UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended August 31, 1999
Commission File Number 0-30368
American Precious Metals, Inc.
Delaware 22-3489463
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
260 Garibaldi Avenue, Lodi, New Jersey 07644
------------------------------------------------------------
(Address of principal executive offices)
(973) 335-4400
(Registrant's telephone number, including area code)
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 proceeding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------------- --------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report:
8,415,544 shares of Common Stock, $.00001 par value.
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(A Development Stage Company)
Form 10-QSB Index
August 31,1999
PART I
Page
Number
Item 1. Financial Statements (Unaudited):
Balance Sheet at August31, 1999----------------------------------- 3
Statements of Operations and Accumulated Deficit for the quarter
ended August 31, 1999 and the year ended May 31, 1999 ------------ 4
Statements of Cash Flows for the quarter
ended August 31, 1999 and the year ended May 31, 1999 ------------ 5
Notes to Financial Statements ------------------------------------ 6
Item 2. Management's Discussion and Analysis or Plan of Operations ------- 7
PART II
Item 1. Legal Proceedings ------------------------------------------------ 9
Item 2. Changes in Securities -------------------------------------------- 9
Item 3. Defaults Upon Senior Securities ---------------------------------- 9
Item 4. Submission of Matters to a Vote of Security Holders -------------- 9
Item 5. Other Information------------------------------------------------- 9
Item 6. Exhibits and Reports on Form 8-K---------------------------------- 9
Signatures------------------------------------------------------------------ 10
2
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
BALANCE SHEET
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
August 31, 1999 May 31, 1999
--------------- ------------
<S> <C> <C>
CASH $ 0 $ 5,604
PROPERTY & EQUIPMENT
Equipment 11,567 11,567
Less Depreciation (473) (378)
--------------- ------------
11,094 11,189
OTHER ASSETS
Security deposit 675 675
--------------- ------------
675 675
--------------- ------------
TOTAL ASSETS $ 11,769 $ 17,468
=============== ============
LIABILITIES AND
STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable $ 13,435 $ 12,291
Due to related parties 27,276 23,976
--------------- ------------
TOTAL CURRENT LIAB. 40,711 36,267
STOCKHOLDERS' DEFICIENCY
Common stock (50,000,000 shares authorized
6,922,159 and 6,922,159 issued, par 6,923 6,923
value .001, respectfully
1,493,385 and 1,493,385 issued, par
value .00001, respectfully) 14 14
--------------- ------------
6,937 6,937
Paid in capital 336,750 336,750
Accumulated (deficit) (372,629) (362,486)
--------------- ------------
TOTAL STOCKHOLDERS' (DEFICIENCY) (35,879) (18,799)
--------------- ------------
TOTAL LIABILITIES &
STOCKHOLDERS' DEFICIENCY $ 11,769 $ 17,468
=============== ============
</TABLE>
3
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(UNAUDITED)
Cumulative Three Months
From Ended
Inception August 31, 1999
----------- ---------------
REVENUE $ 0 $ 0
EXPENSES
GENERAL AND ADMINISTRATIVE EXPENSES 372 629 10,142
----------- ---------------
NET LOSS (372,629) (10,142)
----------- ---------------
ACCUMULATED DEFICIT - BEGINNING $ 0 $ (362,487)
----------- ---------------
ACCUMULATED DEFICIT - ENDING $ (372,629) $ (372,629)
=========== ===============
LOSS PER SHARE ($0.044) ($0.001)
=========== ===============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING DURING THE PERIOD 8,415,544 8,415,544
----------- ---------------
4
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative Three Months
From Ended
Inception August 31, 1999
---------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income/(Loss) $(372,629) $ (10,143)
Adjustments to reconcile net income to net
cash provided by operating activities
Increase/(decrease) in cash:
Depreciation 473 95
Deposits (675) 0
Accounts payable 13,435 1,145
---------- ---------------
Net cash provided by operating activities (359,396) (8,903)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of Stock 343,687 0
Sale /(purch):fixed assets (11,567)
---------- ---------------
Net cash used by investing activities 332,120 0
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans payable 27,276 3,300
---------- ---------------
Net cash provided by financing activities 27,276 3,300
---------- ---------------
Net increase/(decrease) in cash and cash equivalent 0 (5,603)
Cash - beginning of year 0 5,603
---------- ---------------
Cash - end of year $ 0 $ 0
========== ===============
</TABLE>
5
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
(UNAUDITED)
NOTE 1. REGARDING FINANCIAL STATEMENTS:
- -----------------------------------------
The financial information herein submitted is unaudited. However, in the
opinion of management, such information reflects all adjustments (consisting
only of normal occurring accruals) necessary for a fair statement of the results
of operations for the periods being presented. Additionally, it should be noted
that the accompanying condensed financial statements do not purport to be a
complete disclosure in conformity with generally accepted accounting principles.
