<PAGE> 1
FORM 10-KSB
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, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission file number 333-03074
TURTLEBACK MOUNTAIN GOLD CO., INC.
(Exact name of registrant as specified in its charter)
Arizona 86-0790266
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
528 Fon du Lac Drive
East Peoria, Illinois 61611
(Address of principal executive offices, including zip code.)
(309) 699-8725
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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.
(1) YES [ ] NO [ X ] (2) YES [ X ] NO [ ]
Check if no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is contained herein, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year. December 31,
1996 - $180.
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State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was
sold, or the average bid and ask prices of such stock, as of a
specified date within the past 60 days. May 31, 1997 - $ -0-. There
are approximately 116,164,545 shares of common voting stock of the
Registrant held by non-affiliates. During the past five years, there
has been no "public market" for the shares of Common Stock of the
Registrant, so the Registrant has arbitrarily valued these shares on
the basis of par value per share or $1,161.65.
Issuers involved in Bankruptcy Proceedings during the past Five Years.
Not Applicable.
State the number of shares outstanding of each of the Issuer's classes
of common equity, as of the latest practicable date:
June 12, 1997 - 898,000,000 shares of Common Stock
Documents Incorporated by Reference
1. Form S-1 Registration Statement and all amendments thereto, which
was declared effective by the Securities and Exchange Commission
on August 16, 1996 and all exhibits thereto.
2. Form 10-Q for the period ending September 31, 1996 and any
amendments thereto.
Transitional Small Business Issuer Format
YES [ x ] NO [ ]
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TABLE OF CONTENTS
Item 1. Description of Business
Item 2. Description of Property
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Market for Common Equity and Related Stockholder Matters
Item 6. Management's Discussion and Analysis or Plan of Operation
Item 7. Financial Statements
Item 8. Changes in and Disagreements with Accounting
and Financial Disclosure
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
Of the Exchange Act
Item 10. Executive Compensation
Item 11. Security Ownership of Certain Beneficial
Owners and Management
Item 12. Certain Relationships and Related Transactions
Item 13. Exhibits and Reports on Form 8-K
<PAGE> 4
PART I
ITEM 1. BUSINESS.
Background.
Turtleback Mountain Gold Co., Inc. (the "Company") was formed on
March 22, 1995, to engage in the business of identification,
acquisition, exploration and, if warranted, development of mineral
properties and the production of minerals therefrom. The
mineralization of main exploratory interest is gold. No reserves have
been delineated on the property, and to date the Company has not
identified a commercially minable ore body.
The Company currently owns the right to 136 claims. Eight claims
were transferred to the Company on June 30, 1995 in exchange for
310,000,000 "restricted" shares of Common Stock. The Company believes
that these claims may contain valuable ore deposits, however, there is
no assurance that they in fact do.
The Company issued 400,000,000 Units for 128 claims on November
16, 1996. Each Unit consisted of one share of Common Stock; one
warrant to purchase one share of Common Stock at an exercised price of
$0.01 per warrant ("Class A Warrants"); and, one warrant to purchase
one share of Common Stock at an exercise price of $0.02 per warrant
("Class B Warrants"). The Warrants may be redeemed by the Company at
any time upon thirty (30) days written notice to the holders thereof at
redemption price of $0.00001 per warrant. The Warrants are exercisable
up to August 16, 2001 (five years from the effective date) unless
called sooner. The number of shares issued was based on the amount of
acreage owned by a claimant. The Company issued approximately 22,422
Units for each acre it acquired. The foregoing number of Units was
arbitrarily determined by the Company and bore no relationship to the
value of the claims. The four Red Raven II claims purchased from Maxam
Gold Corporation have a royalty fee clause attached to them. The
royalty fee is five percent (5%) of the net income from operations on
the claims or $50,000.00 annually (which ever is greater) starting July
1, 1997.
The Company's management believes that exploration is warranted on
eight claims currently owned by the Company as indicated by current
geology reports. Management's belief is predicated upon the report
dated October 1986 prepared by William T. Marsten, P.E., deceased,
which indicates that there are economically recoverable quantities of
gold in the ore. However, there can be no assurance the occurrence,
grade and quantity of gold or other precious metal mineralization will
satisfy the cost of recovery. Currently, there are no known mineral
deposits of economic significance on any of the Company's properties.
Nevertheless, according to the Company's geological report, eight of
the claims demonstrate mineralization features related to possible
deposits of gold or other precious metals sufficient to merit further
exploration. To date, the Company has not established any marketing
plans or concluded any mineral reserves which may be located on the
Company's claims.
<PAGE> 5
The Company anticipates funding the cost of exploration by the
sale of common stock, loans, or possible joint venture projects with
third parties. The Company has not identified any purchasers of common
stock, lenders or joint venture partners as of the date of this
prospectus and there is no assurance that any sales of common stock,
loans or joint ventures will ever occur.
The eight mining claims referred to previously were initially
transferred to the Company in exchange for 310,000,000 shares of Common
Stock and were valued at the transfors' cost of $13,000.
The Company arbitrarily assigned a value of $50.00 to each claim
exchanged for Units. All of the claims will be reviewed annually by
management for continued valuation or impairment. Management will
consider the estimated undiscounted future cash flows and write off
claims abandoned or impaired. Management intends to adopt Financial
Account Standards No. 121 effective January 1, 1996.
Property Location, Description and Access.
The claims are located in La Paz, Maricopa and Yuma counties,
Arizona. Parker is the county seat for La Paz County, Phoenix is the
county seat for Maricopa County and Yuma is the county seat for Yuma
County.
Title - Unpatented Claims.
The Company owns or holds unpatented mining claims. The
unpatented mining claims are possessory only and are held by right of
location. Management believes that all of its unpatented claims are
properly staked and recorded, and that it has the right to possession
of them, and the right to remove minerals therefrom. Unpatented mining
claims require a maintenance fee of $100 to be paid to the United
States Government by August 31 each year. All maintenance fees have
been paid to date. The claims have been properly recorded at the
Bureau of Land Management, and with the various county recorders, in
compliance with federal and state filing requirements.
History.
To date there has been no exploration on the claims.
Geology.
The sites lie within the Basin and Range province of Southwest
Arizona. Each site is in the flat lying, gently sloping and relatively
uncut area between and a long the adjacent mountains.
The sites are covered (or filled) by basin fill that is recent to
Pleistocene in age. The source areas for the basin fill are the
surrounding ranges of hills and mountains. The basin fill is composed
of unconsolidated gravel, sand, silt, clays, and possibly some glacial
till and debris. The silt and clays are water deposited although there
is evidence that some of the silty sand may be air-borne and deposited.
<PAGE> 6
The gravel may or may not be water worn-usually the top or upper layers
of coarser material are angular indicating that this material has not
traveled far from its in-situ location.
Other Properties.
