<PAGE> 1
PROSPECTUS
APEX MINERALS CORPORATION
800,000 Shares
Offering Price: $0.25 Per Share
Apex Minerals Corporation, a Delaware corporation (the "Company"), is
offering 800,000 Shares (the "Shares") of common stock (par value $.001) of
the Company (the "Common Stock"). (See "Underwriting" and "Description of
Securities.")
All proceeds under this offering will be deposited in an escrow account
with Brighton Bank, Salt Lake City, Utah, no later than noon of the next
business day following receipt thereof, until at least the minimum amount of
this offering has been deposited therein. Officers, directors, and current
shareholders may purchase part of the Shares in order to reach the minimum,
but such persons in the aggregate will not purchase in excess of 10% of the
minimum amount, or 30,000 Shares. In the event less than the minimum amount
of this offering ($75,000) is deposited by noon of the 121st day following the
amended date hereof, all proceeds received will be promptly returned to the
purchasers, without interest and without any deduction for commissions or
other expenses of this offering. Investors will have no right to withdraw
funds deposited in the escrow account. All funds received subsequent to the
minimum amount of this offering, and after deduction of commissions will be
immediately distributed to the Company. This offering will close no later
than 120 days following the date upon which the minimum amount of proceeds is
deposited into the escrow account. This offering may be open for a maximum of
241 days. (See "Plan of Distribution.")
THIS OFFERING IS HIGHLY SPECULATIVE AND INVOLVES SPECIAL RISKS
CONCERNING THE COMPANY AND ITS BUSINESS. PRIOR TO THIS OFFERING THERE HAS BEEN
NO PUBLIC MARKET FOR THE SHARES. (SEE "RISK FACTORS.")
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES AGENCY, NOR HAS THE COMMISSION
OR ANY STATE AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Underwriting Discounts Proceeds to
Public and Commissions(1) Company(2)
<S> <C> <C> <C>
Per Share $0.25(3) $0.025 $0.225
Total Minimum $75,000 $7,500 $67,500
(300,000 Shares)
Total Maximum $200,000 $20,000 $180,000
(800,000 Shares)
</TABLE>
(Footnotes on following page)
The date of this Prospectus is _______, 1997.
<PAGE> 2
(1) This offering is a minimum-maximum offering with 300,000 Shares
constituting the minimum. There is no assurance that any or all of the
securities will be sold. Officers and directors of the Company will use their
best efforts to sell the Shares but will receive no compensation therefor.
Officers, directors, and current shareholders may purchase part of the Shares
in order to reach the minimum. Each officer and director of the Company
believes he is exempt from federal registration as a broker pursuant to Rule
3a4-1 promulgated by the Securities and Exchange Commission because no
compensation will be paid to him, directly or indirectly, for any sale of the
Shares; because he is not currently, has not been for the prior twelve months,
and will not be at the time of any sales, associated with a broker or dealer;
because he performs, and will continue to perform, substantial duties for the
Company other than in connection with this offering; because he has not
participated in selling an offering of securities for any issuer within the
prior twelve months; and because he is believed not to be subject to certain
statutory disqualifications. Although management believes that each of the
officers and directors of the Company meets such requirements, no ruling by
the Securities and Exchange Commission has or will be sought in such regard.
Each officer and director of the Company who participates in the sale the of
Shares in a particular state will be required to be licensed as a selling
agent or otherwise, or be exempt from such requirements, before offering or
selling the Shares in such state. In addition, the Company may retain the
services of outside selling agents to sell the shares and will pay a sales
commission of ten percent (10%) to such selling agents for actual sales of the
Shares. No commissions will be paid unless the minimum amount of this
offering is raised. No selling agents have as yet been identified. (See
"Plan of Distribution.")
(2)The proceeds are stated before deduction of expenses related to the
preparation of the offering which the Company will pay. These expenses, as
presently estimated, are not expected to exceed $10,000, and include the
Company's accounting fees, transfer agent's fees, filing fees, and printing
costs. (See "Use of Proceeds" and "Plan of Distribution.")
(3)The offering price of the Shares has been arbitrarily determined by
the Company and bears no material relationship to book value, par value, or
any other established criterion of value. (See "Plan of Distribution.")
The Company is not subject to the reporting requirements of the
Securities Exchange Act of 1934. However, the Company intends to furnish
annual reports to its shareholders which will include audited financial
statements.
<PAGE> 3
PROSPECTUS SUMMARY
The following summary information is qualified in its entirety by the
detailed information and financial statements appearing elsewhere herein:
The Company:
Apex Minerals Corporation (the "Company") was incorporated in the
State of Delaware on July 10, 1995. Apex Minerals of Utah, Inc. is a Utah
corporation incorporated on June 7, 1996, and is a majority owned subsidiary
of the Company (hereinafter the "Subsidiary"). The Subsidiary is the holder
of 70 unpatented lode mining claims located on BLM property in the Tutsagubet
Mining District, Washington County, Utah. In addition, the Subsidiary holds
two unpatented lode mining claims on Utah school lands in the same mining
district. The Company's principal executive offices are located at 57 West
200 South, Suite 310, Salt Lake City, Utah 84101. Its telephone number is
(801) 359-9300.
The Company is a development stage company as defined in the Statement of
Financial Accounting Standards. In using such term, the Company does not
intend to imply that its exploration has disclosed a commercially minable ore
deposit.
(See "Business of the Company" and "Risk Factors" for a discussion of
certain factors that should be considered in evaluating the Company and its
business.)
The Offering:
SECURITIES OFFERED The Company is offering a minimum of 300,000 and a maximum
of 800,000 shares of its common stock, par value $0.001 (the "Shares"). Sales
of the Shares will be by officers and directors of the Company for no
compensation or by licensed selling agents for 10% commission. (See "Plan of
Distribution" and "Description of Securities.")
PRICE PER SHARE $0.25
COMMON STOCK Outstanding prior to offering: 4,750,000
Outstanding after offering (minimum offering): 5,050,000
Outstanding after offering (maximum offering): 5,550,000
(See "Description of Securities.")
Use of Proceeds:
The net proceeds of this offering will be approximately $57,500 if the
minimum amount is raised and $170,000 if the maximum is raised. The minimum
amount of proceeds will be used to maintain the mining claims, to repay loans
to officers and directors, and to pay operating and overhead expenses. Any
funds in excess of the minimum will be used to purchase office equipment and
pay office rent, and to fund limited exploration activities on the mining
claims. (See "Use of Proceeds.")
<PAGE> 4
Summary Consolidated Financial Information For the Year Ended June 30, 1996
and the six months ended December 31, 1996:
<TABLE>
<CAPTION>
For the Year Ended For the Six Months Ended
Summary Statement June 30, 1996 December 31, 1996
of Operations Data (Audited) (Unaudited)
<S> <C> <C>
Total Revenue $7,250 -0-
Net Loss ($10,502) ($5,308)
Income Loss Per Share ($.00) ($.00)
Summary Balance Sheet Data
Working Capital ($9,823) ($19,534)
Total Assets $16,542 $19,968
Current Liabilities $15,100 $24,201
Minority Interests $1,202 $835
Long-Term Liabilities -0- -0-
Shareholders' Equity $240 ($5,068)
(See "Financial Statements.")
[THIS SPACE INTENTIONALLY LEFT BLANK]
<PAGE> 5
RISK FACTORS
The purchase of the securities being offered by this Prospectus involves
a high degree of risk. Prior to investing in the Shares, a prospective
investor should consider carefully the following risks and speculative factors
and how they may affect the business of the Company:
1. Limited Capitalization. The Company has not generated significant
revenues from operations since its inception. Not later than August 31, 1997,
the Company, through its Subsidiary, is obligated to pay approximately $7,500
to the Bureau of Land Management and the State of Utah for the annual
maintenance fees on the mining properties currently held by the Company. If
the minimum amount of proceeds is not raised by such date, current management
has agreed to advance such amount to the Company as a loan to pay such fees.
The failure to pay such fees would result in the loss of the current mining
claims held by the Subsidiary and would have a materially negative impact on
the Company and this offering. (See "Business of the Company," "Dix-Apex
Mining Properties" and "Management's Discussion and Analysis.")