These condensed statements should be read in conjunction with the Company's
financial statements and 10K report for the fiscal year ended May 31, 1999.
NOTE 2. DUE FROM/TO RELATED PARTIES:
- --------------------------------------
Receivables and Payables have been generated by transactions with related
parties, which are detailed as follows:
AUGUST 31, 1999
---------------
Due to (from) Related Parties:
Corporate Officers and Directors $27,276
---------------
$27,276
---------------
NOTE 3. CAPITAL STOCK:
- ------------------------
During the three months ended August 31, 1999 the Company issued no shares
of common stock, par value $.00001 per share.
NOTE 4. OTHER MATTER
- ----------------------
The financial statements show a loss of ($10,142) for the three months
ended August 31, 1999 with accumulated (deficits) of ($372,629) as of that date.
6
<PAGE>
Item 2.
Management's Discussion and Analysis or Plan of Operations
The Company is considered to be in the development stage as defined in the
Statement of Financial Accounting Standards ("FASB") No.7. Management believes
it will be able to satisfy its cash requirements through debt financing and
sales of equity through private placements during the next twelve months.
However, there can be no assurance that the Company will be able to raise the
financing required. The Company intends to assist other mining companies in
development, process and/or operate junior mining companies through majority
owned subsidiaries or investment in other mining companies through venture
capital arrangements. If successful in acquisition program, the employees would
increase in proportion to the company's acquired. At the present time the
Company has not submitted any proposals for potential acquisition.
In the next twelve months, the Company plans to seek out business
opportunity candidates. To date, the Company has introduced a Birch Mountain
Resources to several analytical labs and processes and a Finders Fee Agreement
has been signed. The Board of Directors of Birch Mountain Resources have
approved an agreement dated the 25th day of June, 1999 with American Precious
Metals, Inc. American Precious Metals, Inc. will receive 500,000 shares of Birch
Mountain Resources common stock as a finder's fee. 70% of the fee (350,000
common shares) shall be issued to American Precious Metals, Inc. in
consideration of introductions to third parties who have materially advanced the
research and development of any assay procedure. 30% of the fee (150,000 common
shares) shall be issued to American Precious Metals, Inc. upon a proprietary
assay procedure on Birch Mountain Athabasca Project. The total value will be
approximately $187,500. The Company plans to introduce other mining companies
and the Company believes that this plan of operations can be conducted through
the efforts of a current officer and will not require any additional funds. The
Company anticipates that the business opportunities will be available through
the contacts of Jack Wagenti, the Company's President. The Company anticipates
that the investigation of specific mining opportunities and the negotiation,
drafting and execution of relevant agreements, and other instruments will be
done by Jack Wagenti or under his direction. The Company plans to investigate,
to the extent believed reasonable by us, such potential mining opportunities.
Due to our limited experience and resources in business analysis, the Company
may not discover or adequately evaluate adverse facts about a potential mining
opportunity.
