U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1996
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to __________________
Commission File No. 2-99110-NY
----------
A.X.R. DEVELOPMENT CORPORATION, INC.
---------------------------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 11-2751537
- ------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
9005 Cobble Canyon Lane
Sandy, Utah 84093
---------------------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 942-0555
Securities Registered under Section 12(b) of the Exchange Act: None.
Securities Registered under Section 12(g) of the Exchange Act: None.
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes No X
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year: December 31, 1996 -
$0
For the Exhibit Index see Item 13 of this Report.
State the aggregate market value of the common voting stock held by non-
affiliates computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of a specified date within
the past 60 days.
October 6, 1998 - $1,150. There are approximately 1,150,000 shares of
common voting stock of the Registrant held by non-affiliates. During the past
five years, there has been no "public market" for shares of common stock of
the Registrant, so the Registrant has arbitrarily valued these shares on the
basis of par value per share or $0.001.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Not Applicable.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
October 6, 1998
13,000,000
DOCUMENTS INCORPORATED BY REFERENCE
------------------------------------
A description of "Documents Incorporated by Reference" is
contained in Item 13 of this Report.
Transitional Small Business Issuer Format Yes X No ___
PART I
Item 1. Description of Business.
-----------------------
Business Development.
- --------------------
A.X.R. Development Corporation, Inc. (the "Company") was organized under
the laws of the State of Nevada on July 10, 1985. The Company was formed for
the purpose of engaging in any lawful business.
At its inception, the Company issued 12,390,000 shares in consideration
for $12,390, to the persons who may be deemed to have been promoters or
founders of the Company. The Company's initial authorized capital consisted
of 100,000,000 shares of one mill ($0.001) par value common voting stock. A
copy of the Company's initial Articles of Incorporation is attached hereto and
incorporated herein by reference. See Item 13 of this Report.
Subsequently, the Company offered and sold 1,000,000 units, each
containing one common share and 5 Class A common stock purchase warrants and 5
Class B common stock purchase warrants to the public at a price of $0.10 per
unit, pursuant to an S-18 Registration Statement which was filed with the
Securities and Exchange Commission on or about July 19, 1985, and which became
effective on October 16, 1985. The offering was completed in the fourth
quarter of 1985, with the Company receiving gross proceeds of $100,000 and net
proceeds of $75,000 after deduction of legal and accounting fees, prospectus
costs and other expenses incidental to the public offering.
By this reference, the Company's Registration Statement on Form S-18 of
the Securities and Exchange Commission and its Prospectus dated October 16,
1985, are incorporated herein. See Item 13 below.
The only business operations conducted by the Company from its inception
to the end of the period covered by this Report were those of described in its
Prospectus, which proved to be unsuccessful, and the Company ceased its
business operations in 1989.
Other than maintaining and restoring its good standing status in the
State of Nevada and seeking prospective businesses or assets to acquire, the
Company has had no material business operations since that time.
Business.
- --------
Other than the above-referenced matters and seeking and investigating
potential assets, properties or businesses to acquire, the Company has had no
material business operations for the past five calendar years. To the extent
that the Company intends to continue to seek the acquisition of assets,
property or business that may benefit the Company and its stockholders, it is
essentially a "blank check" company. Because the Company has limited assets
and conducts no business, management anticipates that any such acquisition
would require it to issue shares of its common stock as the sole consideration
for the acquisition. This may result in substantial dilution of the shares of
current stockholders. The Company's Board of Directors shall make the final
determination whether to complete any such acquisition; the approval of
stockholders will not be sought unless required by applicable laws, rules and
regulations, its Articles of Incorporation or Bylaws, or contract. The
Company makes no assurance that any future enterprise will be profitable or
successful.
The Company is not currently engaging in any substantive business
activity and has no plans to engage in any such activity in the foreseeable
future. In its present form, the Company may be deemed to be a vehicle to
acquire or merge with a business or company. The Company does not intend to
restrict its search to any particular business or industry, and the areas in
which it will seek out acquisitions, reorganizations or mergers may include,
but will not be limited to, the fields of high technology, manufacturing,
natural resources, service, research and development, communications,
transportation, insurance, brokerage, finance and all medically related
fields, among others. The Company recognizes that the number of suitable
potential business ventures that may be available to it may be extremely
limited, and may be restricted to entities who desire to avoid what these
entities may deem to be the adverse factors related to an initial public
offering ("IPO"). The most prevalent of these factors include substantial time
requirements, legal and accounting costs, the inability to obtain an
underwriter who is willing to publicly offer and sell shares, the lack of or
the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other
conditions or requirements imposed by various federal and state securities
laws, rules and regulations. Any of these types of entities, regardless of
their prospects, would require the Company to issue a substantial number of
shares of its common stock to complete any such acquisition, reorganization or
merger, usually amounting to between 80 and 95 percent of the outstanding
shares of the Company following the completion of any such transaction;
accordingly, investments in any such private entity, if available, would be
much more favorable than any investment in the Company.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business, the
Company will be required to file with the Commission a Current Report on Form
8-K within 15 days of such transaction. A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired, as well as
pro forma financial information consisting of a pro forma condensed balance
sheet, pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none
of which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific
objective criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development mode, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products or
services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and principal
stockholders, professional advisors, broker dealers in securities, venture
capital personnel, members of the financial community and others who may
present unsolicited proposals. In certain cases, the Company may agree to pay
a finder's fee or to otherwise compensate the persons who submit a potential
business endeavor in which the Company eventually participates. Such persons
may include the Company's directors, executive officers, beneficial owners or
their affiliates. In this event, such fees may become a factor in negotiations
regarding a potential acquisition and, accordingly, may present a conflict of
interest for such individuals.
