UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB/A
Amendment #1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended May 31, 2000
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)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.00001 par value
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 proceeding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
------------- --------------
The registrant's revenues for its most recent fiscal year were: $0
The number of shares outstanding of the registrant's class of common stock
on August 17, 2000 was 8,420,544 shares.
The aggregate market value of voting stock held by non-affiliates of the
registrant was approximately $842,054 as of May 31, 2000.
<PAGE>
AMERICAN PRECIOUS METALS, INC.
FORM 10-KSB/A
For the fiscal year ended May 31, 2000
TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business 3
Item 2. Description of Properties 3
Item 3. Legal Proceeding 3
Item 4. Submission of Matters to a Vote of Security Holders 3
PART II
Item 5. Market for Common Equity and Related Stockholder Matters 4
Item 6. Management's Discussion and Analysis or Plan of Operations 5
Item 7. Financial Statements 6
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 6
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons, 6
Compliance with Section 16(a) of the Exchange Act
Item 11. Executive Compensation 8
Item 12. Security Ownership of Certain Beneficial Owners and Management 8
Item 13. Exhibits and Reports on Form 8-K 10
Signatures 11
Index to Financial Statements F-1
2
<PAGE>
Item 1. Description of Business
American Precious Metals, Inc., (the "Company") was originally organized as
Lucky Seven Gas and Minerals, Inc., under the laws of the State of Pennsylvania
on July 16, 1984. The name was changed to Lucky Seven Gold Mines, Inc. June 24,
1996. American Precious Metals, Inc was formed January 13, 1998 under the laws
of the State of Delaware. On March 16,1998 Lucky Seven Gold Mines, Inc. merged
into American Precious Metals, Inc., the surviving corporation.
The Company intends to process precious metals using environmentally safe
process. The Company is working on several joint ventures with mining companies
in North America. The Company also, intends to introduce mining companies for
possible acquisition, joint ventures and financing.
Item 2. Description of Property
The Company currently has 350,000 shares of Birch Mountain Resources Ltd.
and 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.
The Company has no policy with respect to investments in real estate or
interest in real estate and no policy with respect to investments in real estate
mortgages. Further, the Company has no policy with respect to investments in
securities of or interests in persons primarily engaged in real estate
activities.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the security holders during fiscal
year ending May 31, 2000.
3
<PAGE>
PART II
Item 5. Market Price for Common Equity and Related Stockholder Matters
Market Information:
The Company's Common Stock was approved for trading on July 22, 1999 on the
Electronic Pink Sheets and February 2000 on the Over the Counter Bulletin Board
under the Symbol "ANPC." There is no assurance that the Common Stock will
continue to be quoted or that any liquidity exists for the Company's
Shareholders. The following table sets forth the monthly trade of high and low
prices for the Company's Common Stock on the Electronic Pink Sheets and Over the
Counter Bulletin Board during the inception of trading.
Monthly: High Low
--------- ----- -----
July 22,1999 $0.03 $0.03
August 23,1999 $0.11 $0.11
September 23,1999 $0.156 $0.156
October 22, 1999 $0.062 $0.062
November 22, 1999 $0.20 $0.187
December 23, 1999 $0.18 $0.125
January 21, 2000 $0.11 $0.11
February 23, 2000 $0.15 $0.15
March 23, 2000 $0.20 $0.20
April 24, 2000 $0.187 $0.187
May 23, 2000 $0.10 $0.10
The Source of this information is Quicken.com; quotation services and
broker-dealers making a market in the Company's Common Stock. These prices
reflect inter-dealer prices, without retail markup, mark-down or commission and
may not represent actual transactions.
The closing sale price of the Common Stock reported on the OTC Bulletin
Board on September 1, 2000 was $0.165.
Holders
As of May 31, 2000, there were approximately 227 holders of record of the
Company's Common Stock (this number does not include beneficial owners who hold
shares at broker/dealers in "street-name").
Dividends
The Company has paid no cash dividends on its Common Stock and management
does not anticipate that such dividends will be paid in the foreseeable future.
