SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
<PAGE>
[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, 1998.
[ ] 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
<TABLE>
<CAPTION>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
(Exact name of Registrant as specified in its charter)
Delaware 82-0277987
- --------------------------------- -----------------------------
<S> <C>
(State or other jurisdiction (IRS Employer Identification
of Incorporation or organization) Number)
</TABLE>
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:
Title of Class Name of each exchange
-------------- ---------------------
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 16, 1998 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.
<TABLE>
<CAPTION>
NUMBER OF SHARES OUTSTANDING
TITLE OF EACH CLASS OF COMMON STOCK AT SEPTEMBER 16, 1998
--------------------------- ---------------------
<S> <C> <C>
COMMON STOCK $.001 PAR VALUE 1,605,818
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE:
NONE
This Form 10-K consists of 21 pages. The Table of Contents is listed on Page i.
** See Page 4.
<PAGE>
i
<TABLE>
<CAPTION>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K ANNUAL REPORT
JUNE 30, 1998
TABLE OF CONTENTS
PART I
<S> <C>
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
</TABLE>
<PAGE>
7
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART I
JUNE 30, 1998
ITEM 1. BUSINESS
- -------- --------
(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 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.
(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, 1998
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 back log 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. (See Item 14)
(xiv) Registrant has no employees and its current officers and
directors serve without established compensation.
(d) Not applicable.
ITEM 2. PROPERTIESITEM 2. PROPERTIESl1
- -------- ----------
(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, 1998
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 PROCEEDINGSITEM 3. LEGAL PROCEEDINGSl1
- -------- ------------------
There are no legal proceedings pending. However, refer to Item 14(b).
ITEM 4. MATTERS SUBMITTED TO A VOTE OF SECURITIES HOLDERSITEM 4. MATTERS
- ------- -------------------------------------------------
SUBMITTED TO A VOTE OF SECURITIES HOLDERSl1
None
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1998
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
- -------- -------------------------------------------------------------------
MATTERSITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
- -------
STOCKHOLDER MATTERSl1
- -------
(a) Price Range of Common Stock
-------------------------------
<TABLE>
<CAPTION>
The following table shows the range of closing bid prices for the Common
Stock as reported by the Spokane Quotation Bureau Service.
Quarter Period 07/01/95 Period 07/01/96 Period 7/1/97
Ended to 06/30/96 to 06/30/97 to 6/30/98
- ---------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
High Low High Low High Low
- ---------------- --------------- --------------- -------------
September 30 * * * * * *
December 31 * * * * * *
March 31 * * * * * *
June 30 * * * * * *
</TABLE>
<TABLE>
<CAPTION>
(b) Approximate number of Equity Security Holders
--------------------------------------------------
Number of Record Owners
<S> <C> <C>
Title of Class at August 13, 1998
----------------------- ------------------
Common Capital Stock 1,473
</TABLE>
(c) No cash dividends have been paid by the Registrant since inception. It
is not anticipated that dividends will be paid in the foreseeable future.
* Quarterly prices are not readily available, this information will be provided
as a supplement to this Form 10-K if the information necessary to complete this
table is received. Recent transactions in the stock have been at a price of
$0.125 per share.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1998
<TABLE>
<CAPTION>
ITEM 6. SELECTED FINANCIAL DATAITEM 6. SELECTED FINANCIAL DATAl1
- -------- -------------------------
The selected financial data for each of the five years ended June 30, 1998,
1997, 1996, 1995, and 1994 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
-----------
1998 1997 1996 1995 1994
----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues:
Advance royalties -0- $-0- $-0- $-0- $-0-
Other Income -0- 2 3,776 3,412 6,685
---------- --------- --------- --------- ---------
Total Revenues $-0- $2 $3,776 $3,412 $6,685
---------- --------- --------- --------- ---------
Expenses:
General and Administrative $(13,377) $(32,633) $(25,143) $(18,730) $(34,161)
Property write-down -0- -0- -0- -0- -0-
Income tax (expense)
benefit -0- -0- -0- 25 2,895
---------- --------- --------- --------- ---------
Net Loss $(13,377) $(32,631) $(21,367) $(15,293) $(24,581)
========== ========= ========= ========= =========
Net (loss) per common
share $(.01) $(.02) $(.01) $(.01) $(.02)
========== ========= ========= ========= =========
Selected Balance Sheet Data:
- -------------------------------
Current Assets: $108,356 $121,733 $154,364 $146,447 $158,238
Mineral rights and
depreciable property
net (1) 10,000 10,000 10,000 10,027 10,529
---------- --------- --------- --------- ---------
Total Assets $118,356 $131,733 $164,364 $156,474 $168,767
========== ========= ========= ========= =========
Current Liabilities: $-0- $-0- $-0- $-0- $-0-
Long-term debt -0- -0- -0- -0- -0-
Commitments
Stockholders' equity $118,356 $131,733 $164,364 $156,474 $168,767
========== ========= ========= ========= =========
Cash dividends N/A N/A N/A N/A N/A
Working Capital $108,356 $121,733 $154,364 $146,447 $158,238
========== ========= ========= ========= =========
</TABLE>
(1) See Note 2 to Financial Statements.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1998
ITEM 7. MANAGEMENT'S DISSCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- -------- -------------------------------------------------------------------
RESULTS OF OPERATIONS
- ------
(a) Results of Operations for the Year Ended June 30, 1998
The Registrant had no operations for the year ended June 30, 1998 and had a net
loss of $13,377 for the year. There was no revenue whereas, the expenses of
$13,377 were for professional fees and general and administrative expenses.
