SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Amendment No. 1)
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)
December 31, 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 [ ].
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 10
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SCHEDULE 13D Page 2 of 10
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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 N/A
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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 0
SHARES ---------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY ---------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER 0
REPORTING ---------------------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY 0
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 0%
ROW (11)
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14. TYPE OF REPORTING PERSON CO
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SCHEDULE 13D Page 3 of 10
This Statement constitutes Amendment No. 1 to the Statement of Beneficial
Ownership on Schedule 13D (the "Initial 13D") filed by fonix corporation, a
Delaware corporation (the "Reporting Person"), dated as of August 16, 1996 and
pertaining to the Reporting Person's beneficial ownership of the common stock of
K.L.S. Enviro Resources, Inc., a Nevada corporation ("KLS"). The Initial 13D
was filed to reflect that in connection with a debt financing transaction
between the Reporting Person and KLS, the Reporting Person had acquired the
right to convert the principal balance due and owing pursuant to such debt
financing into, at the Reporting Person's sole discretion, common stock of
KLS on the terms and conditions as are more fully explained in the Initial 13D.
This Amendment is filed to reflect that on September 30, 1996, KLS retired
$1,673,700 of the then outstanding $1,900,000 balance due to the Reporting
Person. Subsequently, on October 29, 1996, the Reporting Person extended
additional debt financing to KLS in the amount of $200,000 on the same terms and
conditions (including the right to convert the unpaid principal balance into
common stock at $.40 per share), which additional advance was repaid in full on
December 24, 1996. On December 31, 1996, the Reporting Person sold a $270,000
portion of the outstanding debt due from KLS, together with the corresponding
conversion right, to a third-party unrelated to the Reporting Person. Also on
December 31, 1996, KLS repaid the then-outstanding balance due under the debt
financing provided by the Reporting Person, consisting of approximately $10,500.
As of December 31, 1996, KLS had no outstanding obligation to the Reporting
Person and the Reporting Person owned no securities of KLS and did not otherwise
have any right to acquire any securities of KLS.
Except as amended below, the information set forth in the Initial 13D
remains unchanged.
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.
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SCHEDULE 13D Page 4 of 10
(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 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 was 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, on August 16, 1996, 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 purchased 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].
Subsequently, on September 30, 1996, KLS repaid $1,673,700 of the
then outstanding $1,900,000 principal payable to the Reporting
Person, which repayment left an outstanding balance of $272,156,
which was convertible into shares of 907,187 shares of KLS's common
stock at $.30 per share. Subsequently, and consistent with the same
investment policy of the Reporting Person, it advanced an additional
$200,000 of debt financing to KLS as part of the same course of
financing. That principal amount was convertible into KLS's common
stock at the rate
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SCHEDULE 13D Page 5 of 10
of $.40 per share, but was repaid in full on December 24, 1996. On
December 31, 1996, the Reporting Person transferred $270,000 of the
then-outstanding balance due to it from KLS, together with the
corresponding conversion right, to an unrelated third party. Also
on December 31, 1996 KLS repaid the entirety of the remaining balance
due to the Reporting Person (approximately $10,500).
Effective December 31, 1996, Stephen M. Studdert, Roger D. Dudley,
Joseph Verner Reed and Rick D. Nydegger, each a director or executive
officer of the Reporting Person, assumed positions as directors of
KLS.
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)-(b) As of the date of this Amendment No. 1, the Reporting Person
beneficially owns no shares of KLS's common stock and has the
right to acquire no shares of KLS's common stock or any other
equity security of KLS, whether convertible into shares of
common stock or otherwise.
(c) Recent Transactions:
Within the past 60 days, and since the filing of the Initial
13D, the Reporting Person's beneficial ownership of the equity
securities of KLS has changed as follows:
On September 30, 1996, KLS retired $1,673,700 of the then
outstanding $1,900,000 balance due to the Reporting Person.
Subsequently, on October 29, 1996, the Reporting Person
extended additional debt financing to KLS in the amount of
$200,000 on the same terms and conditions (including the right
to convert the unpaid principal balance into common stock at
$.40 per share), which additional advance was repaid in full
on December 24, 1996. On December 31, 1996, the Reporting
Person sold a $270,000 portion of the outstanding debt due from
KLS, together with the corresponding conversion right, to a
third-party unrelated to the Reporting Person. The
consideration paid by such third-party for such portion of the
debt owed to the Reporting Person was $270,000. Also on
December 31, 1996, KLS repaid the then-outstanding balance due
under the debt financing provided by the Reporting Person,
consisting of approximately $10,500. As of December 31, 1996,
KLS had no outstanding obligation to the Reporting Person and
the Reporting Person owned no securities of KLS and did not
otherwise have any right to acquire any securities of KLS.
(d) Rights with Respect to Dividends
or Sales Proceeds: N/A
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SCHEDULE 13D Page 6 of 10
(e) Date of Cessation of Five Percent
Beneficial Ownership: December 31, 1996
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 purchased 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.
In September 1996, the Reporting Person indicated to KLS that it
would seek payment of all or a portion of the short-term debt owed
to the Reporting Person by KLS (which debt was payable upon demand
therefor by the Reporting Person). KLS did not at that time have
sufficient cash resources to repay such debt, and the Reporting
Person's board of directors determined that conversion of the
principal amount owed into common stock of KLS was not appropriate
in light of the Reporting Person's cash requirements and investment
strategy. Consequently, an entity owned and controlled by Messrs.
Studdert, Murdock and Dudley, each of whom are executive officers,
directors and shareholders of the Reporting Person, agreed to loan
sufficient funds to KLS to enable KLS to retire a substantial portion
of the debt owed to the Reporting Person, in return for which KLS
agreed to essentially identical loan terms and issued to that entity
a warrant to purchase 6,600,000 shares of KLS's common stock. Thus,
as of December 31, 1996, the Reporting Person beneficially owns no
securities of KLS and, other than having common directors, has no
business relationship with KLS.
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 7 of 10
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 January 24, 1997.
fonix corporation
By: /s/ Thomas A. Murdock
--------------------------------
Thomas A. Murdock
President and Chief Operating
Officer
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SCHEDULE 13D Page 8 of 10
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 9 of 10
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
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SCHEDULE 13D Page 10 of 10
Name: Rick D. Nydegger
Business Address: Suite 1000, Eagle Gate Tower
60 East South Temple Street
Salt Lake City, Utah 84111
Principal Occupation: Patent, Copyright & Trademark Attorney
Name, principal business and Workman, Nydegger & Seeley
address of corporation or other Patent, Copyright & Trademark Counsel
organization on which employment Suite 1000, Eagle Gate Tower
is conducted: 60 East South Temple Street
Salt Lake City, Utah 84111
