registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
L&B, INC.
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(Exact Name of Small Business Issuer as Specified in its Charter)
Nevada 77-0493876
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(State of Incorporation) (Primary Standard (I.R.S. Employer
Industrial Identification Number)
Classification Number)
2533 N. CARSON STREET, CARSON CITY, NV 89706 559.436.4573
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Approximate date of proposed sale to the public: From time to time after the
effective date of the registration statement.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check this box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each class
Of securities to be Amount to be Price Maximum Amount of
Registered Registered Per Share Offering registration
Fee
Common Stock 300,000 $13.00-$15.00 $4,500,000 $1,125
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The registrant hereby amends this registration statement on an date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on the date the Commission, acting pursuant to said Section 8(a), may
determine.
L&B, INC.
APPLICATION FOR
FILING UNDER
REGULATION SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
A NEVADA CORPORATION
L&B, INC.
A NEVADA CORPORATION
2533 N. CARSON STREET
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CARSON CITY, NV 89706
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559.436.4573
EMPLOYER I.D. # 77-0493876
PROPOSED DATE OF SALE: JULY 1, 2001
REGISTERED SECURITIES, 300,000
PLEASE SEE ITEM 3 REGARDING RISK FACTORS
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
L&B, INC. IS NOT A REPORTING COMPANY
PRICE TO PUBLIC UNDERWRITING PROCEEDS
PER UNIT: $13.00 - 15.00
TOTAL: 300,000
TOTAL MIN: $3,900,000.00
TOTAL MAX $4,500,000.00
2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFIFCATION UNDER THE SECURTITIES LAWS OF ANY SUCH STATE.
DATED: APRIL 13, 2001
L & B, INC. IS NOT A REPORTING COMPANY
L & B, INC. WILL VOLUNTARILY SEND ANNUAL REPORTS WHICH WILL NOT INCLUDE
AUDITED FINANCIAL STATEMENTS
UPON ORAL OR WRITTEN REQUEST, L & B, INC. WILL PROVIDE WITHOUT CHARGE TO
EACH PERSON WHO RECEIVES A COPY OF THE PROSPECTUS A COPY OF ANY INFORMATION
INCORPORATED BY REFERENCE IN THIS PROSPECTUS. SUCH REQUESTS CAN BY DIRECTED TO L
& B, INC. 2533 N. CARSON STREET, NV 89706; 559.436.4573
ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGARION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH REPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
3
TABLE OF CONTENTS
SUMMARY INFORMATION AND RISK FACTORS 5
USE OF PROCEEDS 6
DETERMINATION OF OFFERING PRICE 7
DILUTION 7
SELLING SECURITY HOLDERS 7
PLAN OF DISTRIBUTION 7
LEGAL PROCEEDINGS 8
DIRECTORS, EXECUTIVE OFFICERS 8
SECURITY OWNERSHIP OF MANAGEMEN 11
DESCRIPTION OF SECURITIES 11
INTEREST OF NAMED EXPERTS AND COUNSEL 11
DISCLOSURE OF COMMISSION POSITION 11
ORGANIZATION WITHIN LAST FIVE YEARS 11
DESCRIPTION OF BUSINESS 11
MANAGEMENT'S DISCUSSION OF OPERATION 12
DESCRIPTION OF PROPERTY 13
MARKET FOR COMMON EQUITY 13
EXECUTIVE COMPENSATION 13
FINANCIAL STATEMENTS 14
FINANCIAL DISCLOSURE 14
INDEMNIFICATION OF OFFICERS 14
EXPENSE OF ISSUANCE AND DISTRIBUTION 14
RECENT SALES 14
EXHIBITS 15
UNDERTAKINGS 15
4
SUMMARY INFORMATION AND RISK FACTORS
SUMMARY INFORMATION
A. DIRECTORS: LONNIE BROWN, GAIL E. BROWN
B. OFFICERS: LONNIE BROWN, PRESIDENT AND TREASURER; GAIL E. BROWN,
SECRETARY
C. PARTNERS: NA
D. RECORD OWNERS OF 5 PERCENT: LONNIE BROWN AND GAIL E. BROWN
E. BENEFICIAL OWNERS: LONNIE BROWN AND GAIL E. BROWN
F. PROMOTERS OF ISSUERS: NA
G. AFFILIATES OF ISSUER: NA
H. COUNSEL: JOHN A. BARKER & ASSOCIATES, INC. 2100 TULARE STREET, STE.
200 FRESNO, CA 93721 559.441.0114 ATTN. CHARLES M. BARRETT
I. UNDERWRITER: TO BE DETERMINED
J. UNDERWRITERS DIRECTORS: TO BE DETERMINED
K. UNDERWRITERS OFFICERS: TO BE DETERMINED
L. UNDRWRITERS PARTNERS: UNKNOWN
M. COUNSEL TO UNDERWRITER: TO BE DETERMINED
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RISK FACTORS
1. FAILURE TO COMPLETE PURCHASE OF EXISTING CORPORATE SHARES AND LAND
HELD.
2. FAILURE TO SECURE ADEQUATE INCOME FROM SALE OF SHARES AND COMMERCIAL
FINANCING TO COMPLETE SAND, GRAVEL, AGGREGATE AND EMULSIFIED ASPHALT
OPERATIONS.
3. FAILURE TO OBTAIN LOCAL, STATE, AND FEDERAL PERMITS TO ENGAGE IN SAND
AND GRAVEL, AGGREGATE AND EMULSIFIED ASPHALT OPERATIONS.
4. FAILURE TO OBTAIN ALL NECESSARY EQUIPMENT TO ENGAGE IN OPERATIONS
5. FAILURE TO LOCATE SUFFICIENT QUANTITIES OF SAND, GRAVEL AND AGGREGATE
ROCK TO REALIZE PROFIT AND/ OR SUSTAIN CONTINUED OPERATIONS.
6. FAILURE TO OBTAIN AND RETAIN ADEQUATE PERSONNEL TO MANAGE SAND,
GRAVEL, AGGREGATE AND EMULSIFIED ASPHALT OPERATIONS.
USE OF PROCEEDS
INITIAL CAPITALIZATION WILL PROVIDE FUNDS FOR PRELIMINARY PLANNING WITH MINING
AND GEOLOGICAL ENGINEERS FOR PIT DESIGN. MANAGEMENT AS PRESENTLY COMPOSED IS
SUFFICIENT TO COMPLETE LAND ACQUISITION, NEGOTIATE MINERAL RIGHTS ACQUISITION
AND LEASES AND ACQUIRE RIGHTS TO EQUIPMENT AND LEASEHOLDS NECESSARY FOR
INITIATION OF OPERATIONS.
OUR CORPORATION WILL CONSTRUCT AND OPERATE SAND, GRAVEL, AND AGGREGATE AND
EMULSIFIED ASPHALT OPERATIONS. WE WILL PRODUCE AND SUPPLY RAW MATERIEL AND
MANUFACTURE EMULSIFIED ASPHALT USED IN CONNECTION WITH THE MAINTENANCE AND
OPERATION OF THE STATES HIGHWAY SYSTEM...I.E. ROAD MATERIALS AND CONSTRUCTION
BUILDING MATERIALS, TO THREE (3) OF THE TWEVEL (12) DISTRICTS (5,6& 10),
SERVICED BY THE STATE OF CALIFORNIA'S DEPARTMENT OF TRANSPORTATION (CALTRANS).
THE COMPANY WILL APPLY TO THE STATE OF CALIFORNIA FOR CERTIFICATION AS A
DISADVANTAGED BUSINESS ENTERPRISE (DBE). THIS PROGRAM IS A FEDERAL PROGRAM TO
ENSURE NON-DISCRIMINATION IN THE AWARD AND ADMINISTRATION OF FEDERAL HIGHWAY
ADMINISTRATION, FEDERAL TRANSIT ADMINISTRATION AND FEDERAL AVIATION FUNDED
CONTRACTS. FOR FEDERALLY ASSISTED CONTRACTS, THERE IS A 10% (TEN PERCENT)
NATIONAL ASPIRATIONAL DBE GOAL. OUR MANAGEMENT TEAM FEELS WE WILL BE COMPETITIVE
WITH-IN ONE (1) YEAR.
6
DETERMINATION OF OFFERING PRICE
THERE IS NO ESTABLISHED MARKET FOR THE COMMON EQUITY AND THE OFFERING PRICE IS
BASED ON THE ASSESSMENT OF THE VALUE OF THE COMPANY AFTER ESTABLISHMENT OF THE
LONG-TERM LEASE AGREEMENT WITH KEY LANDOWNERS IN MERCED COUNTY, (SNELLING,
CALIFORNIA).
DILUTION
OFFICERS OR FOUNDERS DID NOT PURCHASE THE SHARES, AND THIS IS A DEVELOPMENTAL
COMPANY.
SELLING SECURITY HOLDERS
LONNIE BROWN AND GAIL E. BROWN ARE THE ONLY HOLDERS OF SECURITIES THEY HAVE
SERVED AS OFFICERS OF THE CORPORATION AND WILL HOLD 60.66 PERCENT OF THE
CORPORATION AFTER THE OFFERING IS COMPLETE.
