FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington D. C. 20549
(Mark One
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2000 OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________
Commission file number: 000-27791
Apolo Gold, Inc.
---------------------------------------
(Exact name of small business issuer in its charter)
Nevada Applied for
-----------------------------------------------------------------------
State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization
#1458 - 409 Granville St.
Vancouver, British Columbia V6C 1T2
--------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 604-687-4150
Securities Registered Under Section 12(b) of the Exchange Act:
None
--------------
(Title of class)
Securities Registered Under Section 12(g) of the Exchange Act:
Common Stock, 0.001 par value
-----------------------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the issuer'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. [X]
State issuer's revenues for most recent fiscal year: $91,841
---------
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates (5,864,580 shares) based on the average bid and asked price as
of September 21, 2000 being $0.21.5 per share: $1,260,885.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 17,714,580 shares of Common Stock as
of September 28, 2000.
Documents Incorporated by Reference: None
<PAGE>
NOTE REGARDING FORWARD LOOKING STATEMENTS
Except for statements of historical fact, certain information contained herein
constitutes "forward-looking statements," including without limitation
statements containing the words "believes," "anticipates," "intends," "expects"
and words of similar import, as well as all projections of future results. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results or achievements of the Company
to be materially different from any future results or achievements of the
Company expressed or implied by such forward-looking statements. Such factors
include, but are not limited to the following: the Company's lack of an
operating history, the Company's minimal level of revenues and unpredictability
of future revenues; the Company's future capital requirements to develop
additional property within the defined claim; the risks associated with rapidly
changing technology; the risks associated with governmental regulations and
legal uncertainties; and the other risks and uncertainties described under
"Description of Business - Risk Factors" in this Form 10-KSB. Certain of the
forward looking statements contained in this annual report are identified with
cross-references to this section and/or to specific risks identified under
"Description of Business - Risk Factors".
PART 1
ITEM 1. DESCRIPTION OF BUSINESS.
History
Apolo Gold, Inc, (the Company) was incorporated in March 1997 under the
laws of the State of Nevada for the purpose of financing and operating gold and
diamond concessions in Venezuela, as well as other precious metals
opportunities.
The Company formed a subsidiary, Compania Minera Apologold, C.A. a
Venezuela corporation (the Venezuela subsidiary) and on May 18, 1999 the
Venezuela subsidiary entered into an agreement with Empresa Proyectos Mineros
Goldma, C.A. to acquire the elluvial diamond and gold mining concession named
Codsa 13, located in the Gran Sabana Autonomous Municipality, State of Bolivar,
Venezuela. The purchase price for the concession was $3,500,000 (2,086,000,000
Bolivars). A down payment of $50,000 (29,800,000 Bolivars) was made on or about
May 30, 1999. A second payment of $50,000 (29,800,000 Bolivars) was made
November 15, 1999. The Venezuela Subsidiary agreed to establish at least one
mining operation on the concession with a minimum production of 1,000 cubic
meters per day, within one year of execution of the agreement and its
authentication by the Venezuela government. The agreement was first filed or
authenticated with the Venezuela government on May 18, 1999.
The Venezuela subsidiary negotiated an extension of this agreement to
November 2000 with Empresa Proyectos Mineros Goldma, C.A.
Once production commences, the Venezuela Subsidiary has agreed to pay
monthly payments in the amount equal to twenty percent of the gross production
from the mining operation. Fifty percent of the monthly payment (10% of the
gross production) is to be credited as payment on the purchase price and fifty
percent is to be applied as rental payment on mining equipment and technical
assistance.
The Venezuela Subsidiary agreed that within one year from the date of
authentication of the purchase agreement with the Venezuelan authorities, the
amount of the monthly payment is to be at least $10,000 even if production is
<PAGE>
insufficient to pay the minimum amount. Payments of the $10,000 minimum began in
June 2000 and have been paid each month since.
All payments to the Seller may be paid in US dollars, gold and diamonds as
priced in Venezuela, and shares in the Company, as selected by the Seller in any
combination thereof. The agreement requires a further payment of a royalty to
the Seller in the amount of 2.5% of the annual net profits from operations on
the concession. This royalty is payable as long as there is production on the
property. There is also a royalty payable to the government of Venezuela of 4%
of gross production. The agreement also requires that an existing mining
operation by the Seller may continue and that the Seller may continue to conduct
exploration and testing until the entire purchase price has been paid.
On May 20 1999,the Company entered into an assignment agreement with its
Venezuelan Subsidiary, which assigned the rights and obligations under the
Concession Agreement to the Company. In addition to the obligations under the
Concession Agreement, the Company paid 3,500,000 in shares of common stock to
AML Diamond and Gold Exp. As well, the Company also agreed to pay a further
royalty in the amount of 7.5% of net production profits. AML Diamond and Gold
Exp is owned by Albert Aleong, a Venezuelan resident who has worked at the
property site. He is not related to any directors or officers of the Company nor
is he currently working at the mine site.
Operations
The Company is taking over an existing elluvial mining operation on the
concession Codsa 13. This existing operation processed approximately 250 cubic
yards of material per day by using very inefficient mining technology and
equipment. The existing process used sluice boxes where hand excavated gravels
are washed over a ridged board to wash away lighter sediments and allowing gold
to collect in the "riffles". The Geological Evaluation commissioned by the
Company from Geological & Mining Exploration Services, S.A. of Las Cumbres,
Panama, tested the tailings of the existing operation and concluded that the
present operation recovers less than 40% of existing gold and diamonds. No
records of the volume of gravel processed or gold and diamonds produced were
maintained or if they were, they were not available to the Company.
The Company has imported mining equipment including a floating dredge and a
"Super Bowl" gold ore processing machine that is fully installed on the property
and currently handling small production. Once preliminary testing is completed,
the Company expects to process a minimum of 1,000 cubic yards of elluvial ore
per day.
As the Company has not yet attained full production, nor has it achieved
the desired one shift level of 1,000 yards per day, there is no assurance that
such production will be attained. Accordingly, there can be no assurance that
the Company will operate at a profitable level.
The mining process being used is open pit placer mining. A large pit is dug
and allowed to fill with ground water. Alluvial ore is pumped from the bottom of
the pit, screened for rough diamonds, and then processed through the Super Bowl
for removal of gold ore. The Subsidiary Company employs a crew of 20 people and
will operate initially on a one-shift basis. When production procedures are
refined, the Company intends to implement a two-shift operation.