Management may enter into new mining ventures with joint
venturers, partners or other third parties. Such arrangements may be
multi-party ventures to which the Company will contribute stock, cash
and/or mineral interests. In such arrangements, the Company's
participation in revenues and profits, if any, will be reduced. At
this time, the Company has no agreement or understanding with any third
parties for the formation of a joint mining operation.
In determining the suitability of any property as a prospective
acquisition, factors to be considered by the Company will include, but
not be limited to, the following: (a) whether the asking price is
competitive and permits possible appreciation in value; (b) condition
of title; (c) whether the geological features of the property indicate
the probable likelihood of gold mineralization of a commercial grade
that is of sufficient quantity to justify further exploration and
development; (d) time and expenses which will be involved in the
exploration and development of the property; and, (e) procedure for
exploration and development (individually or joint venture).
Management, together with such professional advisors which the
Company deems appropriate, will investigate prospective properties
through on-site examination, reviewing available geologic reports or
publications relating to the property, and a general field
reconnaissance to secure preliminary information regarding
characteristics of the property. If, from such preliminary reviews,
management deems it advisable to further investigate the property, the
Company may determine the condition of title and ownership by using
abstractors or title companies, and may obtain a preliminary
feasibility study by one or more geologists, mining engineers, or
accountants. If, after the foregoing preliminary investigation,
management determines that the property does not meet the Company's
acquisition criteria, efforts to acquire the property would be
abandoned, in which case costs incurred in conducting the investigation
would not be recoverable. In the event the property is abandoned, the
Company intends to reallocate the unexpended proceeds for the
acquisition and/or exploration of other prospects.
Exploration.
Since the claims are without known proven or probable reserves.
The Company proposes to investigate and explore the possibility of high
grade minerals in phases of exploratory work:
Phase 1. Phase 1 exploratory work would entail conducting a
survey to determine if the minerals lie within claim boundaries as
staked by the Company. The Company estimates that the cost of Phase 1,
will be $11,000.
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Phase 2. Conduct drilling exploratory work only if the data from
Phase 1 exploratory work indicates a high probability of success in
Phase 2 exploratory work. The Company estimates that the cost of Phase
2, will be $120,000.
Subsequent Phases. Subsequent Phases are intended to determine if
the minerals are commercially viable. Costs of Subsequent Phases are
unknown and may require additional financing by the Company Subsequent
Phases would be heavily dependent on Management's opinion and
evaluation of the success of Phases 1 and 2 above.
The foregoing are only estimates and should not be relied upon.
Costs may vary depending upon unknown events which have impact upon
exploration and development of the claims.
The Company anticipates paying the costs of such exploration from
funds advanced by the officers and directors of the Company in exchange
for promissory notes. There is no assurance, however, that adequate
funds will be available to complete the exploration of the claims. In
the event adequate funds are not available to complete the exploration
of the Claims an investor could loose his/her entire investment.
Environmental Controls.
Mining and processing operations and exploration activities are
subject to various federal, state and local laws and regulations
relating to the protection of the environment. These laws mandate,
among other things, the maintenance of air and water quality standards,
and the preservation of certain archeological sites. These laws also
set forth limitations on the generation, transportation, storage and
disposal of solid and hazardous waste.
Compliance with statutory environmental quality requirements may:
necessitate significant capital outlays; materially affect the earning
power of the Company; or may cause material changes in the Company's
intended activities. No assurance can be given that environmental
standards imposed by either federal or state governments will not be
changed or become more stringent, thereby possibly materially adversely
affecting the proposed activities of the Company.
Competition and Markets.
The Company faces extensive competition in the acquisition of
properties suitable for the exploration and development of gold and
other precious metals. Many of the Company competitors have greater
financial resources and more extensive operating histories that the
Company. There is no assurance the Company will be able to begin
exploration work which result in the discovery of commercially
producible quantities of gold or other previous metals. In addition,
there is no assurance that the Company's property interests can be
economically maintained.
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The exploration and development of mineral properties, and the
marketing of minerals, are affected by a number of facts which are
beyond the Company's control. These factors include fluctuations in
the market price of gold and previous minerals, availability of
adequate transportation, marketing of competitive minerals, prices of
fuels and fluctuating supply and demand for minerals.
Offices.
The Company's headquarters and executive offices are located at
528 Fon du Lac Drive, East Peoria, Illinois 61611 and the telephone
number is (309) 699-8725. The Company uses approximately 100 square
feet of space at the aforementioned address rent free.
Employees.
In addition to the retention of its Officers, the Company does not
currently employ any full time or part-time employees. The Company
anticipates adding employees as needed in the future.
Risk Factors.
1. Exploration Stage Mining Company with No History of Operation.
The Company is in its exploration stage, has no operating history and
is subject to all the risks inherent in a new business enterprise. The
likelihood of success of the Company must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with a new business, and the competitive and
regulatory environment in which the Company will operate.
2. Huge Number of Shares Outstanding. There could be outstanding
over 1.6 billion shares of common stock, assuming the exercise of all
of the Class A and Class B Redeemable Warrants. Because of the huge
number of shares that could be outstanding, it is likely that the
market price, in the event a market for the shares develops, which
there is no assurance, will be low and it is anticipated that the price
of the shares will remain low. In addition it is anticipated that
earnings per share will be minuscule. The Company believes offering a
large number of shares, regardless of the price per share, will be more
attractive to potential investors in light of the fact that there is no
market for the Company's common stock. There is no assurance, however,
that the foregoing belief is in fact correct.
3. Securities are Subject to Penny Stock Rules. The Company's
shares are "penny stocks" consequently they are subject to Securities
and Exchange Commission regulations which impose sales practice
requirements upon brokers and dealers to make risk disclosures to
customers before effecting any transactions therein.
4. No Commercially Mineable Ore Body. No commercially mineable
ore body has been delineated on the properties, nor have any reserves
been identified.
<PAGE> 9
5. Risks Inherent in the Mining Industry. The Company is subject
to all of the risks inherent in the mining industry including, without
limitation, the following: competition from a large number of
companies, many of which are significantly larger than the Company, in
the acquisition, exploration, and development of mining properties; in
order to maintain possessory title to unpatented mining claims after
discovery of valuable mineral deposits, the claim holder must pay fees;
exploration for minerals is highly speculative and involves substantial
risks, even when conducted on properties known to contain significant
quantities of mineralization, and most exploration projects do not
result in the discovery of commercially mineable deposits of ore;
operations are subject to a variety of existing laws and regulations
relating to exploration and development, permitting procedures, safety
precautions, property reclamation, employee health and safety, air
quality standards, pollution and other environmental protection
controls; a large number of factors beyond the control of the Company,
including fluctuations in gold, silver, or other mineral prices,
inflation, and other economic conditions, will affect the economic
feasibility of mining of precious metals, particularly gold and silver;
mining activities are subject to substantial operating hazards some of
which are not insurable or may not be insured due to economic
considerations; the availability of water, which is essential to
milling operations; and, interruptions caused by adverse weather
conditions.
