UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14(a)-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.
[ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
UNICO, INCORPORATED
_____________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
_____________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
_____________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
(5) Total fee paid:
_____________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
______________________________________________________________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
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(1) Amount Previously Paid:
_____________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_____________________________________________________________________________
(3) Filing Party:
_____________________________________________________________________________
(4) Date Filed:
_____________________________________________________________________________
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UNICO, INCORPORATED,
an Arizona corporation
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD
May 21, 2004
________________________________________
TO THE SHAREHOLDERS OF UNICO, INCORPORATED:
A special meeting of shareholders of Unico, Incorporated ("Unico" or the
"Company") will be held at 10:30 a.m. local time on May 21, 2004, at the
Embassy Suites Hotel Convention Center located at 3600 Paradise Road, Las
Vegas, Nevada, 89109. The following notice of meeting identifies each
business item for your action. These items and the vote the board of
directors recommends are:
ITEM RECOMMENDED VOTE
1. Increase the number of Unico's authorized common shares,
from one hundred million (100,000,000) to five hundred
million (500,000,000) shares, and establish a class of
preferred stock, with 20,000,000 shares authorized, with
such preferences, limitations and relative rights as may
be determined in the discretion of Unico's board of
directors. FOR
2. Ratify and approve the board of directors' actions to:
(a) grant presently outstanding warrants to purchase
up to 3,015,000 shares of the Company's common stock
which were granted during 2002, 2003 and/or 2004; and
(b) grant presently outstanding stock options to
purchase up to 300,000 shares of the Company's common
stock which were granted during June 2002. FOR
3. Approve and authorize the sale of shares of Unico's common
stock at prices to be established by the board of directors
which may be below Unico's net asset value per share. FOR
4. To transact any other business which may properly come before FOR
the meeting and any adjournments or postponements thereof.
Only shareholders of record shown on the books of Unico at the close of
business on April 19, 2004 will be entitled to vote at the meeting or any
adjournment thereof. Each shareholder is entitled to one vote per share on
all matters to be voted on at the meeting.
You are cordially invited to attend the meeting. Whether or not you plan to
attend the meeting, please sign, date and return your proxy in the return
envelope provided as soon as possible. Please mail your completed and signed
proxy on or before May 17, 2004 so that we will receive it prior to the
special meeting of shareholders. Your cooperation in promptly signing and
returning your proxy will help avoid further solicitation expense to Unico.
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This notice, the proxy statement and the enclosed proxy are sent to you by
order of the board of directors.
/s/ Ray C. Brown
____________________________________
Ray C. Brown
Chairman and Chief Executive Officer
Dated: April 19, 2004
Magalia, California
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UNICO, INCORPORATED,
an Arizona corporation
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD May 21, 2004
______________________________
INTRODUCTION
Your proxy is solicited by the board of directors of Unico, Incorporated, an
Arizona corporation ("Unico" or the "Company") for use at a special meeting of
shareholders to be held on May 21, 2004, and at any adjournment thereof, for
the purposes set forth in the attached notice of special meeting.
The cost of soliciting proxies, including preparing, assembling and mailing
the proxies and soliciting material, will be borne by Unico. Directors,
officers, and regular employees of Unico may, without compensation other than
their regular compensation, solicit proxies personally, by telephone or
electronic communication including facsimile and electronic mail.
Any shareholder giving a proxy may revoke it at any time prior to its use at
the meeting by giving written notice of such revocation to the Secretary or
other officer of Unico or by filing a new written proxy with an officer of
Unico. Personal attendance at the meeting is not, by itself, sufficient to
revoke a proxy unless written notice of the revocation or a subsequent proxy
is delivered to an officer before the revoked or superseded proxy is used at
the meeting.
Proxies not revoked will be voted in accordance with the choice specified by
means of the ballot provided on the proxy for that purpose. Proxies which are
signed but which lack any such specification will, subject to the following,
be voted in favor of the proposals set forth in the notice of special meeting.
If a shareholder abstains from voting as to any matter, then the shares held
by such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
such matter, but shall not be deemed to have been voted in favor of such
matter. Abstentions, therefore, as to any proposal will have the same effect
as votes against such proposal. If a broker returns a "non-vote" proxy,
indicating a lack of voting instruction by the beneficial holder of the shares
and lack of discretionary authority on the part of the broker to vote on a
particular matter, then the shares covered by such non-vote shall be deemed
present at the meeting for purposes of determining a quorum but shall not be
deemed to be represented at the meeting for purposes of calculating the vote
required for approval of such matter.
The mailing address of Unico's principal executive office is P.O. Box 777,
Magalia, California 95954. This proxy statement and the related proxy and
notice of the special meeting will first be mailed to the shareholders on or
about April 21, 2004.
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VOTING RIGHTS AND REQUIREMENTS
VOTING SECURITIES
Unico's board of directors has fixed April 19, 2004 as the "record date" for
determining shareholders entitled to vote at the special meeting. Persons who
were not shareholders of record at the close of business on such date will not
be allowed to vote at the special meeting. At the close of business on April
19, 2004, 93,462,974 shares of Unico's common stock, par value $0.10 per
share, were issued and outstanding. Such common stock is the only outstanding
class of stock of the Company. Each holder of Unico's common stock is
entitled to one vote for each share held of record on all matters submitted to
the vote of stockholders, including the election of directors. All voting is
noncumulative, which means that the holder of fifty percent (50%) of the
shares voting for the election of the directors can elect all the directors.
Votes cast by proxy or in person at the special meeting will be tabulated by
Wayne Hartle or Mark Lopez, who have been appointed as the inspectors of
election prior to the special meeting. They will also determine whether a
quorum is present. In the event of any abstentions or broker non-votes with
respect to any proposal coming before the special meeting, the proxy will be
counted as present for purposes of determining the existence of a quorum.
Abstentions and broker non-votes typically will not be counted for purposes of
approving any of the matters to be acted upon at the special meeting. A
broker non-vote generally occurs when a broker or nominee who holds shares in
street name for a customer does not have authority to vote on certain
non-routine matters because its customer has not provided any voting
instructions on the matter. Therefore, abstentions and broker non-votes
generally have no effect under Arizona law with respect to the election of
directors or other matters requiring the approval of only a majority of the
shares of common stock present and voting at the meeting.
REVOCABILITY OF PROXY
You may revoke your proxy at any time prior to the start of our special
meeting in three ways:
1. by delivering a written notice of revocation to Mr. Ray Brown, the
chief executive officer of Unico, at P.O. Box 777, Magalia, California
95954;
2. by submitting a duly executed proxy bearing a later date; or
3. by attending our special meeting and expressing the desire to vote your
common shares in person (attendance at our special meeting will not in
and of itself revoke a proxy).
DISSENTERS - RIGHTS OF APPRAISALS
Under Arizona law, shareholders of our common stock are not entitled to
dissenter's rights of appraisal with respect to our proposals.
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QUORUM
The presence at the special meeting of the holders of a number of shares of
our common stock, and proxies representing the right to vote shares of our
common stock, in excess of one-half of the number of shares of our common
stock outstanding as of the record date will constitute a quorum for
transacting business.
VOTE REQUIRED
We are required to obtain the affirmative vote of at least a majority of the
voting shares that are present or represented at the meeting in order to
effect the shareholder approvals described herein.
BOARD RECOMMENDATIONS - INSIDERS' INTENT TO VOTE IN FAVOR
Our board of directors has determined that each of the proposals is in the
best interests of the Company and our shareholders. Accordingly, the board of
directors has unanimously approved each proposal and recommends that the
shareholders vote in favor of each proposal as well.
Members of our board of directors collectively own 11,798,900 shares of
Unico's common stock, or approximately 12.8% of the issued and outstanding
shares of common stock as of the record date. They have indicated their
intentions to vote their shares in favor of each proposal.
