Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A-1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES ACT OF 1934
CENTER STAR GOLD MINES, INC.
(Exact name of Registrant as specified in charter)
Nevada 87-0617674
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
5814 South 900 East, Salt Lake City, UT 84117
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 269-9500
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class each class is to be registered
None N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class
Common Stock
Par Value $.001
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
History and Organization
Center Star Gold Mines, Inc. (the "Company") was incorporated under the
laws of the State of Idaho on May 1, 1961, under the name of Center Star
Mines, Inc., for the primary purpose of exploring for commercial gold
deposits. The Company changed its corporate name on May 15, 1962, to Center
Star Gold Mines, Inc. The Company had owned various unpatented mining claims
near Grangeville, Idaho from 1962 until the last mining claim was abandoned in
1995. The claims were abandoned because the Company did not have adequate
working capital in order to pay the annual maintenance fee of $100 per mining
claim to the U.S. Bureau of Land Management. Since 1995, the Company has been
inactive.
On April 25, 1997, Frank A. Morbeck and Marilyn L. White, officers and
directors of the Company, resigned all their positions and agreed to forgive
any debt owed by the Company to them. Donald Beehner, then a director of the
Company, also resigned. Howard M. Oveson, Robert K. Hatch, and Rhonda Eardley
were appointed to the board of directors for the purpose of cleaning up the
company records and bringing all of its filings and financial statements
current. The new board of directors would also seek business opportunities
for the Company. In connection with the change of control, Milagro Holdings,
Inc., a Delaware corporation controlled by Mr. Oveson, paid $20,000 to Mr.
Morbeck for forgiveness of $3,624 owed to him by the Company and for the
purchase of 466,500 pre-reverse split shares of common stock of the Company
owned by him. Such shares represented approximately 10.76% of the outstanding
stock of the Company at such time.
On April 6, 1998, the Company issued 662,949 pre-reverse split shares of
common stock to Howard M. Oveson for his services in cleaning up the books and
records of the Company and in preparing it to seek a suitable business
venture.
On May 7, 1998, the shareholders of the Company authorized a change of
domicile of the Company to the State of Nevada by means of merger with and
into a Nevada corporation formed by the Company for this purpose. The articles
of merger became effective July 21, 1998. The Nevada company was incorporated
on June 2, 1998.
On May 7, 1998, the shareholders of the Company also authorized a reverse
split of the 5,000,000 outstanding shares of common stock of the Company at
the rate of one share for each four shares outstanding. The reverse spit
reduced the number of outstanding shares to 1,249,960 and was effective August
12, 1998. In addition, the shareholders approved an amendment to Article V of
the Articles of Incorporation of the Company to increase the number of
authorized shares of common stock to 50,000,000 and to reduce the par value to
$.001.
On May 7, 1998, the shareholders of the Company authorized a change to
Article II of the Articles of Incorporation changing the purpose of the
Company to allow it to conduct operations other than in the mining industry.
The shareholders also authorized the elimination of Article IX of the Articles
of Incorporation which dealt with directors interested in certain transactions
since such provisions were codified in the corporate law of the State of
Nevada.
In August, 1998, the Company issued 2,000,000 post-reverse split shares
of common stock to Milagro Holdings, Inc., a Delaware corporation controlled
by Howard M. Oveson, an officer and director of the Company, for the
settlement of debt for $4,760 advanced to the Company by Milagro Holdings,
Inc., which funds were used for operations of the Company. A Debt Settlement
Agreement relating to this transaction was also executed on the same date.
Business
The Company is currently seeking potential business acquisitions or
opportunities to enter into in an effort to commence business operations. The
Company does not propose to restrict its search for a business opportunity to
any particular industry or geographical area and may, therefore, engage in
essentially any business in any industry. The Company has unrestricted
discretion in seeking and participating in a business opportunity.
The Company's Board of Directors shall make the final determination
whether to complete any such venture; the approval of shareholders will not be
sought unless required by applicable laws, rules and regulations, its Articles
of Incorporation or Bylaws, or contract. Neither the Company's Articles of
Incorporation nor its Bylaws require stockholder approval for any such
acquisition. The Company does not intend to provide any disclosure documentatio
n to its shareholders prior to any acquisition transaction. However, as a
reporting issuer subject to the reporting requirements of the 1934 Act, the
Company will be required to disclose any such transaction in a Current Report
on Form 8-K, including audited financial statements of the acquired entity and
consolidated pro forma financial statements.
The selection of a business opportunity in which to participate is
complex and risky. Additionally, as the Company has only limited resources
available to it through advances by management, it may be difficult to find
good opportunities. There can be no assurance that the Company will be able
to identify and acquire any business opportunity based on management's
business judgement.
