UTAH RESOURCES INTERNATIONAL INC, S-1/A, 1998-03-26

UTAH RESOURCES INTERNATIONAL INC
S-1/A, 1998-03-26
LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES)

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<PAGE> 1

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------------------

AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
UTAH RESOURCES INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)

UTAH
(State or Other Jurisdiction of Incorporation or Organization)

6552
(Primary Standard Industrial Classification Code Number)

87-0273519
(I.R.S. Employer Identification Number)

UTAH RESOURCES INTERNATIONAL, INC.
297 WEST HILTON DRIVE, SUITE #4
ST. GEORGE, UTAH 84770
(801) 628-8080
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)

(Name, Address Including Zip Code, and Telephone Number, Including Area Code, of
Agent For Service)

THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
Alan B. Roth
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive
Chicago, Illinois 60606-1229
(312) 201-2633/telephone and (312) 201-2555/facsimile

Approximate date of commencement of proposed sale to the public ,
1998 for the Round Up Option Offering and , 1998, for the Returned
Shares Option Offering.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------------------
CALCULATION OF REGISTRATION FEE

<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.10 par value................ 533,000(1)(2)(3) $3.35 $1,785,550(3) $526.74
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) This figure represents the maximum number of shares of Common Stock which
will be offered to the Company's shareholders pursuant to the 1,000 to 1
reverse stock split and: (a) the Round-Up Option Offering, where any
shareholder of the Company holding fewer than 1,000 shares of Common Stock
or any increment thereof, may (i) purchase additional shares in order to
"round-up" to the equivalent of 1,000 shares at a purchase price of $3.35
per share, or (ii) sell such shares to the Company based upon a
pre-reverse-split price of $3.35 per share; and (b) the Returned Shares
Option Offering, where remaining shareholders of the Company, except for
IMCC, (following the reverse stock split) may purchase on a pro rata basis,
those shares which the Company redeemed from those fractional shareholders
who elected NOT to round up.

(2) This figure does not reflect fractional shares which may be held by
brokerage firms or other third party nominees.

(3) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(o), since it is not clear how many shareholders will participate
and how many shares will be available in the Round Up Option Offering and
the Returned Shares Option Offering.

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.
================================================================================
<PAGE> 2

SUBJECT TO COMPLETION, DATED MARCH , 1998

UTAH RESOURCES INTERNATIONAL, INC.
PROXY STATEMENT
FOR A SPECIAL MEETING OF THE SHAREHOLDERS OF
UTAH RESOURCES INTERNATIONAL, INC.
------------------------------
PROSPECTUS
RELATED TO 533,000 SHARES OF COMMON STOCK OF
UTAH RESOURCES INTERNATIONAL, INC.

This Prospectus is being furnished to holders of common stock, $0.10 par
value per share (the "Common Stock") of Utah Resources International, Inc., a
Utah corporation (the "Company"), in connection with solicitation of proxies by
the Board of Directors of the Company for use at a special meeting of the
Company's shareholders (the "Special Meeting") to be held at on
, 1998 at M.S.T., and at any adjournment or postponement
thereof to consider and vote upon, among other things, a 1,000 to 1 reverse
stock split.

This Prospectus constitutes a prospectus of the Company, with respect to
the issuance and delivery of shares of Common Stock with respect to: (A) the
Round Up Option Offering, pursuant to which a maximum of 429,192 shares of
Common Stock shall be offered to the Company's fractional shareholders (those
shareholders holding fewer than 1,000 shares or any increment thereof) at $3.35
per share; and (B) the Returned Shares Option, pursuant to which a maximum of
103,808 shares of Common Stock (which shares represent the Common Stock redeemed
by the Company in the reverse stock split from those fractional shareholders who
did NOT elect to round up) shall be offered to the Company's remaining
shareholders following the reverse stock split, pursuant to the terms of a
settlement agreement, dated as of June 26, 1996, by and among the Company, R.
Dee Erickson, E. Jay Sheen, Lyle D. Hurd, Mark G. Jones, Mark Technologies
Corporation, Anne Morgan, Victoria Morgan, Inter-Mountain Capital Corp.
("IMCC"), John Fife and Robinson & Sheen, L.L.C. (the "1996 Settlement
Agreement") and a stock purchase agreement, dated as of July 3, 1996, by and
between the Company and IMCC ( the "Stock Purchase Agreement").

SEE "RISK FACTORS" BEGINNING ON PAGE , FOR CERTAIN CONSIDERATIONS
RELEVANT TO AN INVESTMENT IN THE SECURITIES REFERRED TO HEREIN.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

ROUND-UP OPTION OFFERING

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS COMPANY(1)
-------- ------------- -----------
<S> <C> <C> <C>
Per Share............................... $3.35 per share -0- $3.35
Total................................... $3.35 per share -0- $1,437,793
</TABLE>

(1) Before deducting expenses estimated at $ , all of which are
payable by the Company.

RETURNED SHARES OPTION OFFERING

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS COMPANY(1)
-------- ------------- -----------
<S> <C> <C> <C>
Per Share.................................... $3.35 per share -0- $3.35
Total........................................ $3.35 per share -0- $347,757
</TABLE>

(1) Before deducting expenses estimated at $ , all of which are payable
by the Company.

SUBJECT TO COMPLETION.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

THE ATTORNEY-GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
N.Y. # (TO BE ASSIGNED).
<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial statements
and related notes thereto appearing elsewhere in this Prospectus.

THE COMPANY

Utah Resources International, Inc. ("URI" or the "Company") is a Utah
corporation which was organized in 1966 as Utah Industrial, Inc. It was renamed
Utah Resources International, Inc., in 1969. In 1981, the Company became a
"reporting company" requiring it to file various reports with the Securities and
Exchange Commission. The Company's executive offices are located at 297 West
Hilton Drive, Suite #4, St. George, Utah 84770, (801) 628-8080.

The Company is a real property development corporation. As of January 1,
1998, the Company directly owned approximately 400 acres of undeveloped land in
St. George, Utah, approximately 354 acres of which are developable on which it
conducts its real property development business, primarily through its
wholly-owned subsidiary, Tonaquint, Inc. ("Tonaquint"). The Company also has
interests in partnerships that own and are developing other real property in St.
George, Utah. The Company also receives revenues from its ownership of
overriding royalty interests in producing oil and gas leases in Utah and
Wyoming, dating from the Company's historic business of acquiring and selling
oil, gas and mineral leases.

The Company's undeveloped real property is adjacent to Interstate Highway
15, which is a major traffic route from Salt Lake City, Utah to Las Vegas,
Nevada and southern California. The Company's real estate development activities
in recent years have concentrated on subdividing and selling improved lots for
residential construction, as the financial condition of the Company and the St.
George, Utah real estate market have permitted. The Company's lands include
premium priced hillside view lots, as well as lower-priced lots. In addition,
the Company pursues commercial real estate development of some of its
undeveloped real property.

THE OFFERING

On July 3, 1996, the Company consummated a transaction with Inter-Mountain
Capital Corp. ("IMCC"), whereby common stock representing 50.5% of the
outstanding stock of the Company was transferred to IMCC for $3.35 per share,
payable in accordance with the terms of the Stock Purchase Agreement by and
between the Company and IMCC (the "Stock Purchase Agreement"). The transfer of
such shares to IMCC was the product of the consummation of a Letter of Intent
dated April 5, 1996, as amended (the "Letter of Intent"), the Stock Purchase
Agreement, a settlement agreement by and among the Company, R. Dee Erickson, E.
Jay Sheen, Lyle D. Hurd, Mark G. Jones, Mark Technologies Corporation, Anne
Morgan, Victoria Morgan, IMCC, John Fife and Robinson & Sheen, L.L.C. (the "1996
Settlement Agreement") and a settlement agreement, by and among the Company,
John H. Morgan, Jr., Daisy R. Morgan, IMCC, John Fife, Robinson & Sheen, L.L.C.,
R. Dee Erickson, Lyle D. Hurd, Jr., and E. Jay Sheen (the "Morgan Settlement
Agreement") (the Letter of Intent, Stock Purchase Agreement, 1996 Settlement
Agreement and Morgan Settlement Agreement together are the "Transaction
Agreements").

The Transaction Agreements required, among other things, that the Company
cause a reverse stock split to occur on the terms as provided therein and
herein. A company with assets of over $10 million becomes a "reporting company"
when its shareholders number 500 or more and it complies with applicable
securities laws. To thereafter be allowed to become a "non-SEC reporting
company" and cease reporting to the Securities and Exchange Commission, the
number of shareholders must decline to less than 300 and the corporation must
comply with applicable securities laws. The proposed transaction is designed to
result in reducing the number of the Company's shareholders to less than 300, so
that the Company will no longer be required to be a reporting company.

At the Special Meeting of Shareholders, scheduled for , 1998 (the
"Special Meeting Date"), shareholders will be asked to consider and vote upon a
proposal to amend the Company's Articles of
<PAGE> 4

Incorporation to effect a reverse split of the Company's issued and outstanding
common stock as of 4:30 p.m. M.S.T., on , 1998 (the "Effective Date")
on the basis that each 1,000 shares of common, $.10 par value per share stock
then outstanding ("Common Stock") will be converted into one share of common
$100.00 par value per share stock (the "New Stock"), with shareholders holding
less than 1,000 shares or any increment thereof (after being given an
opportunity to purchase additional shares as needed to "round up" to the
equivalent of 1,000 shares at a purchase price of $3.35 per share) being paid
cash in exchange for their fractional shares at a pre-reverse-split price of
$3.35 per share for each share outstanding as of , 1998 (the "Record
Date").

ROUND UP OPTION OFFERING

If the reverse stock split is approved, any shareholder of the Company
holding fewer than 1,000 shares of Common Stock or any increment thereof, may
(i) after providing notice to the Company of his/her/its intent to exercise the
Round Up Option, as defined herein, purchase additional shares in order to
"round up" to the equivalent of 1,000 shares at a purchase price of $3.35 per
share (the "Round Up Option"), or (ii) sell such shares to the Company based
upon a pre-reverse-split price of $3.35 per share.

Also, as indicated above, a shareholder holding 1,000 shares or more (a
"Non-Exercising Shareholder") will have such shares converted into one share of
New Stock of the Company for each 1,000 shares of the Company's Common Stock
owned, with Non-Exercising Shareholders given the option to (i) purchase
additional shares in order to round-up to the next increment of 1,000 shares at
a purchase price of $3.35 per share, pursuant to the Round Up Option, or (ii)
sell such fractional shares to the Company based upon a pre-reverse-split price
of $3.35 per share.

RETURNED SHARES OPTION OFFERING

As required by the terms of the Transaction Agreements, subsequent to the
proposed reverse split, and subject to applicable state and federal securities
and state corporate law, any Common Stock redeemed through the reverse split
(the "Returned Shares") may be acquired by the remaining shareholders of the
Company, other than IMCC, as of a record date five days prior to the
effectuation of the reverse split (the "Returned Shares Record Date"), in
increments of 1,000 shares (the "Returned Shares Option"), at a purchase price
equal to the pre-reverse-split price of $3.35 per share (the "Returned Shares
Purchase Price"). Only those shares for which the Company has received, within
80 days following the Effective Date, a fully and properly executed letter of
transmittal accompanied by the required documents will qualify as Returned
Shares for purposes of this Returned Shares Option. Such Common Stock shall be
purchased in blocks of 1,000 shares of Common Stock such that each purchase of a
1,000 share block of Common Stock shall be converted into 1 share of New Stock.
In the event the Returned Shares Option offering is over-subscribed, then each
of the remaining exercising shareholders may purchase the Returned Shares on a
pro-rata basis (as determined by the number of shares held by each of the
exercising shareholders as of the Returned Shares Record Date less those shares
held by IMCC) in blocks of not less than 1,000 shares. In the event of such
over-subscription, each qualified shareholder could elect to purchase that
percentage of Returned Shares equal to

x
-------
(y -- z)

where "x" equals the number of New Stock shares owned by the qualified
shareholder wishing to purchase the Returned Shares, "y" equals the total number
of issued shares of New Stock, and "z" equals the number of New Stock shares
owned by IMCC. Twenty-five percent (25%) of the Returned Shares Purchase Price
shall be payable in cash upon exercise, with the remaining balance of $2.51 per
share being evidenced by a promissory note, payable in three years (the
"Returned Shares Note"). Subject to applicable Internal Revenue Service rules,
the Returned Shares Note shall bear simple interest at the short term applicable
federal rate as stated in June 1996, which interest shall be payable annually in
arrears. Payment of the Returned Shares Note will be secured by a pledge of the
Returned Shares purchased, as converted into share(s) of New Stock, pursuant to
a stock pledge agreement to be provided by the Company. Exercising shareholders
purchasing Returned Shares shall be required to apply any dividends,
distributions or other payments made to the shareholder of the Company on the
Returned

2
<PAGE> 5

Shares/New Stock to payment of the unpaid balance of the Returned Shares Note.
Returned Shares purchased by an exercising shareholder shall be fully votable in
accordance with the terms of the Company's organizational documents and other
agreements binding the Company for so long as the exercising shareholder is not
in default under the pledge agreement or the Returned Shares Note.

<TABLE>
<S> <C>
COMMON STOCK OFFERED PURSUANT TO THE ROUND UP OPTION........ 429,192 Shares
Assuming all of the fractional shareholders (those holding
fewer than 1,000 shares of Common Stock or any increment
thereof) elect to round-up
COMMON STOCK OFFERED PURSUANT TO THE RETURNED SHARES 103,808 Shares
OPTION....................................................
Assuming no fractional shareholders elect to participate in
the Round Up Option and all of the remaining shareholders
elect to participate in the Returned Shares Option
COMMON STOCK TO BE OUTSTANDING AFTER THE OFFERINGS
Assuming the Round Up Option is fully subscribed............ 2,952,000 Shares
Assuming the Returned Shares Option is fully subscribed..... 2,522,808 Shares
COMMON STOCK TO BE OUTSTANDING AFTER THE CONVERSION TO NEW
STOCK
Assuming the Round Up Option is fully subscribed............ 2,952 Shares
Assuming the Returned Shares Option is fully subscribed..... 2,522 Shares
</TABLE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 429,192 shares of
Common Stock offered by it pursuant to the Round Up Option, after deducting
estimated offering expenses, are estimated at the maximum to be approximately
$ , based upon an offering price of $3.35 per share of Common Stock and
one hundred percent (100%) participation in the Round Up Option Offering. If
there is one hundred percent (100%) participation in the Round Up Option
Offering, then there will be no shares available for the Returned Shares Option
offering.

If no shareholder participates in the Round-Up Option Offering, then the
Company shall be obligated to redeem the fractional shares (those shares held by
shareholders who hold less than 1,000 shares or any increment thereof) at a
purchase price of $3.35 per share. Those returned shares (approximately 103,808)
in turn, will be available for purchase by the remaining shareholders, except
for IMCC. The net proceeds to the Company from the sale of the 103,808 shares of
Common Stock offered by it hereby pursuant to the Returned Shares Option
offering, after deducting estimated offering expenses, are estimated at the
maximum to be approximately $ , based upon an offering price of $3.35
per share of Common Stock, one hundred percent (100%) participation in the
Returned Shares Option Offering, and including all proceeds from the sale
including proceeds from the note, and excluding the cost of redeeming the
fractional shares, pursuant to those shareholders who do not elect to exercise
their Round-Up Option.

The principal purpose of the Round Up Option and the Returned Shares Option
offerings are to fulfill the requirements of the Transaction Agreements,
described herein, that is, to provide fractional shareholders the opportunity to
purchase additional fractional shares to round up to one whole share of New
Stock and thus remain a shareholder of the Company, and to provide remaining
shareholders the opportunity to purchase Returned Shares, and thus, increase
their interest in the Company. The Company intends to become a non-SEC reporting
Company once the Reverse Split is successfully completed and as soon as
permitted under applicable state and federal securities laws. Less than all of
the securities offered may be sold, and thus, less than the maximum proceeds may
be obtained. Consequently, the Company has no specific plan for the proceeds,
other than for general corporate working capital purposes.

3
<PAGE> 6

SUMMARY FINANCIAL DATA

The Summary Financial Data are based on the historical financial statements
of the Company, giving effect to the Round-Up Option offering and the Returned
Shares Option offering. The Summary Financial Data should be read in conjunction
with the financial statements of the Company included elsewhere in the
Prospectus.

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------
1993 1994 1995 1996 1997
--------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Sales...................................... $ 758,114 $2,274,222 $ 587,663 $ 451,406 $ 530,553
Income (loss) from continuing operations... (346,204) 718,512 (260,026) (925,903) (444,623)
Total discontinued operations.............. 168,745 (31,416) (489,593) 73,701 --
Net income (loss).......................... (177,459) 687,096 (749,619) (852,202) (444,623)
Income (loss) per shares continued
operations............................... (.12) .54 (0.16) (0.45) (.18)
Income (loss) per share discontinued
operations............................... .00 .00 (0.30) (0.04) .00
Total earnings (loss) per share............ $(.12) $.54 $(.41) $(.41) $ (.18)
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------
1993 1994 1995 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash................................... $ 369,603 $2,138,795 $ 765,831 $ 517,858 $ 163,230
Real estate held for resale............ 727,477 627,214 854,821 876,088 855,007
Total Assets........................... 2,262,050 3,293,836 2,441,982 1,966,144 1,700,020
Notes payable.......................... 702,611 657,545 599,627 599,627 285,794
Shareholders' equity (deficit) ........ $ 978,008 $1,665,104 $1,065,322 $ 729,597 $ 284,974
</TABLE>

<TABLE>
<CAPTION>
AS ADJUSTED
--------------------------------------
SEPTEMBER 30,
--------------------------------------
(1) (2) (3)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash................................................. $1,601,023 $ -- $ --
Real estate held for resale.......................... 855,007 855,007 855,007
Total Assets......................................... 3,137,813 1,536,790 1,536,790
Notes payable........................................ 285,794 383,121 470,320
Shareholders' equity (deficit)....................... $1,722,767 $ 24,417 $ (62,782)
</TABLE>

- ------------

(1) ROUND UP OPTION OFFERING -- assumes all of the fractional shareholders
(those holding fewer than 1,000 shares of Common Stock or any increment
thereof) elect to round-up for a total of 429,192 available shares, at
$3.35 per share.

