
Securities Exchange Act and will only be subject to Section 15(d) following
the effective date. The proxy rules, short-swing profits regulations,
beneficial ownership reporting regulations and the bulk of the tender offer
regulations will not apply to us.
We intend to furnish our stockholders with annual reports containing
consolidated financial statements audited and reported upon by our
independent accounting firm and such other periodic reports as we may
determine to be appropriate or as may be required by law.
We are an electronic filer. The Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission. The
Commission's Web site address is "http://www.sec.gov."
As of the date of this prospectus, we became subject to the
informational requirements of the Securities Exchange Act of 1934, (the
"Exchange Act") and will file reports and other information with the
Commission. Reports and other information filed by us with the Commission
will be available for inspection and copying at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the
Commission: New York regional Office, Seven World Trade Center, 13th Floor,
New York, New York 10048; Chicago Regional Office, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material may be obtained from the
public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
REPORTS TO SECURITY HOLDERS
----------------------------
Copies of our Annual, Quarterly and other Reports which will be filed
by us with the Commission commencing with the Quarterly Report for the
first quarter ended after the date of this prospectus, which is due 45 days
after the end of such quarter, will also be available upon request, without
charge, by writing EMPS Corporation, 136 E. South Temple, Suite 1700-A,
Salt Lake City, Utah 84111.
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<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
----------------------------------------------------
Some of the statements contained in this prospectus discuss future
expectations, contain projections of results of operation or financial
condition or state other "forward-looking" information. Those statements
are subject to known and unknown risks, uncertainties and other factors
that could cause the actual results to differ materially from those
contemplated by the statements. The forward-looking information is based
on various factors and was derived using numerous assumptions.
Important factors that may cause actual results to differ from
projections include, for example;
- the success or failure of our efforts to implement our business
strategy;
- our ability to raise sufficient capital to proceed with our
prototype and the subsequent testing;
- our ability to negotiate and maintain favorable licensing
arrangements;
- the effect of changing economic conditions;
- the effect of rapidly changing technology;
- other risks which may be described in our future filings with the
SEC.
We do not promise to update forward-looking information to reflect
actual results or changes in assumptions or other factors that could affect
those statements.
[This space intentionally left blank.]
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USE OF PROCEEDS
---------------
The following table sets forth management's present estimate of the
allocation of net proceeds expected to be received from this offering. The
uses set forth below are based on estimated costs, actual costs may vary
from these estimates. If such occurs, we may invest the net proceeds in
investment-grade, short-term, interest-bearing securities.
<TABLE>
<CAPTION>
If Maximum If 50,000
Amount Sold Shares Sold
------------ ------------
<S> <C> <C>
Total Proceeds $200,000 $50,000
Less:
Offering Expenses 20,000 20,000
Filing Fees
Net Proceeds from Offering Available $180,000 30,000
Use of Net Proceeds
Prototype
Power supply amplifier (1) 8,500 8,500
Inductor-capacitor-resistor 8,500
8,500
circuit (1)
High-frequency toroid (1) 12,750 12,750
Research on Effects of technology 15,100 250
Administrative Costs 45,900 -0-
Legal fees 42,500 -0-
Material Handling and Separation 46,750 -0-
Equipment
---------------------------------------------------------------------------
Total Use of Net Proceeds $180,000 $30,000
---------------------------------------------------------------------------
</TABLE>
(1) These items might cost much more than we estimate. In such event,
monies allocated to administrative costs and legal fees, if any, will be
reduced equally to cover the additional costs of the prototype.
Administrative costs include continued accounting, telecommunications,
travel, etc. We anticipate incurring legal fees for the preparation of
patent applications and filings in the United States and certain foreign
countries party to the Paris Convention Treaty.
The funds designated for Material Handling and Separation Equipment
will allow us to purchase a laminar flow, high velocity material handling
separation system which will pre-concentrate aerodynamically, according to
surface area, and by specific gravity any particles of heavier metals
contained in any bulk material targeted for further separation by our
technology. We believe this will allow us to demonstrate an operation on a
commercial scale.
14
</Page>
<PAGE>
Should we realize less than the full offering, we intend to scale back
our initial operations and first allocate any funds on building and testing
a prototype unit rather than pursue additional patent protection and a full
scale operation. In the event insufficient funds are realized to build and
test a prototype, we intend to sell or license the technology in it's
currently developed state to a third party.
DILUTION
--------
As of the date of this offering, we had 800,000 shares issued and
outstanding and a net tangible book value of $0 or $0 per share.
The proceeds from the sale of shares will vary depending on the total
number of shares sold.
If all 200,000 shares are sold, there would be a total of 1,000,000
shares issued and outstanding. If the maximum 200,000 shares are sold,
the net proceeds to us after deducting offering costs of $20,000 would be
$180,000. Adding the net proceeds to the net tangible book value, the
total net tangible book value of EMPS would be $180,000. Dividing the net
worth of EMPS by the number of shares outstanding discloses a per share
book value of approximately $0.18 per share. Therefore, the shareholders
who purchased pursuant to the offering will suffer an immediate dilution in
the book value of their shares of approximately $0.82 or approximately
82.0% and the present shareholders will receive an immediate book value
increase of approximately $0.18 per share.
Offering price per share $1.00
before deduction of operating expense
Net tangible book value per share $0.00
before the offering
Net tangible book value per share $0.18
after the offering
Dilution to new investors $0.82
per share
Dilution to new investors 82.0%
as a percentage
COMPARATIVE DATA
----------------
The following chart illustrates the pro forma proportionate ownership
in EMPS, upon completion of the offering if the maximum amount is sold, of
present stockholders and of investors in the offering, compared to the
relative amounts paid and contributed to the capital of EMPS by present
stockholders and by investors in this offering, assuming no changes in net
tangible book value other than those resulting from the offering.
15
</Page>
<PAGE>
<TABLE>
<CAPTION>
Shares Cash Average
Owned Percent Paid Percent Price/Share
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Present 800,000 80% $9,182 4.4% $0.012
Shareholders
New 200,000 20% $200,000 95.6% $1.00
Investors
</TABLE>
PLAN OF DISTRIBUTION
---------------------
The offering will not be sold through selling agents. Our officers
will sell the shares on a self underwritten offering basis. In the past,
we have received unsolicited indications of interest in EMPS from
researchers and persons within the industry. Our officers will deliver
prospectuses to these individuals and to others who they believe might have
interest in investing in purchasing all or part of this offering.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
------------------------------------------
The following table sets forth our directors,
executive officers, promoters and control persons, their ages, and all
offices and positions held within EMPS. Directors are elected for a period
of one year and thereafter serve until their successor is duly elected by
the stockholders and qualified. Officers and other employees serve at the
will of the Board of Directors.
<TABLE>
<CAPTION>
Name of Director Age Term Served as Positions with EMPS
------------------- ----- --------------------- ----------------------------
<S> <C> <C> <C>
Louis Naegle 35 Since August 26, 1998 President, Treasurer, and
Director
Timothy L. Adair 35 Since May 18, 1999 Director & Secretary
</TABLE>
The above individuals will serve as our officers and/or directors. A
brief description of their positions, proposed duties and their background
and business experience follows:
LOUIS NAEGLE, PRESIDENT, TREASURER AND DIRECTOR. Age 34. Mr. Naegle
graduated from the University of Utah in 1991 with a Bachelor of Arts
degree in Political Science. Mr. Naegle brings over 13 years experience in
marketing and sales. He earned top sales awards while working for a large
international home builder. In 1996-1997, he owned a successful sales
consulting business with annual sales revenue of about $70,000. From 1994
through 1998, Mr. Naegle was employed as a sales agent for Equimark
Properties, Inc. Since 1998, he has been a licensed real estate broker.
