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, Suite 850
Salt Lake City, Utah 84144
(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 14
<PAGE>
SCHEDULE 13D Page 2 of 14
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON BALLARD INVESTMENT CO., LTD.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE 87-0348327
PERSON
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [ ]
GROUP (b) [X]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS BK
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Utah
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER 1,567,381
SHARES -------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY -------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER 1,567,381
REPORTING -------------------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY 1,567,381
EACH REPORTING PERSON
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN 9.3%
ROW (11)
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
- -------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D Page 3 of 14
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON ARROW-1 INVESTMENTS, L.L.C.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE 87-0556727
PERSON
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [ ]
GROUP (b) [X]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS BK
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Utah
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER 1,567,381
SHARES -------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY -------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER 1,567,381
REPORTING -------------------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY 1,567,381
EACH REPORTING PERSON
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN 9.3%
ROW (11)
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO*
- -------------------------------------------------------------------------------
* Reporting Person is a limited liability company that is the managing
general partner of Ballard Investment Co., Ltd.
<PAGE>
SCHEDULE 13D Page 4 of 14
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON MELVIN R. BALLARD
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [ ]
GROUP (b) [X]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER 100,000
SHARES -------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 1,567,381*
OWNED BY -------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER 100,000
REPORTING -------------------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE POWER 1,567,381*
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY 1,667,381*
EACH REPORTING PERSON
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN 9.9%
ROW (11)
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON IN
- -------------------------------------------------------------------------------
* Includes shares of Common Stock of the issuer owned by Ballard Investment
Co., Ltd., a Utah limited partnership as to which Mr. Ballard shares the
power to vote or dispose or direct the disposition of securities owned by
the partnership.
<PAGE>
SCHEDULE 13D Page 5 of 14
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (the "Schedule 13D") relates to the common
stock, par value $.0001 per share (the "Common Stock"), of K.L.S. Enviro
Resources, Inc., a Nevada corporation (the "Company"). The principal executive
offices of the Company are located at 3220 North Freeway, Fort Worth, Texas
76111.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This Schedule 13D is filed on behalf of each of the following
persons (each a "Reporting Person" and collectively the "Reporting Persons"),
with respect to the Common Stock described in this Schedule 13D:
(1) Ballard Investment Co, Ltd., a Utah limited partnership
("BIC"), whose general partners are R&B, L.L.C., a Utah limited liability
company ("R&B"), The Barbara B. Ballard Trust (the "Trust"), Arrow-1
Investments, L.L.C., a Utah limited liability company ("Arrow-1"), and BB & BJ,
Inc., a Utah corporation ("BB&BJ");
(2) Arrow-1, the managing general partner of BIC; and
(3) Melvin R. Ballard, an individual resident in the State of
Utah, a trustee of the Trust and the managing member of R&B ("Mr. Ballard").
Although BIC has four general partners, management control over BIC,
including the power to vote or dispose of or direct the disposition of
securities owned by BIC, is vested in Arrow-1, as the managing general partner
of BIC, or alternatively, in a majority of the four general partners of BIC.
Schedule A to this Schedule 13D sets forth the information required by this
Item for each manager or other person controlling Arrow-1. Schedule B sets
forth the information required by this Item for each manger or other control
person of R&B. Schedule C sets forth the information required by this Item for
each trustee of the Trust. Schedule D sets forth the information required by
this Item for each officer and director of BB&BJ. The information set forth on
Schedules A, B, C and D hereto is incorporated herein by reference.
(b) The principal business address for each of the Reporting Persons
is 145 South Fairway Drive, North Salt Lake City, Utah 84054.
(c) BIC's principal business is the management of its assets and
investments of such assets. Arrow-1's principal business is the management of
its assets on behalf of its members and the investment of such assets. Mr.
Ballard's present principal occupation is as a minister.
(d)-(e) During the last five years, none of the Reporting Persons or
the persons or entities identified on Schedules A, B, C or D hereto has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a 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) Each natural person listed in this Schedule 13D or on Schedules A,
B, C or D hereto is a United States Citizen.
