$PSGR A LOOOOONG READ. What were some of the FORMER company names of PERSHING RESOURCES COMPANY, INC? What happened to the former companies and is there a reason for the name changes? Readers are encouraged to read the ENTIRE POST.
What transpired among the former employees and companies AND the current company (PERSHING RESOURCES COMPANY, INC.) does not define the current company's activities nor the actions of its current employees. The following information is readily available on the internet to all investors, current or potential and is provided for informational purposes only.
A little history to the company known as Pershing Resources Company, Inc.:
Prior to its name being Pershing Resources Company Inc., the company was known as XENOLIX TECHNOLOGIES, INC. and even this name had a brief interruption as Xenolix briefly became Franklin Lake Resources then returned to Xenolix:
FRANKLIN LAKE RESOURCES
Father Gregory Ofiesh
650 588-0425
Stock Symbol:
FKLR
Franklin Lake Resources Cancels Xenolix Transaction.
Aug. 18, 2003
Father Gregory Ofiesh, President and CEO of Franklin Lake Resources, Inc. (OTCBB:FKLR), announces the cancellation of the transaction in which it acquired specified assets of Xenolix Technologies. Father Ofiesh said, "After thorough testing in our own laboratory, in the Xenolix facility at Winslow, Arizona, and in the lab of Johnson and Associates in Phoenix, the company has concluded that no precious metals of any significance can be extracted from the raw materials tested using the Xenolix technology."
Offer of Compromise Rejected
Prior to taking this action, Franklin Lake had notified Xenolix of its final decision as to the ineffectiveness of the technology and made two offers in compromise: (1) Franklin Lake would make available the return of the materials and equipment to Xenolix, or (2) Franklin Lake would keep the materials and equipment in exchange for 300,000 shares of free trading Franklin Lake stock, upon the completion of the filing of the 10-K, after which, a registration statement for all the Franklin Lake shares will be immediately filed. A reply from Austin Lett, president of Xenolix, however, stated that "this unilateral action by Franklin Lake is not acceptable."
Thereafter, Father Ofiesh said the board of directors of the company had determined that its fiduciary obligation to the shareholders required it to take this action. Franklin Lake has demanded the return of the certificate for 1,201,657 restricted shares of stock and the two warrants given to Xenolix in the transaction. It has also sent its transfer agent a stop notice with respect to the transfer of the shares represented by the certificate and informed Xenolix that it will not honor the warrants.
Franklin Lake Continues to Use Its Own Process
Father Ofiesh concluded by saying that Franklin Lake is continuing to enhance its own process for bulk sampling. He and Roger Graham, the company's chief technician, recently met with officials of the Nevada Bureau of Mining Regulation and Reclamation. The company has retained Allstate-Nevada Environmental Management, Inc., of Las Vegas, to file all necessary permit applications, and to deal with governmental authorities.
Similar to the reliance on 'NEW PRECIOUS METALS EXTRACTION TECHNOLOGIES (e.g. Sonication) AN AMAZING OCCURENCE of a NEW TECHNLOGY also was suggested by Xenolix Technologies, unfortunately some things are not as they are represented to be:
NOTE: PORTIONS OF THE FOLLOWING DOCUMENT HAVE BEEN EDITED TO EXPEDITIE READING. FULL TEXT MAY BE LOCATED ON THE ARIZONA CORPORATION COMMISSION SITE BY ENTERING XENOLIX.
BEFORE THE ARIZONA CORPORATION COMMISSION
WILLIAM A. MUNDELL Chairman JIM IRVIN Commissioner MARC SPITZER Commissioner
In the matter of
M.G. NATURAL RESOURCES CORPORATION fka Mariah International, Guildmark Industries and M.G. Gold Corporation, currently known as Xenolix Technologies, Inc. 34 Maple St. Summit, NJ 07901
Respondents.
DOCKET NO. S-03356A-01-0000
NOTICE OF OPPORTUNITY FOR HEARING REGARDING PROPOSED ORDER TO CEASE AND DESIST, FOR ADMINISTRATIVE PENALTIES, AND FOR OTHER AFFIRMATIVE ACTION
NOTICE: RESPONDENTS HAVE 10 DAYS TO REQUEST A HEARING The Securities Division (“Division”) of the Arizona Corporation Commission (“Commission”) alleges
that Respondents have engaged in acts, practices and transactions, which constitute violations of the Securities
Act of Arizona, A.R.S. § 44-1801 et seq, (“Securities Act”).
