-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T4D85O7nbIZvPOaDTBW5BP5dg7nH/WrSNbJqIncLxLxuRGxjprpn7dEZTTDqAzJO L6zwnl9Lc+WyWND47Z9L3g== 0001010412-98-000198.txt : 19981022 0001010412-98-000198.hdr.sgml : 19981022 ACCESSION NUMBER: 0001010412-98-000198 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981016 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981021 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHEROKEE MINERALS & OIL INC CENTRAL INDEX KEY: 0001054524 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-23729 FILM NUMBER: 98728498 BUSINESS ADDRESS: STREET 1: 8989 SCOFIELD CIRCLE CITY: SANDY STATE: UT ZIP: 84093 BUSINESS PHONE: 8019422912 MAIL ADDRESS: STREET 1: 8989 SCOFIELD CIRCLE CITY: SANDY STATE: UT ZIP: 84093 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20509 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act October 16, 1998 Date of Report (Date of Earliest Event Reported) CHEROKEE MINERALS AND OIL, INC. (Exact Name of Registrant as Specified in its Charter) Nevada 02-23729 87-0575839 (State or other juris- (Commission File No.) (IRS Employer diction of incorporation) I.D. No.) 8989 South Scofield Circle Sandy, Utah 84093 (Address of Principal Executive Offices) (801)942-2912 Registrant's Telephone Number Item 1. Changes in Control of Registrant. See Item 7, Exhibits. Item 2. Acquisition or Disposition of Assets. See Item 7, Exhibits. Item 3. Bankruptcy or Receivership. None; not applicable. Item 4. Changes in Registrant's Certifying Accountant. None; not applicable. Item 5. Other Events. None; not applicable. Item 6. Resignations of Registrant's Directors. None; not applicable. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. 2 Letter of Intent dated October 16, 1998, regarding proposed reorganization 99 Press Release regarding same dated October 19, 1998 Item 8. Change in Fiscal Year. None; not applicable. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. CHEROKEE MINERALS AND OIL, INC. Date: 10/21/98 By:/s/Joe Johnson -------------------------------------- Joe Johnson President and Director Date: 10/21/98 By:/s/Melinda Johnson -------------------------------------- Melinda Johnson Treasurer and Director EX-2 2 Environmental Systems & Solutions. Inc. 12226 South 1000 Fast, Suite 9 Draper, Utah 84020 801-553-8753 CONFIDENTIAL October 16, 1998 Cherokee Minerals and Oil, Inc. Salt Lake City, Utah Re: Proposed Reorganization Gentlemen: This letter, upon your acceptance, will evidence our mutual intention to enter into a definitive agreement providing for a reorganization in which all of the outstanding capital stock of Environmental Systems & Solutions, Inc. ("ESSI"), a Nevada corporation (the target company), will be acquired by Cherokee Minerals and Oil, Inc. ("Cherokee"), a Nevada corporation (the acquiring company). The form of the transaction is contemplated to be an exchange of capital stock, between the shareholders of ESSI (the "ESSI Shareholders") and Cherokee in a tax-free reorganization (hereinafter the anticipated transaction is referred to as the "Reorganization"), subject to the approval of the ESSI Shareholders. This letter is also an expression of the intention of ESSI and Cherokee to proceed expeditiously to negotiate, draft and execute a definitive agreement for the Reorganization (hereinafter referred to as the "Agreement"). The Agreement, when executed, will reflect the terms of this letter and such other terms and conditions as are typical to a transaction of this nature (which shall include appropriate representations and warranties as to the business, assets, liabilities, capitalization, material contracts, proprietary rights, financial condition and other matters relevant to the business and operations of the parties), and such additional terms and conditions as shall be mutually agreed upon. The parties to the Agreement shall include Cherokee, the ESSI Shareholders, and any other party who, in the opinion of Cherokee or ESSI, is necessary to the transactions. Cherokee Minerals and Oil, Inc. October 16, 1998 Page Two 1. Certain Terms of Reorganization Agreement. The material terms and conditions of the Reorganization to be included in the Agreement are as follows: 1.1 The Agreement shall provide for the Reorganization, which shall be consummated on or about November 11, 1998 (the "Closing"). On the Closing Date, all of the issued and outstanding ESSI capital stock shall be acquired by Cherokee from the ESSI Shareholders. 