FORM 10-Q-SB
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
MARK ONE
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 0-9494
ASPEN EXPLORATION CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 84-0811316
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) I.D. Number)
Suite 208, 2050 S. Oneida St., Denver, Colorado, 80224
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(303) 639-9860
- --------------------------------------------------------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ] No [ X ]
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at November 12, 1998
- ----------------- --------------------------------
Common stock,
$.005 par value 5,191,322
1
<PAGE>
Part One. FINANCIAL INFORMATION
Item 1. Financial Statements
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, June 30,
1998 1998
---- ----
(Unaudited) (Audited)
Current Assets:
Cash and cash equivalents, including ....... $ 784,484 $ 425,306
$695,429 and $331,894 of invested
cash at September 30, 1998 and June
30, 1998 respective
Precious metals ............................ 18,823 18,823
Accounts receivable, trade ................. 187,351 115,144
Prepaid expenses ........................... 4,332 8,762
----------- -----------
Total current assets .................... 994,990 568,035
----------- -----------
Investment in oil and gas properties,
at cost (full cost method of
accounting) ................................ 1,789,463 1,682,521
Less accumulated depletion and
valuation allowance ...................... (1,031,902) (1,006,902)
----------- -----------
757,561 675,619
----------- -----------
Property and equipment, at cost:
Furniture, fixtures and vehicles ........... 174,550 171,122
Less accumulated depreciation .............. (123,544) (120,544)
----------- -----------
51,006 50,578
----------- -----------
Undeveloped mining properties, at cost ....... 25,856 27,826
Cash surrender value, life insurance ......... 231,314 231,314
Other ........................................ -- 3,400
Deferred compensation costs .................. 28,000 28,000
=========== ===========
TOTAL ASSETS ............................ $ 2,088,727 $ 1,584,772
=========== ===========
(Statement Continues)
See notes to Consolidated Financial Statements
2
<PAGE>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, June 30,
1998 1998
---- ----
(Unaudited) (Audited)
Current liabilities:
Accounts payable and accrued
expenses ..................................... $ 137,710 $ 409,815
Advances from joint owners ..................... 270,212 87,999
Due to related parties ......................... 60,417 68,750
Notes payable - current ........................ 120,257 52,205
----------- -----------
Total current liabilities ...................... 588,596 618,769
----------- -----------
Notes payable - long term ...................... 406,773 280,360
----------- -----------
Stockholders' equity:
Common stock, $.005 par value:
Authorized: 50,000,000 shares
Issued: At September 30, 1998:
5,191,322 and June 30, 1998:
4,916,322 .................................... 25,956 24,581
Capital in excess of par value ................. 5,951,602 5,677,977
Accumulated deficit ............................ (4,884,200) (5,016,915)
----------- -----------
Total stockholders' equity ..................... 1,093,358 685,643
----------- -----------
Total liabilities and stockholders'
equity ......................................... $ 2,088,727 $ 1,584,772
=========== ===========
See Notes to Consolidated Financial Statements
3
<PAGE>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
---------------------------
(unaudited)
1998 1997
---- ----
Revenues:
- ---------
Oil and gas ................................. $ 295,262 $ 70,340
Management fees ............................. 19,614 31,020
Interest and other, net ..................... 6,889 5,770
----------- -----------
Total Revenues ................................ 321,765 107,130
----------- -----------
Costs and expenses:
Oil and gas production ...................... 11,262 5,857
Depreciation, depletion and
amortization .............................. 28,000 10,573
Selling, general and administrative ......... 143,828 114,564
Interest expense ............................ 5,960 --
----------- -----------
Total Costs and Expenses ...................... 189,050 130,994
----------- -----------
NET INCOME (LOSS) ............................. $ 132,715 $ (23,864)
=========== ===========
Basic earnings (loss) per common share ........ $ .03 $ --
=========== ===========
Diluted earnings (loss) per common
share ........................................ $ .03 $ --
=========== ===========
Weighted average number of common
shares outstanding .......................... 4,916,322 4,456,322
=========== ===========
The accompanying notes are an integral
part of these statements.