(2) RETURNED SHARES OPTION OFFERING -- assumes no fractional shareholders elect
to participate in the Round-Up Option offering and all of the remaining
shareholders elect to participate in the Returned Shares Option offering,
for a total of 103,808 available shares, at $3.35 per share. The Returned
Shares Option offering provides for shareholders to pay $.84 cash per share
with the remaining balance of $2.51 per share being in the form of a note.
The cash shortfall of $97,327 has been reflected as an increase to notes
payable.

(3) RETURNED SHARES OPTION OFFERING -- assumes no fractional shareholders elect
to participate in the Round-Up Option offering and none of the remaining
shareholders elect to participate in the Returned Shares Option offering,
for a total of 103,808 available shares at $3.35 per share. The cash
shortfall of $84,526 has been reflected as an increase to notes payable.

4
<PAGE> 7

RISK FACTORS

Prospective purchasers of the Common Stock offered hereby, pursuant to the
Round Up Option offering and the Returned Shares Option offering, as described
herein, should consider carefully the risks associated with investing in the
Common Stock of the Company, including the principal risk factors set forth
below, as well as other information set forth in this Prospectus.

RELIANCE UPON EXECUTIVE OFFICERS AND KEY EMPLOYEES. The success of the
Company is highly dependent upon the efforts and abilities of its executive
officers, particularly Mr. John Fife, the Company's President, Chief Executive
Officer and Chairman of the Board. The loss of the services of executive
officers or key employees for any reason could have a material adverse effect
upon the Company's business, financial condition and results of operations.

CONTROL BY PRINCIPAL STOCKHOLDER. IMCC currently owns 50.5% of the
Company's Common Stock and holds a ten year option to purchase an additional
number of shares necessary to maintain its 50.5% interest. As a result, John
Fife, as the controlling shareholder of IMCC, will continue to be able to
control the outcome of matters requiring a shareholder vote, including the
election of directors. Such control could preclude any unsolicited acquisition
of the Company and, consequently, adversely affect the market price of the
Common Stock.

REAL PROPERTY DEVELOPMENT ACTIVITIES. The real estate development industry
in general and the residential real estate development industry in particular is
a high risk industry, subject to changes in general economic conditions,
fluctuating interest rates, and changing demand for the types of developments
being considered. Volatility in local and regional land use demands, as well as
changing supply and demand for the specific uses for which the real property is
being developed are also factors in assessing the relative risks of the
business. The demand for residential real estate development is particularly
sensitive to changing interest rates and shifting demographics. Both of these
factors affecting the demand for residential housing are highly unpredictable
over both the short and long-term.

GOVERNMENT REGULATION. Real estate development is a government regulated
industry. The regulation of real estate development is the product of political
and practical considerations. Regulation is carried out by municipal, county,
state and federal agencies, but municipal and county governments have the
greatest regulatory impact. The city of St. George, where the Company operates,
has been adopting increasingly restrictive regulations associated with
development activities, including the adoption of more restrictive building
codes and ordinances, greater emphasis on land use planning, pressure to
increase the number of low density residential developments, and heightened
public concern aimed at limiting development as a means to control growth.
Development in some areas close to the Company's property may be limited by
governmental environmental protection activities. Government regulation can have
an effect on the viability of real estate development by the Company.

COMPETITION IN REAL ESTATE DEVELOPMENT. The real property development
industry is highly competitive. Several development companies with interests in
St. George have longer operating histories, greater financial strength and more
experience in the industry than does the Company. The Company's development
activities historically have represented less than 5% of total real estate
development activity in the area in and around St. George, and, in management's
view, that percentage is likely to decrease in the near term given the increase
in overall development activities in the area. The perceived strength of the St.
George real estate market has recently attracted many more developers to the
area, thus increasing competition to the Company.

REDUCTION IN INFORMATION REGARDING THE COMPANY. If the Reverse Split
discussed in the Schedule 13e-3 and Preliminary Proxy Statement, provided by the
Company to its shareholders and dated as of , 1998, is completed, the
Company plans to cease to be an SEC reporting company, as soon as permitted
under applicable state and federal securities laws. Deregistration would
eliminate the Company's obligation to provide detailed information to the
Company's shareholders concerning the Company's principal shareholders,
directors and executive officers, compensation paid the Company's executives,
audited financial statements and certain relationships in related transactions
between the Company's insiders and the Company, which under certain

5
<PAGE> 8

circumstances could better enable the Company's shareholders to assess the
financial operations and policies of a corporation.

LOSS OF PRESTIGE. If the Reverse Split discussed in the Schedule 13e-3 and
Preliminary Proxy Statement is completed, the Company plans to cease to be an
SEC reporting company as soon as permitted under applicable state and federal
securities laws. There will likely be a loss of prestige that being a reporting
company provides.

LOSS OF EASE OF VALUATION OF STOCK. If the Reverse Split discussed in the
Schedule 13e-3 and Preliminary Proxy Statement is completed, the Company plans
to cease to be an SEC reporting company as soon as permitted under applicable
state and federal securities laws. There could be a loss of ease of valuation of
stock where there is active trading of such shares on an established securities
exchange. There has been no such active trading with the Company's Common Stock.

DECREASED LIQUIDITY. If the Reverse Split discussed in the Schedule 13e-3
and Preliminary Proxy Statement is completed, the Company plans to cease to be
an SEC reporting company as soon as permitted under applicable state and federal
securities laws. There will likely be a decreased liquidity to the remaining
shareholders due to the fact that there is a less public market for the
Company's stock.

NO FUTURE PUBLICLY OFFERED SALES OF SECURITIES. If the Reverse Split
discussed in the Schedule 13e-3 and Preliminary Proxy Statement is completed,
the Company plans to cease to be an SEC reporting company as soon as permitted
under applicable state and federal securities laws. The Company will lose the
potential flexibility for current or future financing of corporate expansion
through the building of a more broad equity base through publicly offered sales
of securities.

HISTORY OF PAYMENT OF DIVIDENDS. Over the past ten years the Company's
shareholders have received only one $.10 dividend.

SIGNIFICANT UNALLOCATED NET PROCEEDS. The Company has no specific
allocations for the Company's anticipated net proceeds from the Round Up Option
offering and the Returned Shares Option offering. Accordingly, the Board of
Directors of the Company will have broad discretion with respect to the use of
such unallocated net proceeds. See "Use of Proceeds."

THE COMPANY

The Company was organized in 1966 as Utah Industrial, Inc. It was renamed
Utah Resources International, Inc., in 1969. In 1981, the Company became a
"reporting company" requiring it to file various reports with the Securities and
Exchange Commission.

The Company's executive offices are located at 297 West Hilton Drive, Suite
#4, St. George, Utah 84770, (801) 628-8080.

The Company is a real property development corporation. As of January 1,
1998, the Company directly owned approximately 400 acres of undeveloped land in
St. George, Utah, approximately 354 acres of which are developable on which it
conducts its real property development business, primarily through its
wholly-owned subsidiary, Tonaquint, Inc. ("Tonaquint"). URI also has interests
in partnerships that own and are developing other real property in St. George,
Utah. The Company receives revenues from its ownership of overriding royalty
interests in producing oil and gas leases in Utah and Wyoming, dating from the
Company's historic business of acquiring and selling oil, gas and mineral
leases.

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USE OF PROCEEDS

The net proceeds to the Company from the sale of the 429,192 shares of
Common Stock offered by it pursuant to the Round Up Option offering, after
deducting estimated offering expenses, are estimated at the maximum to be
approximately $ , based upon an offering price of $3.35 per share of
Common Stock and one hundred percent (100%) participation in the Round Up Option
Offering. If there is one hundred percent (100%) participation in the Round Up
Option offering, then there will be no shares available for the Returned Shares
Offering.

If no one participates in the Round-Up Option offering, then the Company
shall be obligated to redeem the fractional shares (those shares held by
shareholders who hold less than 1,000 shares or any increment thereof) at a
purchase price of $3.35 per share. Those returned shares (approximately 103,808)
in turn, will be available for purchase by the remaining shareholders, other
than IMCC. The net proceeds to the Company from the sale of the 103,808 shares
of Common Stock offered by it hereby pursuant to the Returned Shares Option
offering, after deducting estimated offering expenses, are estimated at the
maximum to be approximately $ , based upon an offering price of $3.35
per share of Common Stock, one hundred percent (100%) participation in the
Returned Shares Option Offering, and including all proceeds from the sale
including proceeds from the note, and including the cost of redeeming the
fractional shares.

The principal purpose of the Round Up Option and the Returned Shares Option
offerings are to fulfill the requirements of the Transaction Agreements,
described herein, that is, to provide fractional shareholders the opportunity to
purchase additional fractional shares to round up to one whole share of New
Stock and thus remain a shareholder of the Company, and to provide remaining
shareholders the opportunity to purchase Returned Shares, and thus, increase
their interest in the Company. The Company intends to become a non-SEC reporting
company once the Reverse Split is successfully completed and as soon as
permitted under applicable state and federal securities laws. Less than all of
the securities offered may be sold, and thus, less than the maximum proceeds may
be obtained. Consequently, the Company has no specific plan for the proceeds,
other than for general corporate working capital purposes.

DETERMINATION OF OFFERING PRICE

The Company is contractually obligated to cause the Reverse Split, the
Round Up Option offering and the Returned Shares Option offering, at $3.35 per
share of Common Stock. Such obligation arose in connection with IMCC's
acquisition of 50.5% of the outstanding shares of the Company's Common Stock and
the settlement of protracted and expensive litigation. For a more detailed
description of the litigation which led to the settlement agreements, and the
history of the contractual obligation see the Section entitled "MATERIAL
HISTORICAL EVENTS/Stock Purchase Agreement -- July 3, 1996 and Change in
Control."

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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The following section of the Prospectus, Management's Discussion and
Analysis of Financial Condition and Results of Operations, contains certain
forward-looking statements that involve substantial risks and uncertainties.
"Expect," "believe" and similar expressions, as they relate to the Company or
its management, are intended to identify such forward-looking statements. The
Company's actual results, performance or achievements could differ materially
from the results, performance or achievements expressed in, or implied by, these
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed in "Risk Factors."

DESCRIPTION OF BUSINESS

(a) Business Development.

Form and Year of Organization

The Company is a Utah corporation, organized in 1966 as Utah Industrial,
Inc. It was renamed Utah Resources International, Inc. in 1969. In 1981, the
Company became a "reporting company" requiring it to file various reports with
the Securities and Exchange Commission. The Company's executive offices are
located at 297 W. Hilton Drive, Suite #4, St. George, Utah 84770.

(b) Business of Company.

URI is a real property development corporation. The Company directly owns
approximately 401 acres of undeveloped land in St. George, Utah, approximately
355 acres of which are developable on which it conducts its real property
development business, primarily through its wholly-owned subsidiary, Tonaquint,
Inc. ("Tonaquint"). Most of the land is near the Southgate golf course. URI also
has interests in partnerships that own and are developing other real property in
St. George. The Company receives revenues from its ownership of overriding
royalty interests in producing oil and gas leases in Utah and Wyoming, dating
from the Company's historic business of acquiring and selling oil, gas and
mineral leases.

The Company's undeveloped real property is adjacent to Interstate Highway
15, a major traffic route from Salt Lake City to Las Vegas and Southern
California. URI's real estate development activities in recent years have
concentrated on subdividing and selling improved lots for residential
construction, as the financial condition of the Company and the St. George, Utah
real estate market have permitted. The Company's lands include premium priced
hillside view lots, as well as lower-priced lots. In addition, the Company
pursues commercial real estate development of some of its undeveloped real
property.

Real Property Development Activities

In 1997, the Company had sales in the amount of $530,553 as compared to
$451,406 in 1996 and $587,663 in 1995. In 1994, the Company sold a total of 17
improved residential building lots in its Southgate Hills Phase II subdivision
generating approximately $800,000 in gross revenues.

In July of 1992, Tonaquint executed a Sale and Option Agreement with Kay H.
Traveler (the "Sale and Option Agreement"), pursuant to which Tonaquint was to
sell 14 acres to Mr. Traveler, for a total purchase price of $350,000 ($25,000
per acre), and grant Mr. Traveler an option to acquire an additional 40 acres at
option exercise prices ranging from $20,000 to $50,000 per acre, exercisable
over five years, so long as minimum option exercises occurred each year. Mr.
Traveler's inspection of the 14 acres disclosed adverse soil conditions,
resulting in the execution of an Addendum to the Sale and Option Agreement by
the parties in March of 1993. Mr. Traveler was granted an option to acquire a
total of 56 acres at prices ranging from $22,000 to $50,000 per acre. The Kay
Traveler Sale and Option Agreement resulted in 1997 sales in the amount of
$317,066. In 1996, the Company sold Mr. Traveler 2.11 acres for the sum of
$106,432 and in 1995 sold Mr. Traveler 3.48 acres for the sum of

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$152,137. As of December 31, 1997, approximately 35.3 acres remain under option
to Mr. Traveler, at prices ranging from $22,000 to $50,000 per acre.

During the latter half of 1994, the Company began its development efforts
for Southgate Phase III, consisting of a total of 37 acres of land above the
Southgate golf course, suitable for residential construction. The land to be
developed is on the hillside directly to the south of the Southgate golf course
and directly to the west of Interstate 15. The sloping topography of the land
requires that the Hillside Ordinance Committee of the St. George Planning and
Zoning Commission approve the Company's planned development of the acreage. The
Company is seeking approval for development of all 37 acres for a total of 79
lots. This approval has taken longer than originally anticipated, due in part to
the restrictions of the hillside ordinance and the increasing political pressure
to restrict real estate development generally in St. George, which has resulted
in an increasing regulatory burden on real estate development. Approval is
expected no earlier than the second quarter of 1998. Thereafter, the Company
anticipates, upon Board approval, excavating, building roads, bringing utilities
to the property, constructing curbs and gutters, and selling the improved lots.

Beginning in late 1994, the Company began planning for the development of
its Southgate Valley subdivision, 125 lots on 32 acres of the Company's property
located west of the Southgate golf course. The Company received approval from
the St. George Planning and Zoning Commission for development of the property.
The Company is considering alternative development opportunities from
residential to commercial, based upon zoning requirements and market need.

Real Property Development, Industry Overview, Government Regulation, and
Competition

The real estate development industry in general and the residential real
estate development industry in particular is a high risk industry, subject to
changes in general economic conditions, fluctuating interest rates, and changing
demand for the types of developments being considered. Volatility in local and
regional land use demands, as well as changing supply and demand for the
specific uses for which the real property is being developed are also factors in
assessing the relative risks of the business. The demand for residential real
estate development is particularly sensitive to changing interest rates and
shifting demographics. Both of these factors affecting the demand for
residential housing are highly unpredictable over both the short and long-term.

Real estate development is a government regulated industry. The regulation
of real estate development is often carried out in an unpredictable fashion,
reflective of both political and rational considerations. Regulation is carried
on by municipal, county, state and federal agencies, but municipal and county
governments have the greatest regulatory impact. The city of St. George, in
which URI operates, has been adopting increasingly restrictive regulations
associated with development activities, including the adoption of more
restrictive building codes and ordinances, greater emphasis on land use
planning, pressure to increase the number of low density residential
developments, and heightened public concern aimed at limiting development as a
means to control growth. Development in some areas close to the Company's lands
may be limited by governmental environmental protection activities. Government
regulation can have an effect on the viability of real estate development by the
Company.

The real property development industry is highly competitive. Several
development companies with interests in St. George have longer operating
histories, greater financial strength and more experience in the industry than
does the Company. The Company's development activities historically have
represented less than 5% of total real estate development activity in the area
in and around St. George, and, in management's view, that percentage is likely
to decrease in the near term given the increase in overall development
activities in the area. The perceived strength of the St. George real estate
market has recently attracted many more developers to the area, increasing the
competition for the Company. The Company has very little debt, which has served
it well in being able to weather the ups and downs in the St. George real estate
market. Management believes that the Company's positive equity to debt ratio
could provide the Company with increased liquidity through improved borrowing
capabilities.

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Partnerships

The consolidated financial statements include the financial statements of
the Company, Tonaquint and a number of limited partnerships of which the Company
has ownership in excess of fifty percent (50%) and has management
responsibility. All material intercompany transactions and balances have been
eliminated in consolidation of the Company and partnerships. The Company is both
a general and limited partner in the following limited partnerships:
Tonaquint-Indian Hills Partnership (75.86%), Service Station Partnership (79%),
Southgate Palms Limited Partnership, (100%), Southgate Plaza Limited Partnership
(52.5%), Southgate Resort Partnership (100%), Country Club Partnership (84.04%),
URI-MGO Partnership (70%), and Resources Limited Partnership (83.63%).

In 1989, The Service Station #2 Limited Partnership replaced its gasoline
underground storage tanks, which the partnership was informed had been leaking.
From November of 1992 through December 31, the partnership has spent
approximately $300,000 on efforts to remediate the soil contamination by
gasoline and other hydrocarbons which is alleged to have occurred from operation
of the service station. The Company has hired consultants and engineers and is
following their recommendations to remediate the property as required by Utah
law and regulations.

Morgan Gas & Oil Co., a limited partner of the Service Station Limited
Partnership #2, claims that the Company is indebted to it in the amount of
$124,340.69, which amount and the basis for said amount the Company disputes.
The Company is performing an internal audit to verify the legitimacy of the
claim and its proper characterization, before it determines whether to
acknowledge and pay the claim.

Overriding Royalties in Oil and Gas Leases

URI has overriding royalty interests in oil and gas properties held by
various other parties. All revenues from the Company's interests in the
properties have been received in cash. In 1997, the Company received royalties
in the amount of $176,572. The Company received royalties in the amount of
$153,051 in 1996 as compared to royalties in the amount of $61,006 in 1995. URI
has not engaged in the acquisition and sale of oil and gas leases for many years
and has no intention of doing so in the future, nor does it have facilities or
means to perform the exploration, development and operation of oil and gas wells
on properties in which it has interests. Mineral or oil and gas exploration and
development is undertaken by third parties. If production is realized on any
properties in which URI has an interest, it receives a share of gross production
revenues based upon the percentage overriding royalty interest it has retained.

