SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED) for the fiscal year ended June 30, 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 No. 1-7149
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
(Exact name of Registrant as specified in its charter)
Delaware 82-0277987
(State or other jurisdiction (IRS Employer
Identification
of Incorporation or organization) Number)
1415 Louisiana, Suite 3100 Houston, Texas 77002-7360 (713)
658-1142
(Address, including zip code, and telephone number including area code
of Registrant's principal executive offices and place of business)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of Class on which registered
Common Stock $.001 par value Shares were formerly listed on the
Spokane Stock Exchange which closed May 24, 1991. The Shares of the
Registrant are now quoted by the Spokane Quotation Bureau.
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
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 X No ______
The aggregate market value of the shares of Common Stock held by
non-affiliates of the Registrant at September ___, 1996 was $____________**.
For purposes of this computation, all officers and directors of the Registrant
are deemed to be affiliates. Such determination should not be deemed an
admission that such officers and directors are affiliates.
Indicate the number of shares outstanding of the Registrant's classes of
Common Stock, as of the latest practicable date.
Number of Shares Outstanding
Title of Each Class of Common Stock at September 20, 1996
Common Stock $.001 par value 1,605,147
DOCUMENTS INCORPORATED BY REFERENCE
NONE
This Form 10-K consists of 22 pages. The Table of Contents is listed on Page
i.
** See Page 4.
i
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K ANNUAL REPORT
JUNE 30, 1996
TABLE OF CONTENTS
PART I
ITEM 1 BUSINESS
ITEM 2 PROPERTIES
ITEM 3 LEGAL PROCEEDINGS
ITEM 4 MATTERS SUBMITTED TO A VOTE OF SECURITIES HOLDERS
PART II
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
ITEM 6 SELECTED FINANCIAL DATA
ITEM 7 MANAGEMENT'S DISSCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11 MANAGEMENT REMUNERATION AND TRANSACTIONS
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND RECORDS ON FORM 8-K
SIGNATURES
7
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART I
JUNE 30, 1996
ITEM 1. BUSINESS"ITEM1.BUSINESS"l1
(a) The Registrant was incorporated under the laws of the State of Idaho
on March 22, 1967 and until January 1992 operated as an exploratory mining
company in the development stage.
Since its incorporation, the business activities of Allied Silver-Lead
Company ("Allied") have been confined to the acquisition of mineral rights
lying beneath the City of Mullan, Shoshone, County, Idaho, and seeking to
identify a third-party partner to finance exploration and development of the
property.
Registrant acquired by deed and/or lease the subsurface mineral rights to
approximately 393 acres or 99.9% of the land area contained within the
boundaries of the City of Mullan, County of Shoshone, Idaho, located in the
Hunter Mining District. Included in the above are mineral rights to 3 acres
owned by School District #392 and 200 acres owned by the City of Mullan,
Idaho, under a lease agreement which has now expired.
On January 1, 1981, Registrant entered in to a lease agreement (the
"Agreement") with Sunshine Mining Company, a Delaware corporation, with mining
properties situated in Shoshone County, Idaho. On June 26, 1984, the lease
was assigned by Sunshine to Hecla Mining Company ("Hecla"). The lease covers
all of Registrant's properties north of the Osburn Fault as defined in the
lease agreement. The lease is for a period of forty years with a right to
renew for an additional forty years; however, on October 16, 1991, Hecla
notified the Registrant that it was electing to terminate the Agreement on
January 16, 1992. Hecla paid the final royalty check of $28,512 on December
31, 1991. At a later date, Hecla provided the Registrant with an inventory of
the pipe, track and writing installed in Allied's property.
Effective January 15, 1996, Allied reincorporated in Delaware through a
merger into Planet Resources, Inc. ("Planet" or the "Company"). The
reincorporation resulted in (1) Allied's name being changed to Planet
Resources, Inc., (2) shares of common stock of Allied being converted into the
right to receive one share of common stock of Planet for each five shares of
common stock of Allied as of the date of reincorporation, (3) elimination of
the right to cumulative voting for the election of directors, (4) the persons
serving as officers and directors of Allied continue to serve in their
respective capacities, and (5) the Articles of Incorporation of Allied changed
to (a) reduce the par value of the commons stock from $.01 to $.001, (b)
reduce the number of shares of common stock the Company is authorized to issue
from 50,000,000 to 10,000,000, and (c) authorized the Company to issue
1,000,000 preferred shares with a par value of $.001 per share.
