U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Utah Clay Technology, Inc.
(Exact name of registrant as specified in its charter)
Utah 333-34308 87-0520575
---------- ------------- --------------
(state of (Commission File Number) (IRS Employer
incorporation) I.D. Number)
3985 South 2000 East
Salt Lake City, UT 84124
801-424-0223
____________________________________________________
(Address and telephone number of registrant's principal
executive offices and principal place of business)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve 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 ___
As of November 15, 2002, there were 31,380,931 shares of the Registrant's
Common Stock, par value $0.001 per share, outstanding.
Transitional Small Business Disclosure Format (check one): Yes ___ No _X_
Item 1. Financial Statements
Page
------
Balance Sheet September 30, 2002 (Unaudited) 3
Statements of Operations for the Nine Month Periods Ended
September 30, 2002 and 2001 (unaudited) 4
Statements of Cash Flows for the Nine Month Periods Ended
September 30, 2002 and 2001 (Unaudited) 5
Notes to Unaudited Financial Statements 6
2
UTAH CLAY TECHNOLOGY, INC.
(An Exploration Stage Company)
BALANCE SHEET
September 30, 2002
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash & cash equivalent $ 1,832
PROPERTY AND EQUIPMENT
Laboratory Equipment 2,484
Machine Design & Configuration 128,000
-----------
Total Properties & Equipment 130,484
-----------
$ 132,316
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 103,186
Accrued expenses 395,357
Advances payable-officers and directors 420,428
Notes payable-related parties 214,263
Notes payable 47,415
-----------
Total current liabilities 1,180,649
CONVERTIBLE DEBENTURE 193,000
-----------
Total liabilities 1,373,649
===========
STOCKHOLDERS' DEFICIT
Preferred stock, par value
$0.001;10,000,000 shares authorized;
84,817 shares issued and outstanding 85
Common stock, par value
$0.001;100,000,000 shares authorized;
31,380,931 shares issued and outstanding 31,381
Additional paid-in capital 2,603,016
Stock subscription receivable (59,880)
Deficit accumulated from inception (3,815,935)
-----------
Total stockholders' deficit (1,241,333)
-----------
$ 132,316
===========
The accompanying notes are an integral part of these financial statements.
3
UTAH CLAY TECHNOLOGY, INC.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
Cumulative
Three month period Nine month period From Inception
ended September 30, ended September 30, (March 1, 1994)
2002 2001 2002 2001 to September 30, 2002
----------- ------------ ----------- ----------- ------------------
Net revenues $ - $ - $ - $ - $ -
Expenses:
Mineral lease rentals 15,295 29,547 63,177 73,009 586,875
General and Administrative 97,175 117,124 469,648 265,666 3,227,921
----------- ------------ ----------- ----------- ------------------
Loss before income taxes (112,470) (146,671) (532,825) (338,675) (3,814,796)
Income taxes 25 25 75 75 1,139
----------- ------------ ----------- ----------- ------------------
Net Loss (112,495) (146,696) $ (532,900) $ (338,750) $ (3,815,935)
=========== ============ =========== =========== ==================
Basic and diluted loss
per common share (0.004) (0.005) $ (0.017) $ (0.012)
=========== ============ =========== ===========
Basic and diluted weighted
average number of common
shares outstanding 31,312,878 27,973,666 31,077,599 27,212,848
=========== ============ =========== ===========
*Weighted average number of shares used to compute basic and diluted loss per share is
the same since the effect of dilutive securities is antidilutive.
The accompanying notes are an integral part of these financial statements.
4
UTAH CLAY TECHNOLOGY, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2001
(Unaudited)
Cumulative
From Inception
(March 1, 1994)
2002 2001 to September 30, 2002
------------ ------------- ---------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (532,900) $ (338,750) $ (3,815,935)
Adjustments to reconcile net loss to net cash used in
operating activities:
Issuance of common stock for services 111,193 154,100 1,182,984
Decrease (increase) in receivable 350 - -
Decrease in prepaid expenses 49,500 - 49,500
Increase in accounts payable & accrued expense 206,052 84,992 646,743
------------ ------------- ---------------------
Total Adjustments 367,095 239,092 1,879,227
------------ ------------- ---------------------
Net cash used in operating activities (165,805) (99,658) (1,936,708)
CASH FLOWS FROM INVESTING ACTIVITIES
Mining leases - 15,432 17,740
Machine design & configuration - - (130,484)
------------ ------------- ---------------------
Net cash provided by (used in) investing activities - 15,432 (112,744)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from advances by officers/directors - 33,800 1,074,463
Proceeds from notes payable & debenture 83,078 50,426 456,678
Issuance of shares - - 520,143
------------ ------------- ---------------------
Net cash provided by financing activities 83,078 84,226 2,051,284
Net decrease in cash & cash equivalents (82,727) - 1,832
CASH & CASH EQUIVALENTS, BEGINNING BALANCE 84,559 - -
------------ ------------- ---------------------
CASH & CASH EQUIVALENTS, ENDING BALANCE $ 1,832 $ - $ 1,832
============ ============= =====================
The accompanying notes are an integral part of these financial statements.