Employees

In 1997, the Company employed three full-time employees and no part-time
employees. Pursuant to the Stock Purchase Agreement, the Company and John Fife
entered into an employment agreement dated as of February 27, 1998, but
commencing as of July 13, 1996 which provided for the employment of Mr. Fife as
President and CEO of the Company with an annual salary of $195,000. URI and its
subsidiary currently employ Gerry Brown on a full-time basis, to act as the Vice
President of the Company, where he provides real estate planning, development
and sales services for the Company, Tonaquint, Inc., the Company's wholly-owned
subsidiary, and various affiliated partnerships. Mr. Brown is currently the
President of Tonaquint, Inc., where he assists in land use planning, negotiating
sales and financing arrangements, obtaining government approvals, arranging for
construction contracts, and supervising the performance of engineering services
as have been required. The Company executed and presented Mr. Brown with a three
year employment agreement on June 28, 1995, which employment agreement remains
unexecuted by Mr. Brown. Ladd Worth Eldredge is employed by the Company as its
secretary, Treasurer, CFO and office manager. No employees are party to a
collective bargaining agreement with URI.

DESCRIPTION OF PROPERTY

St. George Properties Industry Segment #6552

For a description of the St. George property, see the section entitled
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS/Description of Business/

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(b) Business of Company." The Company intends to develop its property, primarily
through subdividing and selling improved lots for residential construction,
although sales of undeveloped parcels to other developers are also occurring.

Oil & Gas Interests Industry Segment #1311

The Company has overriding royalty interests in oil and gas wells producing
primarily in the Unitah Basin, Unitah County, Utah, and Sublette County,
Wyoming. URI owns overriding royalty interests from .025 of 1% to 3% of
production.

URI was not the original lessee on several of the oil and gas property
leases. The original lessees were affiliates of, or related parties to, the
Company. As to those lessees, the Company's royalty interest was obtained by
assignment from the original lessees. In some cases, the assignments have not
been recorded. As to some royalty interests, the precise acreage held by the
Company cannot be determined without unreasonable effort and expense. The
Company obtained a reserve report on certain of these properties dated as of
December 31, 1996.

Many oil, gas and hydrocarbon leases issued by the State of Utah or the
United States are issued for definite periods of time, often from five to ten
years. If, at the end of the lease period, production has been realized and is
continuing on the property subject to the lease, the term of the lease continues
for the period of commercial production. Thus, the continuing interest of URI in
state and federal leases is dependent upon the ability of the third party
operators to develop significant production on the properties subject to those
leases. The expense of compliance with environmental regulations on lands in
which the Company may have overriding royalty interests is not borne by the
Company.

Through its wholly-owned subsidiary, New Mercur Gold Exploration, Inc., the
Company holds a 50% joint interest in ten patented lode mining claims covering
approximately 137 acres in Tooele County, Utah. The claims have been leased to
Barrick Mercur Gold Mines for a nominal amount. There is presently no production
on the properties. Development of the Company's mineral properties may be
affected by federal and state regulation relating to the protection of the
environment. Such regulation may prevent the development of properties owned by
the Company, or those in which it retains an overriding royalty interest.

Office Space

URI leases an office for its headquarters at 297 W. Hilton Drive, Suite #4,
St. George, Utah. John Fife, President and CEO of the Company, maintains his
office at 360 E. Randolph Street, Suite 2402, Chicago, Illinois 60601, where he
carries out the business of the Company. To date, the Company has not reimbursed
Mr. Fife for the cost of the office space and related administrative costs
incurred on behalf of the Company and these costs have not been accrued by the
Company.

MATERIAL HISTORICAL EVENTS

Stock Purchase Agreement -- July 3, 1996 and Change in Control

On April 5, 1996, Inter-Mountain Capital Corporation, a Delaware
corporation wholly owned by John Fife ("IMCC"), entered into a Letter of Intent
with the Company (the "Letter of Intent"), whereby IMCC agreed, if certain
conditions were met, to purchase a 51% interest in the Company at a purchase
price of $3.35 per share. One of the conditions for consummating the transaction
contemplated by the Letter of Intent was the spin-off of Midwest Railroad
Construction and Maintenance Corporation of Wyoming ("Midwest"). Pursuant to the
Letter of Intent, IMCC agreed to pay 10% of the purchase price at closing with
the remaining 90% owing to be evidenced by a five year interest bearing
promissory note. The Letter of Intent also provided that the Company grant IMCC
a ten year option to purchase an additional 150,000 or more shares of URI's
stock, so that IMCC, at all times would have the right to own a 51% interest in
the Company. The Letter of Intent also provided that subsequent to the closing
and subject to financing and other conditions, the Company would cause either a:
(i) 12,500 to 1 share reverse split of the Company's stock, at $3.35 per share,
with fractional shareholders given the option to round-up and maintain their
shareholder status; or (ii) tender offer for its shares at $3.35 per share
subject to certain payment options. Under the terms of the Letter of Intent, the
Company agreed to indemnify

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IMCC and its shareholders and directors from and against any liability to the
Company's shareholders, officers and/or directors arising out of IMCC's
negotiation, execution and/or consummation of the Letter of Intent, the Stock
Purchase Agreement, as defined herein, and the transactions contemplated by the
Letter of Intent. Furthermore, IMCC agreed to take all actions necessary to
cause the Company to honor the Company's obligations to indemnify its officers
and directors to the fullest extent permitted by law, including, but not limited
to, the advancement of their legal fees and costs in connection with all present
and future litigation involving them in their capacities as officers and
directors of the Company. The Company entered into the Letter of Intent on April
5, 1996, over the objections of Mark G. Jones and Jenny Morgan, being two
directors of the Company at the time. On April 16, 1996, IMCC filed its Schedule
13D informing the Company's shareholders of its intent to engage in the two step
transaction consisting of the acquisition of a majority interest and conducting
a reverse stock split or a tender offer. It also gave notice of IMCC's intent to
cause a class of securities of the Company to be delisted from a national
securities exchange or cause a class of securities to cease to be authorized to
be quoted in an inter-dealer quotation system of a registered national
securities association, pursuant to Section 12(g)(4) of the Securities Exchange
Act of 1934.

On May 17, 1996, Mark G. Jones, a shareholder and director of the Company
at the time and controlling shareholder of Mark Technologies Corporation, a
greater than 10% shareholder of the Company, brought a shareholders derivative
suit captioned as Mark Technologies Corp., et al. v. Utah Resources
International, Inc. et al., which was filed as Civil No. 96-090-3332CV in the
Third Judicial Court of Salt Lake County, Utah (the "Second State Action")
against the Company, E. Jay Sheen, R. Dee Erickson and Lyle Hurd, then directors
of the Company and IMCC. The Second State Action, included, among other things,
a request for the issuance of a temporary restraining order and injunction
against the transactions contemplated in the Letter of Intent.

On or about June 26, 1996, the Company entered into two settlement
agreements. The first settlement agreement was by and among the Company, John H.
Morgan, Jr., Daisy R. Morgan, IMCC, John Fife, Robinson & Sheen, L.L.C., R. Dee
Erickson, Lyle D. Hurd, and E. Jay Sheen (the "Morgan Settlement Agreement"),
whereby certain disputes among the parties were resolved and settled and the
parties agreed to use their best efforts to terminate the 1993 Settlement
Agreement. The "1993 Settlement Agreement" was the result of the settlement of a
shareholders' derivative action captioned as Ernest Muth, et al. v. John H.
Morgan, Jr. et al., which was filed as Civil Number C-87-1632 in the Third
Judicial District Court of Salt Lake County, Utah (the "First State Action"),
where plaintiffs therein alleged, among other things, that the officers and
directors of the Company committed various breaches of their fiduciary duties to
the Company. A settlement agreement in the First State Action was entered on
April 6, 1993 (the "1993 Settlement Agreement"). On or about July 21, 1995,
attorneys for the Company, on behalf of the Company, filed an action against
John H. Morgan, Jr., and Daisy R. Morgan, directors of the Company at the time,
to enforce the 1993 Settlement Agreement in the First State Action which
resulted in certain findings of fact and conclusions of law and an order
enforcing the 1993 Settlement Agreement entered by Judge Michael R. Murphy on
October 4, 1995 (the "Murphy Order"). The Murphy Order was appealed by John H.
Morgan, Jr. and Daisy R. Morgan and cross-appealed by the Company. An Order to
Show Cause was subsequently filed in the First State Action on behalf of the
Company by attorneys for the Company against John H. Morgan, Jr., Daisy R.
Morgan, Mark G. Jones and others (the "Order to Show Cause"). The second
settlement agreement was by and among the Company, R. Dee Erickson, E. Jay
Sheen, Lyle D. Hurd, Mark G. Jones, Mark Technologies Corporation, Anne Morgan,
Victoria Morgan, IMCC, John Fife and Robinson & Sheen, L.L.C. (the "1996
Settlement Agreement"), whereby the parties, among other things, agreed to
dismiss the Second State Action and to use their best efforts to terminate the
1993 Settlement Agreement and to settle certain other litigation. For a more
detailed description of the Company's legal proceedings, see the section
entitled "Legal Proceedings." In addition, the 1996 Settlement Agreement amended
certain provisions of the Letter of Intent including, the elimination of the
option that IMCC would cause the Company to initiate a tender offer for its
shares and the reduction in the reverse split from 12,500 shares to 1 to 1,000
shares to 1 and an increase in the IMCC payment at closing from 10% of the
purchase price to 15% of the purchase price. On or about August 9, 1996, a
Motion to Intervene was filed by shareholders Jenny T. Morgan (a director of the
Company at the time), Gerard E. Morgan, John C. Morgan and Karen J. Morgan
(together the "Objectors"). On August 22, 1996, the court denied the Objector's
petition. The 1996 Settlement Agreement and the Morgan Settlement Agreement were
approved by the Third Judicial District Court of Salt Lake County, West Valley
Department of Utah, on or about August 23, 1996. The First Federal Action and
the Second State Action
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were dismissed with prejudice on August 28, 1996. The Order to Show Cause was
dismissed with prejudice and the 1993 Settlement Agreement was terminated on
August 29, 1996.

On July 3, 1996, pursuant to the Letter of Intent and the 1996 Settlement
Agreement, the Company and IMCC entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement"), whereby the Company issued and sold 1,275,912
shares (the "Purchased Shares") of its common, $.10 par value per share stock
(the "Common Stock") to IMCC, so that IMCC owned a 50.5% interest in the
Company. IMCC acquired the Purchased Shares at a price equal to $3.35 per share
for an aggregate purchase price of $4,274,305.20 (the "Purchase Price"), of
which $641,145.78 was paid in cash by IMCC to the Company at the closing. The
remaining portion of the purchase price of $3,633,159.42 was evidenced by IMCC's
promissory note (the "Note"). The Note bears interest at a rate equal to the
short-term applicable federal rate published by the Internal Revenue Service in
effect at the time of closing, and is adjusted on each anniversary of the Note
to the applicable short-term federal rate in effect on such anniversary date.
Interest on the Note is to be paid currently in arrears on each anniversary of
the Note. At the closing, IMCC paid $197,872.52 to the Company, which amount
represented the present value first year of interest due under the Note. The
principal and any unpaid interest accrued under the Note is due and payable
August 1, 2001. The Note is secured by the Purchased Shares as evidenced by a
stock pledge agreement, dated as of July 3, 1996, by and between IMCC and the
Company (the "Stock Pledge Agreement"). Pursuant to a separate written guaranty
agreement, John Fife personally guaranteed payment of 25% of all amounts due
under the Note from time to time.

As required by the Stock Purchase Agreement, E. Jay Sheen and R. Dee
Erickson, submitted their resignations as directors of the Company, effective
July 13, 1996. As further required by the Stock Purchase Agreement, John Fife
was appointed a director of the Company. David Fife, the brother of John Fife,
was also appointed as a director of the Company. John Fife and David Fife were
appointed directors of the Company as part of the Muth Group pursuant to the
1993 Settlement Agreement, effective July 13, 1996. As required by the Stock
Purchase Agreement, John Fife was elected President and Chief Executive Officer
of the Company in July, 1996 pursuant to a 3-0 vote of the Board (Mark G. Jones
and Jenny Morgan were not present for the vote). John Fife and David Fife have
since been elected directors of the Company by a majority vote of the
shareholders at the annual meeting, held December 11, 1997.

The Stock Purchase Agreement contemplated that subject to applicable state
and federal securities and state corporate law, the Company would cause a 1,000
to 1 share reverse split of the Company's stock to the shareholders of record at
$3.35 per share (the "Reverse Split"), with fractional shareholders given the
option to either purchase additional fractional shares to round up to one whole
share following the Reverse Split or sell their fractional shares for cash to
the Company. IMCC was granted a ten year option to purchase 150,000 or more
additional shares of stock at a purchase price equal to $3.35 per share and on
the same terms and conditions as those provided under the Stock Purchase
Agreement, so that after the Reverse Split IMCC may maintain its 50.5% majority
interest in the Company. Subsequent to the Reverse Split and subject to
applicable state and federal securities and state corporate law, any Company
shares redeemed by the Company pursuant to the Reverse Split (the "Returned
Shares") may be acquired by the remaining shareholders, other than IMCC or its
affiliates, as of a record date five days prior to the effectuation of the
Reverse Split (the "Returned Shares Record Date"), in increments of 1,000 shares
(the "Returned Shares Option"), at a purchase price equal to the pre-
Reverse-Split price of $3.35 per share (the "Returned Shares Purchase Price").
Only those shares for which the Company has received, within 80 days following
the Effective Date, a fully and properly executed letter of transmittal,
accompanied by the required documents, will qualify as Returned Shares for the
purposes of this Returned Shares Option. Such Common Stock shall be purchased in
blocks of 1,000 shares of Common Stock such that each purchase of a 1,000 share
block of Common Stock shall be converted into one (1) share of common $100.00
par value per share stock of the Company (the "New Stock"). In the event the
Returned Shares Option is over-subscribed, then each of the exercising
shareholders may purchase the Returned Shares on a pro-rata basis (as determined
by the number of shares held by each of the exercising shareholders as of the
Returned Shares Record Date less those shares held by IMCC), but in no event in
less than 1,000 share blocks. In the event of such over-subscription, each
qualified shareholder could elect to purchase that percentage of Returned Shares
equal to x/(y-z) where "x" equals the number of New Stock shares owned by the
qualified shareholder wishing to purchase the Returned Shares, "y" equals the
total number of issued shares of New Stock, and "z" equals the

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number of issued shares of New Stock owned by IMCC. Twenty-five percent (25%) of
the Returned Shares Purchase Price shall be payable in cash upon exercise, with
the remaining balance of $2.51 per share being evidenced by a note (the
"Returned Shares Note"), payable in three (3) years. Subject to applicable
Internal Revenue Service rules, the Returned Shares Note shall bear simple
interest at the short term applicable federal rate as stated in June, 1996,
which interest shall be payable annually in arrears. Payment of the Returned
Shares Note will be secured by a pledge of the Returned Shares purchased, as
converted into share(s) of New Stock, pursuant to a stock pledge agreement to be
provided by the Company. Exercising shareholders purchasing Returned Shares
shall be required to apply any dividends, distributions or other payments made
to the shareholder of the Company on the Returned Shares/New Stock to payment of
the unpaid balance of the Returned Shares Note. Returned Shares, as converted
into New Stock, purchased by an exercising shareholder shall be fully votable in
accordance with the terms of the Company's organizational documents and other
agreements binding the Company for so long as the exercising shareholder is not
in default under the pledge agreement or the Returned Shares Note.

As a result of the Reverse Split, the Company is expected to become a
non-SEC-reporting company. A company with assets of over $10 million becomes a
"reporting company" when its shareholders number 500 or more and it complies
with applicable securities laws. To thereafter be allowed to become a
"non-SEC-reporting company" and cease reporting to the Securities and Exchange
Commission, among other things, the number of shareholders must decline to less
than 300 and the corporation must comply with applicable securities laws. Of the
approximately 558 shareholders, approximately 479 shareholders of record own
fewer than 1,000 shares, leaving approximately 79 shareholders post Reverse
Split if none of these shareholders exercise their option to round up.

Share Exchange Agreement

On June 13, 1995, the Company consummated the exchange of 590,000 shares of
its common stock, representing approximately 33% of the total issued and
outstanding shares of the Company's common stock following the transaction, in
return for receipt of all of the issued and outstanding stock of Midwest
Railroad Construction and Maintenance Corporation of Wyoming ("Midwest")
pursuant to a Plan of Share Exchange and Share Exchange Agreement, dated
February 16, 1995 by and among the Company, Midwest, Robert D. Wolff ("RD
Wolff") and Judith J. Wolff ("JJ Wolff") (the "Share Exchange Agreement"). The
Share Exchange Agreement was approved by a 3-2 vote of the Board. Directors John
H. Morgan, Jr., and Daisy R. Morgan voted against the Share Exchange Agreement.
All of the common stock of Midwest was owned by RD Wolff and JJ Wolff. The Share
Exchange Agreement was accomplished as a tax free reorganization pursuant to
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the
"Code"). Midwest, headquartered in Salt Lake City, Utah, is in the railroad
construction and maintenance business, operating out of five regional offices
located in Utah, Wyoming, Colorado, Nebraska and New Mexico. Midwest also
provides railroad engineering, surveying, bridge and structural maintenance,
grade crossing and in-plant switching services. Pursuant to the terms of the
Share Exchange Agreement, the Company agreed to: (i) indemnify Midwest and the
Wolffs from any liability to the Company's shareholders, its officers or
directors, whether brought directly by the person or in a derivative capacity
arising from Midwest's or the Wolffs' negotiation, execution, or consummation of
the Share Exchange Agreement; (ii) execute a three year employment agreement
between RD Wolff and the Company, whereby RD Wolff would act as the President of
Midwest; (iii) apply for a listing of its stock on the NASDAQ; and (iv) lend
Midwest, in the form of a line of credit, a sum not to exceed $250,000, with the
first draw available after February 15, 1995, evidenced by a promissory note in
standard form, bearing an interest rate of 1% over the posted prime lending rate
at First Security Bank of Utah, N.A., as of February 15, 1995, and adjusted each
three months thereafter. Prior to the closing of the Share Exchange Agreement,
Midwest borrowed a total of $100,000 against the line of credit. Pursuant to the
terms and conditions of the Share Exchange Agreement, the line of credit from
the Company became subordinate to Midwest's existing credit line of $350,000.
The line of credit was secured by the assets and equipment of Midwest. The
Company entered into an employment agreement with RD Wolff, dated as of June 13,
1995 (the "Wolff Employment Agreement"), and an operating agreement between
Midwest and RD Wolff, dated as of June 13, 1995 (the "Operating Agreement").
Pursuant to the Wolff Employment Agreement, RD Wolff was to serve as CEO of the
Company and Midwest, and RD Wolff was to receive $125,000 per year in
compensation during the term of the Wolff Employment
14
<PAGE> 17

Agreement. Furthermore, during the first five quarters of the Wolff Employment
Agreement, beginning July 1, 1995, RD Wolff was to receive $25,000 in additional
compensation per quarter. In addition to his base salary, RD Wolff was to
receive an annual bonus computed on the after tax net earnings of Midwest, as
follows: (a) 5% of the first $200,000 in net earnings of Midwest, (b) 7% of the
next $200,000, and (c) 10% of all amounts over the first $400,000 in net
earnings of Midwest. RD Wolff was also entitled to participate in the Company's
health and benefit plans. Pursuant to the terms of the Operating Agreement and
for services performed in connection with the consummation of the Share Exchange
Agreement, the Company paid as compensation to each of R. Dee Erickson and E.
Jay Sheen, both of whom were directors of the Company at the time of the
execution of the Share Exchange Agreement, 38,000 shares each of the Company's
Common Stock and $104,000 in cash.