(b) Results of Operations for the Year Ended June 30, 1997
---------------------------------------------------------------
The Registrant had no operations for the year ended June 30, 1997 and had a net
loss of $32,631 for the year. The only income was from interest; whereas, the
expenses of $32,633 were for professional fees and general and administrative
expenses.
(c) Results of Operations for the Year Ended June 30, 1996
---------------------------------------------------------------
The Registrant had no operations for the year ended June 30, 1996 and had 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.
(d) Comparison of Operations - June 30, 1998 versus June 30, 1997
-----------------------------------------------------------------------
The Registrant had no operations for the year ended June 30, 1998. The
principal difference between expenses for the two years was a decrease in
professional fees, stock transfer, filing fees, permits and printing costs and
legal fees of $18,628.
(e) Comparison of Operations - June 30, 1997 versus June 30, 1996
-----------------------------------------------------------------------
The Registrant had no operations for year ended June 30, 1997. The
principal difference between expenses for the two years was an increase in
professional fees and stock transfer, filing fees, permits and printing costs of
$11,488.
(f) 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.
(g) Liquidity and Capital Resources
----------------------------------
The Registrant's working capital decreased from $121,733 at June 30, 1997
to $108,356 at June 30, 1998. The decrease was due primarily to the expenses
for the year ended June 30, 1998. 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>
<TABLE>
<CAPTION>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1998
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- -------- ----------------------------------------------
INDEX TO FINANCIAL STATEMENTS
Filed as part of the Annual Report on Form 10-K
June 30, 1998
Page
-----
<S> <C>
Independent Auditor's Report 8
FINANCIAL STATEMENTS:
Balance Sheets, June 30, 1998 and 1997 9
Statements of Operations for the Years Ended
June 30, 1998, 1997, and 1996 10
Statements of Changes in Stockholders' Equity for the
Years Ended June 30, 1998, 1997 and 1996 11
Statements of Cash Flows for the Years Ended
June 30, 1998, 1997 and 1996 12
Notes to Financial Statements for the Years Ended
June 30, 1998, 1997 and 1996 13-15
</TABLE>
<PAGE>
8
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
Planet Resources, Inc.
Houston, Texas
We have audited the accompanying balance sheets of Planet Resources, Inc.
(formerly Allied Silver-Lead Company) as of June 30, 1998 and 1997, and the
related statements of operations, changes in stockholders' equity and cash flows
for the years ended June 30, 1998, 1997 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.
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 Planet Resources, Inc. at June
30, 1998 and 1997, and the results of its operations and its cash flows for the
years ended June 30, 1998, 1997 and 1996 in conformity with generally accepted
accounting principles.
