FLEXWEIGHT CORPORATION
2133 EAST 9400 SOUTH, SUITE 151
SANDY, UTAH 84093
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 8, 1998
TO THE SHAREHOLDERS OF FLEXWEIGHT CORPORATION:
You are cordially invited to attend the special meeting of the
shareholders (the "Special Meeting") of Flexweight Corporation (the "Company")
to be held at the Sandy City Library located at 10100 Petunia Way, Sandy, Utah,
on Wednesday, April 8, 1998, commencing at 10:00 A.M. Mountain Time. The purpose
of this Special Meeting is to consider and vote on the following proposals, as
more fully described in the accompanying Proxy Statement:
1. To reelect Tammy Gehring, Cliff Halling and BonnieJean C.
Tippetts to the Company's board of directors.
2. To amend the Company's Articles of Incorporation to increase
the number of authorized shares of the Company's common stock,
par value $0.10 ("Common Stock"), from 5,000,000 to
25,000,000.
3. To approve a 1-for-100 reverse stock split of the Company's
Common Stock which shall affect the Common Stock currently
issued and outstanding but not the Common Stock authorized for
issuance.
4. To ratify the selection of Jones, Jensen & Company as the
Company's independent auditors for the fiscal year to end
August 31, 1998.
5. To transact such other business as may properly come before
the Special Meeting or any adjournment thereof.
The complete text of these proposals and the reasons the Company's
Board of Directors has proposed their adoption are contained in the Proxy
Statement attached hereto and I urge you to carefully study them. If you do not
plan to attend the Special Meeting, you are respectfully requested to sign,
date and return the enclosed Form of Proxy promptly. You may return the Form of
Proxy by mail or by faxing the signed Form to the Company's offices at (801)
944-0715. A return envelope is enclosed for your convenience.
FOR THE REASONS STATED HEREIN, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
"FOR" THE PROPOSALS SET FORTH IN THE PROXY STATEMENT. YOUR VOTE IS IMPORTANT NO
MATTER HOW MANY SHARES YOU OWN. TO BE SURE THAT YOUR SHARES WILL BE VOTED AT THE
MEETING, PLEASE SIGN AND DATE THE ENCLOSED FORM OF PROXY. THIS WILL NOT PREVENT
YOU FROM ATTENDING THE MEETING AND VOTING YOUR SHARES IN PERSON.
Only shareholders of record as shown on the Company's books at the
close of business on March 6, 1998 (the "Record Date") will be entitled to vote
at the Special Meeting or any adjournment thereof. A list of the Company's
shareholders entitled to notice of, and vote at, the Special Meeting will be
made available during regular business hours from the date of this notice for
inspection by any shareholder for purposes germane to the Special Meeting. This
list may be obtained by contacting the Company at its principal offices of 2133
East 9400 South, Suite 151, Sandy, Utah, 84093, telephone number (801) 944-0701.
BY ORDER OF THE BOARD OF DIRECTORS
Tammy Gehring, President
Sandy, Utah
Dated: March 9, 1998
- -------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
FLEXWEIGHT CORPORATION
2133 EAST 9400 SOUTH, SUITE 151
SANDY, UTAH 84093
I. INFORMATION CONCERNING SOLICITATION AND VOTING
This Proxy Statement is being furnished in connection with the
solicitation of proxies on behalf of the board of directors of Flexweight
Corporation, a Kansas corporation with principal offices at 2133 East 9400
South, Suite 151, Sandy, Utah, 84093, to be voted at the Special Meeting of
shareholders to be held on April 8, 1998, and/or at any adjournment thereof. The
Company's telephone number is (801) 944-0701. A Notice of the Special Meeting
and Annual Report, as required by Rule 14a-3 under the Securities Exchange Act
of 1934, accompany this Proxy Statement and Form of Proxy. The Annual Report is
attached as an appendix to this Proxy Statement. The approximate date of mailing
for these materials is March 9, 1998.
The Company itself is soliciting proxies to the shareholders of record
and it alone will bear the costs associated with such solicitation. No
additional compensation will be paid to any director, officer, or regular
employee for the solicitation of proxies. The Company also expects to utilize
the services of Automated Data Processing Corporation in contacting beneficial
owners whose shares are held in street name. The Company expects the costs of
such services not to exceed $2,500. In addition to soliciting proxies by mail,
the Company may solicit proxies personally, by telephone or by facsimile. The
Company expects such other solicitation to do no more than request that Forms of
Proxy be signed and returned.
Please return the enclosed Form of Proxy immediately. A Form of Proxy may
be returned by faxing the Form, once signed, to the Company's corporate offices
at (801) 944-0715 or by mailing the Form in the enclosed envelope. When a Form
of Proxy is returned to the Company properly executed and not revoked, the
shares represented thereby will be voted at the Special Meeting and/or any
adjournment thereof by Tammy Gehring, the Company's President (hereinafter known
as the "Proxy Holder"). If the Form of Proxy is signed with preferences
indicated, the shares represented thereby will be voted accordingly. Forms of
Proxy signed by shareholders but lacking any such specification will be voted in
favor of the proposals set forth in the Notice of Special Meeting of
Shareholders. The Company does not know of any other matters not included as
proposals which will be presented for action at the Special Meeting. However,
the Proxy Holder intends to vote on, and act with respect to, any other proposal
which may be properly presented in accordance with her best judgment. A
stockholder submitting a Form of Proxy may revoke it at any time before it is
voted at the Special Meeting by executing a Form of Proxy bearing a later date
or by sending a written revocation addressed to the President of Flexweight
Corporation, 2133 East 9400 South, Suite 151, Sandy, Utah, 84093. A shareholder
who attends the Special Meeting may also revoke a previously executed proxy by
voting a ballot at the Special Meeting. The Board of directors recommends a vote
FOR all the proposals discussed in this Proxy Statement.
