FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 31, 1999.
Commission file number
NAMIBIAN COPPER MINES, INC.
DELAWARE 86-0800964
- -------- ----------
(State or other jurisidiction of (I.R.S. Employer
incorporation or organization) Identification number)
C/O BLUME LAW FIRM , PC
- ------------------------
11811 TATUM BLVD, STE 1025
- --------------------------
PHOENIX, AZ 85028
- ----------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602-494-7976
------------
Securities registered pursuant to Section 12 (b) of the Act.
Title of each class Name of each exchange
which registered
NONE
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if the disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this form 10-K [X]
Based on the closing sales price of $0.10 the aggregate sales market value of
the voting and nonvoting common equity held by nonaffiliates of the registrant
was $ 109,439.50 .
The number of shares outstanding of the registrant's common stock, $0.001 par
value was 10,943,950 as of December 31, 1999.
1
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Location in Form 10-K Incorporated Document
NAMIBIAN COPPER MINES, INC.
Table of Contents
Page No.
--------
Part I.
Item 1. Business 3
Item 2. Properties 4
Item 3 Legal Procedings 4
Item 4 Submission of Matters to a Vote of Security Holders 4
Part II
Item 5 Market for Registrant's Common Equity and Related
Shareholder Matters 4
Item 6 Selected Financial Data 5
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Item 8 Financial Statements and Supplementary Data 6
Item 9 Changes in and Disagreements with Accountants
On Accounting and Financial Disclosure 6
Part III
Item 10 Directors and Executive Officers of the Registrant 6
Item 11 Executive Compensation 6
Item 12 Security Ownership of Certain Beneficial Owners
And Management 6
Item 13 Certain Relationships and Related Transactions 6
Part IV
Item 14 Exhibits, Financial Statement Schedules, and Reports
On Form 8-K 7
2
<PAGE>
PART I
Item 1. Business
- ----------------
Namibian Copper Mines, Inc., (the "Company", "Namibian") was
incorporated in the state of Delaware on October 20, 1989, under the name of
Condon Corporation. On December 15, 1989, the Company merged with Cordon
Corporation, a Nevada Corporation, with the Delaware entity being the surviving
corporation. The Company filed for bankruptcy under Chapter 11 and on April 19,
1994, the U.S. Bankruptcy Court, Northern District of Texas, issued an order
closing and finalizing the bankruptcy proceedings. Under the terms of the
bankruptcy, the Company was forced to liquidate all of its assets. The proceeds
were then distributed among the creditors, thereby satisfying all of the
Company's outstanding debts. The Company halted operations and ceased to do
business at the conclusion of the bankruptcy proceedings. The Company utilized a
"fresh-start" accounting method in its re-organization.
On July 14, 1995, the Company effected a reverse split of its $0.001
par value common stock at a ratio of one new share for every fifty old shares.
This reduced the total number of shares issued and outstanding to 152,207. At
this time, Alan Doyle, Peter Prentice, and Willo Stear were appointed to the
Board of Directors and Paul Adams and Dave Wilson resigned as officers and
directors of the Company.
At a Special Shareholders' Meeting held on July 28, 1995, the
Shareholders ratified a name change of the Company to Namibian Copper Mines,
Inc.
A total of 2,000,000 post-split shares and 1,000,000 warrants
exercisable at US $5.00 on or before August 31, 1998, were issued to investors
outside of the U.S. in reliance upon Regulation S in order to fund the earning
of up to 70% of the Haib Copper Project, a copper mine located in the country of
Namibia. An offering was commenced on August 21, 1995, in reliance upon
Regulation S of the Securities Act of 1933, as amended, offering 3,000,000
shares of the Company's common to raise additional funds for the purchase of the
Haib Copper Project. A supplementary offering, also under Regulation S, was made
at $3.50 per share plus one warrant for every three shares purchased. These
warrants were exercisable at $3.50. All sales of the offering and supplement
were to non-US residents in non-U.S. transactions. Of these shares offered,
1,325,000 were sold.
Will Stear resigned from the Board of Directors on December 15, 1995,
and Peter Prentice resigned from the Company's Board of Directors in 1997.