2. Maintenance of Title to Claims. To maintain possessory title to
each of the unpatented mining claims of the Company, it is necessary to pay an
annual fee of $100 per federal claim and $1.00 per acre for state leases. The
Company has paid the annual assessment on its claims through August 1997.
Failure to pay future fees and appropriately file evidence thereof with
respect to any claim could result in the loss of possessory title to such
claims. (See "Properties" and "Use of Proceeds.")
3. Limited Operating History. The Company was recently formed, has
no significant operating history, and has yet to produce a profit. There is
no assurance that it will ever be profitable. As a new enterprise, it is
likely to be subject to risks management has not anticipated. The Company has
limited resources and is dependent on the proceeds of this offering to allow
it to conduct operations. However, the proceeds of the offering and the
Company's other resources may not be sufficient for the Company's needs, and
it may have inadequate funds to finance its operations. (See "Business of the
Company," "Management's Discussion and Analysis" and "Financial Statements.")
4. Start-up Business. The Company is in a start-up phase
(development stage) and has not engaged in any significant operations to
date. There is no certainty that the Company will be successful in overcoming
the risks of development in order to advance beyond the start-up phase
(development stage). (See "Business of the Company," "Management's Discussion
and Analysis," and "Financial Statements.")
5. Prior Business Venture. Principals of the Company and the
Subsidiary have operated entities which owned a number of mining properties,
including those currently owned by the Subsidiary, which never produced any
income. (See "Dix-Apex Mining Properties.")
6. Competition. The Company proposes to engage in a business which
is highly competitive. The Company will be competing with many established
companies having much greater financial resources, experience, and personnel
resources than the Company. (See "Business of the Company.")
7. No Proven or Probable Reserves. The Company lacks sufficient
detailed information to provide any proven or probable reserves of minerals on
the Subsidiary's mining claims. There is no assurance that commercial
quantities of any ore body are accessible on such properties. (See "Dix-Apex
Mining Properties.")
<PAGE> 6
8. Government Regulations. Although the Company does not intend to
become involved directly in mining activities on the mining claims owned by
the Subsidiary, the value of the property is largely dependent upon a joint
venture partner or other party obtaining a mining permit to conduct mining
activities on the property. Such activities would be subject to a variety of
governmental regulations, including the need to comply with laws relating to
the reclamation of the land and other environmental legislation. Compliance
with such regulations may require significant capital outlays. Existing, as
well as future, legislation and regulation concerning mining operations could
cause additional expense, restrictions and delays in commencing and
maintaining mining operations on the property, the extent of which cannot be
predicted. (See "Business of the Company.")
9. No Existing Public Market for Stock. At present, no market exists
for the Company's Common Stock. Upon completion of this offering the Company
intends to make application for clearance of the Common Stock to be traded on
the OTC Bulletin Board. However, there is no assurance that such application
will be accepted. (See "Market Information.")
10. Applicability of Penny Stock Risk Disclosure Requirements. The
Common Stock will be considered a "penny stock" as that term is defined in
rules promulgated under the Securities Exchange Act of 1934, as amended.
Under these rules, broker-dealers participating in transactions in penny
stocks must first deliver a Schedule 15G risk disclosure document which
describes the risks associated with penny stocks, the broker-dealer's duties,
the customer's rights and remedies, and certain market and other information,
and make a suitability determination approving the customer for penny stock
transactions based on the customer's financial situation, investment
experience and objectives. Broker-dealers must also disclose these
restrictions in writing to the customer and obtain specific written consent of
the customer, and provide monthly account statements to the customer. With
all these restrictions, the likely effect of the designation as a penny stock
will be to decrease the willingness of broker-dealers to make a market for the
stock, to decrease the liquidity of the stock, and to increase the transaction
cost of sales and purchases of penny stocks compared to other securities.
11. Dividend Policy. The Company has never paid a cash dividend on
its Common Stock and does not anticipate paying cash dividends on its Common
Stock in the foreseeable future. Accordingly, investors who anticipate the
need for immediate income from their investments by way of dividends should
refrain from purchasing any of the securities offered hereby. (See "Dividend
Policy.")
12. Arbitrary Offering Price. The offering price of the Shares has
been arbitrarily determined by the Company and bears no material relationship
to book value, par value, or any other established criterion of value. (See
"Plan of Distribution.")
13. Dilution. Purchasers of the Shares will incur substantial
dilution of their investment in that the net tangible book value per share of
the Common Stock after the offering will be less than the initial public
offering price of $0.25 per Share. Based upon the net tangible book value of
the Company at December 31, 1996, the dilution to investors would be $.241, or
96.4%, per Share if the minimum amount is raised, or $.22, or 88%, per Share
if the maximum amount is raised. (See "Dilution.")
14. Substantial Promotional Shares Owned by Management. Current
management of the Company and the Subsidiary own 3,750,000, or approximately
79%, of the outstanding shares of Common Stock, for which they paid an average
price of $.0014 as compared with the public offering price of $0.25 per
Share. Even following the maximum offering, such members of management and
other affiliates will own approximately 85.6% of the outstanding shares, and
could thus control the Company. Such concentration of ownership by current
<PAGE> 7
management and the lack of cumulative voting may have the effect of delaying
or preventing a change of control of the Company without the consent of
current management. (See "Dilution" and "Description of Securities.")
15. Market Overhang. The Company currently has 4,750,000 shares of
its Common Stock which have not been registered with the Securities and
Exchange Commission or any state securities agency and which are currently
restricted pursuant to Rule 144 promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended. All of these shares
are restricted from public resale for a period of two years from the date of
issuance. The sale of some or all of the restricted shares of Common Stock
after such two year holding period could have a material negative impact upon
the market price of the Common Stock. (See "Security Ownership of Certain
Beneficial Owners and Management" and "Description of Securities.")
16. Self-underwritten Offering; No Firm Underwriting Agreement.
There has been no firm underwriting agreement entered into with the Company.
The officers and directors of the Company will attempt on a best efforts basis
to sell the Shares, but there is no assurance that any of the Shares will be
sold during the minimum offering period. Officers, directors, and current
shareholders may purchase part of the Shares in order to reach the minimum,
but such persons in the aggregate will not purchase in excess of 10% of the
minimum amount, or 30,000 Shares. Any such shares purchased by officers,
directors, or current shareholders to reach the minimum are subject to the
limitations on resale imposed under Rule 144 relating to sales by affiliates,
unless such sales are registered under the Securities Act of 1933, as amended,
or unless such shares are sold in accordance with an applicable exemption from
registration. Rule 144 limits the volume of such sales by affiliates during
any three month period to one percent of the total shares of such class
outstanding or the average weekly reported volume of trading in such
securities on certain exchanges or automated quotation systems, if
applicable. In addition, for such sales to meet the requirements of Rule 144,
there must be available current public information with respect to the issuer
of the securities and the securities must be sold in "brokers' transactions"
as defined in the rule. Finally, if the amount of such securities sold
exceeds 500 shares or has an aggregate sale price in excess of $10,000, the
selling party must file a notice on Form 144 with the Securities and Exchange
Commission documenting such sales.
If the officers and directors are unable to sell the minimum number of
Shares during the minimum period as set forth on the cover of this Prospectus,
this offering will terminate and any funds placed in escrow will be returned
to subscribers without interest. (See "Plan of Distribution.")
USE OF PROCEEDS
The following table sets forth the use of proceeds, alternatively under
the minimum and maximum offering, and management's present estimate of the
allocation and prioritization of net proceeds expected to be received from
this offering. Actual receipts and expenditures may vary from these
estimates. Pending use of the funds, the Company will invest the net proceeds
in investment-grade, short-term, interest bearing securities.
<PAGE> 8
</TABLE>
<TABLE>
<CAPTION>
Minimum Maximum
Offering Offering
<S> <C> <C>
Gross Proceeds $75,000 $200,000
Selling commissions ($7,500) ($20,000)
Other offering expenses ($10,000) ($10,000)
NET OFFERING PROCEEDS $57,500 $170,000
Use of Net Proceeds<F1>
Mining claims' rentals $15,000 $15,000
Repayment of loans from officers<F2> $25,000 $25,000
Operating and overhead expenses $17,500 $17,500
Office equipment -- $14,500
Office rent -- $18,000
Acquisition of additional mining claims
and/or exploration activities on current or
additional claims -- $60,000
Contingency and reserve funds -- $20,000
TOTAL $57,500 $170,000
</TABLE>
<F1>See "Business of the Company--Proposed Activities."