PLAN OF DISTRIBUTION
REGISTERED SECURITIES ARE OFFERED
MAXIMUM NUMBER OF SECURITIES OFFERED: 300,000
MINIMUM NUMBER OF SECURITIES OFFERED: 150,000
PRICE PER SECURITY: $13.00 - $15.00
TOTAL PROCEEDS
MAXIMUM $4,500,000 MINIMUM $3,900,000
COMMISSIONED SELLING AGENTS WILL SELL SECURITIES,
PERCENT OF PRICE TO PUBLIC FOR COMMISSION IS 10 %
NO OTHER COMPENSATION OFFERED TO SELLER
NO FINDER'S FEE OTHER THAN COMMISSION
ESCROW OF PROCEEDS UNTIL MINIMUM OBTAINED: YES
OFFERING NOT LIMITED TO SPECIAL GROUPS
TRANSFER UNRESTRICTED
7
LEGAL PROCEEDINGS
NOT APPLICABLE
DIRECTORS, EXECUTIVE OFFICERS
EXECUTIVE OFFICER(S)
LONNIE BROWN IS PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS OF L & B, INC.
MR. BROWN SERVED AS CHIEF EXECUTIVE OFFICER AND PRESIDENT OF L & B, INC. FROM
JULY 31, 1998 TO PRESENT.
JULY 31, 1998 MR. BROWN FOUNDED L & B, INC., ITS MISSION WAS TO BUY AND SELL
REAL AND PERSONAL PROPERTY. PRIOR TO FOUNDING L & B, INC. MR. BROWN, AN
ENTREPRENEUR WITH A TWENTY (20) YEAR BACKGROUND IN REAL ESTATE SALES AND PROJECT
FINANCING, SERVED AS A CONSULTANT FOR COMMERCIAL FINANCE PROJECTS.
LLOYD C. SCHANTZ WILL SERVE AS THE COMPANY'S CHIEF EXECUTIVE OFFICER AS OF THE
CLOSING OF THIS OFFERING. MR. SCHANTZ IS CURRENTLY SERVING AS VICE PRESIDENT AND
GENERAL MANAGER FOR NORTH AMERICA WITH DSM FOOD SPECIALTIES USA, INC., KING OF
PRUSSIA, PA, (A SUBSIDIARY OF DSM {DUTCH STATE MINING} GROUP, A $7.5 BILLION
DUTCH-BASED PARENT COMPANY, THE WORLD LEADER IN FERMENTATION TECHNOLOGY) FROM
FEBRUARY, 2000 TO PRESENT.
FROM FEBRUARY 1993 TO FEBRUARY 2000 HE WAS VICE PRESIDENT OF SPECIALTY PRODUCTS
DIVISION, FONTAROME/WIXON USA, ST. FRANCIS, WISCONSIN, AND MANAGING DIRECTOR FOR
FONTAROME SA/CERGY, FRANCE (A SUBSIDIARY OF GROUP SERVIER, A $1.7 BILLION
PARIS-BASED PARENT COMPANY).
FROM SEPTEMBER 1984 TO SEPTEMBER, 1992 MR. SCHANTZ SERVED AS GENERAL MANAGER
(DIVISION CEO) OF M.F. NEAL & COMPANY, RICHMOND, VA, SUBSIDIARY OF REVLON, INC.
($2.3 BILLION PARENT COMPANY, MANUFACTURER OF FLAVORS, BOTANICALS AND SPICES FOR
FOOD, PHARMACEUTICAL AND TOBACCO).
MR. SCHANTZ WAS ASSISTANT GENERAL MANAGER OF DEAN FOODS CO., ROCKFORD, ILLINOIS
IN THE FOODS PRODUCTS DIVISION, WHICH PRODUCED FIFTEEN (15) BRANDED AND PRIVATE
LABELED PRODUCT LINES (THREE (3) PLANTS, TWO HUNDRED AND FIFTY ( 250) EMPLOYEES
AND NATIONWIDE SALES OF $120 MILLION) FROM AUGUST 1983 TO SEPTEMBER 1984. FROM
SEPTEMBER 1979 TO AUGUST, 1983 MR. SCHANTZ WAS MANAGER OF QUALITY CONTROL AND
RESEARCH FOR MJB COMPANY IN SAN FRANCISCO, CA, A MANUFACTURER OF COFFEE, TEA AND
RICE PRODUCTS SERVING THE WESTERN U.S. AND CANADA.
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MARCH 1977 TO SEPTEMBER 1979 BASIC AMERICAN FOODS (LEADING DEHYDRATOR OF ONION,
GARLIC AND POTATO PRODUCTS) IN KING CITY, CALIFORNIA EMPLOYED MR. SCHANTZ, AS A
QUALITY CONTROL MANAGER FOR FIVE (5) PLANTS. MR. SCHANTZ RECEIVED HIS MASTER OF
BUSINESS ADMINISTRATION IN MANAGEMENT FROM GOLDEN GATE UNIVERSITY, SAN FRANCISCO
CALIFORNIA IN MAY, 1989. IN 1975 HE WAS AWARDED HIS BACHELOR OF SCIENCE IN
MICROBIOLOGY DEGREE, SUMMA CUM LAUDE FROM FRESNO STATE UNIVERSITY.
NORMAN LEE HARVEY, JR. WILL SERVE AS THE PROJECT MANAGER. MR. HARVEY IS
CURRENTLY RESIDENT MANAGER FOR SUPERIOR SAND, NEVADA. HE HAS HELD THIS POSITION
SINCE APRIL 1999.
AUGUST 1998 TO MARCH 1999 MR. HARVEY WAS VICE PRESIDENT OF OPERATIONS FOR NEVADA
SUNRISE GYPSUM. HE DESIGNED AND PLACED INTO OPERATION A ONE THOUSAND (1,000) TON
PER DAY GYPSUM MINE. HE WORKED AS A CONSULTANT FOR VARIOUS COMPANIES IN FOUR (4)
STATES FROM NOVEMBER 1997 TO AUGUST 1998.
MR. HARVEY WORKED FOR ECOSOLUTIONS AS A CONSULTANT, MINING & MARKETING FROM
MARCH 1997 TO NOVEMBER 1997.
OCTOBER 1995 TO MARCH, 1997 MR. HARVEY WORKED FOR MOUNTAIN AMERICA CORPORATION,
NEVADA, AS A CONSULTANT, MINING ENGINEERING. HE DESIGNED OPEN PIT GYPSUM MINE AS
WELL AS A SAND AND GRAVEL PIT.
MARCH 1989 TO OCTOBER 1995 MR. HARVEY WAS PRESIDENT/ OWNER OF GOLDEN PORTAL
MINING, INC. HE CONDUCTED MINE EXAMINATION AND PROJECT EVALUATION FOR SEVERAL
U.S. AND CANADIAN CLIENTS. SURVEYED AND COMPILED MASTER MAPS FOR MINES AND
EXPLORATION PROJECTS IN COLORADO, CALIFORNIA, NEVADA AND ARIZONA. MANAGER OF THE
MANZANITA MINE IN NEVADA COUNTY, CALIFORNIA. HE ACTED AS REGIONAL MANAGER FOR
TRI-VALLEY'S MINING OPERATIONS IN ALASKA. HE OPERATED THE HILDA MINE IN SIERRA
COUNTY, CALIFORNIA ON A SEASONAL BASIS AND CONDUCTED SEVERAL EXPLORATION
PROJECTS IN ARIZONA, NEVADA AND CALIFORNIA.
MR. HARVEY WAS MANAGING PARTNER FOR MINERAL EXPLORERS FROM OCTOBER 1982 TO MARCH
1989. HE OPERATED A SMALL UNDERGROUND GOLD MINE IN COLORADO. MR. HARVEY ALSO
ACTED AS A CONSULTANT FOR SEVERAL SMALL MINING COMPANIES AND INVESTOR GROUPS.
APRIL, 1976 TO OCTOBER, 1982 HE WAS CHIEF, MINING DIVISION FOR GREAT BASINS
PETROLEUM CO. HE DIRECTED EXPLORATION EFFORTS FOR URANIUM, BASE METAL, GOLD AND
SILVER, COAL AND INDUSTRIAL MINERALS IN THE U.S. AND CANADA. CONCURRENTLY WITH
THE ABOVE POSITIONS DURING THE PERIOD OF EARLY 1979 UNTIL EARLY 1983 HE OWNED A
COAL MINING COMPANY BASED IN FT. SMITH, ARKANSAS, WHICH OPERATED COAL MINES IN
ARKANSAS AND OKLAHOMA. HE WAS HALF OWNER OF A SMALL OIL COMPANY, WHICH DRILLED
SEVERAL SUCCESSFUL WELLS IN OKLAHOMA.
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MR. HARVEY WAS ASSOCIATE MINERAL RESOURCES ENGINEER FOR THE STATE OF
CALIFORNIA'S STATE LANDS DIVISION FROM JUNE 1974 TO APRIL 1976. HE SERVED ON
SEVERAL ADVISORY COMMITTEES FOR STATUTORY STATE FUNCTIONS. AS CO-OWNER OF
MINERAL RESOURCES EXPL. CO. FROM JUNE 1969 TO JUNE, 1974 MR. HARVEY MANAGED THE
MINING ACTIVITY OF A SMALL MINING AND OIL CONSULTING FIRM. HE OPERATED SEVERAL
SMALL MINES AND PROCESSING PLANTS IN THE U.S. AND ABROAD . CONCURRENT WITH THE
AEROSPACE EXPERIENCE LISTED BELOW AND PRIOR TO THE FORMATION OF HIS OWN COMPANY
MR. HARVEY SPENT APPROXIMATELY SIXTY (60) DAYS PER YEAR IN MINE EXAMINATIONS IN
SEVEN (7) STATES AND FIVE (5) FOREIGN COUNTRIES. HE OPERATED A SMALL MINE OF HIS
OWN FROM 1967 TO 1969.