5
Utah Clay Technology, Inc.
(An Exploration Stage Company)
Notes to Unaudited Financial Statements
Note 1- Organization and basis of presentation
Organization and nature of operations
Utah Clay Technology, Inc. (the "Company"), a Utah corporation, was
incorporated on March 1, 1994. The planned operations of the Company are to
engage in mining, processing and marketing of minerals. For the period from
inception (March 1, 1994) to September 30, 2002, the Company had no revenues.
The Company is classified as an exploration stage company because its principal
activities involve obtaining the capital necessary to execute its strategic
business plan.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Income taxes
Deferred income tax assets and liabilities are computed annually for
differences between the financial statements and tax basis of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted laws and rates applicable to the periods in which the
differences are expected to affect taxable income (loss). Valuation allowance
is established when necessary to reduce deferred tax assets to the amount
expected to be realized.
Basic and diluted net loss per share
Net loss per share is calculated in accordance with the Statement of financial
accounting standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No.
128 superseded Accounting Principles Board Opinion No.15 (APB 15). Net loss per
share for all periods presented has been restated to reflect the adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average
number of common shares outstanding. Diluted net loss per share is based on the
assumption that all dilutive convertible shares and stock options were
converted or exercised. Dilution is computed by applying the treasury stock
method. Under this method, options and warrants are assumed to be exercised at
the beginning of the period (or at the time of issuance, if later), and as if
funds obtained thereby were used to purchase common stock at the average market
price during the period.
Issuance of share for services
Valuation of shares for services is based on the fair market value of services.
Fair value of financial instruments
Statement of financial accounting standard No. 107, Disclosures about fair
value of financial instruments, requires that the company disclose estimated
fair values of financial instruments. The carrying amounts reported in the
statements of financial position for current assets and current liabilities
qualifying, as financial instruments are a reasonable estimate of fair value.
6
Utah Clay Technology, Inc.
(An Exploration Stage Company)
Notes to Unaudited Financial Statements
Basis of preparation
The accompanying unaudited condensed interim financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission for the presentation of interim financial information, but
do not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. The audited financial
statements for the two years ended December 31, 2001 and 2000 was filed on
March 7, 2002 with the Securities and Exchange Commission and is hereby
referenced. In the opinion of management, all adjustments considered necessary
for a fair presentation have been included. Operating results for the
nine-month period ended September 30, 2002 are not necessarily indicative of
the results that may be expected for the year ended December 31, 2002.
Note 2 - Recent pronouncements
In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for
Asset Retirement Obligations". SFAS 143 addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. This Statement is effective
for financial statements issued for fiscal years beginning after June 15, 2002.
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets,"
was issued in August 2001. SFAS No. 144 is effective for fiscal years beginning
after December 15, 2001, and addresses financial accounting and reporting for
the impairment or disposal of long-lived assets. This statement supersedes SFAS
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," and the accounting and reporting provisions of APB
Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions," for the disposal of a segment
of a business.
The adoption of above pronouncements did not materially impact the Company's
financial position or results of operations.
In May 2002, the Board issued SFAS No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections
("SFAS 145"). SFAS 145 rescinds the automatic treatment of gains or losses from
extinguishments of debt as extraordinary unless they meet the criteria for
extraordinary items as outlined in APB Opinion No. 30, Reporting the Results of
Operations, Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions. SFAS
145 also requires sale-leaseback accounting for certain lease modifications
that have economic effects that are similar to sale-leaseback transactions and
makes various technical corrections to existing pronouncements. The provisions
of SFAS 145 related to the rescission of FASB Statement 4 are effective for
fiscal years beginning after May 15, 2002, with early adoption encouraged. All
other provisions of SFAS 145 are effective for transactions occurring after
May 15, 2002, with early adoption encouraged. The Company does not anticipate
that adoption of SFAS 145 will have a material effect on our earnings or
financial position.
