FORM 14-A
SILVER BUTTE MINING COMPANY
PRELIMINARY PROXY STATEMENT
Filing Date: XXXX
Commission File No. XXXX
SCHEDULE 14A
INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential for use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-12
SILVER BUTTE MINING COMPANY
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required. [ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined): n/a.
(4) Proposed maximum aggregate value of transaction: n/a
(5) Total fee paid: -0-
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date filed:
1
SILVER BUTTE MINING COMPANY
520 Cedar Street, Sandpoint, Idaho 83864
February 5, 2003
Dear Stockholder:
You are cordially invited to attend the Special Meeting of Shareholders of
Silver Butte Mining Company on March 14, 2003, at 10:00 a.m. local time, at the
City Forum, 218 Cedar Street, Sandpoint, Idaho.
Those matters expected to be acted upon at the meeting are described in detail
in the attached Notice of Special Meeting of Shareholders and Proxy Statement.
Certain of the matters to be acted upon were subject of an annual meeting of
shareholders held in the Fall of 2002. We are re-submitting the items for
shareholder vote to be in compliance with applicable securities laws and
regulations.
The enclosed notice and proxy statement contain details concerning the business
to come before the meeting. We have also enclosed for your information and
review the Annual Report on Form 10-KSB for the fiscal year ended August 31,
2002.
The board of directors recommends a vote FOR each of the proposals below:
"FOR" electing Terry McConnaughy, Robert J. Evans, Joseph Zinger, Wayne Hohman,
and Donald L. Hess to our board of directors to serve for the ensuing year or
until their successors are duly elected and qualified;
"FOR" the amendment of the Company's Articles of Incorporation, authorizing an
increase of the number of authorized shares of Common Stock from 10,000,000 to
150,000,000 shares; and
"FOR" the change of the Company's name to "Quantum Technology Group, Inc."
All shareholders are cordially invited to attend the Meeting in person. Your
participation at this meeting is very important, regardless of the number of
shares you hold. Whether or not you plan to attend the meeting, please complete,
date, sign and return the accompanying proxy promptly. If you attend the
Meeting, you may revoke your proxy and vote your shares in person.
We look forward to seeing you at the Meeting.
Sincerely,
/s/ Terry McConnaughey
Terry McConnaughey, President, Director
This Proxy Statement and the accompanying proxy card are first being mailed to
Silver Butte Mining Company's Shareholders beginning February 10, 2003.
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SILVER BUTTE MINING COMPANY
NOTICE OF SPECIAL MEETING OF SHAREHOLDER TO BE HELD
FEBUARY 5, 2003
To our Shareholders:
NOTICE is hereby given that on March 14, 2003, Silver Butte Mining Company will
hold a Special Meeting of Shareholders at the City Forum, 218 Cedar Street,
Sandpoint, Idaho. The meeting will begin at 10:00 a.m. local time. At the
meeting, shareholders will be asked:
1. To elect Terry McConnaughy, Robert J. Evans, Joseph Zinger, Wayne Hohman,
and Donald L. Hess to our board of directors to serve for the ensuing year or
until their successors are duly elected and qualified.
2. To amend the Company's Articles of Incorporation to increase the number
of authorized shares of Common Stock from 10,000,000 shares to 150,000,000
shares; and
3. To approve the change of the Company's name to "Quantum Technology Group,
Inc."
We have enclosed for the review of our shareholders the Annual Report on Form
10-KSB for the fiscal year ended August 31, 2002, which was filed with the
Securities and Exchange Commission on December 13, 2002. The Company is unaware
of any other business to be considered and acted upon at the meeting and any
adjournments thereof. Only shareholders of record at the close of business on
February 5, 2003, or such other date as may be determined as the record date are
entitled to notice of and to vote at the meeting and any adjournments thereof.
All shareholders are cordially invited to attend the meeting in person. To
assure your representation at the meeting and whether or not you plan to attend
in person, you are urged to mark, sign, date and return the enclosed proxy card
at your earliest convenience in the self-addressed, stamped envelope. Any
stockholder attending the meeting may revoke their proxy and vote their shares
in person.