The Company presently has no commercial operations although management is
evaluating various future operating strategies, including the merger of the
Company with operating entities.
(b) Not applicable.
(c) (1) (i) if the Registrant were to develop an ore body on its
property, such ores would be processed through a floatation mill and the
concentrates sold at prevailing market prices to a smelter under a negotiated
smelter contract. The closest smelter to the Registrant's properties is the
East Helena Smelter of ASARCO Incorporated, approximately 240 miles to the
east. Any transportation of concentrates would be by truck.
(ii) Not applicable.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART I
JUNE 30, 1996
ITEM 1. CONTINUED
(iii) The source and availability of raw materials essential to
the Registrant's business are readily available from local suppliers.
(iv) Registrant holds no patents, trademarks, licenses franchise
or concessions.
(v) The business of Registrant is not of a seasonal nature.
(vi) The business of Registrant does not require significant
amounts of working capital at the present time.
(vii) See (c)(1)(i) above.
(viii) The Company does not have a backing of orders.
(ix) Registrant does not participate in any governmental
contracts.
(x) Registrant is inactive and is not in direct competition with
any other business.
(xi) Registrant's business is such that no expenditures are
required for research and development.
(xii) See (c)(1)(i) above.
(xiii) There have been no material effects upon Registrant's
business in complying with governmental provisions with respect to protection
of the environment.
(xiv) Registrant has no employees and its current officers and
directors serve without established compensation.
(d) Not applicable.
ITEM 2. PROPERTIES"ITEM2.PROPERTIES"l1
(a) The Company is the owner of subsurface mineral rights on approximately
190 acres located in the City of Mullan, Idaho. Title was acquired by
issuance to real property owners of one share of capital stock for each 25
square feet of surface owned. In acquiring such mineral rights, the Company
issued 361,739 shares of capital stock as adjusted for subsequent stock splits
and the Planet merger. Conveyance of title included, free of any additional
stock issue, all subsurface rights lying beneath adjacent streets and alleys
where ownership rested with the grantor. The acquisition of such mineral
rights was completed in November of 1985.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART I
JUNE 30, 1996
ITEM 2. CONTINUED
(b) Property Being Leased to Allied
(1) Allied entered into an agreement dated May 1, 1981, with the City
of Mullan (which supersedes a previous agreement dated December 31, 1971)
whereby the Company, as Lessee, has the right to mine subsurface minerals on
approximately 200 acres owned by the City north of Osburn Fault for a period
of 25 years (subject to a renewal option for an additional 25 years), The
City, as lessor, received 20% of all royalty payments or other consideration
received by Allied from Hecla. In the event Allied enters in to a lease
agreement for the exploration and development of "City Property" south of the
Osburn Fault, the City shall receive 15% of the royalties received. No
royalties have been paid on "City Property" south of the fault.
(c) The Registrant has no competitive economic position in the mining
industry as no mineral production has ever been realized.
(d) Registrant has no oil and gas operations.
ITEM 3. LEGAL PROCEEDINGS"ITEM3.LEGALPROCEEDINGS"l1
There are no legal proceedings pending.
ITEM 4. MATTERS SUBMITTED TO A VOTE OF SECURITIES
HOLDERS"ITEM4.MATTERSSUBMITTEDTOAVOTEOFSECURITIESHOLDERS"l1
None
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1996
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER
ATTERS"ITEM5.MARKETFORTHEREGISTRANT'SCOMMONSTOCKANDRELATEDSTOCKHOLDERMATTER
"l1
(a) Price Range of Common Stock
The following table shows the range of closing bid prices for the
Common Stock as reported by the Spokane Quotation Bureau Service.
Quarter Period 07/01/94 Period 07/01/95
Ended to 06/30/95 to 06/30/96
High Low High Low
September 30 $.24 $.16 * *
December 31 .18 .10 * *
March 31 .16 .12 * *
June 30 .16 .12 * *
(b) Approximate number of Equity Security Holders
Number of Record Owners
Title of Class at September 20, 1996
Common Capital Stock 1,583
(c) No cash dividends have been paid by the Registrant since inception.