Rough diamonds and gold will be sold to buyers in Venezuela while some
diamonds may be sold in other world markets.
The Company has no employees at present other than its officers. The
Venezuela Company employs 20 people, plus it hires as consultants, mining
engineers and other professionals as required.
<PAGE>
The Company expects to be producing 1,000 cubic yards per day in October
2000. Production will increase to 2,000 cubic yards per day later in the year.
Principal Markets
The products produced by the Company are sold on world markets at prices
established by market forces. These prices are not within the control of the
Company. These prices have been taken into consideration in the evaluation of
the property and its potential. Operating costs have been determined, possible
recovery of precious metals has been estimated, and the risks involved have been
determined. There is no assurance that the recovery of precious metals will
occur as estimated.
Government Regulation
The Company is aware of environmental requirements in the operation of
concession. The Company is subject to regular inspections by Government
authorities and to date has been approved after each inspection. The Company is
also subject to a royalty of 4% on production and is audited on a regular basis
by Government authorities. The Company is comfortable with the requirements and
regulations and continues to abide by all regulations and requirements.
Risk Factors
1. The Company has limited earnings. It is also subject to all the risks
inherent in a developing business enterprise including lack of cash flow,
and no assurance of recovery of precious metals.
2. The Company's success and possible growth will depend on its ability to
recover precious metals, process them, and successfully sell them on world
markets. It is dependent upon the market's acceptance of the quality of the
product presented for sale.
3. Liquidity and Need for additional financing is a concern for the Company.
At the present time, the Company does not have sufficient cash to finance
its operations and is dependent on the ability of its management team to
obtain the necessary working capital to operate successfully. There is no
assurance that the Company will be able to obtain additional capital as
required, or if the capital is available, to obtain it on terms favorable
to the Company. The Company may suffer form a lack of liquidity in the
future that could impair its production efforts and adversely affect its
results of operations.
a) Foreign Operations Risks are significant as its principal business
operations will be located in St Elena, Venezuela. Although management
intends to abide by all laws of the country, including procurement of
all necessary permits, licenses, and other regulatory approvals, the
Company has no control over the regulatory climate and the possible
changes in laws and regulations.
5. Competition is more in the area of ability to sell at world prices, which
the Company cannot control, and the Company competes for access to the
world markets with its products.
6. The Company is wholly dependent at the present upon the personal efforts
and abilities of its Officers and Directors, who exercise control over the
day-to-day affairs of the Company.
a) There are currently 17,714,580 common shares outstanding out of a
total authorized capital of 200,000,000 shares. There are 182,426,420
shares of the Company unissued. The Board of Directors has the power
to issue such shares, subject to shareholder approval, in some
instances. Although the Company presently has no commitments or
contracts to issue any additional shares to other persons, it may in
the future attempt to issue shares to acquire properties, equipment,
or other products, or for corporate purposes. Any additional issuance
of shares by the Company form its' authorized but unissued shares,
would have the effect of diluting the interest of existing
shareholders.
b) There are no dividends anticipated by the Company. At the present
time, the Company intends to focus on reduction of its property debt.
Company's Office
The Company's administrative headquarters are located at #1458-409
Granville St, Vancouver, BC, Canada V6C 1T2 and its telephone number is
604-687-4150.
ITEM 2 - Description of Property
Location and Title
The Company has acquired the alluvial diamond and gold mining concession
named Codsa 13.
Codsa 13 is located in the Gran Sabana Autonomous Municipality, State of
Bolivar, in the extreme southeast of Venezuela. It is approximately sixty
kilometers north of Santa Elena, a village of 15,000 people with sufficient
facilities and supplies to support the mining operation. Santa Elena has daily
flights to Caracas. The mining operation is accessible by gravel road from Santa
Elena.
Title to the Codsa 13 mining concession has been held by Empresa Proyectos
Mineros Goldma, C.A. since 1992 and is the seller as described above to the
Company's Subsidiary.
Regional Geology
Existing data on Codsa 13 defines it as part of the Magnamatica de Roraima
Province, of Proterozoico, between 1,800 and 1,650 million years. This
Magnamatica Province is formed by a series of formations, described in the
"Proyecto de Inventario de Resursos Naturales de la Region de Guayana de C.V.G.
Technical Nigeria C.A. These formations are as follows:
Uairen Formations, Inferior and Superior Part
Formed mainly by quartz sandstone and conglomerate of fine and coarse side,
sandstone feldespatic, limonite, breccia lens and sandstone of white and pink
colors, lens of lutita vitreous.
Uaimpue Formations: Lower, Middle and Upper Part
Formed mainly by quartz sandstone of fine and medium grain with crossed
stratification, "flat and leveled" parallel, pinkish and violet colors, vitreous
tufts, volcanclastic sandstones red in color with pyrite crystals, fine grained
quartz like sandstones, vitreous tufts and green chert. The area is considered
as a diamond bearing and placer gold field, however there is no concluding
criteria on the primary deposits of the same.
<PAGE>
Description of Codsa 13
The gold and diamond deposit currently being exploited on Codsa 13
concession, consists of a series of massive stratum of fine and thick-grained
quartz sands with white quartz edges and gravel with unconsolidated sand quartz
matrix.
This sequence graduates toward the ceiling to levels of very fine grain
similar to volcanic ash, white in color and at a level of black in color, of
quartz grains that make up a good level of stratigraphic reference.
In the current pits, the base of the cystic section cannot be observed,
below the levels of gravel and a lens of breccia cemented with hematite limonite
exists. The lowest level observed consists of very homogenious fine grained
sands, with isolated quartz edges. The sequence of sands with evidence of gold
contents, outcropping in the pits show an average thickness of 9 meters although
true thickness and morphology is unknown.
The soil that is mainly a sandy area, with little organic contents, is not
more than 0.50 meters. The deposit forms a flat area with a slight inclination
that reaches a subsurface level at 1 meter deep. This will allow the Company to
maintain the extraction pit full of water that will be adequate for the planned
extraction process.