4
<PAGE>
Item 6. Management's Discussion and Analysis or Plan Of Operation
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 acquire, develop, 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 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. has received 350,000 shares of Birch
Mountain Resources common stock as a finder's fee in consideration of
introductions to third parties who have materially advanced the research and
development of any assay procedure. 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, see note seven Other Matters, Notes
to the Financial Statement. The Company received the shares in May of 2000. 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 limited 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, the sale of Birch Mountain
shares may have to be sold to cover expenses. At the present time Birch Mountain
shares are not trading. President Jack Wagenti intends to pay all expenses with
personal funds as loans to the Company. The company will be closing on 450,000
common shares of a private placement for accredited investors on August 25,
2000.
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.
YEAR 2000 COMPLIANCE. The Company does have a computer that is in
compliance with the year 2000. Management does not anticipate that there will be
any consequences, material or immaterial, negative or positive, to the Company
as a result of the Year 2000 computer problems. As a result of a Business
Combination or merger, however, the Company may inherit computer systems that
are not Year 2000 compliant, or enter into contracts or business dealings with
suppliers, contractors, or others that are not Year 2000 compliant. Management
cannot anticipate the impact of such future occurrences. Failure to
satisfactorily address the Year 2000 issue could have a material adverse effect
on the Company.
5
<PAGE>
Item 7. Financial Statements
The financial statements required by this Item are set forth beginning on
page F-1 hereof.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 9. Directors. Executive Officers. Promoters and Control Persons
Compliance with Section 16(a) of the Exchange Act
Position
With Year First became
Name Age Company Director or Officer
--------------------------------------------------------------------------------
Dr. Emanuel Ploumis 73 CEO/Director 1996
Jack Wagenti 63 President/Director 1996
Jonathan E. Downs 24 Secretary/Treasurer 1998
Charles A. Fitzpatrick 52 Director 1998
Thomas F. August 47 Director 1998
Brian Russell 71 Director 1998
Dale Truesdell 57 Director 1998
Each director serves until the next annual meeting of Shareholders and
until his respective successor is duly elected and qualifies; Executive officers
are elected by the Board to serve at the discretion of the directors.
6
<PAGE>
Dr. Emanuel Ploumis, D.D.S., Chairman of the Board / Director / CEO
-------------------------------------------------------------------
Dr. Ploumis has been in dental practice since receiving his DDS (Temple
University, 1961). Also, he is the former President of the Chester and Delaware
County Dental Society. Dr. Ploumis has served extensively as a consultant to the
courts and clients in legal issues. Dr Ploumis has been actively engaged as an
explorationist for more than 15 years with a small group of other
explorationists tracking for precious metal deposits. The discovery of "Manny's
Mountain" in Pennsylvania was an outcome of this activity.
Mr. Jack Wagenti, President / Director
--------------------------------------
Mr. Wagenti was formerly a Director and Secretary with Universal Turf, Inc.
and helped structured the company to go public. He was formerly a Director and
President of Santa Fe Gold Mines, Inc. Mr. Wagenti was a Director with Greenleaf
Technology, Inc. a public corporation.
Mr. Charles A. Fitzpatrick, Esq., Director
------------------------------------------
Mr. Fitzpatrick was admitted to the bar in 1976, Pennsylvania and United
States Court of Appeals for the Third Circuit; and 1985, Maryland; Supreme Court
of the United States, 1990. Graduated from St. Joseph's Preparatory School; St.
Joseph's University (B.A. 1969). United States Navy, 1969-1972. Also, graduated
from the University of Pennsylvania (J.D. 1976). Law Clerk to The Honorable
Edmund S. Pawelec, 1976-1978. Mr. Fitzpatrick is a member of the Philadelphia
and Pennsylvania Bar Associations, Defense Research Institute and American
Academy of Hospital Attorneys.
Mr. Thomas F. August, M.S., RPH., Director
------------------------------------------
Mr. August graduated Philadelphia College of Pharmacy and Science and
received a Master Degree in Pharmacy and Chemistry. Mr. August was an Analytical
Chemist for Merck Pharmaceutical and became Senior Analytical Chemist at Merck
Institute for Therapeutic Research. Mr. August was Toxicology Lab Manager at the
Hospital of the University of Pennsylvania. In 1992 he worked at Sterling
Winthrop Pharmaceuticals and was team leader for the NIC Development Program. Mr
August is presently employed at United Chemical Technologies, Inc. where he is
manager of Laboratory Services.