* Quarterly prices are not readily available, this information will be
provided as a supplement to this Form 10-K upon receipt of the information
necessary to complete this table.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1996
ITEM 6. SELECTED FINANCIAL DATA"ITEM6.SELECTEDFINANCIALDATA"l1
The selected financial data for each of the five years ended June 30,
1996, 1995, 1994, 1993 and 1992 were derived from the audited financial
statements for such periods. The selected financial data should be read in
conjunction with, and are qualified by, such financial statements and notes
thereto, including the auditor's report thereon.
Selected Income Statement Data:
YEAR ENDED JUNE 30
1996 1995 1994 1993 1992
Revenues:
Advance royalties $ -0- $ -0- $ -0-
$ -0- $ 28,512
Other Income 3,776 3,412 6,685
3,744 4,891
Total Revenues 3,776 3,412 6,685 3,744 33,403
Expenses:
General and Administrative (25,143) (18,730) (34,161)
(21,045) (17,566)
Property write-down -0- -0- -0- -0- (66,484)
Income tax (expense) benefit -0- 25
2,895 4,117 (3,104)
Net Loss (21,367) (15,293) (24,581) (13,184) (53,751)
Net Income (loss) per common share ( .01) ( .01) (
.02) ( .01) ( .01)
Selected Balance Sheet Data:
Current Assets: 154,364 146,447 158,238 182,338 94,680
Mineral rights and depreciable
property net (1) 10,000 10,027 10,529
11,089 11,712
Total Assets 164,364 156,474 168,767 193,427
106,392
Current Liabilities: -0- -0- -0- 79 3,860
Long-term debt -0- -0- -0- -0- -0-
Commitments
Stockholders' equity 164,364 156,474 168,767 193,348
102,532
Cash dividends N/A N/A N/A N/A N/A
Working Capital 154,364 146,447 158,238 182,259
90,820
(1) See Note 2 to Financial Statements.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1996
ITEM 7. MANAGEMENT'S DISSCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF
PERATIONS"ITEM7.MANAGEMENT'SDISSCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRE
ULTSOFOPERATIONS"l1
(a) Results of Operations for the Year Ended June 30, 1996
The Registrant showed a net loss of $21,367 for the year. The only
income was from interest; whereas, the expenses of $25,143 were for
professional fees and general and administrative expenses.
(b) Results of Operations for the Year Ended June 30, 1995
The Registrant showed a net loss of $15,293 for the year. The only
income was from interest; whereas, the expenses of $18,730 were for
professional fees and general and administrative expenses.
(c) Results of Operations for Year Ended June 30, 1994
The Registrant showed a net loss of $24,581 for the year. The only
income was from interest, dividends and gain on sale of securities; whereas,
the expenses of $34,161 were for professional fees and general administrative
expenses.
(d) Results of Operations for Year Ended June 30, 1993
The Registrant showed net loss of $13,184 for the year. The only income
was from interest and dividends; whereas, the expenses of $21,045 were for
general and administrative expenses.
(e) Comparison of Operations - June 30, 1996 versus June 30, 1995
The Registrant had no operations for year ended June 30, 1996. The
principal difference between expenses for the two years was an increase in
legal fees of $7,168.
(f) Comparison of Operations - June 30, 1995 versus June 30, 1994
The Registrant had no operations for year ended June 30, 1995. The
principal difference between expenses for the two years was a reduction in
geological, accounting and legal fees of $15,572.
(g) Comparison of Operations - June 30, 1994 versus June 30, 1993
The Registrant had no operations for year ended June 30, 1994. The
differences between expenses for the two years were increased professional
fees incurred in the audit of the years ended June 30, 1992 and 1993 together
with preparation and filing of the annual 10-K report with the Securities and
Exchange Commission and the preparation of an independent geological
assessment of the Company's mineral rights.
(h) Liquidity and Capital Resources
The Registrant's working capital increased from $146,447 at June 30, 1995
to $154,364 at June 30, 1996. The increase was due primarily to the issuance
of shares for cash in the amount of $36,000 for the year ended June 30, 1996,
offset by expenses exceeding revenues and the purchase of treasury shares.
The Company does not have any present commitments for capital expenditures.