Although the Company has not identified any potential acquisition
target, the possibility exists that the Company may acquire or merge with a
business or company in which the Company's executive officers, directors,
beneficial owners or their affiliates may have an ownership interest. Current
Company policy does not prohibit such transactions. Because no such
transaction is currently contemplated, it is impossible to estimate the
potential pecuniary benefits to these persons.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $250,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. In the event that such fees are paid, they may become a factor in
negotiations regarding any potential acquisition by the Company and,
accordingly, may present a conflict of interest for such individuals.
Principal Products and Services.
- --------------------------------
The limited business operations of the Company, as now contemplated,
involve those of a "blank check" company. The only activities to be conducted
by the Company are to manage its current limited assets and to seek out and
investigate the acquisition of any viable business opportunity by purchase and
exchange for securities of the Company or pursuant to a reorganization or
merger through which securities of the Company will be issued or exchanged.
Distribution Methods of the Products or Services.
- -------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts,
professionals, securities broker dealers, venture capital personnel, members
of the financial community and others who may present unsolicited proposals;
the Company may also advertise its availability as a vehicle to bring a
company to the public market through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
- --------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
- --------------------------------
Management believes that there are literally thousands of "blank check"
companies engaged in endeavors similar to those engaged in by the Company;
many of these companies have substantial current assets and cash reserves.
Competitors also include thousands of other publicly-held companies whose
business operations have proven unsuccessful, and whose only viable business
opportunity is that of providing a publicly-held vehicle through which a
private entity may have access to the public capital markets. There is no
reasonable way to predict the competitive position of the Company or any other
entity in the strata of these endeavors; however, the Company, having limited
assets and cash reserves, will no doubt be at a competitive disadvantage in
competing with entities which have recently completed IPO's, have significant
cash resources and have recent operating histories when compared with the
complete lack of any substantive operations by the Company for the past
several years.
Sources and Availability of Raw Materials and Names of Principal
Suppliers.
- -----------
None; not applicable.
Dependence on One or a Few Major Customers.
- -------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements or Labor Contracts.
- ------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or
Services.
- ---------
Because the Company currently produces no products or services, it is
not presently subject to any governmental regulation in this regard. However,
in the event that the Company engages in a merger or acquisition transaction
with an entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
Effect of Existing or Probable Governmental Regulations on
Business.
- ---------
The integrated disclosure system for small business issuers adopted by
the Commission in Release No. 34-30968 and effective as of August 13, 1992,
substantially modified the information and financial requirements of a "Small
Business Issuer," defined to be an issuer that has revenues of less than $25
million; is a U.S. or Canadian issuer; is not an investment company; and if a
majority-owned subsidiary, the parent is also a small business issuer;
provided, however, an entity is not a small business issuer if it has a public
float (the aggregate market value of the issuer's outstanding securities held
by non-affiliates) of $25 million or more.
The Commission, state securities commissions and the North American
Securities Administrators Association, Inc. ("NASAA") have expressed an
interest in adopting policies that will streamline the registration process
and make it easier for a small business issuer to have access to the public
capital markets. The present laws, rules and regulations designed to promote
availability to the small business issuer of these capital markets and similar
laws, rules and regulations that may be adopted in the future will
substantially limit the demand for "blank check" companies like the Company,
and may make the use of these companies obsolete.
Research and Development.
- -------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
- -------------------------------------------------------
None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on any business venture viewed by the Company as an
attractive acquisition, reorganization or merger candidate, and these factors
may further limit the number of potential candidates available to the Company
for acquisition, reorganization or merger.
Number of Employees.
- --------------------
None.
Item 2. Description of Property.
- --------------------------------
The Company has no property or assets; its principal executive office
address and telephone number are the business office address and telephone
number of David C. Merrell, its President, which are provided at no cost.
Item 3. Legal Proceedings.
- --------------------------
The Company is not the subject of any pending legal proceedings; and to
the knowledge of management, no proceedings are presently contemplated against
the Company by any federal, state or local governmental agency.
Further, to the knowledge of management, no director or executive
officer is party to any action in which any has an interest adverse to the
Company.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
No matter was submitted to a vote of the Company's security
holders during the fourth quarter of the period covered by this Report or
during the previous two fiscal years; further, since the cessation of business
operations in 1989, no matter has been submitted to a vote of the Company's
security holders.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
- -----------------------------------------------------------------
Market Information
- ------------------
The Company had a "public market" for shares of common stock from
December 1985 through December 1986; these shares were quoted in the "Pink
Sheets" of the National Quotation Bureau, Inc. In any event, no assurance can
be given that any "established trading market" for the Company's common stock
will develop or be maintained. If one ever develops in the future, the sale
of "unregistered" and "restricted" shares of common stock pursuant to Rule 144
of the Securities and Exchange Commission by present or former members of
management or others may have a substantial adverse impact on any such public
market. Once all of the Company's reports have been brought current with the
Securities and Exchange Commission, it is the intention of the Company to file
for quotations of its shares of common stock on the OTC Bulletin Board of the
National Association of Securities Dealers, Inc. ("NASD").
Holders
- -------
The number of record holders of the Company's common stock as of
the years ended December 31, 1997 and 1996 was approximately 129; these
numbers do not include an indeterminate number of stockholders whose shares
may be held by brokers in street name. As of October 5, 1998, there were
approximately 129 stockholders. See Part III, Item 11, for information
regarding these holdings.