Although the Company has not communicated with any other entity with
respect to any potential merger or acquisition transaction, management has
determined to file this Registration Statement on a voluntary basis. In order
to have stock quoted on the OTC Bulletin Board, a company must be subject to
the reporting requirements of the 1934 Act, either by virtue of filing a
registration statement on Form 10 or Form 10-SB, or by filing a registration
statement under the 1933 Act. This Registration Statement became effective on
March 12, 1999, but the Company received comments from the staff of the
Securities and Exchange Commission for which the Company is providing
responses and amending its initial filing by means of this amendment. Upon
the satisfactory completion of all comments, and prior to seeking a new
business venture, the Company intends to apply for quotation of the Company's
common stock on the OTC Bulletin Board. If the Company is successful in
having its common stock quoted on the OTC Bulletin Board, of which there is no
assurance, management believes that this will make the Company more desirable
for entities that may be interested in engaging in a merger or acquisition
transaction. The Company anticipates that it will voluntarily file periodic
reports with the Securities and Exchange Commission, even in the event its
obligation to file such reports is terminated under the Securities Exchange
Act of 1934.
In connection with the application for quotation of the Company's
common stock on the OTC Bulletin Board, management intends to seek a
broker-dealer to become the initial market maker for the Company's common
stock and to submit the application to the OTC Bulletin Board. There have
been no preliminary discussions or understandings between the Company, or
anyone acting on its behalf, and any market maker regarding such application
or the participation of any such market maker in the future trading market for
the Company's common stock. Management intends to contact broker-dealers who
make markets in Bulletin Board companies until one agrees to make the
application. There is no assurance that the Company will be successful in
locating such a broker-dealer, or that the application, if submitted, would be
approved. The Company does not intend to use outside consultants to obtain
market makers.
Management intends to consider a number of factors prior to
making any decision as to whether to participate in any specific business
endeavor, none of which may be determinative or provide any assurance of
success. These may include, but will not be limited to an analysis of the
quality of the entity's management personnel; the anticipated acceptability of
any new products or marketing concepts; the merit of technological changes;
its present financial condition, projected growth potential and available
technical, financial and managerial resources; its working capital, history of
operations and future prospects; the nature of its present and expected
competition; the quality and experience of its management services and the
depth of its management; its potential for further research, development or
exploration; risk factors specifically related to its business operations; its
potential for growth, expansion and profit; the perceived public recognition
or acceptance of its products, services, trademarks and name identification;
and numerous other factors which are difficult, if not impossible, to properly
or accurately analyze, let alone describe or identify, without referring to
specific objective criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development stage, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products or
services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and principal
stockholders, professional advisors, broker dealers in securities, venture
capital personnel, members of the financial community, attorneys and others
who may present unsolicited proposals. In certain cases, the Company may agree
to pay a finder's fee or to otherwise compensate the persons who submit a
potential business endeavor in which the Company eventually participates. Such
persons may include the Company's directors, executive officers, beneficial
owners or their affiliates. In this event, such fees may become a factor in
negotiations regarding a potential acquisition and, accordingly, may present a
conflict of interest for such individuals.
The Company's directors and executive officers have not used any
particular consultants, advisors or finders on a regular basis.
Although the Company has not identified any potential acquisition
target, the possibility exists that the Company may acquire or merge with a
business or company in which the Company's executive officers, directors,
beneficial owners or their affiliates may have an ownership interest. Current
Company policy does not prohibit such transactions. Because no such
transaction is currently contemplated, it is impossible to estimate the
potential pecuniary benefits to these persons.
Although it currently has no plans to do so, depending on the nature
and extent of services rendered, the Company may compensate members of
management in the future for services that they may perform for the Company.
Because the Company currently has extremely limited resources, and is unlikely
to have any significant resources until it has completed a merger or
acquisition, management expects that any such compensation would take the form
of an issuance of the Company's stock to these persons; this would have the
effect of further diluting the holdings of the Company's other stockholders.
However, due to the minimal amount of time devoted to management by any person
other than the Company's directors and executive officers, there are no
preliminary agreements or understandings with respect to management
compensation. Although it is not prohibited by statute or its Articles of
Incorporation, the Company has no plans to borrow funds and use the proceeds
to make payment to its management, promoters or affiliates.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $250,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. Management may actively negotiate or otherwise consent to the purchase
of all or any portion of its common stock as a condition to, or in connection
with, a proposed merger or acquisition. It is not anticipated that any such
opportunity will be afforded to other stockholders or that such stockholders
will be afforded the opportunity to approve or consent to any particular stock
buy-out transaction. In the event that such fees are paid, they may become a
factor in negotiations regarding any potential acquisition by the Company and,
accordingly, may present a conflict of interest for such individuals.
None of the Company's directors, executive officers or promoters, or
their affiliates or associates, has had any negotiations with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger transaction with the Company. Nor are
there any present plans, proposals, arrangements or understandings with any
such persons regarding the possibility of any acquisition or merger involving
the Company.
The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no specific
business and may acquire or participate in a business opportunity based on the
decision of management which potentially could act without the consent, vote,
or approval of the Company's shareholders. The risks faced by the Company are
further increased as a result of its lack of resources and its inability to
provide a prospective business opportunity with significant capital.