Management believes that the present working capital balance will provide
adequate funds to pay ongoing administrative costs for several years.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1996
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA"ITEM8.FINANCIALSTATEMENTSANDSUPPLEMENTARYDATA"l1
INDEX TO FINANCIAL STATEMENTS
Filed as part of the Annual Report on Form 10-K
June 30, 1996
Page
Independent Auditor's Report 8
FINANCIAL STATEMENTS:
Balance Sheets, June 30, 1996 and 1995 9
Statements of Operations for the Years Ended
June 30, 1996, 1995, and 1994 10
Statements of Changes in Stockholders' Equity for the
Years Ended June 30, 1996, 1995 and 1994 11
Statements of Cash Flows for the Years Ended
June 30, 1996, 1995 and 1994 12
Notes to Financial Statements for the Years Ended
June 30, 1996, 1995 and 1994 13
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
Planet Resources, Inc.
Houston, Texas
We have audited the accompanying balance sheet of Planet Resources, Inc.
(formerly Allied Silver-Lead Company) as of June 30, 1996, and the related
statements of operations, changes in stockholders' equity and cash flows for
the year then ended. 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 audit. The financial statements of Allied
Silver-Lead Company as of and for the years ended June 30, 1995 and 1994, were
audited by other auditors whose report dated September 7, 1995, expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 audit provides 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 Planet Resources, Inc. at
June 30, 1996 and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
HARPER & PEARSON COMPANY
Houston, Texas
September 17, 1996
-8-
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
BALANCE SHEETS
JUNE 30, 1996 AND 1995
ASSETS
1996 1995
CURRENT ASSETS
Cash and cash equivalents $154,364 $145,947
Receivables and prepaids -0- 500
Total current assets 154,364 146,447
PROPERTY
Mineral rights 10,000 10,000
Depreciable property 15,963 15,963
Total 25,963 25,963
Accumulated depreciation 15,963 15,936
Net property 10,000 10,027
TOTAL ASSETS $164,364 $156,474
LIABILITIES AND STOCKHOLDERS' EQUITY
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock - par value $.001,
1,000,000 shares authorized, none
issued or outstanding
Common stock
1996 - par value $.001; 10,000,000 shares
authorized, 1,605,147 shares issued
1995 - par value $.01; 50,000,000 shares
authorized, 6,825,737 shares issued $ 1,605 $ 68,257
Additional paid-in capital 252,184 149,532
Retained earnings (deficit) (46,241) (24,874)
Less treasury stock, at cost, 21,475 and
39,944 shares, respectively (43,184) (36,441)
Total stockholders' equity 164,364 156,474
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $164,364 $156,474
See notes to financial statements.
-9-
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30 1996, 1995 AND 1994
1996 1995 1994
INCOME
Interest income $ 3,776 $ 3,412 $ 4,094
Gain on sale of marketable securities -0- -0- 2,551
Dividends and other -0- -0- 40
Total income 3,776 3,412 6,685
EXPENSES
Professional fees 10,940 10,478 26,050
Office rent, related party 4,500 6,000 6,000
Depreciation 27 502 560
Stock transfer, filing fees
and permits 2,471 1,496 1,307
Legal fees 7,168 -0- -0-
Insurance -0- -0- 125
Other 37 254 119
Total expenses 25,143 18,730 34,161
LOSS BEFORE INCOME TAX BENEFIT (21,367) (15,318) (27,476)
INCOME TAX BENEFIT -0- (25) (2,895)
NET LOSS $(21,367) $(15,293) $(24,581)
NET LOSS PER SHARE OUTSTANDING $ (.01) $ (.01) $ (.02)
WEIGHTED AVERAGE SHARES OUTSTANDING 1,485,147 1,351,814
1,337,159
See notes to financial statements.
