SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
K.L.S. ENVIRO RESOURCES, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
482530102
(CUSIP Number)
Jeffrey M. Jones, Esq.
DURHAM, EVANS, JONES & PINEGAR, P.C.
50 South Main Street, 850 Key Bank Tower
Salt Lake City, Utah 84144
TELEPHONE: (801) 538-2424
(Name, Address, and Telephone Number of Person
Authorized to Receive Notices and Communications)
AUGUST 12, 1996
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with this statement [X].
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act.
Page 1 of 8
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SCHEDULE 13D Page 2 of 8
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1. NAME OF REPORTING PERSON fonix corporation
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE 22-2994719
PERSON
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [ ]
GROUP (b) [X]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
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6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
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NUMBER OF 7. SOLE VOTING POWER 5,341,667*
SHARES ------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY ------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER 5,341,667*
REPORTING ------------------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY 5,341,667*
EACH REPORTING PERSON
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN 35.3%
ROW (11)
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14. TYPE OF REPORTING PERSON CO
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* Represents shares of common stock subject to issuance to the Reporting
Person upon conversion, in the discretion of the Reporting Person, of
convertible promissory notes entered into between the issuer and the
Reporting Person as payee.
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SCHEDULE 13D Page 3 of 8
ITEM 1. SECURITY AND ISSUER.
(a) Name and Address of Principal Executive Offices of Issuer:
K.L.S. Enviro Resources, Inc.
3220 North Freeway
Fort Worth, Texas 76111
(b) Title and Class of Equity Securities: Common Stock
ITEM 2. IDENTITY AND BACKGROUND.
(a) Name of Person Filing: fonix corporation
The executive officers and directors
of fonix corporation are set forth
on Appendix A hereto.
(b) Principal Business: Development of computer voice recognition
technologies
(c) Address of Principal Business and Principal Office:
1225 Eagle Gate Tower
60 East South Temple Street
Salt Lake City, Utah 84111
(d) Criminal Proceedings:
During the last five years neither the Reporting
Person nor any officer or director of the Reporting
Person has been convicted in any criminal proceeding.
(e) Civil Proceedings:
During the last five years neither the Reporting
Person nor any officer or director of the Reporting
Person has been party to any civil proceeding of a
judicial or administrative body of competent
jurisdiction as a result of which such person would
have been subject to any judgment, decree or final
order enjoining future violations of or prohibiting
or mandating activities subject to Federal or State
securities laws or finding any violation with respect
to such laws.
(f) State of Incorporation: Delaware
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Funds for the purchase of the securities are derived from
the Reporting Person's working capital.
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SCHEDULE 13D Page 4 of 8
ITEM 4. PURPOSE OF THE TRANSACTION.
In connection with the Reporting Person's financial management, it
seeks opportunities to make short-term debt investments that yield
appropriate rates of return and are adequately secured. As part
of this financial management strategy, the Reporting Person
provided a total of $1,900,000 in short-term debt financing to
K.L.S. Enviro Resources, Inc., a Nevada corporation ("KLS"), which
debt is secured by all of KLS's assets (except certain real
property owned by KLS). In addition, and as a further inducement
to the Reporting Person, KLS agreed that the entirety of the debt
financing provided by the Reporting Person would be convertible,
at the option of the Reporting Person, into shares of KLS's common
stock. Incident to the provision of the debt financing described
herein, Thomas A. Murdock, an executive officer, director and
majority shareholder of the Reporting Person, assumed a position
on KLS's board of directors effective July 10, 1996. Additionally,
a group comprised of a current executive officer and director of
KLS and a private entity controlled by executive officers,
directors and shareholders of the Reporting Person has agreed to
purchase 3,561,000 shares of KLS's common stock and 100,000 shares
of KLS's preferred stock that is convertible into 500,000 shares
of common stock from the estate of a former executive officer and
director of KLS. [See Item 6].
Other than as set forth above, the Reporting Person has no plans
or proposals that relate to or would result in any of the
circumstances described in subparagraphs (a) to (j) of Item 4 of
Schedule 13D.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER.
(a) Number of Shares Beneficially Owned: 0 shares
Right to Acquire: 5,341,667 shares
Percent of Class: 35.2% (based upon 15,154,323 shares of
common stock deemed to be issued and
outstanding based on representations set
forth in KLS's quarterly report on Form
10-QSB for the period ended June 30, 1996
and accounting for the unissued shares of
common stock underlying the Reporting
Person's presently exercisable conversion
right).