<F2>Such loans are due upon demand and were made without interest. The
proceeds of such loans were used by the Company to pay the location or annual
maintenance fees on the mining claims currently held by the Subsidiary.
DILUTION
Since its inception in July 1995, the Company has issued a total of
4,750,000 shares of its Common Stock to officers, directors, promoters or
affiliated persons (hereinafter referred to as "Affiliates"), at an average
price of $.0014 per share. The following table summarizes, as of December 31,
1996, the relative investments of all existing shareholders and the new
investors, after giving pro forma effect to the sale of the maximum number of
Shares:
<PAGE> 9
<TABLE>
<CAPTION>
Shares Purchased Total Consideration Average Price
Number Percent Amount Percent Per Share
<S> <C> <C> <C> <C> <C>
Existing
shareholders 4,750,000 85.6% $6,613 3.2% $.0014
New investors 800,000 14.4% $200,000 96.8% $.25
Total 5,550,000 100% $206,613 100%
</TABLE>
The following table summarizes, as of December 31 1996, the relative
investments of all existing shareholders and the new investors, after giving
pro forma effect to the sale of the minimum number of Shares:
<TABLE>
<CAPTION>
Shares Purchased Total Consideration Average Price
Number Percent Amount Percent Per Share
<S> <C> <C> <C> <C> <C>
Existing
shareholders 4,750,000 94.1% $6,613 8.1% $.0014
New investors 300,000 5.9% $75,000 91.9% $.25
Total 5,050,000 100% $81613 100%
</TABLE>
The financial statements of the Company at December 31, 1996, shows a net
tangible book value of ($5,068) or ($.00113) per share. Net tangible book
value per share represents the amount of the Company's tangible assets (total
assets less intangible assets), less total liabilities, divided by the number
of shares of Common Stock outstanding. Without taking into account any
further adjustments in net tangible book value after December 31, 1996, other
than to give effect to the sale of the 800,000 Shares offered hereby (based on
an offer price of $.25 per Share, after deduction of selling commissions and
other offering expenses) the pro forma net tangible book value of the Company
at December 31, 1996, would have been $164,932 or $.03 per share of Common
Stock, representing an increase in net tangible book value of $.03113 to
existing shareholders and a dilution of $.22 per share to new investors. If
only the minimum number of shares is sold, the pro forma net tangible book
value of the Company at December 31, 1996, would have been $52,432 or $.009
per share of Common Stock, representing an increase in net tangible book value
of $.01013 to existing shareholders and a dilution of $.241 per share to new
investors.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Company has had no material revenues from operations since its
inception in July 1995. During the year ended June 30, 1996, the Company
generated revenue of $7,500 from consulting services performed by one of the
officers of the Subsidiary for a local mining company. The Company has not
generated any revenue during the first six months ended December 31, 1996.
Although the Company may conduct studies or perform research and consulting
services for other mining companies in the future, it is not anticipated that
such revenues will be material to the operations of the Company.
Management believes that the equity funding received by the Company
through this offering, will allow the Company to operate through August 1998.
Except for the previous loans of management in the amount of $24,100 through
December 31, 1996, the sole fixed obligation of the Company is the payment of
the annual maintenance fees to the BLM and the State of Utah which would equal
approximately $15,000 through August 1998. The Company does not anticipate
the need to raise additional funds in the next 12 months. If sufficient funds
in excess of the minimum amount of this offering are raised, the Subsidiary
intends to seek additional mining properties and/or conduct limited geologic
evaluation of the current or additional mining properties in the form of a
limited drilling program or otherwise. Other than the purchase of office
<PAGE> 10
equipment and furniture from the funds in excess of the minimum amount raised,
if any, the Company anticipates no additional purchases of equipment.
Management anticipates that the $17,500 allocated from the use of
proceeds will be adequate to provide the operating capital necessary to locate
a suitable joint venture partner or other party interested in the mining
properties and to pay operating expenses through August 1998.
BUSINESS OF THE COMPANY
General
The Company was incorporated in the State of Delaware on July 10, 1995.
In June 1996 it exchanged and transferred all of its ownership interest in
certain mining claims for 90% of the outstanding stock of Apex Minerals of
Utah, Inc., a Utah corporation incorporated on June 7, 1996, a majority owned
subsidiary of the Company (hereinafter the "Subsidiary"). The Company's princip
al executive offices are located at 57 West 200 South, Suite 310, Salt Lake
City, Utah 84101. Its telephone number is (801) 359-9300.
In July and August 1995 the Company located 45 unpatented lode mining
claims known as the Dix-Apex #1 through #45, inclusive, in the Tutsagubet
Mining District in Washington County, Utah. An additional 25 unpatented lode
mining claims known as the Dix Apex #46 through #70, inclusive, in the same
mining district were located in December 1995 by the Company. These claims
were transferred to the Subsidiary in June 1996. Also in June 1996 the
Subsidiary acquired two Utah state mineral leases in the same mining
district. The state mining leases were purchased from Gaylon W. Hansen, a
principal shareholder of the Company, and an officer and a director of the
Subsidiary, in return for 5% of the outstanding common stock of the
Subsidiary. (See "Certain Relationships and Related Transactions.") In
November 1996 the Company located nine additional unpatented lode claims known
as the Dix Apex #71 through #79, inclusive, and a fraction of #80, also
located in the Tutsagubet Mining District in Washington County, Utah. Since
its inception, neither the Company nor its Subsidiary has conducted any
significant activities on these mining properties.
Proposed Activities
The Company proposes to use the proceeds from this offering to maintain
the current mining properties owned by the Subsidiary and to seek joint
venture partners or others interested in exploring these properties for
possible germanium and gallium commercial mineralization. In addition, the
Company may seek to acquire additional mining claims either in the same mining
district or elsewhere in locations which management determines to be favorable
mining and/or exploration areas. The Company may perform certain limited
geophysical, geologic, and other testing and evaluation studies on theses
mining properties with a view to making further determinations as to the
prospects of placing such properties into eventual production. The Company
does not intend to participate significantly in any possible mining activities
on such properties, but rather will attempt to locate joint venture partners
and/or other interested parties to bring such properties into production. The
participation of the Company will depend upon the nature of the joint venture
or other arrangement; however, it is possible that one or more members of
management of the Company or its Subsidiary would be actively involved in the
mining activities of any such arrangement. However, in most instances, it is
anticipated that the Company will not be in a position to contribute to
significant exploration or mining activities on these properties. It may also
be possible that the Company would transfer its interest in the current
<PAGE> 11
properties for a non-participating interest in any such possible mining
venture. For example, the Company may sell the properties for cash and/or
other consideration, which in turn may be used for other future exploration or
mining or other projects of the Company.
Management of the Company and the Subsidiary have and will continue to
review other geologic or geographic areas to locate and identify prospects
deemed to be favorable for possible exploration or mining activity. When and
if a favorable area has been located, management will determine whether such
properties may be available for exploration or mining activities.
Where federal land, that is, public domain, is involved, lode mining
claim location notices must be filed with the Office of the Bureau of Land
Management (the "BLM") in the state where the acreage is located. The claim
procedures for federal lode mining claims require that the locator distinctly
mark the location on the ground so that its boundaries can be readily traced
and making a record of the name or names of the locators, date of location,
and a description of the claim or claims located by reference to some natural
object or permanent monument that will identify the claim. Leases issued by
the BLM are perpetual so long as the locator pays the annual maintenance fee
of $100 per claim due by August 31st of each year, and makes the required
filings with the BLM and the county in which the claims are located.
State leasing programs, typically on sections of land reserved by the
federal government to support schools in the states. In the State of Utah
metalliferous mineral leases are granted for a base term of ten years, and for
as long thereafter as the leased substances are produced in commercial
quantities. The annual lease fee on Utah leases is $1.00 per acre, and for
each fractional part thereof, and the State of Utah is granted a royalty of 8%
for fissionable metalliferous minerals, and 4% on non-fissionable
metalliferous minerals, produced from the leased lands.