-10- PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1996, 1995 AND 1994
Number Additional Retained Total
of Shares Common Paid-In Earnings Treasury
Stockholders'
Issued Stock Capital (Deficit)
Stock Equity
BALANCES, JUNE 30, 1993 6,683,504 $ 66,835 $ 147,954 $ 15,000
$ (36,441) $ 193,348
ADJUSTMENT TO OUTSTANDING
SHARES 42,233 422 (422) -0- -0- -0-
NET LOSS -0- -0- -0- (24,581)
-0- (24,581)
BALANCES, JUNE 30, 1994 6,725,737 67,257 147,532 (9,581)
(36,441) 168,767
SHARES ISSUED FOR CASH 100,000 1,000 2,000 -0- -0-
3,000
NET LOSS -0- -0- -0- (15,293)
- -0- (15,293)
BALANCES, JUNE 30, 1995 6,825,737 68,257 149,532 (24,874)
(36,441) 156,474
SHARES ISSUED FOR CASH 1,200,000 12,000 24,000 -0- -0-
36,000
FIVE FOR ONE REDUCTION IN
SHARES OUTSTANDING (6,420,590) (78,652) 78,652 -0- -0-
-0-
TREASURY SHARES PURCHASED -0- -0- -0- -0-
(6,743) (6,743)
NET LOSS -0- -0- -0- (21,367)
-0- (21,367)
BALANCES, JUNE 30, 1996 1,605,147 $ 1,605 $ 252,184
$(46,241) $ (43,184) $ 164,364
See notes to financial statements.
-11-
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30 1996, 1995 AND 1994
1996 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(21,367) $(15,293) $(24,581)
Adjustments to reconcile net loss
to net cash used by
operating activities:
Depreciation 27 502 560
Net gains on sales
of marketable securities -0- -0- (2,551)
(Increase) decrease in
receivables and prepaids 500 7,012 (3,270)
(Decrease) increase in
accounts and other payables -0- -0- (79)
Total adjustments 527 7,514 (5,340)
Cash used by operating
activities (20,840) (7,779) (29,921)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of marketable
securities -0- -0- 10,377
Cash provided by investing
activities -0- -0- 10,377
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of
common stock 36,000 3,000 -0-
Purchase of treasury stock (6,743) -0- -0-
Cash provided by financing
activities 29,257 3,000 -0-
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 8,417 (4,779) (19,544)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 145,947 150,726 170,270
CASH AND CASH EQUIVALENTS AT
END OF YEAR $154,364 $145,947 $150,726
See notes to financial statements.
-12-
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1996, 1995 AND 1994
1. ORGANIZATION AND BUSINESS
Allied Silver-Lead Company ("Allied") was incorporated under the laws of the
State of Idaho on March 22, 1967 and has been a company operating in the
exploratory stage initially engaged in the business of exploring for
non-ferrous and precious metals, principally silver, lead and zinc. Allied's
principal operating asset is the ownership of mineral rights under the City of
Mullan, Idaho ("the City"). In January 1992, the lease with Hecla Mining
Company ("Hecla") relating to Allied's mineral rights was terminated, at which
time management determined that Allied could no longer fund its exploratory
stage activities and that its initial development stage had ended.
Accordingly, management commenced a program to obtain additional capital for
Allied from unrelated third-party investors and to pursue other business
opportunities. In October 1992, discussions were commenced with Houston
Resources Corporation ("HRC") which culminated in April 1993 with HRC's
purchase of 2,000,000 shares of Allied's common stock for $100,000.
Effective January 15, 1996, Allied reincorporated in Delaware through a merger
into Planet Resources, Inc. ("Planet" or the "Company"). The reincorporation
resulted in (1) Allied's name being changed to Planet Resources, Inc., (2)
shares of common stock of Allied being converted into the right to receive one
share of common stock of Planet for each five shares of common stock of Allied
as of the date of reincorporation, (3) elimination of the right to cumulative
voting for the election of directors, (4) the persons serving as officers and
directors of Allied continue to serve in their respective capacities; and (5)
the Articles of Incorporation of Allied changed to; (a) reduce the par value
of the common stock from $.01 to $.001, (b) reduce the number of shares of
common stock the Company is authorized to issue from 50,000,000 to 10,000,000,
and (c) authorized the Company to issue 1,000,000 preferred shares with a par
value of $.001 per share.
The Company presently has no commercial operations although management is
evaluating various future operating strategies, including the merger of the
Company with operating entities.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Continued
-13-
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1996, 1995 AND 1994
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Accounting Method - The Company uses the accrual method of
accounting and in accordance with Statement No. 7 of the Financial Accounting
Standards Board for development stage companies (which classification includes
exploration stage mining companies) charges all costs to operations except
those exploration costs which in the opinion of management have a continuing
value. See Notes 1 and 2d.
(c) Equipment and Leasehold Improvements - The costs of equipment and
leasehold improvements are capitalized and charged to earnings utilizing the
straight-line method of depreciation, with useful lives ranging from three to
ten years. The costs of routine maintenance are charged to earnings as
incurred. When assets are sold or retired, any resulting gain or loss is
reflected in operations.