SUMMARY HISTORICAL FINANCIAL INFORMATION
The following summary of historical financial data was derived from Unico's
interim unaudited financial statements as of November 30, 2003, as filed on
Form 10-QSB with the U.S. Securities and Exchange Commission on January 13,
2004. The income statement data for the nine months ended November 30, 2003
is not necessarily indicative of results for a full year. This financial
information is only a summary and should be read in conjunction with the
financial statements of Unico, including the notes thereto, and other
financial information contained in Unico's Annual Report on Form 10-KSB for
the year ended February 28, 2002 and Quarterly Report on Form 10-QSB for the
nine months ended November 30, 2003, which information is incorporated by
reference in this proxy statement.
Condensed Statements of Operations Data (unaudited)
For the Nine For the Three
Months Ended Months Ended
November 30, November 30,
____________________________ _____________________________
2003 2002 2003 2002
____________ ______________ _____________ ______________
Revenue $ 15,450 $ _ $ _ $ _
Gross Margin 3,270 _ _ _
7
Total Operating
Expenses 1,751,157 598,351 905,887 221,998
Net Loss $ (1,887,734) $ (725,373) (955,035) $ (269,602)
Net Loss
per share -
basic and fully
diluted $ (0.02) $ (0.01) $ (0.01) $ (0.00)
Condensed Balance Sheet Data
(unaudited) (audited)
November 30, February 28,
2003 2003
_____________ ____________
Total current assets $ 39,525 $ 39,500
Property and equipment, net $ 884,982 $ 767,203
Total other assets $ 38,901 $ 38,901
Total current liabilities $ 2,144,315 $ 1,505,833
Total long-term liabilities $ 548,466 $ 548,466
Total stockholders' deficit $(1,729,373) $(1,208,695)
PRINCIPAL ACCOUNTANTS
Unico expects that one or more representatives of the accounting firm which
audits Unico's financial statements, HJ Associates & Consultants, LLP, will be
available at the special meeting of shareholders via telephone and will have
the opportunity to make a statement if they desire to do so. Unico expects
they will be available to respond to appropriate questions.
MATTERS TO BE ACTED UPON
PROPOSAL 1
INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
AND CREATE A CLASS OF PREFERRED STOCK
INTRODUCTION
AMENDMENT TO THE ARTICLES OF INCORPORATION OF UNICO
TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK
AND CREATE A CLASS OF PREFERRED STOCK
Our board of directors unanimously approved the increase in the authorized
number of common shares from one hundred million (100,000,000) shares to five
hundred million (500,000,000) shares so that additional shares will be
available for issuance for general corporate purposes, including financing
activities, without the requirement of further action by our shareholders.
Potential uses of additional authorized shares may include public or private
8
offerings, acquisition transactions and other general corporate purposes. In
order for Unico to exercise an option to acquire ownership of the Deer Trail
Mine, management anticipates that Unico may have to first raise substantial
equity capital from the sale of Unico's common stock, and/or possibly from the
sale of Unico's preferred stock. Increasing the authorized number of shares
of our common stock will give us greater flexibility and will allow us to
issue additional common shares in most cases without the expense or delay of
seeking shareholder approval. We are investigating additional sources of
financing which our board of directors believes will be in our best interests
and in the best interests of our shareholders. We do not currently have any
plans, proposals, agreements or understandings, written or otherwise, for any
transaction that would require the issuance of additional shares of common
stock, except that we presently have outstanding options to acquire up to
300,000 additional shares of our common stock, warrants to acquire up to
3,015,000 additional shares of our common stock, and a $125,000 debenture
outstanding which is convertible to shares of our common stock. Our common
shares carry no pre-emptive rights to purchase additional shares. The
adoption of the amendment to our articles of incorporation will not of itself
cause any changes in our capital accounts.
Our board of directors has unanimously approved the creation of a class of
preferred stock and reserves to the Board of Directors the right to establish
the preferences, limitations and relative rights of the preferred stock,
including the right to designate one or more series of preferred stock. The
board of directors believes that the creation of a class of preferred stock
with open designation will provide the Company with increased financing
flexibility while also providing certain anti-takeover protection. The
adoption of the amendment to our articles of incorporation to create a class
of preferred stock with twenty million (20,000,000) shares authorized, will
not of itself cause any changes in our capital accounts.
In the event this proposal is approved by Unico's shareholders, the
preferences, limitations and relative rights of the preferred stock may be
determined by the board of directors in the future, without having to obtain
any additional approvals of Unico's shareholders. This means that the
dividend or interest rates, conversion prices, voting rights, redemption
prices, maturity dates and similar matters involving the preferred stock will
be determined by the board of directors. The preferences, limitations and
relative rights of Unico's preferred stock may be superior to the rights of
Unico's common stock.
The board of directors has unanimously adopted the following resolution,
subject to shareholder approval, amending Unico's articles of incorporation to
increase the number of authorized shares of common stock from one hundred
million (100,000,000) shares to five hundred million (500,000,000) shares, and
to create a class of preferred stock with twenty million (20,000,000) shares
authorized:
"RESOLVED, that Article IV of the Articles of Incorporation be amended in its
entirety in the manner prescribed by the Arizona Code so as to read as
follows:
ARTICLE IV. The authorized capital stock of this corporation
shall consist of five hundred million
9
(500,000,000) shares of common stock, $0.10 par value, said stock
to be paid for at such time and in such manner as the board of
directors may designate, and twenty million (20,000,000) shares
of preferred stock, $0.001 par value, said stock to be issued in
such manner and having such preferences, limitations and relative
rights as the board of directors may designate, as permitted by
the Arizona Code. Such stock shall be issued as fully paid and
shall be forever nonassessable. The judgment of the board of
directors as to the value of the property taken, or services
rendered, in exchange for stock, shall be conclusive in the
absence of fraud. No stockholder shall have pre-emptive rights
as to any stock now or hereinafter authorized to be issued, but
the issuance of stock shall be in the sole discretion of the
board of directors."
If the proposed amendment is adopted by the shareholders, we plan to file an
amendment to our articles of incorporation amending Article IV as described
above, with the Arizona Corporations Commission, to be effective as soon as
practicable following the meeting.
Possible Effects of the Proposed Amendment to the Articles of Incorporation.
- ----------------------------------------------------------------------------
The board of directors believes such action to be in the best interests of the
Company so that additional shares will be available for issuance for general
corporate purposes, including financing activities, without the requirement of
further action by our shareholders. Potential uses of additional authorized
shares may include public or private offerings, acquisition transactions and
other general corporate purposes. Increasing the number of authorized shares
of our common stock will give us greater flexibility and will allow us to
issue additional common shares in most cases without the expense or delay of
seeking shareholder approval.
If Unico's shareholders approve the proposed amendment to the articles of
incorporation, Unico's board of directors may authorize the issuance of
additional shares of common stock and/or authorize the issuance of shares of
preferred stock (with rights and preferences to be determined by our board of
directors) without further approval of Unico's shareholders, except as may be
required in certain cases by Unico's charter documents or applicable law or
regulations. Under Unico's articles of incorporation, Unico's shareholders do
not have preemptive rights to subscribe to additional securities which may be
issued by Unico, which means that current shareholders do not have a prior
right to purchase any new issue of capital stock of Unico in order to maintain
their proportionate ownership of the common stock. Furthermore, if the board
of directors elects to issue additional shares of common stock and/or issue
shares of preferred stock or securities convertible into or exercisable for
shares of common stock or preferred stock, such issuance could have a dilutive
effect on the voting power and earnings per share of existing shareholders.
In addition, the increase in the number of authorized shares of common stock
and the creation of a class of preferred stock could have an anti-takeover
effect. For example, if the board of directors issues additional shares in
the future, such issuance could dilute the voting power of a person seeking
control of Unico, thereby rendering more difficult a merger, tender offer,
proxy contest or an extraordinary transaction opposed by the board of
directors. As of the
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date of this proxy statement, the board of directors is not aware of any
attempt or plan to obtain control of Unico.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO UNICO'S
ARTICLES OF INCORPORATION TO EFFECT THE INCREASE IN THE NUMBER OF SHARES OF
AUTHORIZED COMMON STOCK AND TO CREATE A CLASS OF PREFERRED STOCK.