Billie J. Allred was then appointed to the Board. At this time, the Board was
reduced to two members, Alan Doyle and Billie J. Allred.
In 1997, the Company failed to meet its commitment to fund its right to
earn a seventy (70%) interest in the Haib Copper Project. As a result, the joint
venture partner, Great Fitzroy Mines, N.L., gave notice to forfeit part of the
interest in the project and the Company's interest was reduced to forty-five
percent (45%).
In 1998, the Company received a further notice of forfeiture from Great
Fitzroy Mines, N.L., due to its inability to meet its additional commitments.
The Company lost its interest in the project at that time.
3
<PAGE>
In April 1999, the Company commenced discussions with two Cypress firms
regarding acquiring their rights to various interests and agreements with a
Russian government corporation involved with diamond cutting and marketing. The
Company proposed to enter into identical agreements with two entities formed in
and operating out of Cyprus. These entities were Mosquito Mining Limited
("Mosquito") and Select Mining Limited ("Select"). Both entities are controlled
by the same parties.
The agreements were options to purchase rights to strategic interests
and agrements developed by Mosquito and Select with the Russian governmental
company JVSC Alrosazoloto Co. Ltd. Each set of interests and agreements was to
be purchased in exchange for US $3,250,000 or, at the option of each of Mosquito
and Select, common shares in the Company. The Company was to be able to exercise
its right to the interests and agreements at any time within 120 days of signing
each agreement at its discretion if certain conditions were met.
After a further period of due diligence, the company decided not to
proceed with the transaction as had been presented at the annual meeting.
Item 2: Properties
- -------------------
No licenses or patents are required for the Company, nor does the
Company hold any patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts.
The Company had offices in Namibia, Australia, and Mesa, Arizona. These
offices closed when the Company became inactive in 1997. The Company currently
operates out of the offices of Blume Law Firm, PC, in Phoenix, Arizona.
The Company does not own any investments or interests in real property.
There are no plans in place for the Company to make any investments.
Item 3: Legal Proceedings
- --------------------------
The Company has had no legal proceedings during the past three years.
Item 4: Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
A shareholder's meeting was held on August 2, 1999. At this meeting,
the shareholders approved the proposed agreements. Members authorized a
corporate name change, and a 8:1 rollback of the Company's common stock subject
to a 120 due diligence period.
No other matters were submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report.
PART II
Item 5: Market for Registrant's Common Equity and Related Stockholder Matters.
- ------------------------------------------------------------------------------
Namibian Copper Mines, Inc., common stock, $0.001 par value, is traded on
the
4
<PAGE>
OTC Bulletin Board under the symbol NCMI and the following have been the High
and Low prices for the times indicated:
<TABLE>
<CAPTION>
DATE HIGH LOW
- ---- ---- ---
<S> <C> <C>
October-December 1999 $0.150 $0.080
July-September1999 $0.300 $0.130
April-June 1999 $0.562 $0.040
January-March 1999 $0.093 $0.030
October-December 1998 $0.093 $0.025
July-September1998 $0.218 $0.093
April-June 1998 $0.312 $0.125
January-March 1998 $0.312 $0.187
October-December 1997 $0.500 $0.125
July-September1997 $0.437 $0.187
April-June 1997 $2.125 $0.875
January-March 1997 $3.00 $1.125
</TABLE>
As of September 30, 1999, there were 230 registered shareholders of the
Company holding a total of 10,943,950 shares of common stock. There were no
dividend restrictions on the Company. Market makers who have posted bids or
offers during the period were as follows: Herzog, Heine, Geduld, Inc., Paragon
Capital Corporation, Hill Thompson Magid & Co. Inc., Wm. V. Frankel & Co.,
Incorporated, Knight Securities, Inc., Sharpe Capital, Inc., North American
Institutional Brokers, and Wien Securities Corp.
There have been no cash dividends declared on the Company's common
stock for the past three years.
Item 6: Selected Financial Data
- --------------------------------
None. See financial statements included as part of this filing.
Item 7: Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
-------------
Plan of Operation
- -----------------
The Company has not had any revenues from operations in the last three
fiscal years. The Company has no expenses and does not pay its officers or
directors. Monies for legal and accounting expenses are advanced to the Company
by Doyle Capital Partners.