On July 18, 1995, Anne Morgan and Victoria Morgan, shareholders of the
Company at the time and the adult daughters of John H. Morgan, Jr. ("JH Morgan")
and Daisy R. Morgan ("DR Morgan"), both former directors and shareholders of the
Company, filed a shareholders derivative action against R. Dee Erickson
("Erickson"), E. Jay Sheen ("Sheen"), Lyle D. Hurd ("Hurd") (Messrs. Erickson,
Sheen and Hurd were three of the five directors of the Company at the time the
suit was filed, with JH Morgan and DR Morgan being the remaining two directors),
the Company, Midwest, RD Wolff and JJ Wolff, in the United States District Court
for the Central District of Utah, Case Number 2:95CV661J, captioned as Anne
Morgan et al. v. R. Dee Erickson, et al. (the "First Federal Action"). The
complainants alleged, among other things, that the defendants had violated proxy
solicitation rules, violated disclosure rules under the Exchange Act of 1934,
breached their fiduciary duties to the Company's shareholders, breached
professional duties, committed fraud, wasted and looted the Company's assets,
converted Company property, engaged in self-dealing, mismanaged the Company and
breached their duty of loyalty. The complaint sought, among other things, the
rescission of the Share Exchange Agreement.

The terms of the Letter of Intent between IMCC and the Company required
that the Company rescind the Share Exchange Agreement. For the foregoing reason,
Midwest and the Company entered into a Splitoff Agreement, dated as of April 25,
1996 (the "Splitoff Agreement"), whereby the Share Exchange Agreement was
rescinded. Pursuant to the terms of the Splitoff Agreement, URI transferred all
of the outstanding shares of Midwest stock held by the Company to the Wolffs in
exchange for the 590,000 shares of URI stock then held by the Wolffs, which
transfer was accomplished tax free in accordance with Section 355 of the Code.
Furthermore, the Share Exchange Agreement, the Wolff Employment Agreement and
the Operating Agreement were canceled. RD Wolff ceased to be the President of
URI. Midwest received a net intercompany transfer of approximately $316,974
through March 31, 1996, which Midwest retained. Furthermore, the parties to the
Splitoff Agreement agreed that in the event intercompany transfers for the
period from July 1, 1995 through March 31, 1996 were: (i) less than $316,974,
then URI would pay Midwest the difference; or (ii) more than $316,974, then
Midwest would pay URI the difference. Based upon its own review, the Company
believes that Midwest owes the Company $2,305 in excess intercompany transfers
and $7,445 for Midwest's portion of Ladd Worth Eldredge's employment
compensation pursuant to the terms of an agreement by and between Midwest and
the Company, dated July 24, 1996, and which agreement is no longer in effect.

Pursuant to the Splitoff Agreement, URI agreed to indemnify Midwest and the
Wolffs and their respective agents, employees, attorneys, officers, directors
and assigns from any and all claims, causes of action, liabilities, damages,
costs, expenses and attorneys' fees arising from or relating in any way to URI
or the Share Exchange Agreement. This indemnification provision would not apply
to acts of fraud, gross negligence or willful misconduct by RD Wolff. The Wolffs
and Midwest agreed to indemnify URI and its respective agents, employees,
attorneys, officers, directors, successors and assigns from any and all claims,
causes of action, liabilities and damages arising from or relating in any way to
the Splitoff Agreement, which indemnification obligation is limited to $312,000.
Within 30 days from the date of execution of the Splitoff Agreement, the
Company's accountants were to calculate the federal, state and local income
taxes attributable to Midwest's business operations (excluding any impact of
salary payable or paid to RD Wolff or any intercompany charges to the Company
for rent, overhead and administrative expenses) for the period commencing June
1, 1995 and terminating on December 31, 1995. Such taxes were to be determined
on the basis as if the Company and Midwest were not filing a consolidated tax
return for the same period or part thereof (whether or not a consolidated return
is filed). The amount of such taxes is to be considered an intercompany
receivable between

15
<PAGE> 18

the Company and Midwest. Pursuant to the terms of the Splitoff Agreement,
Midwest agreed to pay such tax amount to the Company in 12 installments.
Simultaneous with the execution of the Splitoff Agreement, Midwest paid the
Company the sum of $10,000 as an initial tax payment. The balance due the
Company is to be paid in 11 additional equal monthly installments, with each
such installment due on the first day of each month until all 11 installments
have been paid in full. The first of the 11 monthly installments is due and
payable on the first day of the month following the determination of the taxes
owed by Midwest to the Company. The Company's accountants have determined that
Midwest owes the Company $45,469 in taxes, of which $35,469 remains due. Midwest
also owes the Company the additional amount of $54,184.61 related to Ladd
Eldredge's salary, audit and other expenses. For 1995 reporting purposes,
Midwest's operations were classified as discontinued operations, with a net
income of approximately $93,000 from operations and a net loss on disposal of
discontinued items of approximately $684,000 to the Company. For 1996 reporting
purposes, Midwest's operations were classified as discontinued operations, with
a net loss of approximately $19,000 from operations and a net income on disposal
of discontinued items of approximately $93,000 to the Company.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock is listed on the OTC Bulletin Board through the
Automated Quotation System, under the symbol "UTRS." The following table sets
forth the closing bid prices for 1996 and for 1997 for the Company's Common
Stock, as reported by National Quotation Bureau, Inc. The quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission, and do not
represent actual transactions and have not been adjusted for stock dividends or
splits.

<TABLE>
<CAPTION>
1997 1996
------------- -------------
LOW HIGH LOW HIGH
----- ----- ----- -----
<S> <C> <C> <C> <C>
1st quarter....................................... $.875 $.875 $.625 $1.00
2nd quarter....................................... $.875 $.875 $ .75 $1.50
3rd quarter....................................... $.875 $.875 $.875 $1.00
4th quarter....................................... $ .25 $.875 $.875 $.875
</TABLE>

Except for certain transactions including: (i) the Splitoff Agreement by
and between Midwest and the Company, wherein the Company returned its Midwest
shares to RD Wolff and JJ Wolff in exchange for the 590,000 shares of the
Company's stock held by the Wolffs; (ii) the 1996 Settlement Agreement, wherein
the Company redeemed 22,950 shares of Anne Morgan's URI stock and 17,602 shares
of Victoria Morgan's URI stock, in cash, at $3.35 per share; and (iii) the
conclusion of the exchange of 10.6 acres of land and 34,150 shares of C.E.C.
Industries Corporation stock for 103,488 shares of the Company's stock, the
Company has made no repurchases of its stock during fiscal years 1995, 1996 and
1997. The Company did declare a $.10 cash dividend which was paid January 26,
1995, to shareholders of record January 12, 1995. A decision to pay dividends in
the future will depend upon the Company's profitability, need for liquidity and
other financial considerations. There are approximately 558 shareholders of
record of the 2,522,808 outstanding shares of the Company's Common Stock.
Approximately 479 shareholders hold less than 1,000 shares of the Company's
Common Stock.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

In 1997, the Company had sales in the amount of $530,553. The Company had
sales of $451,406 in 1996 as compared with sales of $587,663 in 1995. Income on
royalties from production under oil and gas and mineral leases amounted to
$176,572 in 1997 as compared to $153,051 in 1996, $61,006 in 1995 and $92,455 in
1994. The increase in royalties income is due to expanded production.

Cost of land sold was $207,691 in 1997 as compared to $139,175 in 1996 and
$156,250. General and administrative expenses were $1,220,040 in 1997 which is
down from 1,530,288 in 1996. General and administrative expenses were $484,434
in 1995. A significant portion of general and administrative expenses in 1996
and 1997 were legal fees and expenses incurred on behalf of the Company. The
significant general and administrative expenses in 1996 and 1997 were due in
large part to litigation and payment of legal fees incident to

16
<PAGE> 19

the settlement of litigation involving the Company. Furthermore, from July of
1996 through the present, the Company has been engaged in activities to: (i)
bring the Company into compliance with various state and federal securities
laws; and (ii) hold an annual meeting for shareholders; as well as preparing
documents and filings for the SEC with respect to the Reverse Split, the
Round-Up Option offering and the Returned Shares Option offering described
herein. The Company anticipates that once the reverse stock split is completed
and the Company ceases to be an SEC reporting company, the Company's future
legal fees and other administrative expenses will decrease significantly.

LIQUIDITY AND CAPITAL RESOURCES

Cash requirements of URI are met by funds provided from operations
consisting of: (a) the sale of improved lots and undeveloped property; (b)
royalty income; (c) interest income earned on money held in interest bearing
accounts; (d) from proceeds from the sale of its Common Stock; and (e) interest
earned on the IMCC Note.

The Company presently anticipates that cash on hand, cash from land sales
and royalties will be the primary sources for future additional liquidity for
the Company.

From January, 1995, through July, 1996, litigation expenses imposed a
significant drain on the Company's liquidity. The litigation which occasioned
such expenses has been terminated by settlement, and management expects future
legal fees will decrease dramatically.

The Company also expects to be required to expend funds for the cleanup of
gasoline which has apparently leaked from tanks owned by the Service Station
Partnership, which have been replaced. Engineering estimates of total cleanup
costs are not determinable due to uncertainties with respect to state compliance
requirements and the, as yet, unknown extent of the contamination. In 1997,
approximately $71,214 was expended toward this clean-up operation and
approximately $300,000 has been expended by the Company to date.

It is anticipated that the Company's need for cash in excess of its present
resources will be met through revenues from the sale of real estate and oil and
gas royalties and through real estate secured borrowings. No firm financing
commitment has been obtained for the purpose of completing the 1,000 to 1
reverse stock split. The Company does not have backup lines of credit.

URI has no plans for major capital expenditures beyond the cost of
improving portions of its real property.

The Company's business is influenced by interest rates, inflation and
market demands. Its royalty income from oil and gas interests is affected by
fluctuations in the price of oil and the related decisions to drill new wells
and the rates at which wells are pumped. The Company has no control over the oil
and gas field operations.

As of July 3, 1996, the Company holds a promissory note from IMCC in the
original principal amount of $3,633,159 (the "Note"). The Note bears interest at
a rate equal to the short-term applicable federal rate published by the Internal
Revenue Service in effect at the time of closing the Stock Purchase Agreement,
and is adjusted on each anniversary of the Note to the applicable short-term
federal rate in effect on such anniversary date. Interest on the Note is to be
paid currently in arrears on each anniversary of the Note. At the closing, IMCC
paid the Company $197,872.52, which amount represented the present value first
year of interest due under the Note. The principal and any unpaid interest
accrued under the Note is due and payable August 1, 2001. The Note is secured by
the 1,275,912 shares purchased by IMCC as evidenced by a stock pledge agreement,
dated as of July 3, 1996 between IMCC and the Company (the "Stock Pledge
Agreement"). Pursuant to a separate written guaranty agreement, John Fife
personally guaranteed payment of 25% of all amounts due under the Note.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

Tanner + Co. of Salt Lake City, Utah has been the independent public
accountant for the Company's December 31, 1995, 1996 and 1997 financial
statements.

During the Company's two most recent fiscal years and the interim period
thereafter, there were no disagreements between the Company and Tanner + Co. on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure that, if not resolved to the
satisfaction of Tanner

17
<PAGE> 20

+ Co., would have caused Tanner + Co. to make a reference to the subject matter
of the disagreement in connection with its reports on the Company's financial
statements.

The Company currently engages the independent public accounting firm of
Tanner + Co.

CURRENT DIRECTORS

The following tables set forth the name, age and occupation of each
director currently holding office until the next annual meeting of shareholders,
his principal position with the Company and the year he became a director of the
Company.

CURRENT DIRECTORS

<TABLE>
<CAPTION>
NAME, AGE AND PRINCIPAL
OCCUPATION DIRECTOR SINCE
----------------------- --------------
<S> <C> <C>
JOHN FIFE, 37.................. Mr. Fife was appointed a director of the Company July, 1996
effective July 13, 1996 by the Muth Group
pursuant to the 1993 Settlement Agreement. Mr.
Fife was appointed President and Chief Executive
Officer of the Company in July, 1996. He was
named Chairman of the Board of the Company on
October 10, 1996. He is an investor and venture
capitalist and has pursued this course since
July 10, 1990. Mr. Fife has been the President
and sole shareholder of J.F. Venture, Inc. since
1993 and IMCC since 1996, both of which are
investment companies. IMCC acquired a 50.5%
(majority interest) in the Company on July 3,
1996. He has also served as President of
Property Tax Assessor Records Corp., a
Chicago-based real estate tax consulting company
since 1993. Mr. Fife has also served as director
of Hyatt Research Corporation, a magazine
publisher in Middlebury, Vermont since 1995 and
as a Manager of Trans-Wasatch Company, L.L.C.
from 1993 to 1996, which was a land development
company in Park City, Utah. From 1990 through
1992, Mr. Fife held the position of Assistant
Vice President of Continental Equity Capital
Corp. ("CECC"), a subsidiary of Continental
Bank. At CECC, he negotiated, structured and
financed LBO's and later stage venture capital
investments in the mortgage banking, retail,
cable and cellular telephone industries. In
1989, Mr. Fife worked as a financial analyst in
the commercial real estate department of
Trammell Crow Company. Mr. Fife earned his
M.B.A. degree from Harvard University in 1990
and his B.S. in statistics and computer science
from Brigham Young University in 1986. John Fife
and David Fife are brothers.
</TABLE>

18
<PAGE> 21

<TABLE>
<CAPTION>
NAME, AGE AND PRINCIPAL
OCCUPATION DIRECTOR SINCE
----------------------- --------------
<S> <C> <C>
DAVID FIFE, 35................. David Fife was appointed a director of the July, 1996
Company on July 3, 1996 by the Muth group
pursuant to the terms of the 1993 Settlement
Agreement. Mr. Fife has served as the President
and sole beneficial owner of Home Equity Lending
L.L.C., a mortgage origination and finance
company located in Salt Lake City, Utah, from
1996 to the present. From 1990 to 1993, Mr. Fife
was the President of Property Tax Assessor
Records Corp. From 1993 to 1995, Mr. Fife
provided consulting services for Property Tax
Assessor Records Corp., a Chicago based real
estate tax consulting company. David Fife and
John Fife are brothers.
LYLE D. HURD, 60............... Mr. Hurd is a director of the Company and has May, 1993
performed services as Marketing/Consultant
Assistant to the President. He is President of
Hurd Owens Hafen, Inc., a publisher of magazines
and periodicals located in St. George, Utah,
since December of 1990. Hurd Owens Hafen, Inc.
is the publisher of the St. George Magazine and
various other magazines and periodicals. For
approximately 16 years prior to December, 1990,
Mr. Hurd provided marketing consulting services
to magazine publishers through Hurd &
Associates, Inc., a privately owned consulting
firm. Mr. Hurd was appointed as an independent
director of the Company in May, 1993, pursuant
to the terms of the 1993 Settlement Agreement.
STUART B. PETERSON, 36......... Mr. Peterson has served as a director for C.R. December, 1997
England, Inc., a Two Hundred Million Dollar,
privately owned trucking company based in Salt
Lake City, where he sets the prices for customer
contracts and is responsible for the profitable
execution of sales and operating activities from
1995 to the present. Mr. Peterson worked for
Powder River, Inc., from 1993 through 1994,
where he directed sales, marketing and
distributions. Mr. Peterson's background
includes real estate investment banking
experience with Trammell Crow Company, where he
participated in the securitization and sales of
extensive commercial real estate properties held
by Trammell Crow partnerships throughout the
United States. After completing the sale of a
One Hundred Sixty Million Dollar commercial real
estate portfolio, Mr. Peterson supervised the
properties, and issued the quarterly financial
reports to investors. Mr. Peterson has also
performed the valuation and marketing of a Four
Million Dollar manufacturing company based in
California, cumulating in a leveraged
acquisition in 1994. Mr. Peterson received his
M.B.A. degree from Harvard University in 1990
and his A.B. in government from Harvard in 1986.
</TABLE>

19
<PAGE> 22

<TABLE>
<CAPTION>
NAME, AGE AND PRINCIPAL
OCCUPATION DIRECTOR SINCE
----------------------- --------------
<S> <C> <C>
GREGORY WHITE, 34.............. Mr. White has served as a consultant for December, 1997
Shorebank Corporation from 1995 through the
present, where he provided consulting services
to emerging entrepreneurs to expand their
business and evaluated equity and subordinated
debt deals, structured investments, performed
management due diligence, designed and prepared
management reports, and worked intensively with
portfolio companies to maximize performance. Mr.
White acted as a fixed income salesman for
Salomon Brothers from 1993 through 1995, where
he sold a variety of fixed income securities to
institutional clients. From 1990 to 1993, Mr.
White acted as an account officer for
Continental Bank. From 1986 to 1988 he acted as
an associate research analyst for The Rouse
Company and from 1985 to 1986, he was an
assistant field officer for The Enterprise
Foundation. Mr. White earned his M.B.A. degree
from Harvard University in 1990 and his B.A.
with honors at Brown University in 1985.
</TABLE>

NAMED EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
NAME POSITION AGE
---- -------- ---
<S> <C> <C>
JOHN FIFE...................... Chairman of the Board, CEO, President and Director 37
</TABLE>

EXECUTIVE OFFICERS

JOHN FIFE, see description above.