6. Need for Additional Capital. The ability of the Company to
ultimately conclude the exploration of its properties will depend upon
its ability to raise additional capital or to enter into arrangements
for such purposes with third parties. There can be no assurance that
additional financing will not be required sooner than presently
projected. There also can be no assurance that additional capital or
other types of financing will be available when needed or that, if
available, the terms of such financing will be commercially acceptable
to the Company.
7. Nature of the Industry. Exploration, development and mining
of mineral properties is highly speculative and involves unique and
greater risks than are generally associated with other businesses. The
Company's operations will be subject to all the operating hazards and
risks normally incident to the exploration, development and mining of
mineral properties, including risks enumerated above and below.
8. Fluctuating price for gold. The Company's operations will be
greatly influenced by the price of gold. Gold prices fluctuate widely
and are affected by numerous factors beyond the Company's control,
including expectations for inflation, the strength of the United States
dollar, global and regional demand and political and economic
conditions and production costs in major gold producing regions of the
world.
9. Unpatented Claims. The Company holds unpatented mining
claims, which are possessory only and are held by right of location.
These claims are subject to inherent hazards of non-recorded risks.
Unpatented mining claims are subject to title hazards, and require
payment of fees.
<PAGE> 10
10. Environmental Controls. Compliance with statutory
environmental quality requirements may necessitate significant capital
outlays, may materially affect the earning power of the Company, or may
cause material changes in the Company's intended activities. No
assurance can be given that environmental standards imposed by either
federal or state governments will not be changed or become more
stringent, thereby possibly materially adversely affecting the proposed
activities of the Company.
11. Governmental Regulation and Environmental Controls. The
Company's activities are subject to extensive federal, state, county
and local laws and regulations controlling not only the exploration for
and development of mineral properties, but also the possible effect of
such activities upon the environment. In its mining operations, the
Company will use certain equipment which will subject the Company to
federal and state safety and health regulations. While the Company
intends to act in compliance with all such regulations, any adverse
ruling under any regulations, any imposition of a fine, or any
imposition of more stringent regulations could require the Company to
make additional capital expenditures that could impair its operations.
The United State Congress is currently considering changes to the
General Mining Laws of 1872. The exact nature and extent of any
changes are unknown at this time, but it is anticipated that there may
be changes affecting the cost of acquiring patented mining claims and
the assessment work required to hold unpatented claims.
12. No Dividends. The Company has paid no dividends since its
inception and does not intend to pay any dividends in the foreseeable
future. Instead, the Company intends to retain all earnings, if any,
for use in its business operations.
13. Preferred Shares Authorized. Although the Company does not
presently intend to issue preferred shares, the holders of preferred
shares, if and when issued, would more that likely, have rights
superior to those of common shareholders. Any issuance of preferred
shares would dilute the interest of the common shareholders.
14. Reliance Upon Directors and Officers. The Company is wholly
dependent, at the present, upon the personal efforts and abilities of
its Officers who will exercise control over the day to day affairs of
the Company, and upon its Directors, most of whom are engaged in other
activities and will devote limited time to the Company's activities,
upon completion of this offering. The President will devote 25% of his
time to the operation of the day to day affairs of the Company and the
Secretary/Treasurer will devote 25% his time to the operation of the
day to day affairs to the Company. There can be no assurance as to the
volume of business, if any, which the Company may succeed in obtaining,
nor that its proposed operations will prove to be profitable.
15. Issuance of Additional Shares. 1,302,000,000 shares of
Common Stock or 43.40% of the 3,000,000,000 authorized shares of Common
Stock of the Company remain unissued even if all of the Redeemable
Warrants are exercised. The Board of Directors has the power to issue
such shares, subject to shareholder approval, in some instances.
<PAGE> 11
Although the Company presently has no commitments, contracts or
intentions to issue any additional shares to other persons, the
Company may in the future attempt to issue shares to acquire equipment
or services, or for other corporate purposes. Any additional issuance
by the Company following the offering, from its authorized but unissued
shares, would have the effect of further diluting the interest of
investors in this offering.
16. Non-Arms's Length Transaction. The number of shares of
Common Stock issued to present shareholders of the Company for cash and
property was arbitrarily determined and may not be considered the
product of arm's length transactions.
17. Indemnification of Officers and Directors for Securities
Liabilities. The Articles of Incorporation of the Company provide that
the Company may indemnify any Director, Officer, agent and/or employee
as to those liabilities and on those terms and conditions as are
specified in the Arizona Business Corporation Act. Further, the
Company may purchase and maintain insurance on behalf of any such
persons whether or not the corporation would have the power to
indemnify such person against the liability insured against. The
foregoing could result in substantial expenditures by the Company and
prevent any recovery from such Officers, Directors, agents and
employees for losses incurred by the Company as a result of their
actions. Further, the Company has been advised that in the opinion of
the Securities and Exchange Commission, indemnification is against
public policy as expressed in the Securities Act of 1933, as amended,
and is, therefore, unenforceable.
18. Competition. The Company has competitors and potential
competitors, many of whom may have considerably greater financial and
other resources than the Company.
19. Lack of Public Market for Securities. At present, no market
exists for the Company's securities and there is no assurance that a
regular trading market will ever develop or, if developed, that it will
be sustained. A purchaser of shares may, therefore, be unable to
resell the securities offered herein should he or she desire to do so.
Furthermore, it is unlikely that a lending institution will accept the
Company's securities as pledged collateral for loans unless a regular
trading market develops.
20. Cumulative Voting, Preemptive Rights and Control. There are
no preemptive rights in connection with the Company's Common Stock.
The shareholders purchasing in this offering may be further diluted in
their percentage ownership of the Company in the event additional
shares are issued by the Company in the future. Cumulative voting in
the election of Directors is not provided for. Accordingly, the
holders of a majority of the shares of Common Stock, present in person
or by proxy, will be able to elect all of the Company's Board of
Directors.
<PAGE> 12
21. No Marketmaker. There is no assurance the Company's
securities will be traded in the Bulletin Board operated by the
National Association of Securities Dealers, Inc. (the "NASD"). The
Company has no agreement with any member of the NASD to act as a
marketmaker for the Company's securities. Although management intends
to contact several broker/dealers concerning their possible
participation as marketmakers in the Company's securities following the
conclusion of this offering, there is no assurance management will be
successful in obtaining a marketmaker. If the Company is unsuccessful
in obtaining one or more marketmakers, the trading level and/or price
of the Company's securities will be materially adversely affected.
22. Possibility of Defective Title. The Company's interests in
the properties are and will be in the form of unpatented mining claims
acquired from third parties. The validity of all unpatented mining
claims is dependent upon inherent uncertainties and conditions. These
uncertainties related to such non-recorded facts as the sufficiency of
the discovery of minerals, proper posting and marking of boundaries,
whether the minerals discovered were properly locatable as a lode claim
or a placer claim as appropriate, whether sufficient annual assessment
work has been performed since location as required by law, and possible
conflicts with other claims not determinable from description of
record. In the absence of a discovery of valuable minerals, a mining
claims is open to location by others unless the owner is in actual
possession of and diligently working the claim.