I.
JURISDICTION
1. The Commission has jurisdiction over this matter pursuant to Article XV of the Arizona
Constitution, and the Securities Act.
II.
RESPONDENTS
2. M.G. NATURAL RESOURCES CORPORATION fka Mariah International, Guildmark
Industries and M.G. Gold Corporation cka Xenolix Technologies, Inc. (“M.G. NATURAL RESOURCES”),
Docket No. S-03356A-01-0000
FACTS
6. On May 15, 1997, Mariah International and Guildmark Industries merged with M.G. Gold
Corporation. M.G. Gold Corporation was the surviving corporation. M.G. Gold Corporation, through a
name change, became M.G. NATURAL RESOURCES on November 18, 1998. M.G. NATURAL
RESOURCES, through a name change, became Xenolix Technologies, Inc. on June 16, 2000 to the present.
7. Xenolix Technologies, Inc. assumed the assets and liabilities of M.G. NATURAL
RESOURCES when the name changed.
8. Initially, M.G. NATURAL RESOURCES claimed to be in the business of exploring and
developing mining property and natural resource opportunities. The focus of the business changed in about
December of 1999 to focus on developing technology for the economical extraction of precious metals.
Docket No. S-03356A-01-0000
9. M.G. NATURAL RESOURCES was traded on the OTC BB. M.G. NATURAL
RESOURCES became ineligible for quotation as of February of 2000. The stock is now traded on the pink
sheets.
10. RESPONDENTS are attempting to develop technology that would allow for the economical
identification and recovery of precious metals from scoria, volcanic cinders or other media. M.G.
NATURAL RESOURCES owns approximately 413 acres of land located near Flagstaff, Arizona. Situated
on this land is a volcanic cinder cone. In addition, M.G. NATURAL RESOURCES owns an ore processing
plant near Winslow, Arizona.
11. On or about April 1, 1997, M.G. NATURAL RESOURCES offered and sold stock in M.G.
NATURAL RESOURCES to 71 investors raising approximately $750,000. Little or no disclosures were
provided to the investors prior to their investment.
12. In about April of 1997, M.G. NATURAL RESOURCES offered rescission to the 71
investors in the April 1, 1997 offering. Approximately 18 investors requested a refund totaling approximately
$250,000. The remaining investors chose to keep their stock in M.G. NATURAL RESOURCES. The
investors were not provided a disclosure document explaining the reasons for the rescission.
13. On or about March 16, 1998, M.G. NATURAL RESOURCES offered one million shares of
stock in M.G. NATURAL RESOURCES to a number of offerees. No sales of the stock were made. No
offering documents were provided to the offerees. The offering was withdrawn when M.G. NATURAL
RESOURCES learned that the use to which the monies were to be applied (i.e. development of another mine
property) was no longer viable.
14. JOHNSON and Austin Lett are partners of Johnson Lett & Company (“Johnson/Lett”). In
about December of 1998, M.G. NATURAL RESOURCES and Johnson/Lett began negotiations for M.G.
NATURAL RESOURCES to purchase technology from Johnson/Lett. Johnson/Lett purported to have
technology, developed by JOHNSON, which would allow for the economical recovery of precious metals
from scoria, volcanic cinders or other media.
Docket No. S-03356A-01-0000
15. From the time that M.G. NATURAL RESOURCES and Johnson/Lett began to negotiate,
M.G. NATURAL RESOURCES has been utilizing JOHNSON’s technology.
16. On or about December 9, 1998, M.G. NATURAL RESOURCES offered and sold stock to
at least 42 investors. M.G. NATURAL RESOURCES raised $995,000 in this offering. Although the
offering documents represented that only accredited investors were allowed to invest, M.G. NATURAL
RESOURCES in fact sold stock to a number of unaccredited investors.
17. M.G. NATURAL RESOURCES acquired Johnson/Lett on or about May 10, 1999, for 13
million shares of M.G. NATURAL RESOURCES.
18. On or about November 11, 1999, M.G. NATURAL RESOURCES offered and sold stock
for $165,000 to approximately eight investors comprised exclusively of previous investors or individuals
represented by previous investors.
19. In the November, 1999 offering, the focus of the company changed from a mining company
to a technology company. M.G. NATURAL RESOURCES was promoted in this offering as a “high
technology” company engaged in the research and development of geological and chemical research. The
funds were to be used for the normal operating expenses of M.G. NATURAL RESOURCES’ contract
laboratory in Tempe. The laboratory is owned and operated by JOHNSON. In addition, the funds were to
be used for the operating costs and capital equipment purchases at the pilot plant.