The Company has had no employees since discontinuing its operations and
does not intend to employ anyone in the future, unless its present business
operations were to change. Except for the 662,949 pre-reverse split shares
issued to Mr. Oveson as set forth above, the Company is not paying salaries or
other forms of compensation to any officers or directors of the Company for
their time and effort. Unless otherwise agreed to by the Company, the Company
does intend to reimburse its officers and directors for out-of-pocket
expenses.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
The Company is a development stage company. Since 1995, when the last
unpatented mining claim was abandoned, the Company has had no operations. The
Company was organized for the purpose of engaging in mining activities;
however, the Company does not have any significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
operating costs and to allow it to continue as a going concern. The Company
intends to take advantage of any reasonable business proposal presented which
management believes will provide the Company and its stockholders with a
viable business opportunity. The board of directors will make the final
approval in determining whether to complete any acquisition, and, unless
required by applicable law, the articles of incorporation, or the bylaws, or
by contract, stockholders' approval will not be sought.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and
other instruments will require substantial management time and attention and
will require the Company to incur costs for payment of accountants, attorneys,
and others. If a decision is made not to participate in or complete the
acquisition of a specific business opportunity, the costs incurred in a
related investigation will not be recoverable. Further, even if an agreement
is reached for the participation in a specific business opportunity by way of
investment or otherwise, the failure to consummate the particular transaction
may result in a the loss to the Company of all related costs incurred.
Currently, management is not able to determine the time or resources that
will be necessary to locate and acquire or merge with a business prospect.
There is no assurance that the Company will be able to acquire an interest in
any such prospects, products, or opportunities that may exist or that any
activity of the Company, regardless of the completion of any transaction, will
be profitable. If and when the Company locates a business opportunity,
management of the Company will give consideration to the dollar amount of that
entity's profitable operations and the adequacy of its working capital in
determining the terms and conditions under which the Company would consummate
such an acquisition. Potential business opportunities, no matter which form
they may take, will most likely result in substantial dilution for the
Company's shareholders due to the likely issuance of stock to acquire such an
opportunity.
ITEM 3. DESCRIPTION OF PROPERTY
Since 1998, the Company's administrative offices have been located at
5814 South 900 East, Salt Lake City, Utah 84117, which are the offices of
Rhonda Eardley, the secretary and a director of the Company. Mrs. Eardley has
allowed the Company to use this office space without charge.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information furnished by
current management concerning the ownership of common stock of the Company as
of June 2, 1999, 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:
Amount and Nature
Name and Address of Beneficial
of Beneficial Owner Ownership (1) Percent of Class
Howard M. Oveson 2,165,737 (2) 66.64%
57 West 200 South Suite 310
Salt Lake City, UT 84101
Milagro Holdings, Inc. 2,000,000 (3) 61.54%
57 West 200 South Suite 310
Salt Lake City, UT 84101
Rhonda Eardley 116,625 (4) 3.59%
4970 South 900 East
Suite F104
Salt Lake City, UT 84117
Robert K. Hatch -0- 0.00%
841 Three Fountains Dr.
No. 253
Murray, UT 84101
Executive Officers and 2,282,362 70.23%
Directors as a Group
(3 Persons)
(1) Unless otherwise indicated, this column reflects amounts as to which
the beneficial owner has sole voting power and sole investment power. The
number of shares set forth in this table gives effect to the one-for-four
reverse split of the outstanding shares of common stock effective August 12,
1998.
(2) Mr. Oveson is deemed to share beneficial ownership of 2,000,000 of
such shares with Milagro Holdings, Inc., the direct and record owner of such sha
res.
(3) These shares are held directly and of record by Milagro Holdings,
Inc., a corporation controlled by Howard M. Oveson, an officer and director of
the Company. Such entity is deemed to share beneficial ownership of such
shares with Mr. Oveson.
(4) These shares are owned directly by the husband of Mrs. Eardley and
they are deemed to share beneficial ownership of such shares.
The Company is seeking potential business acquisitions or opportunities.
(See "Item 1. Description of Business.") It is likely that such a
transaction would result in a change of control of the Company, by virtue of
issuing a controlling number of shares in the transaction, change of
management, or otherwise.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS
The following table sets forth as of June 2, 1999, the name, age, and
position of the executive officers and directors of the Company and the term
of office of such directors:
Name Age Position(s) Director Since
Howard M. Oveson 65 Director & President September 1997
Keith R. Hatch 70 Director & Vice-President September 1997
Rhonda Eardley 38 Director, Secretary & September 1997
Treasurer
Set forth below is certain biographical information regarding the
Company's current executive officers and directors:
HOWARD M. OVESON has been self-employed since 1980 as a business
consultant to private and public companies. Mr. Oveson has also been a
director and the secretary/treasurer since July 1995, and the president since
June 1998, of Apex Minerals Corporation, a Delaware corporation, which company
is a reporting company with the Securities and Exchange Commission. On March
17, 1992, Howard M. Oveson, an officer and director of the Company, filed a
petition under the federal bankruptcy laws in the U. S. Bankruptcy Court,
District of Utah (Salt Lake), Petition No. 92-21860. The case was originally
filed under Chapter 11 of the U. S. Bankruptcy Code, and was converted to
Chapter 7 on November 12, 1992. The final decree in the case was issued on
November 10, 1996.