PROPOSAL 2
RATIFY AND APPROVE THE BOARD OF DIRECTORS ACTIONS TO: (A) GRANT PRESENTLY
OUTSTANDING WARRANTS TO PURCHASE UP TO 3,015,000 SHARES OF THE COMPANY'S
COMMON STOCK WHICH WERE GRANTED DURING 2002, 2003 AND/OR 2004; AND (B) GRANT
PRESENTLY OUTSTANDING OPTIONS TO PURCHASE UP TO 300,000 SHARES OF THE
COMPANY'S COMMON STOCK WHICH WERE GRANTED DURING JUNE 2002
Purpose: The board of directors previously granted in 2002, 2003 and/or 2004
presently outstanding warrants to purchase up to 3,015,000 shares of Unico's
common stock and/or options to purchase up to 300,000 shares of Unico's common
stock. The warrants outstanding are exercisable at $0.10 per share and expire
in one to three years. None of the warrants are held by affiliates of the
Company. Certain options outstanding to acquire up to 300,000 shares of
Unico's common stock have an exercise price of $0.10 per share. The options
are exercisable for two years, and expire in June 2004. The board of
directors unanimously requests that the shareholders ratify and approve the
prior actions of the board of directors to grant all of the Unico options and
warrants presently outstanding.
Effect: There is no immediate effect from this action. If and when the
holders of the warrants and options choose to exercise their rights, the
immediate effect may be dilutive to the common stock shareholders if the then
fair market value of the common stock is greater than the exercise price of
the warrants or options. If the warrants or options expire unexercised, then
there is no effect from this action. If the warrants or options are exercised
when the fair market value of the common stock is less than the exercise
price, then the effect on the common stock would be anti-dilutive; however,
this event is considered unlikely.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFYING THE BOARD OF
DIRECTORS' ACTIONS TO GRANT ALL PRESENTLY OUTSTANDING OPTIONS AND WARRANTS TO
PURCHASE SHARES OF UNICO COMMON STOCK.
PROPOSAL 3
APPROVE AND AUTHORIZE THE SALE OF SHARES OF UNICO'S COMMON STOCK AT PRICES TO
BE ESTABLISHED BY THE BOARD OF DIRECTORS WHICH MAY BE BELOW UNICO'S NET ASSET
VALUE PER SHARE
Purpose: Unico's board of directors has unanimously adopted a resolution
seeking shareholder approval which would permit Unico to sell its common stock
at prices below Unico's net asset value per share. The Board of Directors
believes that this is in the Company's best interest as it may be necessary,
at some point in the future, to sell stock at such prices in order to raise
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capital for acquisitions or to finance operations. Shareholder approval is
being sought to permit Unico to sell its common stock at price(s) to be
established by the Board of Directors in the future, which may be a price(s)
below Unico's net asset value per share.
Effect: There is no immediate effect of this action. Unico's liabilities
currently exceed its assets, resulting in a negative net asset value per
share. As it is impossible to sell stock at a negative value, Unico is not in
a position to take the action contemplated herein at this time. In the event
Unico should obtain a positive net asset value in the future, and the common
stock price of the Company is less than or equal to the net asset value per
share, the Board of Directors would be authorized to have Unico sell its stock
at price(s) below net asset value per share. If such action were taken, the
result would be immediate dilution to existing shareholders and a further
erosion of the net asset value per share.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL AND AUTHORIZATION TO
SELL UNICO'S COMMON STOCK AT PRICES BELOW UNICO'S NET ASSET VALUE PER SHARE.
OTHER BUSINESS
As of the date of this proxy statement, the only business which the board of
directors intends to present and knows that others will present at the special
meeting is that herein set forth. Management does not know of any items other
than those referred to in the accompanying notice of special meeting of
shareholders which may properly come before the meeting or other matters
incident to the conduct of the meeting. If any other matter is properly
brought before the special meeting or any adjournments thereof, it is the
recommendation of the board of directors that the persons named in the
accompanying form of proxy vote the proxy on such matters in accordance with
their judgment.
The form of proxy and this proxy statement have been approved by the board of
directors and are being mailed and delivered to share owners by its authority.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table describes, as of March 25, 2004, certain information with
respect to the beneficial ownership of our common stock by:
. each person known by us to beneficially own more than 5% of our
common stock,
. each of our executive officers or directors, and
. all of our executive officers and directors as a group.
Amount and nature Percentage of
of beneficial ownership common stock
----------------------- -------------
Ray C. Brown 9,000,000 11.61%
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C. Wayne Hartle 2,105,900 2.94%
Kiyoshi Kasai 693,000 0.89%
Wayne M. Ash 0 0.00%
----------- ------
All Executive Officers 11,798,900 15.51%
And Directors (4 persons)
Each of the executive officers and directors has sole voting and investment
power over the shares listed in the table as being beneficially owned by him
except:
. The amount listed as being beneficially owned by Ray C. Brown
includes 5,000,000 shares which he owns jointly with his wife,
Carryl W. Brown, and excludes an additional 45,000 shares as to
which Mr. Brown disclaims ownership.
. 40,000 of the shares listed as being beneficially owned by Kiyoshi
Kasai are owned of record by his wife, Fumiko Kasai
. 150,000 of the shares listed as being beneficially owned by
Kiyoshi Kasai are owned of record by the Kasai Family Trust.
Kiyoshi Kasai is the trustee of the Kasai Family Trust, and has
sole voting and investment power over the shares held by the
Trust. The beneficiaries of the Kasai Family Trust are Kiyoshi
Kasai, his wife and their children.
There are no warrants or options outstanding which are exercisable by any of
our officers and directors.
OTHER BUSINESS
The board of directors knows of no other matters to be presented at the
special meeting. If any other matter does properly come before the special
meeting, the appointees named in the proxies will vote the proxies in
accordance with their best judgment.
SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented at Unico's next
annual meeting of shareholders must have been received by the Company not
later than a reasonable time before Unico begins to print and mail its proxy
materials under the provisions of Rule 14a-8 of the Securities Exchange Act of
1934. Unico intends that its next annual meeting of shareholders shall be
held in July, 2005.
The person presiding at the next annual meeting of shareholders may refuse to
permit to be brought before the meeting any shareholder proposal not made in
compliance with Rule 14a-8.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows the Company to incorporate by reference information that the
Company files with the SEC. Unico incorporates by reference the information
contained in Unico's Annual Report to Stockholders on Form 10-KSB for the
fiscal year ended February 28, 2003 filed with the SEC on June 13, 2003 and in
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its Quarterly Report on Form 10-QSB for the quarter ended November 30, 2003
filed with the SEC on January 13, 2004 and filed with this proxy statement.
ANNUAL REPORT
A copy of Unico's Annual Report to Shareholders on Form 10-KSB for the fiscal
year ended February 28, 2003, including financial statements, accompanies this
notice of special meeting and proxy statement.
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM
10-KSB FOR THE FISCAL YEAR ENDED FEBRUARY 28, 2003 TO ANY SHAREHOLDER OF THE
COMPANY UPON WRITTEN REQUEST. REQUESTS SHOULD BE SENT TO RAY C. BROWN, P.O.
BOX 777, MAGALIA, CALIFORNIA 95954.
Dated: April 19, 2004
Magalia, California
14
UNICO, INCORPORATED
PROXY FOR SPECIAL MEETING TO BE HELD ON MAY 21, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ray C. Brown and Wayne Hartle, or either of
them, as proxies, with the power to appoint their substitute(s), to represent
and to vote all the shares of common stock of Unico, Incorporated, an Arizona
corporation (the "Company"), which the undersigned would be entitled to vote,
at Unico's special meeting of stockholders to be held on May 21, 2004 and at
any adjournments thereof, subject to the directions indicated on the reverse
side hereof.