Fee exploration and/or mining leases on private and/or located on mineral
claim properties are obtained from the individual landowners pursuant to
negotiations. Generally, leases run from one to ten years, have a negotiated
royalty reserved to the landowners, and often involve an amount of first year
lease bonuses. In addition, fee leases many times require that the lessee
engage in exploration and/or mining activities on the acreage within a
specified time period.
Management of the Company anticipates that the majority of the net
proceeds of this offering will be loaned to the Subsidiary for maintenance and
possibly limited exploitation of the properties. Such loans to the Subsidiary
will be evidenced by promissory notes secured by the interest of the
Subsidiary in the mining properties. The Subsidiary intends to reserve from
the proceeds sufficient funds to pay the annual maintenance fees on its
existing properties through August 1998. In addition, the Company intends to
repay loans to current officers and directors for previous location costs and
maintenance fees on its existing properties. If the minimum amount of this
offering is not completed by August 1996, the Company may be required to
borrow additional funds to pay the maintenance fees on the properties, thus
reducing the amount reserved for future payments and increasing the amount of
this offering to be used to repay loans.
Management anticipates that a significant portion of the proceeds of this
offering will be used in reimbursing management for expenses involved in
locating suitable joint venture partners or locating other parties interested
in the properties. If only the minimum amount of proceeds is raised, the
Company and its Subsidiary will not maintain a separate office, but will use
the facilities of its secretary/treasurer, who has agreed to provide office
space for the Company and the Subsidiary at no cost until sufficient funds are
available to locate a separate office. The Company will reimburse such
officer for out-of-pocket expenses involved with the use of such office by the
<PAGE> 12
Company and the Subsidiary such as long distance telephone expenses, copy
costs, etc. The office will be shared with other unrelated entities and
activities of such person. If sufficient funds in excess of the minimum
amount of this offering are raised, the Company and the Subsidiary intend to
seek and maintain a separate office for their activities.
Management anticipates that it will use its contacts in the mining
industry to locate potential joint venture partners or others interested in
the mining properties held by the Subsidiary. The Company will use the
proceeds from this offering to assemble geophysical surveys and other geologic
and other data on the properties and/or adjoining properties and present the
same to potential joint venture partners and others along with a proposal by
the Company relating to further disposition of the properties. In addition,
if sufficient funds are raised in excess of the minimum amount of proceeds, it
is anticipated that members of management will perform additional geologic
exploration on the properties, including limited exploration drilling
activities. The Subsidiary anticipates compensating such individuals at
competitive rates for any such labor performed, subject to approval of the
board of directors of the Subsidiary, excluding the vote of any interested
party.
Competition
The Company and the Subsidiary will compete with a number of mining and
exploration entities, most of whom have resources much greater than those of
the Company and the Subsidiary. In particular, the Properties adjoining those
held by the Subsidiary are held by Preussag Cominco, a company significantly
larger than the Company in resources and personnel. The Company believes that
the experience of its officers and directors, and the management of the
Subsidiary, in the mining industry will allow it to compete favorably with
such larger entities in locating suitable joint venture partners or others
interested in the properties, and in locating and acquiring additional mineral
properties of potential economic merit in the future.
Regulation
In order to commence mining operations on the Subsidiary's properties, an
operator would be required to file an application for and receive mining
permits from the BLM, the State of Utah, and other regulatory bodies before
mining operations could commence. Federal law requires that prior to
commencing operations, the operator must submit a reclamation plan which
includes an environmental assessment or an environmental impact statement
which sets forth the plan of operation, assesses the impact of the operations
on the local environment, and specifies the extent and type of reclamation
which would be required. Such plan would also require the posting of a bond.
No assurance can be given that a mining permit would be approved or issued for
any mining operations on the Subsidiary's properties. Compliance with such
requirements could be costly and time consuming.
Any future mining operations on the properties would also be subject to
existing federal, state, and local laws and regulations relating to employee
health and safety. The Company is unable to estimate the cost of such
compliance which would be borne by a joint venture partner or other operator.
In general, mining and milling operations are subject to compliance with the
regulations promulgated under the federal Mining and Minerals Policy Act of
1970 and the requirements of the federal Occupational Safety and Health
Administration (OSHA), as well as equivalent state regulations.
Management anticipates that in negotiations with potential joint venture
partners, such joint venture partners will be contractually obligated to bear
the cost of compliance with environmental laws, including the posting of a
bond, if required, for future reclamation work. However, if such entity is
unable to comply with such environmental laws, it is anticipated that the
<PAGE> 13
Company would be responsible for such compliance, the cost of which could be
substantial depending upon the type of mining operation on such property.
Failure to comply with applicable governmental regulations could result
in enforcement proceedings by appropriate agencies. Compliance with existing
regulations and those that may come into existence in the future may have a
substantial impact upon the capital expenditures relating to operation of any
mining operation on the properties and could adversely affect its overall
operations.
Employees
At June 30, 1996, neither the Company nor its Subsidiary had any
employees, and management does not anticipate retaining any employees in the
immediate future. However, the Company may retain the services of some or
several of its officers and directors, or the management of the Subsidiary, to
perform geological and other services on an as-needed basis, for which the
Company intends to compensate such persons at market rates.
DIX-APEX MINING PROPERTIES
General
The Company has located 70 unpatented lode mining claims located on BLM
property in the Tutsagubet Mining District, Washington County, Utah. The
claims are designated as the Dix-Apex #1 through #70, inclusive. These claims
have been assigned to the Subsidiary. In addition, in January 1996, Gaylon
Hansen, an officer and director of the Subsidiary, and a principal shareholder
of the Company, acquired tow Utah state school trust lands metalliferous
leases in the same mining district. The state leases are designated as ML
47201 and ML 47202. These state leases have also been assigned to the
Subsidiary. The claims are located in the central Beaver Dam Mountains in
Washington County, Utah, approximately 10 air miles west of St. George, Utah.
The claims owned by the Company surround claims held by Preussag Cominco (see
Map 2). The following table sets forth the BLM serial number and the claim
name for each of the 70 BLM claims held by the Subsidiary:
BLM Serial Number Claim Name
UMC357712-728 Dix-Apex #1-#17
UMC357729 Dix-Apex Fraction #18
UMC357730-733 Dix-Apex #19-#22
UMC357734 Dix-Apex Fraction #23
UMC357735-740 Dix-Apex #24-#29
UMC357741 Dix-Apex Fraction #30
UMC357742-755 Dix-Apex #31-#44
UMC357756 Dix-Apex #45 Fraction
UMC359470 Dix-Apex Fraction #46
UMC359471-492 Dix-Apex Fraction #47-#68
UMC359493 Dix-Apex Fraction #69
UMC359494 Dix-Apex #70
UMC361376-384 Dix-Apex #71-#79
UMC361385 Dix-Apex Fraction #80
<PAGE> 14
The property on which the Subsidiary's claims are located is without
known mineral ore reserves and the proposed program is exploratory in nature.
However, beginning in 1984 several members of present management were
affiliated with various entities which conducted exploratory activities on the
current properties. Gaylon W. Hansen, an officer and a director of the
Subsidiary, and a principal shareholder of the Company, located a number of
claims, including the ones presently owned by the Company. In approximately
1986 such claims were transferred to a corporation of which Mr. Hansen was an
executive officer and a director. Mr. Gay, an officer and a director of the
Subsidiary, and Mr. Kastelic, an officer and a director of the Subsidiary and
the Company, were both affiliated with such entity and performed geologic
services on such properties, including the properties owned by the
Subsidiary. Funding for such entity was exhausted in 1987 and the claims were
returned to Mr. Hansen who transferred them to an unrelated entity in
approximately 1989. The claims were ultimately abandoned by such new entity
in approximately 1993 when the mining laws were amended to require the current
maintenance fees.
Access to the Property
Access to the property is by U.S. Highway 91, approximately 20 miles by
road westerly from St. George, Utah.
Geology
The property is located in the Beaver Dam Mountains in the southwest
region of the State of Utah, which trend toward the northwest from the Virgin
River. The property elevations are generally 4,000 to 5,000 feet high, but
some peaks reach a maximum of 7,700 feet. The rock formations of this
mountain range consist of Precambrian to Triassic in age and consist mainly of
sedimentary limestones and dolomites.
The oldest rocks are mica and hornblende schists cut by pegmatite dykes.