Please Sign, Date and Return the Enclosed Proxy Immediately to Assure that Your
Shares are Represented at the Special Meeting of Shareholders scheduled for
March 14, 2003.
By Order of the Board of Directors,
/s/ Terry McConnaughey, President, Director
Sandpoint, Idaho
February 5, 2003
3
SILVER BUTTE MINING COMPANY
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
-------------------------------
This Proxy Statement relates to the Special Meeting of Stockholders of Silver
Butte Mining Company, (the "Company"), an Idaho corporation, to be held on March
14, 2003, at 10:00 a.m., at the at the City Forum, 218 Cedar Street, Sandpoint,
Idaho, including any adjournments or postponements thereof (the "Meeting"). This
Proxy Statement, the accompanying proxy card and the Company's Annual Report are
first being mailed to stockholders of the Company on or about February 10, 2003.
THEY ARE FURNISHED IN CONNECTION WITH THE SOLICITATION BY THE COMPANY OF PROXIES
FROM THE HOLDERS OF THE COMPANY'S COMMON STOCK, PAR VALUE $.05 PER SHARE
("COMMON STOCK"), FOR USE AT THE MEETING.
The principal solicitation of proxies is being made by mail; however, additional
solicitation may be made by telephone, facsimile or personal visits by directors
and officers. The Company will reimburse brokerage firms and others for their
reasonable expenses in forwarding soliciting material.
All shares represented by duly executed proxies in the accompanying form
received prior to the Meeting will be voted in the manner specified therein. Any
stockholder granting a proxy may revoke it at any time before it is voted by
filing with the Secretary of the Company either an instrument revoking the proxy
or a duly executed proxy bearing a later date. Any stockholder present at the
Meeting who expresses a desire to vote their shares in person may also revoke
their proxy. As to any matter for which no choice has been specified in a duly
executed proxy, the shares represented thereby will be voted FOR each proposal
listed herein and in the discretion of the persons named in the proxy in any
other business that may properly come before the Meeting.
STOCKHOLDERS ARE URGED, WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING, TO
COMPLETE, SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
We have enclosed for the review of our shareholders the Annual Report on Form
10-KSB for the fiscal year ended August 31, 2002, which was filed with the
Securities and Exchange Commission on December 13, 2002.
PROPOSALS TO BE VOTED UPON BY SHAREHOLDERS AT THE SPECIAL MEETING OF
SHAREHOLDERS
At the Special Meeting, the holders of our shares of Common Stock will be asked
to vote on the proposals set forth below. An affirmative vote of a majority of
the shares present and voting at the Special Meeting is required for approval of
all matters. There are no dissenters' rights to appraisal with respect to the
proposals.
PROPOSAL ONE: To elect Terry McConnaughy, Robert J. Evans, Joseph Zinger, Wayne
Hohman, and Donald L. Hess to our board of directors to serve for the ensuing
year or until their successors are duly elected and qualified.
4
Information Concerning Directors: It is proposed that Terry McConnaughy, Robert
J. Evans, Joseph Zinger, Wayne Hohman, and Donald L. Hess will be elected at the
meeting, each to hold office until the next annual meeting of shareholders
and/or until their successors are duly elected and qualified. The Company has no
reason to believe that any nominee will be unavailable at the time of election.
For information relating to shares owned by the existing director and each of
the nominees, see Item 6 "Voting Securities and Principal Holders Thereof". For
information as to compensation, their principal occupations, age, and
experiences, see Item 7 and Item 8 "Directors and Executive Officers" and
"Compensation of Directors and Executive Officers". Reference is also made to
Item 5, "Interest of Certain Persons in the Matters to be Acted Upon".
PROPOSAL TWO: To amend the Company's Articles of Incorporation to increase the
authorized number of shares of Common Stock from 10,000,000 shares to
150,000,000 shares.