GERRY T. BROWN, 56, was appointed Vice President of the Company July 3,
1996. He served as President of the Company from June 19, 1993 to July 3, 1996.
Mr. Brown has been employed by the Company or its affiliates and related parties
since March, 1985. He has provided real estate planning, development and sales
services for the Company, Tonaquint, Inc., the Company's wholly-owned
subsidiary, and various affiliated partnerships. Mr. Brown is currently the
President of Tonaquint, Inc. Mr. Brown has assisted in land use planning,
negotiating sales and financing arrangements, obtaining government approvals,
arranging for construction contracts, and supervising the performance of
engineering services as have been required in connection with the Company's
property development and sales.

LADD WORTH ELDREDGE, 44, has been employed by the Company since July, 1994,
and is the Secretary, Treasurer, CFO and office manager for the Company. Mr.
Eldredge was appointed Treasurer of the Company in November, 1994 and Secretary
and CFO of the Company in November, 1995. Prior to his employment by the
Company, Mr. Eldredge was the Chief Accountant at the Peppermill Resort in
Mesquite, Nevada, a position he held for two years. Mr. Eldredge has a Masters
of Accountancy degree from Southern Utah University.

EXECUTIVE COMPENSATION

The following table summarizes the compensation of the Company's Chief
Executive Officers, who was John Fife from July 13, 1996 to the present. No
other executive officers earned compensation in excess of $100,000 for the year
ended December 31, 1997.

20
<PAGE> 23

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL
COMPENSATION AWARDS
------------------- -------------------------
SHARES
NAME AND FISCAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
------------------ ------ ----------- ----- ---------- ------------
<S> <C> <C> <C> <C> <C>
John Fife, CEO, President, Chairman of
the Board and Director................. 1997 $ 195,000(1) -- -- 2,400(1a)
</TABLE>

- ---------------

(1) Pursuant to the terms of the Stock Purchase Agreement, the Company and Mr.
Fife entered into an employment agreement, dated as of February 27, 1998,
but commencing as of July 13, 1996 which provided for the employment of Mr.
Fife as President and Chief Executive Officer of the Company with an annual
salary of $195,000.

(1a) Mr. Fife received $2,400 in directors fees.

No SARs were outstanding in 1997.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE
---- -------------------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
IMCC(1)............................. 150,000 or more (3) $3.35 2006
(50.5% interest)(2)
</TABLE>

- ---------------

(1) John Fife, CEO of the Company is the sole shareholder of IMCC.

(2) For a more detailed description of the IMCC Option, see Section entitled
"MATERIAL HISTORICAL EVENTS/Stock Purchase Agreement -- July 3, 1996 and
Change in Control."

(3) This option was not granted as a part of John Fife's employment.

COMPENSATION OF DIRECTORS

Each director receives $200 per director's meeting. Also, directors who
travel out of town to attend the meetings are, upon Board approval, reimbursed
for their travel, lodging and meals.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

Pursuant to the Stock Purchase Agreement, the Company and John Fife entered
into an employment agreement, dated as of February 27, 1998, but commencing as
of July 13, 1996, which provided for the employment of Mr. Fife as President and
CEO of the Company with an annual salary of $195,000.

STOCK PLANS

The Company has no long-term incentive compensation plans other than the
1994 Stock Option Plan. Gerry Brown and each of the five directors who were
directors in 1994 are participating in the Company's 1994 Stock Option Plan.
Under the Plan, each of the six individuals were granted options for 25,000
shares of the Company's Common Stock, pursuant to the terms of a Non-Qualified
Stock Option Agreement between each person and the Company, dated April 7, 1994.
The option exercise price is $2.50 per share, the market price of the stock on
the date of grant. Each of the granted options vested as follows: (a) 9,000
shares on the date of the Option Agreement; and (b) 8,000 shares on each of the
next two anniversary dates of the Agreement (April 7, 1995 and April 7, 1996).

21
<PAGE> 24

STOCK OWNERSHIP OF MANAGEMENT

The following table sets forth, as of November 19, 1997, the shares of
Common Stock beneficially owned by (i) each director of the Company, (ii) the
CEO of the Company, and (iii) the Company's directors and chief executive
officer as a group. The Company had no named executive officers, other than John
Fife as President and CEO, who earned compensation in excess of $100,000 during
1997.

UTAH RESOURCES INTERNATIONAL, INC.
COMMON STOCK OWNERSHIP BY DIRECTORS AND NAMED EXECUTIVE OFFICERS
AS OF NOVEMBER 19, 1997

<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF OUTSTANDING
NAME OF BENEFICIAL OWNER POSITION SHARES SHARES
------------------------ -------- --------- -----------
<S> <C> <C> <C>
David Fife................................... Director 0 0%
John Fife, as the sole shareholder of IMCC... Director, Chief Executive 1,275,912(1) 50.6%
Officer, President, and
Chairman of the Board
Lyle D. Hurd................................. Director 2,000 .08%
Stuart B. Peterson........................... Director 0 0%
Gregory White................................ Director 0 0%
DIRECTORS AND NAMED EXECUTIVE OFFICERS AS A Directors & Officers 1,277,912 50.7%
GROUP...................................... (5 persons)
</TABLE>

- ---------------

(1) IMCC also holds a ten year option to purchase 150,000 or more additional
shares of stock, so as to maintain its 50.5% interest in URI.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information as of November 19, 1997
regarding each person known by the Company to own beneficially more than 5% of
the outstanding shares of Common Stock. Each person named has the sole voting
and investment power with respect to the shares beneficially owned by such
person.

UTAH RESOURCES INTERNATIONAL, INC.
5% OR GREATER BENEFICIAL OWNERS
AS OF NOVEMBER 19, 1997

<TABLE>
<CAPTION>
NUMBER OF SHARES AND
NAME AND ADDRESS OF NATURE OF PERCENT OF COMPANY
BENEFICIAL OWNER BENEFICIAL OWNER SHARES OUTSTANDING
------------------- -------------------- ------------------
<S> <C> <C>
Inter-Mountain Capital Corp.(1)...................... 1,275,912 50.6%
360 East Randolph Street
Suite 2403
Chicago, IL 60601
Mark Technologies Corporation(2)..................... 326,310 13%
One Sansome Street
Suite 1900
San Francisco, CA 94104
</TABLE>

- ------------------------

(1) John Fife, director, President, CEO and Chairman of the Board of the
Company, is the sole shareholder of Inter-Mountain Capital Corp.

(2) Mark G. Jones holds 100 shares individually and an additional 326,210 in
his capacity as the controlling shareholder of Mark Technologies
Corporation.

22
<PAGE> 25

DESCRIPTION OF COMMON STOCK PURSUANT TO THE OFFERINGS

The following brief description of the Company's common stock does not
purport to be complete and is subject in all respects to applicable Utah law and
the provisions of the Articles of Incorporation and By-laws, copies of which
have been filed as exhibits to the Registration Statement on Form S-1 of which
this Prospectus is a part and to which exhibits reference is hereby made.

The authorized common stock of the Company consists of 5,000,000 shares of
Common Stock, $0.10 par value per share, of which 2,522,808 are issued. The
Company is holding a Special Meeting of the Shareholders to consider and vote
upon a proposal to amend the Company's Articles of Incorporation to effect a
reverse split of the Company's issued and outstanding common, $.10 par value per
share stock (the "Common Stock"), as of 4:30 p.m., M.S.T., on , 1998
on the basis that each 1,000 shares of Common Stock then outstanding will be
converted into 1 share of common, $100.00 par value per share stock (the "New
Stock"), with shareholders holding less than 1,000 shares of Common Stock or any
increment thereof (after being given an option to purchase additional shares as
needed to "round up" to the equivalent of 1,000 shares at a purchase price of
$3.35 per share) being paid in cash in exchange for their fractional shares at a
price of $3.35 per share for each share outstanding immediately prior to such
reverse split (the "Reverse Split"). As a result of the Reverse Split, the
Company is expected to take such actions as are necessary and permitted under
applicable securities laws to become a non-SEC reporting company.

ROUND UP OPTION OFFERING

If the Reverse Split is approved, any shareholder of the Company holding
fewer than 1,000 shares of Common Stock or any increment thereof, may (i) after
providing the Company with prior notice of its intent to "round up", purchase
additional shares in order to "round up" to the equivalent of 1,000 shares at a
purchase price of $3.35 per share (the "Round Up Option"), or (ii) sell such
shares to the Company based upon a pre-Reverse-Split price of $3.35 per share.

Also, as indicated above, a shareholder holding 1,000 shares or more (a
"Non-Exercising Shareholder") will have such shares converted into one share of
New Stock of the Company for each 1,000 shares of the Company's Common Stock
owned, with Non-Exercising Shareholders given the option to (i) purchase
additional shares in order to round-up to the next increment of 1,000 shares at
a purchase price of $3.35 per share or (ii) sell such fractional shares to the
Company based upon a pre-Reverse-Split price of $3.35 per share.

RETURNED SHARES OPTION OFFERING

As required by the terms of the Transaction Agreements, subsequent to the
proposed reverse split, and subject to applicable state and federal securities
and state corporate law, any Common Stock redeemed through the Reverse Split
(the "Returned Shares") may be acquired by the remaining shareholders, other
than IMCC or its affiliates, as of a record date five days prior to the
effectuation of the Reverse Split (the "Returned Shares Record Date"), in
increments of 1,000 shares (the "Returned Shares Option"), at a purchase price
equal to the pre-reverse-split price of $3.35 per share (the "Returned Shares
Purchase Price"). Only those shares for which the Company has received, within
80 days following the Effective Date, a fully and properly executed letter of
transmittal accompanied by the required documents will qualify as Returned
Shares for purposes of this Returned Shares Option. Such Common Stock shall be
purchased in blocks of 1,000 shares of Common Stock such that each purchase of a
1,000 share block of Common Stock shall be converted into 1 share of New Stock.
In the event the Returned Shares Option is over-subscribed, then each of the
remaining exercising shareholders may purchase the Returned Shares on a pro-rata
basis (as determined by the number of shares held by each of the exercising
shareholders as of the Returned Shares Record Date less those shares held by
IMCC) in blocks of not less than 1,000 shares. In the event of such
over-subscription, each qualified shareholder could elect to purchase that
percentage of Returned Shares equal to:

x
-------
(y - z)

23
<PAGE> 26

in cash upon exercise, with the remaining balance of $2.51 per share being
evidenced by a promissory note, payable in three years (the "Returned Shares
Note"). Subject to applicable Internal Revenue Service rules, the Returned
Shares Note shall bear simple interest at the short term applicable federal rate
as stated in June 1996, which interest shall be payable annually in arrears.
Payment of the Returned Shares Note will be secured by a pledge of the Returned
Shares purchased, as converted into share(s) of New Stock, pursuant to a stock
pledge agreement to be provided by the Company. Exercising shareholders
purchasing Returned Shares shall be required to apply any dividends,
distributions or other payments made to the shareholder of the Company on the
Returned Shares/New Stock to payment of the unpaid balance of the Returned
Shares Note. Returned Shares purchased by an exercising shareholder shall be
fully votable in accordance with the terms of the Company's organizational
documents and other agreements binding the Company for so long as the exercising
shareholder is not in default under the pledge agreement or the Returned Shares
Note.

If all of the fractional shareholders elect to round up to the next whole
share, then a maximum of 429,192 shares would be issued, which figure does not
include the shares of the Company's Common Stock held by brokerage firms or
other third party nominees. With respect to the mechanism whereby the
shareholders may purchase the returned shares, if the Company redeems all of the
fractional shares in the Reverse Split, then a maximum of 103,808 shares would
be available for the pool, which figure does not include the shares held by
brokerage firms or other third party nominees. Immediately following the
Round-Up Option Offering, there would be a maximum of 2,952,000 shares of Common
Stock, if all of the named fractional shareholders exercised their option to
round-up. Immediately following the Returned Shares Option Offering, there would
be a maximum of 2,522,808 shares of Common Stock, if all of the fractional
shareholders were bought out by the Company and the remaining shareholders
participated fully in the Returned Shares Option Offering.

Assuming approval of the Reverse Split by the shareholders at the Special
Meeting, the Amendment to the Articles of Incorporation will be filed with the
Utah Division of Corporations and Commercial Code and will become effective on
the Effective Date thereof. Under the Amendment, without any further action on
the part of the shareholders, shares of issued and outstanding Common Stock
immediately prior to the Effective Date, will be converted into the right to
receive the number of shares of New Stock equal to the number of shares of
Common Stock held of record by a shareholder, divided by 1,000 or, in the case
of Small-Lot Shareholders and shareholders of fractional shares who do not
exercise the Round Up Option on or before 30 days following the Effective Date,
the right to receive the Cash Consideration, for such fractional shares as of
p.m., M.S.T. on the Effective Date.

The Amendment will, by its terms, decrease the number of shares of the
Company's authorized Common Stock from 5,000,000 shares at $.10 par value per
share to 5,000 shares of $100.00 par value per share to effectuate the Reverse
Split.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share on all matters
to be voted upon by shareholders, including the election of directors. There are
no cumulative voting rights for the election of directors.

Holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds legally
available therefor, in accordance with its Articles of Incorporation, its Bylaws
and applicable law. Holders of Common Stock are entitled to share ratably in the
net assets of the Company upon liquidation after payment or provision for all
liabilities.

Holders of Common Stock have no preemptive rights to purchase shares of
Common Stock of the Company. Shares of Common Stock are not subject to any
redemption provisions and are not convertible into any other securities of the
Company, except as described in this Prospectus and the accompanying Schedule
13e-3 and Preliminary Proxy Statement. All outstanding shares of Common Stock
are, and the shares of Common Stock to be issued pursuant to the Round Up Option
Offering and the Returned Shares Offering offering will be, upon payment
therefor, duly authorized, validly issued, and fully paid and non-assessable.

24
<PAGE> 27

the Company's Common Stock as reported by National Quotation Bureau, Inc. The
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and do not represent actual transactions and have not been adjusted
for stock dividends or splits.

<TABLE>
<CAPTION>
1997 1996
-------------- ---------------
LOW HIGH LOW HIGH
----- ----- ----- ------
<S> <C> <C> <C> <C>
1st quarter.............................................. $.875 $.875 $.625 $ 1.00
2nd quarter.............................................. $.875 $.875 $ .75 $ 1.50
3rd quarter.............................................. $.875 $.875 $.875 $ 1.00
4th quarter.............................................. $ .25 $.875 $.875 $ .875
</TABLE>

IMCC OPTION

IMCC, a fifty and five/tenths percent (50.5%) shareholder of the Company,
was granted a ten year option to purchase 150,000 or more additional shares of
stock at a price equal to $3.35 per share pursuant to and on the same terms and
conditions as those provided under the Stock Purchase Agreement, so that after
the Reverse Split IMCC may maintain its 50.5% interest in the Company.

25
<PAGE> 28

UTAH LAW AND CERTAIN ARTICLES OF INCORPORATION AND BY-LAWS PROVISIONS

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Registrant, being incorporated under the Utah Revised Business
Corporation Act (the "URBCA"), is mandated under Section 16-10a-903, subject to
the Company's Articles of Incorporation to indemnify a director or officer who
was successful, on the merits or otherwise, in the defense of any proceeding, or
in the defense of any claim, issue, or matter in the proceeding, to which he was
a party because he is or was a director of the corporation, against reasonable
expenses incurred by him in connection with the proceeding or claim with respect
to which he has been successful. Pursuant to Section 16-10a-902 and subject to
Section 16-10a-906, the Company may indemnify a director for reasonable expenses
incurred in a proceeding.

The Company's Articles of Incorporation contain certain provisions
permitted under the Utah Revised Business Corporation Act (the "URBCA"),
relating to the liability of directors. These provisions eliminate the liability
of a director to the Company or to its shareholders for monetary damages for any
action taken or any failure to take any action, as a director, except liability
for: (a) the amount of a financial benefit received by a director to which he or
she is not entitled; (b) an intentional infliction of harm on the Company or the
shareholders; (c) a violation of Section 16-10a-842 (regarding unlawful
distributions); or (d) an intentional violation of criminal law. These
provisions do not limit or eliminate the rights of the Company or any
shareholder to seek non-monetary relief, such as an injunction or rescission, in
the event of a breach of a director's fiduciary duty. These provisions do not
alter a director's liability under federal securities laws. Article XII of the
Company's By-laws also contains certain provisions permitted under the URBCA
relating to indemnification of directors and officers of the Company. In
general, these provisions permit the indemnification of directors and officers
in certain circumstances if the person seeking indemnification acted in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Company, and with respect to any criminal
action or proceeding, had not reasonable cause to believe his or her conduct was
unlawful. The provisions also provide for the reimbursement and/or advancement
of expenses to directors and officers under certain circumstances, which
provisions are consistent with the URBCA. The By-laws also provide that the
Company may purchase liability insurance for its officers and directors,
although the Company has not done so. The By-laws also provide for the
limitation of liability of directors as set forth in the URBCA and Article
Twelfth of the Company's Articles of Incorporation. INSOFAR AS INDEMNIFICATION
FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933 MAY BE PERMITTED TO
DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE REGISTRANT PURSUANT TO THE
FOREGOING PROVISIONS, THE REGISTRANT HAS BEEN INFORMED 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. The Company
believes that these provisions assist the Company in attracting and retaining
qualified individuals to serve as directors and officers.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Registrar and
Transfer Company, located at 10 Commerce Drive, Cranford, New Jersey 07016.

The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports and other information with the
Securities and Exchange Commission.

Reports, proxy and information statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Securities and Exchange Commission in Washington, DC, and at
certain of its Regional Offices, located at . Furthermore, copies of
such material can be obtained from the Public Reference Section of the
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, DC 20549
at prescribed rates. Finally, the Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding the
Company, which Web site is located at (http://www.sec.gov).

The Company's Common Stock is listed on the OTC Bulletin Board through the
Automated Quotation System, under the symbol "UTRS." Reports, proxy and
information statements and other information concerning the Company can be
inspected at such exchanges.

26
<PAGE> 29

UTAH RESOURCES INTERNATIONAL, INC.

CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
<PAGE> 30

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS CONTENTS

Independent Auditors' Report................................ F-1

Consolidated balance sheet, December 31, 1997, 1996, and
1995...................................................... F-2

Consolidated statements of operations for the years ended
December 31, 1997, 1996, and 1995......................... F-3

Consolidated statement of stockholders' equity for the years
ended December 31, 1997, 1996, and 1995................... F-4

Consolidated statement of cash flows for the years ended
December 31, 1997, 1996, and 1995......................... F-5

Notes to consolidated financial statements.................. F-7
</TABLE>

<PAGE> 31

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

We have audited the accompanying consolidated balance sheet of UTAH
RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES at December 31, 1997, 1996, and
1995 and the related consolidated statements of operations, stockholders' equity
and cash flows for the three years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated 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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES as of December 31, 1997,
1996, and 1995 and the results of their operations and their cash flows for the
three years then ended, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
the Schedule of Supplementary Information on oil and gas operations is presented
for the purposes of additional analysis and is not a required part of the basic
financial statements. Such information, except for that portion marked
"unaudited," on which we express no opinion, has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

TANNER + CO.

Salt Lake City, Utah

January 28, 1998 except for Note 16, which

is dated February 27, 1998

F-1
<PAGE> 32

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1997 1996 1995
----------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents............................. $ 163,230 $ 517,858 $ 765,831
Accounts receivable from related parties.............. 372,757 262,668 372,622
Notes receivable...................................... 235,746 140,672 178,989
Income tax receivable................................. -- -- 212,328
Property and equipment, net of accumulated
depreciation and amortization of $52,312, $43,408,
$36,409............................................. 17,512 26,019 36,959
Real estate held for resale........................... 855,007 876,088 854,821
Royalty interest in petroleum and mineral production,
net of amortization of $47,729, $44,382, $41,034.... 2,481 5,828 9,176
Other assets.......................................... 53,287 137,011 10,599
Net assets of discontinued operations................. -- -- 657
----------- ----------- ----------
$ 1,700,020 $ 1,966,144 $2,441,982
=========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable...................................... $ 280,802 $ 252,464 $ 276,446
Accrued expenses...................................... 722,652 546,070 312,474
Earnest money deposits................................ 36,000 36,000 36,000
Notes payable......................................... 285,794 291,110 599,627
----------- ----------- ----------
Total liabilities................................ 1,325,248 1,125,644 1,224,547
----------- ----------- ----------
Minority interest..................................... 89,798 110,903 152,113
Commitment and contingencies.......................... -- -- --
Stockholders' equity:
Common stock; par value $.10 per share, 5,000,000
shares authorized, 2,522,808 shares, 2,522,808
shares, 1,851,198 shares, issued and
outstanding...................................... 252,281 252,281 185,120
Additional paid-in capital.......................... 4,431,232 4,431,232 348,757
Note receivable from stock sale..................... (3,633,159) (3,633,159) --
Retained (deficit) earnings......................... (765,380) (320,757) 531,445
----------- ----------- ----------
Total stockholders' equity....................... 284,974 729,597 1,065,322
----------- ----------- ----------
$ 1,700,020 $ 1,966,144 $2,441,982
=========== =========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-2
<PAGE> 33

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------
1997 1996 1995
---------- ----------- ----------
<S> <C> <C> <C>
Sales................................................. $ 530,553 $ 451,406 $ 587,663
Cost of sales......................................... 207,691 139,175 156,250
---------- ----------- ----------
Gross profit..................................... 322,862 312,231 431,413
General and administrative expenses................... 1,222,040 1,530,288 1,045,854
---------- ----------- ----------
Loss from operations............................. (899,178) (1,218,057) (614,441)
---------- ----------- ----------
Other income (expense):
Royalty income...................................... 176,572 153,051 61,006
Interest and dividend income........................ 247,295 156,895 102,794
Interest expense.................................... (22,517) (86,405) (51,279)
Other income (expense).............................. (18,900) (8,772) 35,906
---------- ----------- ----------
Total other income (expense)..................... 382,450 214,769 148,427
---------- ----------- ----------
Loss before minority interest and provision for income
taxes............................................... (516,728) (1,003,288) (466,014)
Minority interest in net loss of subsidiaries......... 21,105 23,385 26,988
---------- ----------- ----------
Loss before provision for income taxes and
discontinued operations............................. (495,623) (979,903) (439,026)
Income tax benefit.................................... 51,000 54,000 179,000
---------- ----------- ----------
Loss from continuing operations....................... (444,623) (925,903) (260,026)
Discontinued operations:
(Loss) income from discontinued operations net of
income taxes of $-0-, $-0-, and $48,000.......... -- (19,365) 93,407
Income (loss) from disposal of discontinued
operations net of income taxes benefit of $-0-,
$-0-, and $227,000............................... -- 93,066 (583,000)
---------- ----------- ----------
Total discontinued operations.................... -- 73,701 (489,593)
---------- ----------- ----------
Net loss......................................... $ (444,623) $ (852,202) $ (749,619)
========== =========== ==========
Loss per share -- continued operations.............. $ (0.18) $ (0.45) $ (0.16)
Income (loss) per share -- discontinued
operations....................................... -- 0.04 (0.30)
---------- ----------- ----------
Total loss per share............................. $ (0.18) $ (0.41) $ (0.46)
========== =========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 34

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995

<TABLE>
<CAPTION>
NOTES
COMMON SHARES ADDITIONAL RECEIVABLE
-------------------- PAID-IN FROM STOCK RETAINED
SHARES AMOUNT CAPITAL SALES EARNINGS
--------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1995.......... 1,284,027 $128,403 $ 127,174 $ -- $ 1,409,527
Common stock issued to purchase
subsidiary valued at book value
of subsidiary................... 590,000 59,000 196,503 -- --
--------- -------- ---------- ----------- -----------
Common stock issued for services
in acquisition of subsidiary.... 76,000 7,600 25,080 -- --
Repurchase of stock through land
issuance........................ (102,429) (10,243) -- -- --
Common stock issued in settlement
of dispute...................... 3,600 360 -- -- --
Dividends......................... -- -- -- -- (128,463)
Net loss.......................... -- -- -- -- (749,619)
--------- -------- ---------- ----------- -----------
Balance, December 31, 1995........ 1,851,198 185,120 348,757 -- 531,445
Common stock retired through
split-off of subsidiary......... (590,000) (59,000) 59,000 -- --
Repurchase of common stock........ (40,552) (4,055) (131,794) -- --
Common stock issued for:
Cash and note receivable........ 1,275,912 127,591 4,146,714 (3,633,159) --
Accounts payable................ 26,250 2,625 8,555 -- --
Net loss.......................... -- -- -- -- (852,202)
--------- -------- ---------- ----------- -----------
Balance, December 31, 1996........ 2,522,808 252,281 4,431,232 (3,633,159) (320,757)
Net loss.......................... -- -- -- -- (444,623)
--------- -------- ---------- ----------- -----------
Balance, December 31, 1997........ 2,522,808 $252,281 $4,431,232 $(3,633,159) $ (765,380)
========= ======== ========== =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 35

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................. $(444,623) $(852,202) $ (749,619)
Loss (income) from discontinued operations............... -- 19,365 (93,407)
Loss (gain) from disposition of discontinued operation... -- (93,066) 583,000
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization......................... 12,253 12,567 12,349
Minority interest in net loss of subsidiaries......... (21,105) (23,385) (26,988)
Loss (gain) on disposition of assets.................. -- 1,221 (3,106)
Bad debt expense...................................... -- -- 10,899
Common stock issued for services...................... -- -- 33,040
(Increase) decrease in:
Accounts receivable................................. (110,089) 109,954 (118,310)
Other assets........................................ 83,724 (32,935) (775)
Real estate held for resale......................... 21,081 87,834 (237,850)
Income tax receivable............................... -- 212,328 (212,328)
(Decrease) increase in:
Accounts payable.................................... 28,338 (23,982) 115,912
Accrued expenses.................................... 176,562 153,787 20,942
Deferred income tax................................. -- -- (300,000)
--------- --------- -----------
Net cash used in continued operations............ (253,839) (428,514) (966,241)
Net cash provided by (used in) discontinued
operations..................................... -- 136,993 (104,846)
--------- --------- -----------
Net cash used in operating activities............ (253,839) (291,521) (1,071,087)
--------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposition of assets...................... -- 500 18,140
Payments on notes receivable............................. 63,459 189,367 137,348
Purchase of property and equipment....................... (399) -- (2,690)
Increase (decrease) in notes receivable.................. (158,333) (151,050) (112,137)
Decrease in minority interest............................ -- (17,825) (4,020)
--------- --------- -----------
Cash for investing activities -- continuing operations... (95,473) 20,992 36,641
Cash for investing activities -- discontinued
operations............................................ -- (38) 76,839
--------- --------- -----------
Net cash (used in) provided by investing
activities..................................... (95,473) 20,954 113,480
--------- --------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of dividends.................................... -- -- (128,463)
Payments on notes payable................................ (5,316) (419,449) (90,129)
Issuance of common stock................................. -- 641,146 --
Retirement of common stock............................... -- (135,849) --
--------- --------- -----------
Cash for financing activities -- continued operations.... (5,316) 85,848 (218,592)
Cash for financing activities -- discontinued
operations............................................ -- (63,254) (196,765)
--------- --------- -----------
Net cash (used in) provided by financing
activities....................................... (5,316) 22,594 (415,357)
--------- --------- -----------
Decrease in cash........................................... (354,628) (247,973) (1,372,964)
Cash and cash equivalents, beginning of period............. 517,858 765,831 2,138,795
--------- --------- -----------
Cash and cash equivalents, end of period................... $ 163,230 $ 517,858 $ 765,831
========= ========= ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 36

1996

The Company issued 1,275,912 shares of stock in exchange for cash and a note
receivable in the amount of $3,633,159.

The Company issued 26,250 shares of stock as payment of a liability in the
amount of $11,180

The Company redeemed and retired 590,000 shares of stock in conjunction with the
split-off of Midwest Railroad at no value.

1995

The Company purchased the assets of another company for common stock valued at
$255,503.

The Company financed the purchase of equipment with debt in the amount of
$28,278.

The Company purchased and retired 102,429 shares of common stock through the
issuance of 10.6 acres of land under the terms of a prior year agreement.

The Company disposed of debt in the amount of $3,933, which was assumed in the
sale of land for which the Company received a note receivable.

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Cash paid for:
Interest.................................................. $2,259 $51,301 $62,427
------ ------- -------
Income taxes.............................................. $ -- $ -- $ --
------ ------- -------
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 37

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

Utah Resources International, Inc., and consolidated Accounting entities
(the Company) is engaged primarily in the development of real estate including
the sale of developed and undeveloped real estate. The Company's assets are
located in the Rocky Mountain West.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of
Utah Resources, Inc., Tonaquint Inc. and a number of limited partnerships of
which the Company has ownership in excess of 50 percent and has management
responsibility. All material intercompany transactions and balances have been
eliminated in consolidation of the Companies and partnerships.

The Company is both a general and limited partner in the following limited
partnerships.

<TABLE>
<CAPTION>
PERCENT
PARTNERSHIP OWNED
----------- -------
<S> <C>
Country Club Partnership.................................... 84.04%
URI -- MGO Partnership...................................... 70.00%
Southgate Palms Ltd. Partnership............................ 100.00%
Southgate Plaza Ltd. Partnership............................ 52.50%
Southgate Resort Partnership................................ 100.00%
Resources Limited Partnership............................... 83.63%
Tonaquint Indian Hills Partnership.......................... 75.86%
Service Station Partnership................................. 79.00%
</TABLE>

Discontinued operations include Midwest Railroad Construction and
Maintenance Corporation (Midwest) from June 13, 1995 (date of acquisition)
through March 31, 1996 (date of disposition). The Company disposed of Midwest
effective March 31, 1996, see notes 7 and 8. Net assets of discontinued
operations in 1995 also included those of a service station, which was closed in
1993.

METHOD OF RECOGNITION OF INCOME

Profits on sale of developed lots, developed land and raw land are
recognized in accordance with standards established for the real estate industry
which generally provide for deferral of all or part of the profit on a sale if
the buyer does not meet certain down payment requirements or certain other tests
of the buyer's financial commitment to the purchase, or the seller is required
to perform significant obligations subsequent to the sale.

Cost of sales include a pro rata portion of acquisition and development
costs (including estimated costs to complete) along with sales commissions,
closing costs and other costs specifically related to the sale.

METHOD OF RECOGNITION OF INCOME

Oil and Gas

Royalty income is recognized when received. The Company has overriding
mineral and oil and gas royalty interests and thus exercises no control over the
activities of the royalty payers and is notified of the amounts or royalties due
when the cash is received.

The Company follows the full-cost accounting method of capitalizing all
exploration and development costs including nonproductive drilling expenses,
lease abandonments, and other related costs. Under this method of

F-7
<PAGE> 38

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 -- (CONTINUED)

accounting, no gains or losses are recognized from the sale or disposition of
properties with insignificant proved oil and gas reserves. If capitalized costs
exceed the present value of future net operations, the excess is charged to
expense.

PROPERTY AND EQUIPMENT

Property and equipment is carried at cost. Depreciation is computed using
the straight-line method based upon the following useful lives of 3-10 years:

REAL ESTATE HELD FOR RESALE

Real estate held for resale includes developed lots, land under development
and raw land. Real estate held for resale is carried at the lower of cost or
market. The cost of development of building lots includes the land and the
related costs of development (planning, survey, engineering and other) which are
capitalized. The cost of interest and property taxes are expensed.

ROYALTY INTEREST IN PETROLEUM AND MINERAL PRODUCTION

The cost of identifiable intangible assets, consisting of royalties, is
being amortized on a straight-line basis over the expected productive life of
the asset of 15 years.

INCOME TAXES

Deferred income taxes are provided in amounts sufficient to give effect to
temporary differences between financial statement and tax reporting purposes.
The differences are primarily a result of differing methods of accounting for
land sales and depreciation of property and equipment.

EARNINGS PER SHARE

The Computation of basic earnings per common share is based on the weighted
average number of shares outstanding during each year.

The computation of diluted earnings per common share is based on the
weighted average number of shares outstanding during the year plus the common
stock equivalents which would arise from the exercise of stock options and
warrants outstanding using the treasury stock method and the average market
price per share during the year. Common stock equivalents have not been included
as the exercise price is in excess of the market price and the amounts are
antidilutive.

STATEMENT OF CASH FLOWS

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.

CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to
concentration of credit risk consist primarily of trade receivables. In the
normal course of business, the Company provides credit terms to its customers.
Accordingly, the Company performs ongoing credit evaluations of its customers
and maintains allowances for possible losses which, when realized, have been
within the range of management's expectations.

F-8
<PAGE> 39

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 -- (CONTINUED)

The Company maintains its cash in bank deposit accounts which, at times,
may exceed federally insured limits. The Company has not experienced any losses
in such account and believes it is not exposed to any significant credit risk on
cash and cash equivalents.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally
accepted accounting principles requires Continued 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 amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

RECLASSIFICATION

Certain balances in the 1996 and 1997 financial statements have been
reclassified to conform to the 1997 presentation.

2. ACCOUNTS RECEIVABLE FROM RELATED PARTIES

Accounts receivable from related parties are as follows at December 31:

<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Entity with shareholders in common.......................... $120,086 $120,086 $132,843
Related party partnership with common ownership............. 153,875 142,582 152,516
Stockholders and directors.................................. 98,796 -- 87,263
-------- -------- --------
$372,757 $262,668 $372,622
======== ======== ========
</TABLE>

3. NOTES RECEIVABLE

The Company has the following notes receivable at Receivable December 31:

<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Note receivable from an individual with interest at 9%,
secured by real estate and due when real estate is sold... $231,225 $131,642 $138,989
Note receivable from a company due in 1997 with interest at
8.5%...................................................... 4,521 9,030 40,000
-------- -------- --------
$235,746 $140,672 $178,989
======== ======== ========
</TABLE>

Future maturities of notes receivable are as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
---- --------
<S> <C>
1998........................................................ $ 4,521
1999........................................................ 231,225
--------
Total....................................................... $235,746
========
</TABLE>

4. REAL ESTATE HELD FOR RESALE

Real estate held for resale consists of approximately for 403 acres of real
estate at December 31, 1997, of which approximately 383 acres is currently
planned for single family dwelling lots, commercial development and

F-9
<PAGE> 40

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 -- (CONTINUED)

multiple housing in St. George, Utah. The aggregate cost of the raw land and
partially developed land is $855,007, $876,088, and $854,821 at December 31,
1997, 1996, and 1995, respectively.

Property related to the Service Station, which was sold with its fixtures
in 1997, amounts to $109,101 and is included in real estate held for investment
at December 31, 1996. At December 31, 1995, the Service Station assets were
included in net assets of discontinued operations. Included in other assets is
$92,773 of fixtures relating to the Service Station at December 31, 1996.

5. ACCRUED EXPENSES

Accrued expenses at December 31, consist of the following:

<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Deficit in investment in partnerships....................... $231,842 $225,661 $168,857
Accrued interest............................................ 145,134 120,358 34,775
Unearned interest received.................................. -- 98,869 --
Accrued costs for clean up.................................. 50,533 50,533 50,533
Accrued payroll and payroll taxes........................... 288,022 -- --
Other accrued expenses...................................... 7,121 50,649 58,309
-------- -------- --------
Total.................................................. $722,652 $546,070 $312,474
======== ======== ========
</TABLE>

6. NOTES PAYABLE

The Company has the following notes payable at December 31:

<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Notes payable to a shareholder of the Company with interest
rates ranging from 7.5% to 9.5%........................... $110,932 $110,932 $ --
Notes payable to a governmental entity requiring annual
payments of approximately $15,000 plus interest at 5.94%,
secured by real estate.................................... 91,551 91,551 106,810
Note payable to entity requiring annual payments of $10,386
including interest at 9%, secured by real estate.......... 67,282 67,282 67,282
Note payable to a financial institution requiring monthly
payments of $491 including interest at 10.5%, secured by a
vehicle................................................... 16,029 20,074 23,600
Note payable to a trust requiring quarterly interest
payments at 10%, principal due in 1996, secured by real
estate.................................................... -- -- 400,000
Other....................................................... -- 1,271 1,935
-------- -------- --------
Total.................................................. $285,794 $291,110 $599,627
======== ======== ========
</TABLE>

F-10
<PAGE> 41

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 -- (CONTINUED)

Future maturities of notes payable at December 31, 1997 are as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
---- --------
<S> <C>
1998........................................................ $162,454
1999........................................................ 25,992
2000........................................................ 27,057
2001........................................................ 23,421
2002........................................................ 22,799
Thereafter.................................................. 24,071
--------
$285,794
========
</TABLE>

None of the Company's debt instruments are held for trading purposes. The
Company estimates that the fair value of all financial instruments at December
31, 1997 does not differ materially from the aggregate carrying values of its
financial instruments recorded in the accompanying balance sheet.