Inasmuch as the Company will have no funds available to us in our search
for mining opportunities, the Company will not be able to expend significant
funds on a complete and exhaustive investigation of potential mining
opportunities. The Company anticipates that it will incur nominal expenses in
the implementation of our business plan described herein. Because the Company
has no capital with which to pay these expenses, our present management, which
consists of Jack Wagenti, President, and Dr. Emanuel Ploumis Chairman of the
Board, CEO, the Company's CEO and President intend to pay all expenses with
personal funds as loans to the Company.
The Company's management has no future obligation to provide the Company
with future loans or contributions. The failure of our management to provide
loans or contributions in the future could prevent the Company's plan to seek
out business opportunities.
REVENUES
Three Months ended August 31, 1999, the Registrant's revenues were $ -0-.
7
<PAGE>
RENT AND ADMINISTRATION
As of February 1, 1999, the Company does not own or lease any real or
personal property. The Company currently operates without charge out of space
donated by the Company's President, Jack Wagenti, at 260 Garibaldi Avenue, Lodi,
NJ 07644, his home. No rent is charged to the Company and no formal lease
exists.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the quarter ended August 31, 1999,
amounted to $10,142. Expenses for the year ended May 31, 1999 totaled $74,372.
Cumulative expenses since inception totaled $345,850.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position was $ 0 as of August 31, 1999, as compared with
a $5,604 balance as of year end May 31, 1999.
The net cash provided during the three months ended August 31, 1999,
consisted of the year end balance of May 31, 1999, $5,604 and loans from the
President Jack Wagenti of $3,300. These proceeds funded operating activities
during the quarter.
During the next twelve months, American Precious Metals, Inc. plans to
satisfy its cash requirements through additional debt and/or equity financing.
There can be no assurance that the Company will be successful in raising the
additional financing.
As of the date of the filing of this report, there were no commitments for
material capital expenditures.
8
<PAGE>
PART II
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
The Board of Directors of Birch Mountain Resources have approved an
agreement dated the 25th day of June, 1999 with American Precious Metals, Inc.
American Precious Metals, Inc. will receive 500,000 shares of Birch Mountain
Resources common stock as a finder's fee. 70% of the fee (350,000 common shares)
shall be issued to American Precious Metals, Inc. in consideration of
introductions to third parties who have materially advanced the research and
development of any assay procedure. 30% of the fee (150,000 common shares) shall
be issued to American Precious Metals, Inc. upon a proprietary assay procedure
on Birch Mountain Athabasca Project. The total value will be approximately
$187,500.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits marked with a footnote reference were filed with a
registration statement, which will automatically become effective on January 8,
2000 under the Securities Act of 1933, as amended (the "Securities Act"), and
are incorporated herein by this reference. If no footnote reference is made, the
exhibit is filed with this Report.
Number Exhibit
3.1 Certificate of Incorporation of Company filed with the Secretary
of State of Delaware on January 13, 1998. (1)
3.2 Copy of the by-laws of the Company. (1)
3.3 Specimen Stock Certificate. (1)
10.1 Copy of Agreement with Birch Mountain Resources.
27 Financial Data Schedule.
- -------------------------------------
(1) Filed as an Exhibit to the Company's Form 10 SB filed November 8, 1999
and incorporated herein by this reference.
(b) Reports on Form 8-K
None
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: December 22,1999
AMERICAN PRECIOUS METALS, INC.
By:/s/ Jack Wagenti
- --------------------
Jack Wagenti
President
10
<PAGE>
EXHIBIT INDEX
EXHIBIT NO DESCRIPTION PAGE
10.1 Birch Mountain Agreement 2
1
FINDER'S FEE AGREEMENT
THIS AGREEMENT made effective the 25th day of June, 1999.
BETWEEN:
BIRCH MOUNTAIN RESOURCES LTD.
Suite 3100, 205 - 5thth Avenue S.W.