In the Codsa 13 concession, the potential zone for the contents of elluvial
with gold and diamonds has not yet been properly defined, although there is
enough evidence to consider that the undulated flat morphology, which forms a
filling at the level of the river, could contain the main potential. In
addition, there is evidence that the area has been affected by hydrothermal
processes of mineralization that increased the possibilities of mineralization.
It is estimated that the alluvium zone is located at the undulated flat
areas, with an approximate elevation of 10 meters above Rio Cuquenan level. The
current works in the two pits indicates that the deposits are extended in this
area and that the same contain gold and diamonds. The works carried out at the
higher topographical levels, have not given good results, however the same have
not been carried out with adequate control of the possible levels of greater
interest. The area covered by this undulated flat area, which is considered as
the best potential covers nearly 3 square km. This represents a 9,000,000 square
meter area. If a minimum thickness of 5 meters is taken into consideration for
the sequence alluvium, the existing potential is of 45,000,000 cubic meters,
which represent close to 112,500,000 tons of alluvial ore.
ITEM 3 - Legal Proceedings
The Company is not a party to any pending or threatened litigation and to
its knowledge, no action, suit or proceedings has been threatened against its
officers and its directors.
ITEM 4 - Submission of Matters to a Vote of Security Holders
None. No matters were submitted during the fiscal year covered by this
report to a vote of security holders.
PART II
ITEM 5 - Market for Common Equity and Related Stockholder Matters
The Company's common stock has been quoted on the National Association of
Securities Dealers' Over-the-Counter market since May 17,2000. There is no other
public trading market for the Company's equity securities.
<PAGE>
The following table summarizes trading in the Company's common stock, as
provided by quotations published by the OTC Bulletin Board for the periods as
indicated. The quotations reflect inter-dealer prices without retail mark-up,
markdown or commission, and may not represent actual transactions.
Quarter Ended High Bid Low Bid
--------------------------------------------------------------
June 30, 2000 $0.31 $0.19
As of September 25 2000, there were fifty-eight holders of record of the
Company's common stock which does not account for the number of beneficial
holders whose stock is held in the name of broker-dealers or banks.
The Company has not paid, and, in the foreseeable future, the Company does
not intend to pay any dividends.
ITEM 6 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
General Overview
Apolo Gold, Inc. ("Company") was incorporated in March 1997 under the laws
of the State of Nevada for the purpose of financing and operating a gold and
diamond mining concession in Southeastern Venezuela, acquired by the Company's
subsidiary Compania Minera Apologold, C.A. a corporation incorporated under the
laws of Venezuela.
Compania Minera Apologold, C.A. entered into an agreement on May 18, 1999
with Empresa Proyectos Goldma, C.A. to acquire the alluvial diamond and gold
mining concession called Codsa 13, that is located in Gran Sabana Autonomous
Municipality State of Bolivar, Venezuela for a total consideration of
$3,500,000(2,086,000 Bolivars). Payments of $100,000 have been made to date on
this debt and starting June 30, 2000, the Company commenced minimum monthly
payments of $10,000 until such time as they enter into full production.
Compania Minera Apologold, C.A. also agreed to establish at least one
mining concession with a minimum production of 1,000 cubic meters per day within
one year from the date of authentication of the purchase agreement by the
government of Venezuela. This authentication occurred on May 18, 1999 and the
Company subsequently negotiated an extension to the one-year provision and now
must be in production by November 1, 2000. Production has already started on the
concession and volumes of 1,000 cubic yards per day are expected in October
2000. This should increase to 2,000 cubic yards per day later in the year.
Once production commences, Compania Minera Apologold, C.A. agreed to
monthly payments in an amount equal to twenty percent of the gross production
from the mining operation. Fifty percent of the monthly payment (10% of the
gross production) is to be credited as payment on the purchase price and the
remaining fifty percent is to be applied as rental payment on mining equipment
and technical assistance. In the event production is inadequate, or delayed for
any reason, minimum payments of $10,000 per month shall be made. This payment
schedule continues until the debt is retired. The same formula applies whereby
fifty percent of the $10,000 is applied to the debt and the remaining 50% is
applied as a rental payment and technical assistance.
All payments to the Seller can be made in US dollars, gold and diamonds as
priced in Venezuela and shares in the Company, or any combination thereof, as
agreed by the Seller.
In addition to the foregoing, a further royalty payment of 2.5% of the
annual net profits of the concession is to be paid to the Seller. The royalty is
payable as long as there is production on the property.
A royalty of 4% of production is also payable to the government of
Venezuela.
<PAGE>
Results of Operations - Period From July 01, 1999 to June 30, 2000
REVENUES: Revenues in the year ending June 30 2000 amounted to $91,841. This was
the result of testing programs carried out over the past several months. Full
production is expected in October 2000.
EXPENSES: During the year ending June 30 2000, the Company incurred direct
expenses of $215,123, indirect expenses of 29,016 and general and administrative
expenses of $107,501.
A summary of these expenditures is as follows: Direct expenses:
Cost of production $ 69,737
Depreciation and depletion 72,160
Wages 65,470
Supplies and sundry 7,756
------------
215,123
------------
Indirect expenses:
Travel and camp expenses 29,016
------------
General and administrative:
Legal and Professional fees $ 15,600
Consulting fees 20,500
Office and Administration 54,374
Travel and promotion 17,037
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Total $107,501
-------------
All of the above noted direct and indirect expenses of $244,139 were wages
and expenses related to preparation of the property for production, installation
of equipment and the setup of production procedures.
General and administrative expenses of $107,501 included legal and
accounting fees paid of $15.600, agreement preparation in Venezuela, and the
preparation and filing of quarterly reports with the SEC and the audits of the
accounts.
The Company continues to carefully control its expenses, and intends to
seek financing in the future to provide necessary funds to conduct its
production and further develop its property concession..
The Company has no employees at the present time other than its officers
and directors and engages personnel through consulting agreements where
necessary as well as outside attorneys, accountants and technical consultants.
Its subsidiary employees between 15 and 20 people at the mine site in Venezuela
who are paid weekly in Bolivars.
Cash on hand at June 30, 2000 was $6,485 and the Company recognizes it does
not have sufficient funds to conduct ifs affairs. It fully intends to seek
financing by way of loans, and private placements.
NET LOSS: The Company incurred a net loss of $259,799 for the fiscal year
ended June 30, 2000. It is expected that the net loss will be eliminated in the
fiscal year 2001.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its development to date by way of sale of common
stock and with loans from a director of the Company.