1.2 At the Closing, Cherokee shall issue and deliver to the ESSI Shareholders previously authorized and unissued shares of Cherokee common stock in an amount equal to 92% of the outstanding shares of the Cherokee (after giving effect to the closing of the Reorganization), calculated on a fully diluted basis. In calculating the outstanding shares of ESSI for this purpose, it will be assumed that outstanding ESSI options, warrants and convertible securities are exercised immediately prior to the closing, and that number of shares of Cherokee common stock necessary to account for ESSI options, warrants and convertible securities will be reserved in lieu of being issued. At the Closing, Cherokee will substitute options, warrants and convertible securities to purchase shares of the Cherokee's common stock for each outstanding option, warrant and other convertible security to acquire shares of ESSI, each such option or wan-ant to represent the right to purchase that number of Cherokee shares as if the ESSI option, warrant or convertible security had been exercised immediately prior to the Reorganization and exercisable for the same aggregate consideration, and on substantially the same other terms and conditions, that would apply if all of such ESSI options, warrant or convertible security had been fully exercised. 1.3 Upon the Closing of the Reorganization, each of the officers, directors and 10% shareholders of Cherokee shall execute an agreement with ESSI and Cherokee in which each of such officer, director and 10% shareholder shall release Cherokee from any and all claims arising as a result of any prior events (except as permitted by the Agreement) and further covenant and agree that they will not compete with Cherokee and ESSI for a period of five (5) years after the Closing In any business engaged in by ESSI as of the Closing Date including, without limitation, the garbage disposer business. 1.4 Until the Closing, each of Cherokee and ESSI shall continue to operate its business In the ordinary course and shall not, without the prior written consent of the other party, do any of the following. (i) Incur any material obligations or commitments other than in the ordinary course of business; Cherokee Minerals and Oil, Inc. October 16, 1998 Page Three (ii) Grant any salary increases (other than as required by existing contracts or consistent with current practices), unscheduled promotions or enter into any new employment or benefit contracts; (iii) Solicit, induce or otherwise engage in discussions or negotiations relating to or proposed to lead to the acquisition or Reorganization of sale of substantially all of the assets or shams of ESSI by or with any party other than Cherokee; (iv) Sell or dispose of any material assets or properties, except in the ordinary course of business or with the prior consent of the other party hereto; or, (v) Sell any additional shares of its capital stock or grant any additional rights or options to acquire its capital stock, with the except of ESSI's current private placement offering. 1.5 ESSI shall provide Cherokee, as soon as practicable after the Closing Date, with audited financial statements required in connection with the acquisition of a "significant subsidiary" by Cherokee as that term is defined by rules and regulations promulgated by the Securities and Exchange Commission and such other information as is required for Cherokee to prepare and file appropriate documents relating to the Reorganization with the Securities and Exchange Commission. Such financial statements will include, among other items, an audited balance sheet of ESSI as of a recent date, statements of income for each of its last two fiscal years, and related statements of shareholders equity, statements of cash flows and the appropriate notes to such financial statements, together with the report of an independent certified public accounting firm. 1.6 As a condition to the consummation of the Reorganization, there shall have been no material adverse change in the assets, business or prospects of either ESSI or Cherokee except as contemplated by the Agreement. All financial statements provided by the parties to each other pursuant to the Agreement shall be represented to fairly present the financial condition of such party at the date of such financial statements and their results of operations for the periods covered thereby, and shall be prepared in accordance with generally accepted accounting principles. Cherokee Minerals and 0i1, Inc. October 16, 1998 Page Four 1.7 Cherokee and ESSI will exert their best efforts to obtain such consents or approvals, and to make such filings as in the opinion of their respective counsel may be necessary or advisable to effect the transactions contemplated herein. At the request of Cherokee, ESSI shall obtain the consent of any third party which is necessary for the transfer of any asset, right or contract of ESSI pertaining to the Reorganization contemplated herein, if any. 1.8 As a condition to the consummation of the Agreement, Cherokee and its counsel and ESSI and its counsel must each be satisfied as to the validity and legality of all aspects of the Reorganization, including all activities undertaken in relation to the Agreement. Each of the parties to the Reorganization will pay their own expenses incurred in connection with the Agreement and all other events required for the Closing. 