In June 2002, the FASB issued SFAS No. 146 " Accounting for Costs Associated
with exit or Disposal Activities." This Statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
an Activity (including Certain Costs Incurred in a Restructuring)." This
Statement requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred. Under Issue
94-3 a liability for an exit cost as defined, was recognized at the date of an
entity's commitment to an exit plan. This statement will not have a material
impact on the Company's financial statements.
7
Utah Clay Technology, Inc.
(An Exploration Stage Company)
Notes to Unaudited Financial Statements
Note 3- An exploration stage company
An exploration stage company is one for which principal operations of mining
have not commenced or principal operations have generated an insignificant
amount of revenue. Management of an exploration stage company devotes most of
its activities in conducting exploratory mining operations. Operating losses
have been incurred through September 30, 2002, and the Company continues to
use, rather than provide, working capital in this operation. Although
management believes that it is pursuing a course of action that will provide
successful future operations, the outcome of these matters is uncertain.
Note 4- Going Concern
The company's financial statements have been presented on the basis that it is
a going concern, which contemplates the realization of assets and satisfaction
of liabilities in the normal course of business. The company incurred a net
loss of $3,815,935 for the period from inception (March 1, 1994) to September
30, 2002. The company's total liabilities exceeded its total assets by
$1,241,333 as of September 30, 2002. These factors, as well as the uncertain
conditions that the company faces in its day-to-day operations, create an
uncertainty as to the company's ability to continue as a going concern. The
financial statements do not include any adjustments that might be necessary
should the company be unable to continue as a going concern. The company plans
to finance the continued operations for the next year through private funding
and funding from officers of the company.
Note 5- Convertible Debenture
On November 30, 2001, the Company issued $100,000 worth of 5%, 3-Year Term,
Convertible Debentures (the "Debentures") and on December 28, 2001, the Company
issued an additional $95,000 worth of the Debentures.
The Debentures shall pay five percent (5%) cumulative interest, in cash or in
shares of common stock, par value $.001 per share, of the Company ("Common
Stock"), at the Company's option, at the time of each conversion. The Company
shall pay interest on the unpaid principal amount of this Debenture (the
"Debenture") at the time of each conversion until the principal amount hereof
is paid in full or has been converted. If the interest is to be paid in cash,
the Company shall make such payment within five (5) business days of the date
of conversion. If the interest is to be paid in Common Stock, said Common
Stock shall be delivered to the Holder, or per Holder's instructions, within
five (5) business days of the date of conversion. The Debentures are subject to
automatic conversion at the end of three (3) years from the date of issuance at
which time all Debentures outstanding will be automatically converted based
upon the formula set forth in the agreement.
The principal amount of this Debenture is secured by shares pledged as
collateral pursuant to the terms of a Security Agreement. This Debenture is a
full recourse loan being made by the Holder and the Company is liable for any
deficiency.
(a) The Holder of this Debenture shall have the right to convert it into shares
of Common Stock at any time and from time to time at the earlier of (i) ninety
(90) calendar days after the Closing Date (November 30, 2001) or after the
effective date of the registration statement. The number of shares of Common
Stock issuable upon the conversion of this Debenture is determined pursuant to
paragraph (d) below.
8
Utah Clay Technology, Inc.
(An Exploration Stage Company)
Notes to Unaudited Financial Statements
(b) Less than all of the principal amount of this Debenture may be converted
into Common Stock if the portion converted is $5,000 or a whole multiple of
$5,000 and the provisions of the debenture agreement that apply to the
conversion of all of the Debenture shall also apply to the conversion of a
portion of it.
(c) In the event all or any portion of this Debenture remains outstanding on
the Maturity Date, the unconverted portion of such Debenture will automatically
be converted into shares of Common Stock on such date.
(d) Should the Holder exercise his right of conversion, the conversion is the
lesser of (i) 120% of the closing bid price (as reported by Bloomberg) on the
Closing Date or (ii) 75% of the average of the three (3) lowest closing bid
prices (as reported by Bloomberg) during the ten (10) trading days immediately
prior to the Conversion Date, each being referred to as the "Conversion Price".
No fractional shares or scrip representing fractions of shares will be issued
on conversion, but the number of shares issuable shall be rounded up or down,
as the case may be, to the nearest whole share.