Mr. Naegle has sold over $30,000,000 in real estate. He currently owns
LISN Investments, LC., a limited liability company used for the purchase
and sale of real estate. He also brings experience from the international
arena where he served as liaison in the former Soviet Union for SATCO
International, a trading company specializing in tourism and sales of
consumer products.
16
</Page>
<PAGE>
<PAGE>
TIMOTHY L. ADAIR, SECRETARY AND DIRECTOR. AGE 34. For more than ten
years, Mr. Adair has worked at Intermountain Health Care in Salt Lake City.
Mr. Adair currently acts as a HR Analysis Manager where he works
specifically with Information Systems/Processes and Financial Analysis.
Mr. Adair graduated from Brigham Young University in 1988 with a Bachelor
of Science degree in Mechanical Engineering and received a Masters of
Business Administration from Brigham Young University in 1990. Prior to
his current position, Mr. Adair has six years previous experience as a
Financial Analyst and a Compensation Analyst. Mr. Adair has had nearly ten
years of real estate investment and management experience. He is a Partner
of Adlaw, a real estate holding and management partnership. He is also a
Member of Forest Property Management LLC, a limited liability company used
for the purchase and sale of real estate and accounting services.
Key Consultants
---------------
RAJ K. RAJAMANI, Ph.D. During the past five years, Dr. Rajamani has
been a professor at the Metallurgical Engineering Department of the
University of Utah. Mr. Rajamani received his Bachelor of Science in
Chemical Engineering at the Annamalai University in Madras, India and
received his M. Tech. in Chemical Engineering from the Indian Institute of
Technology in Kanpur, India. He later received both an M.E. in Chemical
Engineering and a Ph.D. in Metallurgy from the University of Utah. Mr.
Rajamani has done research and published extensively on ultra fine
grinding, computational fluid dynamics applications, electrodynamic
separation of particles and has done modeling of grinding kinetics and
charge motion in comminution machines. Mr. Rajamani supports the Company as
a consultant on an as needed basis.
VLADIMIR LEONIDOVICH SAVELIEV, Ph.D. During the past five years, Dr.
Saveliev has worked as a Senior Researcher at the Institute of Ionosphere
and Higher Energy Physics, Academy of Sciences of the Republic of
Kazakhstan, in Almaty, Kazakhstan. Dr. Saveliev specializes in the fields
of plasma physics, electrodynamics, propagation of radio waves, kinetic
theory, applied mathematics, Monte-Carlo method and numerical simulation.
His extensive education includes a 1966 Specialized Physics, Mathematics
and Chemistry certificate, a 1971 Master of Science degree from Novosibirsk
State University in Physics, 1982 Degree, Candidate of Physical and
Mathematical Sciences, which is equivalent to a Ph.D. Defended at the
Institute of Theory and Applied Mechanics, Novosibirsk Scientific Center
and a 1990 Academic Rank of Senior Researcher, certified by the High
Certification Committee at Ministry Council of USSR. Dr. Saveliev began
his professional career at the Institute of High Energy Physics, Academy of
Sciences of SazSSR in 1971. He has been advisor to the Ph.D. Thesis of
several scientists and a Senior Researcher, Scientific Consultant, Leading
Researcher. He is a member of the American Mathematic Society, Referee of
European Physics Letters and other journals, Expert of Ministry of Science
- Academy of Sciences Republic of Kazakhstan. Dr. Saveliev is widely
published in the areas of electromagnetics, plasma dynamics and ionosphere
excitation.
17
</Page>
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
--------------------------------------------
The term "beneficial owner" refers to both the power of investment or
the right to buy and sell shares of EMPS. It also refers to rights of
ownership or the right to receive distributions from EMPS and proceeds from
the sale of EMPS'shares. Since these rights may be held or shared by more
than one person, each person who has a beneficial ownership interest in
shares is deemed to be the beneficial owners of the same shares because
there is shared power of investment or shared rights of ownership.
Mr. Naegle and Mr. Adair are officers and directors of
EMPS.
<TABLE>
<CAPTION>
Type of Amount & Nature of Beneficial % of Class
Security Name and Address Ownership After Offering
------------ ------------------------------ ------------ ---------------
<S> <C> <C> <C>
Common Louis Naegle -0-
-0-
1020 E. 900 N.
Bountiful, UT 84010
Common Timothy L. Adair -0- -0-
4811 S. 1115 E.
Salt Lake City, UT 84117
Common Particle Separation 800,000 80%
Technologies, LC.(1)
3500 Pine Valley Road
Woodland, Utah 84036
Common The Stephen & Jill Smoot 800,000 80%
Family Trust
3500 Pine Valley Road
Woodland, Utah 84036
-------------------------------------------------------------------------------------
All officers and directors -0- -0-
as a group (2 persons)
=====================================================================================
TOTAL 800,000 80%
-------------------------------------------------------------------------------------
</TABLE>
(1) The Stephen & Jill Smoot Family Trust is the beneficial owner of
Particle Separation Technologies, Inc. Therefore, shares that are in the
registered name of Particle Separation Technologies, Inc., are counted as
shares owned by The Stephen & Jill Smoot Family Trust.
18
</Page>
<PAGE>
COUNSEL TO THE ISSUER WITH RESPECT
TO THE PROPOSED OFFERING
-------------------------------------
Poulton & Yordan, 136 E. South Temple Suite 1700A, Salt Lake City, Utah
84111.
RELATIONSHIP WITH ISSUER OF EXPERTS NAMED
IN REGISTRATION STATEMENT
----------------------------------------------
None of the experts named herein was or is a promoter, underwriter,
voting trustee, director, officer or employee of EMPS. Further, none of
the experts was hired on a contingent basis and none of the experts named
herein will receive a direct or indirect interest in EMPS.
LEGAL PROCEEDINGS
--------------------
To the knowledge of management, there is no material litigation
pending or threatened against EMPS or our management. Further, we are not
aware of any material pending or threatened litigation to which we or any
of our directors, officers or affiliates are or would be a party.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
------------------------------------------------
None.
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
----------------------------------------------------
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons pursuant to the following provisions, or otherwise, we
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of
EMPS in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the shares being registered, we will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
DESCRIPTION OF THE SECURITIES
-------------------------------
The following summary describes the material provisions of our
Articles of Incorporation and Bylaws relating to the securities, copies of
which will be furnished to an investor upon written request therefor.
Pursuant to Article VII of our Articles of Incorporation, no director
or officer shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
person as a director or officer. Notwithstanding the foregoing sentence, a
director or officer shall be liable to the extent provided by applicable
law, (i) for acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law, or (ii) for the payment of dividends in
violation of NRS 78.300.
19
</Page>
<PAGE>
The foregoing limitations do not affect the standards to which
directors must conform in discharging their duties to stockholders or
modify the availability of equitable relief for breach of duty. Further,
the foregoing limitations do not affect the availability of relief under
causes of action based on Federal law, including the Federal securities
laws.