Mr. Dale B. Truesdell, B.S., M.S., Director
-------------------------------------------
Mr. Truesdell, graduated from the University of Massachusetts and received
his B.S. in Geology in 1970 and his M.S. in 1974. Mr. Truesdell worked at Dames
& Moore doing geologic mapping for a proposed nuclear power plant. As a field
geologist for Bendix Field Engineering Corp., he investigated resources
potential for uranium in small and large scale areas. At Morrison-Knudsen
Engineers he did studies of rock and soil for major construction projects and
provided technical geologic support for a major superfund litigation. Mr.
Truesdell is also a certified Secondary school teacher for General Science and
Earth Science. Mr. Truesdell is listed in many publications regarding
Radioactive Placers, Uranium Potential, and Uranium Resource Evaluation in
several states.
7
<PAGE>
Mr. Brian G. Russell, Director
------------------------------
Mr. Russell, graduated from the University of Witwatersrand in 1951 with
degrees in geology and chemistry. He worked for nineteen years with the Council
for Mineral Technology (MINTEK) in South Africa doing analytical research,
established an X-Ray Fluorescence Section and directed the Development
Metallurgical Process Technology. While at MINTEK he presented and published
many scientific papers and supervised several masters and doctorate degrees. In
1974 he was appointed Director of the South African Minerals Bureau and
represented South Africa on the International Standards Organization Committee
for the standardization of Ferro alloys and received an award for meritorious
service from the American Institute for Mining, Metallurgical and Petroleum
Engineers. Mr. Russell of presently a consultant for USA and Canadian companies
that develop precious metals.
Mr. Jonathan Exter Downs, Secretary/Treasurer
---------------------------------------------
Mr. Downs is a graduate of Mountain Lakes High School and has received his
BA from Curry College in Milton, Massachusetts, May of 1998. Mr. Downs was a
deans list student. Mr. Downs has traveled extensively in Europe and Africa and
is the son of Barry Downs, Senior Vice President with the investment firm, Legg
Mason Wood Walker, where he is an authority on gold and gold mining shares.
Jonathan is also the grandson of John Exter, an economist and central banker.
Item 11. Executive Compensation
No compensation has teen awarded to, earned by, or paid to Officers and
Directors, during the last completed fiscal year or as of the date of the
filing.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the date of this report the stock
ownership of each person known by the Company to be the beneficial owner of five
percent or more of the Company's Common Stock, each executive officer and
director individually and all executive officers and directors of the Company as
a group. No other class of voting securities is outstanding. Each person is
believed to have sole voting and investment power over the shares except as
noted.
8
<PAGE>
(a) Security ownership of certain beneficial owners
--------------------------------------------------------
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
-------------------------------------------------------------------------------
Common Haber Inc. 510,417 6.07%
470 Main Rd
Towaco, NJ 07082
(b) Security ownership of management
------------------------------------------
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
--------------------------------------------------------------------------------
Common Dr. Emanuel Ploumis(1) 1,500,000 17.8%
436 Market Street
Oxford, PA 19363
Common Jack Wagenti(2) 1,500,000 17.8%
260 Garibaldi Ave
Lodi, NJ 07644
Common Jonathan E. Downs(3) 1,400,000 16.6%
27 Bush Lane
Denville, NJ 07834
Common Charles A. Fitzpatrick, Esq.(4) 50,000 0.6%
1111 Childs Ave
Drexell, PA 19026
Common Thomas F. August(4) 50,000 0.6%
308 E. Ashland Ave
Glenholden, PA 19036
Common Brian Russell(4) 50,000 0.6%
52 Doris Street
Kensington, South Africa 2094
Common Dale Truesdell(4) 25,000 0.3%
78 Reynolds Road
Shelburne, MA 01370
Common Includes all Officers and 4,575,000 54.3%
Directors of the Company
As a group (7 persons)
(1) Dr. Emanuel Ploumis is Chairman of the Board of Directors and CEO of the
Company.
(2) Jack Wagenti is President and Director of the Company.
(3) Jonathan E. Downs is Secretary/Treasurer of the Company.
(4) Charles A. Fitzpatrick, Esq., Thomas F. August, Brian Russell and Dale
Truesdell are Directors of the Company.
9
<PAGE>
Item 13. Exhibits and Reports on Form 8-K
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. (2)
27 Financial Data Schedule.
-------------------------------------
(1) Filed as an Exhibit to the Company's Form 10SB filed November 8, 1999
and incorporated herein by this reference.