ROBERT K. HATCH has served on boards of public and private
corporations and offered his consulting services. Mr. Hatch has been retired
since 1990. Prior to 1990 he was employed by the Newspaper Agency in Salt
Lake City, Utah.
RHONDA EARDLEY has over seven years experience as a dental
assistant. For the past four years she has worked as a corporate secretary
and office manager for various small companies.
Management devotes only nominal time to the activities of the
Company. If the Company is able to locate a suitable new business venture, it
is anticipated that Mr. Oveson will devote substantially all of his time to
completing the acquistion.
Other Public Shell Activities
Mr. Oveson has been involved as a director or executive officer of
other companies that may be deemed to be "blank check" companies, but has not
been involved in any blank check public offerings. Neither Mr. Hatch nor Ms.
Eardley has had any prior experience with blank check/blind pool
companies.
The information set forth below is provided for the reporting
companies for which Mr. Oveson has served as a director, executive officer, or
consultant, and which have completed a reorganization or merger, and the
consideration received in connection with each reorganization. Following each
such reorganization, Mr. Oveson had no involvement with the company.
1.MSI Holdings, Inc., a Utah corporation ("MSI"). The reorganization
was completed on June 23, 1997. Mr. Oveson was a director and an executive
officer of MSI at the time of the reorganization and received approximately
$100,000 for his services in connection with the reorganization. According to
the most recent annual report of MSI on Form 10-KSB (SEC file no. 000-08164)
for the year ended March 31, 1998, MSI had revenues of $2,740,821 for such
year and provides communications services specializing in turnkey solutions
for high-speed Internet connectivity, communication infrastructure design and
installation, and network system integration for customers in both the private
and public sectors.
2.Consolidated Medical Management, Inc., a Montana corporation
("CMMI"). The reorganization was completed on May 23, 1998. Mr. Oveson was a
consultant to CMMI at the time of the reorganization and received
approximately $100,000 for services rendered his services in connection with
the reorganization. According to the most recent annual report of CMMI on
Form 10-KSB (SEC file no. 333-50807) for the year ended December 31, 1998,
CMMI had revenues of $921,502 for such year and provides management and other
services for home healthcare providers predominately in southern
Louisiana.
3.International Cavitation Technologies, Inc., a Colorado corporation
("ICT"). The reorganization was completed on September 29, 1998. Mr. Oveson
was a director and an executive officer of ICT at the time of the
reorganization and received approximately $150,000 for services rendered in
connection with the reorganization. According to the most recent quarterly
report of ICT on Form 10-QSB (SEC file no. 000-09015) for the quarter ended
February 28, 1999, ICT had a net loss of $(289,440) for the nine months then
ended. According to such report, ICT is proposing to oversee the commercial
implementation of its various patented processes related to the use of ion
collider technology to separate particles from liquid, enhance the recovery of
crude oil, increase the amount of hydrocarbons recoverable from underground
reservoirs, and water clarification.
ITEM 6. EXECUTIVE COMPENSATION
According to information supplied by the president of the Company, there
has been no compensation awarded to, earned by, or paid to any of the
executive officers of the Company during the year ended December 31, 1998, or
the two prior fiscal years, except for the 165,737 post-reverse split shares
which were issued to Mr. Oveson on April 6, 1998, for services rendered to the
Company. Such shares were valued at $663, the par value of the post-reverse
shares. There was no market value for such shares at the time of issuance.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since September 1997, Milagro Holdings, Inc., a corporation owned and
controlled by Mr. Howard M. Oveson, an officer and a director of the Company,
has advanced approximately $5,690 to the Company for the purpose of paying
current expenses for the benefit of the Company's operations. In addition,
such entity paid $3,624 to a former officer and director of the Company for
funds advanced to the Company by such individual.
Mr. Howard M. Oveson, an officer and a director of the Company, is
also an officer or director of Apex Minerals Corporation and Silver Beaver
Mining Company, Inc. These publicly held companies are also seeking business
opportunities, and it is possible that conflicts between such entities and the
Company for new business opportunities may arise. There is no agreement among
such entities concerning such conflict. However, Mr. Oveson intends to
present information for each entity to management for any potential new
business opportunity and allow them to decide which, if any, company they wish
to pursue.
Mr. Howard M. Oveson, an officer, director, and controlling shareholder
of the Company, continues to advance funds to the Company for expenses of the
Company and Rhonda Eardley, an officer and director of the Company, continues
to provide office space for the Company at no cost. There is no agreement or
commitment by either Mr. Oveson or Ms. Eardley in regard to continuing to
advance funds or provide such office space. However, it is anticipated that
such monetary advances and office space will continue to be furnished until
the Company locates a new business venture.
ITEM 8. DESCRIPTION OF SECURITIES
The Company has authorized 50,000,000 shares of common stock, par value
$.001 per share (the "Common Stock"). As of December 14, 1998, the Company
had outstanding 3,249,960 shares of Common Stock. All Common Shares are equal
to each other with respect to voting, and dividend rights, and, are equal to
each other with respect to liquidation rights. Special meetings of the
shareholders may be called by the Chairman, the Board of Directors, President,
the chief executive officer, or the holders of not less than one-tenth of all
the shares entitled to vote at the meeting. Holders of shares of Common Stock
are entitled to one vote at any meeting of the shareholders for each share of
Common Stock they own as of the record date fixed by the Board of Directors.