Recent Sales of Restricted Securities
- -------------------------------------
There have been no sales of "restricted securities" of the Company
during the past three years; however, securities owned by David C. Merrell,
the President and a director of the Company, have all been held for a
sufficient period of time to be resold pursuant to and subject to the volume
limitations of Rule 144 of the Securities and Exchange Commission. See Part
III, Item 11, for information regarding Mr. Merrell's holdings.
Dividends
- ---------
There are no present material restrictions that limit the ability
of the Company to pay dividends on common stock or that are likely to do so in
the future. The Company has not paid any dividends with respect to its common
stock, and does not intend to pay dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis or Plan of Operation.
- ------------------------------------------------------------------
Plan of Operation
- -----------------
The Company has not engaged in any material business operations since
1989. Its only activities since that time have consisted of restoring and
maintaining its good standing in the State of Nevada. The Company has no
material tangible property or assets.
Results of Operations
- ---------------------
The Company discontinued its active operations in 1989, and has had no
revenues since. On January 1, 1996, it recommenced its developmental
stage, and incurred a net loss in the amount of ($740) for the year ended
December 31, 1996.
Liquidity
- ---------
The Company had no assets or liabilities during the year ended December
31, 1996. $740 was contributed by David C. Merrell, the Company's President,
for expenses during 1996.
Item 7. Financial Statements.
- -----------------------------
For the periods ended December 31, 1996 and 1995
Independent Auditors' Report
Balance Sheet for the year ended December 31, 1996
Statements of Operations for the years ended
December 31, 1996 and 1995
Statements of Stockholders' Equity (Deficit)
From December 31, 1994 through December 31, 1996
Statements of Cash Flows for the years ended
December 31, 1996 and 1995
Notes to the Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- --------------------
No independent accountant of the Company has resigned, declined to
stand for re-election or was dismissed during the Company's two most recent
fiscal years or any interim period.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
- -------------------------------------------------
Identification of Directors and Executive Officers
- --------------------------------------------------
The following table sets forth, in alphabetical order, the names
and the nature of all positions and offices held by all directors and
executive officers of the Company during 1997, and the period or periods
during which each such director or executive officer served in his or her
respective positions.
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
Corie Merrell Director 9/96 *
Secretary/ 9/96 *
Treasurer
David C. Merrell Director 9/96 *
President 9/96 *
Term of Office
- --------------
The term of office of the current directors shall continue until
the annual meeting of stockholders, which has been scheduled by the Board of
Directors to be held in December of each year. The annual meeting of the
Board of Directors immediately follows the annual meeting of stockholders, at
which officers for the coming year are elected.
Business Experience
- -------------------
David C. Merrell, Director and President. Since 1989, he has been
the owner of DCM Finance, a Salt Lake City based finance company that makes
and brokers real estate loans. Mr. Merrell received his Bachelor of Science
degree in Economics from the University of Utah in 1981.
Corie Merrell, Director and Secretary/Treasurer. Since 1989, she
has been part owner of DCM Finance and is currently a part time student at
Westminster College majoring in Psychology.
Family Relationships
- --------------------
David C. Merrell and Corie Merrell are husband and wife.
Involvement in Certain Legal Proceedings
- ----------------------------------------
Except as indicated below and to the knowledge of management,
during the past five years, no present or former director, person nominated to
become a director, executive officer, promoter or control person of the
Company:
(1) Was a general partner or executive officer of any business
by or against which any bankruptcy petition was filed,
whether at the time of such filing or two years prior
thereto;
(2) Was convicted in a criminal proceeding or named the subject
of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
(3) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining
him from or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant,
associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or
employee of any investment company, bank, savings and
loan association or insurance company, or engaging in
or continuing any conduct or practice in connection
with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the
purchase or sale of any security or commodity or
in connection with any violation of federal or
state securities laws or federal commodities
laws;
(4) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal
or state authority barring, suspending or otherwise limiting
for more than 60 days the right of such person to engage in
any activity described above under this Item, or to be
associated with persons engaged in any such activity;
(5) Was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any federal or state securities law, and the
judgment in such civil action or finding by the Securities
and Exchange Commission has not been subsequently reversed,
suspended, or vacated; or
(6) Was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to
have violated any federal commodities law, and the judgment
in such civil action or finding by the Commodity Futures
Trading Commission has not been subsequently reversed,
suspended or vacated.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
No securities of the Company are registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, and the Company files reports
under Section 15(d) of the Securities Exchange Act of 1934; accordingly,
directors, executive officers and 10 percent stockholders are not required to
make filings under Section 16 of the Securities Exchange Act of 1934.
Item 10. Executive Compensation.
- -------------------------------
Cash Compensation
- -----------------
The following table sets forth the aggregate compensation paid by
the Company for services rendered during the periods indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
[S] [C] [C] [C] [C] [C] [C] [C] [C]
David
Merrell, 12/31/96 0 0 0 0 0 0 0
President,
Director
Corie
Merrell 12/31/96 0 0 0 0 0 0 0
Secretary/
Treasurer,
Director
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to the Company's management during the
calendar year ended December 31, 1996, or the period ending on the date of
this Report. Further, no member of the Company's management has been granted
any option or stock appreciation right; accordingly, no tables relating to
such items have been included within this Item. See the Summary Compensation
Table of this Item.
Compensation of Directors
- -------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No
additional amounts are payable to the Company's directors for committee
participation or special assignments.
There are no arrangements pursuant to which any of the Company's
directors was compensated during the Company's last completed fiscal year or
the previous two fiscal years for any service provided as director. See the
Summary Compensation Table of this Item.