MR. HARVEY WORKED FOR MCDONNELL DOUGLAS CORP. AS EXECUTIVE ASSISTANT FROM MARCH
1965 TO JUNE 1969. HE ACTED AS PROGRAM OFFICE ADMINISTRATOR FOR THE DC-10
PROGRAM DURING THE PERIOD FROM GO-AHEAD UNTIL JUST BEFORE ROLLOUT. HE PLANNED
AND INSTALLED A NEW MANAGEMENT CONTROL CENTER. DURING THIS TIME HE HELD THE
POSITIONS OF MANAGER, ADMIN. PLANNING AND CONTROL, FOR A SUBDIVISION OF SIXTEEN
HUNDRED AND SIXTY (1,660) PEOPLE. HE WAS ASST. TO THE DIRECTOR OF ADMINISTRATION
AND FACILITIES PLANNING ENGINEER.FROM OCTOBER, 1962 TO MARCH 1965.
MR. HARVEY WORKED FOR NORTH AMERICAN AVIATION AS INDUSTRIAL ENGINEER
(FACILITIES). HE HAD TOTAL RESPONSIBILITY FOR THE CONSTRUCTION AND
IMPLEMENTATION OF A PORTION OF THE SATURN S-II ASSEMBLY PLANT AT SEAL BEACH,
CALIFORNIA. AMONG THE FACILITIES HE WAS INVOLVED WITH WERE A STRUCTURAL TEST
TOWER, A WATER TREATMENT PLANT, A CHEMICAL PROCESSING PLANT, FOUR (4) HYDROTEST
FACILITIES, SEVERAL ENGINEERING DEVELOPMENT LABORATORIES AND THE MAIN
ADMINISTRATION BUILDING.
AS A FACILITIES PROJECT ENGINEER FOR PAN AMERICAN WORLD AIRWAYS (GMRD) FROM
AUGUST 1960 TO OCTOBER, 1962MR. HARVEY ORGANIZED CONSTRUCTION TASK FORCES FOR
ASSIGNMENT TO REMOTE OPERATIONS AND MANAGED THE DEPARTMENT'S ACTIVITIES.
JOHN HOULIHAN WILL SERVE AS CONTROLLER DURING THE STARTUP PHASE. HE HAS BEEN A
CERTIFIED PUBLIC ACCOUNTANT SINCE 1968, RETIRING AS A SHAREHOLDER IN DEMERA
CAMERON,AN ACCOUNTANCY CORPORATION. DURING HIS CAREER, HE HANDLED ACCOUNTS FOR
BUSINESS AND FARMING INTEREST AND NONPROFIT CORPORATIONS. HIS AREA OF PRACTICE
WAS IN THE FIELD OF TAXATION. HE HOLDS A BA DEGREE FROM FRESNO STATE COLLEGE
(NOW CALIFORNIA STATE UNIVERSITY AT FRESNO) IN BUSINESS ADMINISTRATION WITH A
SECONDARY EMPHASIS IN ECONOMICS.
10
FRED WRAZEL WILL SERVE AS REAL ESTATE ACQUISITION AS OF THE CLOSING OF THIS
OFFERING. MR. WRAZEL IS CURRENTLY A CALIFORNIA LICENSED REAL ESTATE BROKER. HE
HAS OVER 30 YEARS EXPERIENCE SPECIALIZING IN ANNEXATION, REZONING, SUBDIVIDING,
DEVELOPMENT AND FINANCING OF BOTH URBAN AND RURAL PROPERTIES.
HE HAS A B.S. DEGREE IN BUSINESS ADMINISTRATION FROM MARQUETTE UNIVERSITY AND IS
A NATIVE OF WISCONSIN.
SECURITY OWNERSHIP OF MANAGEMENT
LONNIE BROWN AND GAIL E. BROWN ARE THE ONLY OWNERS OF INTERESTS OF L&B, INC.
DESCRIPTION OF SECURITIES
THE SHARES OFFERED ARE COMMON STOCK WITH NO CUMULATIVE OR SPECIAL VOTING RIGHTS.
INTEREST OF NAMED EXPERTS AND COUNSEL
NO DISCLOSURES ARE NECESSARY AS NO COUNSEL OR EXPERT HAS A CONTINGENT INTEREST.
DISCLOSURE OF COMMISSION POSITION
THE CORPORATION WILL INDEMNIFY THE OFFICERS AND DIRECTORS FOR LIABILITIES
ALLOWED UNDER THE SECURITIES ACT. NO OFFICERS OR DIRECTORS OF THE CORPORATION
ARE UNDERWRITERS OR OWN AN INTEREST IN THE UNDERWRITERS.
ORGANIZATION WITHIN THE LAST FIVE YEARS
THIS IS A DEVELOPMENTAL COMPANY; HENCE NO RELEATIONSHIPS NEED BE DISCLOSED.
DESCRIPTION OF BUSINESS
INITIAL CAPITALIZATION WILL PROVIDE FUNDS FOR PRELIMINARY PLANNING WITH
MINING AND GEOLOGICAL ENGINEERS FOR PIT DESIGN. MANAGEMENT AS PRESENTLY COMPOSED
IS SUFFICIENT TO COMPLETE LAND ACQUISITION, NEGOTIATE MINERAL RIGHTS ACQUISITION
AND LEASES AND ACQUIRE RIGHTS TO EQUIPMENT AND LEASEHOLDS NECESSARY FOR
INITIATION OF OPERATIONS.
THE CORPORATION WILL CONSTRUCT AND OPERATE A SAND, GRAVEL AND AGGREGATE
OPERATION TO PRODUCE AND SUPPLY RAW MATERIEL AND MANUFACTURE EMULSIFIED ASPHALT
USED IN CONNECTION WITH THE MAINTENANCE AND OPERATION OF THE STATE'S HIGHWAY
SYSTEM...I.E. (ROAD MATERIALS) AND (CONSTRUCTION BUILDING MATERIALS), TO THREE
(3) OF THE TWEVEL (12) DISTRICTS (5,6AND 10), SERVICED BY THE STATE OF
CALIFORNIA'S DEPARTMENT OF TRANSPORTATION (CALTRANS).
11
THE CORPORATION WILL APPLY TO THE STATE OF CALIFORNIA FOR CERTIFICATION AS
A DISADVANTAGED BUSINESS ENTERPRISE (DBE). THIS PROGRAM IS A FEDERAL PROGRAM TO
ENSURE NON-DISCRIMINATION IN THE AWARD AND ADMINISTRATION OF FEDERAL HIGHWAY
ADMINISTRATION, FEDERAL TRANSIT ADMINISTRATION AND FEDERAL AVIATION FUNDED
CONTRACTS, FOR FEDERALLY ASSISTED CONTRACTS, THERE IS A 10% (TEN PERCENT)
NATIONAL ASPIRATIONAL DBE GOAL. OUR MANAGEMENT TEAM FEELS WE WILL BE COMPETITIVE
WITH-IN ONE (1) YEAR.
MANAGEMENT'S DISCUSSION OF OPERATION
OPERATIONS
MINE RUN MATERIAL WILL BE LOADED INTO A GRIZZLY- TRAP SYSTEM IN THE PIT.
OVERSIZED BOULDERS WILL BE STOCKPILED FOR SALE AS LARGE RIPRAP. MATERIAL FROM
THE TRAP WILL BE FED INTO A WET TROMMEL FOR PRE-CLEANING. THE TROMMEL WILL
EFFECTIVELY PRODUCE TWO (2) SIZES, THE LARGER OF WHICH WILL GO DIRECTLY TO THE
JAW CRUSHER., THE UNDERSIZE DISCHARGE WILL BE FED TO A WET SCREEN.
MATERIAL COMING FROM THE WET SCREEN WILL GO DIRECTLY TO AGGREGATE PRODUCT OR TO
THE CONE CRUSHER DEPENDING UPON PRODUCT REQUIREMENTS. UNDERSIZE WILL GO TO THE
SAND WASHING PLANT. DISCHARGE FROM THE CRUSHER SYSTEMS WILL GO TO A WET SCREEN
FOR DIVERSION EITHER TO AGGREGATE PRODUCT OR TO THE SAND WASH PLANT DEPENDING
UPON PARTICLE SIZE. IF THE PRODUCT REQUIRES FURTHER REFINEMENT SUCH AS CHIPS, IT
MAY BE SENT TO THE VERTICAL IMPACT CRUSHER.
IT IS EXPECTED THAT SITE RECLAMATION WILL BE A MANDATORY EFFORT REQUIRED BY THE
PERMITS EXISTING ON THE SITE AND WILL BE A CONSIDERATION WHEN PLANNING MINING
OPERATIONS. ALL EFFORTS WILL BE MADE TO "ROLL-OVER" AS MUCH AS POSSIBLE SO THAT
THE RESPONSIBLE GOVERNMENTAL AGENCIES WILL BE PLEASED WITH OUR USE OF THE SITE.
SUCH ATTENTION TO THIS ITEM WILL PAY DIVIDENDS FOR OUR CONTINUED OPERATIONS IN
THE AREA.
12
EMULSION PLANT
IT IS ESSENTIAL THAT PLANS FOR A STATE-OF THE-ART PLANT BE FINALIZED AS SOON AS
POSSIBLE. THIS IS IMPORTANT SO THAT THE PERMIT PROCESS BE STARTED AT THE
EARLIEST TIME. IT IS EXPECTED THAT THE SELECTED SITE WILL HAVE FAVORABLE ZONING
ALREADY IN PLACE. A PERIOD OF FOUR (4) MONTHS HAS BEEN SET ASIDE FOR ALL
ACTIVITY RELATING TO DESIGN AND PERMITTING.
EQUIPMENT SOURCING AND SITE PREPARATION WORK CAN BE DONE CONCURRENTLY WITH THE
PERMITTING PROCESS. CERTAIN KEY FACILITY ITEMS SUCH AS TRAM LOADERS CAN BE
INSTALLED PRIOR TO FINAL PERMITTING OF THE PLANT.