Only shareholders of record at the close of business on March 6, 1998
are entitled to vote at the Special Meeting. On the Record Date, there were
4,958,078 shares of the Company's Common Stock issued, outstanding, and entitled
to vote. Holders of Common Stock, the Company's only class of voting stock, are
entitled to one vote per share on each issue proposed at the Special Meeting.
The proposal to amend the Articles of Incorporation by changing the number of
shares authorized for issuance by the Company shall be adopted by receiving the
affirmative vote of a majority of the issued and outstanding shares of Common
Stock. All other proposals voted upon at the Special Meeting shall be adopted
upon receiving the affirmative vote of a majority of a quorum of shareholders
represented in person or by proxy at the Special Meeting.
Holders of a majority of the Common Stock issued and outstanding on the
Record Date must be represented in person or by proxy at the Special Meeting to
constitute a quorum for conducting business. Any shares which abstain
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from voting will be counted for the purpose of obtaining a quorum but will not
be counted in calculating the votes for the proposals. Broker non-votes will not
be counted either for purposes of determining a quorum or in calculating the
vote on any proposal.
II. SHAREHOLDER BALLOT ITEMS
A. Proposal Number One: Election of Directors
The Company's Restated Articles of Incorporation provide that the board
of directors shall consist of no less than three (3) and no more than nine (9)
members. Three directors will be elected at the Special Meeting and each
director elected will hold office until the next annual or special meeting of
shareholders. Provided a quorum is present, the affirmative vote of a majority
of shares of Common Stock represented at the Special Meeting is necessary to
elect each director.
The holders of Common Stock are entitled to one vote per share but, in
connection with the cumulative voting feature applicable to the election of
directors, each stockholder is entitled to as many votes as shall equal the
number of shares held by such person at the close of business on the Record
Date, multiplied by the number of directors to be elected. A stockholder may
cast all of such votes for a single nominee or may apportion such votes among
any two or more nominees. For example, when three directors are to be elected, a
holder of 100 shares may cast 300 votes for a single nominee, apportion 150
votes to each of two nominees, or apportion 300 votes in any other manner by so
noting in the space provided on the accompanying Form of Proxy. A shareholder
may withhold votes from any or all nominees by notation to that effect on the
Form of Proxy. Except to the extent that a stockholder withholds votes from any
or all nominees, the person named on the Form of Proxy, in her sole discretion,
will vote such Form of Proxy for, and, if necessary, exercise cumulative voting
rights to secure, the nominees listed below as directors of the Company.
Each of the nominees listed below is currently serving as a director of
the Company and their terms of office expire upon the election of new directors.
Each of the current directors has indicated a willingness to serve if reelected.
If any nominee becomes unable to serve, each proxy conferring authority to vote
for the nominee will be voted, in the discretion of the Proxy Holder, for any
substitute nominee designated by the board of directors. The following directors
are nominated for reelection:
Tammy Gehring, age 23, became president and director of the Company on
August 10, 1996. Ms. Gehring is employed at Park Street Investments as an
assistant and consultant in Mergers and Acquisitions. Park Street serves as a
consultant to the Company which has been retained to assist the Company in
finding a suitable merger or acquisition candidate. Park Street may also be
deemed to be under the common control of Ken Kurtz, a potential control person
of the Company. For more information on Mr. Kurtz and Park Street, see
"Directors, Executive Officers, Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act" from the attached Annual Report. Ms. Gehring
has been employed at Park Street since June 1997. For approximately a year and a
half, Ms. Gehring was employed as an administrative assistant in the mergers and
acquisitions department of a financial consulting firm based in Salt Lake City,
Utah. Previous to that, Ms. Gehring was an accounting and finance student at
Salt Lake Community College.
BonnieJean Tippetts, age 55, became secretary and director of the Company
on March 1, 1996. Ms. Tippetts has been employed as an executive assistant since
1992. Prior to 1992, she was employed as a schoolteacher. Ms. Tippetts earned a
B.A. in commercial art with a minor in music from Lewis and Clark College in
1958, and later earned a B.S. in pre-medicine in 1964. Ms. Tippetts went on to
earn a masters degree in vocational home economics in 1968. Ms. Tippetts has
been employed in various business occupations including accounting and
purchasing and has owned two franchises and a professional kennel. She is also a
professional concert pianist.
Cliff Halling, age 37, was appointed to the Company's board of directors on
February 20, 1998. Over the past five years, Mr. Halling has worked in the sales
and marketing department of both a financial
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consulting firm and companies involved in the production of educational films.
Mr. Halling earned a B.S. in financial planning from Brigham Young University.
Based solely upon a review of Forms 3, 4 and 5 furnished to the Company,
the Company is aware that Tammy Gehring, the Company's president and a director,
failed to timely file a Form 3 within 10 days of being appointed as an officer
and director and failed to timely file Form 4 on or before the tenth day after
the end of the month in which she received 40,000 shares of the Company's Common
Stock, all as required under Section 16(a) of the Securities Exchange Act of
1934. These reports have since been filed. The Company is aware that BonnieJean
Tippetts, the Company's secretary, treasurer and a director, failed to timely
file a Form 3 within 10 days of being appointed as an officer and director as
required to have been filed by Section 16(a) of the Securities Exchange Act of
1934..
The Company does not have any standing audit, nominating, compensation, or
similar committees. During the last fiscal year, the Company's board of
directors did not hold any meetings.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES NAMED IN THIS PROXY STATEMENT.
B. Proposal Number Two: Amending Articles of Incorporation to Increase
Authorized Shares of Common Stock
The Company's Articles of Incorporation provide for a total of five million
(5,000,000) shares of Common Stock authorized for issuance. The Company's Common
Stock constitutes the only class of equity authorized by the Articles of
Incorporation. As of the Record Date, the Company had a total of 4,958,078
shares of Common Stock issued and outstanding.
The Company's board of directors is recommending that the shareholders vote
to increase the total authorized shares of Common Stock to twenty five million
(25,000,000). The board of directors has recommended this increase to facilitate
the Company's planned reorganization. Currently, the Company has no active
operations and has had no revenue from operations during the past several years.
