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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[ X ] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required] for the fiscal year
ended December 31, 1998, or
[ ] 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
Cimarron-Grandview Group, Inc.
(Exact name of registrant as specified in its charter)
State of Washington 91-0239195
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
601 West Main Avenue, Suite 714
Spokane, Washington 99201-0677
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) 509-455-9077
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange
Title of each class on which registered
None None
Securities registered under Section 12(g) of the Exchange Act: None
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. (X)
State issuer's revenues for its most recent fiscal year. $764
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within 60 days. (See definition of affiliate in Rule 12b-2 of
the Exchange Act.) [Amended in release No. 33-7419 (85,938), effective June 13,
1997, 62 F.R. 6387.] $0.00
Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.
<PAGE>
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes No Not Applicable
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 16,863,076
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security
holders; (2) any proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
The list documents should be clearly described for identification purposes
(e.g., annual report to security holders for fiscal year ended December 24,
1990). None
Transitional Small Business Disclosure Format (check one): Yes No X
Document Page: 2 of 21
********************************************************************************
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(A) BUSINESS DEVELOPMENT
The Registrant was incorporated in the State of Washington in 1927.
Historically, the Registrant was engaged in the mineral exploration business.
Although the Company currently holds interests in several mineral exploration
properties, the Registrant currently has no active business operations.
The Registrant is currently seeking to acquire an interest in a business
opportunity. Due to the Registrant's limited assets, it is anticipated that any
such acquisition would be a "reverse take-over" accomplished through a merger or
share exchange. In such event, the Registrant's existing shareholders would
likely become minority shareholders in the surviving entity. The Registrant is
currently evaluating acquisition opportunities.
(B) BUSINESS OF ISSUER
The Registrant has no active business operations. The Registrant is currently
seeking to acquire an interest in a business opportunity.
The Registrant currently holds interests in several mineral properties. Mining
related activities are subject to extensive federal, state and local laws
governing the protection of the environment, prospecting, development,
production, taxes, labor standards, occupational health, mine safety, toxic
substances and other matters. The costs associated with compliance with such
regulatory requirements are substantial and possible future legislation and
regulations could cause additional expense, capital expenditures, and
restrictions, the extent of which cannot be predicted. Although the Registrant
believes it and its properties are in compliance with applicable laws and
regulations, amendments to current laws and regulations-the more stringent
implementation thereof or the adoption of new laws-could have a materially
adverse impact upon the Registrant.
The Registrant currently has no employees.
(C) REPORTS TO SECURITY HOLDERS
You may read and copy any materials filed with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N. W., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1 (800) SEC-0330. The SEC maintains an Internet site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding the Company that is filed electronically with the SEC.
ITEM 2. DESCRIPTION OF PROPERTY
The Company has no offices or facilities. The Company's activities are carried
out from the office of one of its officers and directors.
The Registrant also owns 6,130 acres of patented mineral rights and 38 acres of
surface and mineral rights in Stevens County, Washington. There are no known
mineral reserves on the Registrant's properties and no mineral exploration is
being conducted on the properties.
Document Page: 3 of 21
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
Neither the Registrant nor any of its property is subject to any material
pending legal proceedings.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the fiscal year covered by
this report to a vote of security holders, through the solicitation of proxies
or otherwise.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(A) MARKET INFORMATION
There is no established public trading market for the Registrant's common
equity. There has been no market nor reported quote for the Registrant's common
equity for the past two fiscal years and to the date of this filing.
(B) HOLDERS
There are approximately 2,800 holders of the Registrant's common equity at the
date hereof.
(C) DIVIDENDS
To the management's knowledge, the Registrant has never paid a dividend. There
is no plan to pay dividends for the foreseeable future.
(D) UNREGISTERED SALES
During fiscal years 1996 - 1997, each of the four Directors of the Registrant
received a restricted stock grant of 50,000 shares. The common equity, for
which there is no public trading market, was valued at $.001 per share. A
restricted stock grant for the year ended December 31, 1998 was made to each of
the three Directors of the Registrant in February, 1999. The restricted stock
grants were issued pursuant to a Section 4(2) exemption from registration under
the Securities Act of 1933.