IT IS ALSO PLANNED THAT PERMISSION TO USE THE SITE AS A SAND AND GRAVEL PRODUCT
DISTRIBUTION FACILITY CAN BE OBTAINED SO THAT WE CAN ENTER THAT MARKET WHILE
AWAITING EMULSION PLANT APPROVALS.
AN APPROPRIATE CONTRACTOR WILL DO PRACTICALLY ALL OF THE CONSTRUCTION EFFORT AT
THIS SITE. COMPANY PERSONNEL WILL ACT IN A CONSTRUCTION MANAGEMENT CAPACITY AND
COORDINATE THE EFFORT. THREE (3) MONTHS HAVE BEEN ALLOWED FOR PLANT
CONSTRUCTION.
ANY MATERIAL HAULED TO THIS SITE WILL BE CONTRACT HAULERS ON AN AS NEEDED BASIS.
SOME STOCKPILES WILL BE NECESSARY AT THE SITE IN ORDER TO SERVE OUR CUSTOMERS.
THE EXACT NATURE OF OUR INVENTORY CONTROL WILL BECOME CLEAR AS OUR PENETRATION
OF THE LOCAL MARKET IS ACCOMPLISHED. ALL PRODUCTS WILL BE PICKED UP BY THE
CUSTOMER OR BY CONTRACT HAULER AND COORDINATED THROUGH OUR OPERATIONAL
PERSONNEL.
DESCRIPTION OF PROPERTY
PRIVATELY OWNED RANCH LAND WITH EXISTING PERMITS FOR THE MINING OF SAND AND
GRAVEL. THE PROPERTIES ARE LOCATED IN MERCED COUNTY (SNELLING), CALIFORNIA.
THESE RANCH LANDS HAVE LARGE DEPOSITS OF MERCED RIVER DREDGE TAILINGS.
MARKET FOR COMMON EQUITY
THERE IS NO MARKET WHERE THE STOCK IS PUBLICLY TRADED.
EXECUTIVE COMPENSATION
THERE HAS BEEN NO COMPENSATION PAID TO THE OFFICERS OF THE CORPORATION. A PLAN
FOR COMPENSATION OF PROPOSED OFFICERS AND DIRECTORS HAS NOT BEEN ESTABLISHED.
13
FINANCIAL STATEMENTS
SEE FINANCIAL STATEMENTS ATTACHED.
FINANCIAL DISCLOSURE
THERE ARE NO DISAGREEMENTS WITH ACCOUNTING EXPERTS WITHIN THE LAST TWO YEARS.
14
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L & B, INC.
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TABLE OF CONTENTS
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EXECUTIVE SUMMARY 1
MISSION STATEMENT 1
STATE OF INCORPORATION 2
MANAGEMENT OVERVIEW 2
ORGANIZATION 2
SYSTEMS 2
MARKET FOR OUR MATERIALS 3
MAINTENANCE 3
OBSOLESCENCE OF OUR EQUIPMENT 3
MANAGEMENT'S DISCUSSION OF OPERATION 4
SUMMARY INFORMATION AND RISK FACTORS 4
SUMMARY INFORMATION 4
RISK FACTORS 6
USE OF PROCEEDS 7
PROPOSED LIST OF EXECUTIVE (S) 8
MANAGEMENT PROFILES 9
LIST OF EXECUTIVE OFFICER (DESIGNATE) 9
JOB DESCRIPTIONS SAND AND GRAVEL OPERATION 15
PRODUCTS / STRATEGY 17
GENERAL 17
CATEGORY I ROCK AND SAND PRODUCTS 18
CATEGORY II ASPHALT EMULSIONS 19
PRODUCT PRICE LIST (AVERAGE) 22
CATEGORY I ROCK AND SAND PRODUCTS 22
CATEGORY II ASPHALT EMULSIONS 23
PLAN OF ACTION 23
PRE- CONSTRUCTION 23
CONSTRUCTION 24
OPERATIONS 25
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L & B, INC.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS (CONT'D)
--------------------------
EMULSION PLANT 26
MASTER SCHEDULE (YEAR ONE) 28
SAND AND GRAVEL PIT AND PLANT 28
ASPHALT EMULSION PLANT 29
COMPETITION 30
FINANCIAL OBJECTIVES 31
LONNIE BROWN
MANAGING NATURAL RESOURCES FOR PROFIT
President/ CEO
P.O. Box 3841
Pinedale, California 93650
Phone: 559-436-4573
Cell Phone: 559-213-1118
Fax: 559-436-4379
Email: Lbrown7779@AOL.COM
The Operating Company
Business Plan
EXECUTIVE SUMMARY
DECEMBER 5, 2000
Dear Sir,
L&B, Inc., a Nevada Corporation, is forming a California Corporation. Its
Articles of Incorporation will provide for an adequate number of authorized
shares of common stock and possibly a series of preferred shares to be
established by the Board of Directors. This capitalization will provide maximum
flexibility for financing and developing an operating company.
The Corporation will have the right of first refusal on any transfer or private
sale of common or preferred shares and the Corporation shall have the right to
repurchase the aforesaid shares for Ten (10) times the amount of purchase or
market value, whichever is higher.
At the organizational meeting of the Corporation, the Board of Directors will
authorize the initial issuance of shares. The shares will be issued to
"qualified purchasers" whose characteristics are similar to, but not the same
as, sophisticated investors.
The Corporation will first seek to establish a long-term lease agreement with
several key landowners in Merced County, (Snelling, California). We will develop
a sand, gravel and aggregate operation. At a different sight in Merced County,
we will construct or cause to be constructed an emulsified asphalt plant. We
will produce and keep in inventory asphalt emulsions manufactured to a wide
variety of specifications.
- --------------------------------------------------------------------------------
MISSION STATEMENT
- --------------------------------------------------------------------------------
The company intends to become a leading valued-added provider of sand, gravel,
aggregate and emulsified asphalt and related products and services to the
construction industry in major markets in the state of California.
1
STATE OF INCORPORATION California
Employees Full-time/Part-time 17/ 8 (on as needed basis)
Fiscal Year-End 3/31
Annual Revenue (Projected) $ 2,152,200
Annual Net Income (Projected) $ 800,000 after taxes
MANAGEMENT OVERVIEW
Initial capitalization will provide funds for preliminary planning with mining
and geological engineers for pit design. Management as presently composed is
sufficient to complete land acquisition, negotiate mineral rights acquisition
and leases, and acquire rights to equipment and leaseholds necessary for
initiation of operations.
The Corporation intends to construct and operate a sand, gravel and aggregate
operation to produce and supply raw materials and manufacture emulsified asphalt
used in connection with the maintenance and operation of the state's highway
system...i.e. road materials and building materials, to three (3) of the twelve
(12) districts (5,6&10) serviced by the State of California Department of
Transportation (CALTRANS).
The Corporation will apply for certification as a Disadvantage Business
Enterprise (DBE). This program is a federal program to ensure non-discrimination
in the award and administration of Federal Highway Administration, Federal
Transit Administration and Federal Aviation funded contracts. For federally
assisted contracts, there is a 10% (ten percent) National Aspirational DBE goal.
Our management team feels we will be competitive within one (1) year.
ORGANIZATION
Management: It will be the final responsibility of the top management to recruit
and weld together the required team. The line management must be trained as to
what is expected of them both from the leadership side and from the need to
maintain proper visibility systems so that good decisions can be made at all
levels. Thorough knowledge of the applicable areas of operation is a must.
Personnel Training: Employees must know what is expected of them and how to
carry out their assigned tasks. Employee benefit packages and a production bonus
program are also a must.
SYSTEMS
Management Systems: These systems will be designed to funnel information to all
levels of management on an "as needed" basis. The systems will be oriented to
three (3) objectives:
Production
Cost controls
Specific performance
2
Operational Systems: These systems involve equipment monitoring, energy
controls, quality controls; parts inventory controls, maintenance tracking and
integrated operations performance. Line management will utilize these systems to
spot trouble areas.
Sales: This involves the usual sales data, but should be expanded to include
information on local projects so that production demands in support of key
customers can be anticipated.
MARKET FOR OUR MATERIALS
The market for our materials can be defined by the
following business categories:
Portable sand and gravel contractors
Power plants
Cement manufacturers
Concrete products companies
Residential construction contractors
General Contractors and/or Subcontractors responsible for
contracts to construct repair or alter state highways,
roadways, or bridges and other structures.
Today's customers depend on a supplier that can answer application questions,
engineer, design, and detail and fabricate to the customer's specifications and
supply a designed product that works in the field.
MAINTENANCE
Preventive: Institute program to track repetitive failures of our equipment and
parts. Identify the problems and correct them. Institute inspection procedures.
Replace worn items before failure. Replace items that may be causing failures.
OBSOLESCENCE OF OUR EQUIPMENT
Not Economical To Repair: Plan early replacement so that there is minimum down
time and cost can be held as low as possible.
3
MANAGEMENT'S DISCUSSION OF OPERATION
IT IS ASSUMED THAT OUR INITIAL EFFORT WILL BE DIRECTED TOWARD SECURING ONE (1)
OR MORE MATERIEL SUPPLY CONTRACTS. ALSO, IT IS ASSUMED THAT OUR SOURCE OF
MATERIAL WILL BE MERCED RIVER DREDGE TAILINGS LOCATED ON RANCH LANDS IN
SNELLING, CALIFORNIA.