At any meeting of shareholders, a majority of the outstanding shares of Common
Stock entitled to vote, represented in person or by proxy, constitutes a
quorum. A vote of the majority of the shares of Common Stock represented at a
meeting will govern, even if this is substantially less than a majority of the
shares of Common Stock outstanding. Holders of shares are entitled to receive
such dividends as may be declared by the Board of Directors out of funds
legally available therefor, and upon liquidation are entitled to participate
pro rata in a distribution of assets available for such a distribution to
shareholders. There are no conversion, pre-emptive or other subscription
rights or privileges with respect to any share. Reference is made to the
Articles of Incorporation and Bylaws of the Company as well as to the applicable
statutes of the State of Nevada for a more complete description of the rights
and liabilities of holders of shares. The shares of the Company do not have
cumulative voting rights, which means that the holders of more than fifty
percent of the shares of Common Stock voting for election of directors may
elect all the directors if they choose to do so. In such event, the holders
of the remaining shares aggregating less than fifty percent will not be able
to elect directors.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
There is no established trading market for the common stock of the
Company. However, the common stock is quoted on the Pink Sheets published by
the National Quotation Bureau. There are two market makers listed in the Pink
Sheets, but management does not believe that a significant number of shares,
if any, has traded during the periods listed below. The table below sets
forth for the periods indicated the high and low bid quotations as reported by
one of the market makers. These quotations reflect inter-dealer prices,
without retail market-up, mark-down, or commission and may not necessarily
represent actual transactions, if any. Effective May 7, 1998, the outstanding
shares of common stock of the Company were reverse split on a one-for-four
share basis. The following table reflects the post-split prices:
Quarter High Low
FISCAL YEAR ENDED First $0.004 $0.004
DECEMBER 31, 1997 Second $0.004 $0.004
Third $0.004 $0.004
Fourth $0.004 $0.004
FISCAL YEAR ENDED First $0.004 $0.004
DECEMBER 31, 1998 Second $0.004 $0.004
Third $0.004 $0.004
Fourth $0.004 $0.004
FISCAL YEAR ENDING
DECEMBER 31, 1999 First $0.3 $0.3
None of the common shares are subject to outstanding options or
warrants. Of the outstanding common shares, 2,282,362 shares are subject to
Rule 144 under the Securities Act.
Since its inception, the Company has not paid any dividends on its common
stock and the Company does not anticipate that it will pay dividends in the
foreseeable future.
At December 14, 1998, the Company had approximately 930 shareholders of
record as reported by the Company's transfer agent. The transfer agent for
the Company is Fidelity Transfer Company, 1800 South West Temple, Suite 301,
Salt Lake City, UT 84115; telephone number (801) 484-7222.
ITEM 2. LEGAL PROCEEDINGS
No legal proceedings are reportable pursuant to this item.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
No change in accountant is reportable pursuant to this item.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On April 6, 1998, the Company issued 165,737 post-reverse split shares of
its common stock to Howard M. Oveson for services rendered to the Company. At
such time the shares issued to Milagro Holdings represented approximately
13.26% of the outstanding common stock of the Company. The shares were issued
without registration under the Securities Act of 1933, as amended, by reason
of the exemption from registration afforded by the provisions of Section 4(2)
thereof, as a transaction by an issuer not involving any public offering, the
recipient of the securities having delivered appropriate investment
representations to the Company with respect thereto and having consented to
the imposition of restrictive legends upon the certificates evidencing such
securities. No underwriting discounts or commissions were paid in connection
with such issuance.
On August 4, 1998, the Company issued 2,000,000 post-reverse split shares
of its common stock to Milagro Holdings, Inc., a Delaware corporation
controlled by Howard M. Oveson, for settlement of a debt owed by the Company
to Milagro Holdings, Inc. in the amount of $4,760 owed by the Company for cash
advances to the Company. At such time the shares issued to Milagro Holdings
represented approximately 62% of the outstanding common stock of the Company.
The shares were issued without registration under the Securities Act of 1933,
as amended, by reason of the exemption from registration afforded by the
provisions of Section 4(2) thereof, as a transaction by an issuer not
involving any public offering, the recipient of the securities having
delivered appropriate investment representations to the Company with respect
thereto and having consented to the imposition of restrictive legends upon the
certificates evidencing such securities. No underwriting discounts or
commissions were paid in connection with such issuance.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Nevada law expressly authorizes a Nevada 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 company, 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
proceeding, or in the defense of any claim, issue, or matter in the
proceeding. In addition, as provided in the articles of incorporation,
bylaws, or an agreement, 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 did
not meet the requirements. In order to provide indemnification, unless
ordered by a court, the corporation must determine that the person meets the
requirements for indemnification. Such determination must be made by a
majority of disinterested directors; by independent legal counsel; or by a
majority of the shareholders.