The shares being registered pursuant to the registration statement of
which this prospectus is a part are shares of common stock, all of the same
class and entitled to the same rights and privileges as all other shares of
common stock.
DESCRIPTION OF COMMON STOCK. Our authorized capital stock consists of
50,000,000 shares of common stock with a $.001 par value. As of the date
of this Registration Statement, we had outstanding 800,000 shares, all of
which is validly issued, fully paid and non-assessable. Holders of our
shares are entitled to receive dividends when declared by the Board of
Directors out of funds legally available therefore. Any such dividends may
be paid in cash, property or shares. We have not paid any dividends since
our inception. All dividends will be subject to the discretion of our
Board of Directors, and will depend upon, among other things, our operating
and financial conditions, our capital requirements and general business
conditions. Therefore, there can be no assurance that any dividends on the
shares will be paid in the future.
All shares have equal voting rights and, when validly issued and
outstanding, will have one vote per share on all matters to be voted upon
by the shareholders. Cumulative voting in the election of directors is not
allowed, and a quorum for shareholder meetings shall result from a majority
of the issued and outstanding shares present in person or by proxy.
Accordingly, the holders of a majority of the shares present, in person or
by proxy at any legally convened shareholders' meeting at which the Board
of Directors is to be elected, will be able to elect all directors and the
minority shareholders will not be able to elect a representative to the
Board of Directors.
Shares have no preemptive or conversion rights, no redemption or
sinking fund provisions, and are not liable for further call or assessment.
Each share is entitled to share pro rata any assets available for
distribution to holders of its equity securities upon our liquidation.
During the pendency of the offering, subscribers will have no rights
as stockholders until the offering has been completed and the shares have
been issued to them.
DESCRIPTION OF STOCK OPTIONS. The Board of Directors has adopted the
EMPS Corporation 1998 Stock Option Plan (the "Plan") allowing us to offer
our key employees, officers, directors, consultants and sales
representatives, an opportunity to acquire a proprietary interest in us.
The various types of incentive awards which may be provided under the Stock
Option Plan will enable us to respond to changes in compensation practices,
tax laws, accounting regulations and the size and diversity of its
business. To date we have not issued any options pursuant to the Plan. No
option shares are being registered under this registration statement.
20
</Page>
<PAGE>
The total number of shares reserved and available for distribution
under the Plan shall be 400,000 shares. These shares will underlie the
options issued by us pursuant to the Plan. The option holders will not be
protected against dilution if we should issue additional shares in the
future. Neither the options, nor the shares underlying the option have
preemptive rights.
In the case of any reclassification, change, consolidation, merger,
sale or conveyance of our shares to another corporation, we will make
adequate provision whereby the registered holder of any outstanding option
will have the right thereafter to receive an exercise of the options
immediately prior to the reclassification, change, consolidation, merger,
sale or conveyance of our shares.
Other provisions of the options are set forth below. This information
is subject to the provisions of the Plan and the Stock Option Certificates
representing the options. The following information is a summary of the
EMPS Corporation 1998 Stock Option Plan and is qualified by reference to
the plan.
1. The shares underlying the Options offered pursuant to the Plan
are subject to the same rights and restrictions as other shares.
2. Once an option is granted, it may not be called by us.
3. The options may not be sold prior to six months from the date of
the grant of the related award without our prior approval.
4. Unless exercised within the time provided for exercise, the
options will automatically expire.
5. The exercise price per share purchasable under a stock option
shall be determined by the Committee at the time of grant and may not be
less that 100% of Fair Market Value of the shares, provided however, that
the exercise price of an Incentive Stock Option granted to a 10%
Stockholder shall not be less than 110% of the Fair Market Value of the
shares.
6. There is no minimum number of shares which must be purchased upon
exercise of the option.
7. The option holders, in certain instances, are protected against
dilution of their interest represented by the underlying shares upon the
occurrence of stock dividends, stock splits, reclassifications and mergers.
TRANSFER AGENT. Interwest Transfer Company, Inc., 1981 East 4800
South, Suite 100, Salt Lake City, Utah 84117, Telephone (801) 272-9294, has
agreed to serve as our transfer agent and registrar.
21
</Page>
<PAGE>
ORGANIZATION WITHIN THE LAST FIVE YEARS
------------------------------------------
We are a start-up company and have no operating history. As soon as
the money from this offering is made available, we expect to make all
arrangements necessary so that we can commence operations immediately.
DESCRIPTION OF BUSINESS
------------------------
Company History
---------------
We incorporated under the laws of the state of Nevada on July 14, 1998
as EMPS Corporation. We were formed to further develop and market patented
technology for commercially separating nonmagnetic particulate materials
from other materials without chemicals, heat or water. Our management
believes this new technology is less expensive and environmentally safer
than current materials separation methods.
We have not commenced any business operations other than
organizational and administrative functions.
Business of the Company
-----------------------
We intend to engage in the business of marketing and licensing our
patented technology for use in commercially separating nonmagnetic
particulate material.
No known system or method exists in industry for commercially
separating nonmagnetic particulate material, such as gold, from other
materials without chemicals, heat or water. These current methods are
expensive and can be environmentally unsafe.
When water is used as a separation medium, the water carries the
particles through machinery, over vibrating tables or centrifugal
apparatuses which utilize specific gravity in the separation process. When
water is available, its usage often requires significant capital
expenditures for pumping systems, infrastructure and continual pump
maintenance. Water separation systems can be seasonally restrictive due to
weather considerations. After separation, additional energy is needed for
the drying processes to remove the moisture from the separated material.
Chemical methods require great planning and care. Without proper
handling and disposal of the caustic chemicals used in these processes,
environmental disasters can occur. The long-term environmental effects of
chemical separation are only now beginning to be understood. Usually,
drying processes are needed to remove the moisture from the separated
material.
Methods utilizing heat require strict attention to the toxic gases
created in the energy-intensive burn process. Scrubbers and other
apparatuses are needed to capture furnace emissions.
22
</Page>
<PAGE>
Our invention, uses novel principles that allow separation of
electrically conductive, nonmagnetic particles in a laboratory setting. We
believe that applying our technology on a full-scale basis would be more
efficient and safe than other technologies. Our technology, however, may
prove to be ineffective, uneconomical and may not achieve market acceptance
on a full-scale or commercial level. That is why we will use the funds
from this offering to produce a prototype for further testing and use to
determine its feasibility on a commercial scale.
Electrodynamic separation of nonmagnetic free-flowing materials is
accomplished by introducing the material into a region of magnetic field
gradient that fluctuates with time. The variable field induces magnetic
dipoles in the conducting particles of the material, producing
electrodynamic forces that deflect the electrically conducting particles
from the imposed magnetic field. Therefore, the conducting particles are
separated from the feed material. Research derived from mathematical and
actual working models indicate that the invention should specifically
address this problem in industry.
We employ the use of an alternating magnetic field in certain
configurations to produce an electromagnetic force with frequencies set
according to the specific resistivity and size of the particulate material
which is to be separated from other material.