By voting "FOR" this proposal, shareholders will be authorizing the amendment of
the Articles of Incorporation to increase the number of authorized Common Stock
shares. The reason for the proposals to increase the number of authorized shares
is discussed below.
Recommendation of the Board of Directors: Our Board of Directors recommends that
our shareholders vote "FOR" the amendment to the Articles of Incorporation to
increase the number of authorized shares of Common Stock from 10,000,000 to
150,000,000 shares.
PROPOSAL THREE: To change the Company's name to Quantum Technology Group, Inc.
The reason for this proposal is discussed above in connection with the Share
Exchange Agreement with Quantum Technology Group, Inc. ("Quantum") discussed in
Item 14 below. By voting "FOR" this proposal, shareholders will be authorizing
to change the name of the Company from Silver Butte Mining Company to Quantum
Technology Group, Inc.
Recommendation of the Board of Directors: Our Board of Directors recommends that
the holders of our shares vote "FOR" changing the name of the Company to Quantum
Technology Group, Inc.
The enclosed Proxy is solicited by and on behalf of the board. We are unaware of
any additional matters not set forth in the notice of special meeting that will
be presented for consideration at the meeting. If any other matters are properly
brought before the meeting and presented for a vote of the shareholders, the
persons named in the proxy will vote in accordance with their best judgment upon
such matters, unless otherwise restricted by law.
ITEM 1. DATE, TIME AND PLACE INFORMATION
This proxy statement is furnished in connection with the solicitation of proxies
for use at the meeting of shareholders of Silver Butte Mining Company to be held
on March 14, 2003, at 10:00 a.m. local time the City Forum, 218 Cedar Street,
Sandpoint, Idaho and at any and all adjournments thereof.
5
ITEM 2. REVOCABILITY OF PROXY
The accompanying proxy is solicited by our board and is revocable by the
shareholder anytime before it is voted. For more information concerning the
procedure for revoking the proxy see Item 4. below. This proxy statement is
first being mailed to shareholders on or about February 10, 2003.
ITEM 3. DISSENTERS' RIGHT OF APPRAISAL
There is no Dissenters' Right of Appraisal for any proposal set forth in this
proxy statement.
ITEM 4. PERSONS MAKING THE SOLICITATION
This solicitation is made by the Company's board, which unanimously approved the
proposals, by consent and without a meeting, and no director has informed the
Company that he intends to oppose any action intended to be taken by the
Company.
ITEM 5. INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The following table sets forth information, to the best knowledge of the
Company, as of January 2, 2003, with respect to each person who has been a
director or executive officer of the Company at any time since the beginning of
the last fiscal year or has been nominated for election as a director of the
Company.
Title of Class Name of Beneficial Owner Amount of Beneficial Ownership Percent of Class (1)
Common Stock . Terry McConnaughy 156,457 1.82%
Common Stock . Joseph Zinger 101,000 1.83%
Common Stock . Robert J. Evans 158,000 1.17%
Common Stock . Wayne Hohman 294,501 3.42%
Common Stock . Donald L. Hess 413,082 4.80%
Common Stock . Directors and Executive Officers as a Group 1,123,040 13.04%
(1) based upon 8,610,415 total common stock shares outstanding as of January
2, 2003.
(2) Each of the present directors will be issued 1,000,000 shares of
restricted common stock when and if the share exchange agreement with Quantum
discussed in Proposal 2 above is effective.
ITEM 6. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF.
Only shareholders of record at the close of business on February 5, 2003, the
record date, are entitled to notice of, and to vote at, the meeting. At the
record date, there were 8,610,415 shares of Common Stock issued and outstanding.
Each shareholder of record on the record date is entitled to one vote per share
on each proposal presented at the meeting, exercisable in person or by proxy.
None of the shares have cumulative voting rights.