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SCHEDULE 13D Page 5 of 8
(b) Sole Power to Vote, Direct the
Vote of, or Dispose of Shares: 5,341,667 shares
(c) Recent Transactions:
Between May 14, 1996 and August 13, 1996, the Reporting
Person advanced a total of $1,900,000 of debt financing to
KLS in increments of $710,000, $450,000, $150,000 and
$590,000. KLS executed a promissory note for the $710,000
increment in June 1996, but on August 13, 1996, and pursuant
to ongoing negotiations between the Reporting Person and
KLS, KLS executed and delivered to the Reporting Person a
replacement note for the $710,000 increment and similarly
worded notes for the $450,000, $150,000, and $590,000
increments (collectively the "Notes"). The Notes provide
that the entire balance of any unpaid principal is
convertible at the option of the Reporting Person into shares
of KLS's common stock. Specifically, the Notes provided that
the $710,000 increment is convertible at the rate of $0.30
per share, and the balance of the financing ($1,190,000) is
convertible at the rate of $0.40 per share, for a total of
5,341,667 shares.
(d) Rights with Respect to Dividends
or Sales Proceeds: N/A
(e) Date of Cessation of Five Percent
Beneficial Ownership: N/A
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
By agreement dated August 16, 1996, a group (the "Purchaser")
comprised of Raymond H. Kurzon, a current executive officer and
director of KLS, and a private entity controlled by Stephen M.
Studdert, Thomas A. Murdock and Roger D. Dudley, each of whom is
an executive officer, director and substantial shareholder of the
Reporting Person agreed to purchase 3,561,000 shares of KLS's
common stock and 100,000 shares of KLS's Series A Preferred Stock
that is convertible at the option of the holder thereof into
500,000 shares of KLS's common stock from the Estate of James
Robert Bell, a former executive officer, director and majority
shareholder of KLS, and Jo Ann Bell. The securities purchased by
the Purchaser constitute 41.3% of the presently issued and
outstanding common stock of KLS. The Reporting Person has no
present intention to exercise its conversion rights with respect
to the Notes described herein, and would do so only if the
Reporting Person's independent directors determined that such
exercise would be in the best interests of the Reporting Person.
Even assuming the Reporting Person were to exercise its conversion
right, there is no arrangement or understanding between Purchaser
and the Reporting Person as to matters affecting KLS's securities.
Other than as described herein, there is no relationship,
arrangement or understanding between the Reporting Person and any
other person pertaining to the securities of KLS, including without
limitation the transfer or voting of any such securities.
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SCHEDULE 13D Page 6 of 8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated as of August 22, 1996.
fonix corporation
By: /s/ Thomas A. Murdock
---------------------------------
Thomas A. Murdock
President and Chief Operating
Officer
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SCHEDULE 13D Page 7 of 8
APPENDIX A
DIRECTORS AND EXECUTIVE OFFICERS
The following is a list of all Directors and Executive Officer of
fonix corporation and certain other information with respect to each Director.
All Directors and Executive Officers are United States citizens.
Name: Alan C. Ashton, Ph.D.
Business Address: 1361 South 740 East
Orem, Utah 84058
Principal Occupation: Investment management
Name, principal business and Beesmark Investments, L.C.
address of corporation or other Investment Management
organization in which employment 1361 South 740 East
is conducted: Orem, Utah 84058
Name: Ambassador Joseph Verner Reed
Business Address: United Nations Building
New York, New York
Principal Occupation: Under Secretary General, United Nations
Name, principal business and United Nations
address of corporation or other United Nations Building
organization on which employment New York, New York
is conducted:
Name: James B. Hayes
Business Address: One Education Way
Colorado Springs, Colorado 80906
Principal Occupation: President and Chief Executive Officer of
Junior Achievement, Inc.
Name, principal business and Junior Achievement, Inc., non-profit
address of corporation or other economic free-enterprise education
organization on which employment One Education Way
is conducted: Colorado Springs, Colorado 80906
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SCHEDULE 13D Page 8 of 8
Name: Stephen M. Studdert
Business Address: 1225 Eagle Gate Tower
60 East South Temple Street
Salt Lake City, Utah 84111
Principal Occupation: Chairman, Chief Executive Officer and
Director of fonix corporation
Name, principal business and fonix corporation, development of computer
address of corporation or other voice recognition technologies
organization on which employment 1225 Eagle Gate Tower
is conducted: 60 East South Temple Street
Salt Lake City, Utah 84111
Name: Thomas A. Murdock
Business Address: 1225 Eagle Gate Tower
60 East South Temple Street
Salt Lake City, Utah 84111
Principal Occupation: President, Chief Operating Officer and
Director of fonix corporation
Name, principal business and fonix corporation, development of computer
address of corporation or other voice recognition technologies
organization on which employment 1225 Eagle Gate Tower
is conducted: 60 East South Temple Street
Salt Lake City, Utah 84111
Name: Roger D. Dudley
Business Address: 1225 Eagle Gate Tower
60 East South Temple Street
Salt Lake City, Utah 84111
Principal Occupation: Executive Vice President, Chief
Financial Officer and Director of fonix
corporation
Name, principal business and fonix corporation, development of computer
address of corporation or other voice recognition technologies
organization on which employment 1225 Eagle Gate Tower
is conducted: 60 East South Temple Street
Salt Lake City, Utah 84111