Subsequent to year-end, the Registrant sold 8,431,538 shares of its common stock
for an aggregate amount of $100,000. The shares were purchased by one individual
investor. No fees or commissions were paid in connection with the sale of the
shares. The shares were issued pursuant to a Section 4(2) exemption from
registration under the Securities Act of 1933.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
OF OPERATION
PLAN OF OPERATION
Historically, the Company has been engaged in mineral exploration activities.
Exploration for commercially minable ore deposits is highly speculative and
involves risks greater than those involved in the discovery of mineralization.
Mining companies use the evaluation work of professional geologists,
geophysicists, and engineers in determining whether to acquire an interest in a
Document Page: 4 of 21
<PAGE>
specific property, or whether or not to commence exploration or development
work. These professionals are not always scientifically exact, and in some
instances result in the expenditure of substantial amounts of money on a
property before it is possible to make a final determination as to whether or
not the property contains economically minable ore bodies. The economic
viability of a property cannot be finally determined until extensive exploration
and development work, plus a detailed economic feasibility study, has been
performed. Also, the market prices for mineralization produced are subject to
fluctuation and uncertainty, which may negatively affect the economic viability
of properties on which expenditures have been made.
Given the foregoing risks and the Registrant's limited resources, Management has
decided not to remain actively engaged in mineral exploration. The Company is
currently attempting to sell its mineral properties.
The Registrant is currently seeking to acquire an interest in a business
opportunity. Due to the Registrant's limited assets, it is anticipated that any
such acquisition would be a "reverse take-over" accomplished through a merger or
share exchange. In such event, the Registrant's existing shareholders would
likely become minority shareholders in the surviving entity. The Registrant is
not currently in discussion or negotiation regarding the acquisition of any
specific business opportunity.
The Registrant believes that it can satisfy its cash requirements for the next
twelve months.
ITEM 7. FINANCIAL STATEMENTS
Financial Statements of the Company for the fiscal year ended December 31, 1998
audited by LeMaster & Daniels PLLC and for the fiscal year ended December 31,
1997, audited by Robert Moe & Associates, P.S., are included elsewhere in this
Form 10-KSB.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Registrant was informed that Independent Auditor, Robert Moe & Associates,
P.S. would not be able to perform the audit for the fiscal year ended December
31, 1998. The Auditor's Report on the financial statements for either of the
past two years has contained no adverse opinion or disclaimer of opinion, nor
was modified as to uncertainty, audit scope, or accounting principles.
There were no disagreements with the former accountant on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which, if not resolved to the former accountants
satisfaction, would have caused it to make reference to the subject matter of
the disagreement(s) in connection with its report.
The Registrant has engaged LeMaster & Daniels PLLC as Independent Auditor for
the year ended December 31, 1998
Document Page: 5 of 21
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
(A) IDENTIFICATION OF DIRECTORS
Set forth below is the name, age and length of service of the Company's present
directors:
<TABLE>
NAME (AGE) POSITION LENGTH OF SERVICE
- ----------- -------- -------------------
<S> <C> <C>
William R. Green (60) Director Since 1993
Gregory B. Lipsker (48) Director Since 1993
Eunice R. Campbell (53) Director 1992 and 1994
</TABLE>
The directors are elected for a one-year term and until their successors have
been elected and qualified. There are no arrangements or understandings between
any of the directors and other persons pursuant to which such person was
selected as a director .
(B) IDENTIFICATION OF EXECUTIVE OFFICERS
Set forth below is the name, age and length of service of the Company's present
Executive Officers :
<TABLE>
NAME (AGE) POSITION LENGTH OF SERVICE
- ----------- -------- -------------------
<S> <C> <C>
Gregory B. Lipsker (48) President Since 1998 (1)
William R. Green (60) Vice President/Asst. Secretary Since 1993
Eunice R. Campbell (53) Secretary/Treasurer Since 1992
</TABLE>
(1) Gregory B. Lipsker served as the Company's Secretary from 1983 until
February, 1998
Executive Officers are appointed to serve until the meeting of the Board of
Directors following the next annual meeting of shareholders and until their
successors have been elected and qualified. There are no arrangements or
understandings between any of the directors, officers, and other persons
pursuant to which such person was selected as an Executive Officer.