20. Although JOHNSON did not speak directly with investors, JOHNSON admitted that he
benefited financially from the sale of stock. JOHNSON knew that the sole source of funds for M.G.
NATURAL RESOURCES was from the sale of stock to investors. Moreover, the sole source of
JOHNSON’s salary was from the funds raised through the sale of stock in M.G. NATURAL RESOURCES.
Furthermore, the expenses of JOHNSON’s laboratory were paid for from the proceeds of the sale of stock
in M.G. NATURAL RESOURCES.
21. JOHNSON admitted to assisting in the drafting of the technical information contained in the
offering documents that were provided to investors. JOHNSON admitted that he knew the documents would
be provided to investors. In addition, JOHNSON reviewed and approved the technical information released
Docket No. S-03356A-01-0000
to the public through the web site and press releases regarding the success of his technology in finding
precious metals in scoria, volcanic cinders or other media.
22. Investors were not told that JOHNSON had been trying since 1980 to obtain precious metals
from volcanic cinders. JOHNSON claimed that he had been successful in extracting precious metals from
scoria, volcanic cinders or other media. However, JOHNSON failed to tell investors that his technology has
never been replicated in a commercially economical system.
23. No investor has received a return on his or her investment from any of the offerings that were
sold.
24. M.G. NATURAL RESOURCES issued press releases beginning on December 1, 1998, to
the present referencing JOHNSON’s technology and its ability to obtain precious metals from scoria, volcanic
cinders or other media. The technology would then be used to produce commercial quantities of precious
metals economically. For example, the February 16, 1999, press release stated that the Johnson/Lett
recovery process appears to be economical. The March 15, 1999, press release stated that Dr. Al Johnson
and his associates have proven irrefutably to M.G. management, that gold can be economically extracted from
cinders. The press releases issued on April 21, 1999, and May 10, 1999, stated that M.G. NATURAL
RESOURCES had successfully transformed itself into a profitable natural resource provider with the potential
to redefine the parameters of precious metals extraction.
25. On February 20, 2001, Xenolix, the successor company to M.G. NATURAL
RESOURCES, issued a press release stating that through the “proprietary nanotechnological processing
technology” patented by Xenolix and developed by JOHNSON, it was able to produce non-silver precious
metals from coal combustion products (“CCP”). The Division has been unable to confirm that non-silver
precious metals even exists in CCPs. In fact, the information the Division has obtained, indicates that if any
non-precious metals exist in CCPs it is unlikely to be the 10 – 14 Troy ounces per ton that is represented by
Xenolix. In Arizona, the main use of CCP is to make cement/concrete products.
26. M.G. NATURAL RESOURCES is not a registered securities dealer.
Docket No. S-03356A-01-0000
27. None of the above referenced offerings were registered at the Division or the Securities and
Exchange Commission.
IV.
VIOLATION OF A.R.S. § 44-1841
(Offer or Sale of Unregistered Securities)
28. From on or about 1997, Respondent M.G. NATURAL RESOURCES offered, sold or
purchase of securities in the form of stock, within or from Arizona.
29. The securities referred to above were not registered pursuant to the provisions of Articles 6 or
7 of the Securities Act.
30. This conduct violates A.R.S. § 44-1841.
V.
VIOLATION OF A.R.S. § 44-1842
(Transactions by Unregistered Dealers or Salesmen)
31. Respondent M.G. NATURAL RESOURCES offered or sold securities, within or from
Arizona, while not registered as a dealer or salesman pursuant to the provisions of Article 9 of the Securities
Act.
32. This conduct violates A.R.S. § 44-1842.
VI.
VIOLATION OF A.R.S. § 44-1991
(Fraud in Connection with the Offer or Sale of Securities)
33. In connection with the offer or sale of securities within or from Arizona, Respondent M.G.
NATURAL RESOURCES directly or indirectly: (i) employed a device, scheme or artifice to defraud; (ii)
made untrue statements of material fact or omitted to state material facts which were necessary in order to
make the statements made not misleading in light of the circumstances under which they were made; and (iii)
engaged in transactions, practices or courses of business which operated or would operate as a fraud or
deceit upon offerees and investors. In connection with the offer or sale of securities within or from Arizona,
Docket No. S-03356A-01-0000
Respondent JOHNSON indirectly: (i) employed a device, scheme or artifice to defraud; (ii) made untrue
statements of material fact or omitted to state material facts which were necessary in order to make the
statements made not misleading in light of the circumstances under which they were made; and (iii) engaged in
transactions, practices or courses of business which operated or would operate as a fraud or deceit upon
offerees and investors. RESPONDENTS' conduct includes, but is not limited to, the following:
a) In connection with the offerings of March, 1998, December, 1998 and November, 1999,
M.G. NATURAL RESOURCES failed to disclose that at the time the above referenced
offerings were made, there was a pending lawsuit for $250,000 filed against M.G.