Termination of Employment and Change of Control Arrangement
- -----------------------------------------------------------
There are no compensatory plans or arrangements, including
payments to be received from the Company, with respect to any person named in
the Summary Compensation Table set out above which would in any way result in
payments to any such person because of his or her resignation, retirement or
other termination of such person's employment with the Company or its
subsidiaries, or any change in control of the Company, or a change in the
person's responsibilities following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
- -----------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- -----------------------------------------------
The following table sets forth the share holdings of those persons
who own more than five percent of the Company's common stock as of December
31, 1996 and 1997, and to the date hereof:
Number and Percentage
of Shares Beneficially Owned
Name and Address Then and Now
David C. Merrell 11,850,000 - 91%
9005 Cobble Canyon Lane
Sandy, Utah 84093
TOTALS 11,850,000 - 91%
Security Ownership of Management.
The following table sets forth the shareholdings of the Company's
directors and executive officers as of December 31, 1996 and 1997, and to the
date hereof:
Number and Percentage
of Shares Beneficially Owned
Name and Address Then and Now
David C. Merrell 11,850,000 - 91%
9005 Cobble Canyon Lane
Sandy, Utah 84093
Corie Merrell -0-
9005 Cobble Canyon Lane
Sandy, Utah 84093
TOTALS 11,850,000 - 91%
As of April 27, 1998, the Company's directors and executive
officers as a group (2) beneficially owned a total of 11,850,000 shares of the
Company's common stock, or approximately 91% of the outstanding voting
securities of the Company.
Changes in Control
- ------------------
On August 18, 1997, David C. Merrell foreclosed on certain Promissory
Notes dated September 24, 1996, signed by Messrs. Kelly, Mattar and Drummond,
which were collateralized by 11,850,000 shares of common stock of the Company
collectively held by these persons. Mr. Merrell acquired the 11,850,000
shares of the Company from these individuals through this foreclosure.
Item 12. Certain Relationships and Related Transactions.
- -------------------------------------------------------
Transactions with Management and Others.
- ---------------------------------------
Except as indicated under the heading "Changes in Control" of Part III,
Item 11, there have been no material transactions between any director,
executive officer, five percent stockholder, or promoter of the Company.
Item 13. Exhibits and Reports on Form 8-K.
- -----------------------------------------
Reports on Form 8-K
- -------------------
None.
Exhibit
Exhibits* Number
(i)
Articles of Incorporation dated
July 10, 1985 3
Financial Data Schedule 27
(ii) Where Incorporated
In This Report
S-18 Registration Statement Item I **
Prospectus Item I **
* A summary of any Exhibit is modified in its entirety by reference
to the actual Exhibit.
** These documents and related exhibits have previously been filed
with the Securities and Exchange Commission and are incorporated
herein by this reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
A.X.R. DEVELOPMENT CORPORATION
Date: 10/7/98 By/s/David C. Merrell
David C. Merrell
President and Director
Date: 10/7/98 By/s/Corie Merrell
Corie Merrell
Secretary/Treasurer and Director
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this Report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated:
A.X.R. DEVELOPMENT CORPORATION
Date: 10/7/98 By/s/David C. Merrell
David C. Merrell
President and Director
Date: 10/7/98 By/s/Corie Merrell
Corie Merrell
Secretary/Treasurer and Director
<PAGE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1996
<PAGE>
INDEPENDENT AUDITORS REPORT
To the Board of Directors
A.X.R.
Development Corporation, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheet of A.X.R. Development
Corporation, Inc. (a development stage company) as of December 31, 1996 and
the related statements of operations, stockholders equity and cash flows for
the years ended December 31, 1996 and 1995 and from inception on July 10, 1985
through December 31, 1996. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of A.X.R. Development
Corporation, Inc. (a development stage company) as of December 31, 1996 and
the results of its operations and its cash flows for the years ended December
31, 1996 and 1995 and from inception on July 10, 1995 through December 31,
1996 in conformity with generally accepted accounting principles
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company is a development stage company with no operating
capital which raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also
described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/S/Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
May 23, 1997
<TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Balance
Sheet
<CAPTION>
ASSETS
December 31,
1996
<S> <C>
CURRENT ASSETS
Cash $ -
Total Current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS EQUITY
LIABILITIES
Accounts payable $ -
Total Current Liabilities -
STOCKHOLDERS EQUITY
Common stock $0.001 par value; authorized 100,000,000
shares; 13,000,000 shares issued and outstanding 13,000
Additional paid-in capital 60,130
Deficit accumulated during the development stage (73,130 )
Total Stockholders Equity -
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ -
</TABLE>
<TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Statements of Operations
<CAPTION>
From
Inception on
For the July 10, 1985
Years Ended Through
December 31, December 31,
1996 1995 1996
<S> <C> <C> <C>
REVENUES $ - $ - $ -
INCOME (LOSS)
FROM DISCONTINUED
OPERATIONS (Note 4) (740) - (73,130)
NET INCOME (LOSS) $ (740) $ - $ (73,130)
NET INCOME (LOSS) PER SHARE $ (0.00) $ (0.00)
</TABLE>
<TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
At inception on July 10, 1985 - $ - $ - $ -
Common stock issued for cash at
an average of $0.006 per share 13,000,000 13,000 59,390 -
Net loss from inception through
December 31, 1994 - - - (72,390)
Balance, December 31, 1994 13,000,000 13,000 59,390 (72,390)
Net loss for the year ended
December 31, 1995 - - - -
Balance, December 31, 1995 13,000,000 13,000 59,390 (72,390)
Contributed capital for expenses - - 740 -
Net loss for the year ended
December 31, 1996 - - - (740)
Balance, December 31, 1996 13,000,000 $ 13,000 $ 60,130 $(73,130)
</TABLE>
<TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
From
Inception on
For the July 10, 1985
Years Ended Through
December 31, December 31,
1996 1995 1996
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Income (loss) from operations $ (740) $ - $(73,130)
Adjustments o reconcile net income to
net cash provided by operating
activities:
Contributed capital for expenses 740 - 740
Net Cash Provided (Used) by
Operating Activities - - (72,390)
CASH FLOWS FROM INVESTING
ACTIVITIES: - - -
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock for cash - - 73,390
Stock offering costs - - (1,000)
Net Cash Provided (Used) by
Financing Activities $ - $ - $ 72,390
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ - $ - $ -
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD - - -
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ - $ - $ -
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
</TABLE>
A.X.R.
