SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[_] Preliminary Information Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
CHEYENNE RESOURCES, INC.
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(Name of Registrant as Specified In Its Charter)
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Cheyenne Resources, Inc.
7609 Ralston Road
Arvada, Colorado 80002
(303) 422-8127
NOTICE OF ACTION TAKEN BY THE SHAREHOLDERS
BY WRITTEN CONSENT OF A MAJORITY
APRIL 23, 2004
To The Shareholders of Cheyenne Resources, Inc.
Skye Blue Ventures LLC (collectively, the "Majority Shareholders") are the
holders of a total of 25,325,000 shares or approximately 51% of the total issued
and outstanding stock of Cheyenne Resources Corp., a Wyoming corporation (the
"Company"). The Majority Shareholders have adopted the following resolutions by
written consent in lieu of a meeting pursuant to the Corporation Act of the
State of Wyoming, and subject to the Notice requirements of Section 14 of the
Securities Exchange Act of 1934.
1. To change the Company's name to a name to be determined by the
Board of Directors.
2. To authorize a reverse split of the Company's common stock on a
one for eighty five basis.
Denis Iler, President
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WE ARE NOT ASKING YOU FOR A CONSENT OR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
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Cheyenne Resources, Inc.
7609 Ralston Road
April 23, 2004
NOTICE OF SHAREHOLDERS' ACTION
The Majority Shareholders have submitted their consents to the actions
described in this Information Statement on or about April 23, 2004, to be
effective on or before June 8, 2004. As of April 23, 2004, the Majority
Shareholders held of record 25,325,000 shares of the Company's common stock, or
approximately 51% of the total issued and outstanding common stock of the
Company. The remaining outstanding shares of common stock are held by
approximately four thousand other shareholders.
The Majority Shareholder consenting consist of Skye Blue Ventures LLC. See
"SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS."
Holders of the common stock of record as of April 23, 2004 are entitled
to submit their consent to the shareholder resolutions described in this
Information Statement, although no shareholder consents other than that of the
Majority Shareholders are required to be submitted in order for the resolution
to be adopted. The Company is NOT soliciting consents or proxies and
shareholders have no obligation to submit either of them. Whether or not
shareholders submit consents should not affect their rights as shareholders or
the prospects of the proposed shareholder resolutions being adopted. The
Majority Shareholders will consent to all of the shareholder resolutions
described in this Information Statement. The affirmative vote of the holders of
a majority of the outstanding common stock of the Company is required to adopt
the resolutions described in this Information Statement. Wyoming law does not
require that the proposed transaction be approved by a majority of the
disinterested shareholders. A total of 50,000,000 shares of common stock are
entitled to vote on the Company's proposed transactions described in this
Information Statement.
THE COMPANY
The Company has its executive offices at 7609 Ralston Road, Arvada,
Colorado 80002, and its telephone number is (303) 422-8127. As described in the
accompanying NOTICE OF ACTION TO BE TAKEN BY THE SHAREHOLDERS, the Company
proposes to adopt certain amendments to the Articles of Incorporation by
shareholder action as follows:
Proposal #1
AMENDMENT TO ARTICLES FOR
CORPORATION NAME CHANGE
The majority shareholders have authorized a change in the name of this
corporation to a name to be chosen by the Board in its discretion. This requires
an amendment to the Articles of Incorporation.
The Board believes the name change in our Articles of Incorporation is in
the best interest of the corporation, to create a different image for the
Company, because the Company has been known as a mineral exploration company.
PROPOSAL 2
REVERSE SPLIT OF COMMON STOCK ISSUED AND OUTSTANDING
To Authorize a reverse split of the common stock on a one for eighty five
basis, by which each eighty five shares shall become one share;
Our shareholders have approved a pro-rata reverse split of our common
stock, by which each eighty five shares would become one share. The effective
date of the reverse split will be 45 days following the date of the mailing of
this Notice.