The presence in person or by proxy of a majority of the outstanding shares
entitled to vote is necessary to constitute a quorum at the meeting. Assuming a
quorum is present, the affirmative vote of the holders of a majority of the
shares issued and outstanding present in person or represented by proxy is
required for approval of each proposal to be voted upon at the meeting.
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There is no person or group, as that term is used in section 13(d)(3) of the
Exchange Act, who is known to the Company to be the beneficial owner of more
than five percent of any class of the Company's voting securities.
ITEM 7. DIRECTORS AND EXECUTIVE OFFICERS
NAME . . . . . . . AGE AFFILIATION WITH REGISTRATION EXPIRATION OF TERM
- ------------------ --- ----------------------------- ------------------
Terry McConnaughey 67 President, Director Annual meeting
Joseph Zinger. . . 62 Vice President, Director Annual meeting
Robert J. Evans. . 77 Secretary/Treasurer, Director Annual meeting
Wayne Hohman . . . 62 Director Annual meeting
Donald L. Hess . . 73 Director Annual meeting
There are no material proceedings to which any of our directors, officers or
affiliates of the Company or any owner of record of beneficially more than five
percent (5%) of any class of voting securities of the Company, or any associate
of any such director, officer, affiliate of the Company, or security holder, is
a party. None of our directors or nominees entered into any transaction, or
series of similar transactions, since the beginning of the Company's last fiscal
year, or any currently proposed transaction, or series of similar transactions,
to which the Company was or is to be a party, in which the amount involved
exceeds $60,000 and in which any of our directors or nominees had, or will have,
a direct or indirect material interest.
The following information with respect to the principal occupation or
employment, other affiliations and business experience of each member of the
board of directors during the last five years.
JOHN T. (TERRY) MCCONNAUGHEY: Mr. McConnaughey had various functions with the
- -------------------------------
Alaska State Police and retired in October 1990 at the rank of Major and Deputy
Director of the Alaska State Troopers. He was retired from 1990-1996. In
1994, he became involved with community service work with North Idaho Bikeways,
where he assisted as project Manager. From 1998 to 2000, he was Sagle Fire
District Commissioner. In the Spring of 2001, he was appointed to Sandpoint
Airport Advisory as Director for a four (4) year term. Mr. McConnaughey became
a member of the board of directors of Silver Butte in 1996, and elected
President in March 2001.
ELMER J. (JOE) ZINGER, VICE PRESIDENT: Mr. Zinger was employed as a
- ------------------------------------------
construction foreman at Hidden Lakes Gold Course since 1991. Mr. Zinger was
- -----------
appointed to the Board of Directors of Silver Butte in 1992, and elected Vice
- ---
President in Spring of 2001.
- --
ROBERT J. EVANS, SECRETARY/TREASURER: Mr. Evans has been involved in the mining
- ------------------------------------
business for the past thirty years. He has been a director of the Registrant
for the past 21 years and secretary/treasurer of the Registrant for the past 13
years.
WAYNE A. HOHMAN, DIRECTOR: Mr. Hohman retired from teaching in 1996 after
- ----------------------------
twenty-nine years. He then became involved in land and timber management. He
- -----
was appointed to the Board of Directors in 1996.
DONALD L. HESS, DIRECTOR: Mr. Hess is President of Columbia Stock Transfer
- ---------------------------
Company, the registrant's transfer agent. Don is retired from public
accounting since December 2001, but continues to perform some accounting
function for several publicly held corporations including Silver Butte Mining
Company. Don has been on the board of directors since 2001. Don also serves
as a director of Mineral Mountain Mining and Milling Company and Lucky Friday
Extension Mining Co.
7
COMPLIANCE WITH SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING:
Officers, Directors, and beneficial owners of 10% or more of the registrant's
Common Stock that failed to file on a timely basis the reports required by
section 16(a) of the Exchange Act based on a review of Forms 3, 4, and 5:
To the Registrant's knowledge, the required Forms 3, 4, and 5 have been filed
although not all have been filed on a timely basis.
The Registrant has no standing audit, nominating and compensation committees of
the Board of Directors, or committees performing similar functions.