Set forth below is certain biographical information regarding each Director and
Executive Officer of the Company.
Gregory B. Lipsker - Mr. Lipsker is a practicing attorney in Spokane,
Washington. Mr. Lipsker's practice emphasizes corporate and securities matters.
Mr. Lipsker is an Executive Officer and Director of Metaline Mining and Leasing
Company, a publicly-held, inactive mining exploration company.
Document Page: 6 of 21
<PAGE>
Dr. William R. Green - William R. Green is a mining engineer and geologist, and
was a professor of mining engineering at the University of Idaho from 1965 to
1983. He has been actively involved in the mining business since 1962 and is a
former officer and director of Yamana Resources and currently an officer and
director of Canadian public companies: Maya Gold Limited and Petromin Resources
Ltd., and US companies Mines Management, Inc. and Metaline Mining and Leasing
Co.
Eunice R. Campbell - Mrs. Campbell is a retired businesswoman. Prior to her
retirement in 1987, Mrs. Campbell was the owner of Spokane Guaranty Company, a
stock transfer agency. Mrs. Campbell is an Executive Officer and Director of
Metaline Mining and Leasing Company, a publicly-held, inactive mining
exploration company.
(C) IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES
The Registrant has no employees.
(D) FAMILY RELATIONSHIPS
There is no family relationship between any Director, Executive Officer, or
person nominated or chosen by the Registrant to become a Director or Executive
Officer
(E) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
No Director, or person nominated to become a Director or Executive Officer, has
been involved in any of the enumerated events during the past five years.
(F) PROMOTERS AND CONTROL PERSONS
Not Applicable
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Registrant pursuant to Section 240.16a-3 during its most recent fiscal year
and Form 5 and amendments thereto furnished to the Registrant with respect to
the most recent fiscal year, no person who at any time during the fiscal year
was a director, officer, beneficial owner of more than ten percent of any class
of equity securities of the Registrant registered pursuant to Section 12 of the
Exchange Act, or any other person subject to Section 16 of the Exchange Act with
respect to the Registrant because of the requirements of Section 30 of the
Investment Company Act or Section 17 of the Public Utility Holding Company Act
("reporting person) that failed to file on a timely basis, as disclosed in the
above Forms, reports required by Section 16(a) of the Exchange Act during the
most recent fiscal year or prior fiscal years.
ITEM 10. EXECUTIVE COMPENSATION
(A) EXECUTIVE OFFICERS
The following table sets forth the compensation paid by the Company to its Chief
Executive Officer and any other executive officers whose total annual salary
and bonus exceeded $100,000 during the past three fiscal years ("Executive
Officers"). Except as set forth below, no officer or Executive Officer of the
Company received compensation in excess of $100,000 during the past three
calendar years. This information includes the dollar value of base salaries,
bonus awards and number of stock options granted, and certain other
compensation, if any.
Document Page: 7 of 21
<PAGE>
<TABLE>
Summary Compensation Table
- ----------------------------
Long-Term Compensation
Annual Compensation Awards Payouts
- ------------------------------------------- ---------------------- ------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Other Restricted Securities
and Annual Stock Underlying LTIP All Other
Principal Year Salary Bonus Comp. Awards(1) Options/ Payouts Comp.
Position ($) ($) ($) ($) SARs(#) ($) ($)
- -------------- ---- ------ ----- ------ ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gregory B.