In their discretion, the proxy is authorized to vote upon any other matter
that may properly come before the meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE, BUT IF NO
CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL LISTED ON THE
REVERSE SIDE.
IMPORTANT--This Proxy must be signed and dated on the reverse side.
PLEASE RETURN THIS PROXY TO:
Unico, Incorporated - Proxy
Deer Trail Mine
P.O. Box 129
Marysvale, Utah 84750
Please mail the completed and signed Proxy on or before May 17, 2004.
15
SPECIAL MEETING OF SHAREHOLDERS OF
UNICO, INCORPORATED
May 21, 2004
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT!
Dear Stockholder:
We cordially invite you to attend the Special Meeting of Stockholders of
Unico, Incorporated to be held at 10:30 a.m. local time on May 21, 2004, at
the Embassy Suites Hotel Convention Center located at 3600 Paradise Road, Las
Vegas, Nevada, 89109. Please read the proxy statement which describes the
proposals and presents other important information, and complete, sign and
return your proxy promptly in the enclosed envelope.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [x]
1. Proposal to increase the number of Unico's FOR AGAINST ABSTAIN
authorized common shares from one hundred
million (100,000,000) to five hundred
million (500,000,000) shares, and
establish a class of preferred stock with
20,000,000 shares authorized, with such
preferences, limitations and relative
rights as may be determined in the
discretion of Unico's board of directors. [_] [_] [_]
2. Proposal to ratify and approve the board
of directors' actions to: (a) grant
presently outstanding warrants to purchase
up to 3,015,000 shares of the Company's
common stock which were granted during
2002, 2003 and/or 2004; and (b) grant
presently outstanding stock options to
purchase up to 300,000 shares of the
Company's common stock which were granted
during June 2002. [_] [_] [_]
3. Proposal to approve and authorize the sale
of shares of Unico's common stock at prices
to be established by the board of directors
which may be below Unico's net asset value
per share. [_] [_] [_]
4. To transact such other business as may properly come before the special
meeting and any adjournment or adjournments thereof.
The board of directors recommends you vote "FOR" each of the above
proposals.
16
This proxy when properly executed will be voted in the manner directed above.
In the absence of direction for the above proposal, this proxy will be voted
"FOR" that proposal. Other matters: in their discretion, the appointed
proxies are authorized to vote upon such other business as may properly come
before the meeting.
If you plan to attend the special meeting of shareholders, please mark this
box [_] If you plan to attend the special meeting of shareholders, but you do
not intend to return this proxy in advance of the meeting, please call Ray C.
Brown at (530) 873-4394 so we can be sure to have an adequate size room for
the meeting.
Dated:________________, 2004
SIGNATURE _____________________________________________________________
NAME (PRINTED) ________________________________________________________
TITLE _________________________________________________________________
Important: Please sign exactly as name appears on this proxy. When signing as
attorney, executor, trustee, guardian, corporate officer, etc., please
indicate full title.
17
EXHIBIT "A"
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
of
UNICO, INCORPORATED
Pursuant to the provisions of the Arizona Code, the undersigned
corporation adopts the following Articles of Amendment to its Articles of
Incorporation:
FIRST: The name of the corporation is Unico, Incorporated.
SECOND: Article IV of the Articles of Incorporation is amended in its
entirety in the manner prescribed by the Arizona Code so as to read as
follows:
ARTICLE IV. The authorized capital stock of this
corporation shall consist of five hundred million
(500,000,000) shares of common stock, $0.10 par value,
said stock to be paid for at such time and in such
manner as the Board of Directors may designate, and
twenty million (20,000,000) shares of preferred stock,
$0.001 par value, said stock to be issued in such
manner and having such preferences, limitations and
relative rights as the board of directors may
designate, as permitted by the Arizona Code. Such
stock shall be issued as fully paid and shall be
forever non-assessable. The judgment of the board of
directors as to the value of the property taken, or
services rendered in exchange for stock, shall be
conclusive in the absence of fraud. No stockholder
shall have pre-emptive rights as to any stock now or
hereinafter authorized to be issued, but the issuance
of stock shall be in the sole discretion of the Board
of Directors.
THIRD: The foregoing amendment was adopted by the vote of the
shareholders on May 21, 2004.
FOURTH: The number of shares of the Corporation outstanding at the time
of such adoption was 93,462,974; and the number of shares entitled to vote
thereon was _________. The only class of shares outstanding was Common Stock,
$.10 par value, which is entitled to one vote per share. The number of shares
indisputably represented at the meeting where the vote occurred was _________.
FIFTH: The number of shares voted for such amendment was _________; and
the number of shares voted against such amendment was _____. _____________
shares abstained. The number of shares voted for the amendment was sufficient
for approval of the amendment.
SIXTH: The foregoing amendment does not effect an exchange,
reclassification or cancellation of shares.
18
SEVENTH. The amount of stated capital after the amendment is $_______.
Dated this ____ day of May, 2004
UNICO, INCORPORATED
By __________________________
Its President
and __________________________
Its Secretary
STATE OF ____________________)
: ss.
COUNTY OF____________________)
I, __________________________, Notary Public, do hereby certify that on
this __, day of May, 2004 personally appeared before me ___________________
who being by me first duly sworn, declared that he is the President of Unico,
Incorporated, that he signed the foregoing document as President of the
Corporation, and that the statements therein contained are true.
____________________________________
Notary Public
Residing at: ________________________
My Commission Expires:_______________
19
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended 11/30/03
Commission file number 000-30239
UNICO, INCORPORATED
________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Arizona 86-0205130
_______________________________ ____________________________
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
6475 Grandview Avenue
P.O. Box 777
Magalia, California 95954
________________________________________
(Address of principal executive offices)
(530) 873-4394
________________________________________________
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
As of January 9, 2004, the issuer had outstanding 88,952,974 shares of
its Common Stock, $0.10 par value per share.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The unaudited consolidated balance sheet of Unico, Incorporated, an
Arizona corporation, as of November 30, 2003 and the related audited
consolidated balance sheet of Unico, Incorporated as of February 28, 2003, the
unaudited related consolidated statements of operations for the three and nine
20
month periods ended November 30, 2003 and November 30, 2002 and from inception
of the exploration stage on March 1, 1997 through November 30, 2003, the
unaudited related consolidated statements of stockholders' equity for the
period from February 28, 2003 through November 30, 2003, the unaudited related
consolidated statements of cash flows for the nine month periods ended
November 30, 2003 and November 30, 2002 and from inception of the exploration
stage on March 1, 1997 through November 30, 2003, and the notes to the
financial statements are attached hereto as Appendix "A" and incorporated
herein by reference.
The accompanying financial statements reflect all adjustments which are,
in the opinion of management, necessary to present fairly the financial
position of Unico, Incorporated consolidated with HydroClear, Ltd. and Silver
Bell Mining Company, Incorporated, its wholly-owned subsidiaries. The names
"Unico", "we", "our" and "us" used in this report refer to Unico, Incorporated
and its subsidiaries.
Unico was formed as an Arizona corporation on May 27, 1966. It was
incorporated under the name of Red Rock Mining Co., Incorporated. It was
later known as Industries International, Incorporated and I.I. Incorporated
before the name was eventually changed to Unico, Incorporated in 1979.
Deer Trail Mine.
On March 30, 1992, Unico entered into a Mining Lease and Option to
Purchase agreement with Deer Trail Development Corporation, with headquarters
in Dallas, Texas. Deer Trail Development Corporation is now known as Crown
Mines, L.L.C. The lease was to run for a period of 10 years, and cover 28
patented claims, 5 patented mill sites and 171 unpatented claims located
approximately 5 miles South of Marysvale, Utah. It includes mine workings
known as the Deer Trail Mine, the PTH Tunnel and the Carisa and Lucky Boy
mines. There are no known, proven or probable reserves on the property.