Independent tests were performed on our technology by the Department
of Metallurgical Engineering at the University of Utah. After careful
consideration by the faculty, it was determined that these experiments
warranted special Departmental attention due to the unique nature of the
novel principles involved. Independent test results with supporting
calculations, data and experiments were implemented by a special team,
including two faculty members, and are described by graduate student,
Dongman Kim, in a Master's Thesis entitled "Electrodynamic Separation of
Conducting Particles in an Alternating Magnetic Field" published in
November, 1998. The Thesis concludes:
"In this study, separation of conductive materials from mixed
particles has been proved to be successful. Based on what is reported
here, a pilot-scale unit can be built for further scale-up to a larger
industrial-size unit."
It is this "pilot-scale" unit that will be the focus of our financial
and technical resources.
There are many occasions in scientific and industrial applications
where materials must be separated from one another. Particularly in the
mining industry, valuable metals must be efficiently separated from other
materials which are found in ore. In many industrial applications,
separation of particles having different sizes and densities relies on the
earth's gravity as well as some additional process such as filtration. All
such arrangements which have been devised utilizing gravity to separate
particles of different densities include one or more drawbacks as are
recognized in the art. For example, such arrangements may require water as
a carrier for the particles to be separated. Disadvantageously, the water
must be removed from the particles after separation. Moreover, in some
mining locations, water is not readily available.
23
</Page>
<PAGE>
In order to provide efficient separation without water, various
apparatus and techniques have been proposed which also utilize some
electromagnetic properties of materials, rather than density alone, to
separate materials. While the task of separating magnetic materials from
non magnetic materials is a relatively easy one, the task of separating a
nonmagnetic material from other nonmagnetic materials utilizing the
magnetic properties of the materials has been the subject of research in
the industry. Still, many problems and drawbacks exist with the proposed
schemes. Particularly in the mining industry, there have been numerous
attempts to separate materials from one another, for example gold from
other materials, based on the differing magnetic properties of the
materials.
One example of a previous scheme is represented by U.S. Pat. No.
5,057,210 to Julius. The Julius reference recognizes that the creation of
eddy currents in conductive materials allows a magnetic field to move a
nonmagnetic material. The Julius reference, however, utilizes a rotating
permanent magnet to generate a changing magnetic field and thus does not
recognize critical aspects of the use of induced eddy currents in
electrically conductive, nonmagnetic materials.
Another example of a previous scheme is represented by U.S. Pat. No.
5,161,695 to Roos. The Roos reference also recognizes that the creation of
eddy currents in conductive materials allows a changing magnetic field to
move particles of a nonmagnetic material. The Roos reference, however,
utilizes permanent magnets, as does the Julius reference, and thus does not
recognize critical aspects of utilizing induced eddy currents to cause
movement of nonmagnetic particles. The scheme of the Roos reference is
ineffective.
In view of the shortcomings inherent in the previously proposed
schemes to separate nonmagnetic materials using magnetic force, it is a
significant advance in the art to provide a more efficient system and
method of separating electrically conductive nonmagnetic materials.
The primary object of our invention is to provide a practical system
and method for separating electrically conductive nonmagnetic materials.
It is also an object of our invention to provide a system and method for
separating electrically conductive nonmagnetic materials which does not
rely on moving mechanical parts to achieve separation of the materials. It
is further the object of our invention to provide a system and method for
separating electrically conductive nonmagnetic materials from each other
which does not require any liquid.
Our invention provides a system and method for separating electrically
conductive, nonmagnetic particles which could not otherwise be separated
using flotation or filtration schemes. Further, our invention provides a
system and method for separating electrically conductive, nonmagnetic
particles using characteristics such as the specific resistivity and the
size of the particle to determine the separation of one material from other
materials.
Our invention provides a system for separating first electrically
conductive particulate material from one or more other materials. The
invention is particularly intended for use with materials in particulate
form but can also be used with materials in other forms. Our invention can
also be used in conjunction with other separation technologies, such as
flotation and filtration, which are known in the art. For example, the
separation techniques of the present invention can be used before or after
materials have been subjected to other separation techniques known in the
art.
24
</Page>
<PAGE>
Our invention includes means for localizing a magnetic field at a
first location. The magnetic field is an alternating or oscillating field.
In contrast with prior technology, the present invention considers the size
of the particle when selecting the frequency. As the size of the particle
to be separated decreases, the frequency increases.
Our invention exploits the characteristics of particle electrical
specific resistivity and particle size. Thus, in contrast to the
previously proposed schemes, the present invention considers the size of
the particles in the separation process. For example, some embodiments of
the present invention preferably include means for sorting particles having
a diameter not larger than about five millimeters and more preferably not
larger than about two millimeters. Embodiments of the present invention
may also comprise means for measuring the size of the particles of the
electrically conductive particulate material so that the operation of the
system can be adjusted for best efficiency. Moreover, in contrast to the
previously proposed schemes, the present invention considers the specific
resistivity of the particles in the separation process.
Included in our invention is a means for generating an alternating
current and for applying it to the means for localizing a magnetic field.
The frequency of the alternating current is set according to the specific
resistivity or conductivity of the desired material and the size of the
particles comprising the desired material. Selected embodiments of the
present invention preferably include means for increasing the frequency of
the alternating current as the size of the first particles decreases.
The means for localizing a magnetic field and the means for generating
an alternating current cooperate together to create an alternating magnetic
field at a location, for example the gap, where separation occurs.
Separation occurs as a result of the alternating magnetic field deflecting
the path of the desired material in a different amount than the other
material present in the stream is deflected. Structures are also included
to function as a means for gathering the first particles as they are
separated from the material stream.
The method of our invention preferably includes the steps of
generating an alternating magnetic field, introducing a stream of particles
into the magnetic field, the stream of particles including both the desired
first particles and undesired second particles. The step of adjusting the
frequency of the alternating magnetic field is carried out according to the
specific resistivity and the size of the first particles. By properly
adjusting or choosing the frequency of the alternating magnetic field, the
first particles are imparted a trajectory which is different than the
trajectory of the other particles in the particle stream. In order to
adjust for the size of the particles, the EMPS invention increases the
frequency of the alternating magnetic field as the size of the first
particles decreases.
Since the size of the particles greatly influences the separation
process, it may be desirable to pre-sort the particles according to size or
adjust the size of the particles before being subjected to the alternating
magnetic field. Moreover, it is desirable to adjust the velocity of the
particles in the particle stream as they enter the magnetic field.
The particle stream is subjected to the magnetic field for a period of
time while the first particles are gathered into one location and the
remaining material gathered into another location. Our invention has
particular application for separating particles of gold from other
materials.
25
</Page>
<PAGE>
<PAGE>
On a laboratory level, our invention separates electrically
conductive, nonmagnetic particles based upon the particle's size and the
particle's specific electrical resistivity. We believe that applying our
technology on a full-scale basis, one type of desired electrically
conductive, nonmagnetic particle can be readily separated commercially from
other undesired electrically conductive, nonmagnetic particles. Even if
the desired and undesired particles are of substantially the same particle
size, but the particles have different specific electrical resistivities,
the particles can be separated from one another, using our invention.
We believe our invention can be carried out so that particles can be
separated from each other in a batch-by-batch fashion or in a continuous
flow process. The continuous flow process is presently preferred and more
efficient.