The Reporting Persons could be deemed to be a group for purposes of this
Schedule 13D because Mr. Ballard is a control person of two of the four general
partners of BIC and there are certain family relationships among Mr. Ballard
and the control persons of the general partners of BIC not controlled by Mr.
<PAGE>
SCHEDULE 13D Page 6 of 14
Ballard. Nevertheless, the Reporting Persons disclaim that they have acted as
a group for purposes of acquiring, holding, voting or disposing of the Common
Stock, and each Reporting Person disclaims beneficial ownership of shares of
the Common Stock owned by the other Reporting Persons.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Other than the transaction described in this Item and in Item 5(c), which
necessitated the filing of the Schedule 13D, the Reporting Persons acquired the
Common Stock that is described in this Schedule 13D between March 1994 and
October 1996 through a combination of the conversion of certain convertible
securities, acquisitions directly from the issuer in transactions exempt from
the registration requirement of the Securities Act of 1933, as amended, and
open market transactions. With respect to the transaction described in Item
5(c), BIC obtained 900,000 shares of the Company's Common Stock when it
exercised the right to convert the unpaid balance due under a promissory note
made by the Company and in favor of fonix corporation ("fonix"), an unrelated
third party (the "Note"). Under the terms of the Note, any unpaid balance due
thereunder was convertible at the option of the holder of the Note into shares
of the Company's Common Stock at the conversion rate of $.30 per share. On
December 31, 1996, the Note with a then outstanding principal balance of
$270,000 was assigned to BIC by fonix in exchange for BIC's payment to fonix of
$270,000. Immediately thereafter, BIC exercised the conversion option of the
Note, and the Company issued the Common Stock described in Item 5(c). BIC
obtained the funds necessary for the acquisition of the Note from a commercial
bank loan obtained in the ordinary course of BIC's business. Specifically, BIC
obtained an advance of such funds drawn against a line of credit provided by
Zions First National Bank. Interest is payable on the line of credit in an
amount corresponding to the prime rate charged by Zions First National Bank.
ITEM 4. PURPOSE OF THE TRANSACTION.
The Reporting Persons have acquired the Common Stock described in this
Schedule 13D and are holding such securities for investment purposes only. A
limited liability company unaffiliated with the Company (the "LLC") but as to
which BIC, an entity controlled by the control person of Arrow-1, and an entity
controlled by the control person of BB&BJ each have equity interests is
engaged, as of the date of this Schedule 13D, in private negotiations which
could result in the acquisition by the LLC of warrants to acquire 25,000
additional shares of Common Stock. Additionally, BIC presently is in private
negotiations with parties affiliated with the Company which could result in the
acquisition by BIC of 100,000 additional shares of presently issued and
outstanding shares of Common Stock. Moreover, any of the Reporting Persons may
determine to acquire additional Common Stock in the open market or dispose of
some or all of the Common Stock held by such Reporting Person in privately
negotiated transactions or otherwise, depending on circumstances existing from
time to time.
Except as set forth above, the Reporting Persons have no present plans or
intentions which would result in or relate to any of the transactions described
in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER.
(a) The responses of the Reporting Persons to Items 7, 8, 9, 10 and 11
of the Cover Sheets, which relate to the beneficial ownership of the Company's
Common Stock, are incorporated herein by reference. The percentage of the
Company's Common Stock beneficially owned by the Reporting Persons as set forth
on the Cover Sheets is based in each case upon 16,824,244 outstanding shares of
<PAGE>
SCHEDULE 13D Page 7 of 14
Common Stock, consisting of 15,924,244 shares issued and outstanding on
December 30, 1996, as represented to the Reporting Persons by the Company,
together with the 900,000 shares issued in connection with the transaction
described in Item 5(c) of this Schedule 13D.
(b) Each of the Reporting Persons has the sole or shared power to vote
and to dispose or direct the disposition of the Common Stock as is indicated on
such Reporting Person's respective Cover Sheet, which information is
incorporated herein by reference.