(d) Realization of the Carrying Cost of Mining Property and Exploration
Costs - Following termination of the Hecla lease agreement in January 1992,
the Board of Directors wrote down the mineral rights and capitalized
exploration costs to their best estimate of their net realizable value of
$10,000. The ultimate realization of the Company's carrying costs in these
assets is dependent upon the discovery and the ability of the Company to
finance successful exploration and development of commercial ore deposits, if
any, in the mining properties in sufficient quantity for the Company to
recover its recorded value.
(e) Loss Per Share - Net loss per share of common stock is based on the
weighted average number of shares outstanding during each period, adjusted for
the 5 for 1 reduction in the number of shares authorized, issued and
outstanding resulting from the merger.
(f) Cash Equivalents - The company considers cash equivalents to be
highly liquid investments purchased with an original maturity of three months
or less. Substantially all of the Company's cash and cash equivalents are held
by one financial institution and is therefore subject to the risks inherent in
the financial industry.
3. PROPERTY - MINERAL RIGHTS AND LEASES
(a) The Company is the owner of subsurface mineral rights on approximately
190 acres located in the City of Mullan, Idaho. Title was acquired by issuance
to real property owners of one share of capital stock for each 25 square feet
of surface owned. In acquiring such mineral rights, the Company issued 361,739
shares of capital stock as adjusted for subsequent stock splits and the Planet
merger. Conveyance of title included, free of any additional stock issue, all
subsurface rights lying beneath adjacent streets and alleys where ownership
rested with the grantor. The acquisition of such mineral rights was completed
in November of 1985.
Continued
-14-
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1996, 1995 AND 1994
3. PROPERTY - MINERAL RIGHTS AND LEASES (CONTINUED)
(b) Property Leased by Allied
Allied entered into an agreement dated May 1, 1981, with the City of Mullan
(which supersedes a previous agreement dated December 3, 1971), whereby the
Company, as lessee, has the right to mine subsurface minerals on approximately
200 acres owned by the City north of the Osburn Fault for a period of 25
years. The City, as lessor, will receive 20% of all royalty payments or other
consideration received by Planet from Hecla. In the event Allied enters into a
lease agreement for the exploration and development of "City Property" south
of the Osburn Fault, the City shall receive 15% of the royalties received. No
royalties have been received or paid on "City Property' south of the fault.
4. RELATED PARTY TRANSACTIONS
Prior to April 1993, the Company rented its office and building in Mullan,
Idaho from its president, Marjorie Almquist for $300 per month. Mrs. Almquist
has direct ownership of 69,004 shares (adjusted for the 5 for 1 reduction
resulting from the merger) of the Company's common stock. In March 1993, the
Company entered into a new lease agreement with Mrs. Almquist at a rental rate
of $500 per month for a period of three years. This lease expired in March
1996 and was not renewed.
Mr. Michael Branstetter, a Director of the Company, performs routine legal
services for the Company for which his firm was paid $94 (1996), $53 (1995),
and $1,253 (1994).
As the prior Treasurer for the Company, Mr. Paul Morris performed various
accounting and tax services for the Company for which he was paid $4,500
(1996), $5,425 (1995), and $7,725 (1994).
5. COMMON STOCK
During the year ended June 30, 1994, the Board of Directors authorized an
adjustment in the number of shares outstanding per the financial statements to
that reflected in the stock ledger maintained by the transfer agent. This
adjustment resulted in $422, representing the par value of the additional
shares, being transferred from additional paid-in capital to common stock.
On July 28, 1994, the Board of Directors granted options to purchase an
aggregate of 645,000 (of which 240,000 shares were sold during fiscal 1996)
shares of the Company's common stock, as adjusted for the Planet merger, to
certain officers and directors. The options are exercisable for a period of
five years at $.15 per share, which amount was in excess of net book value per
share at June 30, 1994 and is deemed to represent fair market value at the
date of grant.