DEVELOPMENT CORPORATION, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1996
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
A.X.R. Development Corporation, Inc. was organized under the laws of
the State of Nevada on July 10, 1985. Since then, there was no active
operation. In 1996, the Company changed its management and is seeking
a business opportunity. The Company has selected a calendar year end.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
b. Provision for Taxes
The Company has a $1,200 net operating loss carryover as of December
31, 1996 which expires in 2011. The potential tax benefit has been
offset by a valuation allowance for the same amount.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. The Company has not established
revenues sufficient to cover its operating costs and allow it to
continue as a going concern. Management intends to seek a merger with
an existing, operating company, in the interim it has committed to
meeting the Company's minimal operating expenses.
NOTE 4 - DISCONTINUED OPERATIONS
In 1987, the Company discontinued operations and was reclassified as
a development stage company. All revenues generated by the Company
have been netted against the expenses and are grouped into the
discontinued operations line on the statements of operations.
NOTE 5 - RELATED PARTY TRANSACTIONS
The president of the Company contributed $740 for expenses on behalf
of the Company in 1996.
ARTICLES OF INCORPORATION
A. X. R. DEVELOPMENT CORPORATION, INC.
WE, THE UNDERSIGNED NATURAL PERSONS OF THE AGES OF TWENTY ONE (21) OR
MORE, ACTING AS INCORPORATORS OF A CORPORATION UNDER THE GENERAL CORPORATION
LAW OF NEVADA, ADOPT THE FOLLOWING ARTICLES OF INCORPORATION:
ARTICLE I
NAME: THE NAME OF THE CORPORATION IS A. X. R. DEVELOPMENT CORPORATION,
INC.
ARTICLE II
REGISTERED OFFICE AND AGENT: THE ADDRESS OF THE CORPORATION'S
PRINCIPAL OFFICE IS 2050 ELLIS WAY, IN THE CITY OF ELKO, COUNTY OF ELKO, STATE
OF
NEVADA. THE INITIAL AGENT FOR SERVICE OF PROCESS AT THAT ADDRESS WILL BE GATE-
WAY ENTERPRISES, INC.
ARTICLE III
PURPOSE: THE PURPOSES FOR WHICH THE CORPORATION IS ORGANIZED ARE TO
ENGAGE IN ANY. ACTIVITY OR BUSINESS NOT IN CONFLICT WITH THE LAWS OF THE STATE
OF NEVADA OR OF THE UNITED STATES OF AMERICA, AND WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, SPECIFICALLY:
1. TO HAVE AND TO EXERCISE ALL THE POWERS NOW OR HEREAFTER CONFERRED BY
THE LAWS OF THE STATE OF NEVADA UPON CORPORATIONS ORGANIZED PURSUANT TO THE
LAWS UNDER WHICH THE CORPORATION IS ORGANIZED AND ANY AND ALL ACTS AMENCATOR
THEREOF AND SUPPLEMENTAL THERETO.
2. TO DISCOUNT AND NEGOTIATE PROMISSORY NOTES, DRAFTS, BILL OF EXCHANGE
NO OTHER EVIDENCE OF DEBTS, AND TO COLLECT FOR OTHERS MONEY DUE THEM ON NOTES,
CHECKS, DRAFTS, BILL OF EXCHANGE, COMMERCIAL PAPER AND OTHER EVIDENCE OF
INDEBTEDNESS
3. TO PURCHASE OR OTHERWISE ACQUIRE, OWN, HOLD, LEASE, SELL, EXCHANGE,
ASSIGN, TRANSFER, MORTGAGE, PLEDGE, OR OTHERWISE DISPOSE OF, TO GUARANTY TO
INVEST, TRADE, AND DEAL IN AND WITH PERSONAL PROPERTY OF EVERY CLASS AND
DESCRIPTION.
4. TO ENTER INTO ANY KIND OF CONTRACT OR AGREEMENT, COOPERATIVE OR
PROFIT SHARING PLAN WITH ITS OFFICERS OR EMPLOYEES THAT THE CORPORATION MAY
DEEM ADVANTAGEOUS OR EXPEDIENT OR OTHERWISE TO REWARD OR PAY SUCH PERSONS FOR
THEIR SERVICES AS THE DIRECTORS PAY DEEM FIT.
5. TO PURCHASE, LEASE, OR OTHERWISE ACQUIRE, IN WHOLE OR IN PART, THE
BUSINESS, THE GOOD WILL, RIGHTS, FRANCHISES AND PROPERTY OF EVERY KIND, NO TO
UNDERTAKE THE WHOLE OR ANY PART OF THE ASSETS OR LIABILITIES, OF ANY PERSON,
FIRM, ASSOCIATION, NON-PROFIT OR PROFIT CORPORATION, OR OWN PROPERTY NECESSARY
OR SUITABLE FOR ITS PURPOSES, AND TO PAY THE SAME IN CASH, IN THE STOCKS OR
BONDS OF THIS COW" OR OTHERWISE, TO HOLD OR IN ANY MANNER DISPOSE OF THE WHOLE
OR ANY PART OF THE BUSINESS OR PROPERTY SO ACQUIRED NO TO EXERCISE ALL OF THE
POWERS NECESSARY OR INCIDENTAL TO THE CONDUCT OF SUCH BUSINESS.