ITEM 8. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS.
The following table sets forth, for the fiscal years ended August 31, 2002,
2001, and 2000 compensation paid by the registrant to executives for work
performed for the benefit of the registrant. The registrant has provided no
stock options, warrants, or stock appreciation rights. There are no other
employment contracts or incentive pay agreements with the officers and/or
directors, who are paid on an hourly basis for work performed according to the
terms and rates approved by the Board of Directors. In connection with the
Quantum transaction discussed in Item 14 below, each director will receive
1,000,000 shares of common stock upon the completion of the transaction.
Annual Compensation Long Term Compensation
------------------- ----------------------
Other Restricted Options LTIP All
Annual Stock SARS Payouts Other
Name/Title. . . . . Year Salary Bonus Compensation Awards (#) ($) Compensation
- ------------------- ------------------- ---------------------- ------- ------------- ------ ---- ---- -------------
Terry McConnaughey,
Pres, Dir. 2000 --- --- --- --- --- --- ---
Terry McConnaughey,
Pres, Dir. 2001 --- --- --- --- --- --- ---
Terry McConnaughey,
Pres, Dir. 2002 --- --- $ 2,000[3] --- --- --- $ 4,300 [1]
E. Joseph Zinger,
Vice Pres, Dir. 2000 --- --- --- --- --- --- ---
E. Joseph Zinger,
Vice Pres, Dir. 2001 --- --- --- --- --- ---
E. Joseph Zinger,
Vice Pres, Dir. 2002 --- --- 2,000[3] --- --- --- 667[1]
Robert J. Evans,
Sec/Treas, Dir. 2000 --- --- --- --- --- --- 1,245[1]
Robert J. Evans,
Sec/Treas, Dir. 2001 --- --- --- --- --- --- ---
Robert J. Evans,
Sec/Treas, Dir. 2002 --- --- 3,000[3] --- --- --- 2,131[1]
Wayne Hohman,
Dir 2000 --- --- --- --- --- --- ---
Wayne Hohman,
Dir 2001 --- --- --- --- --- --- ---
Wayne Hohman,
Dir 2002 --- --- 2,000[3] --- --- --- 688[1]
Donald L. Hess,
Dir 2001 --- --- --- --- --- --- 3,419 [2]
Donald L. Hess,
Dir 2002 --- --- 400[3] --- --- --- 4,645 [2]
R. Richard Rice,
Pres/Dir 2000 --- --- --- --- --- --- 1,453 [1]
R. Richard Rice,
Dir 2001 --- --- --- --- --- --- ---
[1] Officers and Directors Fees associated with annual meeting and proxy
solicitation.
8
[2] The registrant paid the Columbia Stock Transfer Registrant, owned by
Donald. L. Hess, Director, $1,662 and $1,994 for stock transfer services and
proxy services during the years ended August 31, 2002 and 2001, respectively.
The registrant also paid the Donald L. Hess P.A. accounting firm $3,083 and
$1,425 for services during the years ended August 31, 2002 and 2001,
respectively. In addition the registrant issued the Columbia Stock Transfer
Registrant 186,667 shares of capital stock during the year ended August 31, 2001
pursuant to a year 1993 agreement.
[3] The registrant issued stock to its directors to compensate them for
directors fees that had not been paid for several years. The number of shares
issued, based upon length of service, were as follows: McConnaughy - 100,000
shares, Zinger - 100,000 shares, Evans - 150,000 shares, Hohman - 100,000
shares, Hess - 20,000 shares. These shares were valued at the two cent per
share bid price on the date of issuance.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Company for the benefit of our
officers or directors.