-15-
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1996, 1995 AND 1994
6. INCOME TAXES
The components of the Company's tax provision (benefit) for the years ended
June 30, 1996, 1995 and 1994 are as follows:
1996 1995 1994
Federal $ -0- $ -0- $ (2,567)
State -0- (25) (328)
Total $ -0- $ (25) $ (2,895)
The income tax provision (benefit) for the years ended June 30, 1996, 1995 and
1994 are different than which would be provided by applying the statutory
federal tax rate to the income (loss) before income taxes. The reasons for
the differences are as follows:
1996 1995 1994
Financial statement net
loss before income taxes $(21,367) $(15,318) $(27,476)
Book gains on sale of
securities not taxable -0- -0- (2,505)
Taxable loss (21,367) (15,318) (29,981)
State tax -0- 25 444
Federal dividend received
deduction -0- -0- (28)
Federal taxable loss $(21,367) $(15,293) $(29,565)
Federal tax at 15% $ -0- $ -0- $ (2,567)
The Company has a net operating loss carryforward for federal income tax
purposes in the amount of $49,144. This carryforward will expire periodically
through the year 2011, if not previously utilized.
The Company was required to adopt in fiscal 1994, the provisions of Statement
of Financial Accounting Standards No, 109, "Accounting for Income Taxes"
("FASB 109"), which amends or supersedes most prior authoritative literature
on the subject, and has as its basic objective the recognition of current and
deferred income tax liabilities or assets based upon all events that have been
recognized in the financial statements as measured by the provision of enacted
tax laws. The impact of adopting FASB 109 was not material. At June 30, 1996
and 1995, the Company had deferred tax assets in the amounts of $16,709 and
$9,722, respectively, applicable to its net operating loss carryforward. As
the Company has no ongoing operations, these amounts have been fully reserved.
-16-
22
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1996
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL
ISCLOSURE"ITEM9.CHANGESINANDDISAGREEMENTSWITHACCOUNTANTSONACCOUNTINGANDFINA
CIALDISCLOSRE"l1
(a) The Company has changed the certifying independent accountant for
the Company from Deloitte & Touche, LLP to Harper & Pearson Company. In
connection with such change of certifying accountant, the Company states that:
(i) The former accountant was dismissed effective July 25, 1996.
(ii) The accountant's report on the prior financial statements
did not contain an adverse opinion or a disclaimer of opinion or was qualified
or modified as to an uncertainty, audit scope, or accounting principals.
(iii) The decision to change accountants was approved by the
Board of Directors.
(iv) There were no disagreements between the Registrant and the
former accountant preceding such dismissal.
(v) With respect to the Company's former principal accountant,
Deloitte & Touche, LLP, the Company states that none of the events described
in Item 304(a)(1)(v) of Regulation S-K occurred within the time specified in
Item 304(a)(1)(v) of Regulation S-K.
(b) The new independent accountant, Harper & Pearson Company, was
engaged by the Company on the 25th day of July, 1996. There was no
consultation between the Registrant and the newly engaged accountant regarding
any of the matters described in Item 304(a)(2)(i) or 304(a)(2)(ii) of
Regulation S-K prior to engaging Harper & Pearson Company.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART III
JUNE 30, 1996
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT"ITEM10.DIRECTORSANDEXECUTIVEOFFICERSOFTHEREGISTRANT"l1
PRINCIPAL OCCUPATION AND FIVE-YEAR BUSINESS HISTORY
SHARES OF CAPITAL STOCK OWNED AS OF JUNE 30, 1996
NAMES OF OFFICERS AND POSITIONS HELD
AGE TERM EXPIRES
A.W. DUGAN** 68 Next Annual Meeting Oil & Gas Operator -0-
President, Director
JACQUE N. YORK** 50 Next Annual Meeting Corporate Officer
- -0-
Secretary, Director
MICHAEL K. BRANSTETTER 42 Next Annual Meeting Attorney 200
Director
** Officer and director of Houston Resources Corp. which owns 400,000 shares
(24.919%) of the Registrant.
Officer and director of Anglo Exploration Corporation which owns 240,000
shares (14.952%) of the Registrant.