THERE MAY BE A DELAY BETWEEN THE TIME WE SECURE A SALES CONTRACT AND THE
DATE WE ARE SCHEDULED TO DELIVER OUR FIRST PRODUCT. WE WILL CONSIDER
THIS POSSIBILITY WHEN DEVELOPING OUR FINANCIAL STRATEGY (ACCOUNTS
RECEIVABLES).
ALL COST WAS DEVELOPED FOR A MINIMUM OF ONE MONTH'S OPERATION. IT IS
EXPECTED THAT WE CAN SECURE ALL OF THE NEEDED EQUIPMENT ON A RENTAL BASIS. FOR
PURPOSES OF PROJECTION, IT IS ASSUMED THAT WE WILL PRODUCE A TOTAL OF TWENTY
FIVE THOUSAND ($25,000) TONS OF TYPE II ROAD BASE MATERIAL. THIS IS THE
LOWEST PRICED ITEM AT ($5 PER TON) THAT WE MIGHT SELL.
TO PRODUCE AN ACCEPTABLE PRODUCT WE MUST FIRST WASH THE PIT RUN MATERIAL. IT
IS BETTER THAN MOST PIT RUN MATERIAL, BUT NOT AS CLEAN AS FIRST INDICATED.
IT WILL BE NECESSARY TO SET UP AT LEAST ONE (1) ADDITIONAL PIECE OF
EQUIPMENT TO MAKE SPECIFICATIONS. THIS EQUIPMENT WILL HAVE TO PURCHASED,
THIS MEANS THAT THE BUDGET FOR A ONE-MONTH EFFORT WILL BE INCREASED.
4
SUMMARY INFORMATION AND RISK FACTORS
SUMMARY INFORMATION
A. DIRECTORS: LONNIE BROWN, GAIL E. BROWN
B. OFFICERS: LONNIE BROWN, PRESIDENT AND TREASURER, GAIL E. BROWN,
SECRETARY
C. PARTNERS: N/A
D. RECORD OWNERS OF FIVE PERCENT (5%): LONNIE BROWN AND GAIL E.
BROWN
E. BENEFICIAL OWNERS: LONNIE BROWN AND GAIL E. BROWN
5
RISK FACTORS
1. FAILURE TO SECURE ADEQUATE INCOME FROM SALE OF SHARES AND
COMMERCIAL FINANCING TO COMPLETE SAND, GRAVEL, AGGREGATE AND
EMULSIFIED ASPHALT OPERATION.
2. FAILURE TO OBTAIN LOCAL, STATE, AND FEDERAL PERMITS (EMULSIFIED
ASPHALT) TO ENGAGE IN SAND, GRAVEL, AGGREGATE AND EMULSIFIED
ASPHALT OPERATIONS.
3. FAILURE TO OBTAIN ALL NECESSARY EQUIPMENT TO ENGAGE IN
OPERATIONS.
4. FAILURE TO LOCATE SUFFICIENT QUANTITIES OF SAND, GRAVEL AND
AGGREGATE ROCK TO REALIZE PROFIT AND/OR SUSTAIN CONTINUED
OPERATIONS.
5. FAILURE TO OBTAIN AND RETAIN ADEQUATE PERSONNEL TO MANAGE SAND,
GRAVEL, AGGREGATE AND EMULSIFIED ASPHALT OPERATIONS.
6
USE OF PROCEEDS
INITIAL CAPITALIZATION WILL PROVIDE FUNDS FOR PRELIMINARY PLANNING WITH
MINING AND GEOLOGICAL ENGINEERS FOR PIT DESIGN. MANAGEMENT AS PRESENTLY
COMPOSED IS SUFFICIENT TO COMPLETE LAND ACQUISITION, NEGOTIATE MINERAL
RIGHTS ACQUISITION AND LEASES, AND ACQUIRE RIGHTS TO EQUIPMENT AND LEASEHOLDS
NECESSARY FOR INITIATION OF OPERATIONS.
OUR CORPORATION WILL CONSTRUCT AND OPERATE SAND, GRAVEL, AGGREGATE AND
EMULSIFIED ASPHALT
OPERATIONS. WE WILL PRODUCE AND SUPPLY RAW MATERIEL AND MANUFACTURE
EMULSIFIED ASPHALT
USE IN CONNECTION WITH THE MAINTENANCE AND OPERATION OF THE STATES
HIGHWAY SYSTEM...I.E. ROAD MATERIALS AND CONSTRUCTION BUILDING
MATERIALS, TO THREE (3) OF THE TWELVE (12) DISTRICTS (5,6 &10), SERVICED BY THE
STATE OF CALIFORNIA'S DEPARTMENT OF TRANSPORTATION (CALTRANS).
7
PROPOSED LIST OF EXECUTIVE (S)
NAME AGE TITLE
- --------------------------------------------------------------------------------
LONNIE BROWN 51 PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS
LLOYD C. SCHANTZ 46 CHIEF EXECUTIVE OFFICER (DESIGNATE)
NORMAN L. HARVEY 67 PROJECT MANAGER
JOHN HOULIHAN 63 CONTROLLER
FRED WRAZEL 70 REAL ESTATE ACQUISITION
JOHN MASMAINIAN 41 ADMINISTRATIVE ASSISTANT TO THE CHAIRMAN OF THE
8
MANAGEMENT PROFILES
LIST OF EXECUTIVE OFFICER (DESIGNATE)
LONNIE BROWN IS PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS OF L&B, INC.,
MR. BROWN SERVED AS CHIEF EXECUTIVE OFFICER AND PRESIDENT OF L&B, INC. FROM JULY
31,1998 TO PRESENT.
JULY 31,1998 MR. BROWN FOUNDED L&B, INC., IT MISSION WAS TO BUY AND SELL REAL
AND PERSONAL PROPERTY. PRIOR TO FOUNDING L&B, INC. MR. BROWN, AN ENTREPRENEUR
WITH A TWENTY (20) YEAR BACKGROUND IN REAL ESTATE SALES AND PROJECT FINANCING,
SERVED AS A CONSULTANT FOR COMMERCIAL FINANCE PROJECTS.
LLOYD C. SCHANTZ IS DESIGNATED TO BE OUR CHIEF EXECUTIVE OFFICER. MR. SHANTZ IS
CURRENTLY SERVING AS VICE PRESIDENT AND GENERAL MANAGER FOR NORTH AMERICA WITH
DMS FOOD SPECIALTIES USA, INC., KING OF PRUSSIA, PENNSYLVANIA, (A SUBSIDIARY OF
DSM {DUTCH STATE MINING} GROUP, A $7.5 BILLION DUTCH-BASED PARENT COMPANY, THE
WORLD LEADER IN FERMENTATION TECHNOLOGY) FROM FEBRUARY 2000 TO PRESENT.
9
FROM FEBRUARY 1993 TO FEBRUARY 2000 MR. SCHANTZ WAS VICE PRESIDENT OF SPECIALTY
PRODUCTS DIVISION, FONTAROME/WIXON USA, ST. FRANCIS, WISCONSIN, AND MANAGING
DIRECTOR FOR FONTAROME SA/CERGY, FRANCE (A SUBSIDIARY OF GROUP SERVIER, A $ 1.7
BILLON PARIS BASED PARENT COMPANY).
FROM SEPTEMBER 1984 TO SEPTEMBER 1992 MR. SCHANTZ SERVED AS GENERAL MANAGER
(DIVISION CEO) OF M.F. NEAL & COMPANY, RICHMOND, VIRGINIA SUBSIDIARY OF REVLON,
INC. ($ 2.3 BILLION PARENT COMPANY, MANUFACTURER OF FLAVORS, BOTANICALS AND
SPICES FOR FOOD, PHARMACEUTICAL AND TOBACCO).
MR. SCHANTZ WAS ASSISTANT GENERAL MANAGER OF DEAN FOODS CO., ROCKFORD, ILLINOIS
IN THE FOODS PRODUCTS DIVISION, WHICH PRODUCED FIFTEEN (15) BRANDED AND PRIVATE
LABELED PRODUCT LINES (THREE (3) PLANTS, TWO HUNDRED AND FIFTY (250) EMPLOYEES
AND NATIONWIDE SALES OF $120 MILLION) FROM AUGUST 1983 TO SEPTEMBER 1984. FROM
SEPTEMBER 1979 TO AUGUST 1983 MR. SCHANTZ WAS MANAGER OF QUALITY CONTROL AND
RESEARCH FOR MJB COMPANY IN SAN FRANCISCO, CALIFORNIA, A MANUFACTURER OF COFFEE,
TEA AND RICE PRODUCTS SERVING THE WESTERN U.S. AND CANADA.
MARCH 1977 TO SEPTEMBER 1979 BASIC AMERICAN FOODS (LEADING DEHYDRATOR OF ONION,
GARLIC AND POTATO PRODUCTS) IN KING CITY, CALIFORNIA EMPLOYED MR. SCHANTZ, AS A
QUALITY CONTROL MANAGER FOR FIVE (5) PLANTS.
MR. SCHANTZ RECEIVED HIS MASTER OF BUSINESS ADMINISTRATION IN MANAGEMENT FROM
GOLDEN GATE UNIVERSITY, SAN FRANCISCO, CALIFORNIA IN MAY 1989. IN 1975 HE WAS
AWARDED HIS BACHELOR OF SCIENCE DEGREE IN MICROBIOLOGY, SUMMA CUM LAUDE FROM
FRESNO STATE UNIVERSITY, FRESNO, CALIFORNIA.
10
NORMAN LEE HARVEY, JR. WILL SERVE AS THE PROJECT MANAGER. MR. HARVEY IS
CURRENTLY RESIDENT MANAGER FOR SUPERIOR SAND, NEVADA. HE HAS HELD THIS POSITION
SINCE APRIL 1999.