Further, our invention provides a system and method for separating
electrically conductive nonmagnetic materials which does not rely on moving
mechanical parts to achieve a separation of the particles. Our invention
also provides a system and method for separating electrically conductive,
nonmagnetic particles by producing a magnetic field which induces eddy
currents in the particles and causes movement of the particles which are to
be separated. Both the electrical conductivity and the size of the
particle determine the separation of one type of particle from other types
of particles.
Competition
-----------
We will operate in a highly competitive environment. Current
competition consists of companies employing chemical, heat and water
separation methods. While these companies have greater resources than we
do, we believe that our method of separation gives us a competitive edge.
Once developed, our process has the potential of separating a large amount
of raw material in a short time (one ton per hour), efficiently and without
harming the environment.
Advertising and Marketing Strategy
----------------------------------
We plan on focusing operations on developing a functional prototype.
We plan to either seek a contract with entities for licensing our
technology for third party use, participating in some form of joint venture
activity with outside companies or enter into the business of separating
various precious metals. We may also assist in environmental clean-up
operations through existing companies involved in governmental projects.
Until the time a functional prototype is constructed, our advertising and
marketing will be limited.
We may seek limited advertizing and marketing through interaction with
the target industry and direct contact sales. Additionally, we may seek
further exposure through trade journals and symposia.
26
</Page>
<PAGE>
Patents
-------
We currently own U.S. Patent 5,772,043, "System and Method for
Separating Electrically Conductive Particles" issued on June 30, 1998 and
U.S. Patent 5,439,117, "System and Method for Separating Electrically
Conductive Particles" issued on August 8, 1995. Both patents expire
December 21, 2013. These patents cover the technology which allows us to
separate nonmagnetic particles from feed material. These patents are very
important to our business and add significant value because they give us an
exclusive right to the covered technology. Moreover, in the event someone
else attempts to use this technology before the patents expire, we may have
a right to recover damages from that party.
The patents are clearly very valuable to us. While we believe we
could continue to operate following their expiration, we believe our
business will be adversely effected. Once the patents expire, the
information covered by them will become part of the public domain. We
anticipate that few purchasers would be willing to pay us for a license for
our technology when it is part of the public domain. Similarly, once this
information becomes part of the public domain, others could use that
technology to compete directly with us, which could adversely effect our
business.
Employees
---------
We currently have no employees aside from officers and directors who
work on a part time, as needed basis with no commitment for full time
employment. Raj Rajamani and Vladimir Saveliev both support EMPS on a
consulting basis. We do not foresee hiring any further employees until
revenues and operations warrant the addition of employees.
PLAN OF OPERATIONS
------------------
Our purpose is to engage in the business of marketing and licensing
the technology rights for nonmagnetic particulate material separation. We
initially intend to design and build a prototype capable of separating one
ton of particles per hour. This will enable us to contract with numerous
entities for either licensing our technology for third party use,
participating in some form of joint venture activity with outside companies
or our actual involvement in using our technology for separating various
precious metals or assisting in environmental clean-up operations through
existing companies involved in governmental projects.
Our plan of operation for the next twelve months is to raise funds
through the offering, develop a prototype device capable of separating one
(1) ton per hour of particles employing the patented technology, market our
technology and commence active business operations. In addition to
providing capital to help defray various start-up expenditures, management
believes that a principal use of the offering proceeds will be to provide
initial working capital necessary upon commencement of operations until
revenues are generated to cover such operating expenditures. In order to
commence active business operations management is engaging in a number of
planning stage and preliminary activities. These activities include the
following:
- Establish agreements on an Independent Contractor basis with
outside labs and shops to use third party equipment to design
and construct the prototype
- Arrange prototype development and testing;
27 </Page>
<PAGE>
- Initial development of marketing literature for use in our
marketing efforts;
- Negotiate and enter into licensing agreements with third parties
to market our technology.
To date, we have not printed any marketing literature, arranged for
prototype development and testing or entered into any licensing agreements.
Start-up costs include purchase of equipment to design and construct a
prototype, costs for research of the effects of EMPS technology, and
administrative fees. We anticipate that we will be able to design and
construct needed equipment and conduct research on the effects of the
technology with less than the full offering amount being raised. However,
we anticipate that additional equipment, which will allow us to set up a
commercial operation, can be purchased if the maximum offering is raised.
Further, we anticipate that the maximum offering will allow us to continue
operations for three years as opposed to a shorter period of operations if
less than the full offering is realized.
There is no assurance that the offering will be successful or that we
will receive any net proceeds therefrom. We have not entered into any
contracts or commitments for purchasing of equipment or proceeding with
prototype development. Therefore, there is no assurance we will be able to
acquire sufficient equipment, contract for laboratory space and services or
to perform prototype development. There is also no assurance that we will
be able to market and license our technology sufficiently to generate
enough business to operate profitably.
We have received indications of interest from outside sources to
license our technology for use in commercial applications once the
prototype testing has proven successful. It is our intent to pursue
outside sources to market and exploit the technology.
DESCRIPTION OF PROPERTY
-------------------------
We use one-quarter of an 800 square foot office condominium located at
875 Donner Way, Unit 705, Salt Lake City, Utah 84108 for our corporate
offices. We pay no rent for this space pursuant to an agreement with
Particle Separation Technologies, L.C., which owns 100% of our currently
outstanding common stock. This free rent is of nominal value. We have no
lease agreement with Particle Separation Technologies, L.C. and occupy the
space subject to its will. If at any time Particle Separation
Technologies, L.C., decides it needs or wants the space, we have no right
to continue to occupy the space and could be forced to move.
MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
-------------------------------
At present, our shares are not traded publicly. There is no assurance
that a trading market will develop, or, if developed, that it will be
sustained. A purchaser of shares may, therefore, find it difficult to
resell the securities offered herein should he or she desire to do so when
eligible for public resales. Furthermore, the shares are not marginable
and it is unlikely that a lending institution would accept the shares as
collateral for a loan.
28
</Page>
<PAGE>
Pursuant to this Registration Statement, we propose to publicly offer
a maximum of 200,000 shares. To date, no shares are subject to outstanding
options, warrants to purchase or securities convertible into common stock.
No shares have been sold pursuant to Rule 144 of the Securities Act. We
have agreed to register no shares held by existing security holders for
resale.
REMUNERATION OF DIRECTORS AND OFFICERS
-----------------------------------------
To date, no compensation has been paid to any person associated with
us and we presently have no formal employment agreements or other
contractual arrangements with the officers, directors or anyone else
regarding the commitment of time or the payment of salaries or other
compensation. We plan that compensation will be based on profit sharing of
ten percent of the pre-tax profit of EMPS to the officers and directors, to
be divided equally amongst them.
INTEREST OF MANAGEMENT AND OTHERS
IN CERTAIN TRANSACTIONS
------------------------------------
On July 21, 1998 we issued Particle Separation Technologies, L.C., the
majority shareholder of the Company, 800,000 shares in exchange for
assignments of patent. No officer or director has any direct or indirect
material interest in or relationship with Particle Separation Technologies
L.C.