(e) The Company shall at all times reserve (or make alternative written
arrangements for reservation or contribution of shares) and have available all
Common Stock necessary to meet conversion of the Debentures by all Holders of
the entire amount of Debentures then outstanding. If, at any time Holder
submits a Notice of Conversion and the Company does not have sufficient
authorized but unissued shares of Common Stock (or alternative shares of Common
Stock as may be contributed by Stockholders) available to effect, in full, a
conversion of the Debentures (a "Conversion Default", the date of such default
being referred to herein as the "Conversion Default Date"), the Company shall
issue to the Holder all of the shares of Common Stock which are available, and
the Notice of Conversion as to any Debentures requested to be converted but not
converted (the "Unconverted Debentures"), may be deemed null and void upon
written notice sent by the Holder to the Company.
(f) If, by the fifth (5th) business day after the Conversion Date of any
portion of the Debentures to be converted (the "Delivery Date"), the transfer
agent fails for any reason to deliver the Common Stock upon conversion by the
Holder and after such Delivery Date, the Holder purchases, in an open market
transaction or otherwise, shares of Common Stock (the "Covering Shares") solely
in order to make delivery in satisfaction of a sale of Common Stock by the
Holder (the "Sold Shares"), which delivery such Holder anticipated to make
using the Common Stock issuable upon conversion (a "Buy-In"), the Company shall
pay to the Holder, in addition to any other amounts due to Holder pursuant to
this Debenture, and not in lieu thereof, the Buy-In Adjustment Amount (as
defined below). The "Buy In Adjustment Amount" is the amount equal to the
excess, if any, of (x) the Holder's total purchase price (including brokerage
commissions, if any) for the Covering Shares over (y) the net proceeds (after
brokerage commissions, if any) received by the Holder from the sale of the
Sold Shares. The Company shall pay the Buy-In Adjustment Amount to the Holder
in immediately available funds within five (5) business days of written demand
by the Holder.
(g) The Company shall be entitled to redeem the unconverted portion of the
Debentures by giving the Holder at least ten (10) calendar days written
notice. If the redemption is to occur after the Holder's right of conversion
has vested, the Holder shall be entitled to convert the balance of the
Debentures not being converted at anytime prior to the date of redemption. The
redemption amount shall be 125% of the principal amount being redeemed, plus
and additional 1% for each 30 day period after the 90th calendar day following
the Closing Date.
9
Utah Clay Technology, Inc.
(An Exploration Stage Company)
Notes to Unaudited Financial Statements
In consideration of Dennis S. Engh, Daniel H. Engh and Thomas F. Harrison, all
officers of the Company, ("Pledgers") depositing an aggregate of 12 million
shares of their holdings of Common Stock of UTCL pursuant to a Security
Agreement, which shares are to serve as security for the Company's performance
under this Agreement which provides for the issuance of up to $200,000 in
Three-Year, 5%, Convertible Debentures, the Company granted options to each of
the Pledgers to purchase, at $0.09 a share, that number of shares of Common
Stock of the Company that may be needed to replace any of such Pledger's 12
million shares that may be sold by the pledgees of the Security Agreement
pursuant to its terms.
During the period ended September 30, 2002, $2,000 of the issued debenture was
converted to 139,130 shares of the Company's common stock at the conversion
price.
Note 6- Stockholders' equity
The Company issued 3,021,548 shares of common stock for services amounting
$111,193 in the nine-month period ended September 30, 2002. In addition,
139,130 shares of common stock were issued for conversion of convertible
debenture during the period ended September 30, 2002.
Note 7- Reclassification
Certain prior period amounts have been reclassified to conform to the period
ended September 30, 2002 presentation.
10
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis should be read in conjunction with
the financial statements and the accompanying notes thereto and is qualified in
its entirety by the foregoing and by more detailed financial information
appearing elsewhere. See "Item 1. Financial Statements."
Plan of Operations for the Next Twelve Months
During the next twelve months we propose to re-analyze the seven core
holes that were drilled on the White Mountain property by Buena Vista Mining
in 1992. This analysis will cover the brightness, alteration minerals, percent
of alteration and color along with other tests. Then, subject to the
availability of approximately $500,000, which we hope to obtain from our Equity
Line of Credit financing, we will conduct a new drilling program. Our plan
provides that holes will be drilled on 200-foot spacing to define the areas of
greatest shallow, high brightness kaolinite. The drilling will commence
outward from the test pit where a previous hole encountered 136 feet of white
kaolin. The next phase of drilling will concentrate on the highest potential
areas found in the first holes. The spacing will be 100 feet. The holes will
be drilled to 150 feet. The drilling will produce cores. Samples from these
cores will be tested for brightness, color, specific gravity, chemical
composition and contaminates. The goal of this drilling and analysis of the
cores is to establish the presence of mineralized material. We will then
combine this information with the requirements of industry standards, prices
of marketable kaolin and recovery costs to determine the degree of legal and
economic feasibility of further activities.