The Company has enough funds to satisfy its cash requirements until
January 1, 2000. The Company will need to raise additional funds in the next
twelve months. The amount required will depend upon the business venture. The
cash requirements are being met on an on-going basis, as needed, by Doyle
Capital Partners.
The Company does not expect to expend any time or money to research or
develop any products. The Company does not expect to purchase equipment during
the next twelve months. Additional employees will be hired as required to meet
the demand based on the business venture. The Company intends to move forward
with some type of business combination not yet identified.
5
<PAGE>
Item 8: Financial Statements and Supplemental Data
- ---------------------------------------------------
The financial statements and financial statement schedules are
incorporated by reference in this report on pages F-1 through F-12.
Item 9: Changes in and Disagreements with Accountants on Accounting on
- -----------------------------------------------------------------------
Accounting and Financial Disclosures
------------------------------------
None
Part III
Item 10: Directors and Executive Officers of the Registrant
- ------------------------------------------------------------
Alan Doyle is the sole officer and director of the Company.
Item 11: Executive Compensation
- --------------------------------
No officer or director receives any compensation.
Item 12: Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name of Amount of Beneficial Percent
Beneficial Owner Ownership Of Class
- ---------------- --------- --------
<S> <C> <C>
Alan Doyle, Director 548,000 shares 5%
Banque Privee Edmond de Rothschild* 972,990 shares 8%
Cede & Co. * 1,754,044 shares 16%
United African Investments, LTD 651,000 shares 5%
VMR Limited 1,000,000 shares 9%
Springbrook Investments LTD. 2,000,000 shares 18%
</TABLE>
*indicates nominee holding shares on behalf of clients who may or may not be
individual beneficial owners.
Item 13: Certain Relationships and Related Transactions
- --------------------------------------------------------
None
6
<PAGE>
Item 14: Exhibits, Financial Statement Schedules and Reports on Form 8-K.
- --------------------------------------------------------------------------
(a) (1) Financial Statements: Page
Report of Independent Public Accountants F-1
Balance Sheets as of December 31, 1999, 1998, and 1997 F-2
Statement of Operations for the Years ended
December 31, 1999, 1998, and 1997 F-4
Statements of Stockholders' Equity for the years ended
December 31, 1999, 1998, and 1997 F-5
Statement of Cash Flows for the years ended
December 31, 1999, 1998, and 1997 F-7
Notes to Financial Statements F-8
(a) (2) Exhibits
The following exhibits are referenced in this report:
Articles of Incorporation
By-Laws
(b) Reports on 8-K
The Company has not filed any reports on Form 8-K during the previous
fiscal year.
SIGNATURES
Pursuant to the requirements of Sections 13 or 15 (d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NAMIBIAN COPPER MINES, INC.
/s/ Alan Doyle
--------------
By Alan Doyle, Chairman &
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in capacities and on the dates indicated.
Signature Title Date
/s/ Alan Doyle Chairman and CEO March 17, 2000
- --------------
7
<PAGE>
ASHWORTH, FRANCIS, MITCHELL, BRAZELTON, PLLC
4225 N. BROWN AVE.
SCOTTSDALE, AZ 85251
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
Board of Directors
Namibian Copper Mines, Inc.
We have audited the accompanying balance sheet of Namibian Copper Mines, Inc.,
as of December 31, 1999, 1998,and December 31, 1997, and the related statements
of income, retained earnings, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also included
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Namibian Copper Mines, Inc., as
of December 31, 1999, 1998, and December 31, 1997, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
As discussed in Note C of the financial statements this company is still in its
development stage, and the statements are prepared based upon the assumption
that the company will continue as a going concern. The company is still in the
exploration/feasibility stage of its development and is not yet generating
revenue, and as shown in the financial statements, has incurred losses in its
development stage. The financial statements do not include any adjustments
relating to the outcome of this situation.
Scottsdale, Arizona
March 13, 2000
F-1
<PAGE>
NAMIBIAN COPPER MINES, INC.