23. Availability of Water Shortages of Supplies and Materials.
Water is essential in all phases of the exploration for and development
of mineral properties. It is used in such processes as exploration,
drilling, leaching, placer mining, dredging, testing, and hydraulic
mining. Water is known to be in short supply throughout the area where
the Company intends to concentrate its mining activities. Furthermore,
any water that may be found will be subject to acquisition pursuant to
local, state federal water quality standards. The Company has not
determined the availability of water, and has not determined the cost
of compliance with any water quality restrictions. Both the lack of
available water and the cost of complying with water quality
regulations may make an otherwise viable project economically
impossible to complete. The mineral industry has experienced from time
to time shortages of certain supplies and materials necessary in the
exploration for an evaluation of mineral deposits. The prices at which
such supplies and materials are available have also greatly increased.
There is a possibility that planned operations may be subject to delays
due to such shortages and that further price escalations will increase
the costs of the Company.
ITEM 2. DESCRIPTION OF PROPERTIES.
The claims are located in La Paz, Maricopa and Yuma counties,
Arizona. Parker is the county seat for La Paz County, Phoenix is the
county seat for Maricopa County and Yuma is the county seat for Yuma
County.
<PAGE> 13
Title - Unpatented Claims.
The Company owns or holds unpatented mining claims. The
unpatented mining claims are possessory only and are held by right of
location. Management believes that all of its unpatented claims are
properly staked and recorded, and that it has the right to possession
of them, and the right to remove minerals therefrom. Unpatented mining
claims require the expenditure of $100 each per year to their benefit.
All of the required expenditures and assessment work on the Company's
property has been accomplished. The claims have been properly recorded
at the Bureau of Land Management, and with the various county
recorders, in compliance with federal and state filing requirements.
The claims are as follows:
<TABLE>
<CAPTION>
Title of BLM Claim Section
Claim County Location AMC Number Number
<S> <C> <C> <C> <C> <C>
Lost Horse Peak Maricopa Township 7 South 317628 11-1 11
Range 1 West 317629 11-2
317630 11-4
317631 12-1 12
Vekol Valley Maricopa Township 8 South 330955 27-1 27
Range 1 East 330956 27-2
330957 27-3
330958 27-4
Red Raven II Yuma Township 4 South 315314 3-1 3
Range 12 West 315315 3-2
315316 3-3
315317 3-4
Salome Lapaz Township 6 North 332066 14-1 14
Range 13 West 332071 15-2 15
332072 15-3
332073 15-4
Winchester Lapaz Township 6 North 332112 6-3 6
Range 12 West 332113 6-4
332114 7-1 7
332115 7-2
Low Mountain Lapaz Township 7 North 332043 28-1 28
Range 12 West 332044 28-2
332045 28-3
332046 28-4
Socorro Peak Lapaz Township 6 North 332098 30-1 30
Range 11 West 332099 30-2
332100 30-3
332101 30-4
Happy Camp Lapaz Township 7 North 332030 8-1 8
Range 11 West 332031 8-2
332032 8-3
332033 8-4
Sacaton Flats Maricopa Township 3 South 329259 5-3 5
Range 10 West 329260 7-2 7
329261 7-4
329262 8-1 8
Red Raven II Yuma Township 4 South 329263 4-1 4
Range 12 West 329969 4-2
329264 4-3
329265 4-4
329266 9-1 9
329971 9-2
329973 10-1 10
329974 10-2
<PAGE> 14
Title of BLM Claim Section
Claim County Location AMC Number Number
- - -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Meltop Maricopa Township 2 South 331076 34-2 34
Range 3 West 331077 35-1 35
331078 35-2
331079 35-3
Tricia-
Sheri-Ect Maricopa Township 2 South 323305 31-3 31
Range 2 West 323308 31-4
Township 2 South 323332 26-2 26
Range 3 West 323331 26-4
Meltop Maricopa Township 2 South 331049 20-3 20
Range 3 West 331050 20-4
331065 29-1 29
331066 29-2
Rainbow Maricopa Township 3 South 331090 7-3 7
Range 1 West 331091 18-1 18
331092 18-3
331093 19-1 19
Mobile Maricopa Township 3 South 331080 19-4 19
Range 1 East 331081 20-3 20
331082 29-1 29
331083 30-2 30
Rainbow
Valley Maricopa Township 3 South 331106 11-1 11
Range 2 West 331107 11-2
331108 11-3
331109 11-4
Bosque Maricopa Township 6 South 329591 1-3 1
Range 3 West 328317 11-2 11
328319 11-4
329600 12-1 12
329601 12-3
329602 13-1 13
328320 14-1 14
328321 14-2
Township 5 South 329605 29-3 29
Range 3 West 330030 29-4
329606 30-3 30
329607 30-4
Coyote Peak Lapaz Township 2 North 329373 3-1 3
Range 13 West 329374 3-2
330478 3-3
330479 3-4
330490 8-1 8
330491 8-2
330492 8-3
330493 8-4
330554 28-1 28
330555 28-2
330556 28-3
330557 28-4
Coyote Well Lapaz Township 2 North 329573 12-3 12
Range 14 West 329572 12-4
329574 13-1 13
329575 13-2
Little Horn Lapaz Township 1 North 330333 2-1 2
Range 13 West 330334 2-2
330335 2-3
330336 2-4
330367 11-1 11
330368 11-2
330369 11-3
330370 11-4
330373 13-1
330374 14-1
330375 14-2
<PAGE> 15
Title of BLM Claim Section
Claim County Location AMC Number Number
- - -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
continued
Little Horn Lapaz Township 1 North 330376 14-3
Range 13 West
Red Raven Yuma Township 3 South 329944 2-1 2
Range 12 West 329934 2-2
329946 2-3
329947 2-4
329964 34-2 34
329965 34-3
329966 34-4
329967 35-1 35
Charco Tank Lapaz Township 3 North 329485 17-3 17
Range 14 West 329486 17-4
329487 18-3 18
329488 18-4
Mike Lapaz Township 2 North 330295 6-1 6
Range 12 West 330296 6-2
330297 6-3
330298 6-4
Getz Well Maricopa Township 7 South 338174 34-1 34
Range 2 West 339175 34-2
338176 34-3
338201 34-4
Palomas Yuma Township 2 South 339721 1-1 1
Range 13 West 339722 1-2
337241 1-3
339723 1-4
337302 36-1 36
339796 36-2
339797 36-3
339798 36-4
</TABLE>
ITEM 3. LEGAL PROCEEDINGS.
The Company is not the subject of any pending legal proceedings;
and to the knowledge of management, no proceedings are presently
contemplated against the Company by any federal, state or local
governmental agency.