AUGUST 1998 TO MARCH 1999 MR. HARVEY WAS VICE PRESIDENT OF OPERATIONS FOR NEVADA
SUNRISE GYPSUM. HE DESIGNED AND PLACED INTO OPERATION A ONE THOUSAND (1,000) TON
PER DAY GYPSUM MINE. HE WORKED AS A CONSULTANT FOR VARIOUS COMPANIES IN FOUR (4)
STATES FROM NOVEMBER 1997 TO AUGUST 1998.
MR. HARVEY WORKED FOR ECOSOLUTIONS AS A CONSULTANT, MINING & MARKETING FROM
MARCH 1997 TO NOVEMBER 1997.
OCTOBER 1995 TO MARCH 1997 MR. HARVEY WORKED FOR MOUNTAIN AMERICA CORPORATION,
NEVADA, AS A CONSULTANT, MINING ENGINEERING. HE DESIGNED AN OPEN PIT GYPSUM MINE
AS WELL AS A SAND AND GRAVEL PIT.
MARCH 1989 TO OCTOBER 1995 MR. HARVEY WAS PRESIDENT / OWNER OF GOLDEN PORTAL
MINING, INC. HE CONDUCTED MINE EXAMINATION AND PROJECT EVALUATION FOR SEVERAL
UNITED STATES AND CANADIAN CLIENTS, CALIFORNIA, NEVADA AND ARIZONA. HE WAS
MANAGER OF THE MANZANITA MINE IN NEVADA COUNTY, CALIFORNIA. HE ACTED AS REGIONAL
MANAGER FOR TRI-VALLEY'S MINING OPERATIONS IN ALASKA, OPERATED THE HILDA MINE IN
SIERRA COUNTY, CALIFORNIA ON A SEASONAL BASIS AND CONDUCTED SEVERAL EXPLORATION
PROJECTS IN ARIZONA, NEVADA AND CALIFORNIA.
11
MR. HARVEY WAS MANAGING PARTNER FOR MINERAL EXPLORERS FROM OCTOBER 1982 TO MARCH
1989. HE OPERATED A SMALL UNDERGROUND GOLD MINE IN COLORADO AND ACTED AS A
CONSULTANT FOR SEVERAL SMALL MINING COMPANIES AND INVESTOR GROUPS.
APRIL 1976 TO OCTOBER 1982 HE WAS CHIEF, MINING DIVISION FOR GREAT BASINS
PETROLEUM COMPANY. HE DIRECTED EXPLORATION EFFORTS FOR URANIUM, BASE METAL, GOLD
AND SILVER, COAL AND INDUSTRIAL MINERALS IN THE UNITED STATES AND CANADA.
CONCURRENTLY WITH THE ABOVE POSITIONS DURING THE PERIOD OF EARLY 1979 UNTIL
EARLY 1983 MR. HARVEY OWNED A COAL MINING COMPANY BASED IN FORT SMITH, ARKANSAS,
WHICH OPERATED COAL MINES IN ARKANSAS AND OKLAHOMA. HE WAS HALF OWNER OF SMALL
OIL COMPANY THAT DRILLED SEVERAL SUCCESSFUL WELLS IN OKLAHOMA.
MR. HARVEY WAS ASSOCIATE MINERAL RESOURCES ENGINEER FOR THE STATE OF
CALIFORNIA'S STATE LANDS DIVISION FROM JUNE 1974 TO APRIL 1976. HE SERVED ON
SEVERAL ADVISORY COMMITTEES FOR STATUTORY STATE FUNCTIONS. AS CO-OWNER OF
MINERAL RESOURCES EXPLORATION CO. FROM JUNE 1969 TO JUNE 1974, MR. HARVEY
MANAGED THE MINING ACTIVITY OF A SMALL MINING AND OIL CONSULTING FIRM. HE
OPERATED SEVERAL SMALL MINES AND PROCESSING PLANTS IN THE UNITED STATES AND
ABROAD.
CONCURRENT WITH THE AEROSPACE EXPERIENCE LISTED BELOW AND PRIOR TO THE FORMATION
OF HIS COMPANY MR. HARVEY SPENT APPROXIMATELY SIXTY (60) DAYS PER YEAR IN MINES
EXAMINATIONS IN SEVEN (7) STATES AND FIVE (5) FOREIGN COUNTRIES. HE OPERATED A
SMALL MINE OF HIS OWN FROM 1967 TO 1969.
12
MR. HARVEY WORKED FOR MCDONNELL DOUGLAS CORPORATION AS EXECUTIVE ASSISTANT FROM
MARCH 1965 TO JUNE 1969. HE ACTED AS PROGRAM OFFICE ADMINISTRATOR FOR THE DC-10
PROGRAM DURING THE PERIOD FROM GO- AHEAD UNTIL JUST BEFORE ROLL-OUT. HE PLANNED
AND INSTALLED A NEW MANAGEMENT CONTROL CENTER. DURING THIS TIME HE HELD THE
POSITIONS OF MANAGER, ADMINISTRATIVE PLANNING AND CONTROL FOR A SUBDIVISION OF
SIXTEEN HUNDRED AND SIXTY (1,660) PEOPLE. HE WAS THE ASSISTANT TO THE DIRECTOR
OF ADMINISTRATION AND FACILITIES PLANNING ENGINEER FROM OCTOBER 1962 TO MARCH
1965.
MR. HARVEY WORKED FOR NORTH AMERICAN AVIATION AS INDUSTRIAL ENGINEER
(FACILITIES). HE HAD TOTAL RESPONSIBILITY FOR THE CONSTRUCTION AND
IMPLEMENTATION OF A PORTION OF THE SATURN S-II ASSEMBLY PLANT AT SEAL BEACH,
CALIFORNIA. AMONG THE FACILITIES HE WAS INVOLVED WITH WERE A STRUCTURAL TEST
TOWER, A WATER TREATMENT PLANT, A CHEMICAL PROCESSING PLANT, AND FOUR (4) HYDRO
TEST FACILITIES, SEVERAL ENGINEERING DEVELOPMENT LABORATORIES AND THE MAIN
ADMINISTRATION BUILDING.
AS A FACILITIES PROJECT ENGINEER FOR PAN AMERICAN WORLD AIRWAYS (GMRD) FROM
AUGUST 1960 TO OCTOBER 1962 MR. HARVEY ORGANIZED CONSTRUCTION TASK FORCES FOR
ASSIGNMENT TO REMOTE OPERATIONS AND MANAGED THE DEPARTMENT'S ACTIVITIES.
JOHN HOULIHAN WILL SERVE AS CONTROLLER DURING THE STARTUP PHASE. HE HAS BEEN A
CERTIFIED PUBLIC ACCOUNTANT SINCE 1968, RETIRING IN 1998 AS A SHAREHOLDER IN
DEMERA CAMERON, AN ACCOUNTANCY CORPORATION. DURING HIS CAREER, HE HANDLED
ACCOUNTS FOR BUSINESS AND FARMING INTEREST AND NONPROFIT CORPORATIONS. HIS AREA
OF PRACTICE WAS IN THE FIELD OF TAXATION. HE HOLDS A BA DEGREE FROM FRESNO STATE
COLLEGE (NOW CALIFORNIA STATE UNIVERSITY AT FRESNO) IN BUSINESS ADMINISTRATION
WITH A SECONDARY EMPHASIS IN ECONOMICS.
13
FRED WRAZEL WILL SERVE AS OUR REAL ESTATE ACQUISITION SPECIALIST; HE IS
CURRENTLY A CALIFORNIA LICENSED REAL ESTATE BROKER. MR. WRAZEL HAS OVER THIRTY
(30) YEARS EXPERIENCE SPECIALIZING IN ANNEXATION, REZONING, SUBDIVIDING,
DEVELOPMENT AND FINANCING OF BOTH URBAN AND RURAL PROPERTIES.
MR. WRAZEL HAS A BACHELOR OF SCIENCE DEGREE IN BUSINESS ADMINISTRATION FROM
MARQUETTE UNIVERSITY AND IS A NATIVE OF WISCONSIN.
14
JOB DESCRIPTIONS SAND AND GRAVEL OPERATION
SITE FOREMAN
SUPERVISE THE INSTALLATION OF EQUIPMENT DURING CONSTRUCTION OF THE PLANT.
RECRUIT AND TRAIN PLANT AND EQUIPMENT OPERATORS. MAKE SURE SAFETY TRAINING IS UP
TO DATE. MAINTAIN RECORDS FOR MSHA AND CAL-OSHA. SCHEDULE OPERATIONS AND DIRECT
PRODUCTION. OVERSEE THE APPLICATION OF EQUIPMENT AND MAINTENANCE THEREOF.
SUPERVISE CREATION OF AND VERIFY PRODUCTION AND SHIPMENT RECORDS. MONITOR
PERFORMANCE OF PERSONNEL AND EQUIPMENT AND MAKE RECOMMENDATIONS FOR CHANGES TO
UPPER MANAGEMENT. SCHEDULE AND SUPERVISE RECLAMATION EFFORTS. MUST BE MSHA MINE
SAFETY TRAINED.
MASTER MECHANIC
ASSIST IN THE CONSTRUCTION OF THE PLANT. RESPONSIBLE FOR THE MAINTENANCE OF ALL
PLANT EQUIPMENT AND ROLLING STOCK. PERFORM ALL ADJUSTMENTS TO MACHINERY. PERFORM
REPAIRS AS COMPANY CAPABILITY ALLOWS. SCHEDULE MAJOR REPAIRS BY DEALERS OR
SUB-CONTRACTORS. MAKE OR SUPERVISE ALL MODIFICATIONS TO PLANT. BACK-UP PLANT
OPERATOR OR EQUIPMENT OPERATOR AS NEEDED. MUST BE MSHA CONSTRUCTION SAFETY OR
MINE TRAINED.