The Company does not produce any goods or provide any services. The Company's
current business plan centers around its quest to find a suitable merger or
acquisition target which it can acquire or with which it can combine, and the
Company is currently seeking out privately-held businesses interested in merging
with or being acquired by the Company. Due to the Company's lack of cash
resources, the Company will have to tender shares of its Common Stock as
consideration for any such acquisition or merger. The Company's board of
directors believes that the proposed increase in authorized shares of Common
Stock will allow the Company to issue a sufficient number of shares to
facilitate its intended reorganization.
The Company is currently negotiating with several parties in furtherance of
a potential merger or acquisition, but all negotiations are preliminary and no
final agreements have been reached. Accordingly, the Company cannot predict with
any degree of certainty the number of shares of Common Stock that will
ultimately be issued to facilitate a merger. However, any such exchange will
likely involve a large quantity of the Company's Common Stock and will likely
dilute the existing ownership position of current shareholders to a significant
degree. There are no preemptive rights provided for by the Company's Articles of
Incorporation or applicable state law which provide for the issuance of
additional Common Stock to shareholders of the Company. To increase the
authorized shares of Common Stock, the Company must amend its Articles of
Incorporation. To effect this amendment, the Company must obtain the approval of
the owners of a majority of the Company's issued and outstanding Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE
COMPANY'S ARTICLES OF INCORPORATION INCREASING THE NUMBER OF SHARES OF THE
COMPANY'S COMMON STOCK AUTHORIZED FOR ISSUANCE.
C. Proposal Number Three: Approval of a 1-for-100 Reverse Stock Split
The Company's board of directors recommended that the Company effect a
1-for-100 reverse stock split of the Company's issued and outstanding Common
Stock. The reverse split will decrease the number of issued and
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outstanding shares of Common Stock to one percent (1%) of its level prior to the
reverse split. For every hundred shares of Common Stock now owned, the Company's
shareholders shall receive one share of post-reverse Common Stock. All
fractional shares that result from the reverse split shall be rounded up to one
whole share. The number of shares which the Company is authorized to issue
(which is currently 5,000,000 but which will be increased to 25,000,000 if
Proposal Number Two is approved) shall not change as a result of the reverse
split. Therefore, the number of shares of Common Stock that remain authorized
but unissued after the reverse split shall increase from the number of shares
authorized but unissued prior to the reverse split. No tax consequences shall
result from the reverse split.
The board of directors recommended the reverse stock split because they
believe that the number of issued and outstanding shares of Common Stock is
disproportionately large given the Company's absence of revenue, net income and
net worth. The reverse stock split will increase the authorized number of shares
of Common Stock which the Company has available to issue, which the board of
directors believes will help the Company in its efforts to acquire or merge with
another entity. Any such future issuances of stock would dilute the ownership
interest of the Company's current shareholders. The reverse stock split shall be
effective upon receiving the affirmative vote of shareholders holding a majority
of the shares represented at the Special Meeting, provided a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED 1-FOR-100 REVERSE
SPLIT OF THE COMPANY'S ISSUED AND OUTSTANDING SHARES OF COMMON STOCK.
D. Proposal Number Four: Ratification of Jones, Jensen & Company as the
Company's Independent Auditors
On August 28, 1997, the Company retained Jones, Jensen & Company of Salt
Lake City, Utah to audit the Company's financial statements. This appointment
followed the resignation of Allen, Gibbs & Houlik, the Company's prior auditors.
Allen, Gibbs & Houlik resigned following the Company's 10-year period of
dormancy and subsequent move of corporate offices to Utah. There were no
disagreements between the Company and its prior auditors regarding accounting
principles and practices, financial statement disclosure or auditing scope and
procedures; nor did the Company consult with its new auditors regarding the
application of accounting principles, type of audit opinion or other matters.
Jones, Jensen & Company audited the Company's financial statements for the
year ended August 31, 1997 and the board of directors has also selected them as
the Company's independent auditors for fiscal year 1998. Although it is not
required to do so, the board of directors wishes to submit the selection of
Jones, Jensen & Company to the shareholders for ratification. If the selection
of Jones, Jensen & Company is not ratified, the board of directors may
reconsider its selection. Approval of this proposal requires the affirmative
vote of a majority of the shares represented at the Special Meeting. The Company
will request that a representative of Jones, Jensen & Company attend the Special
Meeting and make a statement or, at that representative's discretion, answer
appropriate questions. The Company expects that a representative of Jones,
Jensen & Company will be present at the Special Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF JONES, JENSEN &
COMPANY AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING AUGUST
31, 1998.
III. COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
No compensation in excess of $100,000 was awarded to, earned by, or paid to
any executive officer of the Company during the years 1996 and 1997. The
following two tables and the accompanying notes provide summary information for
each of the last two fiscal years concerning cash and non-cash compensation paid
to or accrued by the Company to Steven Pollack, the Company's president through
August 10, 1996, and Tammy Gehring, the Company's president from August 1996 to
present.
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards Payouts
Restricted Securities
Other Annual Stock Underlying All Other
Name and Salary Bonus Compensation Award(s) Options LTIP payouts Compensation
Principal Position Year ($) ($) ($) ($) SARs(#) ($) ($)
<C> <C> <C> <C> <C> <C> <C> <C> <C>
(1)Tammy Gehring 1997 - - - 4,000 - - -
Current President 1996 - - - - - - -
(1)Steven Pollack 1996 - - - 4,000 - - -
Former President
Gerald Kathol 1995 - - - - - - -
Former President
- ---------------
(1) Ms. Gehring and Mr. Pollack were each awarded 40,000 shares of the
Company's restricted stock as compensation for their services as the Company's
president. The shares were valued at the par value of the Common Stock. However,
given the fact that the Common Stock has not traded over $0.01 during the past
two years and given the very limited volume of Common Stock traded, it is
unlikely that these figures represent the actual value of the Common Stock
issued.