(A Development Stage
Company)
BALANCE SHEET
December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
ASSETS
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 212 $ 328 $ 328
DEFERRED MINERAL EXPLORATION COSTS
PROPERTY AND EQUIPMENT (AT COST)
Mining properties (Haib Project) 1,588,799
Roads
Machinery and equipment 31,014 31,014
Furniture, fixtures and office equipment 16,788 129,311
----- ------ -------
Total property and equipment 47,802 1,749,124
Less accumulated depreciation (28,050) (52,494)
------- -------
Net property and equipment 19,752 1,696,630
OTHER ASSETS
Organization Costs, net 14,000 38,000 62,000
Deposits and other assets
------ ------ ------
Net other assets 14,000 38,000 62,000
------ ------ ------
Total Assets $ 14,212 $ 58,080 $ 1,758,958
========= ========= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
NAMIBIAN COPPER MINES, INC.
(A Development Stage Company)
BALANCE SHEET
December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
LIABILITIES
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
CURRENT LIABILITIES
Accounts Payable $ 73,060 $ $
Notes Payable 469,970
Interest Payable
Total Current Liabilities 73,060 - 469,970
STOCKHOLDER'S EQUITY
Common stock-authorized, 100,000,000 shares at
$.001 par value; issued and outstanding,
10,643,950 shares in 1999, 9,263,950 in
1998, and 8,190,960 shares in 1997 10,944 9,264 8,191
Paid in Capital 11,329,802 11,243,482 10,774,586
Common stock subscribed - 1,085,000 shares
in 1996
Deficit accumulated during the
development stage (11,399,594) (11,194,666) (9,493,789)
Total Stockholder's Equity (58,848) 58,080 1,288,988
Total liabilities and stockholder's equity $ 14,212 $ 58,080 $ 1,758,958
============ ============ ============
</TABLE>
F-3
<PAGE>
NAMIBIAN COPPER MINES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Period from
Cumulative July 28, 1995
during Year ended Year ended through
development December 31, December 31, December 31,
stage 1999 1998 1997
----- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue
Miscellaneous Income $ 76,794 $ - $ - $ 76,794
Expenses
General and Administrative 3,618,453 161,176 79,109 3,378,168
Organizational Costs 106,000 24,000 24,000 58,000
Depreciation 61,465 8,969 52,496
------ ------ ----- ------
Total expenses 3,785,918 185,176 112,078 3,488,664
Loss from development stage operations (3,709,124) (185,176) (112,078) (3,411,870)
Interest Income 7,144 7,144
----- -------- -------- -----
Net operating (loss) (3,701,980) (185,176) (112,078) (3,404,726)
Extraordinary income (expenses)
Restatement of prior year expenses
resulting from write-off of
liabilities on the Hiab Project 266,135 266,135
Write-down of Hiab mining
properties, net (3,477,840) (1,588,799) (1,889,041)
Loss of Disposal of Equipment (19,753) (19,753)
Write-off of exploration and development
costs on the Hiab Project (4,466,157) (4,466,157)
---------- ----------
Net (loss) $ (11,399,595) $ (204,929) $ (1,700,877) $ (9,493,789)
============= ============= ============= =============
Net (loss) per share $ (1.21) $ (0.02) $ (0.19) $ (1.16)
============= ============= ============= =============
Weighted average shares 9,443,508 10,103,950 9,085,118 6,194,988
========= ========== ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
NAMIBIAN COPPER MINES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDER'S EQUITY
December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional Common During The
Common Stock Paid-in Stock Development
Shares Amount Capital Subscribed Stage Total
------ ------ ------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance at July 28, 1995 30,367 $ 30 $ $ $ $ 30
Shares issued at $.015 for
services rendered 2,000,000 2,000 74,202 76,202
Shares issued at $0.15 for cash 2,967,493 2,967 441,747 444,714
Shares subscribed -
145,000 shares @ $3.50 507,500 507,500
Net Loss (879,868) (879,868)
--------- -------- ------------ -------- ---------- ----------
Balance at December 31, 1995 4,997,860 $ 4,997 $ 515,949 $ 507,500 $ (879,868) $ 148,578
Issuance of subscribed shares 145,000 145 507,355 (507,500)
Shares issued for cash
604,900 shares @ $3.50 604,900 605 2,116,545 2,117,150
490,200 shares @ $5.00 490,200 491 2,450,509 2,451,000