Lipsker 1996 $0 $0 $0 $0 -0- $0 $0
Secretary
('96-'97) 1997 $0 $0 $0 $0 -0- $0 $0
President
('98) 1998 $0 $0 $0 $0 -0- $0 $0
</TABLE>
<TABLE>
Aggregate Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR values
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised In-
Shares unexercised the-Money
Acquired Value Options/SARS at Options/SARS
Name on Exercise Realized FY-End (# at FY-End ($)
Exercisable/ Exercisable/
Unexercisable) Unexercisable
- --------------------- ------------------ --------- ---------------- ---------------
<S> <C> <C> <C> <C>
Gregory Lipsker 400,000 $2,000 0 -0-
William R. Green 400,000 $2,000 0 -0-
</TABLE>
(B) DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
<TABLE>
Cash Compensation Security Grants
Number of
Annual Meeting Consulting Number of Securities
Retainer Fees ($) Fees/Other Shares (#) Underlying
Name Fees ($) Fees ($) Options/SARs(#)
(a) (b) (c) (d) (e) (f)
- ------------------ --------- ------------ ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
Gregory Lipsker $500 -0- -0- 50,000 0
William R. Green $500 -0- -0- 50,000 0
Eunice Campbell $500 -0- -0- 50,000 0
</TABLE>
Document Page: 8 of 21
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets out as of the date hereof, the names and shareholdings
of beneficial owners known to the Company to own more than five percent (5%) of
the common stock of the Company, each director and executive officer of the
Company, and the shareholdings of all directors and executive officers as a
group. At such date, the number of issued and outstanding shares of common stock
of the Company was 16,863,076.
<TABLE>
Amount and Nature of
Beneficial Ownership
Name of Person (all direct unless
or Group (1) otherwise noted) % of class
- -------------- ------------------- ----------
<C> <S> <S>
Principal Shareholders:
- ------------------------
Albert Zlotnick 8,431,538 50.00%
301 City Ave.
Bala Cynwyd,PA 19004
Directors and Executive Officers:
- ------------------------------------
Eunice R. Campbell 821,000 4.87%
301 S. Chestnut, Ste. #6
Spokane, WA 99204
William Green 636,000 3.77%
905 W. Riverside, Ste. 311
Spokane, WA 99201
Greg Lipsker 887,000 5.20%
714 Washington Mutual Financial Center
601 W. Main Avenue
Spokane, WA 99201
All executive officers and 2,344,000 13.90%
directors as a group (3 persons)
</TABLE>
(1) The positions of those persons who are directors or executive officers
of the Registrant are set out in Item 9.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(A) TRANSACTIONS WITH MANAGEMENT AND OTHERS
In February, 1998, two Directors, William Green and Greg Lipsker, each exercised
options to acquire 400,000 shares of the Company's common stock at a price of
$.005 per share. The options were granted in 1994 consideration of services
performed by the individuals on behalf of the Registrant. Each of optionees paid
the $2,000 option price with a non-recourse 8% promissory note due on or before
January 25, 2000. The shares purchased are held by the Registrant as collateral
for the promissory notes.
Document Page: 9 of 21
<PAGE>
(B) CERTAIN BUSINESS RELATIONSHIPS
None
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of the report:
1. Financial Statements
Document
Page
Independent Auditors' Reports 11-12
Balance Sheet
December 31, 1998 and 1997 13
Statements of Income (Loss))
for the years ended December 31, 1998, 1997, and 1996 14
Statements of Stockholders' Equity
for the years ended December 31, 1998, 1997, and 1996 15
Statements of Cash Flows
for the years ending December 31, 1998, 1997, and 1996 16
Notes to Financial Statements 17-19
CIMARRON-GRANDVIEW GROUP, INC.
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORTS
DECEMBER 31, 1998 AND 1997
CONTENTS
Report
Page
INDEPENDENT AUDITORS' REPORTS 2-3
FINANCIAL STATEMENTS:
Balance sheets 4
Statements of income 5
Statements of stockholders' equity 6
Statements of cash flows 7
Notes to financial statements 8-10
Document Page: 10 of 21
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Cimarron-Grandview Group, Inc.
Spokane, Washington
We have audited the accompanying balance sheet of Cimarron-Grandview Group, Inc.
(a Washington corporation) as of December 31, 1998, and the statements of
income, 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.
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 account-ing principles used and signifi-cant estimates made by
management, as well as evaluating the overall finan-cial statement presentation.
We believe 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 Cimarron-Grandview Group, Inc.
as of December 31, 1998, and the results of its operations and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
/s/ LeMaster & Daniels PLLC
Spokane, Washington
March 22, 1999
2
Document Page: 11 of 21
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Cimarron-Grandview Group, Inc.