There are no standard arrangements pursuant to which directors of the
Company are compensated for their services as directors.
IV. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the ownership
of the Company's Common Stock as of March 9, 1998 with respect to: (i) each
person known to the Company to be the beneficial owner of more than five percent
of the Company's Common Stock; (ii) all directors; and (iii) directors and
executive officers of the Company as a group. For purposes of determining the
percentage of class owned, the Company has used the 4,958,078 shares issued and
outstanding as of the Record Date.
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of class
<S> <C> <C> <C>
Common Stock A-Z Professional Consultants, Inc. 878,504 17.7%
268 West 400 South, Suite 306
Salt Lake City, Utah 84101
Common Stock Capital Investors 333,333 6.7%
Rt. 3 Box 1660
Afton, OK 74331
Common Stock Grand Lake Investments 527,048 10.6%
8614 Stoneridge
Wichita, KS 67206
Common Stock Lea Kathol 476,171 9.6%
8100 E 22nd St. N
Bldg. 300, Suite 200
Wichita, KS 67208
Common Stock George Pace Estate 391,157 7.9%
P.O. Box 364
Great Bend, KS 67530
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</TABLE>
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<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of class
<S> <C> <C> <C>
Common Stock Tammy Gehring 40,000 0.8%
2133 East 9400 South, #151
Sandy, UT 84093
Common Stock Directors and Executive Officers as 40,000 0.8%
a Group (3 individuals)
</TABLE>
V. SHAREHOLDER PROPOSALS FOR THE FOLLOWING ANNUAL MEETING
Shareholder proposals to be presented in the proxy materials relating to
the next annual meeting of shareholders must be delivered to the President at
the Company's offices at 2133 East 9400 South, Suite 151, Sandy, Utah, 84093, on
or before January 31, 1999.
VI. OTHER MATTERS
The Company does not know of any matters that will be considered at the
Special Meeting other than the proposals described in this Proxy Statement.
However, if any other matters properly come before the Special Meeting, or any
of its adjournments, the Proxy Holder intends to vote the shares represented by
the Forms of Proxy according to her best judgment.
In order to assure the presence of the necessary quorum, please date, sign,
and promptly return the enclosed Form of Proxy in the envelope provided. No
postage is required if mailed in the United States. The signing of a Form of
Proxy by no means prevents you from attending the meeting and voting your shares
in person.
By order of the Board of Directors,
/s/ Tammy Gehring
---------------------
Tammy Gehring, President
Sandy, Utah
March 9, 1998
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APPENDIX I
TO PROXY STATEMENT OF
FLEXWEIGHT CORPORATION
ANNUAL REPORT AS REQUIRED BY RULE 14A-3(B)
OF THE EXCHANGE ACT OF 1934, AS AMENDED
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DESCRIPTION OF BUSINESS AND RELATED INFORMATION
Business Development
Flexweight Corporation (the "Company") was originally incorporated under
the name Flexweight Drillpipe Company in 1958. From 1958 to late 1961, the
Company acted as a distributor of oil field equipment, representing several
manufacturers. In 1961, the Company commenced the manufacture of double-wall
drill pipes under its own name through patent rights acquired for the Flexweight
system. These patents expired in 1987.
The Company had been primarily in the business of manufacturing and
marketing Flexweight pipe, a double-wall flexible weight pipe used in oil field
drilling, and couplings, devices which join lengths of pipe in a pipeline
system. These products were manufactured and sold under the name Flexweight
Double-Wall Drill Pipe and Flexweight Perma Couplings, respectively. Each
product was subject to patent rights of the Company. These patents have since
expired. The Company also provided tool joint welding services, machine shop and
custom repair work including rebuilding drilling rigs and their components
principally in the State of Kansas.
On August 27, 1980, the Company completed an S-1 offering, resulting in a
public sale of 1,100,000 shares of common stock at $1.00 per share. The Company
retained $941,665 after offering expenses. A new plant building and offices were
completed in 1980 and leased to the Company. During these years, the oil field
supply business was expanding; however, in March 1982, the slow down of drilling
activity commenced, with active rig count in the United States dropping from
approximately 4,530 to a low of 950 by 1985. In Kansas, the rig count dropped to
around 35 from a high of over 250. In 1982, the Company experienced its first
loss after eight years of increasing profits and the losses continued to
increase through 1984 due to the drastically reduced demand for its manufactured
products and services.
Products were sold below cost to reduce inventory and generate funds in an
attempt to sustain operations and in hopes of a turnaround in the drilling
industry. This turnaround did not occur, and on March 11, 1985, the Company
filed for protection in the U.S. Bankruptcy Court for the District of Kansas
while formulating a reorganization plan. The secured creditors demanded complete
liquidation, sales of inventory, machines, tools and office furniture. The sale
was held on June 12, 1986. The secured creditors agreed to cancel all debt not
satisfied by the proceeds distribution of the liquidation sale resulting in a
$1,721,483.00 reduction of secured indebtedness.
Certain officers and directors of the Company purchased machines, tools and
inventory in the liquidation sale with plans to lease such assets to the Company
and then later exchange the assets for stock if the plan of reorganization were
approved. All transactions were disclosed in the disclosure statement and
reorganization plan as filed on June 26, 1987. The plan of reorganization was
approved by the Bankruptcy Court on February 16, 1988, almost 3 years from the
date of filing Chapter 11. A Form 8-K was filed in April 1989 with the
Securities and Exchange Commission disclosing the plan of reorganization and
including as exhibits all court documents, August 31, 1988 unaudited financial
statements and a letter to shareholders.
Following the court's approval of the plan of reorganization, the
equipment, tools and inventory were exchanged for shares of the Company's Common
Stock. The amount of Common Stock exchanged for debt by unsecured creditors as
disclosed in the bankruptcy disclosure statements totaled 1,781,000 shares. The
additional issuance of shares increased the Company's total shares outstanding
to 3,901,962 shares outstanding as compared to the 2,120,962 shares outstanding
prior to the Chapter 11 filing.