Shares subscribed at $3.50
For cash - 85,000 shares 297,500 297,500
For mining properties
1,000,000 shares 3,500,000 3,500,000
Net Loss (2,327,161) (2,327,161)
--------- -------- ------------ -------- ---------- ----------
Balance at December 31, 1996 6,237,960 $ 6,238 $ 5,590,358 $ 3,797,500 $ (3,207,029) $ 6,187,067
Issuance of subscribed shares 1,085,000 1,085 3,796,415 (3,797,500)
Shares issued for cash
370,000 shares at $2.50 370,000 370 924,630 925,000
Shares issued for services
498,000 shares at $.93 498,000 498 463,183 463,681
Net (loss) (6,286,760) (6,286,760)
--------- -------- ------------ -------- ---------- ----------
Balance at December 31, 1997 8,190,960 $ 8,191 $ 10,774,586 $ - $ (9,493,789) $ 1,288,988
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
NAMIBIAN COPPER MINES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDER'S EQUITY (CON'T)
December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional Common During The
Common Stock Paid-in Stock Development
Shares Amount Capital Subscribed Stage Total
------ ------ ------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 8,190,960 $ 8,191 $ 10,774,586 $ - $ (9,493,789) $ 1,288,988
Issuance of shares for
conversion of debt at $.44 1,072,990 1,073 468,897 469,970
Net (loss) (1,700,877) (1,700,877)
--------- -------- ------------ -------- ---------- ----------
Balance at December 31, 1998 9,263,950 $ 9,264 $ 11,243,483 - $(11,194,666) $ 58,081
Shares issued for cash
900,000 at $.02 900,000 900 17,100 18,000
Shares issued for services
100,000 shares at $.02 100,000 100 1,900 2,000
Shares issued for cash
680,000 shares at $.10 680,000 680 67,320 68,000
Net Loss (146,604) (146,604)
--------- -------- ------------ -------- ---------- ----------
Balance at December 31, 1999 10,943,950 10,944 11,329,803 - (11,194,666) (523)
========== ====== ========== =========== ====
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
NAMIBIAN COPPER MINES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
December 31, 1998 and 1997
<TABLE>
<CAPTION>
Period from
Cumulative July 28, 1995
during Year ended Year ended through
development December 31, December 31, December 31,
stage 1999 1998 1997
----- ---- ---- ----
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net (loss) $ (11,194,664) $ (204,929) $ (1,700,877) $ (9,493,787)
Adjustments to reconcile net loss to
net used in operating activities:
Depreciation 136,004 8,969 127,035
Decrease in accounts receivable 2,422 2,422
Amortization of organizational costs 82,000 24,000 24,000 58,000
Loss or (gain) on Asset Sales (19,753)
Decrease (increase) in deposits and (760) (760)
other assets
Increase (decrease) in accounts (915,911) 73,538 (915,911)
payable
Increase (decrease) in notes payable (1,696,722) (469,970) (1,226,752)
Increase (decrease) in interest
payable 7,113 7,113
--------- ------ --------- ---------
Net cash (used) by operating activities (13,580,518) (127,144) (2,137,878) (11,442,640)
Cash flows from investing activities
Write-off of exploration costs 4,466,157 4,466,157
Write-off of machinery & office eqpt 28,049
Purchase of property and equipment (931,920) 79,109 (1,011,029)
Expenditures on mineral exploration (3,283,917) (3,283,917)
costs
Write down of mining properties 5,654,010 1,588,799 4,065,211
--------- ------ --------- ---------
Net cash (used) by investing activities 5,904,330 28,049 1,667,908 4,236,422
--------- ------ --------- ---------
Cash flows from financing activities
Sales of common stock 6,871,516 98,980 469,970 6,401,546
Common stock subscriptions received 805,000 805,000
Net cash provided by financing activities 7,676,516 98,980 469,970 7,206,546
--- --- --- ---
Net increase (decrease) in cash 328 (116) - 328
Cash at the beginning of period 328 328
--- --- --- ---
Cash at end of period $ 212 212 $ 328 328
============= === ============ ===
</TABLE>
The accompanying notes are an integral part of these financial statements
F-7
<PAGE>
NAMIBIAN COPPER MINES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
Namibian Copper Mines, Inc. (the "Company") is a mineral exploration and
development company whose sole purpose is to explore and develop the Haib Copper
Project in Namibia, Africa.