Calgary, Alberta, T2P 2V7
(the "Corporation")
- and -
AMERICAN PRECIOUS METALS, INC.
260 Garibaldi Avenue, Lodi
New Jersey, 07046
(the "Finder")
WHEREAS the Finder has introduced the Corporation to several individuals or
companies purporting to have methods to accurately determine the precious metal
content of materials supplied by the Corporation:
AND WHEREAS the Finder is not an insider nor an associate of an insider of
the Corporation, nor a control person of the Corporation, as those terms are
defined in the Securities Act (Alberta), nor will it become an insider, an
associate of an insider or a control person of the Corporation upon the payment
of the Fee (as hereinafter defined);
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties. hereto agree as follows:
ARTICLE I
INTERPRETATION
1.1 For the purposes of this Agreement, including the recitals and any
amendment hereto, the following~owing words and phrases shall have the
following meanings:
1. "Agreement" means this agreement,all schedules hereto and any amendment
thereof from time to time;
2. "Assay Procedure" means a proprietary assay or analytical procedure
that is used by the Corporation and approved by the Exchange;
c. "Exchange" means The Alberta Stock Exchange;
4. "Parties" means each of the Corporation and the Finder and "Party"
means either one of them;
2
5. "Third Party" means: (i) an individual, (ii) a partnership, (iii) a
corporation, (iv) an incorporated or unincorporated association, (v) an
incorporated or unincorporated syndicate or.. (vi). another
incorporated or unincorporated organization that is introduced directly
by the Finder to the Corporation, and, without limiting the generality
of the foregoing, excludes the persons and companies listed in Schedule
"B" to this Agreement.
1.2 The headings of the Articles of this Agreement are inserted for
convenience of reference only and shall not in any manner affect the
construction or meaning of anything herein contained or govern the
rights or liabilities of the parties hereto.
1.3 Words importing the singular number only shall include the plural and
vice versa and words of gender shall entail all genders, including the
neuter gender and words importing persons shall include companies,
corporations, partnerships, syndicates, trusts and any number or
aggregate of persons.
ARTICLE II
ACKNOWLEDGMENTS
2.1 The Finder acknowledges that the Corporation is continuing to deal with
individuals, partnerships, corporations, incorporated or unincorporated
associations, incorporated or unincorporated syndicates or other
incorporated or unincorporated organizations who are not a third Party
who are investigating assay and production development methods.
2.2 The Finder further acknowledges that the Corporation will be under no
obligation to pay a Fee to the Finder for an Assay Procedure of a party
other than a Third Party.
ARTICLE Ill
PAYMENT OF FINDER'S FEE
3.1 In consideration of the Finder introducing the Corporation to a Third
Party or Parties which have or are instrumental in developing an Assay
Procedure, the Corporation shall pay the Finder the Fee.
3.2 The Fee shall be equal to:
500,000 common shares in the capital of the Corporation or such
lessor number as may be permitted under the policies of the Exchange,
which shall be issued to the Finder on the following conditions:
70% of the Fee (350,000 common shares) shall be issued to Finder in
consideration of introductions to Third Parties who have materially advanced
the research and or development of the Corporation in its own efforts to
develop an Assay Procedure including the acquisition of data and complementary
processes previously unknown to the Corporation or proprietary to such Third
Party; and
3
30% of the Fee (150,000 common shares) shall be issued to the Finder upon a
Proprietary Assay Procedure reliably confirming concentrations of precious
metals in Birch Mountain's Athabasca Project rock equal to or greater than 1
gram per tonne, the validity of which concentration is verified by the
Corporation, to its sole satisfaction, at a laboratory of its choice, and if
applicable, the negotiation of a satisfactory commercial arrangement with the
Third Party owner of the Assay Procedure on terms consistent with industry
practice and standards; or
c. 30% of the Fee (150,000 common shares) shall be issued to the Finder
upon the President of the Corporation, Douglas Rowe, determining, in
Rowe's sole and exclusive discretion, that the introductions of the
Party have substantially and materially contributed to the development
by the Corporation of a Proprietary Assay Procedure conforming with the
provisions of sub-paragraph b. above. For greater certainty,
substantial and material contribution must be such that without such
contribution the Corporation would not have been able to develop a
Proprietary Assay Procedure.