7. INVESTMENT IN MIDWEST

Effective June 13, 1995, the Company acquired 100% ownership of Midwest
through the issuance of 590,000 shares of the Company's common stock for all of
the outstanding stock of Midwest. The acquisition was accounted for as a
purchase. The fair market value of the Midwest assets and liabilities
approximated the historical cost of the assets and liabilities. The net equity
of Midwest at the date of acquisition was $255,503.

Effective March 31, 1996, the Company distributed Midwest to its former
owner. The Company returned to the former Midwest owner all of the common stock
of Midwest and in return received 590,000 shares of its restricted common stock
and agreed to forgive net cash advances made to Midwest over the ownership
period. The return of the 590,000 shares of common stock to the Company was
recorded at no value as the Company exchanged its ownership in Midwest for the
return of the shares of the Company. The 1995 financial statements reflect a
pretax write-down of approximately $752,000 for its investment in Midwest to its
estimated realizable value. The write-down in 1995, was a result of the
forgiveness of approximately $384,000 of intercompany debt from 1995 and the
write-off of the approximate $368,000 of Midwest investment at December 31,
1995.

In 1996, the aggregate loss on the disposal of Midwest was reduced by
$93,066 due primarily to the offsetting of certain costs against the advances
made to Midwest incurred on behalf of Midwest.

For the three months ended March 31, 1996, Midwest had a loss of $19,365
resulting in a net gain on disposition in 1996 of $73,701. The Company realized
an aggregate total loss of $659,934 on the disposal of Midwest.

F-11
<PAGE> 42

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 -- (CONTINUED)

8. DISCONTINUED OPERATIONS

Condensed financial information for Midwest, which was discontinued, is as
follows for the periods June 13, 1995 (date of acquisition) through December 31,
1995 and January 1, 1996 through March 31, 1996 (date of disposition). The
Service Station had no operations subsequent to 1994.

<TABLE>
<CAPTION>
JUNE 13,
JANUARY 1, 1995 (DATE OF
1996 THROUGH ACQUISITION)
MARCH 31, THROUGH
1996 (DATE OF DECEMBER 31,
DISPOSITION) 1995
-------------- -------------
<S> <C> <C>
Revenues.................................................... $2,690,730 $5,598,542
Costs and expenses.......................................... 2,710,095 5,457,135
---------- ----------
Net (loss) income before income tax......................... (19,365) 141,407
Income tax expense.......................................... -- 48,000
---------- ----------
Net income (loss) $ (19,365) $ 93,407
========== ==========
</TABLE>

9. INCOME TAXES

The benefit (expense) for income taxes is as follows:

CONTINUING OPERATIONS

<TABLE>
<CAPTION>
1997 1996 1995
------- ------- --------
<S> <C> <C> <C>
Current..................................................... $51,000 $54,000 $106,000
Deferred.................................................... -- -- 73,000
------- ------- --------
Total continuing operations................................. $51,000 $54,000 $179,000
======= ======= ========
</TABLE>

DISCONTINUED OPERATIONS

<TABLE>
<CAPTION>
1997 1996 1995
------- ------- --------
<S> <C> <C> <C>
Current..................................................... $ -- $ -- $ --
Deferred.................................................... -- -- 227,000
------- ------- --------
Total discontinued operations $ -- $ -- $
======= ======= ========
</TABLE>

F-12
<PAGE> 43

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 -- (CONTINUED)

The benefit (provision) for income taxes differs from the amount computed
at the federal statutory rate as follows:

CONTINUING OPERATIONS

<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- --------
<S> <C> <C> <C>
Income tax benefit at federal statutory rates............... $ 151,000 $ 333,000 $158,000
State income taxes.......................................... 5,000 49,000 23,000
Valuation allowance......................................... (105,000) (328,000) --
Other....................................................... -- -- (2,000)
--------- --------- --------
Total current income taxes.................................. $ 51,000 $ 54,000 $179,000
========= ========= ========
</TABLE>

DISCONTINUED OPERATIONS

<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Income tax (expense) benefit at federal statutory rates..... $-- $(11,000) $227,000
State income taxes.......................................... -- (4,000) 20,000
Other....................................................... -- 15,000 (20,000)
--- -------- --------
Total.................................................. $-- $ -- $227,000
=== ======== ========
</TABLE>

Deferred income taxes have been established to reflect timing differences
between financial reporting and income tax purposes. The primary differences are
as follows:

<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Condemnation sales.......................................... $ -- $ -- $ 300,000
Discontinued operations..................................... -- -- (227,000)
Net operating loss carryforward............................. (433,000) (328,000) (73,000)
Valuation allowance......................................... 433,000 328,000 --
--------- --------- ---------
Total.................................................. $ -- $ -- $ --
========= ========= =========
</TABLE>

The Company has a net operating loss carryforward of approximately
$1,447,000, which expires between 2011 and 2012. The benefit of the net
operating loss (NOL) carryforwards available to offset future taxes will be
limited by the tax laws in effect at the time such NOL's can be utilized.
Significant changes in the ownership of the Company or tax laws could limit the
amount of NOL benefit.

10. STOCK SUBSCRIPTION RECEIVABLE

The Company has a promissory note receivable at December 31, 1997 and 1996
in the amount of $3,633,159. The note bears interest at the short-term Federal
Internal Revenue Service rate (6.77% at December 31, 1997). Interest is due
annually in July of each year with the principal balance due August 1, 2001. The
note is secured by 1,285,912 shares of the Company's common stock.

11. LOSS PER SHARE

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 (SFAS 128) "Earnings Per Share," which
requires companies to present basic earnings per share (EPS) and diluted
earnings per share, instead of the primary and fully diluted EPS that was
previously

F-13
<PAGE> 44

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 -- (CONTINUED)

required. The new standard also requires additional informational disclosures,
and makes certain modifications to the previously applicable EPS calculations
defined in Accounting Principles Board No. 15. The new standard is required to
be adopted by all public companies for reporting periods ending after December
15, 1997, and requires presentation of EPS for all prior periods reported.
During the year ended December 31, 1997, the Company adopted this standard.

Loss per share information in accordance with SFAS 128 is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
----------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
<S> <C> <C> <C>
Net loss................................................... $(444,623)
Less preferred stock dividends............................. --
---------
BASIC EPS
Income available to common stockholders.................... (444,623) 2,522,808 $(.18)
-----
EFFECT OF DILUTIVE SECURITIES
Stock options.............................................. -- --
--------- ---------
DILUTED EPS
Income available to common stockholders plus assumed
conversions.............................................. $(444,623) 2,522,808 $(.18)
========= ========= =====
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
----------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
<S> <C> <C> <C>
Net loss................................................... $(852,202)
Less preferred stock dividends............................. --
---------
BASIC EPS
Income available to common stockholders.................... (852,202) 2,072,105 $(.41)
-----
EFFECT OF DILUTIVE SECURITIES
Stock options.............................................. -- --
--------- ---------
DILUTED EPS
Income available to common stockholders plus assumed
conversions.............................................. $(852,202) 2,072,105 $(.41)
========= ========= =====
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
----------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
<S> <C> <C> <C>
Net loss................................................... $(749,619)
Less preferred stock dividends............................. --
---------
BASIC EPS
Income available to common stockholders.................... (749,619) 1,619,000 $(.46)
-----
EFFECT OF DILUTIVE SECURITIES
Stock options.............................................. -- --
--------- ---------
DILUTED EPS
Income available to common stockholders plus assumed
conversions.............................................. $(749,619) 1,619,000 $(.46)
========= ========= =====
</TABLE>

F-14
<PAGE> 45

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 -- (CONTINUED)

12. CONTINGENCIES

The Company is aware of certain claims made against the Company, which
could result in liabilities in excess of amounts accrued in the financial
statements. Management believes that any such claim will not result in any
adverse effect on the financial position of the Company.

The Company is in the process of remediation of the service station
property. It is not known if any additional costs over what the Company has
accrued will be needed to complete the remediation.

13. COMMITMENTS

The Company leases its office facility under a year lease requiring monthly
payments of $500 which expires in 1998. Lease expense was $6,000 in 1997.

On February 27, 1998, the Company, in connection with the execution of the
stock purchase agreement in 1996, entered into an employment agreement with the
president of the Company for a salary of $195,000 per year. The agreement
commences the salary on July 13, 1996. Accrued and expensed salary to the
president for the year ended December 31, 1997 is $286,356.

14. SIGNIFICANT CUSTOMERS

The Company had land sales of $331,000, $106,000, and $152,000 to a
significant customer in 1997, 1996, and 1995, respectively.

15. RECENTLY ISSUED ACCOUNTING STATEMENTS

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130 (SFAS 130), "Reporting Comprehensive Income." SFAS 130 requires entities
presenting a complete set of financial statements to include details of
comprehensive income that arise in the reporting period. Comprehensive income
consists of net income or loss for the current period and other comprehensive
income, which consists of revenue, expenses, gains, and losses that bypass the
income statement and are reported directly in a separate component of equity.
This statement is effective for fiscal years beginning after December 15, 1997,
and requires restatement of prior period financial statements presented for
comparative purposes. Management believes that it will not have a material
effect on the Company.

16. SUBSEQUENT EVENT

The Company filed with the Securities and Exchange Commission in February
1997, documents to have the shareholders of the Company consider and vote upon a
proposal to amend the Company's Articles of Incorporation to effect a reverse
split of the Company's issued and outstanding stock on the basis that each 1,000
shares of common stock then outstanding will be converted into one share, at
$3.35 per share prereverse-split price, with fractional shareholders given the
option to either receive cash in lieu of their resulting fractional share or
purchase additional fractional shares to round up to one whole share following
the reverse split.

F-15
<PAGE> 46

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF SUPPLEMENTARY INFORMATION ON OIL AND GAS OPERATIONS

The information on the Company's oil and gas operations as shown in this
schedule is based on the full-cost method of accounting and is presented in
conformity with the disclosure requirements of Statement of Financial Accounting
Standards NO. 69 "Disclosures about Oil and Gas Producing Activities."

COSTS INCURRED IN OIL AND GAS PROPERTY ACQUISITION,

EXPLORATION AND DEVELOPMENT ACTIVITIES

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Acquisition of proved properties............................ $ -- $ --
-------- --------
Exploration and affiliate costs............................. $ -- $ --
-------- --------
Development costs........................................... $ -- $ --
======== ========
</TABLE>

RESULTS OF OPERATIONS FOR PRODUCING ACTIVITIES

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Royalty income.............................................. $176,572 $153,051
Production costs............................................ -- --
Exploration costs........................................... -- --
Depreciation, depletion, amortization, and valuation
provisions................................................ (3,347) (3,348)
-------- --------
Results of operations from producing activities before
taxes..................................................... 173,225 149,703
Income tax expense.......................................... (59,000) (51,000)
-------- --------
Results of operations from producing activities (excluding
corporate overhead and interest costs).................... $114,225 $ 98,703
======== ========
</TABLE>

CAPITALIZED COSTS RELATING TO OIL AND GAS PRODUCING ACTIVITIES

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Proved oil and gas properties............................... $ 50,210 $ 50,210
Accumulated depreciation, depletion, amortization and
valuation allowances...................................... (47,729) (44,382)
-------- --------
Net capitalized costs....................................... $ 2,481 $ 5,828
======== ========
</TABLE>

ESTIMATED QUANTITIES OF RESERVES (UNAUDITED)

The estimated quantities of proved oil and gas reserves disclosed in the
table below are based upon estimates prepared by American Energy Advisors, Inc.,
petroleum engineers. Such estimates are inherently imprecise and may be subject
to substantial revisions.

F-16
<PAGE> 47

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF SUPPLEMENTARY INFORMATION ON OIL AND GAS OPERATIONS --
(CONTINUED)

All quantities shown in the table are proved developed reserves and are
located within the United States.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
BARRELS MCF
------- --------
<S> <C> <C>
Proved oil and gas reserves:
Balance at beginning of year.............................. $45,000 $437,000
Revisions of previous estimates........................... -- --
Improved recovery and acquisition of minerals in place.... -- --
Extensions and discoveries................................ -- --
Production................................................ (2,000) (51,000)
------- --------
Balance at end of year...................................... $43,000 $386,000
======= ========
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
------------------
BARRELS MCF
------- ---
<S> <C> <C>
Proved oil and gas reserves:
Balance at beginning of year.............................. $51,000 $488,000
Revisions of previous estimates........................... -- (40,000)
Improved recovery and acquisition of minerals in place.... -- --
Extensions and discoveries.................................. -- --
Production.................................................. (6,000) (11,000)
------- --------
Balance at end of year...................................... $45,000 $437,000
======= ========
</TABLE>

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS

RELATING TO PROVED OIL AND GAS RESERVES (UNAUDITED)

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-----------------------
1997 1996
---- ----
<S> <C> <C>
Future cash in flows........................................ $1,651,000 $1,830,000
Future production and development costs..................... (62,000) (70,000)
Future income tax expenses.................................. (540,000) (598,000)
---------- ----------
Future net cash flows....................................... 1,049,000 1,162,000
10% annual discount for estimated timing of cash flows...... (529,000) (508,000)
---------- ----------
Standardized measure of discounted future net cash flows.... $ 520,000 $ 654,000
========== ==========
</TABLE>

F-17
<PAGE> 48

UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF SUPPLEMENTARY INFORMATION ON OIL AND GAS OPERATIONS --
(CONTINUED)

CHANGES RELATING TO STANDARDIZED MEASURE OF DISCOUNTED

FUTURE NET CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
---------------------
1997 1996
---- ----
<S> <C> <C>
Sales, net of production costs.............................. $(177,000 $(153,000)
Net changes in prices....................................... (80,000) --
Acquisition and improved recover, less related costs........ -- --
Revisions of previous quantity estimates.................... -- (85,000)
Accretion of discount....................................... 65,000 74,000
Net change in income taxes.................................. 58,000 80,000
--------- ---------
Net change................................................ $(134,000) $ (84,000)
========= =========
</TABLE>

F-18
<PAGE> 49

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
ITEM NUMBER
---- ------
<S> <C>
PROSPECTUS SUMMARY.......................................... 1
The Company............................................... 1
The Offering.............................................. 1
Round Up Option Offering............................... 2
Returned Shares Option Offering........................ 2
Use of Proceeds........................................ 3
SUMMARY FINANCIAL DATA...................................... 4
RISK FACTORS................................................ 5
THE COMPANY................................................. 6
USE OF PROCEEDS............................................. 7
DETERMINATION OF OFFERING PRICE............................. 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................. 8
Introduction.............................................. 8
Description of Business................................... 8
(a) Business Development............................. 8
Form and Year of Organization.................... 8
(b) Business of Company.............................. 8
Real Property Development Activities............. 8
Real Property Development, Industry Overview,
Government Regulation, and Competition............ 9
Partnerships..................................... 10
Overriding Royalties in Oil and Gas Leases....... 10
Employees........................................ 10
Description of Property................................... 10
St. George Properties Industry Segment #6552........... 10
Oil & Gas Interests Industry Segment #1311............. 11
Office Space........................................... 11
Material Historical Events................................ 11
Stock Purchase Agreement -- July 3, 1996 and Change in
Control............................................... 11
Share Exchange Agreement............................... 14
Market for Common Equity and Related Stockholder
Matters................................................ 16
Management's Discussion and Analysis or Plan of
Operation.............................................. 16
Results of Operations.................................. 16
Liquidity and Capital Resources........................ 17
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................... 17
Current Directors......................................... 18
Current Directors...................................... 18
Named Executive Officers............................... 20
Executive Officers..................................... 20
Executive Compensation................................. 20
Compensation Of Directors.............................. 21
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements........................ 21
Stock Plans............................................ 21
Stock Ownership of Management.......................... 22
Security Ownership of Certain Beneficial Owners........ 22
DESCRIPTION OF COMMON STOCK PURSUANT TO THE OFFERINGS....... 23
Round Up Option Offering.................................. 23
Returned Shares Option Offering........................... 23
Common Stock.............................................. 24
IMCC OPTION................................................. 25
Utah Law and Certain Articles of Incorporation and
By-laws................................................ 26
Provisions Limitation of Liability and Indemnification.... 26
Transfer Agent and Registrar.............................. 26
</TABLE>

<PAGE> 50

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Set forth below is an estimate of the approximate amount of fees and
expenses payable by the Company in connection with the issuance and distribution
of the Common Stock pursuant to the Round Up Option Offering and the Returned
Shares Option Offering described in the Prospectus contained in this
Registration Statement.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $
Legal fees and expenses.....................................
Accountants' fees and expenses..............................
Printing expenses...........................................
Transfer Agent and Registrar fees and expenses..............
Blue Sky fees and expenses..................................
Directors' and officers' insurance fees and expenses........
Miscellaneous expenses......................................
Federal taxes...............................................
State taxes.................................................
--------
Total..................................................
========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Article Twelfth of the Company's Articles of Incorporation contains certain
provisions permitted under the URBCA relating to the liability of directors.
These provisions eliminate the liability of a director to the Company or to its
shareholders for monetary damages for any action taken or any failure to take
any action, as a director, except liability for: (a) the amount of a financial
benefit received by a director to which he or she is not entitled; (b) an
intentional infliction of harm on the Company or the shareholders; (c) a
violation of Section 16-10a-842 (regarding unlawful distributions); or (d) an
intentional violation of criminal law. These provisions do not limit or
eliminate the rights of the Company or any shareholder to seek non-monetary
relief, such as an injunction or rescission, in the event of a breach of a
director's fiduciary duty. These provisions do not alter a director's liability
under federal securities laws.

Article XII of the Company's By-laws also contains certain provisions
permitted under the URBCA relating to indemnification of directors and officers
of the Company. In general, these provisions permit the indemnification of
directors and officers in certain circumstances if the person seeking
indemnification acted in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the Company, and with
respect to any criminal action or proceeding, had not reasonable cause to
believe his or her conduct was unlawful. The provisions also provide for the
reimbursement and/or advancement of expenses to directors and officers under
certain circumstances, which provisions are consistent with the URBCA. The
By-laws also provide that the Company may purchase liability insurance for its
officers and directors, although the Company has not done so. The By-laws also
provide for the limitation of liability of directors as set forth in the URBCA
and Article Twelfth of the Company's Articles of Incorporation.