These are overlain by several hundred feet of red quartzite with beds of fine
conglomerate. Above this are several hundred feet of sandy shale, sandstone
and arenaceous limestone and then thick-bedded limestone (600 to 800 feet of
blue limestone and 600 to 800 feet of grey lime-stone). This sequence is
overlain by thin-bedded limestone and, finally, sandstone.
The sediments strike generally toward the northwest and dip shallowly to
the east and west. They are part of a basin and range fault block, that is,
faulted along the western margin and tilted toward the east. Major and minor
faulting is also present within the block. The sedimentary rock formations
have been folded into a major eroded anticlinal structure throughout the
mountain range of this district. The axis of this anticlinal structure trends
northwest and plunges gently to the southeast and northwest.
The property on which the claims of the Subsidiary are located contains
fault fissure veins which host the main type of mineralization in the
district. In addition to the vein type mineralization, there is a connected
bedding controlled type of mineralization, which occurs within the bedded
strata of the Pennsylvanian Callvile formation, which forms the principle rock
unit on the flanks of the anticlinal structure. This structure encompasses an
area of approximately 15 miles long and approximately 5 miles wide.
Certain fault fissure veins and bedded deposits which occur within the
anticlinal structures contain minerals such as copper, lead, zinc, silver,
germanium and gallium.
<PAGE> 15
Mining history in the district includes production of copper as early as
1870 and more recently the production of germanium and gallium in the 1980s.
Notable in the district is the Apex Mine which is the first mine in the world
to be operated primarily for the production of germanium and gallium.
However, the Apex mine has been inactive since approximately 1991. Although
management does not have any direct knowledge of the specific reasons for such
closure, management believes that the principal reason that the mine has been
inactive since 1991 was because the current owner of the mine, at the time of
purchase, chose to close the mine and sell the operating plant because of the
lower price of gallium and germanium in the early 1990s. Mr. Lawrence R.
Bernstein, a director of the Subsidiary, has had extensive experience in
performing research on the Apex Mine, particularly for the U.S. Geological
Survey. (See "Management.") In addition, Mr. Gaylon Hansen, an officer and
director of the Subsidiary, has performed significant independent geological
work within the mining district which includes the Apex mine. However, other
than such geological work performed for others or themselves, no officer or
director of the Company or the Subsidiary has had any relationship with, or
interest in, such mine or its owners or operators. Management believes that
the mineralization on the claims held by the Subsidiary are similar to the
mineralization of the Apex Mine which is surrounded by the Subsidiary's
claims. However, there is no assurance that commercial quantities of gallium
or germanium exist on the claims held by the Subsidiary.
Gallium
Gallium is a scarce element currently produced predominantly as a
byproduct of aluminum and zinc recovery. Its production is controlled by a
small number of companies worldwide. Gallium is probably best know for its
use in gallium arsenide and related semiconductors, as well as for medical
purposes. At present, new gallium supply (as opposed to recycled gallium) is
obtained predominately from the processing of bauxite to recover aluminum,
with a small amount coming from the processing of zinc ores. The supply of
gallium in the U.S. and Europe (and probably Japan) is currently dominated by
the French chemical company, Rhone-Poulenc, which probably controls well over
half of the supply in these areas. There has not been any domestic gallium
production in many years. However, two U.S. companies, Recapture Metals, Inc.
of Blanding, Utah, and Eagle-Picher Industries, Inc. of Quapaw, Oklahoma,
recover and process gallium from scrap or other sources.
About 95% of gallium n the U.S. is used in gallium arsenide and related
materials. In 1995, about 65% of gallium went into optoelectronic devices,
such as light emitting diodes (LEDs), laser diodes, photdetectors, and solar
cells. Integrated circuits used about 33%, with the remainder going into
research, alloys, pharmaceuticals, and other uses.
The published prices for gallium have risen sharply since 1995 due
primarily to increased demand of gallium in integrated circuits and LEDs, the
disrupted supply from the former Soviet Union, as well as the concentrated
control of the supply.
Germanium
Although originally used in certain electronic applications, germanium is
currently used primarily in fiber optics, infrared optics, catalysts,
phosphors, and medicinal compounds. Germanium is a very scarce element and is
produced almost entirely as a byproduct of zinc recovery. The price of
germanium has increased more than 500% in the last year. This increase is
believed due to increased demand, particularly for fiber optics and catalysts,
and the exhaustion of stockpiles and disruption of supply from countries of
the former Soviet Union.
<PAGE> 16
Production of germanium is mainly from the U.S., China, France, and
Germany. In the U.S. germanium concentrates are produced by Savage Zinc, Inc.
from its Tennessee mines, and from the RedDog Mine in Alaska by Cominco.
Several companies produce germanium from scrap or other secondary sources.
Title
The owner of an unpatented mining claim holds possessory title to the
claim. Possessory title is not legal title in the usual sense of that term,
nor does it arise out of any instrument or grant by the United States or out
of any action taken by any officer or agency of the state or federal
governments. Only when a claim is patented is there any affirmative
government grant under which legal title vests in the usual concept of
property ownership. Possessory title arises as a matter of law out of the
performance by the locator of the claim of certain acts of location, including
the staking of claim boundaries and the making of certain record filings in
compliance with the requirements of federal and state laws. The validity of
an unpatented mining claim cannot be conclusively determined by an inspection
of public records. It is dependent upon the legal availability of the lands
at the time the location is made and the validity of the mineral discovery
within the boundaries of each claim, in compliance with federal, state and
local laws relative to location procedures. Prior to 1992 possessory title
was maintained against subsequent location by the annual performance of labor
or improvements on or for the benefit of each mining claim. Since 1992
possessory title for persons holding ten or more claims is maintained by
payment of an annual claim fee of $100. The Company believes it has met these
requirements.
The Company believes the unpatented mining claims it holds have been
located in compliance with the applicable state and federal mining laws and
generally accepted standards in the mining industry. The Company is not aware
at the present time of any material conflicts with other parties concerning
the claims and believes it has valid possessory right in those claims.
Maps
The following maps appear after this page:
1. A map indicating the location of the claims in the State of
Utah.
2. A land status map showing the various lode claims and leases
comprising the property.
Map 2 shows the claims held by the Subsidiary, as well as claims held by
other entities. The claims held by the Subsidiary should not be confused with
the other claims which are owned and operated by other entities in which
neither the Company nor the Subsidiary has any interest.
(Maps were filed on paper)
[THIS SPACE INTENTIONALLY LEFT BLANK]
<PAGE> 17
MANAGEMENT
General
The officers and directors of Apex Minerals Corporation are as follows:
William R. Kastelic President and Director
Howard M. Oveson Secretary/Treasurer and Director
The officers and directors of the Subsidiary, Apex Minerals of Utah,
Inc., are as follows:
William R. Kastelic President and Director
S. Parker Gay, Jr. Vice-president and Director
Gaylon W. Hansen Secretary/Treasurer and Director
Lawrence R. Bernstein, Ph.D. Director
Set forth below is the business experience and biographical information
on each of the executive officers and directors of Apex Minerals Corporation
and Apex Minerals of Utah, Inc.:
WILLIAM R. KASTELIC, has been a director of Apex Minerals Corporation
since February 1996, and has been President since June 1996. He has also been
a director and the president of Apex Minerals of Utah, Inc. since its
inception in June 1996.Since 1988 Mr. Kastelic has been self-employed as an
independent consultant in areas of geology, mining, metallurgy, project
evaluation, and environmental compliance. He received a bachelor of science
degree in geological engineering in 1953 from the University of Utah, and a
business administration degree in business administration in 1970 from the
same university. Age 70.
HOWARD M. OVESON, has been a director and the secretary/treasurer of Apex
Minerals Corporation since July 1995. Since 1980 Mr. Oveson has been
self-employed as a business consultant to private and public companies. Age
62.
GAYLON W. HANSEN, was a director and the president of Apex Minerals
Corporation from July 1995 until June 1996. He has been a director and the
secretary/treasurer of Apex Minerals of Utah, Inc. since its inception in June
1996. Since 1984 Mr. Hansen has been self-employed as an independent
geologist, engaged in identifying and acquiring selected high technology
mineral deposits, and especially including the identification of gallium and
germanium mineral occurrences and their ore deposits. He received a bachelor
of science degree in geology in 1960 from Westminster College, Salt Lake City,
Utah. Age 63.