At June 30, 2000, the Company had 17,573,580 shares of common stock
outstanding and has raised total capital to date of $1,177,577. In addition the
Company has borrowed $159,659 for a total capital injection to date of
$1,337,236.
The Company is aware that it will require additional capital during the
current fiscal year to assist in the development of its property. It intends to
seek additional capital by private placement, loans or a combination of both.
The Company is not in arrears on any of its obligations.
INFLATION
Inflation has not been a factor during the fiscal year ending June 30,
2000. While inflationary forces are moderately higher in the current year, it is
not considered a factor in capital expenditures or production activities.
<PAGE>
Item 7. Financial Statements.
APOLO GOLD, INC.
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statement of Stockholders' Equity 4
Consolidated Statements of Cash Flows 5
NOTES TO FINANCIAL STATEMENTS 6
<PAGE>
((LOGO))
Williams & Webster, P.C.
Certified Public Accountants & Business Consultants
Bank of America Financial Center
601 W. Riverside, Suite 1940
Spokane, WA 99201-0611
509-838-5111 Fax: 509-838-5114 Email: [email protected]
Board of Directors
Apolo Gold, Inc.
Vancouver, British Columbia
CANADA
Independent Auditor's Report
We have audited the accompanying consolidated balance sheets of Apolo Gold, Inc.
as of June 30, 2000 and 1999 and the related consolidated statements of
operations and comprehensive loss, cash flows, and stockholders' equity for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Apolo Gold, Inc. as
of June 30, 2000, and 1999 and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 9 to the
financial statements, the Company's significant operating losses and default on
its equipment purchase contract raise substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters also are
described in Note 9. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Williams & Webster, P.S.
----------------------------
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
August 31, 2000
<PAGE>
APOLO GOLD, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, June 30,
2000 1999
--------------- --------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash $ 6,485 $ 10,143
Accounts receivable 4,880 -
Deposit - 50,000
--------------- --------------
--------------- --------------
Total Current Assets 11,365 60,143
--------------- --------------
PROPERTY AND EQUIPMENT
Equipment 350,658 4,100
Less accumulated depreciation (61,694) (34)
--------------- --------------
--------------- --------------
Total Property and Equipment 288,964 4,066
--------------- --------------
MINERAL PROPERTY 2,999,500 -
--------------- --------------
TOTAL ASSETS $ 3,299,829 $ 64,209
=============== ==============
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 57,454 $ -
Loans payable 5,000 5,000
Accrued interest 193,979
Shareholder advances 154,659 239,859
Mineral property contract payable 60,000 -
--------------- --------------
Total Current Liabilities 471,092 244,859
--------------- --------------
LONG-TERM LIABILITIES
Mineral property contract payable, net of current portion 2,845,000 -
--------------- --------------
TOTAL LIABILITIES 3,316,092 244,859
--------------- --------------
COMMITMENTS AND CONTINGENCIES - -
--------------- --------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 200,000,000 shares authorized, $0.001
par value; 17,573,580, and 12,942,250 shares
issued and outstanding, respectively 17,574 12,942
Additional paid-in-capital 1,160,023 796,489
Stock subscriptions receivable - (250,000)
Accumulated deficit (1,193,859) (740,081)
--------------- --------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (16,263) (180,650)
--------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 3,299,829 $ 64,209
=============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements
-2-
<PAGE>
APOLO GOLD, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
June 30, June 30,
2000 1999
--------------- ----------------
<S> <C> <C>
REVENUES $ 91,841 $ -
COST OF REVENUES
Direct costs 215,123 -
Indirect costs 29,016 -
--------------- ----------------
--------------- ----------------
TOTAL COST OF REVENUES 244,139 -
--------------- ----------------
GROSS PROFIT (LOSS) (152,298) -
--------------- ----------------
EXPENSES
Mineral property exploration expense - 70,919
Consulting and professional fees 36,100 27,000
General and administrative expenses 71,401 2,248
--------------- ----------------
TOTAL EXPENSES 107,501 100,167
--------------- ----------------
LOSS FROM OPERATIONS (259,799) (100,167)
OTHER EXPENSES
Interest Expense 193,979 -
--------------- ----------------
NET LOSS BEFORE INCOME TAXES (453,778) (100,167)
INCOME TAXES - -
--------------- ----------------
NET LOSS AFTER INCOME TAXES $ (453,778) (100,167)
=============== ================
NET LOSS PER COMMON SHARE,
BASIC AND DILUTED $ (0.029) (0.008)
=============== ================
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING,
BASIC AND DILUTED 15,585,915 11,823,591
=============== ================
</TABLE>
The accompanying noates arae an integral part of these financial statements
-3-
<PAGE>
APOLO GOLD, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
Common Stock Additional Stock Total
Number Paid-In Subscriptions Accumulated Stockholders'
of Shares Amount Capital Receivable Deficit Equity
----------- --------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1998 12,517,800 $ 12,518 $ 716,681 $ (250,000) $ (639,914) $ (160,715)
Issuance of shares at $0.12
to $0.25 per share for cash 324,450 324 78,908 - - 79,232
Issuance of shares at $0.01
per share for equipment 100,000 100 900 - - 1,000
Net loss for the year ended June 30, 1999 - - - - (100,167) (100,167)
---------- --------- -------- --------- -------- ---------
Balance, June 30, 1999 12,942,250 12,942 796,489 (250,000) (740,081) (180,650)
Issuance of shares at $0.01
for cash 3,520,000 3,520 31,680 - - 35,200
Issuance of shares at $0.35
for equipment 120,252 120 42,068 - - 42,188
Issuance of shares at $0.35
for cash 499,363 499 174,178 - - 174,677
Issuance of shares an average of $0.24 per share
for services and debt 491,715 492 115,608 - - 116,100
Payment of stock subscriptions receivable - - - 250,000 - 250,000
Net loss for the year ended June 30, 2000 - - - - (453,778) (453,778)
------------- ----------- ------------ ------------- ------------- -----------
Balance, June 30, 2000 $ 17,573,580 $ 17,574 $ 1,160,023 $ - $ (1,193,859) $ (16,263)
============= =========== ============ ============= ============= ===========
</TABLE>
The accompnaying notes are an intergral part of these financial statements.