1.9 The Agreement will provide that any claims or disputes arising thereunder or as a result of the transactions contemplated therein which cannot be resolved by the parties will be referred to alternative dispute resolution by binding arbitration in the State of Utah. 2. Due Diligence. Upon the execution of this letter of intent by the parties, ESSI and Cherokee, and each of their duly authorized representatives, will be provided with full access to the projections, financial records and supervisory management personnel of the other party, which shall include copies of all material agreements, corporate proceedings, access to the chief executive officer and chief financial officer, marketing, product development and manufacturing supervisors, and other records and information which each party deems of significance in an due diligence investigation of the other party hereto. The disclosure of any such information shall be subject to the provisions of Section 3 of this letter agreement. 3. Confidentiality. In connection with the foregoing matters, each party hereto has or will be furnishing to the other from time to time with oral and written information as to its proprietary products, marketing strategy and business plans, significant portions of which each of the parties considers to be proprietary and confidential information (herein called the "Confidential Information"). Each party acknowledges that "Confidential Information," as used herein, does not include any information which (i) was or becomes generally available to the public other than as a result of an improper disclosure by the other party hereto, or (ii) was or becomes information available to the other party on a non-confidential basis from a third party source that is not bound by a confidentiality obligation to either of the parties hereto. Cherokee Minerals and oil, Inc. October 16, 1998 Page Five Each party agrees that Confidential Information will be used solely for the purpose of evaluating the Reorganization, investigating market information and potential markets, and for Cherokee to pursue due diligence and legal disclosure requirements in connection with proposed financing activities by Cherokee, and will not be used in the business or operations of the party to which such information has been disclosed or used in any other way, directly or indirectly, that may detrimental to the interests of the party that owns such Confidential Information. Confidential Information may be disclosed to representatives of the party receiving the same who need to know such Confidential Material for the purposes described above, it being understood that such representatives shall be informed of the confidential nature of the Confidential Information and shall be directed to treat the Confidential Information confidentially and as proprietary information of the party that owns the same. Each party shall notify the other as to the identity of such representatives. If either party receives a request, including a subpoena or similar legal inquiry. to disclose any of the Confidential Material, it shall provide the party that owns such Confidential Information with prompt notice so that the owner may seek appropriate protective relief. If the Agreement is not executed or the Closing thereunder shall fail to occur for any reason, each party shall promptly deliver and return all copies of Confidential Information to the party which owns the same, and without retaining any copy, notes or extracts thereof. Although each party understands that they will endeavor to include in the Confidential Information all materials which it believes to be relevant for the purposes of this letter agreement and the Reorganization, each party further understands that no representation or warranty as to the accuracy or completeness of the Confidential Information has or will be made except as provided by separate written agreement. 