(c) On December 31, 1996, BIC acquired 900,000 shares of the Company's
Common Stock when it exercised the right to convert the unpaid balance due
under the Note [see Item 3]. Under the terms of the Note, any unpaid balance
due thereunder was convertible at the option of the holder of the Note into
shares of the Company's Common Stock at the conversion rate of $.30 per share.
On December 31, 1996, the Note with a then outstanding principal balance of
$270,000 was assigned to BIC by an unrelated third party in exchange for BIC's
payment to such third party of $270,000. Thereafter, BIC exercised the
conversion feature of the Note, and the Company issued the 900,000 shares of
Common Stock. Except as set forth in this paragraph, to the best knowledge and
belief of the Reporting Persons, neither of the Reporting Persons has effected
any transaction in any equity security of the Company during the past sixty
days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The Reporting Persons have entered into an agreement, dated as of January
9, 1997 (the "Filing Agreement"), with respect to the filing of this Schedule
13D and any amendment hereto, and pursuant to the Filing Agreement certain
Reporting Persons have granted a power-of-attorney to Craig B. Ballard to
execute this Schedule 13D and any amendment hereto on behalf of such Reporting
Persons. The discussion of certain preliminary negotiations that could result
in the acquisition by the Reporting Persons or entities controlled by or
affiliated with the Reporting Persons of additional shares of the Common Stock
as set forth in Item 4 is incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following Exhibits are filed herewith:
1. Filing Agreement, dated as of January 9, 1997, by and among the
Reporting Persons.
<PAGE>
SCHEDULE 13D Page 8 of 14
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 9, 1997.
BALLARD INVESTMENT CO., LTD.
a Utah limited partnership
By Arrow-1 Investments, L.L.C.,
a Utah limited liability company, its
managing general partner
By /s/ Craig B. Ballard
--------------------------------
Craig B. Ballard, Manager
ARROW-1 INVESTMENTS, L.L.C.,
a Utah limited liability company
By /s/ Craig B. Ballard
--------------------------------
Craig B. Ballard, Manager
/s/ Craig B. Ballard
----------------------------------
Craig B. Ballard, Attorney-in-Fact for
Melvin R. Ballard
<PAGE>
SCHEDULE 13D Page 9 of 14
SCHEDULE A
Identity and Background
of Control Persons of
Arrow-1 Investments, L.L.C.
The following table sets forth the name and principal occupation or
employment of the managers or other persons controlling Arrow-1 Investments,
L.L.C., a Utah limited liability company ("Arrow-1"), and the sole managing
general partner of Ballard Investment Co., Ltd. Arrow-1's principal business
is the management of its assets on behalf of its members and the investment of
such assets. The business address of each person listed below is 145 South
Fairway Drive, North Salt Lake City, Utah 84054.
Name Present Principal Occupation
---- or Employment
------------------------------
Craig B. Ballard Trust Manager, Arrow-1 Investments,
investment management
Melissa G. Ballard Trust Manager, Arrow-1 Investments,
investment management
Craig B. Ballard Trustee, Craig B. Ballard Trust;
Trustee, Melissa G. Ballard Trust;
investment management
Melissa G. Ballard Trustee, Melissa G. Ballard Trust;
Trustee, Craig B. Ballard Trust;
investment management
<PAGE>
SCHEDULE 13D Page 10 of 14
SCHEDULE B
Identity and Background
of Control Persons of
R&B, L.L.C.
The following table sets forth the name and principal occupation or
employment of the managers and other persons controlling R&B, L.L.C., a Utah
limited liability company ("R&B") that is one of four general partners of
Ballard Investment Co., Ltd. R&B is principally engaged in the business of
investment management on behalf of its members. The business address of each
person listed below is 145 South Fairway Drive, North Salt Lake City, Utah
84054.