NATURAL RESOURCES by a former insider.
b) In connection with the offers and sales of securities on April, 1997, March, 1998 and
December, 1998, M.G. NATURAL RESOURCES failed to provide adequate disclosure
information to the offerees and investors to allow them to make an informed investment
decision at the time investors invested.
c) In connection with the December 1998 offer and sale of securities, M.G. NATURAL
RESOURCES and JOHNSON failed to disclose to offerees and investors that the
technology upon which the company’s future depended had been in development for over 20
years by JOHNSON, director and vice president of Technology, Research and Development
of M.G. NATURAL RESOURCES, and that it had yet to prove commercially viable.
d) M.G. NATURAL RESOURCES issued press releases on a regular basis starting from about
the beginning of 1997 and continuing through at least July of 2000. Some of the press
releases misrepresented or otherwise gave the misleading impression that M.G. NATURAL
RESOURCES was close to economically producing precious metals from scoria, volcanic
cinders or other media. In fact, there was no basis for such representations and the company
has yet to produce precious metals in commercial quantities through an economically viable
process.
Docket No. S-03356A-01-0000
e) JOHNSON provided information that was contained in press releases beginning in December
of 1998 and continuing through at least July of 2000. Some of the press releases represented
or otherwise gave the impression that M.G. NATURAL RESOURCES was close to
economically producing precious metals from scoria, volcanic cinders or other media using the
technology developed by JOHNSON. In fact, there was no basis for such representations
and the company has yet to produce precious metals in commercial quantities through an
economically viable process.
34. This conduct violates A.R.S. § 44-1991.
VII.
REQUESTED RELIEF
The Division requests that the Commission grant the following relief against RESPONDENTS:
1. Order RESPONDENTS to permanently cease and desist from violating the Securities Act,
pursuant to A.R.S. § 44-2032;
2. Order RESPONDENTS to take affirmative action to correct the conditions resulting from
their acts, practices or transactions, including a requirement to make restitution pursuant to A.R.S. § 44-2032;
3. Order RESPONDENTS to pay the state of Arizona administrative penalties of up to five
thousand dollars ($5,000) for each violation of the Securities Act, pursuant to A.R.S. § 44-2036;
4. Order any other relief that the Commission deems appropriate.
. . .
. . .
. . .
VIII.
HEARING OPPORTUNITY
RESPONDENTS may request a hearing pursuant to A.R.S. § 44-1972 and A.A.C. R14-4-306. A
request must be in writing and received by the Commission within 10 business days after service of this Notice
of Opportunity for Hearing. Each RESPONDENT must deliver or mail the request to Docket Control,
Docket No. S-03356A-01-0000
Arizona Corporation Commission, 1200 W. Washington, Phoenix, Arizona 85007. A Docket Control cover
sheet must accompany the request. A cover sheet form and instructions may be obtained from Docket
Control by calling (602) 542-3477 or on the Commission's Internet web site at
www.cc.state.az.us/utility/forms/index.htm.
If a request for a hearing is timely made, the Commission shall schedule the hearing to begin 20 to 60
days from the receipt of the request unless otherwise provided by law, stipulated by the parties, or ordered by
the Commission. If a request for a hearing is not timely made, the Commission may, without a hearing, enter
an order against each RESPONDENT granting the relief requested by the Division in this Notice of
Opportunity for Hearing.
Persons with a disability may request a reasonable accommodation such as a sign language interpreter,
as well as request this document in an alternative format, by contacting Shelly M. Hood, ADA Coordinator,
voice phone number 602/542-3931, e -mail shood@cc.state.az.us. Requests should be made as early as
possible to allow time to arrange the accommodation.
Dated this _____ day of __________________, 2001.