3.3 Notwithstanding the foregoing, the payment of the Fee to the Finder is
also subject to the issuance of common shares to the Finder being
exempt from the prospectus and registration requirements of the
applicable securities laws, and to approval by the Exchange, by all
other regulatory bodies having jurisdiction and by the shareholders of
the Corporation, if required.
ARTICLE IV
NOTICES
4.1 Any notice required or permitted to be given hereunder shall be in
writing and shall be deemed to have been given or made when delivered
at the addresses of the relevant party set forth below or such other
address as a party may stipulate in writing:
to the Corporation at: To the Finder at:
3100, 205 - 5th Avenue S.W. 260 Garibaldi Avenue
Calgary, Alberta Lodi, New Jersey
T2P 2V7 07644
Attention: President Attention: President
ARTICLE V
GENERAL
5.1 All information relating to this Agreement shall be treated as
confidential and no public disclosure by either party will be made
without the prior approval of the provider of such information, except
disclosure required to be made to any regulatory authority, including
the Exchange, the Alberta Securities Commission and the British
Columbia Securities Commission.
5.2 Each party shall be responsible for the payment of all their respective
legal fees incurred in connection with this Agreement.
5.3 Each party hereto will execute and deliver all documents as shall be
reasonably required in order to fully perform and carry out the terms
of this Agreement.
5.4 Time shall be of the essence with respect to the terms and conditions
6f this Agreement.
4
5.5 If one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein.
5.6 It is understood that the terms and conditions of this Agreement
supercede any previous verbal or written agreement between the Finder
and the Corporation and there exist no other representations, covenants
or agreements as between the Finder and the Corporation whatsoever.
5.7 This Agreement may be executed in several counterparts and may be
represented by facsimile, each of which so executed shall be deemed to
be an original, and such counterparts together shall constitute one and
the same instrument and notwithstanding their date of execution, shall
be deemed to bear the date as of the date above written.
5.8 This Agreement shall be construed and interpreted, and the rights and
obligations of the parties .arising hereunder governed, by me laws: of
the Province of Alberta. The parties agr6e that the Court of Alberta
shall have exclusive jurisdiction over any dispute, termination or
breach of any kind or nature whatsoever arising out of or in connection
with this Agreement.
5.9 The execution and delivery of this Agreement by the Corporation and by
the Finder is subject to approval of the board of directors of both
parties and all necessary regulatory approvals. The Corporation agrees
to use it best efforts to obtain or cause to be obtained all necessary
regulatory approvals for this Agreement.
All the terms and provisions of this Agreement shall be binding upon, shall
enure to the benefit of, and shall be enforceable by and against the parties
hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF the parties hereby have executed this Finder's Fee
Agreement effective as of the date first above written as witnessed by their
signatures.
BIRCH MOUNTAIN RESOURCES LTD. AMERICAN PRECIOUS METALS, INC.
Per:/s/ Douglas Rowe Per:/s/ Jack Wagenti
---------------- ----------------
Douglas Rowe, President Jack Wagenti, President
5
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000005656
<NAME> American Precious Metals, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-01-1999
<PERIOD-END> AUG-31-1999
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 675
<PP&E> 11,567
<DEPRECIATION> (473)
<TOTAL-ASSETS> 11,769
<CURRENT-LIABILITIES> 40,711
<BONDS> 0
0
0
<COMMON> 6,937
<OTHER-SE> (35,879)
<TOTAL-LIABILITY-AND-EQUITY> 11,769
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 10,142
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> (10,142)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,142)
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