4
<PAGE>
<TABLE>
<CAPTION>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three months ended September 30,
1998 1997
---- ----
Cash flows from operating activities:
- -------------------------------------
<S> <C> <C>
Net gain (loss) ........................................ $ 132,715 $ (23,864)
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation, depletion & amortization ............... 28,000 10,573
Loss on write off of investments ..................... 3,400 --
Changes in assets and liabilities:
Increase in accounts receivable ...................... (72,207) (214,597)
Decrease in prepaid expense .......................... 4,430 2,101
Increase (decrease) in accounts payable and accrued
expense ............................................ (89,892) 756,007
Increase (decrease) in due to related parties ........ (8,333) 17,768
--------- ---------
Net cash provided (used) by operating activities ..... (1,887) 547,988
--------- ---------
Cash flows from investing activities:
- -------------------------------------
Conveyance of oil & gas properties for cash .......... 477,950 --
Development & acquisition of oil & gas properties .... (103,642) (183,051)
Purchase of office equipment ......................... (3,428) --
Sale of mining data .................................. 1,970 --
Additions, undeveloped mining properties ............. -- (40)
Proceeds to prospect fees ............................ -- 86,500
Additions to cash surrender value .................... -- (9,487)
--------- ---------
Net cash used in investing activities ................ 372,850 (106,078)
--------- ---------
Cash flows from financing activities:
- -------------------------------------
Note payable - proceeds .............................. 2,571 81,000
Repayment of notes payable ........................... (14,356) --
--------- ---------
(11,785) 81,000
Net increase in cash and cash equivalents ............ 359,178 522,910
Cash and cash equivalents, beginning of year ......... 425,306 238,465
--------- ---------
Cash and cash equivalents, end of year ............... $ 784,484 $ 761,375
========= =========
Interest paid ........................................ $ 5,960 $ --
========= =========
Schedule of non cash investing and financing activities:
- --------------------------------------------------------
Notes payable issued for properties .................. $ 206,250 $ --
Common stock issued for properties ................... 275,000 --
--------- ---------
$ 481,250 $ --
========= =========
The accompanying notes are an integral
part of these statements.
5
</TABLE>
<PAGE>
ASPEN EXPLORATION CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
September 30, 1998
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Aspen Exploration Corporation ("the Company") was incorporated on February
28, 1980 and is engaged in the business of acquiring and developing
interests in domestic oil and gas properties and uranium and other mineral
properties.
Through November 1996, the Company had oil and gas operations in Wyoming,
Montana, North Dakota, Colorado and California, and after November 1996,
principally in California. The Company's primary mineral projects and
targets of exploration (uranium) are in central Wyoming.
The Company has two wholly owned subsidiaries. None of the subsidiaries
have any assets, liabilities or operations.
During fiscal year 1997 and the first two quarters of fiscal year 1998, the
Company experienced cash flow and liquidity problems; however, subsequently
cash flow has substantially increased, due to the production from three gas
wells and four oil wells, which has allowed the Company to pay creditors
and resume normal operations.
A summary of the Company's significant accounting policies follows:
Consolidated financial statements
---------------------------------
The consolidated financial statements include the Company and its
wholly-owned subsidiaries, Aspen Gold Mining Company and Aspen Recursos de
Mexico. Significant intercompany accounts and transactions, if any, have
been eliminated.
Statement of cash flows
-----------------------
For statement of cash flow purposes, the Company considers short-term
investments with original maturities of three months or less to be cash
equivalents. Cash restricted from use in operations beyond three months is
not considered a cash equivalent.
6
<PAGE>
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Management's Use of Estimates
-----------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities at the date of the
financial statements and reported amounts of revenues and expenses. Actual
results could differ from those estimates.
The mining and oil and gas industries are subject, by their nature, to
environmental hazards and cleanup costs for which the Company carries
catastrophe insurance. At this time, management knows of no substantial
costs from environmental accidents or events for which it may be currently
liable. In addition, the Company's oil and gas business makes it vulnerable
to changes in wellhead prices of crude oil and natural gas. Such prices
have been volatile in the past and can be expected to be volatile in the
future. By definition, proved reserves are based on current oil and gas
prices and estimated reserves. Price declines reduce the estimated quantity
of proved reserves and increase annual amortization expense (which is based
on proved reserves).
Impairment of Long-lived Assets
-------------------------------
The Company evaluates the carrying value of assets other than oil and gas
assets for potential impairment on an ongoing basis. The Company evaluates
the carrying value of long-lived assets and long-lived assets to be
disposed of for potential impairment periodically. The Company considers
projected future operating results, cash flows, trends and other
circumstances in making such estimates and evaluations.