ITEM 9. INDEPENDENT PUBLIC ACCOUNTANTS
The Company has engaged the independent public accounting firm of DeCoria,
Maichel & Teague, a Professional Services corporation, with offices in Spokane,
WA, to conduct the audits for the Company's fiscal years ended August 31, 2002
and 2001. The financial statements of the Company for 2001 through 2002 were
audited by DeCoria, Maichel & Teague. During the two most recent fiscal years or
during any subsequent interim period, there were no other independent
accountants engaged by the Company nor did any other independent accountants
resign, decline to stand for re-election or was dismissed by the Company. Audit
fees paid to the firm of DeCoria, Maichel & Teague in connection with the
September 30, 2002 and 2001 audits were $10,000. No fees were paid for
financial information systems or other services other than the audit fees.
ITEM 10. COMPENSATION PLANS
The Company does not have any plans for the payment of cash or non-cash
compensation to any executive officers, directors or any other persons. In
connection with the Quantum transaction discussed in Item 14 below each director
will receive 1,000,000 shares of common stock upon the completion of the
transaction.
ITEM 11. AUTHORIZATION OR ISSUANCE OF SECURITIES OTHERWISE THAN FOR EXCHANGE.
The Board is asking shareholders to amend the Company's Articles of
Incorporation to increase the authorized number of shares of Common Stock from
10,000,000 shares to 150,000,000 shares.
The Company is currently pursuing a transaction that requires issuing additional
shares of common stock. On July 12, 2002, the Company entered into a preliminary
Share Exchange Agreement with Quantum Technology Group, Inc. (Quantum). See
Item 14 "Mergers, consolidations, acquisitions and similar matters" for a
description of this agreement.
9
ITEM 13. FINANCIAL AND OTHER INFORMATION
Information required by this item is included in the Company's Annual Report on
Form 10-KSB for the fiscal year ended August 31, 2002 which document is hereby
incorporated by reference.
A representative of the Company's independent public accounting firm of DeCoria,
Maichel & Teague, is not expected to be attendance at the Special Meeting and
therefore will not be available to respond to shareholder questions.
ITEM 14. MERGERS, CONSOLIDATIONS, ACQUISITIONS AND SIMILAR MATTERS.
(a) The Company has entered into a Share Exchange Agreement ("SEA") with
Quantum Technology Group ("Quantum"). As a result of this agreement, the
Company and Quantum will be merged into one entity.
(b) (1) Summary of terms of the SEA is as follows:
- - Each shareholder of Quantum will receive 50 shares of unregistered and
restricted common stock of the Company for each one (1) share of Quantum.
- - This exchange would result in the issuance of 41,000,000 new unregistered
common shares of the Company to Quantum shareholders.
- - Each of the present directors of the Company will receive 1,000,000 shares
of common stock in payment of prior year and current period services.
(b) (2) Contact information: The following individuals can be contacted with
regards to this SEA agreement:
SILVER BUTTE MINING COMPANY . QUANTUM TECHNOLOGY GROUP, INC.
- ----------------------------- ------------------------------
Terry McConnaughey, President Liem T. Nguyen, President
- ----------------------------- ------------------------------
520 Cedar Street. . . . . . . 376 East 11th Street
- ----------------------------- ------------------------------
Sandpoint, ID 83864. . . . . Idaho Falls, Idaho 83840
- ----------------------------- ------------------------------
(208) 263-5154 208-403-8861
- -------------- ------------
(b)(3) BUSINESS CONDUCTED. For information about the Company's business, see
Item 1 of the Company's annual report 10KSB for the year ended August 31, 2002
included in the Proxy mailing.
Quantum Technology Group, Inc. ("Quantum"), was incorporated on May 20, 2002 and
is in its development stage of organization and operations. Quantum holds the
exclusive license to market and sell in the United States of America, an
electronic device known as the Handheld Portable Digital Geographic Data Manager
(hand-held field digital data mapping device). Quantum plans to develop and
commercialise this device as well as other advanced and innovative technologies.
(b)(4) The terms of the transaction are outlined below.