(2) Filed as an Exhibit to the Company's Form 10QSB filed December 30, 1999
and incorporated herein by this reference.
Reports on Form 8-K
None
10
<PAGE>
SIGNATURE
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on the behalf by the
undersigned, thereunto duly authorized.
AMERICAN PRECIOUS METALS, INC.
Date: September 6, 2000 By:/s/Jack Wagenti
------------------
Jack Wagenti
President
11
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(A Development Stage Company)
TABLE OF CONTENTS TO FINANCIAL STATEMENTS
Page
Report of Independent Certified Public Accountants . . . . . . . . . . . F-2
Balance Sheet for the fiscal years ended May 31, 2000 and 1999 . . . . . ...F-3
Statement of Operations and Accumulated Deficit -
for the fiscal years ended May 31,2000 and 1999 . . . . . . . . . . . . . . F-4
Statement of Cash Flows -
For the fiscal years ended May 31,2000 and 1999. . . . . . . . . . . . . . F-5
Statement of Stockholder's Deficiency -
For the period from inception (June 1, 1996) through May 31, 2000 . . . . ..F-6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . ..F-9
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Stockholders and Board of Directors
American Precious Metals, Inc.
260 Garibaldi Avenue
Lodi, N.J. 07644
Gentlemen and Madames:
We have audited the accompanying comparative balance sheets of American
Precious Metals as of May 31, 2000 and 1999 and the related comparative
statements of operations and accumulated deficit, and cash flows for the years
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 accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position as of May 31, 2000 and 1999,
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has suffered recurring losses from operations
and, as of May 31,2000 has a net capital deficiency that raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 4. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Our audits were made to form an opinion on the basic financial statements
taken as a whole. The supplemental schedules to the financial statements are
presented to comply with rules and regulations under the Securities and Exchange
Act of 1934 and are not otherwise a required part of the basic financial
statements. The supplementary schedule of changes in stockholder's deficiency,
the supplementary schedule of operations and accumulated deficit, and the
supplementary schedule of cash flows are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/GERALD BRIGNOLA, CPA.,PA
August 17, 2000
Hackensack, NJ
F-2
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
BALANCE SHEET
May 31, 2000 and 1999
** 2000 ** ** 1999 **
ASSETS
CURRENT ASSETS
Cash in bank $ 63 $ 5,604
Prepaid expenses 100
----------- -----------
Total Current Assets 163 5,604
PROPERTY & EQUIP
Equipment 11,567 11,567
Less Depreciation ( 1,913) ( 378)
----------- ----------
9,654 11,189
OTHER ASSETS
Security deposit 0 675
----------- ----------
0 675
----------- ----------
TOTAL ASSETS $ 9,817 $ 17,468
=========== ==========
LIABILITIES AND
STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable 10,077 12,291
Fed & state tax payable 200
Loan payable 37,876 23,976
Deposit payable 10,000
---------- ----------
TOTAL CURRENT LIAB. 58,153 36,267
STOCKHOLDER'S EQUITY
Common stock (50,000,000 shares authorized
6,922,159 and 6,922,159 issued, par 6,928 6,923
value .001, respectfully
1,498,385 and 1,493,385 issued, par
value .00001, respectfully) 14 14
---------- -----------
6,942 6,937
Paid in capital 336,745 336,750
Accumulated (deficit) ( 392,023) ( 362,486)
---------- -----------
TOTAL STOCKHOLDERS' (DEFICIENCY) ( 48,336) ( 18,799)
---------- -----------
TOTAL LIABILITIES &
STOCKHOLDERs' DEFICIENCY $ 9,817 $ 17,468
========== ===========
See accountants' report and notes to financial statements
F-3
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
STATEMENTS OF OPERATIONS & ACCUMULATED DEFICIT
Year ended May 31, 2000 and 1999
** 2000 ** ** 1999 **
OPERATING EXPENSES
Entertainment $ 2,826 $ 3,589
Travel 1,756 14,586
Supplies 181 261
Laboratory costs 223 8,709
Small equipment/tools 206
Professional fees 11,802 8,430
Automobile expense 1,290 2,754
Interest & bank charges 183 222
Consulting fees 279
Depreciation 1,535 378
Dues & subscriptions
Insurance 225 23
License & fees
Legal 3,184
Maintenance 181 776
Office expense 2,809 4,481
Rent and lease expense 3, 175 37,145
Property tax 347
Corp tax/annual rept 400 360
State corporate tax 715
Telephone 2,951 4,563
----------- -----------
TOTAL OPERATING EXPENSES 29,537 91,008
----------- -----------
----------- -----------
NET INCOME/-LOSS 29,537 ( 91,008)
Accumulated (deficit)-beginning ( 362,486) ( 271,478)