___________________________________________ Mark Sendrow Director of Securities
I am positive that as the days roll on, there will be more HISTORICAL AND DOCUMENTED information provided, ALL of which is readily available on the internet for those who choose to do their own due diligence.
What transpired among the former employees and companies AND the current company (PERSHING RESOURCES COMPANY, INC.) does not define the current company's activities nor the actions of its current employees. The following information is readily available on the internet to all investors, current or potential and is provided for informational purposes only.
A little history to the company known as Pershing Resources Company, Inc.:
Prior to its name being Pershing Resources Company Inc., the company was known as XENOLIX TECHNOLOGIES, INC. and even this name had a brief interruption as Xenolix briefly became Franklin Lake Resources then returned to Xenolix:
FRANKLIN LAKE RESOURCES
Father Gregory Ofiesh
650 588-0425
Stock Symbol:
FKLR
Franklin Lake Resources Cancels Xenolix Transaction.
Aug. 18, 2003
Father Gregory Ofiesh, President and CEO of Franklin Lake Resources, Inc. (OTCBB:FKLR), announces the cancellation of the transaction in which it acquired specified assets of Xenolix Technologies. Father Ofiesh said, "After thorough testing in our own laboratory, in the Xenolix facility at Winslow, Arizona, and in the lab of Johnson and Associates in Phoenix, the company has concluded that no precious metals of any significance can be extracted from the raw materials tested using the Xenolix technology."
Offer of Compromise Rejected
Prior to taking this action, Franklin Lake had notified Xenolix of its final decision as to the ineffectiveness of the technology and made two offers in compromise: (1) Franklin Lake would make available the return of the materials and equipment to Xenolix, or (2) Franklin Lake would keep the materials and equipment in exchange for 300,000 shares of free trading Franklin Lake stock, upon the completion of the filing of the 10-K, after which, a registration statement for all the Franklin Lake shares will be immediately filed. A reply from Austin Lett, president of Xenolix, however, stated that "this unilateral action by Franklin Lake is not acceptable."
Thereafter, Father Ofiesh said the board of directors of the company had determined that its fiduciary obligation to the shareholders required it to take this action. Franklin Lake has demanded the return of the certificate for 1,201,657 restricted shares of stock and the two warrants given to Xenolix in the transaction. It has also sent its transfer agent a stop notice with respect to the transfer of the shares represented by the certificate and informed Xenolix that it will not honor the warrants.
Franklin Lake Continues to Use Its Own Process
Father Ofiesh concluded by saying that Franklin Lake is continuing to enhance its own process for bulk sampling. He and Roger Graham, the company's chief technician, recently met with officials of the Nevada Bureau of Mining Regulation and Reclamation. The company has retained Allstate-Nevada Environmental Management, Inc., of Las Vegas, to file all necessary permit applications, and to deal with governmental authorities.
Similar to the reliance on 'NEW PRECIOUS METALS EXTRACTION TECHNOLOGIES (e.g. Sonication) AN AMAZING OCCURENCE of a NEW TECHNLOGY also was suggested by Xenolix Technologies, unfortunately some things are not as they are represented to be:
NOTE: PORTIONS OF THE FOLLOWING DOCUMENT HAVE BEEN EDITED TO EXPEDITIE READING. FULL TEXT MAY BE LOCATED ON THE ARIZONA CORPORATION COMMISSION SITE BY ENTERING XENOLIX.
BEFORE THE ARIZONA CORPORATION COMMISSION
WILLIAM A. MUNDELL Chairman JIM IRVIN Commissioner MARC SPITZER Commissioner
In the matter of
M.G. NATURAL RESOURCES CORPORATION fka Mariah International, Guildmark Industries and M.G. Gold Corporation, currently known as Xenolix Technologies, Inc. 34 Maple St. Summit, NJ 07901
Respondents.
DOCKET NO. S-03356A-01-0000
NOTICE OF OPPORTUNITY FOR HEARING REGARDING PROPOSED ORDER TO CEASE AND DESIST, FOR ADMINISTRATIVE PENALTIES, AND FOR OTHER AFFIRMATIVE ACTION
NOTICE: RESPONDENTS HAVE 10 DAYS TO REQUEST A HEARING The Securities Division (“Division”) of the Arizona Corporation Commission (“Commission”) alleges
that Respondents have engaged in acts, practices and transactions, which constitute violations of the Securities
Act of Arizona, A.R.S. § 44-1801 et seq, (“Securities Act”).
I.
JURISDICTION
1. The Commission has jurisdiction over this matter pursuant to Article XV of the Arizona
Constitution, and the Securities Act.
