<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACTO OF 1934 [FEE REQUIRED]
For the fiscal year ended May 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to __________
Commission File Number: 0-9015
YELLOW GOLD OF CRIPPLE CREEK, INC.
(Exact name of Registrant as specified in charter)
Colorado 84-0768695
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
57 West 200 South, Suite 310, Salt Lake City, Utah 84101
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 359-9309
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None N/A
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, None
Par Value $.0025
<PAGE> 2
Check whether the Issuer (1) has filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such fling requirements for the past 90
days. (1) Yes [ ] No [X] (2) Yes [X] No [ ]
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10- KSB or any amendment to
this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: $-0-
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days: The aggregate market value of the voting stock held by
non-affiliates of the Registrant computed by using the closing sale price has
been indeterminable within the past 60 days as there has been no market for the
stock.
State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At January 6, 1997 there were
19,700,000 shares of the Registrant's Common Stock outstanding.
Documents Incorporated by Reference: None
PART I
ITEM 1. DESCRIPTION OF BUSINESS
YELLOW GOLD OF CRIPPLE CREEK, INC. (THE "COMPANY") HAS BEEN DELINQUENT IN THE
FILING OF ITS PERIODIC REPORTS SINCE APRIL 1995. THIS REPORT IS ONE OF SEVERAL
REPORTS BEING FILED ESSENTIALLY SIMULTANEOUSLY IN ORDER TO BRING THE COMPANY
CURRENT IN ITS REPORTING OBLIGATIONS. THE REPORTS PROVIDE INFORMATION FOR THE
PERIOD DESCRIBED IN THE COVER PAGE HEREOF TO WHICH IT RELATES. SUCH INFORMATION
SHOULD BE CONSIDERED IN LIGHT OF ALL OTHER REPORTS FILED BY THE COMPANY,
PARTICULARLY REPORTS BEING FILED FOR SUBSEQUENT PERIODS.
History and Organization
The Company was incorporated under the laws of the State of Colorado on
August 24, 1936, as Dooley Leasing Company to engage in the mining industry.
<PAGE> 3
The Company changed its name to Yellow Gold of Cripple Creek, Inc. on April 17,
1978. The Company discontinued its mining operations in 1993 and is considered
a development stage company.
In January 1994 all of the officers and directors of the Company resigned.
In December 1996 a new director was elected by the shareholders and new officers
were appointed.
On March 2, 1994, the Company's charter was suspended by the State of
Colorado for failure to maintain a registered agent. The Company was reinstated
in December 1996.
On October 21, 1996, Howard M. Oveson, the president and sole director of
the Company since December 6, 1996, purchased 11,102,500 shares of common stock
from Charles A. Dager for $30,000. Said shares represent approximately 56.36%
of the outstanding common stock of the Company. As a result of such purchase,
Mr. Dager also agreed to forgive any debt owed by the Company to him and to file
a satisfaction of the judgement obtained by him against the Company. (See "ITEM
3. LEGAL PROCEEDINGS.")
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, subject to
the availability of such opportunities, economic conditions, and other factors.
The selection of a business opportunity in which to participate is complex
and risky. Additionally, as the Company has only limited resources, 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.
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.
ITEM 2. DESCRIPTION OF PROPERTY
Since December 1996, the Company's administrative offices have been located
at 57 West 200 South, Suite 310, Salt Lake City, Utah 84101, which are the
offices of Howard M. Oveson, the president and sole director of the Company.
Mr. Oveson has allowed the Company to use this office space without charge.
<PAGE> 4
ITEM 3. LEGAL PROCEEDINGS
On March 11, 1994, Mr. Charles A. Dager, a former officer and director of
the Company, and at the time a controlling shareholder of the Company, obtained
a judgement against the Company in the District Court, Teller County, State of
Colorado (Case No. 94CV-000013 Division 5), in the principal amount of
$675,143.19. On May 15, 1995, at a sheriff's sale conducted in Teller County,
State of Colorado, Mr. Dager purchased all of the remaining mining assets of the
Company for $50,000. On October 23, 1996, the balance of the amount of the
judgement was forgiven by Mr. Dager and a Satisfaction of Judgement was filed
by him in such case.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during
the fourth quarter of the fiscal year ended May 31, 1996.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is listed on the National Association of
Securities Dealers' OTC Bulletin Board under the symbol "YGCC." There is
presently no public trading market for the common stock of the Company, and
there has been no reported bid price of the stock since at least third quarter
1993. At January 6, 1997, there was no bid price for the Company's common
stock.