10
(i) The agreement calls for the shareholders of Quantum to receive 50 shares of
the Company's unregistered and restricted common stock in exchange for each one
(1) Quantum share owned. This exchange would result in the issuance of
41,000,000 new unregistered common shares of the Company to Quantum
shareholders. In connection with this transaction, each of the present
directors will receive 1,000,000 shares of common stock in payment of prior year
and current period services. The issuance of additional shares will result in
the dilution of the percentage equity interest of our existing shareholders and
will likely result in a change in control of the Company and a change in the
board of directors.
(ii) No consideration is offered to the Company's common stockholders in
connection with the SEA;
(iii) The Company believes that this transaction fits well with the Company's
decision to abandon its mining exploration activities and its mineral leases
and use its resources to investigate other business opportunities.
(iv) The Company's board of directors has approved this transaction pending
shareholder approval of increasing the authorized number of shares.
Shareholder approval of the transaction itself is not required.
(v) The issuance of additional shares will result in the dilution of the
percentage equity interest of our existing shareholders and will likely result
in a change in control of the Company and a change in the board of directors.
(vi) This transaction will be accounted for as a purchase under Statement on
Financial Accounting Standards No. 141 "Business Combinations."
(vii) For federal income tax purposes, the SEA is intended to constitute a Type
"B" reorganization with the meaning of Section 368 of the Internal Revenue Code.
The parties to the SEA adopted the Agreement as a "plan of reorganization"
within the meaning of Sections 1.368-2(g) and 1.368 (a) of the United States
Treasury Regulations.
(b)(5) Regulatory approval: The transaction is subject to applicable laws and
regulations at both the federal and state level. Approval from a specific
federal or state authority is not required in connection with the transaction.
(b)(6) Reports, opinions, appraisals. Not Applicable
(b)(7) Past contacts, transactions or negotiations. Not Applicable.
(b)(8) Selected financial data. Not Applicable.
(b)(9) Pro forma selected financial data. Not Applicable
(b)(10) Pro forma information. Not Applicable.
11
(c) Quantum is not subject to the reporting requirements of either Section
13(a) or 15(d) of the Exchange Act. Pursuant to Form S-4 Part C Item 17 (b),
the following information about Quantum is provided:
(b)(1) Business. Quantum Technology Group, Inc. ("Quantum"), was incorporated
on May 20, 2002 and is in its development stage of organization and operations.
Quantum holds the exclusive license to market and sell in the United States of
America, an electronic device known as the Handheld Portable Digital Geographic
Data Manager (hand-held field digital data mapping device). Quantum plans to
develop and commercialise this device as well as other advanced and innovative
technologies.
The Geographic Data Manager is designed to be an integral component of a
real-time mobile Geographic Information System and utilizes the Global
Positioning System (GPS). The technology of the Geographic Data Manager is
designed to aid in the collection and verification planning and engineering
field data. This personal digital assistant is intended to meet the needs of
the construction and utility industry and will be applicable to other tasks,
such as environmental sampling, agricultural field data collection, and property
appraisal and construction inspection. Large opportunities for use also exist
in the gas, water, sewer, telephone and cable TV utilities; in local state and
federal government inspection agencies, and in the insurance and transportation
industries.
(b)(2) Quantum's common stock is not listed on any exchange and has no stated
market value. No dividends have been paid since Quantum's inception.
(b)(3) Not Applicable.
(b)(4) Not Applicable.
(b)(5) Management's Discussion and Analysis:
Plan of operation: Quantum's purpose is to develop and commercialise advanced
and innovative technologies. Currently, it holds the exclusive license to
market and sell in the United States of America, an electronic device known as
the Handheld Portable Digital Geographic Data Manager (a handheld field digital
data mapping device). In order to further this plan, Quantum has actively
pursued venture capital as well as merger candidates. Quantum has entered into
a Share Exchange Agreement with Silver Butte Mining Company in order to have
better access to capital funds.
Results of operations: Since its inception on May 20, 2002, Quantum has had no
revenue and has incurred $5,183 in expenses related to organizational and legal
costs.