-4-
<PAGE>
APOLO GOLD, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Year For the Year
Ending Ending
June 30, 2000 June 30, 1999
-------------------- ----------------------
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (453,778) $ (100,167)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation 61,660 34
Depletion 10,500 -
Stock issued for services 16,100 1,000
Decrease (increase) in:
Accounts receivable (4,880) -
Accounts payable 14,954 -
Accrued interest 193,979 -
Deposits - (50,000)
Short term notes payable - 5,000
-------------------- ----------------------
Net cash (used) by operating activities (161,465) (144,133)
-------------------- ----------------------
Cash flows from investing activities:
Purchase of mineral property (55,000) -
Purchase of equipment (261,870) (4,100)
-------------------- ----------------------
Net cash (used) by investing activities (316,870) (4,100)
-------------------- ----------------------
Cash flows from financing activities:
Net proceeds from shareholder loans 14,800 77,942
Proceeds from collection of subscriptions receivable 250,000 -
Proceeds from sale of common stock 209,877 78,240
-------------------- ----------------------
Net cash provided by financing activities 474,677 156,182
-------------------- ----------------------
Increase (Decrease) in cash (3,658) 7,949
Cash, beginning of year 10,143 2,194
-------------------- ----------------------
Cash, end of year $ 6,485 $ 10,143
==================== ======================
Supplemental disclosures:
Interest paid $ - $ -
==================== ======================
Income taxes paid $ - $ -
==================== ======================
Non-cash investing and financing activities:
Common stock issued for services $ 16,100 $ 1,000
Common stock issued for equipment $ 42,188 $ -
Common stock issued for debt $ 100,000 $ -
Property and equipment purchased on financing contract $ 3,600,000 $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
APOLO GOLD, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Apolo Gold, Inc. (the Company) was incorporated in March of 1997 under the laws
of the State of Nevada primarily for the purpose of acquiring and developing
mineral properties. The Company conducts operations primarily from its offices
in Vancouver, British Columbia, Canada. The Company has formed a subsidiary
corporation in Venezuela. Although this entity has had no financial
transactions, the Company used this subsidiary to acquire a Venezuelan mining
property.
In November 1997, the Company incorporated Apologold C.A. (a Venezuelan
company). The Company owns 99 shares of the 100 shares issued by Apologold C.A.
The remaining share is owned by a citizen of Venezuela. See Note 6.
Apologold C.A. began production in the State of Bolivar, Venezuela in November
1999 using an open pit mining process.
The Company's year-end is June 30.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Apolo Gold, Inc. is presented
to assist in understanding the Company's financial statements. The financial
statements and notes are representations of the Company's management, which is
responsible for their integrity and objectivity. These accounting policies
conform to generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Accounting Method
-----------------
The Company's financial statements are prepared using the accrual method of
accounting.
Basic and Diluted Loss Per Share
--------------------------------
Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding during the period. The weighted average number of
shares was calculated by taking the number of shares outstanding and weighting
them by the amount of time that they were outstanding. Basic and diluted loss
per share was the same, as there were no common stock equivalents outstanding.
Estimates
---------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Development Stage in Prior Years
--------------------------------
The Company was formed in March 1997, and was in the development stage through
June 30, 1999. The year 2000 is the first year during which it is considered an
operating company.
Mineral Exploration and Development Costs
-----------------------------------------
All exploration expenditures are expensed as incurred. Significant property
acquisition payments for active exploration properties are capitalized. If no
minable ore body is discovered, previously capitalized costs are expensed in the
period the property is abandoned. Expenditures to develop new mines, to define
further mineralization in existing ore bodies, and to expand the capacity of
operating mines, are capitalized and amortized on a units of production basis
over proven and probable reserves.
Should a property be abandoned, its capitalized costs are charged to operations.
The Company charges to operations the allocable portion of capitalized costs
attributable to properties sold. Capitalized costs are allocated to properties
sold based on the proportion of claims sold to the claims remaining within the
project area.
Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.
The Venezuelan government does not require foreign entities to maintain cash
reserves in Venezuela.
Foreign Currency Translation
----------------------------
Assets and liabilities of the Company's foreign operations are translated into
U.S. dollars at the year-end exchange rates, and revenue and expenses are
translated at the average exchange rates during the period. Exchange differences
arising on translation are disclosed as a separate component of shareholders'
equity. Realized gains and losses from foreign currency transactions are
reflected in the results of operations.
Impaired Asset Policy
---------------------
The Company reviews its long-lived assets quarterly to determine if any events
or changes in circumstances have transpired which indicate that the carrying
value of its assets may not be recoverable. At June 30, 2000, the Company has
written off amounts expended for its Panama operations (Notes 4 and 6) and has
determined that there was no further impairment of long-lived assets.
Provision for Taxes
-------------------
At June 30, 2000, the Company has a net operating loss of approximately
$1,000,000, which may be offset against future taxable income through 2019. No
provisions for taxes or tax benefit from net operating loss carryforwards has
been reported in the financial statements as it is currently unknown if the
carryforwards will expire unused.
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Derivative Instruments
----------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This standard establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
balance sheet and measures those instruments at fair value. At June 30, 2000,
the Company has not engaged in any transactions that would be considered
derivative instruments or hedging activities.
Reclamation Costs
-----------------
Management believes reclamation costs at its mining site in State of Bolvar,
Venezuela will be minimal. The reclamation process is expected to be completed
by the Apologold C.A. work crew. Venezuela requires that a bond be posted prior
to depletion of the mineral reserves. The Company will begin to accrue $12,000 a
year for reclamation costs after one year of full production. At June 30, 2000,
this bond has not been posted.
Compensated Absences
--------------------
Employees of the Company are entitled to paid vacation, paid sick days and
personal days off depending on job classification, length of service, and other
factors. The Company's policy is to recognize the cost of compensated absences
when actually paid to employees. If the amount were estimatible, it would not be
currently recognized as the amount would be deemed immaterial.
Fair Value of Financial Instruments
-----------------------------------
The carrying amounts for cash, marketable securities, accounts receivable,
accounts payable, notes payable and accrued liabilities approximate their fair
value.
Concentration of Risk
---------------------
The Company maintains its cash accounts in primarily one commercial bank in
Vancouver, British Columbia, Canada. The Company's cash account, which is not
insured, is a business checking account maintained in United States dollars.