Article VI of the bylaws of the Company provides that the corporation
shall indemnify its directors, officers, agents and other persons to the full
extent permitted by the laws of the State of Nevada. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 (the
"Act") may be permitted to directors, officers, controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised 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.
PART F/S
Financial Statements. The following financial statements are included in
this statement:
PAGE
Unaudited financial statements for the three months ended March 31, 1999
Balance Sheets as of March 31, 1999, and December 31, 1998 F-1
Statements of Operations for the three months ended March 31, 1999
and 1998, and the period from June 2, 1998 (inception) to
March 31, 1999 F-2
Statements of Cash Flows for the three months ended March 31, 1999
and 1998, and the period from June 2, 1998 (inception) to
March 31, 1999 F-3
Notes to Financial Statements F-4
Audited financial statements for the years ended December 31, 1998,
1997 and 1996
Report of Schvaneveldt and Company, Certified Public Accountants F-5
Balance Sheets as of December 31, 1998, 1997 and 1996 F-6
Statements of Operations for the years ended December 31, 1998,
1997 and 1996 F-7
Statements of Stockholders' Equity for the period December 31, 1995
to December 31, 1998 F-8
Statements of Cash Flows for the years ended December 31, 1998,
1997 and 1996 F-9
Notes to Financial Statements F-10
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Balance Sheets
March December
31, 1999 31, 1998
ASSETS
Current Assets
Cash $ -0- $ -0-
Total Assets $ -0- $ -0-
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 500 $ 500
Total Current Liabilities 500 500
Stockholders' Equity
Common Stock; $.001 Par Value, 50,000,000
Shares Authorized; 3,249,760 Shares
Issued and Outstanding Retroactively
Restated 3,250 3,250
Paid In Capital 436,008 436,008
Accumulated Deficit (439,758) (439,758)
Total Stockholder' Equity (500) (500)
Total Liabilities & Stockholders' Equity $ -0- $ -0-
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Statement of Operations
For the period
From
For the three For the three June 2, 1998
Months ended Months ended (Inception) to
March March March
31, 1999 31, 1998 31, 1999
Revenues
Transfer Fees $ -0- $ -0- $ -0-
Operating Expenses
Legal & Accounting -0- -0- 4,400
Fees -0- -0- 990
Consulting Fees -0- -0- 663
Total Operating Expenses -0- -0- 6,053
(Loss) from Operations -0- -0- (6,053)
Other Income
Forgiveness of Debt -0- -0- 3,624
Net (Loss) $ -0- $ -0- $ (2,429)
Net (Loss) Per Share $ .00 $ .00 $ .00
Weighted Average
Number of Shares 3,249,960 1,084,263 3,249,960
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Statements of Cash Flows
For the period
From
For the three For the three June 2, 1998
Months ended Months ended (Inception) to
March March March
31, 1999 31, 1998 31, 1999
Cash Flows from Operating
Activities
Net (Loss) $ -0- $ -0- $ (2,429)
Adjustments to Reconcile
Net Income to Net Loss
Used by Operating
Activities:
Forgiveness of Debt -0- -0- (3,624)
Non Cash Consulting Fees -0- -0- 663
Increase in Accounts Payable -0- -0- 500
Net Cash Used by Operating
Activities -0- -0- (4,890)
Cash Flows from Financing
Activities
Advances from Officer -0- -0- 4,890
Net Cash Used from
Financing Activities -0- -0- 4,890
Net Decrease in Cash -0- -0- -0-
Cash at Beginning of Year -0- -0- -0-
Cash at End of Year $ -0- $ -0- $ -0-
Disclosures from Operating
Activities
Interest $ -0- $ -0- $ -0-
Taxes -0- -0- -0-
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Organization
The Company was incorporated on May 1, 1961, under the laws of the State of
Idaho. On July 21, 1998, the Company filed Articles of Merger in the state of
Nevada wherein Center Star Gold Mines, Inc., an Idaho Corporation, merger with
Center Star Gold Mines, Inc., a Nevada Corporation, incorporated on June 2,
1998.
The purpose for which the Company is organized is to transact any lawful
business or to promote or conduct any legitimate object or purpose under and
subject to the laws of the state of Nevada.
Since its incorporation in the State of Nevada the Company is considered to be
in the development stage.
<PAGE>
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple #300
Salt Lake City, Utah 84111
(801) 521-2392
Darrell T. Schvaneveldt, C.P.A.
Independent Auditors Report
Board of Directors
Center Star Gold Mines, Inc.
(A Development Stage Company)
I have audited the accompanying balance sheets of Center Star Gold Mines,
Inc., (a development stage company), as of December 31, 1998, 1997 and 1996,
and the related statements of operations, stockholders' equity, and cash flows
for the years ended December 31, 1998, 1997 and 1996. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatements. 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 the
significant estimates made by management, as well as evaluating the overall
financial statements presentation. I believe that my audit provides a
reasonable basis for my opinion.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note #3 to the financial
statements, the Company has an accumulated deficit and a negative net worth at
December 31 1998. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also discussed in Note #3. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
In my opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of Center Star Gold Mines, Inc., (a
development stage company), as of December 31, 1998, 1997 and 1996, and the
results of its operations and its cash flows for the years ended December 31,
1998, 1997 and 1996, in conformity with generally accepted accounting
principles.