Following the approval of the plan, the Company's then president, Mr.
George Pace, continued to operate the Company on a limited basis with two to
three other employees. The expected drilling industry recovery did not
materialize as anticipated and there were indications that the recovery would
not transpire for several more years, if ever. The Company began to investigate
other types of businesses including the manufacture of a cooker fueled by the
incineration of ordinary newspaper. However, these efforts failed to produce a
significant amount of revenue which could be used to decrease the Company's
indebtedness.
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The Company began operating with one full-time employee and actively
pursued work orders with limited success. Unfortunately, the drilling industry
never resurfaced, and as time progressed, the Company accrued debt and incurred
further expenses for maintenance and repair.
On April 8, 1994, the Company's president, George Pace, resigned and on
November 15, 1994, Luann Pace was elected president for the purpose of
proceeding with the liquidation and sale of the Company's machinery and
equipment. The authority granted to the president also included authority to
contact and negotiate an auction contract with an auction company. Soon
thereafter, the Company began liquidating assets in an attempt to meet expenses
necessary to sustain the Company. After liquidation of all corporate assets,
Luann Pace resigned as the Company's President on December 4, 1995. Gerald
Kathol was elected President to replace Luann Pace and the Company became
dormant soon thereafter.
In March 1996, the Company executed a Consulting Agreement (the
"Agreement") with A-Z Professional Consultants Inc. ("A-Z"), a Utah corporation
providing business and financial consulting services. Pursuant to the Agreement,
A-Z was to assist the Company in restructuring its capitalization and in finding
a suitable merger or acquisition candidate. In consideration for the assistance
of A-Z, the Company issued 878,504 shares of Common Stock, to A-Z and 97,612
shares of Common Stock, to Park Street Investments, a Utah corporation who was
also to assist the Company in restructuring its operations ("Park Street").
On April 3, 1996, Gerald Kathol, president and director of the Company,
resigned along with Lea Kathol, Treasurer and Clayton Morrison, Director. The
Board then appointed Steven Pollack as president and director and BonnieJean
Tippetts, as secretary and director. On August 10, 1996, Steven Pollack resigned
and the Company appointed Tammy Gehring as the Company's president and a
director. On February 20, 1998, Cliff Halling was appointed as a director of the
Company. The new officers and directors were appointed to facilitate the
Company's efforts in becoming an entity suitable for merger with or acquisition
by another entity.
On April 1, 1997, the Company executed a Mutual Agreement to Terminate with
A-Z which terminated the March 1, 1996 Consulting Agreement. On September 1,
1997, the Company executed a new Consulting Agreement with Park Street, whose
principal officer and sole director is Ken Kurtz, a control person of the
Company, (See "Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act."). Pursuant to the new
agreement, Park Street was retained to provide financial consulting services,
marketing and public relations services on behalf of the Company to facilitate
the Company's plan to merge with or acquire another business entity. As
consideration for these services, the Company is obligated to issue up to 15% of
its outstanding shares of Common Stock to Park Street upon Park Street
successfully locating a merger or acquisition candidate and facilitating the
Company's planned merger or acquisition. Park Street may be deemed to be a
control person of the Company by virtue of this contract or by virtue of the
fact that Tammy Gehring, the Company's president and director, is an employee of
Park Street.
Business of Issuer
The Company is currently a developmental stage company actively seeking to
renew its operations and recover from its previous period of dormancy. The
Company does not currently produce any products or provide any services. The
Company has no employees, full or part time, aside from its officers and
directors. Through its new agreement with Park Street, the Company receives
services necessary to maintain its operations which are primarily focused on
locating an entity with which it can combine or acquire.
MANAGEMENT'S PLAN OF OPERATIONS
The Company has not had revenues from operations in either of the last two
fiscal years. The Company is actively seeking to recover from its significant
decline in operations and subsequent period of dormancy. The Company's plan of
operations for 1998 centers around its quest to find a suitable merger or
acquisition target which it can acquire or with
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which to combine. Although the Company is seeking to effect a merger or
acquisition, there can be no assurances that it will be able to do so, or if a
combination is achieved, that it will be profitable, worthwhile or sustainable.
The Company is substantially dependent on Park Street Investments, an
entity that has been retained to assist the Company in restructuring operations
and in locating a suitable merger or acquisition candidate. Presently, the
Company is unable to satisfy its cash requirements without the services provided
by Park Street, which has agreed to provide the Company with services necessary
to sustain the day to day operations of the Company in exchange for the receipt
of a quantity of shares Common Stock equal to up to 15% of the total shares
outstanding upon the Company's successful completion of a merger or acquisition.
Park Street has made limited cash advancements to the Company to assist the
Company in meeting its short-term cash needs, but the Company can provide no
assurances that such advancements will continue in the future. The Company will
need to raise additional financing in the next 12 months and the Company intends
to raise such funds once it has successfully completed a merger or acquisition.
In an attempt to prepare the Company for a successful merger or acquisition
with another business entity, the Company agreed to settle its debt obligation
to Barton County, Kansas. The original amount of debt claimed by Barton County
against the Company is $223,255. This debt was incurred by the Company during
1985 and 1986 and is related to personal property tax liabilities. On November
26, 1997, the Company executed a Settlement Agreement with Barton County, Kansas
pursuant to which the Company is obligated to pay $12,500 to Barton County
within 90 days of the date of the Agreement. Upon Barton County's receipt of
such payment from the Company, the County will release any and all liens held
against the Company.
It is likely that if the Company locates a merger or acquisition candidate,
the Company will be required to issue a substantial number of shares of its
Common Stock to facilitate the planned merger or acquisition. It is expected
that such an issuance of shares would likely dilute the ownership interest of
the Company's current shareholders to a substantial degree.