Should this determination be favorable for further activities, we will
seek the funds to construct a processing facility. The engineering and
design work that has been completed thus far indicates that we will need
approximately $20 million to construct a processing facility. We will pursue
a loan backed by the U.S. Department of Agriculture that would include 80
percent of the construction costs of such a facility. In order to qualify
for such a loan, we will have to demonstrate that we have, or will have, 20
percent of the cost of the processing facility, which 20 percent would be
approximately $4 million. In an effort to obtain such funds, we entered
into the Equity Line of Credit agreement with a New York investment banking
firm. Due to the depressed price of our common stock, it has not been
prudent for us to require purchases of our stock under the terms of the
Equity Line of Credit.
We estimate it will take approximately one year after the funds are
committed to the facility to complete its design and construction and to make
it operational. Only then would we first obtain revenues for our company.
Oro Blanco.
A drilling and testing program similar to that planned for White Mountain
is contemplated. There was an indication from the previous program that a
promising trend of kaolin continues to the east past where the previous
drilling program stopped. This trend will be explored in the new drilling
program.
11
Koosharem, Kimberly and Topaz Claims. We have no present proposed
program of exploration on these properties that are subject to our options to
acquire. They are without known reserves.
Item 3. Controls and Procedures
Evaluation of disclosure controls and procedures. We maintain controls
and procedures designed to ensure that information required to be disclosed in
this report is recorded, processed, accumulated and communicated to our
management, including our chief executive officer and our chief financial
officer, to allow timely decisions regarding the required disclosure. Within
the 90 days prior to the filing date of this report, our management, with the
participation of our chief executive officer and chief financial officer,
carried out an evaluation of the effectiveness of the design and operation of
these disclosure controls and procedures. Our chief executive officer and
chief financial officer concluded, as of fifteen days prior to the filing
date of this report, that these disclosure controls and procedures are
effective.
Changes in internal controls. Subsequent to the date of the above
evaluation, we made no significant changes in our internal controls or in
other factors that could significantly affect these controls, nor did we take
any corrective action, as the evaluation revealed no significant deficiencies
or material weaknesses.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed, by incorporation by reference, as part
of this Form 10-QSB:
Exhibit
Number Description of Exhibit
3(i) - Articles of Incorporation of Utah Clay Technology, Inc. and
amendments thereto.*
3(i).1 - Amended Articles of Incorporation of Utah Clay Technology,
Inc.***
3(ii) - Bylaws of Utah Clay Technology, Inc.*
10 - 2000 Stock Option Plan.*
10.1 - White Mountain mining lease, consisting of Amendment Agreement
of November 9, 1992; Mining Lease dated March 1, 1994; Addendum
to Mining Lease dated March 15, 2000; and Addendum to Mining
Lease dated March 27, 2000.*
10.2 - Oro Blanco mining lease, consisting of Mining Lease dated
December 31, 1999.*
12
10.3 - Kimberly claims: Mining Lease Agreement (Fullmer-Engh), dated
June 19, 1993; Addendum to Fullmer-Engh Mining Lease, dated
March 15, 2000; Option (Engh-Kaolin of the West)to Enter Into
Mining Lease, dated September 30, 1996; Option (Kaolin of the
West-Utah Clay) to Enter Into Mining Lease, dated September 30,
1996, to which is attached an unexecuted Mining Lease; Addendum
to Engh-Kaolin of the West Option to Enter Into Mining Lease,
dated March 27, 2000; and Addendum to Kaolin of the West-Utah
Clay Option to Enter Into Mining Lease dated March 27, 2000.*
10.4 - Koosharem claims: Mining Lease Agreement (Fullmer-Engh), dated
June 19, 1993; Addendum to Fullmer-Engh Mining Lease, dated
March 15, 2000; Option (Engh-Kaolin of the West)to Enter Into
Mining Lease, dated September 30, 1996; Option (Kaolin of the
West-Utah Clay) to Enter Into Mining Lease, dated September 30,
1996, to which is attached an unexecuted Mining Lease; Addendum
to Engh-Kaolin of the West Option to Enter Into Mining Lease,
dated March 27, 2000; and Addendum to Kaolin of the West-Utah
Clay Option to Enter Into Mining Lease dated March 27, 2000.*
10.5 - Topaz claims: Mining Lease Agreement (Fullmer-Engh), dated June
19, 1993; Addendum to Fullmer-Engh Mining Lease, dated March 15,