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 January 6, 1997, the Company had approximately 1,140 shareholders of
record as reported by the Company's transfer agent. The transfer agent for the
Company is OTC Stock Transfer, Inc., 231 East 2100 South, Salt Lake City, Utah
84115, with a mailing address of P.O. Box 65665, Salt Lake City, Utah 84165;
telephone number (801) 485-5555.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Overview
Since discontinuing operations in 1993, 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 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
<PAGE> 5
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
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 possible reverse split of the outstanding shares of
common stock, or the increase in the number of authorized shares of common
stock, and the issuance of stock to acquire such an opportunity.
Liquidity and Capital Resources
As of May 31, 1996, the Company had no assets and no liabilities, and had
no revenues or losses therefrom. For the period during the development stage of
the Company, from August 1953 through May 31, 1996, the Company had an
accumulated loss of $506,154. Since discontinuing operations in 1993, the
Company has not generated revenue and it is unlikely that any revenue will be
generated until the Company locates a business opportunity with which to
acquire or merge. Management of the Company will be investigating various
business opportunities. These efforts may cost the Company not only out-of-
pocket expenses for its management, but also expenses associated with legal and
accounting costs. To date such expenses have been advanced by the president of
the Company, but there is no arrangement or assurance that the president will
continue to advance such costs on behalf of the Company. There can also be no
guarantees that the Company will receive any benefits from the efforts of
management to locate such business opportunities.
<PAGE> 6
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. The president of the Company is providing the
Company with a location for its offices on a "rent free" basis. The Company is
not paying salaries or other forms of compensation to any officers or the sole
director of the Company for their time and effort. Unless otherwise agreed to
by the Company, the Company does intend to reimburse its officers and director
for out-of-pocket expenses.
Results of Operations
The Company has not had any operations during the fiscal year ended May
31, 1996, and has not had any operations since discontinuing operations in 1993.
Since that time, the Company's only operations have involved the negotiation of
settlement of the Company's outstanding liabilities, primarily to its former
president and director, Mr. Charles A. Dager.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company are set forth immediately following
the signature page of this annual report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
In December 1996, the Company engaged Orton & Company, Certified Public
Accountants as independent auditors of the Company. Because of the change of
control of the Company and the location of new management to the State of Utah,
the board of directors decided not to retain H. Hassel Taylor, C.P.A., the prior
independent auditor, to audit the financial statements of the Company for the
fiscal year covered by this report. The decision not to re-engage Mr. Taylor
did not involve a dispute with the Company over accounting policies or
practices. The report of Mr. Taylor on the Company's financial statements
for the years ended May 31, 1994 and 1993 contained an explanatory paragraph
as the Company's ability to "continue development stage operations." Except for
such "going concern" limitation, the report of Mr. Taylor did not contain an
adverse opinion or disclaimer of opinion, nor was it modified as to uncertainty,
audit scope, or accounting principals. In connection with the audits of the
Company's financial statements for each of the three years ended May 31, 1994,
there were no disagreements with Mr. Taylor on any matters of accounting
principles and practices, financial statement disclosure, or auditing scope and
procedures which, if not resolved to the satisfaction of Mr.Taylor would have
caused such firm to make reference to the matter in his report.
<PAGE> 7
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
General
The following table sets forth as of January 6, 1997, the name, age, and
position of the sole executive officer and director of the Company and the term
of office of such director:
Name Age Position(s) Director/Officer Since
Howard M. Oveson 63 Director, President December 1996
and Treasurer
Set forth below is certain biographical information regarding the
Company's current executive officer and director:
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 of Apex Minerals Corporation, a Delaware
corporation, since July 1995, and a director and the secretary of Mountain
States Resources Corporation, a Utah corporation, since July 1996. Each of
these corporations is a reporting company with the Securities and Exchange
Commission.