Effective December 1, 2001, a new lease agreement was entered into
between the parties covering the same property for a period of thirty (30)
months. It expires in May 2004. The new lease agreement is referred to in
this report as the "Deer Trail Lease". The Deer Trail Lease requires Unico to
make monthly lease payments and pay a 3% net smelter return on ore removed
from the Deer Trail Mine.
Unico acquired the necessary permits to commence mining activities,
provided that the surface disturbance from the mining activities does not
exceed 10 acres for both mine and mill. Unico plans to seek a permit for
large scale mining operations.
Unico worked for more than two years to reopen the Deer Trail Mine.
Unico commenced mining activities in late March or early April 2001 on the
Deer Trail Mine. To date, the mining activities have been fairly limited.
Unico presently has eight full time employees. There have been between 2 and
5 miners at various times working at the Deer Trail Mine. Some of the
employees have worked on mine maintenance.
Unico has completed a mill on site at the Deer Trail Mine. In November
2001 Unico began milling activities.
21
Unico has started screening ore dumps on the Upper Deer Trail Mine and
moving the screened materials to its ball mill.
Silver Bell Mine.
In September and December 2000, Unico acquired all of the issued and
outstanding shares of stock of Silver Bell Mining Company, Incorporated, a
Utah corporation, in consideration for the issuance of 3,000,000 restricted
shares of Unico common stock. Of the 3,000,000 shares of Unico common stock
issued in the acquisition, approximately 2,300,000 shares were issued to W.
Dan Proctor. W. Dan Proctor is the President and a director of Silver Bell
Mining Company, Incorporated. Mr. Proctor also serves as a business consultant
to Unico and project manager.
Silver Bell Mining Company, Incorporated was incorporated in the State of
Utah on April 26, 1993. It has acquired 26 patented mining claims located in
American Fork Canyon, Utah County, Utah, which is organized into three
separate parcels. The claims contain mining properties which have not been
mined for production since 1983. The properties were mined primarily for
silver, lead and zinc. There are no known, proven or probable reserves on the
property.
Unico conducted some additional exploration work on the Silver Bell Mine
in Summer, 2003, but it is not presently known when Unico will commence mining
activities at the Silver Bell Mine.
Bromide Basin Mines.
On July 20, 2001, Unico entered into a Mining Lease and Option to
Purchase with Kaibab Industries, Inc., an Arizona corporation. The parties
then entered into a Revised Mining Lease and Option to Purchase effective
April 1, 2003 (the "Revised Kaibab Mining Lease"). Under the Revised Kaibab
Mining Lease, Kaibab Industries, Inc. has leased to Unico certain mining
claims located in the Henry Mountain Mining District in Garfield County, Utah
containing approximately 400 acres, which includes the Bromide Basin Mines.
The Revised Kaibab Mining Lease runs until March 31, 2005, and grants to Unico
the option to purchase all of the property being leased. The option is
exercisable during the two year term of the Revised Kaibab Mining Lease.
There are no known, proven or probable reserves on the property.
Under the Revised Kaibab Mining Lease, Unico has agreed to pay to Kaibab
Industries, Inc. a 5% net smelter return upon all ore taken from the property
during the term of the Revised Kaibab Mining Lease. The Revised Kaibab Mining
Lease requires Unico to produce a minimum of 2,500 ounces of gold (or to pay
to Kaibab Industries, Inc. a net smelter return equivalent to the amount that
would have been paid if Unico had produced 2,500 ounces of gold) during the
first year ending March 31, 2004, and to produce a minimum of 5,000 ounces of
gold during the second year ending March 31, 2005. In the event that Unico is
unable to meet the minimum production requirements, then Kaibab Industries,
Inc. may terminate the Revised Kaibab Mining Lease.
Unico commenced mining efforts on the Bromide Basin Mines in September
2001 with five full time miners. Because of the Bromide Basin Mine's high
elevation, mining activities are seasonal and generally occur only from June
22
through November. When seasonal mining efforts stopped in November 2003 due
to weather, Unico was working to extend the El Padre Tunnel approximately 200
feet to get under the Bromide Vein in order to reach higher grade ore and make
the mining efforts more efficient. Unico transports the mined ore to the Deer
Trail Mine for further milling and testing.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
During the next 12 months, Unico's plan of operation consists of the
following:
. Increase mining activities at the Deer Trail Mine and the Bromide
Basin Mine;
. Increase milling activities at the Deer Trail Mine;
. Continue to screen and process the ore dumps on the upper Deer Trail
Mine;
. Ship concentrates to smelters for smelting and refining;
. Evaluate how best to proceed with mining activities at the Silver Bell
Mine;
. Increase the number of full-time employees from 8 to approximately 35;
. Explore the possibility of obtaining a joint-venture partner to more
fully develop Unico's mining operations;
. Explore the possibility of building a small portable gold processing
plant to be located at the Deer Trail Mine and/or the Bromide Basin
Mine to recover gold by gravity or flotation means; and
. Raise a minimum of $250,000 in additional equity capital, loans and/or
other financing transactions.
Accomplishing our 12-month plan of operations is dependent on the Company
raising approximately $250,000 in equity or debt financing during the next 2
to 3 months. The Company's current cash will sustain operations for
approximately 60 days.
Results of Operations.
During the three months ended November 30, 2003, Unico experienced a net
loss in the amount of $955,035, or approximately ($0.01) per share, which is
$685,433 more than the net loss of $269,602, or approximately ($0.00) per
share, incurred for the three months ended November 30, 2002. For the nine
months ended November 30, 2003, Unico incurred a net loss of $1,887,734, or
approximately ($0.02) per share. This was $1,162,361 more than the net loss
of $725,373, or approximately ($0.01) per share, incurred by Unico during the
nine month period ended November 30, 2002.
For the three months ended November 30, 2003, Unico reported no revenues.
For the three months ended November 30, 2002, Unico reported no revenues. For
the nine months ended November 30, 2003, Unico reported revenues of $15,450
which is $15,450 greater than the revenues of $0 reported for the nine months
ended November 30, 2002. The $15,450 of revenues earned in the nine months
ended November 30, 2003 was generated from the sale of concentrates to a
23
smelter in Mexico. Cost of goods sold for the nine month period ended
November 30, 2003 was $12,180.
Unico attributes the increased net loss for the three month period ended
November 30, 2003 primarily to a $681,270 increase in general and
administrative expenses. Unico attributes the increased net loss for the nine
month period ended November 30, 2003 primarily to a $1,138,304 increase in
general and administrative expenses, a $11,822 increase in interest expense
and an increase in depreciation and amortization expenses of $14,502. The
substantial increase in general and administrative expenses for the three and
nine month periods ended November 30, 2003 is attributable to the substantial
number of shares of Unico's common stock issued to consultants during these
periods. Unico anticipates that general and administrative expenses will
increase as additional employees are hired in order to increase Unico's mining
operations.
Liquidity and Capital Resources
Unico's stockholders' deficit increased $520,678 in the nine months ended
November 30, 2003, from a deficit of ($1,208,695) as of February 28, 2003 to a
deficit of ($1,729,373) as of November 30, 2003. Cash and cash equivalents
increased $25 to $33,582 at November 30, 2003 from $33,557 at February 28,
2003.
Cash used in operating activities for the nine months ended November 30,
2003 reflects a net loss of $1,887,734, partially offset by non-cash expenses
of $1,265,000 for stock issued for services, $72,726 for depreciation and
amortization expenses, a $32,589 increase in accounts payable and other
liabilities, and a $24,556 non-cash expense for warrants issued below market
value.
Cash used in investing activities includes $10,350 for the purchase of
fixed assets.