2000; Option (Engh-Kaolin of the West)to Enter Into Mining
Lease, dated September 30, 1996; Option (Kaolin of the West-Utah
Clay) to Enter Into Mining Lease, dated September 30, 1996, to
which is attached an unexecuted Mining Lease; Addendum to
Engh-Kaolin of the West Option to Enter Into Mining Lease, dated
March 27, 2000; and Addendum to Kaolin of the West-Utah Clay
Option to Enter Into Mining Lease dated March 27, 2000.*
10.6 - Agreement between Utah Clay Technology, Inc. and ISG Resources,
Inc. dated November 30, 1999 and extensions dated February 10,
2000 and June 15, 2000.**
10.7 - Agreements between Utah Clay Technology, Inc. and Precision
System Engineering dated June 14, 1999 and November 16, 1999.**
10.8 - Small Miner's Permit for White Mountain lease issued by Bureau
of Land Management and Utah State Division of Oil, Gas and
Mining.**
10.9 - Subscription Agreement of November 30, 2001 between Utah Clay
Technology, Inc. and the Purchasers of $200,000 of Convertible
Debentures of Utah Clay Technology, Inc.****
10.10 - Form of Debenture of the convertible debentures described in
Exhibit 10.9.****
10.11 - Security Agreement (Stock Pledge) of November 30, 2001 between
Dennis S. Engh, Daniel Engh, Thomas Harrison (as Pledgors) and
the Purchasers of the convertible debentures described in
Exhibit 10.9.****
10.12 - Registration Rights Agreement of November 30, 2001 between Utah
Clay Technology, Inc. and the Purchasers of the convertible
debentures described in Exhibit 10.9.****
10.13 - Investment Agreement (Equity Line Financing) of November 30,
2001 between Utah Clay Technology, Inc. and the Investors bound
by the equity line financing.****
13
10.14 - Registration Rights Agreement of November 30, 2001 between Utah
Clay Technology, Inc. and the Investors described in Exhibit
10.13.****
10.15 - Escrow Agreement of November 30, 2001 among First Union National
Bank of New York, New York; Utah Clay Technology, Inc.; and May
Davis Group, Inc.****
*Previously filed with Amendment No. 1 to Form SB-2 Commission file number
333-34308; incorporated herein.
**Previously filed with Amendment No. 2 to Form SB-2 Commission file number
333-34308; incorporated herein.
***Previously filed with Form 10-QSB Current Report for the Period Ended
September 30, 2001 Commission file number 333-34308; incorporated herein.
****Previously filed with Form SB-2, Commission file number 333-76110;
incorporated herein.
(b) Forms 8-K
None
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: November 19, 2002 Utah Clay Technology, Inc.
/s/ Dennis Engh
By -----------------------
Dennis Engh, President
14
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
I, Dennis Engh, Chief Executive Officer of the registrant, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Utah Clay
Technology, Inc.;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
15
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: November 19, 2002 /s/ Dennis Engh
----------------------------
Dennis Engh
Chief Executive Officer
16
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
I, Thomas F. Harrison, Chief Financial Officer of the registrant, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Utah Clay
Technology, Inc.;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and
17
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 19, 2002 /s/ Thomas F. Harrison
----------------------------
Thomas F. Harrison
Chief Financial Officer
18
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the accompanying Quarterly Report of Utah Clay
Technology, Inc. (the "Company") on Form 10-QSB for the period ended
September 30, 2002 (the "Report"), I, Dennis Engh, Chief Executive Officer of
the Company, hereby certify that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Dennis Engh
Dated: November 19, 2002 ----------------------------
Dennis Engh
Chairman and Chief Executive Officer
The above certification is furnished solely pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and is not being filed as part of
the Form 10-Q or as a separate disclosure document.
19
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the accompanying Quarterly Report of Utah Clay
Technology, Inc. (the "Company") on Form 10-QSB for the period ended
September 30, 2002 (the "Report"), I, Thomas F. Harrison, Chief Financial
Officer of the Company, hereby certify that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d));
and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Thomas F. Harrison
Dated: November 19, 2002 -------------------------------
Thomas F. Harrison
Chief Financial Officer
The above certification is furnished solely pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and is not being filed as part
of the Form 10-Q or as a separate disclosure document.
20