The Company was incorporated in the state of Delaware on October 20, 1989, under
the name of Cordon Corporation and subsequently changed its name to Ameriserv
Financial Corporation ("Ameriserv"). On April 19, 1994, bankruptcy proceedings
for Ameriserv were finalized in the US Bankruptcy Court, Northern District of
Texas. Under the terms of the reorganization plan, Ameriserv was forced to
liquidate all of its assets and the proceeds were distributed amount the
creditors, thereby satisfying all of Ameriserv's outstanding debts. Ameriserv
ceased operations at the conclusion of the bankruptcy proceedings.
At a special shareholders meeting held on July 28, 1995, shareholders ratified
the name change of the company from Ameriserv to Namibian Copper Mines, Inc. The
shareholders also approved the Company entering into a Farm-In Agreement with
Great Fitzroy Mines NL of Australia. In order to earn a 70% equity in the Haib
Agreements the Company undertook a reverse split on the basis of 50:1, which
reduced the shares held by the pre- bankruptcy shareholders to 30,367.
In July 1995, a private placement of the Company's common stock was undertaken
in order to fund preliminary work on the Haib Copper Project, provide working
capital to the Company, and to enable the company to undertake more substantial
capital raising in the future. Seed capital was raised which resulted in
2,967,493 fully paid shares being issued. As compensation for services rendered
in conjunction with the private placement, the Company issued 1,502,000 shares
to two entities; such shares were recorded at their par value.
The Company issued Peter Prentice and Alan Doyle, directors of the Company,
249,000 fully paid shares each as compensation for services rendered; such
shares were recorded at the private placement price of $0.15 per share, with a
corresponding charge to expenses.
The Company is party to an agreement (the "Swanson Agreement") to acquire the
mining claims owned by Mr. Swanson's company, Haib Copper Co. (Pty) Limited. The
total purchase consideration is $3,780,000 subject to CPI indexation.
Installments totaling
$427,000 has been paid to Mr. Swanson. The Swanson Agreement entitled the
Company to explore the claims and carry out mining to obtain bulk samples. When
the Company defaulted on their Farm-in Agreement, their interests in the Swanson
Agreement transferred to Great Fitzroy Mines, their joint-venture partner.
F-8
<PAGE>
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Accounting Method
---------------------
The Company's financial statements are prepared using United States
generally accepted accounting principles with a fiscal year ending
December 31.
2. Deferred Mineral Exploration Costs and Mineral Properties
-------------------------------------------------------------
Costs of acquisition and development relating to the Haib Project are
capitalized on an area of interest basis.
3. Depreciation
----------------
Depreciation is computed on a straight-line basis over an estimated
service life of five years.
4. Income Taxes
----------------
The Company has a net operating loss of approximately $11,000,000,
which may be carried forward to reduce taxable income in future years
through 2011. Because of the loss, no current provision for income
taxes has been recorded for the year ended December 31, 1998.
5. Foreign Currency Transactions
---------------------------------
Monetary assets and liabilities in foreign exchange currencies have
been translated into United States dollars at the exchange rates
prevailing at the balance sheet date. Other assets and liabilities,
revenue and expenses arising from foreign currency transactions have
been translated at the exchange rate prevailing at the date of the
transaction. Gains and losses arising from these translation policies
are included in income.
6. Use of Estimates
--------------------
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions
F-9
<PAGE>
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
7. Estimated Fair Value Information
------------------------------------
Statement of Financial Accounting Standards ("SFAS") No. 107,
"Disclosure about Fair Value of Financial Instruments" requires
disclosure of the estimated fair value of an entity's financial
instrument assets and liabilities, as defined, regardless of whether
recognized in the financial statements of the reporting entity. The
fair value information does not purport to represent the aggregate net
fair value of the Company.