Unico's other major cash needs include raising additional funds to
exercise Unico's option to purchase the Deer Trail Mine for $4,000,000 on or
before May 31, 2004. If Unico decides to exercise the option, Unico will need
to raise substantial additional funds for that purpose unless Unico's
operations can generate sufficient profits before the option expires. Unico
may also seek to negotiate an extension of the option expiration date.
Presently our liquid resources are sufficient to support operations for
approximately 60 days. We are dependent on raising approximately $250,000 to
successfully implement our 12 month business plan described above.
Our auditors have issued a "going concern" opinion in note 2 of our
audited financial statements, indicating we do not have established revenues
sufficient to cover our operating costs and to allow us to continue as a going
concern. If we are successful in raising an additional $250,000 in equity or
debt capital or through other financing transactions in the next 2 to 3
months, we believe that Unico will have sufficient funds to meet operating
expenses until income from mining operations should be sufficient to cover
operating expenses. However, this amount does not include any funds needed to
exercise the Deer Trail Mine Option.
24
We intend to seek additional capital from private sales of Unico's common
stock and, if necessary, from loans from our management and/or others. In the
event income from mining operations is delayed or is insufficient to cover
operating expenses, then Unico will need to seek additional funds from equity
or debt financing, for which we have no commitments.
ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-QSB REFLECT
MANAGEMENT'S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND INVOLVE RISKS
AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY MATERIALLY.
Item 3. Controls and Procedures.
As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of Ray C. Brown,
who serves as both our chief executive officer and chief financial officer, of
the effectiveness of the design and operation of our disclosure controls and
procedures. Based on this evaluation, our chief executive officer and chief
financial officer concluded that our disclosure controls and procedures are
effective in timely alerting him to material information required to be
included in our periodic SEC reports. It should be noted that the design of
any system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design
will succeed in achieving its stated goals under all potential future
conditions, regardless of how remote.
In addition, there has been no change in our internal control over
financial reporting during the most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
No legal proceedings involving Unico as a defendant were commenced during
the three month period ended November 30, 2003. No material developments
occurred in any legal proceedings involving Unico as a defendant during the
same time period.
Item 2. Changes in Securities.
During the three month period ended November 30, 2003, Unico made the
following sales of shares of Unico's common stock which were not registered
under the Securities Act of 1933:
No. Of
Date Recipient Shares Consideration Valuation
- -----------------------------------------------------------------------------
09/05/03 Steven Margolin 150,000 Cash $0.10/share
- -----------------------------------------------------------------------------
09/05/03 Ronda Kay 30,000 Cash $0.10/share
- -----------------------------------------------------------------------------
25
- -----------------------------------------------------------------------------
09/05/03 Art Conn 30,000 Cash $0.10/share
- -----------------------------------------------------------------------------
09/05/03 Fred Margolin 50,000 Cash $0.10/share
- -----------------------------------------------------------------------------
09/05/03 Michael Margolin 175,000 Cash $0.10/share
- -----------------------------------------------------------------------------
09/05/03 Michael Margolin 110,000 Cash $0.10/share
- -----------------------------------------------------------------------------
09/05/03 Fred Margolin 175,000 Assets $0.10/share
- -----------------------------------------------------------------------------
09/05/03 Michael Margolin 25,000 Assets $0.10/share
- -----------------------------------------------------------------------------
Each of the persons named in the table above who purchased shares of
Unico's common stock for cash during the three months ended November 30, 2003
also received a warrant to purchase an equivalent number of shares at the
exercise price of $0.10 per share which expires September 5, 2005. The shares
to be issued upon any exercise of these warrants shall be restricted.
All of the shares described above in the table were sold directly by
Unico, and no underwriters were involved in the transactions. Unico relied on
section 4(2) of the Securities Act of 1933 in making the sales of securities.
No advertising or general solicitation was employed in offering the shares.
Each purchaser received disclosure information concerning Unico. Each
purchaser also had the opportunity to investigate Unico and ask questions of
its president and board of directors. The securities sold were offered for
investment purposes only and not for the purpose of resale or distribution.
The transfer of the shares sold was appropriately restricted by Unico.
During the three month period ended May 31, 2003, Unico made sales of
shares of Unico's common stock which were not registered under the Securities
Act of 1933. For a description of those sales, please see Unico's quarterly
report on Form 10-QSB for the period ended May 31, 2003.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
-------- ------------
26
31.1 Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
(b) No Current Reports on Form 8-K were filed by Unico during the quarter
ended November 30, 2003.
27
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNICO, INCORPORATED
(Registrant)
Date: January 12, 2004 By: /s/ Ray C. Brown
-----------------------------------
Ray C. Brown, Chief Executive
Officer and Principal Financial and
Accounting Officer
28
EXHIBIT 31.1
SECTION 302
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Ray C. Brown, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Unico,
Incorporated;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, the results of operations and cash flows of the small
business issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
small business issuer and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during
the period in which this report is being prepared;
(b) evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based
on such evaluation; and
(c) disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
29
(a) all significant deficiencies in the design or operation of internal
control over financial reporting which are reasonably likely to
adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: January 12, 2004 /s/ Ray C. Brown
----------------------------------------
Ray C. Brown,
Chief Executive Officer
30
EXHIBIT 31.2
SECTION 302
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Ray C. Brown, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Unico,
Incorporated;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, the results of operations and cash flows of the small
business issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
small business issuer and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during
the period in which this report is being prepared;
(b) evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such
evaluation; and
(c) disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
31
(a) all significant deficiencies in the design or operation of internal
control over financial reporting which are reasonably likely to
adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: January 12, 2004 /s/ Ray C.Brown
-----------------------------
Ray C. Brown,
Chief Financial Officer
32
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Unico, Incorporated (the
"Company") on Form 10-QSB for the period ending November 30, 2003, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Ray C. Brown, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of the
operation of the Company.
/s/ Ray C. Brown
- ---------------------------------
Ray C. Brown
Chief Executive Officer
January 12, 2004
33
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Unico, Incorporated (the
"Company") on Form 10-QSB for the period ending November 30, 2003, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Ray C. Brown, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of the
operation of the Company.
/s/ Ray C. Brown
- --------------------------------
Ray C. Brown
Chief Financial Officer
January 12, 2004
34
Appendix "A"
UNICO, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
November 30, 2003 and February 28, 2003
35
UNICO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
------
November 30, February 28,
2003 2003
------------- -------------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 33,582 $ 33,557
Certificate of deposit 5,293 5,293
Employee advances 650 650
------------- -------------
Total Current Assets 39,525 39,500
------------- -------------
PROPERTY AND EQUIPMENT
Property and equipment, net 884,982 767,203
------------- -------------
OTHER ASSETS
Refundable deposit 500 500
Reclamation bond 38,401 38,401
------------- -------------
Total Other Assets 38,901 38,901
------------- -------------
TOTAL ASSETS $ 963,408 $ 845,604
============= =============
The accompanying notes are an integral part of these
consolidated financial statements.
36
UNICO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
-------------------------------------------------
November 30, February 28,
2003 2003
------------- -------------
(Unaudited)
CURRENT LIABILITIES
Bank overdraft $ 21,240 $ 411
Accounts payable 29,146 30,271
Accrued expenses 9,778 9,778
Notes payable - related party 961,192 697,716
Notes payable - current 640,588 319,000
Accrued interest payable 252,028 216,655
Accrued interest payable - related party 114,228 69,387
Commitments and contingencies 116,115 162,615
------------- -------------
Total Current Liabilities 2,144,315 1,505,833
------------- -------------
LONG-TERM LIABILITIES
Notes payable - non current 548,466 548,466
------------- -------------
Total Long-Term Liabilities 548,466 548,466
------------- -------------
Total Liabilities 2,692,781 2,054,299
------------- -------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 100,000,000 shares authorized at
$0.10 par value; 87,852,974 and 74,427,974
shares issued and outstanding, respectively 8,785,299 7,442,799
Additional paid-in capital 795,437 770,881
Deficit accumulated prior to exploration stage (3,788,522) (3,788,522)
Deficit accumulated during the exploration stage (7,521,587) (5,633,853)
------------- -------------
Total Stockholders' Equity (Deficit) (1,729,373) (1,208,695)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 963,408 $ 845,604
============= =============
The accompanying notes are an integral part of these
consolidated financial statements.