Revenue Recognition
-------------------
Sales are recorded when minerals are delivered to the purchaser. The Company
sells its products immediately upon extraction and does not maintain any
inventory.
Reclassifications
-----------------
Certain amounts from prior periods have been reclassified to conform with the
current period presentation. This reclassification has resulted in no changes to
the Company's accumulated deficit or net losses presented.
<PAGE>
NOTE 3 - MINERAL PROPERTIES
Venezuela
---------
In May 1999, the Company entered into an agreement through its subsidiary,
Aplogold C.A., to acquire a mine in Venezuela. See Note 6. Under the terms of
the agreement, the Company acquired control over all rights for the exploitation
of diamonds and gold in a mining concession called Codsa 13, which is located in
the jurisdiction of Gran Sabana Autonomous Municipality, State of Bolivar,
Venezuela.
The mining property is being depleted using the units of production method base
upon proven and probable reserves. The depletion expense for the year ended June
30, 2000 is $10,500.
Panama
------
In October 1997, the Company entered into an agreement to purchase a 99%
interest in Golden Cycle of Panama, Inc. (a Panamanian company). Under terms of
the agreement, the Company assumes all profits and expenses for operating Golden
Cycle's mine located at the Conception River Basin, Calovebora Township,
District of Santa Fe, Province of Veraguas, Republic of Panama. Although
expenditures have been made on the property and core samples have been
promising, operations have been abandoned due to nondelivery of the shares of
Golden's stock. The Company is attempting to restore the agreement to its
original terms (Note 6) and all amounts expended for the venture have been
charged to operations as incurred.
Foreign Operations
------------------
The accompanying balance sheet includes $3,288,464 relating to the Company's
assets in Venezuela. Although this country is considered economically stable, it
is always possible that unanticipated events in foreign countries could disrupt
the Company's operations.
Segment Information
-------------------
The Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," in the year ended June 30, 2000. SFAS No. 131
supersedes SFAS No. 14, "Financial Reporting for Segments of a Business
Enterprise," replacing the "industry segment" approach with the "management"
approach. The management approach designates the internal organization that is
used by management for making operating decisions and assessing performance as
the source of the Company's reportable segments. SFAS No. 131 also requires
disclosures about products and services, geographic areas and major customers.
The adoption of SFAS No. 131 did not affect the Company's results of operations
or financial position, but did affect the disclosure of segment information as
illustrated in Note 9.
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Major additions and improvements
are capitalized. Minor replacements, maintenance and repairs that do not
increase the useful lives of the assets are expensed as incurred. Depreciation
of property and equipment is being calculated using the straight-line method
over the expected useful lives of the assets. Depreciation expense for the year
ended June 30, 2000 was $61,660.
<PAGE>
NOTE 5 - MINERAL PROPERTY CONTRACT PAYABLE
The contracted purchase price for the Company's Venezuelan mine was $3,500,000,
which consisted of a cash deposit paid of $100,000 and a non-interest bearing
loan in the amount of $3,400,000. The loan, collateralized by the mine, was
recorded at its present value to reflect an effective interest rate of 5.92%.
The loan calls for initial minimum payments of $5,000 per month commencing in
June 2000. The loan matures in 2002. See Note 8.
NOTE 6 - COMMON STOCK
During 1998, services were performed by directors in payment of stock
subscriptions receivable. These services were valued at $54,000. The Company
also issued 1,000,000 shares of common stock for stock subscriptions receivable,
valued at $0.25 per share, which is the fair market value of the shares on the
date of issuance. This amount was fully paid in September 1999.
During 1999, the Company issued 100,000 shares of common stock in exchange for
services. The shares were valued at $0.01 per share, which is the fair market
value of the shares on the date of issuance.
As part of a purchase agreement, the Company issued 50,000 shares of common
stock to Mohammed Youssef Merhi, and 3,500,000 shares of common stock as a
finder's fee to AML Diamond and Gold Exp., Inc. The stock was issued at $0.01
per share. (Note 6.)
The Company issued 120,252 shares of common stock for mining equipment valued at
$42,188 and 492,000 shares of common stock for $100,000 in debt and $16,100 in
services. A total of 469,078 shares of common stock was issued for an average
cash price of $0.24 per share.
NOTE 7 - RELATED PARTIES
As of June 30, 2000 and 1999, the Company has received $154,659 and $239,859
respectively, in cash advances from shareholders. These advances are
noninterest-bearing, uncollateralized and are expected to be repaid in the year
ended June 30, 2001.
The Company leases office facilities in Vancouver, British Columbia. The lease
is classified as a month-to-month tenancy and provides for monthly payments of
$2,228. During the year ended June 30, 2000, lease payments totaled $26,730.
<PAGE>
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Apologold C.A. (a Venezuelan Company)
-------------------------------------
In May 1999, the Company through Apologold C.A. entered into an agreement to
acquire a mine in Venezuela. The terms of the acquisition are as follows.
1. Contract purchase price of $3,500,000. The Company paid a deposit of
$100,000 to obtain the property and obligated itself to pay $3,400,000 of
non-interest bearing debt. (See Note 5.)
2. As part of the transaction, the Company issued 50,000 shares of its stock
to the seller for $0.01 per share.
3. The seller retains a 10% royalty payment from production as payment for
rent and operational and technical assistance and receives a 10% royalty
payment from production to be applied against the purchase price. The
minimum monthly payments are $5,000 for rent and operational and technical
assistance and $5,000 toward the purchase price. This is in effect until
the purchase price is paid in full.
4. The seller retains a net production royalty of 2.5% after ownership
transfers. (Note 5.)
Equipment Purchase Contract
---------------------------
During the year ended June 30, 2000, the Company entered into an agreement to
purchase equipment located in Venezuela for $100,000 cash plus 50,000 shares of
its common stock valued at $0.01 per share. The terms of payment in regards to
the $100,000 are as follows:
Payments of $25,000 were due in November and December 1999 and in March and June
2000. During the year ended June 30, 2000, $57,500 was paid in cash and stock.
At June 30, 2000, $42,500 is in arrears and is expected to be paid in the second
half of 2000.