FINANCIAL STATEMENTS
Please see Pages F-1 through F-9 which follow this Annual Report.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
On March 8, 1990, the Company's auditors Allen, Gibbs, & Houlik were
confirmed by a majority vote of the shareholders in a Special Meeting of the
shareholders. However, soon thereafter, the Company's operations significantly
declined and later became dormant. Allen, Gibbs & Houlik resigned as the
Company's auditors soon after the Company moved it operations from Kansas to
Utah. There were no disagreements between the Company and Allen, Gibbs, & Houlik
regarding accounting principles and practices, financial statement disclosure,
or auditing scope and procedures. The Company engaged Jones, Jensen & Company on
August 28, 1997. The Company did not consult with the auditors regarding the
application of accounting principles, type of audit opinion or any other matters
outlined in Item 304(a)(2) of Reg. S-B under the Securities Act of 1933.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Directors, Executive Officers and Control Persons
Name Age Positions(s) and Office(s)
Tammy Gehring 23 President, Director
BonnieJean Tippetts 55 Secretary, Director
A-3
<PAGE>
Cliff Halling 37 Director
Ken Kurtz 30 Control Person
Tammy Gehring became president and director of the Company on August 10,
1996. Ms. Gehring is employed at Park Street Investments as an assistant and
consultant with respect to mergers and acquisitions. She has been employed at
Park Street since June 1997. For approximately a year and a half, Ms. Gehring
was employed as an administrative assistant in the mergers and acquisitions
department of a financial consulting firm based in Salt Lake City, Utah.
Previous to that, Ms. Gehring was an accounting and finance student at Salt Lake
Community College.
BonnieJean Tippetts became secretary and director of the Company on March
1, 1996. Ms. Tippetts has been employed as an executive assistant since 1992.
Prior to 1992, she was employed as a schoolteacher. Ms. Tippetts earned a B.A.
in commercial art with a minor in music from Lewis and Clark College in 1958,
and later earned a B.S. in Pre- Medicine in 1964. Ms. Tippetts went on to earn a
Masters degree in vocational home economics in 1968. Ms. Tippetts has been
employed in various business occupations including accounting and purchasing and
has owned two franchises and a professional kennel. She is also a professional
concert pianist.
Cliff Halling, age 37, was appointed to the Company's board of directors on
February 20, 1998. Over the past five years, Mr. Halling has worked in the sales
and marketing department of both a financial consulting firm and companies
involved in the production of educational films. Mr. Halling earned a B.S. in
financial planning from Brigham Young University.
Ken Kurtz, has never been named as an officer or director of the Company.
He may, however, be deemed to be a control person based upon his significant
influence and "control" (as defined in Rule 12b-2 of the Securities Exchange Act
of 1934) over the affairs of the Company. Mr. Kurtz is the sole owner of Park
Street Investments, Inc., a shareholder of the Company which, pursuant to a
Consulting Agreement executed with the Company, is entitled to receive a
quantity of Common Stock equivalent to up to 15% of the total shares outstanding
upon the successful completion of a merger with or acquisition of a third party.
Mr. Kurtz has been the president and sole director of Park Street Investments,
Inc., since February 1992. From November 1990 to February 1992, Mr. Kurtz was
secretary-treasurer of Boss International, Inc., a company which published time
management systems. Park Street Investments, Inc. is also the employer of the
Company's president, Tammy Gehring.
Compliance with Section 16(a) of the Exchange Act
The Company is aware that Tammy Gehring, the Company's president and a
director, failed to file a Form 3 within 10 days of being appointed as an
officer and director as required to have been filed by Section 16(a) of the
Securities Exchange Act of 1934. The Company is also aware that Ms. Gehring
failed to timely file Form 4 as required to have been filed by Section 16(a) of
the Securities Exchange Act of 1934 on or before the tenth day after the end of
the month in which she received 40,000 shares of the Company's Common Stock as
compensation. These documents have since been filed with the Commission.
The Company is aware that BonnieJean Tippetts, the Company's secretary,
treasurer and a director, failed to file a Form 3 within 10 days of being
appointed as an officer and director as required to have been filed by Section
16(a) of the Securities Exchange Act of 1934.
The Company is aware that Steven Pollack, the Company's past president and
a director, failed to file a Form 3 within 10 days of being appointed as an
officer and director as required to have been filed by Section 16(a) of the
Securities Exchange Act of 1934. The Company is also aware that Mr. Pollack
failed to timely file a Form 4 as required to have been filed by Section 16(a)
of the Securities and Exchange Commission on or before the tenth day after the
end of the month in which he received 40,000 shares of the Company's Common
Stock as compensation.
A-4
<PAGE>
The Company is also aware that Steven Christensen, the Company's past
director, failed to file a Form 3 within 10 days of being appointed as a
director as required to have been filed by Section 16(a) of the Securities
exchange Act of 1934.
Finally, the Company is aware that A-Z, a beneficial owner of 17.7% of the
Company's issued and outstanding Common Stock, failed to file a Form 3 within 10
days of acquiring such stock as required to have been filed by Section 16(a) of
the Securities Exchange Act of 1934.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Common Stock of the Company is traded through the OTC Bulletin Board
under the symbol FXWA, although very limited trading has occurred over the past
several years.
The table set forth below lists the range of high and low bids of the
Company's Common Stock for each quarter over the last two fiscal years. The
prices in the table reflect inter-dealer prices, without retail markup, markdown
or commission and may not represent actual transactions.
Calendar Year Quarter High Low
1996 First .015 .01
Second .015 .01
Third .015 .01
Fourth .015 .01
1997 First .015 .01
Second .015 .01
Third .015 .01
Fourth .015 .01
As of March 9, 1998, there were 667 holders of record of the Company's
Common Stock. The Company has not declared any cash dividends for the last two
fiscal years. The Company does not anticipate declaring any cash dividends in
the near future. There are no restrictions that limit the Company's ability to
pay dividends, other than those generally imposed by applicable state law. The
future payment of dividends, if any, on the Common Stock is within the
discretion of the board of directors and will depend on the Company's earnings,
capital requirements, financial condition, and other relevant factors. The
Company does not anticipate the payment of future dividends.