SIGNIFICANT PARTIES
---------------------
<TABLE>
<CAPTION>
Officers and Directors Positions Held
---------------------------------------- ---------------------
<S> <C>
Louis Nagle President, Treasurer
1020 East 900 North and Director
Bountiful, Utah 84010
Timothy L. Adair Secretary and Director
4811 South 1115 East
Salt Lake City, Utah 84010
Record Owners of 5% or more of
------------------------------
our equity securities
---------------------
Particle Separation Technologies, L.C. (1)
3500 Pine Valley Road
Woodland, Utah 84036
Beneficial Owners of 5% or more of
----------------------------------
our equity securities
---------------------
The Stephen & Jill Smoot Family Trust
3500 Pine Valley Road
Woodland, Utah 84036
29
</Page>
<PAGE>
Counsel to the issuer for this offering
---------------------------------------
Ronald L. Poulton
Poulton & Yordan
136 East South Temple, #1700-A
Salt Lake City, Utah 84111
</TABLE>
(1) The Stephen & Jill Smoot Family Trust is the beneficial owner of
Particle Separation Technologies, Inc. Therefore, shares that are in the
registered name of Particle Separation Technologies, Inc., are counted as
shares owned by The Stephen & Jill Smoot Family Trust.
FINANCIAL STATEMENTS
---------------------
Our audited financial statements appearing in this Registration
Statement have been examined by David C. Thomson, P.C., Certified Public
Accountant, as indicated in its report contained herein. The financial
statements are included in this Registration Statement in reliance upon the
report of that firm as an expert in auditing and accounting.
[This space intentionally left blank.]
30
</Page>
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
WITH
INDEPENDENT AUDITOR'S REPORT
35
</Page>
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
CONTENTS
----------
Page
------
Independent Auditor's Report. . . . . . . . . . . . . . . . . . . . 37
Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Statements of Operations. . . . . . . . . . . . . . . . . . . . . . 39
Statements of Stockholders' Equity. . . . . . . . . . . . . . . . . 40
Statements of Cash Flows. . . . . . . . . . . . . . . . . . . . . . 41
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 43
36
</Page>
<PAGE>
[Letterhead]
Independent Auditor's Report
----------------------------
Board of Directors
EMPS CORPORATION
I have audited the accompanying balance sheets of EMPS Corporation (A
development stage company) as of December 31, 1999 and 1998 and the related
statements of operations, stockholders' equity and cash flows for the year
ended December 31, 1999 and the period from inception (July 14, 1998) to
December 31, 1998. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on the
financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatements. 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. I believe that my audits provide
a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of EMPS Corporation (A
development stage company) at December 31, 1999 and 1998, and the results
of its operations and its cash flows for the year ended December 31, 1999
and the period from Inception (July 14, 1998) to December 31, 1998 in
conformity with generally accepted accounting principles.
As discussed on Notes 1 and 8, the Company has been in the development
stage since its inception on July 14, 1998. The Company has no operating
capital with current liabilities exceeding current assets by $10,109, and
has no operations. Realization of a major portion of the assets is
dependent upon the Company's ability to meet its future financing
requirements, and the success of future operations. These factors raise
substantial doubt about the Company's ability to continue as a going
concern.
As discussed in Note 1 to the financial statements under organization
costs, the Company in 1999 changed its method of accounting for the costs
of organizing the Company.
/S/ David T. Thomson
Salt Lake City, Utah
May 11, 2000
37
</Page>
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
March December December
31, 2000 31, 1999 31, 1998
------------ ------------ ------------
(Unaudited)
<S> <C> <C> <C>
CURRENT ASSETS
Cash on Hand $ 0 $ 0 $ 0
------------ ------------ ------------
Total Current Assets $ 0 $ 0 $ 0
------------ ------------ ------------
OTHER ASSETS
Deferred offering costs 9,151 9,152 5,003
Patents, net of amortization of $89,
$76 and $20 711 724 780
Organization costs of net of
amortization of $100 in 1998 0 0 1,109
------------ ------------ ------------
Total Other Assets 9,862 9,876 6,892
------------ ------------ ------------
TOTAL ASSETS $ 9,862 $ 9,876 $ 6,892
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 6,300 $ 6,270 $ 5,212
Accrued interest payable 211 128 0
Due to Parent 3,711 3,711 0
------------ ------------ ------------
Total Current Liabilities 10,222 10,109 5,212
------------ ------------ ------------
STOCKHOLDERS' EQUITY
Common stock; $.001 par value, 50,000,000
shares authorized, 800,000 issued and
outstanding all periods presented 800 800 800
Additional paid in capital 1,000 1,000 1,000
Deficit accumulated during the development
stage (2,160) (2,033) (120)
------------ ------------ ------------
Total Stockholders' Equity (Deficit) (360) (233) 1,680
------------ ------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,862 $ 9,876 $ 6,892
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
38
</Page>
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the For the From Cumulative
Three Three Inception During
Months Months For the (July 14, the
Ended Ended Year Ended 1998) to Develop-
March March December December ment
31, 2000 31, 1999 31, 1999 31, 1998 Stage
----------- ----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited)
<C> <C> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0 $ 0 $ 0
----------- ----------- ----------- ----------- -----------
EXPENSES
Amortization expense 14 71 56 120 190
Professional fees 0 0 505 0 505
Filings fees 0 0 85 0 85
Interest 113 2 158 0 271
----------- ----------- ----------- ----------- -----------
Total Expenses 127 73 804 120 1,051
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) BEFORE
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE (127) (73) (804) (120) (1,051)
Cumulative effect of
accounting change for
organization costs 0 0 (1,109) 0 (1,109)
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (127) $ (73) $ (1,913) $ (120) $ (2,160)
=========== =========== =========== =========== ===========
EARNINGS (LOSS) PER SHARE
BEFORE ACCOUNTING CHANGE $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
=========== =========== =========== =========== ===========
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
=========== =========== =========== =========== ===========
EARNINGS (LOSS) PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
39
</Page>
EMPS CORPORATION
(A Development Stage Company)
<TABLE>
<CAPTION>
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Common Stock Additional During the
------------------------- Paid In Development
Shares Amount Capital Stage
--------------------------------------------------
<S> <C> <C> <C> <C>
BALANCE, July 14,
1998 (inception) 0 $ 0 $ 0 $ 0
Shares issued to
parent in exchange
for assignment of
patents, at par
value of $0.001
per share,
July 14, 1998 800,000 800 0 0
Capital contributed
to the Company to
pay costs 0 0 1,000 0
Net income (loss)
from inception
(July 14, 1998) to
December 31, 1998 0 0 0 (120)
--------------------------------------------------
BALANCE,
December 31, 1998 800,000 800 1,000 (120)
Net income (loss)
for the year ended
December 31, 1999 0 0 0 (1,913)
--------------------------------------------------
BALANCE,
December 31, 1999 800,000 800 1,000 (2,033)
Net income (loss)
for the three months
ended March 31, 2000
(Unaudited) 0 0 0 (127)
--------------------------------------------------
BALANCE, March 31,
2000 (Unaudited) 800,000 $ 800 $ 1,000 $ (2,160)
==================================================
</TABLE>
The accompanying notes are an integral part of these financial statements
40
</Page>
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
From Cumulative
For the For the For the Inception During