Golden Cycle of Panama, Inc. (a Panamanian Company)
---------------------------------------------------
In October 1997, the Company entered into an agreement to purchase a 99%
interest in Golden Cycle of Panama, Inc. (a Panamanian Company). The agreement
called for a 6% royalty from gold production or minimum payments of $15,000
until May 1998, at which time the minimum payment increased to $20,000 until a
total of $5,000,000 had been paid. In addition, the Company was to make a
payment of approximately $97,000 for payment of Golden's outstanding debts. The
Company made payments as agreed, however, the shares of common stock of Golden
were never delivered. Further development of the mineral properties has been
suspended pending restoration of this agreement to its original standing.
Management does not expect to receive Golden's stock and has charged $629,117 to
operations as incurred for the year ended June 30, 1999. See Note 3.
<PAGE>
NOTE 8 - COMMITMENTS AND CONTINGENCIES - (continued)
Compliance with Environmental Regulations
-----------------------------------------
The Company's mining activities are subject to laws and regulations controlling
not only the exploration and mining of mineral properties, but also the effect
of such activities on the environment. Compliance with such laws and regulations
may necessitate additional capital outlays, affect the economics of a project,
and cause changes or delays in the Company's activities.
NOTE 9 - SUBSEQUENT EVENTS
The Company is continuing efforts to restore a purchase agreement for a 99%
interest in Golden Cycle of Panama, Inc. to its original standing. Management
does not expect to receive Golden's common stock as originally agreed. (Note 6.)
On July 20, 2000, the Company's board of directors approved the Apolo Gold, Inc.
2000 stock option plan. Under this plan, 5,000,000 shares of common stock have
been set aside to be issued to officers, directors and key employees. The
exercise price of the options will be determined at the date of grant.
NOTE 10 - REPORTING SEGMENTS
As described in Note 2, the Company adopted SFAS No. 131 for 2000. The Company's
operations are classified into two principal reporting segments that provide
different products or services. Separate management of each section is required
because each business unit is subject to different marketing, production, and
technology strategies.
The table below presents information about the Company's reportable segments:
<TABLE>
<CAPTION>
For Year Ending June 30, 2000
-------------------------------
ApoloGold, Inc. Apologold C.A Eliminations Consolidated
------------------------------------------------------------------
<S> <C> <C> <C> <C>
External revenue $ - $ 91,841 $ - $ 91,841
Intersegment revenue - - - -
--------- --------- ---------- ----------
Total net revenue $ - $ 91,841 $ - $ (91,841)
========= ========= ========== ==========
Operating Income (loss) $(107,501) $(152,298) $ - $ (259,799)
========= ========= ========== ==========
(Options) Corporate expenses -
----------
Income (loss) before income taxes $ (259,799)
==========
Depreciation and depletion $ 3,427 $ 68,733 $ - $ 72,160
========= ========== ========== ==========
Interest expense $ - $ 193,979 $ - $ 193,979
========= ========== ========== ==========
Identifiable assets $ - $3,299,829 $ - $3,299,829
========= ========== ==========
General corporate assets $ -
----------
Total assets $3,299,829
==========
</TABLE>
<PAGE>
NOTE 10 - REPORTING SEGMENTS (continued)
Apolo Gold, Inc., the first reportable segment, is a holding for Apologold C.A.,
the operating company. The second reportable segment derives its revenues from
the sale of minerals mined in Venezuela.
The accounting policies for the two reportable segments are the same as those
described in the summary of significant accounting policies. The Company
allocates resources to and evaluates performance of its operating segments based
on operating income.
NOTE 11 - GOING CONCERN
As shown in the financial statements, the Company incurred a net loss of
$453,778 for the year ended June 30, 2000 and has an accumulated deficit of
$1,193,859 since inception.
The Company is actively seeking additional capital and management believes that
properties can ultimately be developed to enable the Company to continue its
operations. However, there are inherent uncertainties in mining operations and
management cannot provide assurances that it will be successful in its
endeavors.
These factors indicate that the Company may be unable to continue in existence.
The financial statements do not include any adjustments related to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue existence. Management plans to attract additional investment
capital and believes that significant and imminent private placements as well as
income from operations will generate sufficient cash for the Company to operate
for the next few years.
NOTE 12 - YEAR 2000 ISSUES
The Company has modified its business technologies to be ready for the Year
2000. Critical data processing systems have been reviewed and the Company does
not expect a significant effect on internal operations. However, like other
companies, Apolo Gold, Inc. could be adversely affected if the computer systems
its suppliers or customers use do not properly process and calculate
date-related information and data for the period surrounding and including
January 1, 2000. This is commonly known as the "Year 2000" issue. Additionally,
this issue could impact non-computer systems and devices such as production
equipment, elevators, etc. The costs related to Year 2000 compliance are
expensed as incurred. As of June 30, 2000, the Company had not experienced any
significant problems arising from Year 2000 issues.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act
(a) Directors and Executive Officers
<TABLE>
<CAPTION>
NAME AGE POSITION 1ST YEAR WITH COMPANY
<S> <C> <C>
Martial Levasseur 66 President, Director 1997
Robert E. Lee 65 Director, Vice-President, Treasurer 2000
Robert G. Dinning 61 Director, Chief Financial Officer, Secretary 2000
</TABLE>
Business Experience
Martial Levasseur.
Mr. Levasseur is a founder of the Company and has served as its President
since inception. Mr. Levasseur's business experience is as follows:
1993-1997 Consultant - La Rock Mining Corp of Vancouver BC. Studying various
projects for La Rock.
1968-1993 President - Consolidated Silver Tusk Mines Ltd, in the Northwest
Territories. Managed and supervised the exploration and development of all
properties. One mine went into full production. Became Vice President in
1994 as was busy developing other properties not related to Consolidated
Silver Tusk Mines Ltd.
1972-1993 President of Reako Exploration Ltd, in Vancouver B.C. Supervised and
managed all exploration and drilling projects for Reako, as well as
developing their iron-ore property, and bringing into production a gold
property in British Columbia.
Robert E. Lee.
Dental Surgeon from 1963 until 1993 when he retired from practice.
1993 - Present President of La Rock Mining Corp, of Vancouver BC. Handles all
administration and continued assessment of property known as Brandy Wine.
1993-1997 President - Consolidated Silver Tusk Mines Ltd, with a gold property
in Indonesia. Managed and supervised exploration and development on this
property.