37
UNICO, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
From
Inception
of the
Exploration
Stage on
For the Three Months Ended For the Nine Months Ended March 1,
November 30, November 30, 1997 Through
---------------------------- --------------------------- November 30,
2003 2002 2003 2002 2003
-------------- ------------- ------------- ------------- -------------
REVENUES $ - $ - $ 15,450 $ - $ 15,450
COST OF SALES - - 12,180 - 12,180
-------------- ------------- ------------- ------------- -------------
Gross Margin - - 3,270 - 3,270
-------------- ------------- ------------- ------------- -------------
EXPENSES
Bad debt expense - - - - 279,260
General and administrative 882,915 201,645 1,678,431 540,127 5,454,754
Depreciation and amortization 22,972 20,353 72,726 58,224 374,869
-------------- ------------- ------------- ------------- -------------
Total Expenses 905,887 221,998 1,751,157 598,351 6,108,883
-------------- ------------- ------------- ------------- -------------
Loss from Operations (905,887) (221,998) (1,747,887) (598,351) (6,105,613)
-------------- ------------- ------------- ------------- -------------
OTHER INCOME (EXPENSES)
Interest income 43 552 149 1,152 14,106
Interest expense (49,191) (48,156) (139,996) (128,174) (1,039,550)
Decline in value of assets - - - - (651,810)
Settlement of debt - - - - (91,000)
Loss on valuation of assets - - - - (309,817)
Gain on expiration of debt - - - - 638,025
Gain on gold contract - - - - 24,072
-------------- ------------- ------------- ------------- -------------
Total Other Income (Expenses) (49,148) (47,604) (139,847) (127,022) (1,415,974)
-------------- ------------- ------------- ------------- -------------
NET LOSS $ (955,035) $ (269,602) $ (1,887,734) $ (725,373) $ (7,521,587)
============== ============= ============= ============= =============
NET LOSS PER SHARE $ (0.01) $ (0.00) $ (0.02) $ (0.01)
============== ============= ============= =============
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 85,147,205 74,112,974 79,497,356 73,358,610
============== ============= ============= =============
The accompanying notes are an integral part of these consolidated financial statements.
38
UNICO, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity (Deficit)
Common Stock Additional
--------------------------- Paid-In Accumulated
Shares Amount Capital Deficit
------------- ------------- ------------- -------------
<s> <c> <c> <c> <c>
Balance, February 28, 2003 74,427,974 $ 7,442,799 $ 770,881 $ (9,422,375)
March 6, 2003, common stock issued
for services at $0.10 per share
(unaudited) 50,000 5,000 - -
March 14, 2003 common stock issued
for services at $0.10 per share
(unaudited) 350,000 35,000 - -
April 1, 2003 common stock issued
for services at $0.10 per share
(unaudited) 300,000 30,000 - -
April 4, 2003 common stock issued
for services at $0.10 per share
(unaudited) 300,000 30,000 - -
April 14, 2003 common stock issued
for services at $0.10 per share
(unaudited) 350,000 35,000 - -
April 22, 2003 common stock issued
for cash at $0.10 per share
(unaudited) 30,000 3,000 - -
April 23, 2003 common stock issued
for services at $0.10 per share
(unaudited) 350,000 35,000 - -
June 3, 2003, common stock issued
for services at $0.10 per share
(unaudited) 350,000 35,000 - -
June 16, 2003, common stock issued
for services at $0.10 per share
(unaudited) 350,000 35,000 - -
June 23, 2003, common stock issued
for services at $0.10 per share
(unaudited) 500,000 50,000 - -
June 23, 2003, common stock issued
for services at $0.10 per share
(unaudited) 350,000 35,000 - -
------------- ------------- ------------- -------------
Balance forward 77,707,974 $ 7,770,799 $ 770,881 $ (9,422,375)
------------- ------------- ------------- -------------
The accompanying notes are an integral part of these consolidated financial statements.
39
UNICO, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
Common Stock Additional
--------------------------- Paid-In Accumulated
Shares Amount Capital Deficit
------------- ------------- ------------- -------------
<s> <c> <c> <c> <c>
Balance forward 77,707,974 $ 7,770,799 $ 770,881 $ (9,422,375)
July 1, 2003, common stock issued
for services at $0.10 per share
(unaudited) 350,000 35,000 - -
July 8, 2003, common stock issued
for services at $0.10 per share
(unaudited) 200,000 20,000 - -
July 28, 2003, common stock issued
for services at $0.10 per share
(unaudited) 350,000 35,000 - -
August 1, 2003, common stock issued
for services at $0.10 per share
(unaudited) 200,000 20,000 - -
August 11, 2003, common stock issued
for services at $0.10 per share
(unaudited) 250,000 25,000 - -
August 29,2003, common stock issued
for services at $0.10 per share
(unaudited) 450,000 45,000 - -
Additional expense recognized on
stock warrants granted (unaudited) - - 24,556 -
September 2, 2003, common stock
issued for services at $0.10 per share
(unaudited) 1,000,000 100,000 - -
September 3, 2003 common stock
issued for services at $0.10 per share
(unaudited) 500,000 50,000 - -
September 5, 2003, common stock
issued for cash at $0.10 per share
(unaudited) 545,000 54,500 - -
September 5, 2003, common stock
issued for purchase of fixed assets
at $0.10 per share (unaudited) 200,000 20,000 - -
September 16, 2003, common stock
issued for services at $0.10 per share
(unaudited) 800,000 80,000 - -
------------- ------------- ------------- -------------
Balance forward 82,552,974 $ 8,255,299 $ 795,437 $ (9,422,375)
------------- ------------- ------------- -------------
The accompanying notes are an integral part of these consolidated financial statements.
40
UNICO, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
Common Stock Additional
--------------------------- Paid-In Accumulated
Shares Amount Capital Deficit
------------- ------------- ------------- -------------
<s> <c> <c> <c> <c>
Balance forward 82,552,974 $ 8,255,299 $ 795,437 $ (9,422,375)
September 24, 2003, common stock
issued for services at $0.10 per share
(unaudited) 1,300,000 130,000 - -
October 9, 2003, common stock issued
for services at $0.10 per share
(unaudited) 2,000,000 200,000 - -
October 20, 2003, common stock
issued for services at $0.10 per
share (unaudited) 1,000,000 100,000 - -
November 6, 2003, common stock
issued for services at $0.10 per
share (unaudited) 1,000,000 100,000 - -
Net loss for the nine months
ended November 30, 2003
(unaudited) - - - (1,887,734)
------------- ------------- ------------- -------------
Balance, November 30, 2003
(unaudited) 87,852,974 $ 8,785,299 $ 795,437 $(11,310,109)
============= ============= ============= =============
Deficit accumulated prior to the exploration stage $ (3,788,522)
Deficit accumulated during the exploration stage (7,521,587)
-------------
Total accumulated deficit $(11,310,109)
=============
The accompanying notes are an integral part of these consolidated financial statements.