/S/ Schvaneveldt & Company
Salt Lake City, Utah
May 13, 1999
<PAGE>
The accompanying notes are an integral part of these financial statements
Center Star Gold Mines, Inc.
(A Development Stage Company)
Balance Sheets
December 31, 1998, 1997 and 1996
December December December
31, 1998 31, 1997 31, 1996
Assets
Current Assets
Cash $ -0- $ -0- $ 245
Total Assets $ -0- $ -0- $ 245
Liabilities & Stockholders' Equity
Current Liabilities
Advances from Officer $ -0- $ 3,624 $ 2,485
Accounts Payable 500 -0- -0-
Total Current Liabilities 500 3,624 2,485
Stockholders' Equity
Common Stock; $.001 Par Value,
50,000,000 Shares Authorized;
3,249,760 and 1,084,223 Shares
Issued and Outstanding
Retroactively Restated 3,250 1,084 1,084
Paid In Capital 436,008 432,621 432,621
Accumulated Deficit (439,758) (437,329) (435,945)
Total Stockholder' Equity (500) (3,624) (2,240)
Total Liabilities & Stockholders'
Equity $ -0- $ -0- $ 245
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Statement of Operations
For the Years Ended December 31, 1998, 1997 and 1996
December December December
31, 1998 31, 1997 31, 1996
Revenues
Transfer Fees $ -0- $ 46 $ 172
Operating Expenses
Legal & Accounting 4,400 3,200 -0-
Fees 990 423 -0-
Office -0- 61 175
Taxes & Licenses -0- 30 -0-
Loss on Abandoned Mining Claims -0- -0- 100
Consulting Fees 663 -0- -0-
Total Operating Expenses 6,053 3,714 275
(Loss) from Operations (6,053) (3,668) (103)
Other Income
Forgiveness of Debt 3,624 2,284 -0-
Net (Loss) ($ 2,429) ($ 1,384)($ 103)
Net (Loss) Per Share ($ .00) ($ .00) ($ .00)
Weighted Average Number of
Shares 2,022,847 1,084,263 1,084,263
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
For the Period December 31, 1995 to December 31, 1998
Paid In
Common Stock Accumulated
Shares Amount Capital Deficit Totals
Balance, December 31, 1995
Retroactively Restated 1,084,223 $ 1,084 432,621 ($435,842) ($2,137)
Net Loss for the Year Ended
December 31, 1996 (103) (103)
Balance, December 31,
1996 1,084,223 1,084 432,621 (435,945) (2,240)
Net Loss for the Year Ended
December 31, 1997 (1,384) (1,384)
Balance, December 31,
1997 1,084,223 1,084 432,621 (437,329) (3,624)
Shares Issued for Services
Retroactively Restated 165,737 166 497 663
Shares Issued for Expenses
Paid by Officer 2,000,000 2,000 2,890 4,890
Net Loss for Year Ended
December 31, 1998 (2,429) (2,429)
Balance, December 31,
1998 3,249,960 $ 3,250 $436,008 ($439,758) ($500)
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Statements of Cash Flows
For the Years Ended December 31, 1998, 1997 and 1996
December December December
31, 1998 31, 1997 31, 1996
Cash Flows from Operating Activities
Net (Loss) ($2,429) ($1,384) ($103)
Adjustments to Reconcile Net
Income to Net Loss Used by
Operating Activities:
Loss on Abandoned Mining Claims -0- -0- 100
Forgiveness of Debt -0- (2,284) -0-
Non Cash Consulting Fees 663 -0- -0-
Gain on Mining Claims (3,624) -0- -0-
Increase in Accounts Payable 500 -0- -0-
Net Cash Used by Operating
Activities (4,890) (3,668) (3)
Cash Flows from Financing Activities
Advances from Officer 4,890 3,624 -0-
Repayments of Advances -0- (201) -0-
Net Cash Used from Financing
Activities 4,890 3,423 -0-
Net Decrease in Cash -0- (245) (3)
Cash at Beginning of Year -0- 245 248
Cash at End of Year $ -0- $ -0- $ 245
Disclosures from Operating Activities
Interest $ -0- $ -0- $ -0-
Taxes -0- -0- -0-
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Organization
The Company was incorporated on May 1, 1961, under the laws of the State of
Idaho. On July 21, 1998, the Company filed Articles of Merger in the state of
Nevada wherein Center Star Gold Mines, Inc., an Idaho Corporation, merger with
Center Star Gold Mines, Inc., a Nevada Corporation, incorporated on June 2,
1998.
The purpose for which the Company is organized is to transact any lawful
business or to promote or conduct any legitimate object or purpose under and
subject to the laws of the state of Nevada.
Since its incorporation in the State of Nevada the Company is considered to be
in the development stage.