Three Three Year (July 14, the
Ended Ended Ended 1998) to Develop-
March March December December ment
31, 2000 31, 1999 31, 1999 31, 1998 Stage
---------- ---------- ---------- ---------- ----------
<C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Cash paid for expense $ 0 $ (800) $ (247) $ 0 $ (247)
---------- ---------- ---------- ---------- ----------
Total Cash used in
Operating activities 0 (800) (247) 0 (247)
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM
INVESTING ACTIVITIES
Organization costs 0 0 0 (1,000) (1,000)
---------- ---------- ---------- ---------- ----------
Total Cash used in
Investing Activities 0 0 0 (1,000) (1,000)
CASH FLOWS FROM
FINANCING ACTIVITIES
Capital Contributed to
the Company 0 0 0 1,000 1,000
Advances from Parent 0 800 3,711 0 3,711
Deferred offering costs 0 0 (3,464) 0 (3,464)
---------- ---------- ---------- ---------- ----------
Total Cash provided by
Financing Activities 0 800 247 1,000 1,247
---------- ---------- ---------- ---------- ----------
NET INCREASE (DECREASE)
IN CASH 0 0 0 0 0
CASH BEGINNING OF PERIOD 0 0 0 0 0
---------- ---------- ---------- ---------- ----------
CASH END OF PERIOD $ 0 $ 0 $ 0 $ 0 $ 0
========== ========== ========== ========== ==========
RECONCILIATION OF NET
INCOME (LOSS) TO NET CASH
PROVIDED (USED) BY
OPERATING ACTIVITIES
NET INCOME (LOSS) $ 127 $ (73) $ (1,913) $ (120) $ (2,160)
---------- ---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
41
</Page>
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
-Continued-
<TABLE>
<CAPTION>
From Cumulative
For the For the For the Inception During
Three Three Year (July 14, the
Ended Ended Ended 1998) to Develop-
March March December December ment
31, 2000 31, 1999 31, 1999 31, 1998 Stage
---------- ---------- ---------- ---------- ----------
<C> <C> <C> <C> <C>
Adjustment to reconcile
net income (loss) to net
cash provided by operating
activities
Cumulative effect of
accounting change 0 0 1,109 0 1,109
Amortization of
organization and patent
costs 14 71 56 120 190
Change in assets and
liabilities
Accrued interest 83 2 128 0 211
Accounts payable 30 (800) 373 0 403
---------- ---------- ---------- ---------- ----------
Total Adjustments 127 (727) 1,666 120 1,913
---------- ---------- ---------- ---------- ----------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES $ 0 $ (800) $ (247) $ 0 $ (247)
========== ========== ========== ========== ==========
NON CASH TRANSACTIONS
Accounts payable for
organizations costs $ 0 $ 0 $ 0 $ 209 $ 209
========== ========== ========== ========== ==========
Accounts payable for
deferred offering costs $ 0 $ 1,817 $ 1,899 $ 5,003 $ 6,902
========== ========== ========== ========== ==========
Commons stock issued for
assignment of patents $ 0 $ 0 $ 0 $ 800 $ 800
========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
42
</Page>
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - EMPS Corporation (The Company) was organized under
the laws of the State of Nevada on July 14, 1998 and has elected a
fiscal year end of December 31st . The Company was formed for the
purpose of furthering development and marketing of patented technology
for commercially separating nonmagnetic particulate material from
other materials without heat or water. The Company has not commenced
planned principle operations and is considered a development stage
company as defined in SFAS No. 7. The Company has acquired two
patents having to do with the business purpose outlined above.
FINANCIAL STATEMENTS - The accompanying financial statements include
only the accounts of EMPS Corporation and are not presented on a
consolidated basis with Particle Separation Technologies, L.C.,
(Parent) which is its Parent Company. The Parent owns 100% of the
common stock of EMPS Corporation.
NET EARNINGS PER SHARE - The computation of net income (loss) per
share of common stock is based on the weighted average number of
shares outstanding during the period presented.
ORGANIZATION COSTS - The Company was amortizing its organization
costs, which reflected amounts expended to organize the Company, over
sixty (60) months using the straight-line method. In 1998, the
Accounting Standards Executive Committee (AsSEC) of the American
Institute of Certified Public Accountants issued Statement of Position
(SOP) 98-5, "Reporting on the Cost of Start-up Activities." The SOP
requires costs of start-up activities and organization costs to be
expensed as incurred. During 1999, the Company adopted the SOP and
recognized a charge for the cumulative effect of accounting change of
$1,109.
ASSIGNMENT OF PATENT RIGHTS - The Company is amortizing its cost
associated with the acquisition of its patents over 14.5 and 15.4
years using the straight-line method. These lives are the legally
remaining protected lives of the patents. Amortization expense shown
from 1999 forward is for patents only.
INCOME TAXES - Due to losses at December 31, 1999 and 1998, no
provisions for income taxes has been made. There are deferred income
taxes resulting from income and expense items being reported for
financial accounting and tax reporting purposes in different periods.
The difference arises from the accelerating of the write-off of
organization costs for financial statement purposes as compared to
amortizing over 60 months for tax purposes.
CASH AND CASH EQUIVALENTS - For purposes of the statement of cash
flows, the Company considers all highly liquid debt instruments
purchased with a maturity of three months or less to be cash
equivalents. The Company did not have non-cash investing activities
at during 1999 and 1998.
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.
43 </Page>
<PAGE>
EMPS CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
UNAUDITED INTERIM INFORMATION - In the opinion of management, the
unaudited financial statements reflect all adjustments, consisting
only of normal adjustments, necessary to present fairly, the financial
position of the Company at March 31, 2000 and 1999 and the results of
operations and cash flows for the three months then ended. The results
of operations and cash flows for the three months ended March 31,
2000 should not necessarily be taken as indicative of the results of
operations and cash flows for the entire year ended December 31, 2000.
NOTE 2 - EQUITY TRANSACTIONS
The Company on July 14, 1998 issued 800,000 of $.001 par value common
stock to its Parent Company to acquire Patents to technology explained
above in the organization footnote. The stock was valued at par value
for a total acquisition cost of $800 (see Note 4). At December 31,
1998 $1,000 was contributed to the Company to pay certain cost to
organize the Company. The Company has recorded the contributed capital
as additional paid-in capital in its financial statements.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Parent is providing free office space to the Company, the free
rent has been determined to have only nominal value.
The Company has no employees. As of December 31, 1999 and 1998 no
compensation has been paid or accrued to any officers or directors of
the Corporation due to the fact that it is of only nominal value.
NOTE 4 - ASSIGNMENTS OF PATENTS TO THE COMPANY
As outlined above, the Parent has assigned patents for its technology
to the Company in exchange for common stock of the Company. The term
of the assignment is for the length of time covered under the letters
of Patent. At the time of the assignment, the costs of the patents
were recorded at no more than the cost of the patents to its Parent.
NOTE 5 - PROPOSED PUBLIC OFFERING OF THE COMPANY'S COMMON STOCK
The Company is in the process of preparing a Registration Statement on
Form SB-1, under the Securities Act of 1933. The offering to the
public will be for 200,000 maximum of its shares of common stock at an
offering cost of $1.00 per share. The offering will be managed by the
Company and the shares of common stock will be offered and sold by
officers of the Company without any discounts or other commissions.
The offering terminates 120 days from the effective date unless
extended 30 days by management. Direct costs of the offering are
estimated to be $20,000.