UNDERTAKING REGARDING FORM 10-KSB
The Company hereby undertakes to provide without charge to each person
solicited with this proxy statement, on the written request of any such person,
a copy of its annual report on Form 10-KSB including the financial statements
and the financial statement schedules, required to be filed with the Securities
and Exchange Commission pursuant to Rule 13a-1 under the Act for the fiscal year
ended August 31, 1997. This written request should be addressed to Tammy Gehring
at the Company's headquarters at 2133 East 9400 South, Suite 151, Sandy, Utah
84093.
A-5
<PAGE>
APPENDIX II
TO PROXY STATEMENT OF
FLEXWEIGHT CORPORATION
AUDITED FINANCIAL STATEMENTS FOR
PERIOD ENDED AUGUST 31, 1997
A-6
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Flexweight Corporation
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Flexweight Corporation (a
development stage company) as of August 31, 1997 and the related statements of
operations, stockholders' equity (deficit), and cash flows for the years ended
August 31, 1997 and 1996 and from inception on November 26, 1962 through August
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Flexweight Corporation (a
development stage company) as of August 31, 1997 and the results of its
operations and its cash flows for the years ended August 31, 1997 and 1996 and
from its inception on November 26, 1962 through August 31, 1997 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage company and has no
operating capital which raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Jones, Jensen & Company
November 11, 1997
<PAGE>
FLEXWEIGHT CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
August 31, 1997
C O N T E N T S
Independent Auditors' Report ................................................. 3
Balance Sheet ............................................................ 4
Statements of Operations ..................................................... 5
Statements of Stockholders' Equity (Deficit) ................................. 6
Statements of Cash Flows ..................................................... 7
Notes to the Financial Statements ............................................ 8
<PAGE>
FLEXWEIGHT CORPORATION
(A Development Stage Company)
Balance Sheet
ASSETS
August 31,
1997
CURRENT ASSETS
Cash .......................................................... $ --
-----------
Total Current Assets ....................................... --
TOTAL ASSETS ............................................... $ --
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable .............................................. $ 10,133
Taxes payable (Note 5) ........................................ 223,255
-----------
Total Current Liabilities .................................. 233,388
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 5,000,000 shares authorized
of $0.10 par value, 4,958,078 shares issued
and outstanding .............................................. 495,808
Additional paid-in capital .................................... 1,040,508
Deficit accumulated during the development stage .............. (1,769,704)
-----------
Total Stockholders' Equity (Deficit) ............................ (233,388)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) .......... $ --
===========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
FLEXWEIGHT CORPORATION
(A Development Stage Company)
Statements of Operations
From
Inception on
November 26,
For the Years Ended 1962 Through
August 31, August 31,
1997 1996 1997
--------------- --------------- ------------
REVENUES .......................... $ -- $ -- $ --
LOSS FROM DISCONTINUED
OPERATIONS (NOTE 3) .............. (8,000) (97,612) (2,048,687)
GAIN FROM DISPOSITION OF
DISCONTINUED OPERATIONS (Note 3) . -- 278,983 278,983
----------- ----------- -----------
NET INCOME (LOSS) ................. $ (8,000) $ 181,371 $(1,769,704)
=========== =========== ===========
NET INCOME (LOSS) PER
SHARE OF COMMON STOCK ............ $ (0.00) $ .05
=========== ===========
The accompanying notes are an integral part of these financial statements
5
<PAGE>
<TABLE>
<CAPTION>
FLEXWEIGHT CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
At inception on November 26, 1962 ..................... -- $ -- $ -- $ --
Common stock issued for cash
at approximately $0.55 per share ..................... 2,120,500 212,050 946,395 --
Common stock issued for reorganization
at approximately $0.14 per share ..................... 1,781,462 178,146 71,906 --
Sale of treasury stock ................................ -- -- 22,207 --
Net loss from inception on November
26, 1962 to August 31, 1995 ......................... -- -- -- (1,943,075)
----------- ----------- ----------- -----------
Balance, August 31, 1995 .............................. 3,901,962 390,196 1,040,508 (1,943,075)
Common stock issued for consulting
fee at $0.10 per share ............................... 976,116 97,612 -- --
Net income for the year ended
August 31, 1996 ...................................... -- -- -- 181,371
----------- ----------- ----------- -----------
Balance, August 31, 1996 .............................. 4,878,078 487,808 1,040,508 (1,761,704)
Common stock issued for consulting
fee at $0.10 per share ............................... 80,000 8,000 -- --
Net loss for the year ended
August 31, 1997 ...................................... -- -- -- (8,000)
----------- ----------- ----------- -----------
Balance, August 31, 1997 .............................. 4,958,078 $ 495,808 $ 1,040,508 $(1,769,704)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
<TABLE>
<CAPTION>
FLEXWEIGHT CORPORATION
(A Development Stage Company)
Statements of Cash Flows
From
Inception on
November 26,
For the Years Ended 1962 Through
August 31, August 31,
1997 1996 1997
--------------- --------------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) ........................................... $ (8,000) $ 181,371 $(1,769,704)
Adjustments to reconcile net loss to
net cash used by operating activities:
Loss on discontinued operations ............................. -- -- 303,243
Gain on disposal of assets .................................. -- (278,983) (278,983)
Stock issued for services ................................... 8,000 97,612 105,612
Increase (decrease) in accounts and taxes payable ........... -- -- 233,388
----------- ----------- ---------
Net Cash Used by Operating Activities .................... -- -- (1,406,444)
----------- ----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment ....................................... -- -- (124,208)
----------- ----------- ---------
Net Cash Used by Investing Activities .................... -- -- (124,208)
----------- ----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable ................................. -- -- 350,000
Issuance of common stock for cash ........................... -- -- 1,180,652
----------- ----------- ---------
Net Cash Provided by Financing Activities ................ -- -- 1,530,652
----------- ----------- ---------
NET INCREASE (DECREASE) IN CASH ............................... -- -- --
----------- ----------- ---------
CASH AT BEGINNING OF PERIOD ................................... -- -- --
----------- ----------- ---------
CASH AT END OF PERIOD ......................................... $ -- $ -- $ --
=========== =========== =========
CASH PAID FOR:
Interest .................................................... $ -- $ -- $ --
Income taxes ................................................ $ -- $ -- $ --
NON CASH FINANCING ACTIVITIES
Common stock issued for services ............................ $ 8,000 $ 97,612 $ 105,612
</TABLE>
The accompanying notes are an integral part of these financial statements
7
<PAGE>
FLEXWEIGHT CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
August 31, 1997 and 1996
NOTE 1 - ORGANIZATION AND HISTORY
The Company was incorporated under the laws of the State of Kansas on
November 26, 1962 under the name of "Flexweight Drillpipe Company,
Inc." The purpose of the Company was to engage in manufacturing and
marketing of double-wall drill pipe. It changed its name to
"Flexweight Corporation" on September 11, 1967.