LAWRENCE R. BERNSTEIN, was a director of Apex Minerals Corporation from
May 1996 until June 1996. He has been a director of Apex Minerals of Utah,
Inc. since its inception in June 1996. Since 1992 he has been the director of
Terrametrix, Menlo Park, CA, where he has performed chemical, geological,
biomedical, and materials research and analysis. Also since 1992 he has been
employed as the minerals editor for the International Centre for Diffraction
Data, Newtown Square, PA, where he is the editor for scientific publications
and an international database. From 1990 to 1992 he was employed as a senior
research scientist and laboratory director for Yaskawa Electric Manufacturing
Company, Inc., Mountain View, CA, where he performed materials science
research. Dr. Bernstein graduated from Harvard University, Cambridge,
Massachusetts, with a bachelor of arts degree in geology (highest honors) in
1977 and a master of arts degree in geology in 1978. He received a doctorate
degree in geology in 1985 from Stanford University, Stanford, CA. Dr.
<PAGE> 18
Bernstein is the author of numerous articles, including the following relating
to gallium and germanium: Geology and Mineralogy of the Apex Mine, Washington
County, Utah. U.S. Geological Survey Open File Report 85-511 (1985);
Germanium Geochemistry and Mineralogy. Geochimica et Cosmochimica Acta, 49,
2409-2422 (1985); and Geology and Mineralogy of the Apex Germanium-Gallium
Mine, Washington County, Utah. U.S. Geological Survey Bulletin 1577 (1986).
Dr. Bernstein is a member of the Mineralogical Society of America; Sigma Xi;
and the American Geophysical Union. Age 40.
S. PARKER GAY, JR., was a director of Apex Minerals Corporation from
February 1996 until June 1996. He has been a director and a vice-president of
Apex Minerals of Utah, Inc. since its inception in June 1996. Since 1971 he
has been the owner and operator of Applied Geophysics, Inc., Salt Lake City,
Utah, involved in uranium, base metal, iron ore, and oil and gas exploration,
utilizing air, ground, and helicopter geophysical methods in the U.S., Mexico,
and Central and South America. Mr. Gay received a bachelor of science from
the Massachusetts Institute of Technology in 1952, and a master of science
degree in geophysics from Stanford University, Stanford, CA, in 1961. Mr. Gay
is the author of numerous articles and three books on geology. He is a member
of the Society of Exploration Geophysicists (Vice-president, 1974-1975); the
European Association of Exploration Geophysicists; the American Institute of
Mining Engineers (Geophysical Unit Chairman, 1969); the Utah Geological
Association; the Utah Geophysical Society (President, 1971-1973); the
Geological Society of Peru (Director, 1962-1964); and the New Basement
Tectonics Committee. Age 65
Each director of the Company is elected to hold office until the next
annual meeting of the shareholders and until his or her successor is elected
and duly qualified. Each officer of the Company is appointed to hold office
until the first meeting of the Board of Directors immediately following the
annual meeting of shareholders. There are no family relationships among any
of the directors or executive officers of the Company or its Subsidiary.
Executive Compensation
There has been no compensation awarded to, earned by, or paid to any of
the executive officers of the Company or its Subsidiary during the year ended
June 30, 1996, except that Mr. Gay, Mr. Bernstein, and Mr. Kastelic each
received 150,000 shares of common stock of the Company in partial
consideration of accepting appointments as officers and/or directors of the
Company or the Subsidiary.
Neither the Company nor its Subsidiary has a written employment contract
with any of its officers.
Under Utah law the Company is entitled to pay compensation to its
directors, unless the articles or bylaws provide otherwise. The Company has
not adopted a policy of compensating its directors, and neither the Company's
Articles of Incorporation, nor the current Bylaws prohibit such payments. The
Company and the Subsidiary have agreed to reimburse their officers and
directors for out-of-pocket expenses relating to their activities as officers
or directors.
Indemnification of Directors, Officers, and Others
Delaware law expressly authorizes a Delaware corporation to indemnify its
directors, officers, employees, and agents against liabilities arising out of
such persons' conduct as directors, officers, employees, or agents if they
acted in good faith, in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation, and, in the case of criminal
proceedings, if they had no reasonable cause to believe their conduct was
unlawful. Generally, indemnification for such persons is mandatory if such
person was successful, on the merits or otherwise, in the defense of any such
<PAGE> 19
proceeding, or in the defense of any claim, issue, or matter in the
proceeding. In addition, the corporation may pay for or reimburse the
reasonable expenses incurred by such a person who is a party to a proceeding
in advance of final disposition if such person furnishes to the corporation an
undertaking to repay such expenses if it is ultimately determined that he is
not entitled to be indemnified. A corporation may also purchase and maintain
liability insurance on behalf of such persons.
Section 14 of Article V of the Company's Bylaws provides for the
indemnification of the Company's officers and directors. In addition, each of
the directors of the Subsidiary has entered into an indemnification agreement
with the Subsidiary to provide for mandatory indemnification of such person
and the advancement of expenses in any action involving indemnification. The
Company does not maintain any liability insurance on behalf of any director,
officer, or other person affiliated with the Company.
Insofar as indemnification by the Company for liabilities arising under
the Securities Act of 1933, as amended (the "Act"), may be permitted to
officers and directors of the Company pursuant to the foregoing provisions, or
otherwise, the Company is aware that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is therefore, unenforceable.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
The founders of the Company were Gaylon W. Hansen, a current officer and
director of the Subsidiary, and a principal shareholder of the Company, and
Howard M. Oveson, an officer, a director, and a principal shareholder of the
Company. On or about July 11, 1995, each of the organizers of the Company
paid $1,650 cash consideration for 1,650,000 shares each of the Common Stock
of the Company.
In June 1996 the Subsidiary acquired two Utah mineral leases from Mr.
Hansen, who had received such leases from the State of Utah in January 1996.
In return, the Subsidiary issued 500 shares, or 5%, of its authorized and
outstanding stock to Mr. Hansen in return for such leases. The Board of
Directors of the Subsidiary determined that the consideration for such the
issuance of such stock was adequate. Mr. Hansen had a cost basis in such
claims of approximately $1,250. (See "Dix-Apex Mining Properties.")
Mr. Hansen may perform geologic services for the Subsidiary pertaining to
its properties, for which he will be paid market rates, subject to the
approval of the Board of Directors of the Subsidiary, excluding the vote of
Mr. Hansen as a director.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information furnished by the
following persons concerning the Common Stock ownership as of February 10,
1997, of (i) each person who is known to the Company to be the beneficial
owner of more than 5 percent of the Common Stock; (ii) all directors and
executive officers; and (iii) directors and executive officers of the Company
as a group:
<PAGE> 20
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of Beneficial
of Beneficial Owner Ownership<F3> Percent of Class
Before Offering After Offering
Minimum Maximum
<S> <C> <C> <C> <C>
Howard M. Oveson<F4> 1,650,000 34.74% 32.67% 29.73%
57 West 200 South
Suite 310
Salt Lake City, Utah 84101
Gaylon W. Hansen 1,650,000 34.74% 32.67% 29.73%
1780 Shaleh Meadows Road
#6-C
Salt Lake City, UT 84117
Ronald N. Vance 1,000,000 21.05% 19.8% 18.02%
57 West 200 South
Suite 310
Salt Lake City, UT 84101
William R. Kastelic 150,000 3.16% 2.97% 2.70%
7124 Brent Lane
Salt Lake City, UT 84121
S. Parker Gay, Jr. 150,000 3.16% 2.97% 2.70%
3801 Barbara Way
Salt Lake City, UT 84117
Lawrence R. Bernstein 150,000 3.16% 2.97% 2.70%
107 Gilbert Avenue
Menlo Park, CA 94025
Officers and Directors 1,800,000 37.89% 35.64% 32.43%
as a Group (2 Persons)
</TABLE>
There are no arrangements, known to the Company, the operation of which
may at a subsequent date result in a change of control of the Company.
<F3>Unless otherwise indicated, this column reflects amounts as to which the
beneficial owner has sole voting power and sole investment power.
<F4>In addition, Mr. Oveson beneficially owns 300 shares, or 3%, of the
outstanding shares of common stock (no par value) of Apex Minerals of Utah,
Inc., the majority owned Subsidiary of the Company.