II.
RESPONDENTS
2. M.G. NATURAL RESOURCES CORPORATION fka Mariah International, Guildmark
Industries and M.G. Gold Corporation cka Xenolix Technologies, Inc. (“M.G. NATURAL RESOURCES”),
Docket No. S-03356A-01-0000
FACTS
6. On May 15, 1997, Mariah International and Guildmark Industries merged with M.G. Gold
Corporation. M.G. Gold Corporation was the surviving corporation. M.G. Gold Corporation, through a
name change, became M.G. NATURAL RESOURCES on November 18, 1998. M.G. NATURAL
RESOURCES, through a name change, became Xenolix Technologies, Inc. on June 16, 2000 to the present.
7. Xenolix Technologies, Inc. assumed the assets and liabilities of M.G. NATURAL
RESOURCES when the name changed.
8. Initially, M.G. NATURAL RESOURCES claimed to be in the business of exploring and
developing mining property and natural resource opportunities. The focus of the business changed in about
December of 1999 to focus on developing technology for the economical extraction of precious metals.
Docket No. S-03356A-01-0000
9. M.G. NATURAL RESOURCES was traded on the OTC BB. M.G. NATURAL
RESOURCES became ineligible for quotation as of February of 2000. The stock is now traded on the pink
sheets.
10. RESPONDENTS are attempting to develop technology that would allow for the economical
identification and recovery of precious metals from scoria, volcanic cinders or other media. M.G.
NATURAL RESOURCES owns approximately 413 acres of land located near Flagstaff, Arizona. Situated
on this land is a volcanic cinder cone. In addition, M.G. NATURAL RESOURCES owns an ore processing
plant near Winslow, Arizona.
11. On or about April 1, 1997, M.G. NATURAL RESOURCES offered and sold stock in M.G.
NATURAL RESOURCES to 71 investors raising approximately $750,000. Little or no disclosures were
provided to the investors prior to their investment.
12. In about April of 1997, M.G. NATURAL RESOURCES offered rescission to the 71
investors in the April 1, 1997 offering. Approximately 18 investors requested a refund totaling approximately
$250,000. The remaining investors chose to keep their stock in M.G. NATURAL RESOURCES. The
investors were not provided a disclosure document explaining the reasons for the rescission.
13. On or about March 16, 1998, M.G. NATURAL RESOURCES offered one million shares of
stock in M.G. NATURAL RESOURCES to a number of offerees. No sales of the stock were made. No
offering documents were provided to the offerees. The offering was withdrawn when M.G. NATURAL
RESOURCES learned that the use to which the monies were to be applied (i.e. development of another mine
property) was no longer viable.
14. JOHNSON and Austin Lett are partners of Johnson Lett & Company (“Johnson/Lett”). In
about December of 1998, M.G. NATURAL RESOURCES and Johnson/Lett began negotiations for M.G.
NATURAL RESOURCES to purchase technology from Johnson/Lett. Johnson/Lett purported to have
technology, developed by JOHNSON, which would allow for the economical recovery of precious metals
from scoria, volcanic cinders or other media.
Docket No. S-03356A-01-0000
15. From the time that M.G. NATURAL RESOURCES and Johnson/Lett began to negotiate,
M.G. NATURAL RESOURCES has been utilizing JOHNSON’s technology.
16. On or about December 9, 1998, M.G. NATURAL RESOURCES offered and sold stock to
at least 42 investors. M.G. NATURAL RESOURCES raised $995,000 in this offering. Although the
offering documents represented that only accredited investors were allowed to invest, M.G. NATURAL
RESOURCES in fact sold stock to a number of unaccredited investors.
17. M.G. NATURAL RESOURCES acquired Johnson/Lett on or about May 10, 1999, for 13
million shares of M.G. NATURAL RESOURCES.
18. On or about November 11, 1999, M.G. NATURAL RESOURCES offered and sold stock
for $165,000 to approximately eight investors comprised exclusively of previous investors or individuals
represented by previous investors.
19. In the November, 1999 offering, the focus of the company changed from a mining company
to a technology company. M.G. NATURAL RESOURCES was promoted in this offering as a “high
technology” company engaged in the research and development of geological and chemical research. The
funds were to be used for the normal operating expenses of M.G. NATURAL RESOURCES’ contract
laboratory in Tempe. The laboratory is owned and operated by JOHNSON. In addition, the funds were to
be used for the operating costs and capital equipment purchases at the pilot plant.