----------- -----------
Accumulated (deficit)-ending ($ 392,023) ($ 362,486)
=========== ===========
Earnings per share ($0.0466) ($0.0430)
=========== ===========
See accountants' report and notes to financial statements
F-4
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
Year ended May 31, 2000 and 1999
** 2000 ** ** 1999 **
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income / (Loss) ($ 29,537) ($ 91,008)
Adjustments to reconcile net income to net
cash provided by operating activities
Increase / (decrease) in cash:
Depreciation 1,535 378
Prepaid ( 100)
Deposits 675
Investments
Accounts payable ( 2,214) 3,468
Fed & St taxes payable 200
Deposits payable 10,000
----------- -----------
Net cash provided by operating activities ( 19,441) ( 87,162)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of Stock 0 69,000
Sale / (purch): fixed assets 0 ( 11,567)
----------- -----------
Net cash used by investing activities 0 57,433
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans payable 13,900 23,976
----------- -----------
Net cash provided by financing activities 13,900 23,976
----------- -----------
Net increase in cash and cash equivalent ( 5,541) ( 5,753)
Cash - beginning of year 5,604 11,357
------------ -----------
Cash - end of year $ 63 $ 5,604
============ ===========
See accountants' report and notes to financial statements
F-5
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
SUPPLEMENTARY SCHEDULE OF CHANGES IN STOCKHOLDERS' DEFICIENCY
Cumulative from Inception through May 31, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Additional During Stock-
Common Stock Paid In Development holders
Shares Amount Surplus Stage Deficiency
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LUCKY SEVEN GOLD MINES, INC
---------------------------
Issuance of Common
Stock for Services
Directors & Officers 5,775,000 $5,775 $ $ $ 5,775
5/31/96
Issuance of Common
Stock for Services
& Consulting 770,000 770 770
5/31/96
Shares Issued for
Previous Payments of
Blackhawk Lease
5/31/96 320,000 320 320
Sale of Common Stock
for Cash in Private
Offering 6/1/96 thru
5/31/97 118,100 118 117,982 118,100
Shares Issued In
Exchange of Amerigold
& Sante Fe Common
Stock 10/7/96 thru
5/31/97 1,323,344 1,332 1,332
Common Stock
Rescinded 11/21/97 (1,720,000) (1,720) (1,720)
Issuance of
Common Stock for
Cash in Private
Offering 5/1/97
thru 3/15/98 148,500 149 148,351 148,500
Issuance of Common
Stock for Services
& Consulting 9/5/97 112,300 112 1,416 1,528
--------------------------------------------------------------------------------------------------------------------
Sub Total: 6,847,244 6,856 267,749 274,605
</TABLE>
See accountants' report and notes to financial statements
F-6
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
SUPPLEMENTARY SCHEDULE OF CHANGES IN STOCKHOLDERS' DEFICIENCY
Cumulative from Inception through May 31, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Additional During Stock-
Common Stock Paid In Development holders
Shares Amount Surplus Stage Deficiency
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sub Total Forward: 6,847,244 6,856 267,749 274,605
Shares Issued in
Exchange of Amerigold
& Sante Fe Common Stock
6/1/97 thru 3/15/98 74,915 74 74
--------------------------------------------------------------------------------------------------------------------
Sub Total: 6,922,159 6,930 267,749 274,679
(See Note 6)
--------------------------------------------------------------------------------------------------------------------
AMERICAN PRECIOUS METALS, INC. (Surviving Company)
--------------------------------------------------------------------------------------------------------------------
Outstanding Shares 1,400,000 14 14
of APM 1/14/98
issued 5/20/98
Net Loss for the
Year Ended 5/31/97 (107,508) (107,508)
Net Loss for the
Year Ended 5/31/98 (163,970) (163,970)
Rounding Dollars (7) (7)
--------------------------------------------------------------------------------------------------------------------
Ending Balance
5/31/98 8,322,159 6,937 267,749 (271,478) 3,208
--------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Cash in
Private Offering
6/1/98 thru 5/31/99 69,000 69,000 69,000
Shares Issued in
Exchange of Amerigold
& Sante Fe Common Stock
6/1/98 thru 5/31/99 24,385
--------------------------------------------------------------------------------------------------------------------
Sub Total 8,415,544 6,937 336,749 (271,478) 72,208
</TABLE>
See accountants' report and notes to financial statements
F-7
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(a development stage company)
SUPPLEMENTARY SCHEDULE OF CHANGES IN STOCKHOLDERS' DEFICIENCY