<PAGE> 21
DESCRIPTION OF SECURITIES
Common Stock
The Company has one class of stock, namely common (par value $.001). The
holders of the Common Stock have equal ratable rights to dividends from funds
legally available therefor, when, as, and if declared by the Board of
Directors of the Company and are entitled to share ratably in all of the
assets of the Company available for distribution to holders of Common Stock
upon liquidation, dissolution, or winding up of the affairs of the Company.
Holders of the Common Stock are entitled to one vote per share on all matters
on which shareholders may vote at all meetings of shareholders. There are no
conversion rights, subscription rights, preemptive rights, cumulative voting
rights, or redemptive rights with respect to the Common Stock. The presently
issued and outstanding shares of Common Stock of the Company are, and upon
sale and issuance as set forth in this Prospectus, the Shares will be, validly
issued, fully paid, and non-assessable.
Transfer Agent
The Company is acting as its own transfer agent. However, management
intends to engage an independent transfer agent immediately upon completion of
the minimum amount of this offering.
MARKET INFORMATION
There currently exists no public trading market for the Common Stock of
the Company. However, the Company intends to make application with the OTC
Bulletin Board immediately following the completion of the minimum amount of
this offering for inclusion on the OTC Bulletin Board.
None of the currently outstanding shares of Common Stock is subject to
outstanding options or warrants to purchase, or securities convertible into,
common equity of the Company. None of the outstanding shares of Common Stock
could presently be sold pursuant to Rule 144 promulgated by the Securities and
Exchange Commission, nor has the Company agreed to register any such shares.
Also, none of the outstanding shares of Common Stock is being, or has been
proposed to be, publicly offered by the Company.
As of June 30, 1996, there were 6 holders of record of the Common Stock
of the Company.
DIVIDEND POLICY
No cash dividends have been declared or paid as yet on the Common Stock
and the Board of Directors of the Company has not yet decided on a dividend
policy. Whether dividends will be paid will be determined by the Board of
Directors of the Company and will necessarily depend on the Company's
earnings, financial condition, capital requirements and other factors. The
Board of Directors has no current plans to declare any dividends in the
foreseeable future.
PLAN OF DISTRIBUTION
<PAGE> 22
The offering will be a minimum-maximum offering with 300,000 Shares being
the minimum. The Shares are offered for cash only and are subject to prior
sale and withdrawal. Although no one has guaranteed the sale of any Shares,
at least 300,000 Shares must be sold if any are sold. Officers and directors
of the Company intend to offer and sell the Shares, for which they will
receive no compensation. The Company may also enter into agreements with
selected outside selling agents to assist it in the sale of the Shares, for
which the Company intends to pay commissions of ten percent (10%) of the
purchase price of such Shares received by the Company.
All funds received by the Company for the purchase of Shares prior to the
sale of the minimum offering will be placed into a escrow account at Brighton
Bank, Salt Lake City, Utah, no later than noon of the next business day
following receipt thereof. All funds received by officers and directors, or
by selling agents, if any, will be transmitted by such persons directly to
Brighton Bank by noon of the next business day after receipt thereof. All
checks shall be made payable to "Brighton Bank" as escrow agent.
If less than the minimum amount of this offering is placed in the escrow
account by noon of the 121st day following the date of this Prospectus, all
funds in the escrow account will be promptly returned to investors without
payment of interest or deduction of commissions and expenses. If at least the
minimum amount of this offering has been placed in the escrow account within
such period, escrowed funds will be released to the account of the Company
after payment of commissions, if any. Investors shall have no right to
withdraw their funds from the escrow account. The Company shall terminate
this offering no later than 120 days following the date upon with the minimum
amount of gross proceeds is deposited into the escrow account.
Upon release of the funds in the escrow account to the Company, the
following shall occur:
(a) The selling agents, if any, will be paid, out of proceeds
from the sale of Shares, a commission equal to ten percent (10%) of the gross
offering price of the Shares sold by them.
(b) The Company will pay the legal, accounting, registration,
printing, and other expenses of this offering not previously paid.
(c) Certificates for the Shares will be prepared and delivered
to purchasers of the Shares.
If at least the minimum number of Shares has been sold, the offering will
continue until all 800,000 Shares are sold, termination of the offering by the
Company, or 120 days following the date upon which the minimum amount of gross
proceeds is deposited into the escrow account, whichever shall first occur.
Prior to this offering there has been no public market for the Common
Stock. There can be no assurance that an active trading market for the
Company's securities will develop following the offering. The public offering
price has been determined by the Company. Among the factors considered in
determining the public offering price, in addition to prevailing market
conditions, were the history of and the prospects for the industry in which
the Company competes, an assessment of the Company's management, its capital
structure, the business potential of the Company, and the demand for similar
securities of comparable companies.
<PAGE> 23
LEGAL PROCEEDINGS
Neither the Company, any of its properties, nor its Subsidiary is a party
to any material pending legal proceedings or government actions, including any
material bankruptcy, receivership, or similar proceedings. Management of the
Company does not believe that there are any material proceedings to which any
director, officer or affiliate of the Company or its Subsidiary, any owner of
record of beneficially of more than five percent of the common stock of the
Company, or any associate of any such director, officer, affiliate of the
Company, or security holder is a party adverse to the Company or its
Subsidiary or has a material interest adverse to the Company or its
Subsidiary.
LEGAL MATTERS
The legality of the Shares offered hereby will be passed upon for the
Company by Ronald N. Vance, Attorney at Law, Salt Lake City, Utah. Mr. Vance
owns 1,000,000 shares of the common stock of the Company and 200 shares, or
2%, of the outstanding stock of the Subsidiary, which shares he received for
services performed for such entities. (See "Security Ownership of Certain
Beneficial Owners and Management.")
EXPERTS
The financial statements of the Company included in this Prospectus have
been examined by Orton & Company, Certified Public Accountants. The financial
statements examined by the Certified Public Accountants have been included in
reliance upon their audit report.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission,
Central Regional Office, 1801 California Street, Suite 4800, Denver, Colorado
80202-2648, a registration statement under the Securities Act of 1933, as
amended, with respect to the Shares. The Prospectus does not contain all the
information set forth in the registration statement and the exhibits and
schedules thereto. For further information with respect to the Company and
the Shares, reference is hereby made to the registration statement and the
schedules and exhibits filed as a part thereof. Statements contained in this
Prospectus as to the contents of any contract or any other document are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the registration statement,
each statement being qualified in all respects by such reference. The
registration statement, including exhibits thereto, may be inspected without
charge at the Central Regional Office set forth above, and copies of all or
any part thereof may be obtained from the Commission's principal office in
Washington, D.C. upon payment of the fees prescribed by the Commission.
The Company is not a reporting company. However, the Company intends to
deliver an annual report to security-holders which will include audited
financial statements.