Spokane, Washington
We have audited the accompanying balance sheet of CIMARRON-GRANDVIEW
GROUP, INC. (A Washington Corporation) as of December 31, 1997 and 1996,
and the related statements of income and retained earnings, stockholders'
equity and cash flows for each of the three years in the period ended
December 31, 1997. 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.
We conducted our audits 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 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 CIMARRON-GRANDVIEW
GROUP, INC. (A Washington Corporation) as of December 31, 1997 and 1996,
and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.
/s/ ROBERT MOE & ASSOCIATES, P.S.
Spokane, Washington
March 16, 1998
3
Document Page: 12 of 21
<PAGE>
CIMARRON-GRANDVIEW GROUP, INC.
BALANCE SHEETS
<TABLE>
December 31,
---------------------------
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash in bank $ 24,988 $ 1,248
Temporary cash investments 3,700 7,049
------------ ------------
Total current assets 28,688 8,297
SECURITIES 10,964 24,774
MINING PROPERTIES 3,911 34,043
------------ ------------
$ 43,563 $ 67,114
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,267 $ 767
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock-50,000,000 shares, no par value,
authorized; 7,881,254 and 7,081,254 shares
issued and outstanding, respectively 591,799 587,799
Note receivable, stock purchase (4,000) -
Accumulated other comprehensive income:
Unrealized loss, marketable securities (26,547) (26,387)
Retained earnings (deficit) (519,956) (495,065)
------------ ------------
Total stockholders' equity 41,296 66,347
------------ ------------
$ 43,563 $ 67,114
============ =============
</TABLE>
See accompanying notes to financial statements.
4
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<PAGE>
CIMARRON-GRANDVIEW GROUP, INC.
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
INCOME:
Dividend and interest income $ 764 $ 1,182 $ 1,752
Timber sale - - 1,000
------------ ------------ ------------
764 1,181 2,752
------------ ------------ ------------
EXPENSES:
Directors' fees 1,500 5,740 4,660
Professional fees 19,707 9,577 2,550
Office rent and telephone - 310 310
Office expense 2,016 115 459
Real and property taxes - 481 502
Taxes, licenses, and fees 930 331 259
------------ ------------ ------------
24,153 16,554 8,740
------------ ------------ ------------
LOSS BEFORE OTHER INCOME (EXPENSE) (23,389) (15,373) (5,988)
------------ ------------ ------------
OTHER INCOME (EXPENSE):
Income (loss) from partnership
interests (182) (119) 522
Loss on sale of investment (1,320) - -
Impairment of long-lived asset - (70,000) -
------------ ------------ ------------
(1,502) (70,119) 522
------------ ------------ ------------
NET LOSS $ (24,891) $ (85,492) $ (5,466)
============ ============ ============
BASIC INCOME (LOSS) PER SHARE $ NIL $ (0.01) $ NIL
============ ============ =============
</TABLE>
See accompanying notes to financial statements.
5
Document Page: 14 of 21
<PAGE>
CIMARRON-GRANDVIEW GROUP, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
(Begin 9pt type)
<TABLE>
<CAPTION>
Notes Accumulated
Number of Receivable/ Other Retained
Shares Common Stock Comprehensive Earnings
Outstanding Stock Option Income (Deficit) Total
----------- ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31, 1995 6,337,254 $ 580,359 $ - $ (20,987) $ (404,107) $ 155,265
ADD (DEDUCT):
COMPREHENSIVE INCOME:
Net loss - - - - (5,466) (5,466)
Unrealized loss in
marketable securities - - - (1,152) - (1,152)
-----------
COMPREHENSIVE
INCOME (LOSS) - - - - - 6,618
-----------
Shares issued to
directors for
services 400,000 4,000 - - - 4,000
----------- ----------- ----------- ------------- ----------- -----------
BALANCE,
DECEMBER 31, 1996 6,737,254 584,359 - (22,139) (409,573) 152,647
ADD (DEDUCT):
COMPREHENSIVE INCOME:
Net loss - - - - (85,492) (85,492)
Unrealized loss in
marketable securities - - - (4,248) - (4,248)
-----------
COMPREHENSIVE
INCOME (LOSS) - - - - - (89,740)
-----------
Shares issued to
directors fo services 344,000 3,440 - - - 3,440
----------- ----------- ----------- ------------- ----------- -----------
BALANCE,
DECEMBER 31, 1997 7,081,254 587,799 - (26,387) (495,065) 66,347
ADD (DEDUCT):
COMPREHENSIVE INCOME:
Net income (loss) - - - - (24,891) (24,891)
Unrealized loss in
marketable securities - - - (160) - (160)
-----------
COMPREHENSIVE
INCOME (LOSS) - - - - - (25,051)
-----------
Shares issued in
exchange for note 800,000 4,000 (4,000) - - -
----------- ----------- ----------- ------------- ----------- -----------
BALANCE,
DECEMBER 31, 1998 7,881,254 $ 591,799 $ (4,000) $ (26,547) $ (519,956) $ 41,296
========= ========== ========= ============ ========= ==========
(End 9pt type)
</TABLE>
See accompanying notes to financial statements.