Further, to the knowledge of management, no director or executive
officer is party to any action in which any has an interest adverse to
the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held one shareholders meeting on November 19, 1996.
The only matter voted upon was the election of directors.
<PAGE> 16
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS.
(a) Market Information.
At present, no market exists for the Company's securities and
there is no assurance that a regular trading market will ever develop
or, if developed, that it will be sustained. A purchaser of shares
may, therefore, be unable to resell the securities offered herein
should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept the Company's securities as pledged
collateral for loans unless a regular trading market develops.
(b) Holders.
As of June 12, 1997, there were approximately 133 holders of the
Registrant's Common Stock. This number does not include those
beneficial owners whose securities are held in street name.
(c) Dividends.
The Registrant has never paid a cash dividend on its Common Stock
and has no present intention to declare or pay cash dividends on the
Common Stock in the foreseeable future. The Registrant intends to
retain any earnings which it may realize in the foreseeable future to
finance its operations. Future dividends, if any, will depend on
earnings, financing requirements and other factors.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULT OF OPERATIONS.
The Company is considered to be in the development stage as
defined in the Statement of Financial Accounting Standards No. 7.
There have been no operations since incorporation.
Liquidity and Capital Resources.
The Company sold 498,000,000 shares of its Common Stock to
nineteen persons and two corporations for $44,450 in cash and property.
The cash has been used for organizational matters and initial start-up.
Included in the foregoing were eight mining claims transferred to
the Company on June 30, 1995 by "Quitclaim Deed" in exchange for
310,000,000 shares of common stock. The mining claims are reflected in
the balance sheet at the transferor's costs of $13,000.
One hundred twenty-eight mining claims were transferred to the
Company on November 16, 1996 by "Quitclaim Deed" in exchange for
400,000,000 shares of common stock. The mining claims are reflected in
the balance sheet at the transferor cost of $66,076.
<PAGE> 17
The Company must obtain additional capital in order to fully
develop its claims. The Company intends to raise additional capital in
the future through loans or the sale of common stock. There is no
assurance that the Company will be able to raise such additional
capital. The Company has no operating history.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
TURTLEBACK MOUNTAIN GOLD CO., INC.
FINANCIAL INFORMATION
PAGE
INDEX NUMBER
Accountants' Report F-1
Balance Sheet as of December 31, 1996 and 1995 F-2
Statement of Loss and accumulated deficit
for the period from inception (March 22, 1995)
through December 31, 1996 F-3
Statement of Changes in Stockholders' Equity
for the period from inception (March 22, 1995)
through December 31, 1996 F-4
Statement of Cash Flows for the period from
inception (March 22, 1995) through
December 31, 1996 F-5
Notes to Financial Statements F-6 - F-7
<PAGE> 18
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Turtleback Mountain Gold Co.,Inc.
We have audited the accompanying balance sheet of Turtleback Mountain
Gold Co., Inc. (A Development Stage Company) as of December 31, 1996
and 1995, and the related statements of operations, changes in
stockholders' equity and cash flows for the periods ended December 31,
1996 and 1995. 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 includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide 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 Turtleback
Mountain Gold Co., Inc. (A Development Stage Company) at December 31,
1996 and 1995, and the results of its operations, changes in
stockholders' equity and its cash flows for the periods ended December
31, 1996 and 1995, in conformity with generally accepted accounting
principles.
Robert Moe & Associates, P.S.
Certified Public Accountants
Spokane, Washington
February 21, 1997
F-1
<PAGE> 19
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
BALANCE SHEET
December 31, 1996 and 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
CURRENT ASSETS
Cash $ 3,536 $ 521
--------- --------
Accounts receivable 1,500
Total current assets 3,536 2,021
OTHER ASSETS
Organization costs (net of $137
amortization 1996, -0- 1995) 548 685
Deferred registration costs 30,200
Mining claims 79,076 13,000
--------- --------
$ 83,160 $ 45,906
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 11,000 $ None
-------- --------
STOCKHOLDERS' EQUITY
Common stock - $.00001 par value,
3,000,000,000 shares authorized,
898,000,000-1996 and 498,000,000-
1995 shares issued 8,980 4,980
Preferred Stock - $.00001 par value,
400,000,000 shares authorized, 0
shares issued -- --
Additional paid in capital 77,708 52,470
-------- --------
86,688 57,450
Less stock subscriptions receivable -- (1,450)
-------- --------
86,688 56,000
Deficit accumulated during the
development stage (14,528) (10,094)
-------- --------
Total Stockholders' Equity 72,160 45,906
-------- --------
$ 83,160 $ 45,906
======== ========
</TABLE>
See accompanying notes to financial statements
F-2
<PAGE> 20
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
for the period from inception (March 22, 1995)
through December 31, 1996
<TABLE>
<CAPTION>
Cumulative
during
development
stage from
inception
03-22-95 (03-22-95)
through through
1996 12-31-95 12-31-96
<S> <C> <C> <C>
INCOME $ 180 $ 203 $ 383
OPERATING EXPENSES 4,614 10,297 14,911
-------- --------- ---------
NET INCOME (LOSS) $ (4,434) $ (10,094) $ (14,528)
======== ========= =========
NET INCOME PER SHARE $ NIL $ NIL $ NIL
======== ========= =========
</TABLE>
The company is in the development stage and has not commenced
operations.
See accompanying notes to financial statements
F-3
<PAGE> 21
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
March 22, 1995 (Inception) through December 31, 1996
<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid-in Earnings
Shares Amount Capital (Deficit)
<S> <C> <C> <C>
BALANCE
Inception March 22, 1995 -- $ -- $ -- $ --
ADD:
Sale of 188,000,000 shares
of common stock for
$44,450 cash 188,000,000 1,880 42,570
Sale of 310,000,000 shares
of common stock for mining
claims at a value of
$13,000 310,000,000 3,100 9,900
Net loss for the period (10,094)
----------- ------- --------- --------
BALANCE, December 31, 1995 498,000,000 4,980 52,470 (10,094)
ADD:
Sale of 400,000,000
shares of common stock
for mining claims at a
value of $66,076 400,000,000 4,000 62,076
Deferred registration costs
charged to paid-in-capital (36,838)
Net loss for 1996 (4,434)
----------- ------- --------- --------
BALANCE, December 31, 1996 898,000,000 $ 8,980 $ 77,708 $(14,528)
=========== ======= ========= ========
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE> 22
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for the period from inception (March 22, 1995)
through December 31, 1996
<TABLE>
<CAPTION>
Cumulative
during
development
stage from
inception
03-22-95 (03-22-95)
through through
1996 12-31-95 12-31-96
<S> <C> <C> <C>
CASH FLOWS PROVIDED (USED)
IN OPERATIONS
Net loss for the period $ (4,434) $ (10,094) $ (14,528)
Noncash expense included:
Amortization of organization costs 137 137
(Increase) decrease
in accounts receivable 1,500 (1,500) --
Increase in accounts payable 11,000 -- 11,000
--------- -------- ---------
8,203 (11,594) (3,391)
--------- --------- ---------
CASH FLOWS PROVIDED (USED) IN
INVESTING ACTIVITIES -- -- --
-------- --------- ---------
CASH FLOWS PROVIDED (USED) IN
FINANCING ACTIVITIES
Proceeds from sale of stock 1,450 43,000 44,450
Payment of deferred registration
and organization costs (6,638) (30,885) (37,523)
-------- --------- ---------
(5,188) 12,115 6,927
-------- -------- ---------
NET INCREASE (DECREASE) IN CASH 3,015 521 3,536
CASH BEGINNING OF PERIOD 521 -- --
-------- --------- ---------
CASH END OF PERIOD $ 3,536 $ 521 $ 3,536
======== ======== =========
</TABLE>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ -0- $ -0- $ -0-
Income taxes $ -0- $ -0- $ -0-
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES
Mining claims were transferred to the Company during 1995, in exchange
for 310,000,000 shares of common stock and is reflected in the balance
sheet at the transferor cost of $13,000. The mining claims were
appraised in October 1986 for an amount that exceeds the value
reflected in the balance sheet by Marston & Marston, Inc. (engineers to
the mining industry). Mining claims were transferred to the Company
during 1996 in exchange for 400,000,000 shares of common stock and is
reflected in the balance sheet at the transferor cost of $66,076.