15
PLANT OPERATOR
REPORT TO MASTER MECHANIC. ASSIST IN THE CONSTRUCTION OF THE PLANT. RESPONSIBLE
FOR OPERATION OF THE PLANT INCLUDING LUBRICATION AND OTHER SCHEDULED MAINTENANCE
ITEMS. MAINTAIN SMOOTH THROUGHPUT AND BALANCE OF ALL PLANT COMPONENTS.
RESPONSIBLE FOR PLANT SAFETY. MUST BE MSHA CONSTRUCTION SAFETY OR MINE TRAINED.
EQUIPMENT OPERATOR
OPERATE ROLLING STOCK SUCH AS WHEELED LOADERS OR EXCAVATORS. HAS RESPONSIBILITY
FOR GREASING OWN MACHINE AND WILL ASSIST MASTER MECHANIC IN CHANGING FILTERS AND
OIL. WILL FUEL THEIR OWN MACHINES AND PERFORM VISUAL INSPECTION FOR READINESS
AND SAFETY. WILL MAINTAIN INDIVIDUAL MACHINE RECORDS. MUST BE MSHA MINE SAFETY
TRAINED.
SCALE OPERATOR
WEIGH TRUCKS FOR TARE ON ENTRY AND AGAIN AS THEY LEAVE THE SITE FOR NET LOAD.
KEEP COPIES OF ALL TICKETS AND TURN THEM IN TO THE SITE FOREMAN AT THE END OF
SHIFT ALONG WITH A SUMMARY OF THE DAY'S ACTIVITY. PERFORM SUCH OTHER
ADMINISTRATIVE AND RECORD KEEPING DUTIES AS THE SITE FOREMAN MAY ASSIGN.
16
PRODUCTS / STRATEGY
GENERAL
THERE WILL BE TWO (2) BASIC PRODUCT CATEGORIES. EACH WILL COMPLIMENT THE OTHER.
CATEGORY I WILL BE BASIC ROCK AND SAND PRODUCTS FOR THE CONSTRUCTION INDUSTRY.
CATEGORY II WILL BE EMULSIONS FOR SLURRY AND CHIP SEAL ROAD SURFACING. CATEGORY
I PRODUCTS WILL BE USED IN CATEGORY II APPLICATIONS GIVING US A CAPTIVE MARKET.
A DISTRIBUTION FACILITY CENTRALIZED TO THE HIGHWAY 99 CORRIDOR MARKET WILL SERVE
BOTH CATEGORIES AND IS A KEY TO THE EXPANSION OF THE INITIAL MARKET.
THE LOCATION OF THE RAW MATERIALS IN MERCED COUNTY, ALL BUT GUARANTEES SALES IN
THAT GEOGRAPHIC AREA. THE CATEGORY II MARKET IS PRACTICALLY WIDE OPEN IN
ADJACENT GEOGRAPHIC AREAS AND THIS WILL ENSURE THAT THE MARKET FOR CATEGORY I
PRODUCTS CAN BE READILY EXPANDED.
THERE IS A NATIONWIDE MOVEMENT TO PROLONG THE LIFE OF OUR PAVED STREETS AND
HIGHWAYS. ALTERNATIVES TO CUTBACK ASPHALT SURFACING ARE FAVORED FOR A VARIETY OF
REASONS INCLUDING AIR POLLUTION REDUCTION. TRADE ORGANIZATIONS AND POLITICIANS
ALIKE BACK TREATMENT BY SLURRY AND CHIP SEALS. IT IS COST EFFECTIVE AND
PRACTICAL. ALL SUPPORTS THE EXPANSION OF THIS ACTIVITY IN CALIFORNIA.
17
CATEGORY I ROCK AND SAND PRODUCTS
- ---------------------------------
CONCRETE AGGREGATE - CRUSHED AND SCREENED ROCK FOR SALE TO READY- MIX
COMPANIES AND OTHER CONTRACTORS WHO MAKE CONCRETE
CONCRETE SAND - SCREENED AND WASHED SAND FOR THE SAME CUSTOMERS
BASE ROCK - COARSE AGGREGATE FOR ROAD BASE
RIP RAP - LARGE SIZED ROCK FOR EROSION CONTROL
DRAIN ROCK - LARGE GRAVEL SIZED FOR USE TO LINE SMALL DITCHES AND
OTHER AREAS WHERE WATER NEEDS TO PENETRATE
18
TRENCH FILL - SPECIALTY SAND TO BACKFILL TRENCHES FOR BURIED PIPE-
LINES AND CABLE
ASPHALT AGGREGATE - CRUSHED AND SCREEN-SIZED ROCK TO BE MIXED WITH ASPHALT
FOR ROAD SURFACING
THE CRUSHING AND SCREENING PLANT CAN PRODUCE ALMOST ANY ROCK AND SAND PRODUCT
USED IN THE CONSTRUCTION INDUSTRY ON A CUSTOM BASIS OR AS THE MARKET MAY
DICTATE.
CATEGORY II ASPHALT EMULSIONS
- -----------------------------
EMULSION TYPE USES
- ------------- ----
ANIONIC, SLOW TO - TACK COATS, FOG SEAL, SLURRY SEAL, DUST CONTROL, FINE
TO COARSE
MEDIUM SETTING
GRADED MIXES
19
ANIONIC, HIGH - TACK COATS, COARSE GRADE MIXES, HOT AND COLD LAY AND
ROAD
FLOAT, MEDIUM
MIXES SETTING
ANIONIC, HIGH - HOT AND COLD RECYCLING, IN- PLACE OR CENTRAL PLANT
FLOAT, MEDIUM
SETTING, POLYMER
MODIFIED
ANIONIC, HIGH - CHIP SEAL / SURFACE TREATMENT
FLOAT, RAPID
SETTING
ANIONIC, HIGH - CHIP SEAL / SURFACE TREATMENT
FLOAT, RAPID
SETTING, POLYMER
MODIFIED
20
CATIONIC, RAPID - CHIP SEAL / SURFACE TREATMENT
SETTING
CATIONIC, RAPID - CHIP SEAL / SURFACE TREATMENT
SETTING, POLYMER
MODIFIED
CATIONIC, MEDIUM - HOT AND COLD LAY AND ROAD MIXES
SETTING
OTHER SPECIALTY EMULSIONS WILL BE AVAILABLE FROM THE REFINERY FOR DISTRIBUTION
AS THEIR APPLICATIONS DICTATE. TANKAGE MAY BE ADDED TO THE SITE AS REQUIRED FOR
INVENTORY.
21
PRODUCT PRICE LIST (AVERAGE)
CATEGORY I ROCK AND SAND PRODUCTS
- ---------------------------------
PRICES QUOTED ARE F.O.B. PIT AND PLANT SITE AND AT THE EMULSION PLANT/
DISTRIBUTION SITE. IT IS EXPECTED THAT CERTAIN PRODUCTS WILL NOT BE COMPETITIVE
AT THE DISTRIBUTION SITE IN SOME CASES.
ITEM PRICE (PER TON)
---- -----------------------
PIT DIST
--- ----
CONCRETE AGGREGATE $ 7.00 $ 7.50
CONCRETE SAND 7.00 7.00
BASE ROCK 6.50 --
RIP RAP 5.00 --
ASPHALT AGGREGATE 20.00 20.00
22
CATEGORY II ASPHALT EMULSIONS
- -----------------------------
ANIONIC AND CATIONIC EMULSIONS $ 180/TON*
POLYMER MODIFIED EMULSIONS $ 230/TON*
23
PLAN OF ACTION
PRE-CONSTRUCTION
- ----------------
IT WILL BE NECESSARY TO COMPLETE SEVERAL SPECIFIC MATERIAL TESTS ON THE SNELLING
SITE BEFORE FINALIZING THE PLANT DESIGN. IT IS EXPECTED THAT THIS WILL TAKE
ABOUT ONE MONTH TO COMPLETE. IN THE MEANTIME ALL ITEMS OF EQUIPMENT CAN BE
SOURCED AND A GENERAL DESIGN COMPLETE.
CARE WILL BE TAKEN TO FOLD ALL PLANNED OPERATIONS INTO THE CURRENT PERMIT
STRUCTURE. AIR POLLUTION PERMITS MUST BE SECURED AS SOON AS SPECIFIC EQUIPMENT
CAN BE IDENTIFIED. IT IS PLANNED THAT A FULLY INTEGRAL TEMPORARY PLANT WILL BE
MOVED ON SITE AS SOON AS CONTRACTS CAN BE SECURED. INFORMATION FROM THE
OPERATION OF THIS PLANT MAY INFLUENCE THE FINAL PLANT DESIGN.
CONCURRENT WITH THE ABOVE, A COMPREHENSIVE MARKET STUDY SHOULD BE COMPLETED.
THIS WILL PROVIDE THE FINAL CRITERIA FOR THE PLANT, WHICH IS THE PRODUCTION
LEVEL REQUIRED TO SERVICE THE CUSTOMER.
CONSTRUCTION
- ------------
THE SITE IS IN GOOD CONDITION AND WILL REQUIRE A MINIMUM OF GRADING FOR
PREPARATION. IT IS EXPECTED THAT SOME WORK WILL BE DONE DURING THE TEMPORARY
PRODUCTION PHASE. AFTER FINALIZATION OF PLANT DESIGN ALL EQUIPMENT CAN BE
PURCHASED AND SCHEDULED FOR DELIVERY AS NEEDED. SUB-CONTRACTS SUCH AS FINISHING
THE SCALE SET UP AND SUBSEQUENT CERTIFICATION CAN BE PUT IN MOTION.