6
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<PAGE>
CIMARRON-GRANDVIEW GROUP, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN CASH
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (24,891) $ (85,492) $ (5,466)
Adjustments to reconcile net
loss to net cash provided by
(used in) operations:
Loss (income) from partnership
interest 132 73 (573)
Stock issued for services - 3,440 2,560
Impairment loss on Scandia
property - 70,000 -
Gain (loss) on sale of
securities (69) - -
Gain (loss) on sale of
mining properties 1,389 - -
Increase (decrease) in:
Accounts payable 1,500 (3,220) -
------------ ------------ ------------
Net cash provided by (used in)
operating activities 2,952 (15,199) (3,479)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of securities 13,719 - -
Proceeds from sale of mining property 28,611 - -
------------ ------------ ------------
Net cash provided by
investing activities 42,330 - -
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH 20,391 (15,199) (3,479)
CASH, BEGINNING OF YEAR 8,297 23,496 26,975
------------ ------------ ------------
CASH, END OF YEAR $ 28,688 $ 8,297 $ 23,496
============ ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Income taxes $ - $ - $ -
Interest - - -
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Common stock issued in exchange
for note $ 4,000 $ - $ -
Common stock issued for services - 3,440 4,000
Increase (decrease) in
partnership interests (132) (73) 573
</TABLE>
See accompanying notes to financial statements.
7
Document Page: 16 of 21
<PAGE>
CIMARRON-GRANDVIEW GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization:
The Company was incorporated in the State of Washington in 1927. Although it
has previously been engaged in mineral exploration and continues to hold
interests in mineral exploration properties, the Company currently has no active
business operations. The Company is currently seeking to acquire an interest in
a business opportu-nity.
Summary of Significant Accounting Policies:
a. Cash includes short-term cash investments that have an initial maturity
of 90 days or less.
The Company's marketable securities are stated at estimated fair value at the
balance-sheet dates and unrealized losses are reported in stockholders' equity
as accumulated other comprehensive income. All such securities are considered
to be available-for-sale. Gains and losses are determined using the specific
identification method.
c. The Company capitalizes acquisition and exploration costs on nonoperating
mining properties and mineral rights for accounting and income tax purposes.
Upon commencement of operations, the capitalized costs will be amortized based
on proven or probable reserves by the unit of production method so that each
unit produced is assigned a prorata portion of the unamortized acquisition
costs.
d. Capitalized costs are charged to operations as impairment losses when
title to the property has expired or when management believes the properties are
not economically feasible to develop or hold for future development.
5. Deferred income tax assets are recognized for the estimated future tax
benefits of tax-basis operating losses being carried forward. A valuation
allowance for deferred tax assets is also recognized when appropriate.
6. In 1998, the Company adopted SFAS No. 130, Reporting Comprehensive
Income, which establishes rules for the reporting of comprehensive income and
its components. Comprehensive income consists of net income (loss) and changes
in unrealized losses on securities available-for-sale. The adoption of SFAS 130
had no impact on total stockholders' equity. Prior year financial statements
have been reclassified to conform to the SFAS 130 requirements.