See accompanying notes to financial statements
F-5
<PAGE> 23
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization: The Turtleback Mountain Gold Co., Inc. was
incorporated on March 22, 1995, under the laws of the State of
Arizona. The Company has adopted a year ending on December 31.
The Company was organized to use the limited funding it obtained
from its original shareholders for organizational matters and
preparation of an offering. The Company exchanged stock for
mining claims.
Because of the speculative nature of the Company, there are
significant risks which are summarized as follows:
Newly formed company with no operating history and minimal
assets.
Limited funds available for acquisition.
Management is inexperienced and offers limited time
commitment.
Conflict-of-interest, as all employees have other part-time
or full-time employment.
The Company is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7.
There have been no operations since incorporation.
Summary of Significant Accounting Principles: Organization costs
will be amortized over sixty (60) months beginning January 1,
1996.
Mining claims transferred to the Company were recorded at the
transferor cost basis.
Mining claims are reviewed annually by management for continued
valuation or impairment. Management will consider the estimated
undiscounted future cash flows and write off claims abandoned or
impaired. Management elected to adopt Financial Accounting
Standards No. 121 effective January 1, 1996. The adoption did
not impact the financial statements at December 31, 1995.
F-6
<PAGE> 24
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
2. STOCKHOLDERS' EQUITY
Incorporation shares: Upon incorporation, the Company had a total
of 498,000,000 shares subscribed.
Public stock offering: On November 16, 1996, the Company issued
four hundred million (400,000,000) units in exchange for one
hundred twenty eight (128) mining claims located in La Paz,
Maricopa, and Yuma counties, Arizona. Each Unit consists of one
share of Common Stock; one warrant to purchase one share of Common
Stock at an exercised price of $0.01 per warrant ("Class A
Warrants"); and, one warrant to purchase one share of Common Stock
at an exercise price of $0.02 per warrant ("Class B Warrants").
The Warrants may be redeemed by the Company at any time upon
thirty (30) days written notice to the holders thereof at
redemption price of $0.00001 per warrant. The Warrants are
immediately detachable and separately tradable. The Warrants are
exercisable up to five (5) years from the effective date of the
offering unless called sooner.
3. OFFICES AND EMPLOYEES
The Company's office are located at 528 Fon du Lac Drive, East
Peoria, Illinois 61811.
The Company currently has no full-time employees.
4. MINING CLAIMS
Eight mining claims were transferred to the company on June 30,
1995 by "Quitclaim Deed" in exchange for 310,000,000 shares of
common stock. The mining claims are reflected in the balance
sheet at the transferor cost of $13,000.
One hundred twenty-eight mining claims were transferred to the
Company on November 16, 1996 by "Quitclaim Deed" in exchange for
400,000,000 shares of common stock. The mining claims are
reflected in the balance sheet at the transferor cost of $66,076.
The Four (4) Red Raven II claims purchased from Maxam Gold
Corporation has a Royalty Fee clause attached to them. The
royalty fee is Five (5) percent of the net income from operations
on the claims or $50,000.00 annually (which ever is greater)
starting July 1, 1997.
F-7
<PAGE> 25
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None; not applicable.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Identification of Directors and Executive Officers.
The following table sets forth the names and nature of all
positions and offices held by all directors and executive officers of
the Company for the calendar year ending December 31, 1996, and to the
date hereof, and the period or periods during which each such director
or executive officer served in his or her respective positions.
Date of Date of
Position Election of Termination
Name Held Designation or Resignation
Alan Hubbard President and a 1996
Member of the
Board of Directors
Dale L. Runyon Secretary/Treasurer 1995
Chief Financial Officer
and a member of the
Board of Directors
Robert M. Brown Member of the 1995 [1]
Board of Directors
Richard G. Steeves Member of the 1996
Board of Directors
[1] Mr. Brown resigned as President on October 31, 1996.
Term of Office
The terms of office of the current directors continue until the
annual meeting of stockholders, which the Bylaws provide shall be held
on the third Friday of November of each year; officers are elected at
the annual meeting of the board of directors, which immediately follows
the annual meeting of stockholders.
<PAGE> 26
Alan Hubbard - President and a member of the Board of Directors of the
Company.
Mr. Hubbard was elected to the Board of Directors on November 19,
1996. From May 1988 to the present, Mr. Hubbard has been the President
and Chief Executive of Al Hubbard Associates, Inc., a Texas
corporation. Since July 1995, Mr. Hubbard has been the President and
a member of the Board of Directors of Maxam Gold Corporation, a Utah
corporation. Maxam Gold Corporation is a natural resource company.
Since May 1996, Mr. Hubbard has been the President and a member of the
Board of Directors of Phoenix Mining Company, a Nevada corporation.
Phoenix Mining Company is a natural resource company. Mr. Hubbard
received a B.A. from Bradley University.
Dale L. Runyon - Secretary/Treasurer, Chief Financial Officer and a
member of the Board of Directors.
Mr. Runyon is a founder of the Company. Since the Company's
inception, he has been the Secretary/Treasurer, Chief Financial Officer
and a member of the Board of Directors. Since 1978, Mr. Runyon has
been a business consultant in the mining industry. As a consultant, he
assists companies with economic analysis of potential mining properties
and, in general, supervises "turnkey projects" from start to finish.