4. Press Release. Upon your acceptance and approval hereof, each of us is authorized by the other to issue a press release for the purpose of publicly announcing the transactions contemplated by this letter. Cherokee and ESSI each agree to consult with the other as to the form and substance of any press release or other public disclosure of the matters covered in this letter, provided that this shall not be deemed to prohibit Cherokee or ESSI from making any disclosure which its respective counsel deems necessary to comply with applicable law. 5. Survival of Certain Provisions. The provision of Sections 3, 4 and 5 of this letter agreement are for the benefit of the respective parties hereto, shall survive any termination of this letter agreement, and shall be governed by and construed in accordance with the laws of the State of Utah. Cherokee Minerals and Oil, Inc. October 16, 1998 Page Six This letter reflects an expression of our mutual intent only, and shall not constitute a binding legal obligation for the transactions described herein (except as expressly set forth in Sections 3, 4 and 5 above) until such time as the Agreement has been executed and the Reorganization have been approved by the Board of Directors and shareholders of Cherokee and the Board of Directors and ESSI Shareholders. It is our desire to move expeditiously towards the completion of these transactions on the basis of the terms and conditions contained herein. To help accomplish this goal, if you are in agreement with the foregoing, would you please indicate your approval of the contents of this letter by signing the attached copy in the space provided and returning it to us at your earliest convenience. The parties acknowledge that they were initially introduced to each other by, and currently share, two common directors and common outside corporate counsel who will have an inherent and unavoidable conflict of interest as to the Reorganization. Each of the parties agrees to engage the services of their own independent counsel for purposes of advising them in connection with this letter of intent, the Agreement, the Closing and other matters relevant to the Reorganization. Each of the parties will require approval of the Reorganization by a majority or more of their independent direction; who are not affiliated with the other party. Very truly yours, ENVIRONMENTAL SYSTEMS & SOLUTIONS, INC. By:/S/Cully W. Davis Cully W. Davis, President and Chief Executive Officer Accepted and Agreed to this 16th day of October, 1998 CHEROKEE MINERALS AND OILS, INC. By:/s/Joe K. Johnson Joe K. Johnson, President and Chief Executive Officer EX-99 3 Cherokee Minerals and Oil, Inc. 8999 South Scofield Circle Sandy, Utah 84093 PRESS RELEASE FOR IMMEDIATE RELEASE October 19, 1998 Sandy, Utah, Cherokee Minerals and Oil, Inc. ("Cherokee) announced today that it has entered into a letter of intent with Environmental Systems & Solutions, Inc., a Nevada corporation based in Draper, Utah ("ESSI")to acquire all of the issued and outstanding shares of common stock of ESSI in a tax-free, stock-for-stock reorganization. In accordance with the terms of the letter of intent, the shareholders of ESSI will acquire 92% of the outstanding shares of Cherokee following the reorganization, assuming a11 of the shareholders of ESSI elect to enter into the reorganization agreement with Cherokee. It is anticipated that the current shareholders of Cherokee will own approximately 1,920,000 shares and that the shareholders of ESSI will be issued approximately 22,080,000 shares, including shares reserved for issuance in accordance with outstanding ESSI stock options. ESSI is engaged in the development, manufacture, marketing, sales, and distribution of a patented garbage disposer known as the "Hydro-Maid." The Hydro-Maid garbage disposer is completely water-powered. Rather than using electricity to power the disposer, the Hydro-Maid uses only the pressure from the existing cold water supply line to the kitchen sink to power the cutting action of the disposer. Water pressure drives a patented piston, which in turn drives the five stainless steel cutting blades that oscillate back and forth, cutting food waste into small particles. The Hydro-Maid easily processes chicken bones, banana peels, stalks of celery, avocado pits and nut shells that most conventional garbage disposers have difficulty processing. However, if silverware is accidentally dropped into the Hydro-Maid disposer, the oscillating motion shifts automatically into a harmless mode until the object in removed, damage free. As of the date of this release, sales of the Hydro-Maid have been minimal as ESSI completes its manufacturing, assembly, and distribution arrangements. ESSI anticipates that its full-scale sales effort will commence in the first quarter of 1999. Cherokee has no current operations. The Transaction is scheduled to close on or about November 11, 1998, subject to the acceptance of the offer from Cherokee by the shareholders of ESSI. For further information, contact Leonard W. Burningham, Esq., counsel to Cherokee (801-363-7411), or Edward B. Paulsen, Esq., counsel to ESSI (801 501- 7800). -----END PRIVACY-ENHANCED MESSAGE-----