6. TO LEND OR BORROW MONEY NO TO NEGOTIATE AND MAKE LOANS, EITHER ON ITS
OWN ACCOUNT OR AS AGENT, OR BROKER FOR OTHERS.
7. TO ENTER INTO, MAKE, PERFORM AND CARRY OUT CONTRACTS OF EVERY KIND
AND FOR ANY LAWFUL PURPOSE, WITHOUT LIMIT AS TO AMOUNT WITH ANY PERSON, FIRM,
ASSOCIATION, COOPERATIVE PROFIT OR NON-PROFIT CORPORATION, MUNICIPALITY, STATE
OR GOVERNMENT OR ANY SUBDIVISION, DISTRICT OR DEPARTMENT THEREOF.
8. TO BUY, SELL, EXCHANGE, NEGOTIATE, OR OTHERWISE DEAL IN, OR
HYPOTHECATE SECURITIES, STOCKS, BONDS, DEBENTURES, MORTGAGES, NOTES OR OTHER
COLLATERALS OR SECURITIES, CREATED OR ISSUED BY ANY CORPORATION WHEREVER
ORGANIZED INCLUDING THIS CORPORATION, WITHIN SUCH LIMITS AS MAY BE PROVIDED BY
LAW, AND WHILE OWNER OF ANY SUCH STOCKS OR OTHER COLLATERALS TO EXERCISE ALL
RIGHTS, POWERS NO PRIVILEGES OF OWNERSHIP, INCLUDING THE RIGHT TO VOTE THE
SAME; TO SUBSCRIBE FOR STOCK OF ANY CORPORATION TO BE ORGANIZED, OTHER THAN TO
PROMOTE THE ORGANIZATION THEREOF.
9. TO PURCHASE OR OTHERWISE ACQUIRE, OWN, HOLD, LEASE, SELL, EXCHANGE,
ASSIGN, TRANSFER, MORTGAGE, PLEDGE, LICENSE, OR OTHERWISE DISPOSE OF ANY
ITEMS, PATENTS, COPYRIGHTS, OR TRADEMARKS OF ANY CLASS NO DESCRIPTION.
10. TO DO ANY NO ALL OTHER SUCH ACTS, THINGS, BUSINESS OR BUSINESSES IN
MY MANNER CONNECTED WITH OR NECESSARY, INCIDENTAL, CONVENIENT OR AUXILIARY TO
DO MY OF THESE OBJECTS HEREINBEFORE ENUMERATED, OR CALCULATED, DIRECTLY OR
INDIRECTLY, TO PROMOTE THE INTEREST OF THE CORPORATION; AND IN CARRYING ON ITS
PURPOSES, OR FOR THE PURPOSE OF OBTAINING OR FURTHERING ANY OF ITS BUSINESS,
TO DO MY NO ALL ACTS AND THINGS, AND TO EXERCISE ANY AND ALL OTHER POWERS
WHICH A CO-PARTNER OR NATURAL PERSON COULD DO OR EXERCISE, AND WHICH NOW OR
HEREAFTER MAY BE AUTHORIZED BY LAW, HERE AND IN ANY OTHER PART OF THE WORLD.
11. THE SEVERAL CLAUSES CONTAINED IN THIS STATEMENT OF POWERS SMALL BE
CONSTRUED AS BOTH PURPOSES AND POWERS. AND THE STATEMENTS CONTAINED IN EACH OF
THESE CLAUSES SHALL BE IN NO WAY LIMITED OR RESTRICTED, BY REFERENCE TO OR
INFERENCE FROM, THE TERMS OF ANY OTHER CLAUSES, BUT SHALL BE REGARDED AS INDE-
PENDENT PURPOSES AND POWERS; AND NO RECITATIONS, EXPRESSION OR DECLARATION OF
SPECIFIC OR SPECIAL POWERS OR PURPOSES HEREIN ENUMERATED SMALL BE DEEMED TO BE
EXCLUSIVE; BUT IS HEREBY EXPRESSLY DECLARED THAT ALL OTHER LAWFUL POWERS NOT
INCONSISTENT HEREWITH, ARE HEREBY INCLUDED.
ARTICLE IV
STOCK: THE AGGREGATE NUMBER OF SHARES WHICH THE CORPORATION SMALL HAVE
AUTHORITY TO ISSUE IS 100,000,000 SHARES AT A PAR VALUE OF .001 PER SHARE. ALL
STOCK WHEN ISSUED SMALL BE FULLY PAID NO NON-ASSESSABLE.
NO HOLDER OF SHARES OF COMMON STOCK OF THE CORPORATION SHALL BE
ENTITLED, AS SUCH, TO ANY PRE-EMPTIVE OR PREFERENTIAL RIGHTS TO SUBSCRIBE TO
ANY UNISSUED STOCK OR ANY OTHER SECURITIES WHICH THE CORPORATION MAY NOW OR
THEREAFTER BE AUTHORIZED TO ISSUE. THE BOARD OF DIRECTORS OF THE CORPORATION
MY, HOWEVER, AT ITS DISCRETION, BY RESOLUTION DETERMINE THAT ANY UNISSUED
SECURITIES OF THE CORPORATION SMALL BE OFFERED FOR SUBSCRIPTION SOLELY TO THE
WAIVERS OF COMMON STOCK Of THE CORPORATION OR SOLELY TO THE HOLDERS OF ANY
CLASS OR CLASSES OF SUCH STOCK, IN SUCH PROPORTIONS BASED ON STOCK OWNERSHIP
AS SAID AT ITS DISCRETION MAY DETERMINE.