Financial Instruments
---------------------
The carrying value of current assets and liabilities reasonably
approximates their fair value due to their short maturity periods. The
carrying value of the Company's debt obligations reasonably approximates
their fair value as the stated interest rate approximates current market
interest rates of debt with similar terms.
New Accounting Pronouncements
-----------------------------
Earnings Per Share
------------------
In February 1997, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 128 ("SFAS No. 128"), addressing earnings per
share. SFAS No. 128 changed the methodology of calculating earnings per
7
<PAGE>
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
share and renamed the two calculations basic earnings per share and diluted
earnings per share. The calculations differ by eliminating any common stock
equivalents (such as stock options, warrants, and convertible preferred
stock) from basic earnings per share and changes certain calculations when
computing diluted earnings per share. The Company adopted SFAS No. 128 in
fiscal year 1998.
The following is a reconciliation of the numerators and denominators used
in the calculations of basic and diluted earnings (loss) per share for the
three months ended September 30, 1998 and 1997:
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
Per Per
Net Share Net Share
Income Shares Amount Loss Shares Amount
------ ------ ------ ---- ------ ------
Basic earnings per share:
<S> <C> <C> <C> <C> <C> <C>
Net income (loss)
and share amounts 132,715 4,916,322 .03 (23,864) 4,456,322 --
Dilutive securities
stock options 460,000
Repurchased shares (181,700)
---------------------------------------------------------------
Diluted earnings per share:
Net income and assumed
share conversion 132,715 5,194,562 .03 (23,864) 4,456,322 --
========= ========= === ========= ========= =====
</TABLE>
Precious metals and revenues
----------------------------
Precious metals inventories are valued at the lower of cost (specific
identification method) or market. There was no allowance for unrealized
losses against inventories due to market decline at September 30, 1998.
Oil and gas properties
----------------------
The Company follows the "full-cost" method of accounting for oil and gas
properties. Under this method, all costs associated with property
acquisition, exploration and development activities, including internal
costs that can be directly identified with those activities, are
capitalized within one cost center. No gains or losses are recognized on
the receipt of prospect fees or on the sale or abandonment of oil and gas
properties, unless the disposition of significant reserves is involved.
8
<PAGE>
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Depletion and amortization of the full-cost pool is computed using the
units-of-production method based on proved reserves as determined annually
by the Company and independent engineers. An additional depletion provision
in the form of a valuation allowance is made if the costs incurred on oil
and gas properties, or revisions in reserve estimates, cause the total
capitalized costs of oil and gas properties in the cost center to exceed
the capitalization ceiling. The capitalization ceiling is the sum of (1)
the present value of future net revenues from estimated production of
proved oil and gas reserves applicable to the cost center plus (2) the
lower of cost or estimated fair value of the cost center's unproved
properties less (3) applicable income tax effects. The valuation allowance
was $281,719 at September 30, 1998 and September 30, 1997.
Property and equipment
----------------------
Depreciation and amortization of property and equipment are expensed in
amounts sufficient to relate the expiring costs of depreciable assets to
operations over estimated service lives, principally using the
straight-line method. Estimated service lives range from three to eight
years. When assets are sold or otherwise disposed of, the cost and
accumulated depreciation are removed from the accounts and any resulting
gain or loss is reflected in operations in the period realized.
Undeveloped mining properties
-----------------------------
The Company capitalizes all costs associated with acquiring, exploring and
developing mineral properties, including certain internal costs which
specifically relate to each mining property area ("cost center").
Capitalized costs are deferred until the area of interest to which they
relate is put into operation, sold, abandoned or impaired. The Company's
pro rata share of advance mineral royalties, bonuses and other cash
payments received by the Company from joint venture or other exploration
participants reduce the amount of a cost center as a recovery of
capitalized costs. The excess of the Company's pro rata share of advance
mineral royalties, bonuses and other cash payments received by the Company
from joint venture or other exploration participants over capitalized costs
in a specific cost center are recognized as revenue in the period received.
Gains or losses on the sale or abandonment of mining properties are charged
to current operations.
9
<PAGE>
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred compensation Costs
---------------------------
The Company records stock bonuses to employees as an expense and an
increase to paid-in capital in the year of grant unless the bonus vests
over future years. Bonuses that vest are deferred and expensed ratably over
the vesting period.