Financial condition and liquidity: Since its inception on May 20, 2002, Quantum
has raised money through the sale of its common stock. Through October 31,
2002, Quantum sold shares of its common stock for cash of $1,929. Quantum also
borrowed $1,096 from a shareholder. These funds were used to pay organization
expenses of Quantum.
12
In addition, Quantum purchased the licensing agreement of the Handheld Portable
Digital Geographic Data Manager for a price of $7,500. The licensing agreement
calls for a royalty payment of four percent (4%) of the selling price, with
minimum royalty payments of $10,000 each year through 2007 and every year
thereafter, for the life of the agreement.
(b)(6) Quantum engaged the independent public accounting firm of Galusha
Higgins & Galusha, with offices in Idaho Falls, Idaho, to conduct the audits for
the Quantum's period from inception, May 20, 2002, to October 31, 2002.
Quantum has had no disagreements with their accountants regarding accounting and
financial disclosure. There have been no changes in Quantum's accounting firm
since its inception.
ITEM 19. AMENDMENT OF CHARTER, BYLAWS OR OTHER DOCUMENTS.
The Company is asking the shareholders to ratify the Amendment of the Articles
of Incorporation to increase the number of authorized shares of Common Stock
from 10,000,000 shares to 150,000,000 shares. Under Idaho law, the Company may
only issue shares to the extent that such shares have been authorized for
issuance under the Company's Articles of Incorporation. As of record date,
8,610,415, or 86.1% of our presently authorized 10,000,000 shares of Common
Stock were issued and outstanding. As a result, the Company has a limited number
of additional shares available that may be necessary for corporate purposes such
as mergers, acquisitions, and similar transactions, or in order to engage the
services of any personnel for future operations that the Company or any
successor may wish to pursue.
ITEM 21. VOTING PROCEDURE
The presence, in person or by proxy, of the holders of a majority of the shares
of outstanding common stock of the Company entitled to vote is necessary to
constitute a quorum at the Special Meeting. The affirmative vote of a majority
of the shares of common stock represented at the meeting and entitled to vote is
required for each proposal. Abstentions and broker non-votes are each included
in the determination of the number of shares present at the meeting for purposes
of determining a quorum. Abstentions and broker non-votes have no effect on
determinations of plurality, except to the extent that they affect the total
votes received by any particular candidate.
The Company's annual report 10KSB for the year ended August 31, 2002 is enclosed
in this Proxy Mailing.
13
PROXY CARD
PLEASE MARK YOUR VOTES AS [X] INDICATED IN THIS EXAMPLE. IF NO MARK IS
INDICATED, THE VOTE WILL CONSIDERED AS "FOR" THE PROPOSAL
1. ELECTION OF DIRECTORS (to withhold authority to vote for any individual
members, strike a line through the members name in the list below).
FOR all nominees [ ] (to vote for all nominees, except as marked to the
contrary) AGAINST [ ] ABSTAIN [
]
Terry McConnaughey
Robert J. Evans
Joseph Zinger
Wayne Hohman
Donald L. Hess
2. TO APPROVE THE INCREASE IN AUTHORIZED NUMBER OF SHARES OF COMMON STOCK FROM
10,000,000 TO 150,000,000
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. TO CHANGE THE COMPANY'S NAME TO QUANTUM TECHNOLOGY GROUP, INC.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please sign below exactly as your name appears on this Proxy Card. If shares are
registered in more than one name, the signatures of all such persons are
required. A corporation should sign in its full corporate name by a duly
authorized officer, stating his/her title. Trustees, guardians, and
administrators should sign in their official capacity, giving their title as
such. Partnerships should sign in the partnership name by the authorized
person(s).
The undersigned acknowledge(s) receipt of the Notice of the aforesaid Special
Meeting, the Proxy Statement, each dated February 5, 2003 and the Annual Report
dated December 13, 2002.
Date: February 5, 2003
SIGNATURE OF STOCKHOLDER
______________________________________________________________________________
SIGNATURE IF HELD JOINTLY
Name and address of shareholder