41
UNICO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
From
Inception of the
Exploration
Stage on
For the Nine Months Ended March 1,
November 30, 1997 Through
---------------------------- November 30,
2003 2002 2003
--------------- --------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,887,734) $ (725,373) $ (7,521,587)
Adjustments to reconcile net loss to net cash and
cash equivalents used by operating activities:
Stock issued for services 1,265,000 8,500 2,591,099
Bad debt expense - - 279,260
Warrants issued below market value 24,556 - 179,556
Pre-paid services expensed - 3,460 -
Depreciation expense 72,726 58,224 374,869
Loss on disposition of asset - - (21,055)
Settlement of debt - - 19,000
Gain on expiration of debt - - (638,025)
Gain on gold contract - - (24,072)
Decline in value of assets - - 960,960
Changes in operating assets and liabilities:
(Increase) in accounts receivable and
related receivables - (650) (65)
(Increase) in other assets - - (6,192)
Decrease in prepaid expenses - - 3,460
Increase in accounts payable and other
liabilities 32,589 41,755 1,008,282
--------------- --------------- --------------
Net Cash Used by Operating Activities (492,863) (614,084) (2,794,510)
--------------- --------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in receivable-related party - (20,000) -
Proceeds from receivable-related party - 15,000 -
Purchase of land - - (50,000)
Decrease in investment - - 95,068
Purchase of fixed assets (10,350) (76,824) (572,765)
--------------- --------------- --------------
Net Cash Used by Investing Activities (10,350) (81,824) (527,697)
--------------- --------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in bank overdraft 20,829 (3,325) 21,240
Proceeds from notes payable - related party 263,476 66,795 1,374,388
Proceeds from notes payable 183,447 625,000 801,447
Payments on notes payable (22,014) (16,534) (173,548)
Issuance of stock for cash 57,500 30,000 1,286,250
Receipt of stock subscription receivable - - 41,990
--------------- --------------- --------------
Net Cash Provided by Financing Activities $ 503,238 $ 701,936 $ 3,351,767
--------------- --------------- --------------
The accompanying notes are an integral part of these consolidated financial statements.
42
UNICO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
From
Inception of the
Exploration
Stage on
For the Nine Months Ended March 1,
November 30, 1997 Through
---------------------------- November 30,
2003 2002 2003
--------------- --------------- --------------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 25 $ 6,028 $ 29,560
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 33,557 33,009 4,022
--------------- --------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 33,582 $ 39,037 $ 33,582
=============== =============== ==============
CASH PAID DURING THE PERIOD FOR:
Interest $ 59,782 $ 44,886 $ 80,594
Income taxes $ - $ - $ -
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of stock for services $ 1,265,000 $ 8,500 $ 2,591,099
Issuance of stock for debt $ - $ 170,000 $ 1,384,069
Issuance of stock for subsidiary acquisition $ - $ 33,000 $ 309,150
Issuance of stock for fixed assets $ 20,000 $ - $ 68,400
Issuance of stock for prepaid services $ - $ - $ 3,460
Acquisition of assets with note payable $ 160,155 $ - $ 160,155
The accompanying notes are an integral part of these consolidated financial statements.
43
UNICO, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
November 30, 2003 and February 28, 2003
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted in accordance with such rules and regulations.
The information furnished in the interim consolidated financial statements
include normal recurring adjustments and reflects all adjustments, which, in
the opinion of management, are necessary for a fair presentation of such
financial statements. Although management believes the disclosures and
information presented are adequate to make the information not misleading, it
is suggested that these interim consolidated financial statements be read in
conjunction with the Company's most recent audited consolidated financial
statements and notes thereto included in its February 28, 2003 Annual Report
on Form 10-KSB. Operating results for the nine months ended November 30, 2003
are not necessarily indicative of the results that can be expected for the
year ending February 29, 2004.
NOTE 2 - GOING CONCERN
The Company's consolidated financial statements are prepared using accounting
principles generally accepted in the United States of America applicable to a
going concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has incurred losses
from its inception through November 30, 2003. It has not established
revenues sufficient to cover its operating costs and to allow it to continue
as a going concern. During the next 12 months, the Company's plan of
operation consists of the following:
.. Increase mining activities at the Deer Trail and Bromide Basin Mines;
.. Increase milling activities at the Deer Trail Mine;
.. Continue to screen and process the ore dumps on the upper Deer Trail Mine;
.. Ship concentrates to smelters for smelting and refining;
.. Evaluate how best to proceed with mining activities at the Silver Bell
Mine;
.. Increase the number of full-time employees from 8 to approximately 35;
.. Explore the possibility of obtaining a joint-venture partner to more fully
develop the Company's operations;
.. Explore the possibility of building a small portable gold processing plant
to be located at the Deer Trail Mine and/or the Bromide Basin Mine to
recover gold by gravity or floatation means; and
.. Raise a minimum of $250,000 in additional equity capital, loans, and/or
other financing transactions.
44
UNICO, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
November 30, 2003 and February 28, 2003
NOTE 2 - GOING CONCERN (Continued)
Management believes the Company's current cash as of November 30, 2003, will
sustain operations for approximately two additional months. In the event
income from mining operations is delayed or is insufficient to cover operating
expenses, the Company will need to seek additional funds from equity or debt
financing, for which the Company has no current commitments. In the interim,
management is committed to meeting the minimum operating needs of the Company.
NOTE 3 - MATERIAL EVENTS
During the nine months ended November 30, 2003, the Company borrowed an
additional $263,476 from a related party. At November 30, 2003, the total
balance on this related party note was $935,473, plus an additional $111,940
in accrued interest. Additionally, the Company borrowed $75,000 from an
unaffiliated individual. This note bears interest at a rate of 10.0% per
annum, and has no formal payment terms. Also, the Company borrowed $103,600
from an unaffiliated individual. This note has no stated interest rate.
Interest was imputed at 10.0% per annum. There are no formal payment terms.
During the nine months ended November 30, 2003, the Company issued 12,650,000
shares of common stock to various consultants for services rendered. These
shares were valued by the Company at $0.10 per share. Additionally, the
Company issued 575,000 shares of common stock for cash at $0.10 per share.
During the nine months ended November 30, 2003, the Company issued 200,000
shares of common stock for the purchase of fixed assets valued by the Company
at $0.10 per share.
On April 1, 2003, the Company elected to purchase certain fixed assets from an
unaffiliated entity for $165,000. As a part of this purchase, certain of
these fixed assets were expensed as minor supplies, while capitalizing a total
of $160,155. Per the terms of the asset purchase agreement, the seller agreed
to finance the purchase price of $165,000 for the Company, such that the
Company is to make 24 monthly installment payments of $2,000, with the
remaining outstanding balance due on April 1, 2005. The note bears interest
at a rate of 10.0% per annum. The principal balance on this note at November
30, 2003 was $142,986.
NOTE 4 - OUTSTANDING STOCK OPTIONS AND WARRANTS
During the nine months ended November 30, 2003, the Company granted 2,575,000
common stock warrants to purchase the Company's common stock. Each option and
warrant is convertible into one share of common stock at an exercise price of
$0.10 per share. The options and warrants have been granted as compensation
for consulting services and as incentives for the purchase of common stock for
cash, and generally have a life of two to three years.
45
UNICO, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
November 30, 2003 and February 28, 2003
NOTE 4 - OUTSTANDING STOCK OPTIONS AND WARRANTS (Continued)
A summary of the Company's outstanding stock options as of November 30, 2003,
including all changes during the nine months ended November 30, 2003
Weighted
Average
Shares Exercise Price
------------- --------------
Options outstanding at November 30, 2003:
Options issued in 2003 1,255,000 0.11
Options issued in 2004 2,575,000 0.10
------------- --------------
Total options outstanding, November 30, 2003 3,830,000 $ 0.11
============= ==============
Exercisable, November 30, 2003 3,830,000 $ 0.10
============= ==============
Summary of activity for the nine months ended November 30, 2003:
Granted 2,575,000 $ 0.10
Canceled - -
Exercised - -
Expired 3,373,041 $ 0.10
NOTE 5 - SUBSEQUENT EVENTS
Subsequent to November 30, 2003, the Company borrowed an additional $55,700
from an unrelated party.
On December 4, 2003, the Company issued 1,100,000 shares of common stock for
services valued at $0.10 per share.
46