Note 2 MINING PROPERTIES
KAYCEE AND SHAMROCK URANIUM PROSPECTS
-------------------------------------
The Company has recently begun exploration for in situ uranium deposits in
Wyoming. During the years ended June 30, 1998 and 1997, the Company
expended $4,472 and $63,352, respectively, on the Kaycee and Shamrock
prospects. In addition during 1998, the Company issued to the president
100,000 shares of the Company's common stock, valued at $14,000, in
exchange for the president's 25% interest in geological data and potential
uranium prospects.
During fiscal 1998, the Company sold the geological data of the Kaycee and
Shamrock prospects to a privately-held Canadian company and, in exchange,
received a $125,000 cash payment and a commitment to receive an additional
$125,000 prior to December 31, 1998. Under the terms of the sales agreement
reached in March, 1998, the Company also received 2 million shares or
approximately 25% of the common stock of the privately-held company. To the
knowledge of the Company, at the time of this filing, the stock had no
market value.
Note 3 NOTES PAYABLE
The Company owes the following debt:
September 30, June 30,
1998 1998
---- ----
Borrowings from life insurance company on
cash surrender value of officer life
insurance, interest at 6% per annum, no
specific due date, however, the Company
intends to repay this obligation in equal
installments during fiscal years 6/30/2000
and 6/30/2001, collateralized by cash
surrender value of policy
$ 210,437 $ 210,437
10
<PAGE>
Note 3 NOTES PAYABLE (CONTINUED)
Note payable to related party, monthly
principal and interest payments of $4,269,
due September, 2000, collateralized by
working interests in the Emigh lease 91,398 101,456
Note payable to auto dealership, monthly
principal and interest payments of $879, due
July, 2000, collateralized by new vehicle 18,945 20,672
Note payable to an unaffiliated third party
for the acquisition of producing gas
properties in Tehama and Glenn Counties,
California, interest at 5.475% and
collateralized by working interests in the
Johnson and Gay Gas Units 206,250 --
---------- ----------
527,030 332,565
Less current portion 120,257 52,205
---------- ----------
$ 406,773 $ 280,360
========== ==========
Note 4 COMMITMENTS AND CONTINGENCIES
At September 30, 1998 the Company was committed to the following drilling
and development projects in California:
1. Drill, complete and equip the Emigh 35-2.
2. Drill, complete and equip the Cilker 4-1 well.
3. Drill, complete and equip the Brandt 46X-27 well.
Additional perforations were added in the Emigh 34-1 and Emigh 35-1 wells
during the first quarter of the current fiscal year. These additional
producing intervals, in addition to the production from the Emigh 2-1, have
increased the gross production from these three wells to its current level
of approximately 8,000 MMBTU per day.
During the second quarter of the fiscal year, the Company drilled the Emigh
35-2 and set producing casing to a depth of approximately 10,640'. This
well will be deepened to a depth of approximately 11,200' in the near
future.
11
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
September 30, 1998 as compared to September 30, 1997
- ----------------------------------------------------
Registrant has sustained operating losses in prior years. In addition,
Registrant has used substantial amounts of working capital in its operations.
However, at September 30, 1998 current assets exceeded current liabilities by
$406,394, and cash used for operations during the quarter amounted to only
$1,887. At June 30, 1998 current liabilities exceeded current assets by $50,734
and Registrant had a working capital deficit to that extent. The improvement of
$457,128 in working capital from a negative $50,734 to a positive $406,394 is
primarily due to the issuance of common stock and the increase in long term debt
by Registrant in conjunction with the acquisition of two producing gas
properties in California.
On July 16, 1998, Registrant acquired a net 21% working interest (16.17% net
revenue interest) in two natural gas units, the Johnson and Gay Units, in
addition to a 5.00% royalty interest in the Gay Unit, located in Tehama and
Glenn Counties, California. Registrant acquired a 100% working interest in the
two properties from D. E. Craggs, Inc., an unaffiliated third party for $275,000
in cash and 275,000 shares of Registrant's restricted common stock valued at
$1.00 per share. Simultaneously with the acquisition Registrant sold a 79%
working interest in the two prospects to certain unaffiliated and three
affiliated purchasers for a total price of $477,950.
The effective date of the acquisition and disposition was June 30, 1998.
Pursuant to the agreement with Craggs, Registrant paid Craggs 25% of the cash
and stock at the closing ($68,750 and 68,750 shares) and is obligated to pay an
additional 25% (plus interest on the cash from the date of closing at the daily
rate of 0.015%) in January 1999, 2000, and 2001.