II-1
<PAGE> 51

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Over the past nine years, the Company has been involved in various disputes
and controversies involving its ownership, operation and management. A
shareholders derivative action captioned as Ernest Muth, et al. v. John H.
Morgan, Jr., et al., was filed as Civil Number C-87-1632 in the Third Judicial
District Court of Salt Lake County, Utah (the "First State Action"), alleging
among other things that the officers and directors of the Company committed
various breaches of their fiduciary duties to the Company. A settlement
agreement was entered into in the First State Action on April 6, 1993 (the "1993
Settlement Agreement"), wherein, among other things, parties to the lawsuit
agreed to the manner in which directors of the Company would be selected until
such time as the 1993 Settlement Agreement was terminated. On or about July 21,
1995, attorneys for the Company on behalf of the Company filed an action against
John H. Morgan, Jr. and Daisy R. Morgan (John H. Morgan, Jr. and Daisy R. Morgan
were shareholders and directors of the Company at this time), to enforce the
1993 Settlement Agreement in the First State Action which resulted in certain
findings of fact and conclusions of law that John H. Morgan, Jr. and Daisy R.
Morgan had violated the 1993 Settlement Agreement. On October 4, 1995, the
Honorable Michael R. Murphy ruled that John H. Morgan, Jr. and Daisy R. Morgan
had violated the 1993 Settlement Agreement and entered an order enforcing the
1993 Settlement Agreement (the "Murphy Order"). The Murphy Order was appealed by
John H. Morgan, Jr. and Daisy R. Morgan and cross-appealed by the Company. An
Order to Show Cause was subsequently filed in the First State Action on behalf
of the Company by attorneys for the Company against John H. Morgan, Jr. and
Daisy R. Morgan and others (the "Order to Show Cause").

On or about June 13, 1995, pursuant to a Plan of Share Exchange Agreement
dated as of February 16, 1995 by and among the Company, Midwest Railroad
Construction and Maintenance Corporation of Wyoming, a Wyoming corporation
("Midwest"), Robert D. Wolff ("RD Wolff") and Judith J. Wolff ("JJ Wolff") (the
"Share Exchange Agreement"), the Company acquired all of the outstanding shares
of Midwest from RD Wolff and JJ Wolff in exchange for 590,000 restricted shares
of authorized but unissued shares of the Company. The issuance to Midwest
pursuant to the Share Exchange Agreement was exempt from registration under
Section 4(2) of the Securities Act of 1933 because it was a transaction by an
issuer not involving any public offering. Pursuant to the Share Exchange
Agreement, RD Wolff became the President of the Company. A shareholders
derivative action captioned as Anne Morgan et al. v. R. Dee Erickson, et al.,
was filed as Case Number 2:95CV-0661C in the United States District Court for
the District of Utah, Central Division (the "First Federal Action"), alleging
among other things that the defendants had, among other things, violated proxy
solicitation rules, violated disclosure rules under the Securities and Exchange
Act of 1934, breached their fiduciary duties to the Company's shareholders,
breached professional duties, committed fraud, wasted and looted the Company's
assets, converted Company property, engaged in self-dealing, mismanaged the
corporation and breached the duty of loyalty. The complaint sought among other
things, the rescission of the Share Exchange Agreement. In April 1996, the
Company, Midwest, RD Wolff and JJ Wolff entered into a Split-Off Agreement
whereby, among other things, the Share Exchange Agreement was rescinded (the
"Rescission Agreement") and the shares of Midwest acquired by the Company were
returned to RD Wolff and JJ Wolff.

On April 5, 1996, the Company entered into a letter of intent ("Letter of
Intent") with IMCC to sell a controlling interest in the Company to IMCC, at a
purchase price equal to $3.35 per share. On May 17, 1996, a shareholders
derivative suit captioned as Mark Technologies Corp. et al. v. Utah Resources
International, Inc., et al., was filed as Civil No. 96-090-3332CV in the Third
Judicial Court of Salt Lake County, Utah (the "Second State Action"). Mark G.
Jones, a director of the Company at the time, is the controlling shareholder of
Mark Technologies Corporation and a shareholder of the Company. The Second State
Action included, among other things, a request for the issuance of a temporary
restraining order and injunction against the transactions contemplated in the
Letter of Intent. On June 26, 1996, the Company entered into two settlement
agreements. The first settlement agreement was by and among the Company, John H.
Morgan, Jr., Daisy R. Morgan, IMCC, John Fife, Robinson & Sheen, L.L.C., R. Dee
Erickson, Lyle D. Hurd, and E. Jay Sheen (the "Morgan Settlement Agreement"),
whereby certain disputes among the parties were resolved and settled and the
parties agreed to use their best efforts to terminate the 1993 Settlement
Agreement. In particular, the parties to the Morgan Settlement Agreement
executed full mutual releases, thereby releasing the claims that they had
asserted in the Order to Show Cause, the First State Action and the First
Federal Action and a release of approximately $89,229.81 to John

II-2
<PAGE> 52

H. Morgan, Jr. previously collected from him pursuant to paragraph 8 of the
Murphy Order and other amounts covered by the Order staying the execution of the
Murphy Order to John H. Morgan, Jr. The second settlement agreement was by and
among the Company, R. Dee Erickson, E. Jay Sheen, Lyle D. Hurd, Mark G. Jones,
Mark Technologies Corporation, Anne Morgan, Victoria Morgan, IMCC, John Fife and
Robinson & Sheen, L.L.C. (the "1996 Settlement Agreement"), whereby the parties
agreed, among other things, to dismiss the First Federal Action, the Order to
Show Cause, the Second State Action and to use their best efforts to terminate
the 1993 Settlement Agreement. On July 19, 1996, the notice of hearing on
proposed settlement of the Second State Action, the First State Action and the
First Federal Action and the notice of hearing on petition to terminate the 1993
Settlement Agreement was mailed to all the Company's shareholders of record as
of June 24, 1996. Among other things, the notice provided that the 1996
Settlement Agreement and the Morgan Settlement Agreement (together the
"Settlement Agreements") were to be considered approved by the court on August
12, 1996, and that all objections to the Settlement Agreements had to be
presented at that time. On August 9, 1996, shareholders Jenny T. Morgan (who was
a director of the Company at the time), Gerard E. Morgan, John C. Morgan and
Karen J. Morgan (together the "Objectors") filed an objection to the hearing and
requested that the court continue the settlement approval hearing until after a
Company shareholders' vote on the Settlement Agreements and the IMCC Stock
Purchase Agreement. In their objections and request for continuance of hearing,
the Objectors, among other things, claimed that they had insufficient
information with which to evaluate the Stock Purchase Agreement between IMCC and
the Company; that they objected to the "no-shop" provision contained in the
Letter of Intent; that they had insufficient information regarding John Fife,
the sole shareholder of IMCC, and that they needed additional time and
information to evaluate the fairness of the Stock Purchase Agreement, and to
have the opportunity to solicit other competitive bids to sell the Company.
Further, the Objectors alleged that the Company had failed to provide
documentation relating to the Stock Purchase Agreement to them. After
considering the Objectors' and the parties' initial arguments, the court granted
both the parties and the Objectors an additional seven days, through August 19,
1996, to submit written memoranda in support of their positions. Both the
Objectors and the parties submitted written memoranda supporting their positions
in regard to the Settlement Agreements and the Stock Purchase Agreement. On or
about August 23, 1996, the court in the Second State Action reviewed and
considered the 1996 Settlement Agreement, the Stock Purchase Agreement and the
1993 Settlement Agreement, written memoranda submitted by various parties and
other comments and objections and ordered that: (1) the notice given pursuant to
Rule 23.1 of the applicable rules of civil procedure for the State of Utah was
adequate, fair and proper; (2) the procedural and substantive objections of
Jenny T. Morgan (a director and shareholder of the Company), Gerard E. Morgan,
John C. Morgan and Karen J. Morgan be overruled; (3) the 1996 Settlement
Agreement was fair, adequate and reasonable; (4) the Petition to Terminate the
1993 Settlement Agreement was fair, adequate and reasonable; and (5) the 1996
Settlement Agreement and Petition to Terminate the 1993 Settlement Agreement was
approved. As required by the Transaction Agreements, as defined below, the 1996
Settlement Agreement and the Morgan Settlement Agreement were approved by the
Third Judicial District Court of Salt Lake County, West Valley Department Utah,
on or about August 28, 1996. The Order to Show Cause was dismissed with
prejudice and the 1993 Settlement Agreement was terminated on August 29, 1996.

On July 3, 1996, following the execution of the Letter of Intent and the
execution of the Morgan Settlement Agreement and the 1996 Settlement Agreement,
the Company and IMCC entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement") (the Letter of Intent, the Morgan Settlement Agreement, the
1996 Settlement Agreement and the Stock Purchase Agreement are hereinafter
referred to as the "Transaction Agreements") whereby the Company issued and sold
1,275,912 shares (the "Purchased Shares") of common, $.10 par value per share
stock (the "Common Stock") to IMCC, which is wholly owned by John Fife (who,
after the acquisition became a director of the Company and currently serves as a
director of the Company), so that IMCC owned a 50.5% interest in the Company.
IMCC acquired the Purchased Shares at a price equal to $3.35 per share for an
aggregate purchase price of $4,274,305.20 (the "Purchase Price"), of which
$641,145.78 was paid in cash by IMCC to the Company at the closing. The
remaining $3,633,159.42 was evidenced by IMCC's promissory note (the "Note").
The Note bears interest at a rate equal to the short-term applicable federal
rate published by the Internal Revenue Service in effect at the time of closing,
and is adjusted on each anniversary of the Note to the applicable short-term
federal rate in effect on such anniversary date. Interest on the Note is paid
currently in arrears on each anniversary of the Note. At the closing, IMCC paid
$197,872.52 to the Company

II-3
<PAGE> 53

which amount represented the present value first year of interest due under the
Note. The principal and any unpaid interest accrued under the Note is due and
payable August 1, 2001. The Note is secured by the Purchased Shares as evidenced
by a stock pledge agreement, dated as of July 3, 1996, by and between IMCC and
the Company (the "Stock Pledge Agreement"). Pursuant to a separate written
guaranty agreement, John Fife personally guaranteed payment of 25% of all
amounts due under the Note. The issuance to IMCC pursuant to the Stock Purchase
Agreement was exempt from registration under Section 4(2) of the Securities Act
of 1933 because it was a transaction by an issuer not involving any public
offering.

As required by the Stock Purchase Agreement, E. Jay Sheen and R. Dee
Erickson submitted their resignations as directors of the Company, effective
July 13, 1996. As further required by the Stock Purchase Agreement, John Fife
was appointed a director of the Company. David Fife, the brother of John Fife,
was also appointed as director of the Company. John Fife and David Fife were
appointed as directors of the Company by the Muth Group pursuant to the 1993
Settlement Agreement, effective July 13, 1996. As required by the Stock Purchase
Agreement, John Fife was elected President and Chief Executive Officer of the
Company in July, 1996, pursuant to a 3-0 vote of the Board (Mark G. Jones and
Jenny Morgan were not present for the vote). John Fife and David Fife have since
been elected directors of the Company by a majority vote of the shareholders at
the annual meeting held December 11, 1997.

The Letter of Intent and the Transaction Agreements, including the Stock
Purchase Agreement, contemplated that, subject to applicable state and federal
securities and state corporate law, the Company would cause a 1,000 to 1 share
reverse split of the Company's Common Stock to the shareholders of record at
$3.35 per share (the "Reverse Split"), with fractional shareholders given the
option to either purchase additional fractional shares to round up to one whole
share following the Reverse Split or sell their fractional shares for cash to
the Company. IMCC was granted a ten year option to purchase 150,000 or more
additional shares of stock at a price equal to $3.35 per share and on the same
terms and conditions as those provided under the Stock Purchase Agreement, so
that after the Reverse Split IMCC may maintain its 50.5% interest in the
Company. Subsequent to the Reverse Split and subject to applicable state and
federal securities and state corporate law, any Company shares redeemed by the
Company pursuant to the Reverse Split (the "Returned Shares") may be acquired by
the remaining shareholders, other than IMCC or its affiliates, as of a record
date five days prior to the effectuation of the Reverse Split, in increments of
1,000 shares (the "Returned Shares Option") at a purchase price equal to the
pre-Reverse-Split price of $3.35 per share (the "Returned Shares Purchase
Price"). Only those shares for which the Company has received a fully and
properly executed Letter of Transmittal, accompanied by the required documents,
will qualify as Returned Shares for the purposes of this Returned Share Option.
Such Common Stock shall be purchased in blocks of 1,000 shares of Common Stock
such that each purchase of a 1,000 share block of Common Stock shall be
converted into 1 share of common, $100.00 par value per share stock of the
Company (the "New Stock"). In the event the Returned Shares Option is
over-subscribed, then each of the exercising shareholders may purchase the
Returned Shares on a pro-rata basis. Twenty-five percent (25%) of the Returned
Shares Purchase Price will be payable in cash upon exercise, with the remaining
balance of $2.51 per share being evidenced by the Returned Shares Note on the
terms and conditions as more fully described herein.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION LOCATION/INCORPORATION BY REFERENCE
- ----------- ----------- -----------------------------------
<S> <C> <C>
2.2 Stock Purchase Agreement Incorporated by reference to Exhibit 1 to
13D-A as filed September 9, 1996
3.1 Articles of Incorporation of Utah Incorporated by reference to Exhibit 3.A to
Resources International, Inc. the Company's registration statement on Form
10 as filed June 22, 1981
3.2 Bylaws of Utah Resources International, Incorporated by reference to Exhibit 3.B to
Inc. the Company's registration statement on Form
10 as filed June 22, 1981
</TABLE>

II-4
<PAGE> 54

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION LOCATION/INCORPORATION BY REFERENCE
- ----------- ----------- -----------------------------------
<S> <C> <C>
3.3 Amendment of Bylaws dated November 17, Incorporated by reference to Exhibit 3.3 to
1992 the Company's Annual Report of Form 10-KSB
for the year ended December 31, 1992
3.4 Amendment of Bylaws -- December, 1994 Incorporated by reference to Exhibit 3.4 to
the Company's Annual Report of Form 10-KSB
for the year ended December 31,1994
3.5 Amendment to Articles of Incorporation Incorporated by reference to Exhibit 3.5 to
adopted by shareholders January 26, 1995 the Company's Annual Report of Form 10-KSB
for the year ended December 31, 1994
4.1 Instruments defining the rights of See Exhibit numbers 3.1 through 3.5
security holders, including indentures
5.1 Opinion of Wildman, Harrold, Allen & Dixon *
10. Share Exchange Agreement Incorporated by reference to Exhibit 3 to
Form 8-K as filed July 20, 1995
10.2 Stock Purchase Agreement Incorporated by reference to Exhibit 1 to
Form 13D-A as filed September 9, 1996
10.3 Splitoff Agreement Incorporated by reference to Exhibit 10.36
to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1995
10.4 Morgan Settlement Agreement Incorporated by reference to Exhibit 10.37
to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1995
10.5 1996 Settlement Agreement Incorporated by reference to Exhibit 10.38
to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1995
21. List of Subsidiaries Incorporated by reference to Exhibit 21 to
the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1992
23 Consent of Tanner + Co. Filed Herein
27 Financial Data Schedule Filed Herein
</TABLE>

- ---------------

* To be filed by amendment

(b) Financial Statement Schedule:

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted.

II-5
<PAGE> 55

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes:

(A) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.

for purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(B) INCORPORATED ANNUAL AND QUARTERLY REPORTS.

to deliver or cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report, to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim financial
information.

(1) that for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the registrant
pursuant to rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the
time it was declared effective.

(2) that for the purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

II-6
<PAGE> 56

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company has
duly caused this Registration Statement to be signed on its behalf by the
following persons in the capacities indicated on March 26, 1998.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ JOHN M. FIFE President, Director, CEO and Chairman of the
- ----------------------------------------------------- Board
John M. Fife

/s/ GERRY BROWN Vice President
- -----------------------------------------------------
Gerry Brown

/s/ LADD WORTH ELDREDGE CFO, Secretary and Treasurer
- -----------------------------------------------------
Ladd Worth Eldredge

/s/ LYLE D. HURD, JR. Director
- -----------------------------------------------------
Lyle D. Hurd, Jr.

/s/ DAVID FIFE Director
- -----------------------------------------------------
David Fife

/s/ STUART B. PETERSON Director
- -----------------------------------------------------
Stuart B. Peterson

/s/ GREGORY WHITE Director
- -----------------------------------------------------
Gregory White
</TABLE>

II-7

<PAGE> 1
EXHIBIT 23

CONSENT AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

UTAH RESOURCES INTERNATIONAL, INC.

We hereby consent to the use in this Registration Statement our report
dated January 28, 1998, except for note 16, which is dated February 27, 1998,
relating to the consolidated financial statements of Utah Resources
International, Inc. and subsidiaries, and to the reference to our Firm under
the caption "Experts" in the Prospectus.

TANNER + CO.

Salt Lake City, Utah
March 26, 1998

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE DECEMBER
31, 1997 FINANCIAL STATEMENTS OF UTAH RESOURCES INTERNATIONAL, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 163,230
<SECURITIES> 0
<RECEIVABLES> 608,503
<ALLOWANCES> 0
<INVENTORY> 855,007
<CURRENT-ASSETS> 0
<PP&E> 69,826
<DEPRECIATION> 52,314
<TOTAL-ASSETS> 1,700,020
<CURRENT-LIABILITIES> 0
<BONDS> 285,794
0
0
<COMMON> 252,281
<OTHER-SE> 32,693
<TOTAL-LIABILITY-AND-EQUITY> 1,700,020
<SALES> 530,553
<TOTAL-REVENUES> 954,420
<CGS> 207,691
<TOTAL-COSTS> 1,222,040
<OTHER-EXPENSES> 18,900
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,517
<INCOME-PRETAX> (495,623)
<INCOME-TAX> (51,000)
<INCOME-CONTINUING> (444,623)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (444,623)
<EPS-PRIMARY> (0.18)
<EPS-DILUTED> (0.18)

</TABLE>