Cumulative from Inception through May 31, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Additional During Stock-
Common Stock Paid In Development holders
Shares Amount Surplus Stage Deficiency
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sub Total Forward: 8,415,544 6,937 336,749 (271,478) 72,208
Rounding (1)
Net Income for the
Year Ended 5/31/99 (91,008) (91,008)
--------------------------------------------------------------------------------------------------------------------
Balance 5/31/99 8,415,544 6,937 336,749 (362,486) (18,799)
================================================================================
</TABLE>
See accountants' report and notes to financial statements
F-8
<PAGE>
AMERICAN PRECIOUS METALS, INC.
(A Development Stage company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
Note 1. Summary of Significant Accounting Policies Reporting Entity.
Lucky Seven Gold Mines, Inc. was incorporated in the Commonwealth of
Pennsylvania on July 16, 1984. On March 16, 1998, Lucky Seven Gold
Mines, Inc. merged with American Precious Metals, a Delaware
Corporation, incorporated on January 13, 1998. The Surviving
corporation will be American Precious Metals, Inc. and maintains a
classification as a development stage company. Lucky Seven Gold Mines,
Inc. shareholders received an equivalent amount of shares from
American Precious Metals, Inc.
Activities to date have been limited to the sale of its common stock
securities. The company has, over a number of years, been developing a
process of technology relating to the testing of precious metals
mineralization. As more fully explained in Note 4, management of the
company has identified and intends to pursue new business
opportunities with other mining companies.
Method of accounting: The financial statements have been prepared in
accordance with the accrual basis method of accounting. Under this
method of accounting, income and expenses are identified with specific
periods of time and are recorded as earned or incurred without regard
to date of receipt or disbursement of cash.
Costs of securities registration - All costs incurred by the company
in connection with the pubic offering of the Company's common stock
securities were charged to expense.
Research and Development Costs: The Company charges research and
development costs, which are not incurred in conjunction with
contractual obligations, to expense as incurred.
Earnings Per Share: Computed by dividing the net loss by the weighted
average number of shares outstanding during the year. Common stock
equivalents have not been included in the earnings-per share
computation because of their anti-dilutive effect.
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the dates of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results
could differ from those estimates.
Note 2. Issuance of Common Stock. The Company issued its common stock
according to a public offering made in accordance with and pursuant to
the provisions of Regulation D, Rule 504 as promulgated under the
Securities Act of 1933, as amended. The Company sold 100,100 founders
shares of common stock and 23,550 were units, at a price of $10.00 a
unit. Each unit consisted of Ten (10) shares of common stock, par
value $.001 per share and three redeemable common stock purchase
warrants. The redeemable common stock purchase warrants are designated
as Class "A", Class "B", and Class "C". Each class of redeemable
common stock purchase warrants will be exercisable for a period of six
months commencing twelve (12) , eighteen(18) and twenty four (24)
months respectively, from the date of the closing at an exercise price
of $1.50, $2.00 and $2.50. All or any portion of the Class "A", "B",
or "C" redeemable warrants can be called for at a redemption price of
one mil ($.00l) per redeemable warrant by the Company on a minimum of
thirty days written notice of call mailed to the registered holders of
the Class "A", "B", and "C" redeemable warrants, provided the closing
bid of the common stock exceeds $1.50 $2.06 and $2.50 per share for
ten (10) consecutive trading days prior to the notice of the
redemption. Any holder who does not exercise his redeemable Warrant
prior to the. date set for call, will receive the call price and will
forfeit his rights to purchase the common stock underlying the
redeemable warrants so called. The Company must have a current and
effective notification and/or offering memorandum or registration
statement and prospectus on tile with the Securities and Exchange
Commission in order for a redeemable common stock purchased warrant
holder to be able to exercise his redeemable warrant.