/s/Harper & Pearson Company
Houston, Texas
August 13, 1998
<PAGE>
12
<TABLE>
<CAPTION>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
BALANCE SHEETS
JUNE 30, 1998 AND 1997
ASSETS
---------
1998 1997
--------- ---------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $108,356 $121,733
--------- ---------
Total current assets 108,356 121,733
--------- ---------
PROPERTY
Mineral rights 10,000 10,000
Depreciable property 15,963 15,963
--------- ---------
25,963 25,963
Accumulated depreciation 15,963 15,963
--------- ---------
Net property 10,000 10,000
--------- ---------
TOTAL ASSETS $118,356 $131,733
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock - par value $.001,
1,000,000 shares authorized, none
issued or outstanding $ -0- $ -0-
Common stock - par value $.001; 10,000,000
shares authorized, 1,605,147 shares
issued and 1,583,672 shares outstanding 1,605 1,605
Additional paid-in capital 252,184 252,184
Retained earnings (deficit) (92,249) (78,872)
Less treasury stock, at cost, 21,475 shares (43,184) (43,184)
--------- ---------
Total stockholders' equity 118,356 131,733
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $118,356 $131,733
========= =========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30 1998, 1997 AND 1996
1998 1997 1996
-------------- -------------- --------------
<S> <C> <C> <C>
INCOME
Interest income $ -0- $ 2 $ 3,776
-------------- -------------- --------------
EXPENSES
Professional fees 9,381 16,869 10,940
Office rent, related party -0- -0- 4,500
Depreciation -0- -0- 27
Stock transfer, filing fees,
permits and printing costs 1 8,030 2,471
Legal fees 3,930 7,222 7,168
Other 65 512 37
-------------- -------------- --------------
Total expenses 13,377 32,633 25,143
-------------- -------------- --------------
NET LOSS $ (13,377) $ (32,631) $ (21,367)
============== ============== ==============
NET LOSS PER SHARE
OUTSTANDING $ (.01) $ (.02) $ (.01)
============== ============== ==============
WEIGHTED AVERAGE SHARES
OUTSTANDING 1,583,672 1,583,672 1,485,147
============== ============== ==============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
Number Additional Retained Total
of Shares Common Paid-In Earnings Treasury Stockholders'
Issued Stock Capital (Deficit) Stock Equity
-------- -------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
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-
67,430 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
NET LOSS -0- -0- -0- (32,631) -0- (32,631)
--------- -------- ------- ------- -------- -----------
BALANCES,
JUNE 30, 1997 1,605,147 1,605 252,184 (78,872) (43,184) 131,733
NET LOSS -0- -0- -0- (13,377) -0- (13,377)
--------- -------- ------ -------- ------- -----------
BALANCES,
JUNE 30, 1998 1,605,147 $1,605 $252,184 $(92,249) $(43,184) $118,356
========= ======== ======= ======== ======== ==========
</TABLE>
See notes to financial statements.
<PAGE>
12
<TABLE>
<CAPTION>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30 1998, 1997 AND 1996
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(13,377) $(32,631) $(21,367)
--------- --------- ---------
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation -0- -0- 27
Decrease in receivables and prepaids -0- -0- 500
--------- --------- ---------
Total adjustments -0- -0- 527
--------- --------- ---------
Cash used by operating activities (13,377) (32,631) (20,840)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of
common stock -0- -0- 36,000
Purchase of treasury stock -0- -0- (6,743)
--------- --------- ---------
Cash provided by financing activities -0- -0- 29,257
--------- --------- ---------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (13,377) (32,631) 8,417
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 121,733 154,364 145,947
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT
END OF YEAR $108,356 $121,733 $154,364
========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE>
17
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
1. ORGANIZATION AND BUSINESS
Planet Resources, Inc.(formerly Allied Silver-Lead Company) ("Allied") was
incorporated under the laws of the State of Idaho on March 22, 1967 and was 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.
(b) 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.
(c) 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.
(d) 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.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Cash Equivalents - The Company considers as cash equivalents 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 1985.
(b) Property Leased by Allied
----------------------------
The Company 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 the Company from Hecla. In the event the Company
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.
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 in 1996
.
The Company receives free rent, accounting, and management services from an
entity controlled by the Company's president.
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
5. 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.
On February 28, 1997, the Company's Board of Directors unanimously approved the
issuance and sale at a future date, to Delaware Royalty, Inc. of 360,000 shares
of its common stock subject to the $.15 per share option agreement. Delaware
Royalty, Inc. is a Texas corporation owned by a Trust whose beneficiaries
include family members of the Company's president and director.
6. INCOME TAXES
The Company has a net operating loss carryforward for federal income tax
purposes in the approximate amount of $95,121. This carryforward will expire
periodically through the year 2013, 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, 1998, 1997 and
1996 the Company had deferred tax assets in the approximate amounts of $32,000,
$28,000 and $17,000, respectively, applicable to it's net operating loss
carryforward. As the Company has no ongoing operations, these amounts have been
fully reserved.
7. CONTINGENT LIABILITY
On June 10, 1997, the Company received from the EPA a request for information
pursuant to Section 104(e) of the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"). The request for information is
seeking information and documents relating to the Company's knowledge of or
involvement in releases or threatened releases of hazardous substances
associated with mining activities occurring within the Coeur d'Alene Basin of
Northern Idaho. The investigation includes an inquiry into the identification,
nature, source and quantity of materials transported to or generated, treated,
stored or disposed of within the Coeur d'Alene Basin.
On August 21, 1997, the Company received from the EPA, a letter stating that the
EPA has determined that it will not, based upon current information, include the
Company in any litigation associated with this matter.
Management of the Company does not believe the Company was involved in releases
or threatened releases of hazardous substances associated with mining
activities. No amounts have been recorded in the accompanying financial
statements for any possible costs associated with this matter.