20. Although JOHNSON did not speak directly with investors, JOHNSON admitted that he
benefited financially from the sale of stock. JOHNSON knew that the sole source of funds for M.G.
NATURAL RESOURCES was from the sale of stock to investors. Moreover, the sole source of
JOHNSON’s salary was from the funds raised through the sale of stock in M.G. NATURAL RESOURCES.
Furthermore, the expenses of JOHNSON’s laboratory were paid for from the proceeds of the sale of stock
in M.G. NATURAL RESOURCES.
21. JOHNSON admitted to assisting in the drafting of the technical information contained in the
offering documents that were provided to investors. JOHNSON admitted that he knew the documents would
be provided to investors. In addition, JOHNSON reviewed and approved the technical information released
Docket No. S-03356A-01-0000
to the public through the web site and press releases regarding the success of his technology in finding
precious metals in scoria, volcanic cinders or other media.
22. Investors were not told that JOHNSON had been trying since 1980 to obtain precious metals
from volcanic cinders. JOHNSON claimed that he had been successful in extracting precious metals from
scoria, volcanic cinders or other media. However, JOHNSON failed to tell investors that his technology has
never been replicated in a commercially economical system.
23. No investor has received a return on his or her investment from any of the offerings that were
sold.
24. M.G. NATURAL RESOURCES issued press releases beginning on December 1, 1998, to
the present referencing JOHNSON’s technology and its ability to obtain precious metals from scoria, volcanic
cinders or other media. The technology would then be used to produce commercial quantities of precious
metals economically. For example, the February 16, 1999, press release stated that the Johnson/Lett
recovery process appears to be economical. The March 15, 1999, press release stated that Dr. Al Johnson
and his associates have proven irrefutably to M.G. management, that gold can be economically extracted from
cinders. The press releases issued on April 21, 1999, and May 10, 1999, stated that M.G. NATURAL
RESOURCES had successfully transformed itself into a profitable natural resource provider with the potential
to redefine the parameters of precious metals extraction.
25. On February 20, 2001, Xenolix, the successor company to M.G. NATURAL
RESOURCES, issued a press release stating that through the “proprietary nanotechnological processing
technology” patented by Xenolix and developed by JOHNSON, it was able to produce non-silver precious
metals from coal combustion products (“CCP”). The Division has been unable to confirm that non-silver
precious metals even exists in CCPs. In fact, the information the Division has obtained, indicates that if any
non-precious metals exist in CCPs it is unlikely to be the 10 – 14 Troy ounces per ton that is represented by
Xenolix. In Arizona, the main use of CCP is to make cement/concrete products.
26. M.G. NATURAL RESOURCES is not a registered securities dealer.
Docket No. S-03356A-01-0000
27. None of the above referenced offerings were registered at the Division or the Securities and
Exchange Commission.
IV.
VIOLATION OF A.R.S. § 44-1841
(Offer or Sale of Unregistered Securities)
28. From on or about 1997, Respondent M.G. NATURAL RESOURCES offered, sold or
purchase of securities in the form of stock, within or from Arizona.
29. The securities referred to above were not registered pursuant to the provisions of Articles 6 or
7 of the Securities Act.
30. This conduct violates A.R.S. § 44-1841.
V.
VIOLATION OF A.R.S. § 44-1842
(Transactions by Unregistered Dealers or Salesmen)
31. Respondent M.G. NATURAL RESOURCES offered or sold securities, within or from
Arizona, while not registered as a dealer or salesman pursuant to the provisions of Article 9 of the Securities
Act.
32. This conduct violates A.R.S. § 44-1842.
VI.
VIOLATION OF A.R.S. § 44-1991
(Fraud in Connection with the Offer or Sale of Securities)
33. In connection with the offer or sale of securities within or from Arizona, Respondent M.G.
NATURAL RESOURCES directly or indirectly: (i) employed a device, scheme or artifice to defraud; (ii)
made untrue statements of material fact or omitted to state material facts which were necessary in order to
make the statements made not misleading in light of the circumstances under which they were made; and (iii)
engaged in transactions, practices or courses of business which operated or would operate as a fraud or
deceit upon offerees and investors. In connection with the offer or sale of securities within or from Arizona,
Docket No. S-03356A-01-0000
Respondent JOHNSON indirectly: (i) employed a device, scheme or artifice to defraud; (ii) made untrue
statements of material fact or omitted to state material facts which were necessary in order to make the
statements made not misleading in light of the circumstances under which they were made; and (iii) engaged in
transactions, practices or courses of business which operated or would operate as a fraud or deceit upon
offerees and investors. RESPONDENTS' conduct includes, but is not limited to, the following:
a) In connection with the offerings of March, 1998, December, 1998 and November, 1999,
M.G. NATURAL RESOURCES failed to disclose that at the time the above referenced
offerings were made, there was a pending lawsuit for $250,000 filed against M.G.