The shareholders entitled to fractional shares as a result of the reverse
split will have the fractional shares rounded up to the nearest whole share,
because the cost of administering fractional share to the Company and the
confusion, inconvenience, and administrative time for the Company and at the
transfer agent and for "street name" shareholders. The Board has determined that
it is more cost effective and better business practice on a cost/benefit
analysis to handle fractional shares this way than to attempt to administer them
as fractional shares or to pay cash or scrip for them. At the most, the Company
estimates, this rounding up to the nearest whole share would result in the
issuance of $5,000 fractional shares on a post-reverse split basis which at
current price is less than $2,380 at $.007 per share.
There will be no change in the number of record holders as a result of
the reverse split.
We believe that reverse split will be advantageous to us and to all
shareholders, because it may provide the opportunity for higher share prices
based upon fewer shares. It is also a factor that most brokerage houses do not
permit or favor lower-priced stocks to be used as collateral for margin
accounts. Certain polices and practices of the securities industry may tend to
discourage individual brokers within those firms from dealing in lower-priced
stocks. Some of those polices and practices involve time-consuming procedures
that make the handling of lower priced stocks economically unattractive. The
brokerage commissions on the purchase or sale of lower priced stocks may also
represent a higher percentage of the price than the brokerage commission on
higher priced stocks.
As a general rule, potential investors who might consider making
investments in our company will refuse to do so when the company has a large
number of shares issued and outstanding with no equity. In other words, the
"dilution" which new investors would suffer would discourage them from
investing, as general rule of experience. A reduction in the total outstanding
shares may, without any assurance, make our capitalization structure more
attractive.
The Company does not now qualify for a listing on any exchange, AMEX,
NASDAQ, NYSE, or any smaller exchange. The Company does not meet any exchange
qualifications at this time except that it is an SEC registered company. There
is no assurance whatsoever that the Company will ever meet most of any exchange
listing criteria.
There is no assurance that any effect to the price of our stock will
result, or that the market price for our common stock, immediately or shortly
after the proposed changes will rise, or that any rise which may occur will be
sustained. Market conditions are not predictable and may be influenced by
changes in investor attitudes and external economic conditions. We are proposing
the steps we deem best calculated to meet the market attractively. We cannot
control the market's reaction.
Effect of the Reverse Split upon Shareholdings
Pre-Split Shares Post Split Shares
- ---------------- -----------------
Less than 85 shares 1 (after rounding up)
850 10
8,500 100
20,000 236
50,000 589
100,000 1,177
500,000 5,883
1,000,000 11,765
Dissenting shareholders have no appraisal rights under Wyoming law or
pursuant to our constituent documents of incorporation or bylaws, in connection
with the reverse split.
Additional information regarding the Company, its business, its stock,
and its financial condition are included in the Company's Form 10-KSB annual
reports and its Form 10-QSB quarterly reports. Copies of the Company's Form
10-KSB for its fiscal year ending December 31, 2003 and its quarterly report on
the Form 10-QSB for the quarter ending September 30, 2003 are available upon
request to: Denis Iler c/o 7609 Ralston Road, Arvada, Colorado 80002.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's common stock as of
April 20, 2004 by (i) each person who is known by the Company to own
beneficially more than 5% of the Company's common stock, (ii) each of the
Company's directors and executive officers, and (iii) all officers and directors
of the Company as a group.