F-9
<PAGE>
Note 3. Based on management's present assessment, the Company has not yet
determined it to be more likely than not that a deferred long term tax
asset of $124,053 attributable to the future utilization of $392,023
of net operating loss carry forwards as of May 31, 2000, will be
realized. Accordingly, the Company has provided a 100% allowance
against the deferred tax asset in the financial statements as May 31,
2000. The Company will continue to review this valuation allowance and
make adjustments as appropriate. The net operating. loss carry
forwards will expire as follows:
Year Amount
---- --------
2011 $ 33,703
2012 58,532
2013 27,383
2014 4,435
--------
$124,053
========
Note 4. Basis of Presentation - The accompanying financial statements have
been prepared on a going concern basis, which contemplates the
realization of assets and liquidation of liabilities in the normal
course of business. As shown in the financial statements, the Company
has experienced substantial operating losses. The continuation of the
Company as a going concern is dependent on its ability to generate
sufficient cash flows to meet its obligations and sustain its
operations.
Management of the Company has identified and intends to pursue new
business opportunities, which it believes will be profitable and plans
to infuse new equity capital into the Company. There are no
assurances, however, that management of the Company will be successful
with either the new business opportunities or raising new equity
capital.
Note 5. Leases
On June 1,1999, The Company was declared in default of a lease it had
previously accepted on assignment of a related party lease on June 26,
1996 From Amerigold, Inc. and Santa Fe Gold Mines, Inc. The Company
has no further obligations under this lease.
The prior monthly rental was $2,500 per month or $30,000 annually.
Note 6. Mergers and Acquisitions
On June 27, 1996, the shareholders of Santa Fe Gold Mines, Inc. and
Amerigold, Inc. agreed to the following exchange of shares.
I. Santa Fe Fold Mines, Inc.
(a) The principals of Santa Fe Gold Mines, Inc. agreed to accept one
share of Lucky Seven Gold Mines, Inc. stock in exchange for three
shares of Santa Fe Gold Mines, Inc.
(b) The remaining shareholders agreed to accept one share of common
stock in exchange for one share of Lucky Seven Gold Mines Inc.
II. Amerigold, Inc.
(a) The shareholders agreed to accept one share of Lucky Seven Gold
Mines, Inc. in exchange for three shares of Amerigold, Inc.
III American Precious Metals, Inc.
On March 16, 1998, 6,922,159 shares of Lucky Gold Mines were
exchanged for 6,922,159 shares of American Precious Metals.
F-10
<PAGE>
The total number of outstanding shares of the surviving company
(American Precious Metals, Inc.) were unchanged by this stock
swap. The only outstanding shares of American Precious Metals,
Inc. before the merger were 1,400,000 shares. Total outstanding
shares after the merger were 8,322,159 shares. The surviving
company is American Precious Metals Inc.
Due to the fact that there is no market value for either Santa Fe Gold
Mines, Inc. or Amerigold, Inc., the financial statements do not
reflect any value for these securities.
Note 7. OTHER MATTERS
During the fiscal year ended May 31,2000, the Company earned a finders
fee per an agreement dated June 25, 1999 with Birch Mountain
Resources, Ltd. On May 16, 2000, the Company received 350,000 shares
of restricted common stock (four months), in connection with the
agreement. On June 15, 2000, the Canadian Exchange suspended from
trading the stock of Birch Mountain Resources, Ltd., effective at the
close of trading June 28, 2000, pursuant to Rule C.1.07. The Exchange
is requiring an independent review and verification of Birch
Mountain's proprietary precious metal extraction technology and the
reported occurrence of precious metals on its Athabasca Prairie Gold
property. The Exchange is also continuing its own review of Birch
Mountain's disclosure. The trading price of Birch Mountain Resources
Ltd. on May 16, 2000 was $.95, however, due to the actions of the
Canadian Exchange, which was announced within 15 days after the
year-end of American Precious Metals, Inc. the financial statements at
May 31, 2000, do not reflect any income or related asset.
F-11