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is
practicable to estimate that value:
Cash
----
The carrying value amount approximates fair value.
Notes Payable
-------------
Fair value can not be determined due to the Company's lack of credit
history.
NOTE C- DEVELOPMENT STAGE AND GOING CONCERN
Since July 28, 1995, the Company has been in the development stage and
its principal activities have consisted of raising capital, obtaining
property or exploration rights and conducting exploratory operations in
anticipation of completing a feasibility study on the Haib Copper
Project.
The accompanying financial statements have been prepared on the basis
of a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. The
Company is not yet generating revenue from mining operations and, at
December 31, 1997, has accumulated a deficit from its operating
activities and has incurred substantial obligations. Continuation of
the Company as a going concern is dependent upon, among other
F-10
<PAGE>
NOTE C - DEVELOPMENT STAGE AND GOING CONCERN - CONTINUED
things, obtaining additional capital, and achieving satisfactory levels
of profitable operations. The financial statements include adjustments
resulting from the default on the Farm-In Agreement with Great Fitzroy
Mines NL and the write-down of assets relating to the Haib Project. It
is unlikely the Company will continue in the mining industry.
In April 1999, the Company commenced discussions with two Cypress firms
regarding acquiring their rights to various interests and agreements
with a Russian government corporation involved with diamond cutting and
marketing. The Company proposed to enter into identical agreements with
two entities formed in and operating out of the island nation of
Cyprus. These entities were Mosquito Mining Limited ("Mosquito") and
Select Mining Limited ("Select"). Both entities are controlled by the
same parties.
The agreements were options to purchase rights to strategic interests
and agreements developed by Mosquito and Select with the Russian
governmental company JVSC Alrosazoloto Co. Ltd. Each set of interests
and agreements was to be purchased in exchange for US $3,250,000 or, at
the option of each of Mosquito and Select, common shares in the
Company. The Company was to be able to exercise its right to the
interests and agreements at any time within 120 days of signing each
agreement at its discretion if certain conditions were met.
A shareholder's meeting was held on August 2, 1999. At this meeting,
the shareholders approved the proposed agreements. Members authorized a
corporate name change, and an 8:1 rollback of the Company's common
stock subject to a 120 due diligence period.
After a further period of due diligence, the company decided not to
proceed with the transaction as had been presented at the annual
meeting.
NOTE D - DEFAULT ON FARM-IN AGREEMENT
During 1997, the Company was unable to raise sufficient funds for the
continued development of the Haib Project. As a result, the Company has
defaulted on its Farm-In Agreement with Great Fitzroy Mines NL to earn
an 80% interest in the Haib project. At December 31, 1997, the
following adjustments and write-downs were made to reduce assets to
their expected net realizable value.
Deferred Mineral Exploration costs in the amount of $4,887,852 were
written off.
F-11
<PAGE>
NOTE D - DEFAULT ON FARM-IN AGREEMENT CONTINUED
In 1997, total capitalized costs of the Haib mining property in the
amount of $5,740,262 were reduced by $4,151,463 to $1,588,799
representing a 20% interest in the Haib project.
Liabilities in the amount of $2,684,118 relating to the Haib project
have been written off.
Prior year expenses resulting from the write-off liabilities in the
amount of $266,136 have been restated (reduced).
Effective December 31, 1998, additional write-offs of $1,588,788 were
made resulting in the Company owning no residual interest in the Haib
Project.
In 1999, the Company determined that it needed to write off all its
remaining fixed assets, as they we no longer owned by the Company. All
machinery and office equipment were removed from the balance sheet and
the loss on the disposition of these assets were noted. Expenses were
recorded for the purpose of getting the Company ready to re-register
its stock on the NASD Bulletin Board. The Company has successfully
completed the filing of its financial information with the SEC.
Accordingly, the Company is in compliance with the new NASD OTC
Bulletin Board eligibility rules for continued quotation as a fully
reporting company.
NOTE E - WARRANTS
At December 31, 1999, the Company had no outstanding warrants to be
redeemed.
F-12
<PAGE>
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<PERIOD-END> DEC-31-1999
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<RECEIVABLES> 0
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