Name and Address of Amount and nature of
Beneficial Owner Beneficial Ownership (1) Percentage of Class
- - ------------------------------------------------------------------------------
Robert R. Spatz 20,000 (2)(3) .04%
2846 Kelly Drive Direct and
Cheyenne, Wyoming 82001 Beneficial
Berge Exploration, Inc. 630,827 1.2%
8774 Yates Dr., Ste. 100 Direct and
Westminister, CO 80030 Beneficial
Berge Enterprises, Inc. 904,500 1.8%
5862 Owens St. Direct and
Arvada, CO 80004 Beneficial
Whiting Enterprises, Inc. 914,500 1.8%
5855 Parfet St. Direct and
Arvada, CO 80004 Beneficial
Skye Blue Ventures LLC 25,325,000(1) 51%
2000 Wadsworth Blve. PMB 179,
Lakewood,CO 80214 (Beneficially
Denis Iler (2)(4)
President/Director)
Officers and Directors 25,345,000 (1)(2) 52%
As a Group (Two Direct and
Persons) Beneficial
(1) Does not include option to convert loan of $25,000 @ $.001 per share and
does not include option to convert future advances of up to $50,000 @ $.001 per
share.
(2) Officer and/or Director of Cheyenne Resources, Inc.
(3) Does not include 90,000 shares to be issued for salary accrued on a
post reverse basis. This would be 7,650,000 shares pre-reverse split.
(4) Includes 25,000 shares owned directly by Denis Iler, manager for Skye Blue
Ventures LLC.
Notes to the table:
Unless otherwise indicated, the persons named in the table have sole voting
and investment power with respect to all shares of common stock shown as
beneficially owned by them.
MANAGEMENT
The following table lists the names and ages of the executive officers and
directors of the Company. The directors were appointed and will continue to
serve until the next annual shareholders meeting or until their successors are
appointed and qualified. All officers serve at the discretion of the Board of
Directors.
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
Denis Iler 65 President, Director & CFO
Robert Spatz 79 Director
Denis R. Iler, age 65, Director, CFO and President received a BA in Math
from San Jose State University in California, and an MBA from Regis University
in 1982. He was a comptroller with Berge Exploration from 1978 to 1984. Since
1984, he has been President and principal accountant for Business Financial
Systems, Inc., an independent accounting firm, providing tax and accounting
services for the small business community, including oil and gas, construction,
and real estate brokerage accounting. He was a director of Nelx, Inc. from
1999-2001.
Robert R. Spatz has been the President and a director of the Company since
1970, devoting substantially full time to the affairs of the Company. He was
employed by Discovery Oil, Ltd. as office manager & land man in addition to his
position with the Company from April 1976 to September 1 1979. Since the mid
80's, when the oil crisis occurred, Mr. Spatz his been the only employee. Mr.
Spatz attended the University of Wyoming, but did not finish. He was a Director
of First Wyoming Bank North in Cheyenne, Wyoming for eight years. Mr. Spatz was
born in Laramie County, Wyoming and has lived there all his life.
Under the Wyoming Business Corporation Act and the Company's Articles of
Incorporation, as amended, the Company's directors have no personal liability to
the Company or its stockholders for monetary damages incurred as the result of
the breach or alleged breach by a director of his "duty of care". This provision
does not apply to the directors' (i) acts or omissions that
involve intentional misconduct or a knowing and culpable violation of law, (ii)
acts or omissions that a director believes to be contrary to the best interests
of the corporation or its shareholders or that involve the absence of good faith
on the part of the director, (iii) approval of any transaction from which a
director derives an improper personal benefit, (iv) acts or omissions that show
a reckless disregard for the director's duty to the corporation or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of serious injury to the corporation or its shareholders, (v) acts or omissions
that constituted an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the corporation or its shareholders, or
(vi) approval of an unlawful dividend, distribution, stock repurchase or
redemption. This provision would generally absolve directors of personal
liability for negligence in the performance of duties, including gross
negligence.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
BOARD COMMITTEES
The Board of Directors currently serves as an Audit Committee and
Compensation Committee. During the fiscal year ended December 31, 2003, the
Board of Directors held occasional meetings.
COMPENSATION OF DIRECTORS
Officers in the past, accrued salaries as shown in the following table.
Directors receive no cash compensation for their services to the Company as
directors, but are reimbursed for expenses actually incurred in connection with
attending meetings of the Board of Directors.