<PAGE> 24
FINANCIAL STATEMENTS
Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Balance Sheet
<TABLE>
<CAPTION>
ASSETS
December 31, June 30,
1996 1996
(unaudited) (audited)
CURRENT ASSETS
<C> <S> <S>
Cash $ - $ 3,964
Prepaid mining leases (Note 1) 4,667 1,313
Total Current Assets 4,667 5,277
OTHER ASSETS
Mining claims (Note 1) 11,919 10,569
Organizational costs (Note 1) 615 696
Prepaid offering costs 2,767 -
Total Other Assets 15,301 11,265
TOTAL ASSETS $ 19,968 $ 16,542
</TABLE>
<PAGE> 25
Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Balance Sheet (Continued)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, June 30,
1996 1996
(unaudited) (audited)
CURRENT LIABILITIES
<C> <S> <S>
Bank overdraft $ 1 $ -
Accounts payable -
related party (Note 2) 24,100 15,000
Accrued expenses 100 100
Total Current Liabilities 24,201 15,100
Minority interests 835 1,202
STOCKHOLDERS' EQUITY
Common stock, authorized 50,000,000
sharesat $.001 par value; 4,750,000
shares issued and outstanding 4,750 4,750
Capital in excess of par value 5,992 5,992
Retained deficit (accumulated during
the development stage) (15,810) (10,502)
Total Stockholders' Equity (5,068) 240
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 19,968 $ 16,542
</TABLE>
<PAGE> 26
Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Unaudited Statements of Operations
<TABLE>
<CAPTION>
For the Period
For the Three Months Ended For the Six Months Ended From Inception
December 31, December 31, to December 31
1995 1996 1995 1996 1996
REVENUE
<C> <S> <S> <S> <S> <S>
Consulting
Revenue $ - $ - $ - $ - $ 7,250
Total Revenue - - - - 7,250
EXPENSES
General and
Administrative
Expense 2,713 2,081 10,487 5,675 23,325
Total Expenses 2,713 2,081 10,487 5,675 23,325
OTHER INCOME
(EXPENSES)
Loss
attributable to
minority
interests - 179 - 367 415
- 179 - 367 415
Net (loss)
before
provision
for taxes (2,713) (1,902) (10,487) (5,308) (15,660)
Provision
for Taxes
(Note 1) - - - - 150
Net income
(loss) $ (2,713) $ (1,902) $ (10,487) $ (5,308) $ (15,810)
Loss Per
Share
(Note 1) $ - $ - $ - $ - $ -
Average
shares
outstanding 3,300,000 4,750,000 3,300,000 4,750,000 3,938,888
</TABLE>
<PAGE> 27
Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Capital in
Common Stock Excess of Retained Minority
Shares Amount Par Value (Deficit) Interests
<C> <S> <S> <S> <S> <S>
Balance, July 1,
1995 - $ - $ - $ - $ -
Issuance of shares
for cash at $.001 3,300,000 3,300 - - -
Issuance of shares
for services at
$.001 (Note 2) 1,300,000 1,300 - - -
Issuance of shares
for services at
$.0134 (Note 2) 150,000 150 1,863 - -
Capital contribution
by shareholder/
officer (Note 2) - - 4,129 - -
Issuance of
subsidiary stock
for services &
state mining
claims (Note 2) - - - - 1,250
Net (loss) for
the year - - - (10,502) (48)
Balance, June 30,
1996 4,750,000 $ 4,750 $ 5,992 $ (10,502) $ 1,202
Net (loss) for
the period - - - (5,308) (367)
Balance, December
31, 1996 4,750,000 $ 4,750 $ 5,992 $ (15,810) $ 835
</TABLE>
<PAGE> 28
Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the Six For the Six For the Period
Months Ended Months Ended From Inception
December 31, December 31, to December 31,
1995 1996 1996
CASH FLOWS FROM
OPERATING ACTIVITIES
<C> <S> <S> <S>
Net income (loss) $ (10,487) $ (5,308) $ (15,810)
Items not requiring cash flow:
Amortization 48 81 192
Mining leases 8,700 3,646 3,646
Increase in accounts payable - 1 101
Issuance of stock for services - - 3,688
Minority share of net loss - (367) (415)
Net Cash (Used) by
Operating Activities (1,739) (1,947) (8,598)
CASH FLOWS FROM
INVESTING ACTIVITIES
Cash paid for:
Mining claims (2,069) (1,350) (11,294)
Prepaid mining leases (10,575) (7,000) (8,313)
Prepaid offering costs - (2,767) (3,324)
Net cash (used) by
Investing Activities (12,644) (11,117) (22,931)
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock 3,300 - 3,300
Loans from related parties 6,900 9,100 24,100
Capital contribution by
related parties 4,129 - 4,129
Net Cash provided by
Financing Activities $ 14,329 $ 9,100 $ 31,529
NET INCREASE (DECREASE) IN CASH $ 54 $ (3,964) $ -
CASH AT BEGINNING OF PERIOD - 3,964 -
CASH AT END OF PERIOD $ 54 $ - $ -
Supplemental Cash Flow
Information
Cash paid for:
Interest $ - $ - $ -
Income taxes $ - $ - $ 50
Non Cash Flow Information
Stock issued for:
Services $ - $ - $ 3,688
Organization Costs - - 250
Mining claims - - 625
$ - $ - $ 4,563
</TABLE>
<PAGE> 29
Apex Minerals Corporation and Subsidiary
(a development stage company)
Notes to the Consolidated Financial Statements
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated in the State of Delaware on July 10, 1995
for the primary purpose of acquiring mining claims. In July and August 1995 the
Company located 45 unpatented lode mining claims known as the Dix Apex #1
through #45 inclusive, in the Tutsagubet Mining District in Washington County,
Utah. An additional 25 unpatented lode mining claims known as the Dix Apex #46
through #70 inclusive, were located in the same mining district in December
1995.
The Company's 90% owned subsidiary, Apex Minerals of Utah, Inc. (Apex
Utah) was incorporated in June 1996 for the purpose of holding title to the Utah
mining claims. These claims were transferred in June 1996. In November 1996,
Apex Utah purchased an additional 9 mining claims and part of a 10th mining
claim in the same vicinity as the six Apex claims.
The Company exchanged all of its interest in the mining claims and the
prepaid mining leases for 9,000 shares of the subsidiary. Another 1,000 shares
were issued to other parties for various services rendered and two state mining
leases (See Note 2).
In the future, the Company will recognize it's revenues from the sale of
mineral and mining claims and may conduct studies and perform research and
consultation from time to time.
Loss Per Share
The computations of loss per share of common stock are based on the
weighted average number of shares outstanding at the date of the financial
statements.
Provision for Income Taxes
Minimum state income taxes have been accrued. Due to operating losses,
no federal income tax has been accrued.
Cash and Cash Equivalents
For the purposes of the statements of cash flows, cash and cash
equivalents are defined as demand deposits at banks and certificates of deposits
with maturities less than three months.
Consolidation
The consolidated financial statements as of June 30, 1996 and December
31, 1996 include the accounts of the parent company, Apex Minerals Corporation,
and its majority owned subsidiary Apex Minerals of Utah, Inc. All significant
intercompany transactions and accounts have been eliminated.
<PAGE> 30
Apex Minerals Corporation and Subsidiary
(a development stage company)
Notes to the Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Organization Costs
Organization costs of the Company are being amortized over 60 months.
Total amortization costs for the six months was $81.
Development Stage Company
The Company has yet to fully develop any material income from its stated
primary objective and it is classified as a development stage company. All
income, expenses, cash flows and stock transactions are reported since inception
Mining Claims
The Company has acquired several mining claims in Washington county in the
state of Utah. The Company has expended funds in staking the claims and making
the proper filings with the appropriate county, state and federal agencies.
Prepaid Mining Leases
Each year, the Bureau of Land Management charges $100 per mining claim
which is to be paid in advance for the fiscal year September 1 to August 31.
The Company has prepaid its lease on the mining claims to August 31, 1997.
NOTE 2 - RELATED PARTY TRANSACTIONS
During the period, an officer and shareholder has provided loans for
operating cash for the Company. Total loans made to the Company during the six
month period ending December 31, 1996 was $9,100. Total loans advanced since
inception is $24,100 The loans are non-interest bearing and payable on demand.
NOTE 3 - INTERIM FINANCIAL STATEMENTS
The unaudited financial statements for the three and six months ended
December 31, 1996 were prepared from the books and records of the Company.
Management believes that all adjustments have been made to the financial
statements to make a fair presentation of the financial condition of the Company
as of December 31, 1996. The results of the three and six months are not
indicative of a full year of operation for the Company.
<PAGE> 31
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY 3
RISK FACTORS 5
USE OF PROCEEDS 7
DILUTION 8
MANAGEMENT'S DISCUSSION AND ANALYSIS 9
BUSINESS OF THE COMPANY 10
General 10
Proposed Activities 10
Competition 12
Regulation 12
Employees 13
DIX-APEX MINING PROPERTIES 13
General 13
Access to the Property 14
Geology 14
Gallium 15
Germanium 15
Title 16
Maps 16
MANAGEMENT 17
General 17
Executive Compensation 18
Indemnification of Directors, Officers, and Others 18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 19
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 19
DESCRIPTION OF SECURITIES 21
Common Stock 21
Transfer Agent 21
MARKET INFORMATION 21
DIVIDEND POLICY 21
PLAN OF DISTRIBUTION 22
LEGAL PROCEEDINGS 23
LEGAL MATTERS 23
EXPERTS 23
ADDITIONAL INFORMATION 23
FINANCIAL STATEMENTS 24
Until _____, 1997, (ninety days after the date of this Prospectus) all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to delver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