Since 1986, Mr. Runyon has been the Chairman of the Board and Chief
Executive Officer of Phoenix International Mining, Inc., a Nevada
corporation. Since 1987, Mr. Runyon has been the Chairman of the Board
and Chief Executive Officer of Maxam Gold Corporation, an Utah
corporation, involved in the business of mining. Mr. Runyon received
a B.A. from Knox College and is a retired Colonel in the United States
Army.
Robert M. Brown - Member of the Board of Directors
Mr. Brown is a founder of the Company. Since the Company's
inception, he has been a member of the Board of Directors. From the
Company's inception until October 31, 1996, Mr. Brown served as
President of the Company. Since 1985, Mr. Brown has been a member of
the Board of Directors of H.W.W. Foundation, a Colorado corporation,
involved in the business of family investments. Mr. Brown received a
B.A. from DePauw University, Greencastle, Indiana.
Richard G. Steeves - Member of the Board of Directors
Since November 1996, Mr. Steeves has been a member of the Board of
Directors. Since August 1994, Mr. Steeves has been the President and
a member of the Board of Directors of JohsTe, Inc., an Illinois
corporation. JohsTe, Inc. consults with companies on business
management. From July 1978 to August 1993, Mr. Steeves was the
controller and division manager of Southland Corporation. Southland
Corporation, a Texas corporation, is an operator of a convenience store
chain ("Seven-Eleven"). Since April 1993, Mr. Steeves has been the
President and a member of the Board of Directors of Sandaz Corporation,
a Nevada corporation. Sandaz Corporation is a natural resources
company. Since April 1993, Mr. Steeves has been the President and a
<PAGE> 27
member of the Board of Directors of RGS Services, Inc., an Illinois
corporation. RGS Services, Inc. consults with companies on business
management, transportation and taxes. Mr. Steeves received a B.A. from
Hampton Institute, Hampton, Virginia.
Family Relationships
There are currently no family relationships between any directors
or executive officers of the Company, either by blood or happenstance
of marriage.
Involvement in Certain Legal Proceedings
During the past five years, no present or former director,
executive officer or person nominated to become a director or an
executive officer of the Company has been the subject matter of any
legal proceedings, including bankruptcy, criminal proceedings, or civil
proceedings. Further, no legal proceedings are known to be
contemplated by governmental authorities against any director,
executive officer and person nominated to become a director.
Compliance with Section 16(a) of the Exchange Act.
No securities of the Company are registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, and the Company files
reports under Section 15(d) of the Securities Exchange Act of 1934;
accordingly, directors, executive officers and ten percent stockholders
are not required to make filings under Section 16 of the Securities
Exchange Act of 1934.
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth the aggregate compensation paid by
the Company for services rendered during the period indicated:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> Long Term Compensation Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (I)
Name Other Restricted LTIP All
and Annual Stock Pay- Other
Principal $ $ Compen Awards Options/ Outs Compen
Position Year Salary Bonus sation($) $ SAR's(#) ($) sation$
<S> <C> <C> <C> <C> <C> <C> <C> <C>
December 31
Alan Hubbard
President &
Director 1996 $ -0- $0 $0 $0 0 $0 $0
Dale R. Runyon
Treasurer &
Director 1996 $ -0- $0 $0 $0 0 $0 $0
<PAGE> 28
Robert M.
Brown
Director 1996 $ -0- $0 $0 $0 0 $0 $0
Richard G.
Steeves
Director 1996 $ -0- $0 $0 $0 0 $0 $0
Named
Executive
Officers
None n/a $ -0- $0 $0 $0 0 $0 n/a
</TABLE>
Cash Compensation.
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to the Company's management during
the calendar year ended December 31, 1996, or the period ending on the
date of this Report. Further, no member of the Company's management
has been granted any option or stock appreciation right; accordingly,
no tables relating to such items have been included within this Item.
See the "Summary Compensation Table" of this Item.
Compensation of Directors.
The Company's Board of Directors unanimously resolved that
directors receive no compensation for their services; however, they are
reimbursed for travel expenses incurred in serving on the Board of
Directors.
No additional amounts are payable to the Company's directors for
committee participation or special assignments.
Termination of Employment and Change of Control Arrangements.
There are no compensatory plans or arrangements, including
payments to be received from the Company, with respect to any person
named in the Summary Compensation Table set out above which would in
any way result in payments to any such person because of his or her
resignation, retirement or other termination of such person's
employment with the Company or its subsidiaries, or any change in
control of the Company, or a change in the person's responsibilities
following a change in control of the Company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Security Ownership of Certain Beneficial Owners
The following table sets forth the shareholdings of those persons
who own more than five percent of the Company's Common Stock as of
December 31, 1996:
<PAGE> 29
Name and address 12/31/96
of owner Shares Percent
Maxam Gold Corporation[1] 76,000,000 8.46%
528 Fon du Lac Drive
East Peoria, IL 61611
Dale L. Runyon[2][3] 662,236,767 73.75%
528 Fon du Lac Drive
East Peoria, Illinois
TOTAL 738,236,787 82.21%
[1] Dale Runyon, Alan Hubbard and Richard Steeves are officers and/or
directors of Maxam Gold Corporation.
[2] Includes shares owned by Charco Tank Mining, LLC; Coyote Peak
Mining, LLC; DLR Trust #3; Getzwell Mining, LLC; Little Horn
Mining, LLC; Maxam Gold Corporation; Meltop Mining, LLC; Phoenix
International Mining, Inc.; Rainbow Valley Mining, LLC.; Lost
Horse Peak Trust; Uranco Trust #1; Uranco Trust #5; Tank Mountain
Gold Co., Inc.; and, Uranco Mining, LLC., which Mr. Runyon is
affiliated with.
[3] Does not include 305,330,164 Class A Warrants and 305,330,164
Class B Warrants to purchase up to 610,660,328 shares of Common
Stock.
Security Ownership of Management
The following table sets forth the shareholdings of the Company's
directors and executive officer as of June 12, 1997:
<TABLE>
<CAPTION>
Shares Beneficially Owned
Number Percent
Name & address 06/12/97
<S> <C> <C>
Alan Hubbard[5] 20,000,000 2.23%
3140 Hampshire Court
Frisco, Texas 75034
Dale L. Runyon[2][4] 662,236,767 73.75%
528 Fon du Lac Drive
East Peoria, IL 61611
Robert M. Brown[1][3] 12,000,000 1.34%
528 Fon du Lac Drive
East Peoria, IL 61611
Richard G. Steeves 1,000,000 0.11%
1911 E. Meadowlake Drive
Mahomet, Illinois 61853
ALL OFFICERS 695,236,767 77.44%
</TABLE>
[1] Includes shares owned by the Estate of Teddi N. Brown; R. D. Brown; Brown
Family Investments and the HWW Foundation.