NATURAL RESOURCES by a former insider.
b) In connection with the offers and sales of securities on April, 1997, March, 1998 and
December, 1998, M.G. NATURAL RESOURCES failed to provide adequate disclosure
information to the offerees and investors to allow them to make an informed investment
decision at the time investors invested.
c) In connection with the December 1998 offer and sale of securities, M.G. NATURAL
RESOURCES and JOHNSON failed to disclose to offerees and investors that the
technology upon which the company’s future depended had been in development for over 20
years by JOHNSON, director and vice president of Technology, Research and Development
of M.G. NATURAL RESOURCES, and that it had yet to prove commercially viable.
d) M.G. NATURAL RESOURCES issued press releases on a regular basis starting from about
the beginning of 1997 and continuing through at least July of 2000. Some of the press
releases misrepresented or otherwise gave the misleading impression that M.G. NATURAL
RESOURCES was close to economically producing precious metals from scoria, volcanic
cinders or other media. In fact, there was no basis for such representations and the company
has yet to produce precious metals in commercial quantities through an economically viable
process.
Docket No. S-03356A-01-0000
e) JOHNSON provided information that was contained in press releases beginning in December
of 1998 and continuing through at least July of 2000. Some of the press releases represented
or otherwise gave the impression that M.G. NATURAL RESOURCES was close to
economically producing precious metals from scoria, volcanic cinders or other media using the
technology developed by JOHNSON. In fact, there was no basis for such representations
and the company has yet to produce precious metals in commercial quantities through an
economically viable process.
34. This conduct violates A.R.S. § 44-1991.
VII.
REQUESTED RELIEF
The Division requests that the Commission grant the following relief against RESPONDENTS:
1. Order RESPONDENTS to permanently cease and desist from violating the Securities Act,
pursuant to A.R.S. § 44-2032;
2. Order RESPONDENTS to take affirmative action to correct the conditions resulting from
their acts, practices or transactions, including a requirement to make restitution pursuant to A.R.S. § 44-2032;
3. Order RESPONDENTS to pay the state of Arizona administrative penalties of up to five
thousand dollars ($5,000) for each violation of the Securities Act, pursuant to A.R.S. § 44-2036;
4. Order any other relief that the Commission deems appropriate.
. . .
. . .
. . .
VIII.
HEARING OPPORTUNITY
RESPONDENTS may request a hearing pursuant to A.R.S. § 44-1972 and A.A.C. R14-4-306. A
request must be in writing and received by the Commission within 10 business days after service of this Notice
of Opportunity for Hearing. Each RESPONDENT must deliver or mail the request to Docket Control,
Docket No. S-03356A-01-0000
Arizona Corporation Commission, 1200 W. Washington, Phoenix, Arizona 85007. A Docket Control cover
sheet must accompany the request. A cover sheet form and instructions may be obtained from Docket
Control by calling (602) 542-3477 or on the Commission's Internet web site at
www.cc.state.az.us/utility/forms/index.htm.
If a request for a hearing is timely made, the Commission shall schedule the hearing to begin 20 to 60
days from the receipt of the request unless otherwise provided by law, stipulated by the parties, or ordered by
the Commission. If a request for a hearing is not timely made, the Commission may, without a hearing, enter
an order against each RESPONDENT granting the relief requested by the Division in this Notice of
Opportunity for Hearing.
Persons with a disability may request a reasonable accommodation such as a sign language interpreter,
as well as request this document in an alternative format, by contacting Shelly M. Hood, ADA Coordinator,
voice phone number 602/542-3931, e -mail shood@cc.state.az.us. Requests should be made as early as
possible to allow time to arrange the accommodation.
Dated this _____ day of __________________, 2001.
___________________________________________ Mark Sendrow Director of Securities
I am positive that as the days roll on, there will be more HISTORICAL AND DOCUMENTED information provided, ALL of which is readily available on the internet for those who choose to do their own due diligence.
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