Compliance with Section 16(a) of the Exchange Act
The Company's common stock is registered pursuant to Section 12(g) of the
SecuritiesAct of 1934, as amended (the "Exchange Act"), and in connection
therewith, directors, officers, and beneficial owners of more than 10% of the
Company's outstanding common stock are required to file on a timely basis
certain reports under Section 16 of the Exchange Act as to their beneficial
ownership of the Company's common stock. The Company had no officers or
directors during the fiscal year ended May 31, 1996, and the only person known
to the Company to beneficially own in excess of 10% of the outstanding common
stock of the Company was Mr. Charles A. Dager. Mr. Dager has represented to the
Company that no such required reports were filed late or were not filed as
required by Section 16 of the Exchange Act for such fiscal year.
ITEM 10. EXECUTIVE COMPENSATION
According to information supplied by the former president of the Company,
there was no compensation awarded to, earned by, or paid to any of the executive
officers of the Company or any of its subsidiaries during the year ended May 31,
1996, or the two prior fiscal years.
<PAGE> 8
ITEM 11. 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 January
6, 1997, of (i) each person who is known to the Company to be the beneficial
owner of more than 5 percent of the Common Stock; (ii) all directors and
executive officers; and (iii) directors and executive officers of the Company as
a group:
Amount and Nature
Name and Address of Beneficial
of Beneficial Owner Ownership Percent of Class
Howard M. Oveson 11,102,500 56.36%
57 West 200 South
Suite 310
Salt Lake City, Utah 84101
Charles A. Dager 1,000,000 5.076%
106 South Third Street
P.O. Box 85
Victor, CO 80860
Executive Officers and
Directors as a Group
(1 Person) 11,102,500 56.36%
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others
Since December 1996, Mr. Howard M. Oveson, an officer, director, and
controlling shareholder of the Company, has advanced funds to the Company for
the purpose of making payments for the benefit of the Company to the Company's
accountants and legal counsel so that the Company may complete appropriate
periodic reports for filing with the Securities and Exchange Commission, and for
the payment of the expenses involved in reinstating the Company's charter in the
State of Colorado.
<PAGE> 9
During the year ended May 31, 1996, the Company was indebted to Mr. Charles
A. Dager, an officer and a director of the Company through January 1994, and a
person owning in excess of 10% of the outstanding common stock of the Company
through October 1996. Mr.Dager held a judgement against the Company in the
principal amount of $675,143.19, of which $50,000 had been satisfied through the
foreclosure sale of all of the assets of the Company to Mr. Dager in May 1995.
The remaining balance of the debt was forgiven in full in October 1996 and a
satisfaction of judgment was filed by Mr. Dager in October 1996 in connection
with the sale of shares of common stock of the Company owned by him to Milagro
Holdings, Inc., a Delaware corporation controlled by Mr. Howard M. Oveson,
a current officer, director, and 10% shareholder of the Company.
Mr. Howard M. Oveson, an officer, director, and controlling shareholder of
the Company, is also an officer and director of two other reporting companies,
one of which is publicly held and the other of which is in the process of
raising capital through a public offering registered with the Securities and
Exchange Commission for the specific purpose of engaging in mining or other
operations relating to mining claims located in southern Utah. The existing
publicly held company is also seeking business opportunities, and it is possible
that conflicts between such entity and the Company for such business
opportunities may arise. There is no agreement between such two entities
concerning such conflict.
To the best of management's knowledge and except as otherwise set forth
herein, during the fiscal year ended May 31, 1996, there were no material
transactions, or series of similar transactions, since the beginning of the
Company's prior fiscal year, or any currently proposed transactions, or series
of similar transactions, to which the Company was or is to be party, in which
the amount involved exceeds $60,000, and in which any director or executive
officer, or any security older who is known by the Company to own of record or
beneficially more than 5% of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, has an interest.
Certain Business Relationships
According to information supplied by former management, during the fiscal
year ended May 31, 1996, there were no material transactions between the
Company and its management or principal shareholders.
<PAGE> 10
Indebtedness of Management
Unless otherwise disclosed herein or in the financial statements, there
were no material transactions, or series of similar transactions, since the
beginning of the Company's fiscal year ended May 31, 1996, or any currently
proposed transactions, or series of similar transactions, to which the Company
was or is to be a party, in which the amount involved exceeds $60,000 and in
which any director or executive officer, or any security holder who is known
to the Company to own of record or beneficially more than 5% of any class of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, has an interest.