EACH SHARE OF COMMON STOCK SHALL BE ENTITLED TO ONE VOTE AT STOCKHOLDERS
MEETINGS, EITHER IN PERSON OR BY PROXY. CUMULATIVE VOTING IN ELECTIONS OF
DIRECTORS NO ALL OTHER MATTERS BROUGHT BEFORE STOCKHOLDERS MEETINGS. WHETHER
THEY BE ANNUAL OR SPECIAL, SHALL NOT BE PERMITTED.
ARTICLE V
STOCKHOLDERS MEETING: MEETINGS OF THE SHAREHOLDERS SHALL BE HELD AT SUCH
PLACE WITHIN OR WITHOUT THE STATE OF NEVADA AS MAY BE PROVIDED BY THE BY-LAWS
OF THE CORPORATION. SPECIAL MEETINGS OF THE SHAREHOLDERS MAY BE CALLED BY THE
PRESIDENT OR ANY OTHER EXECUTIVE OFFICER OF THE CORPORATION, THE BOARD OF
DIRECTORS, OR ANY MEMBER THEREOF, OR BY THE RECORD HOLDER OR HOLDERS OF AT
LEAST TEN PERCENT (10%) OF ALL SHARES ENTITLED TO VOTE AT THE MEETING. ANY
ACTION OTHERWISE REQUIRED TO BE TAKEN AT A MEETING OF THE SHARE
HOLDERS, EXCEPT ELECTION OF DIRECTORS, MAY BE TAKEN WITHOUT A MEETING IF A
CONSENT IN WRITING, SETTING FORTH THE ACTION SO TAKEN, SHALL BE SIGNED BY
SHAREHOLDERS HAVING AT LEASE A MAJORITY OF THE VOTING POWER.
ARTICLE VI
COMMENCING BUSINESS: THE CORPORATION SHALL NOT COMMENCE BUSINESS UNTIL
AT LEAST $1,000.00 HAS BEEN RECEIVED BY IT AS CONSIDERATION FOR THE ISSUANCE
OF SHARES.
ARTICLE VII
STOCK RIGHTS: THE BOARD OF DIRECTORS SHALL HAVE THE AUTHORITY TO
DETERMINE THE CLASSES AND SERIES OF ANY SUBSEQUENT STOCK ISSUED BY THE
CORPORATION AND THE RIGHT AND PREFERENCES PERTAINING THERETO.
ARTICLE VIII
BOARD OF DIRECTORS: A MAJORITY OF THE BOARD OF DIRECTORS SHALL BE
NECESSARY TO CONSTITUTE A QUORUM; AND WHEN SO CONSTITUTED, THE BOARD SHALL BE
AUTHORIZED TO TRANSACT SUCH BUSINESS AS MAY BE DELEGATED TO IT BY THE
STOCKHOLDERS NO WHENEVER THE BOARD OF DIRECTORS SHALL BE SO ASSEMBLED AND ACT
AS A BOARD, EITHER WITHIN OR WITHOUT THE STATE OF NEVADA, ANY ACTION TAKEN
SHALL BE THE ACTION OF THE BOARD OF DIRECTORS AND SHALL BE BINDING UPON THE
CORPORATION, PROVIDED THAT THREE DAYS PRIOR NOTICE, GIVEN EITHER ORALLY OR IN
WRITING, OF THE TIME AND PLACE OF THE MEETING AND OF THE NATURE OF THE
BUSINESS
TO BE TRANSACTED SHALL HAVE BEEN GIVEN TO THE ENTIRE BOARD OF DIRECTORS,
UNLESS SUCH NOTICE BE WAIVED AS HEREINAFTER PROVIDED. ANY DIRECTOR MAY WAIVE
NOTICE OF MY MEETING; NO IN THE EVENT OF SUCH WAIVER, NOTICE SHALL BE IN
WRITING OR A WRITTEN MEMORANDUM SHALL BE MADE OF AN ORAL WAIVER OF NOTICE.
ARTICLE IX
OFFICERS: THE OFFICERS OF THE CORPORATION SHALL CONSIST OF A BOARD OF
DIRECTORS OF NOT LESS THAN THREE NOR MORE THAN TWENTY-FIVE. A CHAIRMAN OF THE
BOARD OF DIRECTORS, A PRESIDENT, A VICE-PRESIDENT, A SECRETARY AND A
TREASURER, WHO SHALL PERFORM SUCH DUTIES NO HAVE SUCH AUTHORITY AS USUALLY
PERTAINS TO SUCH OFFICERS OF A CORPORATION OR AS PAY BE PRESCRIBED BY TK BONO
OF DIRECTORS FROM TIME TO TIME.
QUALIFICATION OF OFFICERS: OFFICERS AND DIRECTORS OF THE CORPORATION
NEED NOT BE RESIDENTS OF THE STATE OF NEVADA AND NEED NOT OWN SHARES OF THE
CORPORATION'S STOCK. THE SECRETARY AND TREASURER MAY, BUT NEED NOT BE, THE
SAME PERSON.
ELECTION: DIRECTORS SHALL BE ELECTED AT THE ANNUAL MEETING OF THE
SHAREHOLDERS. AND THE PERSONS RECEIVING THE HIGHEST NUMBER OF VOTES SMALL BE
DECLARED DULY ELECTED, PROVIDING SUCH NUMBERS SHALL REPRESENT A MAJORITY OF
ALL VOTES CAST. WITHIN TEN (10) DAYS AFTER THE ELECTION, THE DIRECTORS SHALL
MET NO ELECT A PRESIDENT, VICE-PRESIDENT, SECRETARY NO TREASURER.