The Company filed for Chapter 11 bankruptcy protection on June 25,
1987. In September 1995, the Company's only asset, a building, was
foreclosed upon.
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected an August 31 year end.
b. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
c. Loss Per Share
The computations of loss per share of common stock are based on the
weighted average number of shares outstanding at the date of the
financial statements.
d. Provision for Taxes
At August 31, 1997, the Company had net operating loss carryforwards
of approximately $1,500,000 that may be offset against future taxable
income through 2012. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater
chance the carryforwards will expire unused. Accordingly, the
potential tax benefits of the loss carryforwards are offset by a
valuation account of the same amount.
e. 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.
8
<PAGE>
FLEXWEIGHT CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
August 31, 1997 and 1996
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of
the Company to seek a merger with an existing, operating company.
Until that time, shareholders of the Company have committed to meeting
its minimal operating needs.
NOTE 3 - DISCONTINUED OPERATIONS
The Company has been inactive since August 1995. All activity
subsequent to August 1995 is relating to the discontinued operations.
The following is a summary of income (loss) from operations of the
Company.
Revenue $ 729,587
Expenses (2,778,274)
---------------
Loss from Discontinued Operations $ (2,048,687)
===============
Write-off of assets $ (295,373)
Gain on write off of debt 574,356
------------
Gain on Disposal of Discontinued Operations $ 278,983
============
NOTE 4 - STOCK TRANSACTIONS
On August 8, 1996, the Board of Directors approved to issue 878,504
and 97,612 shares of common stock to A-Z Professional Consultants and
Park Street Investments, Inc. for consulting fees valued at $87,850
and $9,761, respectively.
In June 1997, the Company issued a total of 80,000 shares of its
common stock to its officers for services they rendered valued at
$8,000.
NOTE 5 - TAXES PAYABLE
The taxes payable pertain to personal property taxes payable on
equipment and machinery which the Company no longer owns.
9
<PAGE>
FORM OF PROXY
SPECIAL MEETING OF THE SHAREHOLDERS OF
FLEXWEIGHT CORPORATION, APRIL 8, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Tammy Gehring (the "Proxy Holder"),
president of Flexweight Corporation (the "Company"), as proxy, with full power
of substitution, to vote, as directed below, the shares of the Company's common
stock which the undersigned is entitled to vote at the annual meeting of
shareholders to be held at the Sandy City Library at 10100 Petunia Way, Sandy,
Utah 84093, on April 8, 1998, at 10:00 A.M., Mountain Time, or any
adjournment(s) thereof (the "Special Meeting"). This proxy, when properly
executed and returned to the Company as provided below, will be voted in the
manner directed by the undersigned shareholder. If no direction is given, the
Proxy Holder will vote the shares represented by this proxy FOR all proposals.
1. Election of Directors: Nominees are Tammy Gehring, BonnieJean C.
Tippetts and Cliff Halling. AUTHORITY TO VOTE FOR ANY NOMINEE MAY BE
WITHHELD BY LINING THROUGH THE NOMINEE'S NAME ABOVE. To cumulate votes
as to a particular nominee(s) as explained in the proxy statement,
indicate the name(s) and number of votes to be given to such
nominee(s):
[ ] FOR all nominees(except as marked [ ] WITHHOLD AUTHORITY to vote
to the contrary above____________) for all nominees
CUMULATIVE VOTING
For Nominee(s)_________________ Number of Cumulated Votes_____________
For Nominee(s)_________________ Number of Cumulated Votes_____________
For Nominee(s)_________________ Number of Cumulated Votes_____________
2. Amendment to Amend Articles of Incorporation to Increase Shares of
Common Stock Authorized For Issuance to 25,000,000.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approval of 1-for-100 Reverse Stock Split.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Ratification of Jones, Jensen & Company as the Company's Independent
Auditors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
================================================================================
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON YOUR CERTIFICATE(S). WHEN SHARES ARE
HELD BY JOINT TENANTS, BOTH SHOULD SIGN. PLEASE MARK, SIGN, DATE, AND RETURN
THIS PROXY TO THE COMPANY IMMEDIATELY. YOU MAY RETURN THIS FORM BY FAXING A
SIGNED COPY TO THE COMPANY'S CORPORATE OFFICES AT (801) 944-0715. YOU MAY ALSO
RETURN THIS FORM BY MAIL, USING THE ENCLOSED ENVELOPE.
================================================================================
Date:_______________
______________________________ ________________________________
Name of Brokerage/Clearing House Number of Shares Held
______________________________ ________________________________
Signature Signature (If Held Jointly)
______________________________ _______________________________
Print Name Print Name (If Held Jointly)