Transactions with Promoters
The Company was formed more than five years ago, and therefore,
transactions between the Company and its promoters or founders are not deemed to
be material.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
(a)(1) Financial Statements. The following financial statements are
included in this report:
Page
Report of Orton & Company, Certified Public Accountants 12
Balance Sheet as of May 31, 1996 13
Statements of Operations for the fiscal years ended May 31,
1996 and 1995, and for the period during development
stage from August 1953 through May 31, 1996 14
Statements of Stockholders' Equity from August 1953
through May 31, 1996 15
Statements of Cash Flows for the fiscal years ended May 31,
1996 and 1995, and for the period during development
stage from August 1953 through May 31, 1996 17
Notes to Financial Statements 18
(a)(2) Exhibits. The following exhibits are included as part of this
report:
Exhibit No. Description of Exhibit Page
3.1 Articles of Incorporation, as amended *
3.2 By-Laws of the Company currently in effect *
4.1 Form of certificate evidencing shares of Common Stock *
16.1 Letter on change in certifying accountant. **
23.1 Consent of Orton & Company, independent auditor 19
<PAGE> 11
*Incorporated by reference from the Company's registration statement
on Form 10 filed with the Securities and Exchange Commission, file no. 0-9015.
**Incorporated by reference from the Company's annual report on Form
10-KSB for the year ended May 31, 1995, file no. 0-9015.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the
forth quarter of the fiscal year ended May 31, 1996.
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.
Yellow Gold of Cripple Creek, Inc.
Date: January 13, 1997 By /s/ Howard M. Oveson
Howard M. Oveson, President
In accordance with the Exchange Act, this report has been signed below by
the following person on behalf of the registrant and in the capacitates and on
the dates indicated.
Date: January 13, 1997 /s/ Howard M. Oveson
Howard M. Oveson, Sole Director and
Principal Financial and Accounting Officer
<PAGE> 12
Independent Auditors' Report
To the Board of Directors and Stockholders of Yellow Gold of Cripple Creek,
Inc.:
We have audited the accompanying balance sheet of Yellow Gold of Cripple Creek,
Inc., (a development stage company) as of May 31, 1996 and the related
statements of operations, stockholders' equity and cash flows for the years
ended May 31, 1995 and 1996. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits. The financial statements for
the periods August 1953 (inception) to May 31, 1994 were audited by other
auditors who expressed unqualified opinions on them. The accumulated totals
are the responsibility of the auditors of the respective periods.
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 financial statements referred to above present fairly, in
all material respects, the financial position of Yellow Gold of Cripple Creek,
Inc. as of May 31, 1996 and the results of its operations and cash flows for the
years ended May 31, 1995 and 1996 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 2 to the
financial statements, the Company has no operating capital and has no
operations. These factors raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in the Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Orton & Company
Certified Public Accountants
Salt Lake City, Utah
January 6, 1997
<PAGE> 13
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
ASSETS
May 31,
1996
<S> <C>
Total Assets $ -
STOCKHOLDERS' EQUITY
Stockholders' Equity
Common stock $.0025 par value, 20,000,000 shares
authorized, 19,700,000 shares issued and
outstanding $ 49,250
Capital in excess of par 460,904
Retained (deficit) accumulated since the development
stage (506,154)
Less treasury stock (Note 5) (4,000)
Total Stockholders' Equity $ -
</TABLE>
<PAGE> 14
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
For the
Period During
the Development
Stage from
August 1953
For the Year Ended Through
May 31, May 31,
1996 1995 1996