ALL EQUIPMENT EXCEPT THE SCALE CAN BE CONSIDERED PORTABLE AND THEREFORE SHOULD
EXEMPT US FROM A NUMBER OF PERMITS. IT WILL BE NECESSARY TO CONSTRUCT CONVEYOR
SUPPORTS AND SOME OF THE MAIN TRAP SYSTEM ON SITE. OTHER EQUIPMENT CAN BE MOVED
INTO POSITION AS IT ARRIVES.
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AN ELECTRICAL CONTRACTOR WILL BE HIRED TO FABRICATE THE SWITCHING AND MOTOR
CONTROL SYSTEM AND TO CERTIFY THE GROUNDS. A SAFETY SURVEY BY A CONSULTANT WILL
BE A GOOD IDEA SO THAT WE WILL START OFF IN COMPLIANCE WITH ALL FEDERAL AND
STATE AUTHORITIES.
A WATER SYSTEM WILL BE CONSTRUCTED ALONG WITH APPROPRIATE HOLDING PONDS FOR THE
SEDIMENTS. DESIGN WILL BE PARTLY DICTATED BY THE PLAN OF OPERATIONS ALREADY IN
PLACE. ANOTHER CRITERIA FOR THIS WILL BE FURNISHED BY THE MATERIAL TESTS, WHICH
WILL SHOW THE AMOUNT OF WASTE WE WILL HAVE TO DEAL WITH. WE WILL ALLOW ONE MONTH
FOR COMPLETION OF THE PLANT.
OPERATIONS
- ----------
MINE RUN MATERIAL WILL BE LOADED INTO A GRIZZLY-TRAP SYSTEM IN THE PIT.
OVERSIZED BOULDERS WILL BE STOCKPILED FOR SALE AS LARGE RIPRAP. MATERIAL FROM
THE TRAP WILL BE FED INTO A WET TROMMEL FOR PRE-CLEANING. THE TROMMEL WILL
EFFECTIVELY PRODUCE TWO (2) SIZES, THE LARGER OF WHICH WILL GO DIRECTLY TO THE
JAW CRUSHER. THE UNDERSIZE DISCHARGE WILL BE FED TO A WET SCREEN.
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MATERIAL COMING FROM THE WET SCREEN WILL GO DIRECTLY TO AGGREGATE PRODUCT OR TO
THE CONE CRUSHER DEPENDING UPON PRODUCT REQUIREMENT. UNDERSIZE WILL GO TO THE
SAND WASHING PLANT. DISCHARGE FROM THE CRUSHER SYSTEMS WILL GO TO A WET SCREEN
FOR DIVERSION EITHER TO AGGREGATE PRODUCT OR TO THE SAND WASH PLANT DEPENDING
UPON PARTICLE SIZE. IF THE PRODUCT REQUIRES FURTHER REFINEMENT SUCH AS CHIPS IT
MAY BE SENT TO THE VERTICAL IMPACT CRUSHER.
IT IS EXPECTED THAT SITE RECLAMATION WILL BE A MANDATORY EFFORT REQUIRED BY THE
PERMITS EXISTING ON THE SITE AND WILL BE A CONSIDERATION WHEN PLANNING MINING
OPERATIONS. ALL EFFORTS WILL BE MADE TO "ROLL-OVER" AS MUCH AS POSSIBLE SO THAT
THE RESPONSIBLE GOVERNMENTAL AGENCIES WILL BE PLEASED WITH OUR USE OF THE SITE.
SUCH ATTENTION TO THIS ITEM WILL PAY DIVIDENDS FOR OUR CONTINUED OPERATIONS IN
THE AREA.
EMULSION PLANT
- --------------
IT IS ESSENTIAL THAT PLANS FOR A STATE-OF-THE-ART PLANT BE FINALIZED AS SOON AS
POSSIBLE. THIS IS IMPORTANT SO THAT THE PERMIT PROCESS BE STARTED AT THE
EARLIEST TIME. IT IS EXPECTED THAT THE SELECTED SITE WILL HAVE FAVORABLE ZONING
ALREADY IN PLACE. A PERIOD OF FOUR (4) MONTHS HAS BEEN SET ASIDE FOR ALL
ACTIVITY RELATING TO DESIGN AND PERMITTING.
EQUIPMENT SOURCING AND SITE PREPARATION WORK CAN BE DONE CONCURRENTLY WITH THE
PERMITTING PROCESS. CERTAIN KEY FACILITY ITEMS SUCH AS TRAN LOADERS CAN BE
INSTALLED PRIOR TO FINAL PERMITTING OF THE PLANT.
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IT IS ALSO PLANNED THAT PERMISSION TO USE THE SITE AS A SAND AND GRAVEL PRODUCT
DISTRIBUTION FACILITY CAN BE OBTAINED SO THAT WE CAN ENTER THAT MARKET WHILE
AWAITING EMULSION PLANT APPROVALS.
AN APPROPRIATE CONTRACTOR WILL DO PRACTICALLY ALL OF THE CONSTRUCTION EFFORT AT
THIS SITE. COMPANY PERSONNEL WILL ACT IN A CONSTRUCTION MANAGEMENT CAPACITY AND
COORDINATE THE EFFORT. THREE (3) MONTHS HAVE BEEN ALLOWED FOR PLANT
CONSTRUCTION.
ANY MATERIAL HAULED TO THIS SITE WILL BE BY CONTRACT HAULERS ON AN AS NEEDED
BASIS. SOME STOCKPILES WILL BE NECESSARY AT THE SITE IN ORDER TO SERVE OUR
CUSTOMERS. THE EXACT NATURE OF OUR INVENTORY CONTROL WILL BECOME CLEAR AS OUR
PENETRATION OF THE LOCAL MARKET IS ACCOMPLISHED. ALL PRODUCTS WILL BE PICKED UP
BY THE CUSTOMER OR BY CONTRACT HAULER COORDINATED THROUGH OUR OPERATIONAL
PERSONNEL.
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MASTER SCHEDULE (YEAR ONE)
ITEM 1 2 3 4 5 6 7 8 9 10 11 12
----
SAND AND GRAVEL PIT AND PLANT
- -----------------------------
--------------------------
ENGINEER / PLANS / PERMITS
--------------------------
EQUIPMENT ACQUISITION
--------------------------
CONSTRUCTION
--------------------------
PRODUCTION
--------------------------
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ASPHALT EMULSION PLANT
- ----------------------
--------------------------
PLANS / PERMITS
--------------------------
EQUIPMENT ACQUISITION
--------------------------
SITE PREPARATION
--------------------------
PLANT CONSTRUCTION
--------------------------
PRODUCTION
--------------------------
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COMPETITION
THE MATERIAL AND SUPPLY HANDLING INDUSTRY IS HIGHLY COMPETITIVE. THE
COMPETITIVE POSITION OF OUR COMPANY IN A GIVEN MARKET WILL DEPEND LARGELY
ON THE LOCATION AND OPERATING COST OF THE PIT, THE LOCATION AND OPERATION
OF THE EMULSIFIED ASPHALT PLANTS AND PREVAILING PRICES IN THOSE MARKETS.
PRICE IS THE PRIMARY COMPETITIVE FACTOR AMONG SUPPLIERS FOR SMALL OR SIMPLE
JOBS PRINCIPALLY IN RESIDENTIAL CONSTRUCTION, WHILE TIMELINESS OF DELIVERY
AND CONSISTENCY OF QUALITY AND SERVICE, AS WELL AS PRICE, ARE THE PRINCIPAL
COMPETITIVE FACTORS AMONG SUPPLIERS FOR LARGE OR COMPLEX JOBS.
OUR COMPETITORS WILL RANGE FROM SMALL, OWNER-OPERATED PRIVATE COMPANIES
TO SUBSIDIARIES OR OPERATING UNITS OF LARGE, VERTICALLY INTEGRATED CEMENT
MANUFACTURING AND CONCRETE PRODUCTS COMPANIES. COMPETITORS MAY HAVE
LOWER OPERATING COSTS THAN WE DO, OR HAVE THE FINANCIAL RESOURCES TO
ENABLE THEM TO ACCEPT LOWER MARGINS.
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FINANCIAL OBJECTIVES
WE INTEND TO BECOME A LEADING VALUE-ADDED PROVIDER OF SAND, GRAVEL,
AGGREGATE AND EMULSIFIED ASPHALT AND RELATED PRODUCTS AND SERVICES TO THE
CONSTRUCTION INDUSTRY IN MAJOR MARKETS IN THE STATE OF CALIFORNIA. OUR
COMPANY WILL INITIALLY SERVE ALL SEGMENTS OF THE CONSTRUCTION INDUSTRY IN
THE SAN LUIS OBISPO, FRESNO, MERCED, STOCKTON AND MARIPOSA AREAS OF
CALIFORNIA. THE OVERALL OBJECTIVE OF OUR OPERATING COMPANY WILL BE TO SELL
MORE PRODUCTS TO OUR TOP TIER CUSTOMERS AS WELL AS THOSE CUSTOMERS WHO
HAVE SMALL, OWNER-OPERATED PRIVATE COMPANIES. THE SPECIFIC FINANCIAL
OBJECTIVE OF OUR OPERATING COMPANY IS TO BREAK-EVEN IN THE FIRST YEAR AND
YIELD A PROFIT IN YEARS TWO (2) THROUGH THREE (3). WE EXPECT TO BEGIN SALES
AND PRODUCTION IN THE FIRST QUARTER OF 2001 WITH THE SUCCESSFUL CONCLUSION
OF OUR EFFORTS TO OBTAIN FUNDING.
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