Securities
or Property, Aggregate of
Name of Insurance contingent
individual Salaries, fees benefits or forms of
or number of directors' fees reimbursement remuneration
persons in commissions, personal and proposed
group Year and bonuses benefits remuneration Options
================================================================================
Robert R. Spatz 2003 0 0 0 0
Former President,
Assistant- 2002 $26,000* 0 0 0
Treasurer & 2001 $53,500* 0 0 0
Director
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Don Goddard 2003 0 0 0 0
Director (Resigned) 2002 $12,000* 0 0 0
2001 $34,200* 0 0 0
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Randall L. Reichert 2003 0 0 0 0
Director (Resigned) 2002 0 0 0 0
2001 0 0 0 0
================================================================================
Denis Iler 2004 0 0 0 0
President/CFO
and Director
================================================================================
2003 0 0 0 0
All directors and 2002 $38,000* 0 0 0
officers as a group 2001 $87,200* 0 0 0
(2 Persons)
*Includes accruals
(b) Directors' Compensation
Directors who may be also officers of Cheyenne Resources, Inc. receive no
cash compensation for services as a director. However, the directors will be
reimbursed for out-of-pocket expenses incurred in connection with attendance at
board and committee meetings. The Company has granted options to directors under
its Stock Incentive Plan subsequently adopted.
Option/SAR Grants or Exercises
- ------------------------------
There have been no Option/SAR grants or exercises in the last fiscal
year reportable under Reg. S-B, 402(c) or (d).
(c) Termination of Employment and Change of Control Arrangements. None.
(d) Stock purchase options: None to Officers or Directors except as set forth
in Certain Relationships and Related Transactions hereafter.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In February 2004, Skye Blue Ventures LLC, managed by Denis Iler, who was
neither an officer nor director but since has become President and Director and
CFO, was granted (in 2004) an option to purchase 75,000,000 shares of common
stock at $.001 per share. The option to purchase shares was part of a conversion
feature of a Promissory Note representing a loan to the Company from Skye Blue
Ventures LLC. The option was also granted from other additional advance to the
Company in the future Skye Blue Ventures LLC purchased 23,500,000 shares for
$45,000 in February 2004, from the Company.
Robert Spatz settled all prior accrued salary claims and options for the
agreement to issue 90,000 shares of common stock registered under S-8 to be
issued.
Other individuals or affiliates agreed to accept S-8 registered shares
totalling 70,000, to be issued, to settle accrued compensation claims.
INDEPENDENT AUDITORS
The Board of Directors has authorized the firm of Michael Johnson & Co.,
LLC, independent certified public accountants, to serve as independent auditors
for the fiscal year ended December 31, 2004.
SHAREHOLDER PROPOSALS AND NOMINATING PROCEDURES
Any proposal that a shareholder intends to present at the Company's 2004
Annual Meeting should have been received at the Company's principal executive
office not later than May 30, 2004. Any such proposal must comply with Rule
14a-8 of Regulation 14A of the proxy rules of the Securities and Exchange
Commission. Shareholder proposals should be addressed to the Secretary of the
Company.
Nominations for directors to be elected at the 2004 Annual Meeting, other
than those made by the Board of Directors, should be submitted to the Secretary
of the Company no later than May 30, 2004. The nomination should include the
full name of the nominee and a description of the nominee's background in
compliance with Regulation S-K of the reporting rules of the Securities and
Exchange Commission.
OTHER MATTERS
The Board of Directors of the Company is not aware that any matter
other than those described in this Information Statement is to be presented for
the consent of the shareholders.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO DENIS ILER, PRESIDENT OF THE
COMPANY, AT CHEYENNE RESOURCES, INC., 7609 RALSTON ROAD, ARVADA, COLORADO
TELEPHONE (303) 422-8127, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB
AND INTERIM REPORTS ON FORM 10QSB WILL BE PROVIDED WITHOUT CHARGE.