<S> <C> <C> <C>
Revenues:
Sale of minerals and tailings $ - $ - $ 92,556
Expenses:
Mine development costs - - 134,730
Salaries and related expenses - - 559,009
Professional services - - 126,134
Other general and administrative - 42 180,065
Depreciation - - 158,699
Net Income from Operations $ - $ (42) $ (1,066,081)
Other income (expenses)
Interest income - - 59,438
Interest expense - (77,724) (299,859)
Gain (loss) on sale of
assets (Note 4) - (14,387) 237,573
Gain on relief of
indebtedness (Note 4) - 732,885 732,885
Loss on abandonment of
subsidiaries (Note 3) - (181,900) (181,900)
Other - - 11,790
Net (loss) income before taxes $ - $ 458,832 $ (506,154)
Taxes (Note 1) - - -
Net income (loss) $ - $ 458,832 $ (506,154)
Net income (loss) per
common share $ - $ .02 $ (.03)
Average weighted shares
outstanding 19,600,000 19,600,000 15,996,751
</TABLE>
<PAGE> 15
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development Treasury
Shares Amount Capital Stage Stock
<S> <C> <C> <C> <C> <C>
August 1953:
Issued for cash,
$.0025/share 10,000,000 $ 25,000 $ (17,500) $ - $ -
Issued for cash,
$.04/share 500,000 1,250 18,750 - -
Net loss, inception
to 5/31/78 - - - (8,383) -
August 1978:
Issued for cash,
$10 per share
net of issue costs
of $68,596 5,000,000 12,500 418,904 - -
Sale of warrants,
500,000 shares - - 50 - -
Net loss FYE
5/31/79 - - - (61,759) -
June 1979:
Purchase 100,000
shares of treasury
stock - - - - (4,000)
January 1980, issued
for cash at option
price of $.04 per
share 100,000 250 3,750 - -
March 1980, issued
for cash at option
price of $.04 per
share 100,000 250 3,750 - -
Net loss FYE
5/31/80 - - - (99,561) -
Net loss FYE 5/31/81,
82, 83 (217,641)
Capital contributed
through the
Rittenhouse Project 23,200
Net loss FYE
5/31/84, 85, 86 (234,569)
Net income FYE
5/31/87 89,534
Net loss FYE
5/31/88 - - - (70,767) -
July 1988, stock
issued in exchange
for note due 4,000,000 10,000 10,000 - -
Net loss FYE
5/31/89 - - - (61,242) -
Net loss FYE
5/31/90 - - - (56,726) -
Net loss FYE
5/31/91 - - - (65,708) -
Net loss FYE
5/31/92 - - - (55,621) -
Net loss FYE
5/31/93 - - - (52,962) -
Net loss, FYE
5/31/94 - - - (69,581) -
Net income FYE
5/31/95 458,832
Net loss FYE
5/31/96 -
19,700,000 $ 49,250 $ 460,904 $ (506,154) 4,000
</TABLE>
<PAGE> 16
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
For the
Period
During the
Development
Stage from
August
For the year ended 1953 Through
May 31, May 31,
1996 1995 1996
Cash Flow from Operating Activities:
<S> <C> <C> <C>
Net (loss) income $ - $ 458,832 $ (506,154)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 158,699
Gain/loss on sale of assets/
subsidiaries - (450,659) (450,659)
Increase (decrease) in accounts
payable and accrued expenses - (8,215) 19,569
Net cash used by operating
activities - (42) (778,545)
Cash Flow from Investing Activities:
Proceeds from sale of equipment - - 44,838
Capital expenditures - - (196,037)
Acquisition of mineral properties - - (71,887)
Investment in subsidiaries - - (181,900)
Net Cash (Used) Provided by
Investing Activities - - (404,986)
Cash Flow from Financing Activities:
Net borrowing from stockholder/
director and others - - 677,377
Net proceeds, sales of common
stock - - 510,154
Purchase of treasury
stock (4,000)
Net Cash (Used)/Provided by
Financing Activities - - 1,183,531
Net Cash Provided (Used) - (42) -
Cash at Beginning of the Year - 42 -
Net Cash at the End of the Year $ - $ - $ -
</TABLE>
<PAGE> 17
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Notes to Financial Statements
May 31, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The Company was incorporated under the laws of the State of Colorado
on August 24, 1936. The Company was involved in various mining activities over
the years, none of which proved successful. During the year 1953, the Company
discontinued all operations and has had no significant revenues from any
activity since that time and is classified as a development stage company per
SFAS #7.
b. Income Taxes
The Company adopted Statement of Financial Accounting Standards No.