7. Basic loss per share is computed using the weighted average number of
shares outstanding during the years (7,481,000 in 1998, 6,909,000 in 1997, and
6,537,000 in 1996). Diluted loss per share was the same as basic loss per share
for the years presented.
h. 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
disclosures 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.
8
Document Page: 17 of 21
<PAGE>
CIMARRON-GRANDVIEW GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SECURITIES:
Following is a summary of marketable securities as of December 31, 1998 and
1997:
<TABLE>
1998 1997
----------- -----------
<S> <C> <C>
Aggregate fair value of marketable securities $ 10,964 $ 24,774
Gross unrealized holding losses 26,547 26,387
Amortized cost basis 37,511 51,161
</TABLE>
Changes in marketable securities for the years ended December 31, 1998 and 1997,
are as follows:
<TABLE>
1998 1997
----------- -----------
<S> <C> <C>
Cost, as of January 1 $ 51,161 $ 51,161
Sale of securities (13,650) -
Unrealized loss, as of December 31 (26,547) (26,387)
----------- -----------
Fair value, as of December 31 $ 10,964 $ 24,774
=========== ============
</TABLE>
NOTE 3 - MINING PROPERTIES:
Investments in mining properties, net of impairment losses recognized, consisted
of the following:
<TABLE>
1998 1997
----------- -----------
<S> <C> <C>
Partnership interest in two units of Pondera Partners,
Ltd., a drilling project located in Teton County,
Montana (at cost less equity in partnership losses) $ 3,911 $ 4,043
Approximately 72 acres of surface and mineral rights
Located in northern Stevens County, Washington
(see note 6) - -
Approximately 6,130 acres of patented mineral rights
Located in northern Stevens County, Washington - -
Approximately 110 acres of mineral rights and mining
property ("Scandia property") located in northern
Stevens County, Washington, net of $70,000 impairment
loss recognized in 1997 - 30,000
----------- -----------
Totals $ 3,911 $ 34,043
=========== ===========
</TABLE>
9
Document Page: 18 of 21
<PAGE>
CIMARRON-GRANDVIEW GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - COMMON STOCK:
The Company's Articles of Incorporation were amended March 31, 1982, to
reclassify shares and reduce capital to $350,000, comprising 50,000,000 shares
of no par value common stock. Each share of the capital stock of the par value
of $.10 per share previously outstanding was changed to one share of no par
value common stock. The Articles were amended July 11, 1990, to change the
Company's name from Grandview Mines, Inc., to Cimarron Gas & Oil, Inc., and were
amended on July 25, 1990, to change the Company's name from Cimarron Gas & Oil,
Inc., to Cimarron-Grandview Group, Inc.
In February 1998, two directors of the Company purchased a total of 400,000
common shares at $.005 per share. The shares were purchased in exchange for an
8 percent nonrecourse promissory note, which has been reported as a reduction of
stockholders' equity at December 31, 1998.
The accompanying financial statements reflect reclassifications of the cost of
previously acquired treasury stock in accordance with Washington state law.
Such cost has been reclassified to reduce the balances of outstanding common
stock and retained earnings. In addition, previously reported paid-in capital
has been combined with the balance no-par value common stock. These
reclassifications had no effect on total stockholders' equity or net loss.
NOTE 5 - FEDERAL INCOME TAX:
At December 31, 1998 and 1997, the Company had deferred tax assets of $37,000
and $33,000, respectively, which were fully reserved by valuation allowances.
For 1998, 1997, and 1996, the Company has recognized no net tax benefits for its
operating losses in the statements of income, as valuation allowances offset
such benefits. Changes in the deferred tax asset valuation allowance for 1998,
1997, and 1996, relate only to corresponding changes in the deferred tax assets
for those years.
At December 31, 1998, the Company had a net operating loss carryforward of
$247,293 which is available to offset future taxable income. The carryforward
expires in various amounts from 1999 through 2018.
NOTE 6 - SUBSEQUENT EVENTS:
On January 11, 1999, the Company sold approximately 34 acres of surface and
mineral rights located in northern Stevens County for $25,000 cash.