<PAGE>
24
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART II
JUNE 30, 1998
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- -------- -------------------------------------------------------------------
FINANCIAL DISCLOSURE
- --------------------
For the year ended June 30, 1998:
NONE
For the year ended June 30, 1997:
NONE
For the year ended June 30, 1996:
(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, 1998
<TABLE>
<CAPTION>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- --------------------------------------------------
PRINCIPAL OCCUPATION AND FIVE-YEAR BUSINESS HISTORY
SHARES OF CAPITAL STOCK OWNED AS OF JUNE 30, 1997
NAMES OF OFFICERS AND
POSITIONS HELD
AGE TERM EXPIRES
----------- -------------------
<S> <C> <C>
A.W. DUGAN(1) 70 Next Annual Meeting
President, Director
JACQUE N. YORK(1) 52 Next Annual Meeting
Secretary, Director
MICHAEL K. BRANSTETTER(2) 44 Next Annual Meeting
Director
- -------------------------------------
NAMES OF OFFICERS AND POSITIONS HELD
<S> <C> <C>
A.W. DUGAN(1) Oil & Gas Operator -0-
President, Director
JACQUE N. YORK(1) Corporate Officer -0-
Secretary, Director
MICHAEL K. BRANSTETTER(2) Attorney 200
Director
- -------------------------------------
</TABLE>
(1) 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.
(2) Mr. Branstetter is an officer and director of the following public
companies: Pilot Silver Lead, Inc., Idaho General Mines, Inc.; and Lucky Friday
Extension Mining Company.
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, 1998
<TABLE>
<CAPTION>
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONSITEM 11. MANAGEMENT
- --------- -------------------------------------------
REMUNERATION AND TRANSACTIONSl1
- ---
(a) The following table sets forth all remuneration paid by the Company on
an accrual basis during the fiscal years ended June 30, 1998, 1997 and 1996 for
the services in all capacities to all directors and executive officers of the
Company:
NAME AND CAPACITY IN WHICH REMUNERATION WAS RECEIVED
<S>
All executive officers and directors as group (4 to 6 persons in group)
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
<S> <C> <C> <C>
All executive officers
and directors
as group (4 to 6
persons in group) $ -0- (1997) None See Note 4 to Financial Statements
$ 4,594 (1996) None
$ 5,478 (1995) None
</TABLE>
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTITEM
- --------- --------------------------------------------------------------
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTl1
(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:
<S> <C> <C> <C> <C>
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
</TABLE>
** 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.
<TABLE>
<CAPTION>
(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
- ---------------------- ------------------------- -----------------
<S> <C> <C>
.01 par value common 640,000 40%
Non-assessable shares
</TABLE>
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART III
JUNE 30, 1998
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 TRANSACTIONSITEM 13. CERTAIN
- --------- ----------------------------------------------
RELATIONSHIPS AND RELATED TRANSACTIONSl1
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. The Corporation
receives free rent, accounting and management services from an entity controlled
by the Company's President.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCEHDULES AND RECORDS ON FORM
- --------- ------------------------------------------------------------------
8-KITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCEHDULES AND RECORDS ON FORM
- ------
8-Kl1
- ---
(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
--------
27 - Financial Data Schedule
<PAGE>
PLANET RESOURCES, INC.
(FORMERLY ALLIED SILVER-LEAD COMPANY)
FORM 10-K -- PART IV
JUNE 30, 1998
ITEM 14. CONTINUED
- --------- ---------
(b) Reports on Form 8-K
The following reports on Form 8-K were filed during fiscal 1997:
On June 10, 1997, the Company received from the United States
Environmental Protection Agency ("EPA") a request for information pursuant to
Section 104(e) of the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"). The request for information is seeking information
and documents relating to the Company's knowledge of or involvement in releases
or threatened releases of hazardous substances associated with mining activities
occurring within the Coeur d'Alene Basin of Northern Idaho. The investigation
includes an inquiry into the identification, nature, source and quantity of
materials transported to or generated, treated, stored or disposed of within the
Coeur d'Alene Basin.
On August 21, 1997, the Company received from the EPA, a letter
stating that the EPA has determined that it will not, based upon current
information, include the Company in any litigation associated with this matter.
Management of the Company does not believe the Company is involved in
releases or threatened releases of hazardous substances associated with mining
activities and that no future liability will exist.
<PAGE>
SIGNATURESSIGNATURESl1
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: August 13, 1998 /s/A.W. Dugan
-------------------------
A.W. Dugan, CFO and Director
Date: August 13, 1998 /s/Jacque N. York
-------------------------
Jacque N. York, Director
Date: August 13, 1998 /s/Michael K. Branstetter
-------------------------
Michael K. Branstetter,
Director