109 "Accounting for Income Taxes" in the fiscal year ended May 31, 1995 and has
applied the provisions of the statement on a retroactive basis to the previous
fiscal year which resulted in no significant adjustment.
Statement on Financial Accounting Standards No. 109 "Accounting for
Income Taxes" requires an asset and liability approach for financial accounting
and reporting for income tax purposes. This statement recognizes (a) the amount
of taxes payable or refundable for the current year and (b) deferred tax
liabilities and assets for future tax consequences of events that have been
recognized in the financial statements or tax returns.
Deferred income taxes result from temporary differences in the
recognition of accounting transactions for tax and financial reporting purposes.
There were no temporary differences at May 31, 1996 and earlier years;
accordingly, no deferred tax liabilities have been recognized for all years.
The Company has cumulative net operating loss carryforwards of
approximately $148,000 at May 31, 1996 and 1995 and $607,000 at May 31, 1994.
No effect has been shown in the financial statements for the net operating loss
carryforwards as the likelihood of future tax benefit from such net operating
loss carryforwards is not presently determinable. Accordingly, the potential
tax benefits of the net operating loss carryforwards, estimated based upon
current tax rates of $0 at May 31, 1996 and $50,000 at May 31, 1995 have been
offset by valuation reserves of the same amount. The net change in deferred tax
asset and offsetting valuation reserve amounted to $0 for 1996 and $(156,000)
for 1995.
The Company has available $148,000 in federal income tax carryforwards
that will begin to expire in the year 2004.
c. Loss Per Share
The computation of loss per share of common stock is based on the
weighted average number of shares outstanding during the period less shares held
in treasury.
d. Cash and Cash Equivalent
For the purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments with maturity of three months or less to be
cash equivalents.
<PAGE> 18
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Notes to Financial Statements
May 31, 1996
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. It is the
intent of the Company to seek a merger with an existing, operating company.
NOTE 3 - LOSS ON ABANDONMENT OF SUBSIDIARIES
The Company held an investment in two subsidiaries, Black Gold
International, Inc. (since 1979) and Moffatt Tunnel Transportation and Mining
Company (since 1981). During 1995, management determined that the subsidiaries
were worthless and allowed the corporations to be involuntarily dissolved by
the state of Colorado. The investments have been written off as a total loss
and does not intend to reincorporate or revive the subsidiaries in any form.
Total loss on the abandonment of the subsidiaries was $181,900.
NOTE 4 - LOSS ON SALE OF ASSETS AND GAIN ON RELIEF ON INDEBTEDNESS
In January 1994, Mr. Charles A. Dager, a major shareholder, resigned
as president, treasurer, director and registered agent for the Company. In
March, 1994, Mr. Dager received a default judgement against the Company in the
amount of $675,143. The default judgment would accrue interest at 12% until
paid. Mr. Daeger also had an open account receivable of $1,234 in addition to
the $675,143 judgment.
On May 15, 1995, all remaining assets of the Company (mostly mining
claims) were sold by Sheriff's sale for the sum of $50,000 to the high bidder of
Mr. Daeger. The Company recognized a loss on the sale of the mining claims in
the amount of $14,837.
In October, 1996, Mr. Daeger filed a satisfaction of judgment in the
amount of $675,143 to settle any and all outstanding obligations against the
Company. The Company recognized a gain on the forgiveness of the debt in 1995
of $732,885, the amount of the debt, legal fees, and accrued interest up to May
15, 1995.
NOTE 5 - TREASURY STOCK
The Company holds 100,000 common shares in treasury. The cost of the
stock was $4,000.
NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
<TABLE>
<CAPTION>
From August
1953
to May 31,
1996 1995 1996
<S> <C> <C> <C>
Interest $ - $ - $ 146,325
Taxes - - -
<PAGE> 19
ACCOUNTANTS' CONSENT
We hereby consent to the use of our audit report of Yellow Gold of Cripple
Creek, Inc. dated January 6, 1997 for the year ended May 31, 1996 in the Form
10-KSB Annual Report for Yellow Gold of Cripple Creek, Inc.
January 9, 1997
Salt Lake City, Utah<PAGE>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 49,250
<OTHER-SE> (49,250)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
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</TABLE>