On February 24, 1999, 400,000 shares of Cimarron common stock was issued and
exercised by Company directors. The exercised price is $.005 per share, payable
by a one-year nonrecourse promissory note bearing interest at 8 percent per
annum. Also, the Company issued restricted stock grants (50,000 each) to three
directors for services.
On March 4, 1999, the Company sold 8,431,538 shares of its common stock for
$100,000.
10
Document Page: 19 of 21
<PAGE>
3. Exhibits required by Item 601
(1) Underwriting Agreement. (1)
(2) Plan of Acquisition, reorganization, arrangement,
liquidation or succession. (1)
(3)(i) Articles of Incorporation (2)
(3)(ii) Bylaws. (2)
(4) Instruments defining the rights of security holders,
including indentures. (1)
(9) Voting trust agreements. (1)
(10) Material contracts. (1)
(11) Statement re: computation of per share earnings. (1)
(12) Statements re: computation of ratios. (1)
(13) Annual report to security holders, Form 10Q
or quarterly report to security holders. (1)
(16) Letter re: change in certifying accountant. (2)
(18) Letter re: change in accounting principles. (1)
(19) Subsidiaries of the Registrant. (1)
(22) Publisher report regarding matters submitted
to vote of security holders. (1)
(23) Consents of Experts and counsel. EX 23
(24) Power of Attorney. (1)
(27) Financial Data Schedule EX 27
(99) Additional Exhibits. (1)
(1) These items have either been omitted or are not applicable
(2) Incorporated by reference to previous filing
(b) No reports have been filed on Form 8-K during the last fiscal quarter
covered by this report.
(c) Exhibit (23), Consent of Accountants, is filed herewith
(d) Financial Statements are filed herewith
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS
Not Applicable
Document Page: 20 of 21
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act , the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CIMARRON-GRANDVIEW GROUP, INC .
(Registrant)
By: /s/ Gregory B. Lipsker Date: 4/14/99
GREGORY B. LIPSKER, President
(Principal Executive Officer)
By: /s/ Eunice R. Campbell Date: 4/14/99
EUNICE R. CAMPBELL, Secretary/Treasurer
(Principal Financial Officer)
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Gregory B. Lipsker Date: 4/14/99
GREGORY B. LIPSKER,
Director
/s/ William R. Green Date: 4/14/99
WILLIAM R. GREEN,
Director
/s/ Eunice Campbell Date: 4/14/99
EUNICE CAMPBELL,
Director
<PAGE>
(Letterhead of LeMaster & Daniels PLLC)
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Cimarron-Grandview Group, Inc.
Spokane, Washington
We hereby consent to the use of our report, dated March 27, 1999, on the
financial statements of Cimarron-Grandview Group, Inc, as of December 31, 1998,
and for the year then ended, in the Company's Form 10-K for the year ended
December 31, 1998.
/s/ LeMaster & Daniels PLLC
Spokane, Washington
March , 1999
(Letterhead of Robert Moe & Associates, P.S.)
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Cimarron-Grandview Group, Inc.
Spokane, Washington
We hereby consent to the use of our opinion, dated March 16, 1998 on the
financial statements of Cimarron-Grandview Group, Inc for the year ended
December 31, 1997 in the Form 10-KSB.
/s/ Robert Moe & Associates
Robert Moe & Associates, P.S.
Spokane, Washington
April 13, 1999
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheets for Cimarron-Grandview Group, Inc. at December 31, 1998, the Statements
of Income for the year ended December 31, 1998, and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 28,688
<SECURITIES> 10,964
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 39,652
<PP&E> 3,911
<DEPRECIATION> 0
<TOTAL-ASSETS> 43,563
<CURRENT-LIABILITIES> 2,267
<BONDS> 0
0
0
<COMMON> 591,799
<OTHER-SE> (550,503)
<TOTAL-LIABILITY-AND-EQUITY> 43,563
<SALES> 764
<TOTAL-REVENUES> 764
<CGS> 0
<TOTAL-COSTS> 24,153
<OTHER-EXPENSES> 1,502
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (24,891)
<INCOME-TAX> 0
<INCOME-CONTINUING> (24,891)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24,891)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