44
</Page>
<PAGE>
EMPS CORPORATION USA, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - STOCK OPTION PLAN
The Company has adopted a stock option plan. The total number of
shares of common stock reserved and available for distribution under
the Plan shall be 400,000 shares. At December 31, 1999 and 1998 no
options have been granted. The Company can grant incentive stock
options or Non-qualified stock options. The grant holding period, the
term of the grant, the grant exercise price, when the grant can be
exercisable, and the method of exercise are detailed in the stock
option plan.
NOTE 7 - INCOME TAXES
At December 31, 1999 and 1998 the Company had net federal operating
losses (NOL) of $1,166 and $120 which can be carried forward to offset
operating income. The NOL's will expire in the years 2019 and 2018.
Valuation allowances of $305 and $18 have been established for
deferred tax assets associated the above NOL's for 1999 and 1998 and
for the amortizing of organization costs for tax purposes from 1999
forward. The change in the NOL allowances for 1999 and 1998 was $287
and $18.
NOTE 8 - GOING CONCERN
The Company has experienced losses of $2,033 and $120 in 1999 and 1998
and has experienced losses from its inception. The Company has no
operating capital and no income. In light of the above circumstances,
the ability of the Company to continue as a going concern is
substantially in doubt. The financial statements do not include any
adjustments that might result form the outcome of this uncertainty.
Management believes their plans will provide the corporation with the
ability to continue in existence at least for the next 12 months.
Management plans to maintain its filing for corporate existence and to
limited expenses to the minimum to remain in existence. This may
require additional advances or loans from its Parent or stockholders.
The Company will continue to work with its creditors to postpone
payment until capital has been raised. Management believes these
efforts will maintain the entity as a going concern.
45
</Page>
<PAGE>
No one is authorized to make any EMPS CORPORATION
representations other than those
contained in this Prospectus. Maximum Offering: 200,0000 Shares
This Prospectus is not an offer of $.001 Par Value Common Stock
to sell or buy securities in any
prohibited jurisdiction. There Offering Price: $1.00 Per Share
might be changes in the affairs
of the Company after the date ------------------------------------
of this Prospectus. PROSPECTUS
------------------------------------
, 2000
----------------
--------------------------------------------------------------------------
TABLE OF CONTENTS Page
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . .9
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
COMPARATIVE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . 13
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . 15
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
DESCRIPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . 16
DESCRIPTION OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . 19
MANAGEMENT'S PLAN OF OPERATION . . . . . . . . . . . . . . . . . . . . . 24
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 27
46
</Page>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------------------------------------------
ITEM 1 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
The statutes, charter provisions, bylaws, contracts or other
arrangements under which controlling persons, directors or officers of the
registrant are insured or indemnified in any manner against any liability
which they may incur in such capacity are as follows:
(a) Section 78.751 of the Nevada Business Corporation Act provides that
each corporation shall have the following powers:
1. A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the right of
the corporation, by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
him in connection with the action, suit or proceeding if he acted in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, does not, of itself create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal
action or proceeding, he had reasonable cause to believe that his
conduct was unlawful.
2. A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him
in connection with the defense or settlement of the action or suit if he
acted in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to
which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable to
the corporation or for amounts paid in settlement to the corporation,
unless and only to the extent that the court in which the action or suit
was brought or other court of competent jurisdiction, determines upon
application that in view of all the circumstances of the case, the
person is fairly and reasonably entitled to indemnity for such expenses
as the court deems proper.
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<PAGE>
3. To the extent that a director, officer, employee or agent of
a corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections 1 and 2, or
in defense of any claim, issue or matter therein, he must be indemnified
by the corporation against expenses, including attorneys' fees, actually
and reasonably incurred by him in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered
by a court or advanced pursuant to subsection 5, must be made by the
corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is
proper in the circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum
consisting of directors who were not parties to the act, suit or
proceeding;
(c) If a majority vote of a quorum consisting of directors
who were not parties to the act, suit or proceeding so orders, by
independent legal counsel, in a written opinion; or
(d) If a quorum consisting of directors who were not parties
to the act, suit or proceeding cannot be obtained, by independent
legal counsel in a written opinion.
5. The certificate or articles of incorporation, the bylaws or an
agreement made by the corporation may provide that the expenses of
officers and directors incurred in defending a civil or criminal
action, suit or proceeding must be paid by the corporation as they
are incurred and in advance of the final disposition of the action,
suit or proceeding, upon receipt of an undertaking by or on behalf
of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions of
this subsection do not affect any rights to advancement of expenses
to which corporate personnel other than directors or officers may
be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in
or ordered by a court pursuant to this section:
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<PAGE>
(a) Does not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be entitled
under the certificate or articles of incorporation or any bylaw,
agreement, vote of stockholders of disinterested directors or
otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to subsection
2 or for the advancement of expenses made pursuant to subsection 5,
may not be made to or on behalf of any director or officer if a
final adjudication establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and
was material to the cause of action.
(b) Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the heirs,
executors and administrators of such a person.
7. The registrant's Articles of Incorporation limit liability of
its Officers and Directors to the full extent permitted by the Nevada
Business Corporation Act.
ITEM 2 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All expenses are estimates
<TABLE>
<CAPTION>
Amount
Expense Maximum
------- -------
<S> <C>
SEC Registration Fees $56.00
Blue Sky fees and expenses $2,500.00
Printing and shipping expenses $3,500.00
Legal fees and expenses $10,000.00
Accounting fees and expenses $2,000.00
Transfer and miscellaneous expenses $1,944.00
Total $20,000.00
</TABLE>
ITEM 3 - UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of EMPS pursuant to the foregoing provisions, or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred
or paid by a director, officer or controlling person of EMPS in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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<PAGE>
EMPS hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a post-
effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 242(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act treat each post-
effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
ITEM 4 - UNREGISTERED SECURITIES ISSUED
OR SOLD WITHIN ONE YEAR
The following unregistered securities were issued by EMPS:
On July 14, 1998, we issued 800,000 shares to Particle Separation
Technologies, L.C. to acquire Patents to technology. The transaction was
effected pursuant to Section 4(2) of the Securities Act of 1933, as amended.
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<PAGE>
<TABLE>
<CAPTION>
ITEM 5 - INDEX TO EXHIBITS
Exhibit No. Document
<S> <C> <C>
2.1 Articles of Incorporation As Filed
2.2 Bylaws As Filed
4 Subscription Agreement As Filed
6.1 Assignment of Patents As Filed
10.1 Consent of Independent Auditor Attached
10.2 Consent of Legal Counsel As Filed
(included in Exhibit 11)
11 Opinion re legality As Filed
12.1 EMPS Corporation 1998 As Filed
Stock Option Plan
27 Financial Data Schedule Attached
</TABLE>
ITEM 6 - DESCRIPTION OF EXHIBITS
See Item 5.
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<PAGE>
SIGNATURES
The issuer has duly caused this offering statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Salt
Lake City, State of Utah, on May 20, 2000.
EMPS Corporation
By: /s/ Louis Naegle
----------------
Its: President, Treasurer, Principal Financial
Officer & Director
This offering statement has been signed by the following persons in the
capacities and on the dates indicated.
Name and Title Date
/s/ Louis Naegle May 20, 2000
---------------- -------------
Louis Naegle,
President, Treasurer, Principal Financial Officer
& Director
/s/ Timothy L. Adair May 20, 2000
-------------------- ------------
Timothy L. Adair,
Secretary & Director
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