NOTE #2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period when the
goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average number
of shares outstanding at the dates of the financial statements. Fully Diluted
Earnings Per Shares shall be shown on stock options and other convertible
issues that may be exercised within ten years of the financial statement
dates.
E. Inventories: Inventories are stated at the lower of cost, determined by
the FIFO method or market.
F. Depreciation: The cost of property and equipment is depreciated over the
estimated useful lives of the related assets. The cost of leasehold
improvements is depreciated (amortized. over the lesser of the length of the
related assets or the estimated lives of the assets. Depreciation is computed
on the straight line method for reporting purposes and for tax purposes.
G. Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
NOTE #3 - Going Concern
The Company has no assets and no operations from which it can obtain working
capital. The Company recognizes that it must find a source of working capital
or the Company may not be able to continue its existence.
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #4 - Income Taxes
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax assets
in future years. Due to the uncertainty as to the utilization of net
operating loss carry-forwards an evaluation allowance has been made to the
extent of any tax benefit that net operating losses may generate.
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal revenue Codes are met. These losses
are as follows:
Year of Loss Amount Expiration Date
1998 $ 1,921 2013
Current Tax Asset Value of Net Operating Loss Carry-forwards
at Current Prevailing Federal Tax Rate $ 289
Evaluation Allowance (289)
Net Tax Asset $ -0-
Current Income Tax Expense -0-
Deferred Income Tax Benefit -0-
NOTE #5 - Stockholders' Equity
Common Stock:
Prior to the merger with Center Star Gold Mines, Inc., a Nevada Corporation,
the Idaho Corporation reverse split all of the issued and outstanding shares
of common stock on a one for four basis. There were 5,000,000 shares
pre-split and 1,249,960 post-split shares outstanding.
The Idaho Corporation issued 165,737 post-split shares of its common stock for
consulting services valued at the par value of the shares issued in the amount
of $663.
Shareholders of the Idaho Corporation received on a share for share basis
shares of the Nevada Corporation after the merger.
Subsequent to the merger the Company issued an officer 2,000,000 shares for
$4,760 the officer had expended in behalf of the Company.
<PAGE>
Center Star Gold Mines, Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #5 - Stockholders' Equity -Continued-
Accumulated Deficit
The Company has accumulated deficit as follows:
Prior to the Development Stage $ 437,329
Post Merger and During the Development Stage 1,929
Total $ 439,258
NOTE #6 - Forgiveness of Debt
A former officer of the Idaho Corporation had advanced to the Company $3,624.
Concurrent with the change in management with the Nevada Corporation he
forgave $3,624 owed him by the Company.
NOTE #7 - New Technical Pronouncements
In February 1997, SFAS No. 129, "Disclosure of Information about Capital
Structure" was issued effective for periods ending after December 15, 1997.
The Company has adopted the disclosure provisions of SFAS No. 129 effective
with the fiscal year ended December 31, 1998.
In June 1997, SFAS No. 130, "Reporting Comprehensive Income" was issued
effective for fiscal years beginning after December 31, 1997, with earlier
application permitted. The Company has elected to adopt SFAS No. 130
effective with the fiscal year ended December 31, 1998. Adoption of SFAS
No. 130 is not expected to have a material impact on the Company's financial
statements.
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information" was issued for fiscal year beginning after December 31,
1997, with earlier application permitted. The Company has elected to adopt
SFAS No. 131, effective with the fiscal years ended December 31, 1998.
Adoption of SFAS No. 131 is not expected to have a material impact on the
Company's financial statements.
<PAGE>
PART III
Items 1 and 2. Index to Exhibits and Description of Exhibits. The
following exhibits are included as part of this statement:
Exhibit No. Description Page
2.1 Articles of Incorporation filed June 2, 1998 *
2.2 Articles of Merger filed July 21, 1998 *
2.3 Plan and Agreement of Merger dated June 23, 1998 *
2.4 Current Bylaws *
3.1 Form of Common Stock Certificate *
6.1 Debt Settlement Agreement *
12.1 Consent of Auditor 29
*Incorporated by reference from the Company's original registration
statement on Form 10-SB filed with the Securities and Exchange Commission on
January 11, 1999, file no. 0-29804.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this amended registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
CENTER STAR GOLD MINES, INC.
Date: June 2, 1999 By /s/ Rhonda Eardley
Chief Financial& Principal Accounting
Officer
By /s/ Howard M. Oveson, President
EXHIBIT 12.1
/Letterhead/
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple, Suite #300
Salt Lake City, Utah 84111
Darrell T. Schvaneveldt, C.P.A.
Consent of Darrell T Schvaneveldt
Independent Auditor
I consent to the use, of our report dated May 13, 1999, in this amended
Form 10-SB, on the financial statements of Center Star Gold Mines, Inc., dated
December 31, 1998, included herein and to the reference made to me.
/s/ Schvaneveldt & Company
Salt Lake City, Utah
June 7, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> MAR-31-1999 DEC-31-1998
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 00
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 500 500
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 3,250 3,250
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 6,053
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 (2,429)
<INCOME-TAX> 0 (2,429)
<INCOME-CONTINUING> 0 (2,429)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 (2,429)
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
</TABLE>