The City of Mullan is also entitled to have a representative on the Board
pursuant to the lease between the Company and the City but has not requested
same.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART III
JUNE 30, 1996
ITEM 11. MANAGEMENT REMUNERATION AND
TRANSACTIONS"ITEM11.MANAGEMENTREMUNERATIONANDTRANSACTIONS"l1
(a) The following table sets forth all remuneration paid by the Company on
an accrual basis during the fiscal years ended June 30, 1996, 1995 and 1994
for the services in all capacities to all directors and executive officers of
the Company:
SECURITIES OR PROPERTY, INSURANCE BENEFITS OR REIMBURSEMENTS
PERSONAL BENEFITS
NAME AND CAPACITY IN WHICH REMUNERATION WAS RECEIVED SALARIES, FEES,
DIRECTORS' FEES, COMMISSIONS AND BONUSES
AGGREGATE OF CONTINGENT FORMS OF REMUNERATION
All executive officers and directors as group (4 to 6 persons in group)
$4,594 (1996) None See Note 4 to Financial Statements
$5,478 (1995) None
$8,978 (1994) None
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT"ITEM12.SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENT"l1
(a) As to voting securities of the Registrant owned of record or
beneficially by each person who owns of record, or is known by the Registrant
to own beneficially, more than five percent (5%) of any class of such
securities:
Marjorie P. Almquist $.001 Common Record and 68,984** 4%
254 Copper Street Non-Assessable Shares Beneficial
Mullan, Idaho
Houston Resources Corp. $.001 Common Record and 400,000 25%
1415 Louisiana, Suite 3100 Non-Assessable Shares Beneficial
Houston, Texas 77002
Anglo Exploration Corporation $.001 Common Record and 240,000
15%
1415 Louisiana, Suite 3100 Non-Assessable Shares Beneficial
Houston, Texas 77002
** An additional 29,592 shares of the Registrant are owned of record by
family members related to Marjorie P. Almquist. Mrs. Almquist disclaims any
beneficial ownership of these shares.
(b) As to each class of equity securities of the Registrant other than
directly or indirectly by all directors and officers of the Registrant, as a
group, without naming them:
TITLE OR CLASS AMOUNT BENEFICIALLY OWNED PERCENT OF CLASS
$.01 par value common 640,000 40%
Non-assessable shares
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART III
JUNE 30, 1996
ITEM 12. CONTINUED
(c) On July 28, 1994, the following options were granted for a period of 5
years at $.15 per share (which was in excess of book value on June 30, 1994)
for 645,000 shares of the unissued common stock to the following officers and
directors:
A.W. Dugan and/or assignees - President,
CEO and Director 600,000 shares
P.V. Morris - Treasurer and Director, Deceased 40,000
shares
Michael K. Branstetter - Director 5,000 shares
During fiscal 1996, 240,000 of the option shares were sold to a corporate
entity controlled by A.W. Dugan.
Upon exercise of the remaining 360,000 share options by A.W. Dugan, he
and his assignees would control 51% of the outstanding shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS"ITEM13.CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONS"l1
The corporation previously rented a building and office from its former
President, Marjorie Almquist, for $500 per month through March 31, 1996. Upon
expiration on March 31, 1996, the lease was not renewed.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCEHDULES AND RECORDS ON FORM
8-K"ITEM14.EXHIBITS,FINANCIALSTATEMENTSSCEHDULESANDRECORDSONFORM8-K"l1
(a) 1. Financial Statements Page No.
See Item 8, Index to Financial Statements of this Report 7
Other schedules are omitted because of the absence of conditions under
which they are required, or because the required information is given in the
financial statements or notes thereto.
3. Exhibits
No new exhibits required.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART IV
JUNE 30, 1996
ITEM 14. CONTINUED
(b) Reports on Form 8-K
The following reports on Form 8-K were filed during fiscal 1996:
DATE PURPOSE
January 16, 1996 On December 31, 1995, the Company entered into a Plan and
Agreement of Merger with Allied Silver-Lead Company for the purpose of
reincorporating the Company into Delaware.
July 25, 1996 Changes in Registrant's Certifying Accountants.
July 31, 1996 Amendment No. 1 to Form 8-K
Amending Item 4 to include letter from former independent auditors.
<PAGE>
SIGNATURES"SIGNATURES"l1
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on behalf by
the undersigned, thereunto duly authorized.
PLANET RESOURCES, INC.
Registrant
/s/Jacque N. York By: /s/A.W. Dugan
Jacque N. York, Secretary A.W. Dugan,
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant, in the capacities and as of the date indicated.
Date: September 30, 1996 A.W. Dugan
A.W. Dugan, Director
Date: September 30, 1996 /s/Jacque N. York
Jacque N. York, Director
Date: September 30, 1996 /s/Michael K.
Branstetter
Michael K. Branstetter, Director