<PAGE> 30
[2] Includes shares owned by Charco Tank Mining, LLC; Coyote Peak Mining, LLC;
DLR Trust #3; Getzwell Mining, LLC; Little Horn Mining, LLC; Maxam Gold
Corporation; Meltop Mining, LLC; Phoenix International Mining, Inc.;
Rainbow Valley Mining, LLC.; Lost Horse Peak Trust; Uranco Trust #1;
Uranco Trust #5; Tank Mountain Gold Co., Inc.; and, Uranco Mining, LLC.,
which Mr. Runyon is affiliated with.
[3] Does not include 10,973,668 Class A Warrants and 10,973,668 Class B
Warrants to purchase up to 21,957,336.
[4] Does not include 305,330,164 Class A Warrants and 305,330,164 Class B
Warrants to purchase up to 610,660,328 shares of Common Stock.
[5] Does not include 20,000,000 Class A Warrants and 20,000,000 Class B
Warrants to purchase up to 40,000,000 shares of Common Stock.
Changes in Control
To the knowledge of management, there are no present arrangements
or pledges of securities of the Company which may result in a change in
control of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Registrant has engaged in no transactions with management or
others in which the amount involved exceeds $60,000 other than the
following:
On March 31, 1995, the Company issued 498,000,000 shares of Common
Stock to nineteen persons in exchange for $44,450 in cash and property.
The foregoing includes shares issued to its officers and directors or
affiliates thereof.
The following table reflects the name of each officer and director
and their affiliates, the amount of cash contributed by each and in the
case of the 8-160 acre claims contributed by the Lost Horse Peak A
Trust and the Phoenix International Mining, Inc., the dollar value
assigned to the claims. The dollar value assigned to each claim was
arbitrarily determined by the Company and claimant, and bears no
relationship to the value of the claim.
<TABLE>
<CAPTION> Amount of
Shares Consideration Date of
Name of Owner Acquired Cash/Other Sale
- - -----------------------------------------------------------------------
<S> <C> <C> <C>
William Brown 3,000,000 $ 3,000.00 2/13/95
H. W. W. Foundation 1,000,000 $ 1,000.00 3/25/95
Lost Horse Peak,
A Trust 210,000,000 4-160 acre 02/21/95
mining claims
Phoenix International
Mining, Inc. 100,000,000 4 - 160 acre 02/21/95
mining claims
Uranco Trust #5 145,000,000 $ 1,450.00 01/06/95
</TABLE>
<PAGE> 31
Dale Runyon, the Company's Secretary/Treasurer, Chief Financial
Officer and a member of the Board of Directors is the Trustee of the
Uranco Trust #5; and affiliate and a Director of Phoenix International
Mining, Inc.; and a Trustee of Lost Horse Peak A Trust. Further,
Robert M. Brown, the Company's President and a member of the Board of
Directors is a member of the Board of Directors of H.W.W. Foundation,
a foundation which holds title to investments made by the Brown family.
The transactions with the Lost Horse Peak A Trust and Phoenix
International Mining, Inc. were arbitrarily decided by the Company and
the respective party and were not at arms-length and were more
favorable to the Company and less favorable to those entities than in
an arm's length transaction with unaffiliated third parties. The basis
for the foregoing statement is that Lost Horse Peak A Trust and Phoenix
International Mining, Inc. would not have transferred the claims to the
Company for 310,000,000 restricted shares of common stock in a start-up
venture, but for the affiliation of Dale L. Runyon with the Company.
The following table reflects the name of each officer and director
and their affiliates that were issued in exchange for claims:
Name Number of Units
Estate of Teddi N. Brown 5,174,334
R. M. Brown & R. D. Brown 125,000
Robert M. Brown 5,299,334
Brown Family Investments 375,000
Charco Tank Mining LLC 10,000,000
Coyote Peak Mining LLC 40,000,000
DLR Trust #3 1,691,397
Getzwell Mining LLC 10,000,000
Alan E. Hubbard 20,000,000
Little Horn Mining LLC 30,000,000
Maxam Gold Corporation 76,000,000
Meltop Mining LLC 10,000,000
Mike Mining LLC 10,000,000
Rainbow Valley Mining LLC 40,000,000
Tank Mountain Gold Co., Inc. 20,000,000
Uranco Mining LLC 34,375,000
Uranco Trust #5 6,675,545
Uranco Trust #1 2,123,923
Dale L. Runyon 4,463,299
To date, there have not been any transactions between the Company
and its Officers, Directors, principal shareholders or affiliates other
than as set forth above. If such transactions occur in the future,
they will be on terms no less favorable to the Company than could be
obtained from unaffiliated parties.
<PAGE> 32
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter of the
period covered by this report.
Exhibits
The following documents are incorporated herein by reference from
the Registrant's Form S-1 Registration Statement and all amendments
thereto, which was declared effected by the Securities and Exchange
Commission on August 16, 1996, and all exhibits thereto, as filed with
the Commission:
Exhibit
No. Description
3.1 Articles of Incorporation.
3.2 Amended Articles of Incorporation.
3.3 Bylaws of the Company.
4.1 Specimen certificate for Common Stock.
4.2 Specimen certificate for Class A Redeemable Warrants.
4.3 Specimen certificate for Class B Redeemable Warrants.
The following documents are incorporated herein:
27 Financial Data Schedule
<PAGE> 33
SIGNATURES
Pursuant to the requirements of Section 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, on this 18th day of August, 1997.
TURTLEBACK MOUNTAIN GOLD CO., INC.
(Registrant)
BY: /s/ Alan Hubbard, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following person on
behalf of the Registrant and in the capacities and on this 18th day of
August, 1997.
SIGNATURES TITLE DATE
/s/ Alan Hubbard President and a member August 18, 1997
Alan Hubbard of the Board of Directors
/s/ Dale L. Runyon Secretary/Treasurer, August 18, 1997
Dale L. Runyon Chief Financial Officer and
a member of the Board of
Directors
________________________ Member of the Board ______________, 1997
Robert M. Brown of Directors
/s/ Richard G. Steeves Member of the Board August 18, 1997
Richard G. Steeves of the Board of Directors
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
No annual report material has been forwarded to securities holders
of the Registrant during the period covered by this report or for the
previous five calendar years ended December 31; however, if any annual
report or proxy material is furnished to security holders in connection
with the annual meeting stockholders to be held in 1997, a copy of any
such annual report or proxy materials shall be forwarded to the
Commission when it is forwarded to security holders.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at December 31, 1996 (Audited) and the
Statement of Income for the year ended December 31, 1996 (Audited)
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 3,536
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,536
<PP&E> 79,624
<DEPRECIATION> 0
<TOTAL-ASSETS> 83,160
<CURRENT-LIABILITIES> 11,000
<BONDS> 0
0
0
<COMMON> 8,980
<OTHER-SE> 63,180
<TOTAL-LIABILITY-AND-EQUITY> 83,160
<SALES> 0
<TOTAL-REVENUES> 383
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 14,911
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (14,528)
<INCOME-TAX> 0
<INCOME-CONTINUING> (14,528)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14,528)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