Registrant believes that actions presently being taken to revise Registrant's
operations and financial requirements provide the opportunity for Registrant to
continue as a going concern. In light of recent successful drilling operations
and the acquisition of producing properties, increased revenues will continue to
have a positive effect on Registrant's working capital and contribute
significantly to its cash flow in the coming months.
Registrant is now focusing most of its efforts on drilling for or acquiring oil
and gas production in the state of California.
Registrant shares certain oil and gas drilling opportunities with third party
investors (including some affiliated investors) and takes a reduced interest
until after payout to the third party investors. Payout in several of the wells
has occurred, and consequently Registrant is now receiving increased revenues
from its oil and gas operations. This commenced in the first quarter of calendar
year 1997 when Emigh 2-1 paid out, and will continue for the foreseeable future.
12
<PAGE>
Results of Operations
---------------------
September 30, 1998 Compared to September 30, 1997
- -------------------------------------------------
For the three months ended September 30, 1998 Registrant's operations continued
to be focused on the production of oil and gas, and the investigation for
possible acquisition of producing oil and gas properties.
Oil and gas revenues for the three months ended September 30, 1998 increased
$224,922, from $70,340 to $295,262, a 220% increase. This increase reflects
Registrant's continued successful efforts in drilling exploratory and extension
wells in California as well as bringing recent acquisitions into the revenue
stream.
Oil and gas production expenses increased $5,405 or 92% from $5,857 to $11,262
for the period ended September 30, 1998. This increase was due to a number of
new wells coming into production during the past year. These new wells also
reflect positively on increased oil and gas revenue.
Depletion, depreciation and amortization increased significantly, from $10,573
to $28,000, a $17,427 or 165% increase. This increase reflects added volumes
produced from the new wells and the under estimate of actual depletion expense
for the first quarter of 1997 by approximately $16,000.
Selling, general and administrative expenses increased by $29,264 or 25.5% from
$114,564 to $143,828. The bulk of this increase was caused by an increase in
audit and accounting fees of $21,824 due to the fact that the audit was
performed for fiscal 1997 during the second and third quarters of 1998 resulting
in no expenditure for accounting fees during the three months ended September
30, 1997. Membership dues, temporary secretarial fees, and unclassified
miscellaneous expense increased by a further $12,000 and was offset by a
reduction of salary expense of approximately $8,000 during the three months
ended September 30, 1998.
As a result of Registrant's operations for the three months ended September 30,
1998, Registrant ended the quarter with net income of $132,715 compared to a net
loss of ($23,864) a year earlier. This increase of approximately $156,600
reflected an increase in total revenues of $225,000 due primarily to newly
discovered oil and gas production coming on line and was offset by an increase
in operating costs, depletion, depreciation and amortization, and general and
administrative expenses of approximately $58,000.
13
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ASPEN EXPLORATION CORPORATION
(Registrant)
/s/ R. V. Bailey
-------------------------------------
By: R. V. Bailey,
November 12, 1998 Chief Executive Officer,
Principal Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
09/30/98 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> JUN-30-1999 JUN-30-1998
<PERIOD-START> JUL-01-1998 JUL-01-1997
<PERIOD-END> SEP-30-1998 JUN-30-1998
<CASH> 784,484 425,306
<SECURITIES> 18,823<F1> 18,823<F1>
<RECEIVABLES> 187,351 115,144
<ALLOWANCES> 0 0
<INVENTORY> 4,332<F2> 8,762<F2>
<CURRENT-ASSETS> 994,990 568,035
<PP&E> 1,789,463 1,682,521
<DEPRECIATION> (1,031,902) (1,006,902)
<TOTAL-ASSETS> 2,088,727 1,584,772
<CURRENT-LIABILITIES> 588,596 618,769
<BONDS> 0 0
0 0
0 0
<COMMON> 5,977,558 5,702,558
<OTHER-SE> (4,884,200)<F3> (5,016,915)<F3>
<TOTAL-LIABILITY-AND-EQUITY> 2,088,727 1,584,772
<SALES> 295,262 739,426
<TOTAL-REVENUES> 321,765 910,824
<CGS> 11,262 75,775
<TOTAL-COSTS> 189,050 800,286
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 189,050 110,538
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 189,050 110,538
<EPS-PRIMARY> .03 .02
<EPS-DILUTED> .03 .02
<FN>
<F1> Precious Metals
<F2> Prepaid Expense
<F3> Retained Earnings
</FN>
</TABLE>