TERM OF OFFICE: THE TERM OF OFFICE OF ALL DIRECTORS NO OFFICERS SHALL BE
ONE YEAR, PROVIDED ALL DIRECTORS AND OFFICERS SHALL HOLD OFFICE UNTIL THEIR
SUCCESSORS ARE DULY ELECTED AND QUALIFIED.
RESIGNATION OF OFFICERS: ANY OFFICER OR DIRECTOR MY RESIGN BY FILING HIS
WRITTEN RESIGNATION WITH THE SECRETARY OF THE CORPORATION, OR IN THE CASE OF
THE SECRETARY, WITH THE PRESIDENT OF THE CORPORATION AND UPON ACCEPTANCE
THEREOF BY THE BOARD OF DIRECTORS OR IF SUCH BOARD SHALL NEGLECT TO ACT UPON
SUCH RESIGNATION WITHIN FOURTEEN (14) DAYS AFTER RECEIPT, THE RESIGNATION
SHALL BECOME EFFECTIVE AND THE OFFICE SHALL BE DEEMED VACANT.
REMOVAL OF OFFICERS: ANY OFFICER OR DIRECTOR OF THIS CORPORATION MAY BE
REMOVED AT ANY TIME WITHOUT CAUSE IN THE MANNER PROVIDED BY THE LAWS OF THE
STATE OF NEVADA, FOR THE REMOVAL OF SUCH OFFICER OR DIRECTOR, OR BY A MAJORITY
VOTE OF THE OUTSTANDING STOCK OF THE CORPORATION AT ANY SPECIAL MEETING OF THE
STOCKHOLDERS CALLED FOR THAT PURPOSE AS HEREIN PROVIDED.
VACANCIES: IN THE CASE OF DEATH, DISABILITY, OR RESIGNATION OF ANY
OFFICER OR DIRECTOR OF THE COMPANY, THE REMAINING DIRECTORS OR DIRECTOR OF THE
COMPANY, EVEN THOUGH LESS THAN A QUORUM, SHALL FILL VACANCIES FOR THE
UNEXPIRED TERM OR TERMS.
ORIGINAL DIRECTORS: THE NUMBER OF DIRECTORS CONSTITUTING THE INITIAL
BOARD OF DIRECTORS OF THE CORPORATION IS THREE (3), AND THE NAMES AND
ADDRESSES OF THE PERSONS WHO ARE THE INCORPORATORS NO WHO ARE TO SERVE AS
DIRECTORS UNTIL THE FIRST ANNUAL MEETING OF SHAREHOLDERS OR UNTIL THEIR
SUCCESSORS ARE ELECTED AND QUALIFIED ARE:
1. SHIRRELL W. HUGHES
2929 HILLSDEN DRIVE, SALT LAKE CITY, UTAH 84117
2. CATHERINE J. LEAUTUTU
7672 SOUTH 2030 WEST, WEST JORDAN, UTAH 84084
3. SINDIE SPENCER
11131 SOUTH 2820 WEST, SOUTH JORDAN, UTAH 84085
ARTICLE X
DURATION: THE PERIOD OF DURATION OF THE CORPORATION SHALL BE PERPETUAL.
ARTICLE XI
AMENDMENT: THESE ARTICLES OF INCORPORATION, BY VOTE OF NOT LESS THAN
FIFTY PER CENT OF THE ISSUED AND OUTSTANDING CAPITAL STM OF THE CORPORATION,
PAY BE DEEMED AMENDED IN ANY RESPECT AMENDABLE AT LAW AT ANY MEETING. A COPY
OF THE PROPOSED AMENDMENT SHALL BE GIVEN TO THE STOCKHOLDERS AS PROVIDED IN
ARTICLE VI HEREOF, FOR CALLING AND HOLDING MEETINGS OF THE STOCKHOLDERS.
ARTICLE XII
BY-LAWS: THE BOARD OF DIRECTORS OF THE CORPORATION SHALL HAVE AUTHORITY
TO ADOPT SUCH BY-LAWS AS IN THEIR JUDGMENT MAY BE DEEMED NECESSARY OR
ADVISABLE FOR THE MANAGEMENT AND TRANSACTION OF THE BUSINESS OF THE
CORPORATION PROVIDED THAT SUCH BY-LAWS ARE NOT IN CONFLICT WITH THESE ARTICLES
OF INCORPORATION OR THE CONSTITUTION OF THE STATE OF NEVADA.
IN WITNESS WHEREOF, THE UNDERSIGNED INCORPORATORS HAVE HEREUNTO AFFIXED
THEIR SIGNATURES AT SALT LAKE CITY, UTAH THIS 9TH DAY OF JULY 1985.
/s/Shirrell W. Hughes
/s/Catherine J. Leaututu
/s/Sindie Spencer
STATE OF UTAH )
COUNTY OF SALT LAKE)
A NOTARY PUBLIC, DO HEREBY CERTIFY THAT SHIRRELL W. HUGHES, CATHERINE J.
LEAUTUTU, AND SINDIE SPENCER, DID PERSONALLY APPEAR BEFORE ME TO AFFIX THEIR
SIGNATURES TO THIS DOCUMENT.
/S/Kurt D. Hughes
NOTARY PUBLIC
COMMISSION EXPIRES:
12/17/85
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 13000
<OTHER-SE> (13000)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 740
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (740)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (740)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (740)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