Robert G. Dinning C.A.
Mr. Dinning is a Chartered Accountant, and member in good standing of the
Alberta and Canadian Institute of Chartered Accountants. Mr. Dinning has
operated his own Business and Management Consulting business since 1977, in the
forestry, mining, and software/high tech industries. Mr. Dinning has been active
as a Director and Officer in various public companies over the past 25 years.
Prior to commencing his consulting business, Mr. Dinning was CFO and Secretary
of Western Communications Ltd., a large publicly traded broadcast and sports
Entertainment Company.
<PAGE>
(b) Significant Employees: None
Compliance with Section 16(a) of the Securities Exchange Act of 1934:
The Company's three executive officers and directors have each timely filed
Form 5 for the fiscal year ended June 30, 2000.
Item 10. Executive Compensation
a) Summary Compensation Table: The Company has omitted the Summary
Compensation Table as it has not paid any non-cash compensation or
bonuses and nor has any such compensation been accrued. Cash
Compensation during the year fiscal year ended June 30, 2000 for
officers and directors was as follows:
M. Levasseur $ 3,000
R. E. Lee $ 14,500
R.G. Dinning -
b) Option/SAR Grants in Last Fiscal Year (Individual Grants): The Company
had not made any option grants during the fiscal year ended June 30,
2000. The Company has a Stock Option Plan, entitled the "Apolo Gold,
Inc. 2000 Stock Option Plan" (the "Plan") that was adopted in July
2000. Its purpose is to advance the business and development of the
Company and its shareholders by affording to the employees, officers,
directors and independent contractors or consultants of the Company
the opportunity to acquire a proprietary interest in the Company by
the grant of Options to such persons under the Plan's terms. Article 3
of the Plan provides that the Board shall exercise its discretion in
awarding Options under the Plan, not to exceed 5,000,000 shares. The
per share Option price for the stock subject to each Option shall be
as the Board may determine. All Options must be granted within ten
years from the effective date of the Plan. There is no express
termination date for the Options, although the Board may vote to
terminate the Plan. Under the Plan, there following Options were
granted in July 2000 to the executive officers and directors:
<TABLE>
<CAPTION>
Name # of Shares Underlying Option Exercise Price Expiration Date
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert Edward Lee 1,000,000 $0.14 July 1, 2005
Robert Dinning 1,000,000 $0.14 July 1, 2005
Martial H. Levasseur 1,000,000 $0.14 July 1, 2005
</TABLE>
(c) Aggregated Option/SAR Exercises in Last Fiscal Year and FY-end
Option/SAR Values : None
(d) Long-term Incentive Plans -- Awards in Last Fiscal Year: None
(e) Compensation of Directors
1. Standard Arrangements: The members of the Company's Board of
Directors are reimbursed for actual expenses incurred in
attending Board meetings.
2. Other Arrangements: There are no other arrangements.
(f) Employment Contracts And Termination of Employment, And
Change-in-control Arrangements
<PAGE>
The Company's officer and directors do not have employment agreements and
do not presently draw a salary. The Company expects that as and when additional
funding or revenue is obtained, a salary and other compensation such as stock
options will be adopted.
Item 11. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners holding five percent
or greater of the 17,714,580 shares of common stock outstanding as of
September 28, 2000 plus the 3,000,000 shares underlying outstanding
options granted to the executive officers and directors.
<TABLE>
<CAPTION>
Title of Class Name and Address Amount and Nature % of
of Beneficial Owner of Beneficial Owner Class
----------------------------------------------------------------------------------------
<S> <C> <C>
Common AML Diamond & Gold 3,500,000 16.9%
Exploration, Inc.
Apartado 6-5172, El Dorado Panama
Republica De Panama
</TABLE>
(b) Security Ownership of Management
<TABLE>
<CAPTION>
Name and Address(1) Position Amount and Nature % of
Title of Class of Beneficial Owner of Beneficial Owner Class
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Robert Elliot Lee Director 5,150,000 (2) 24.9%
Martial Levasseur Director 5,150,000 (3) 24.9%
Robert G. Dinning Director, CFO 1,050,000 (4) 5.1%
--------------------------------------------------------------------------------------------------
All officers and Directors
as a Group (3 persons) 11,350,000 54.9%
</TABLE>
(1) The Address of the executive officers and directors is that of the
Company: Suite 1458 - 409 Granville Street, Vancouver, B.C. V6C1T2
(2) Includes 1,000,000 underlying an exercisable option; 950,000 shares
held by Robert Edward Lee, Mr. Lee's son; 350,000 held by Katrina Lee
the daughter of Mr. Lee; and 350,000 held by Shari Lee the daughter of
Mr. Lee. Robert Elliot Lee disclaims beneficial ownership in the
shares held by his adult children.
(3) Includes 1,000,000 underlying an exercisable option; 950,000 held by:
Peter Levasseur, the son of Martial Levasseur;; 350,000 shares held by
John Levasseur, the son of Martial Levasseur; and 350,000 shares held
by Anna Levasseur, the daughter of Martial Levasseur. Martial
Levasseur disclaims beneficial ownership in the shares held by his
adult children.
(4) Includes 1,000,000 underlying an exercisable option and 50,000 shares
held by Castle Creek Corp., for which Mr. Dinning is the beneficial
owner.
<PAGE>
Item 12. Certain Relationships and Related Transactions: None
Item 13. Exhibits and Reports on Form 8-K
A. Exhibits
(3) (i) Articles of Incorporation (Incorporated by reference from Form
10SB Registration SEC File # : 000-27791 filed October 25, 1999)
(3) (ii) By-Laws of Corporation (Incorporated by reference from Form 10SB
Registration SEC File # : 000-27791 filed October 25, 1999)
(27) Financial Data Schedule
B. Reports on Form 8-K: None
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: September 28,2000
/s/ Robert E. Lee
-----------------------------
Robert E. Lee, Vice President
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Martial Levasseur
------------------------
Martial Levasseur President, Director September 28, 2000
/s/ Robert E. Lee
------------------------
Robert E. Lee Vice President, Treasury, September 28, 2000
Principal Operating Officer
/s/ Robert G. Dinning
------------------------
Robert G. Dinning Chief Financial Officer,
Secretary, Director September 28, 2000
<PAGE>