Name Present Principal Occupation
---- or Employment
------------------------------
The M. Russell Ballard Trust Investment Management, Manager of R&B
The Barbara B. Ballard Trust Investment Management, Manager of R&B
Melvin R. Ballard Minister, Co-trustee of the M. Russell
Ballard Trust and Co-trustee of the
Barbara B. Ballard Trust
Barbara B. Ballard Investment management, Co-trustee of
the Barbara B. Ballard Trust and Co-
trustee of the M. Russell Ballard Trust
<PAGE>
SCHEDULE 13D Page 11 of 14
SCHEDULE C
Identity and Background
of Control Persons of
The Barbara B. Ballard Trust
The following table sets forth the name and principal occupation or
employment of the trustees and other persons controlling The Barbara B. Ballard
Trust (the "Trust") that is one of four general partners of Ballard Investment
Co., Ltd. The Trust is principally engaged in the business of investment
management on behalf of its beneficiaries. The business address of each person
listed below is 145 South Fairway Drive, North Salt Lake City, Utah 84054.
Name Present Principal Occupation
---- or Employment
------------------------------
Melvin R. Ballard Minister, Co-trustee of the M. Russell
Ballard Trust and Co-trustee of the
Barbara B. Ballard Trust
Barbara B. Ballard Investment management, Co-trustee of
the Barbara B. Ballard Trust and Co-
trustee of the M. Russell Ballard Trust
<PAGE>
SCHEDULE 13D Page 12 of 14
SCHEDULE D
Identity and Background
of Control Persons of
BB & BJ, Inc.
The following table sets forth the name and principal occupation or
employment of the officers and directors or other persons controlling BB & BJ,
Inc., a Utah corporation ("BB&BJ"), and one of four general partners of Ballard
Investment Co., Ltd. BB&BJ's principal business is investment. The business
address of each person listed below is 145 South Fairway Drive, North Salt Lake
City, Utah 84054.
Name Present Principal Occupation
---- or Employment
------------------------------
Bradford J. Brower President, Sole Director of BB&BJ
<PAGE>
SCHEDULE 13D Page 13 of 14
EXHIBIT INDEX
-------------
EXHIBIT
NO EXHIBIT
------ -------
1 Filing Agreement, dated as of January 9, 1997,
among the Reporting Persons
<PAGE>
SCHEDULE 13D Page 14 of 14
Exhibit No. 1
------------
FILING AGREEMENT
----------------
This will confirm the agreement by and among the undersigned that the
statement on schedule 13D filed on or about this date (the "Schedule 13D") with
respect to the beneficial ownership by the undersigned of shares of common
stock, $.0001 par value, of K.L.S. Enviro Resources, Inc., a Nevada
corporation, is being filed on behalf of each of the signatories named below
(each, a "Reporting Person" and collectively the "Reporting Persons").
This will also confirm the agreement by and among the Reporting Persons
that any amendment to such Schedule 13D which may be required to be filed shall
be filed on behalf of each of the Reporting Persons.
Each of the undersigned Reporting Persons, by his, her or its execution
hereof, hereby irrevocably makes, constitutes and appoints Craig B. Ballard as
his, her or its true and lawful agent and attorney-in-fact, with full power of
substitution and full power and authority in his, her or its name, place and
stead, to make, execute, sign, acknowledge, swear to, record and file (i) the
Schedule 13D and all amendments thereto and (ii) all certificates and other
instruments deemed advisable by Craig B. Ballard to comply with the provisions
of the Securities Exchange Act of 1934, as amended.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
Dated: January 9, 1997
BALLARD INVESTMENT CO., LTD.
a Utah limited partnership
By Arrow-1 Investments, L.L.C.,
a Utah limited liability company, its
managing general partner
By /s/ Craig B. Ballard
--------------------------------
Craig B. Ballard, Manager
ARROW-1 INVESTMENTS, L.L.C.,
a Utah limited liability company
By /s/ Craig B. Ballard
--------------------------------
Craig B. Ballard, Manager
/s/ Craig B. Ballard
----------------------------------
Craig B. Ballard, Attorney-in-Fact for
Melvin R. Ballard
