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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, 1997, 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
METALINE MINING & LEASING COMPANY
(Exact name of registrant as specified in its charter)
State of Washington 91-06843860
______________________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
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:
Title of each class Name of each exchange
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. ($33,956)
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. 26387.] $0.00
DOCUMENT PAGE: 1 OF 25
<PAGE>
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.
(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. 7,073,430
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)
*****************************************************************************
(This space left blank intentionally)
DOCUMENT PAGE: 2 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
PART I
ITEM 1. BUSINESS
(a) General Development of Business
The Registrant was incorporated in the State of Washington in 1927.
Historically, the Registrant was engaged in the mineral exploration
business. The Company does not currently hold an interest in any
interests in mineral exploration properties and 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 and its inability to
raise additional financing due to the lack of a market for its Common
Stock, 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) Narrative Description of Business
The Registrant has no active business operations. The Registrant is
currently seeking to acquire an interest in a business opportunity.
The Registrant currently has no employees.
ITEM 2. DESCRIPTION OF PROPERTY
The Company has no officers or facilities. The Company's activities
are carried out from the office of one of its officers and directors.
The Company disposed of the last of its interests in mineral properties in
1990.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Registrant is
a party or of which any of its property is subject.
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.
DOCUMENT PAGE: 3 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
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 since at least 1991.
(b) Holders
There are approximately 1,273 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 1997, each of the four directors of the Company were granted
80,000 shares of stock at a deemed price of $.005 per share representing
a compensation equivalent of $400.00 per person as directors' fees for
1997. Additionally, the following shares which had been authorized in
previous years for issuance as directors' fees were actually issued in 1997:
<TABLE>
Year Number of Directors Shares Per Director Total Number of Shares
____ ___________________ ___________________ ______________________
<C> <C> <S> <S>
1993 Four 36,000 144,000
1995 Four 130,000 520,000
1996 Four 150,000 600,000
</TABLE>
In December, 1997, two Directors, William Green and Greg Lipsker, each
exercised options to acquire 500,000 shares of the Company's common stock
at a price of $.005 per share. The options were granted in 1994, in
consideration of services performed by the individuals on behalf of the
Registrant. Each of optionees paid the $2,500 option price with a 12 month
non-recourse 8% promissory note. The shares purchased are held by the
Registrant as collateral for the promissory notes.
DOCUMENT PAGE: 4 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
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 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 extremely limited
resources, Management has decided not to attempt to again become
actively engaged in mineral exploration.
The Company has one asset, its ownership of an 11% interest in an
inactive non-reporting public company, Metaline Contact Mines ("MCM"),
which the Company believes may have some value due to the timber
value of the land held by MCM. Because there is no market for the MCM
shares, the Registrant is currently examining different avenues to
attempt to liquidate its MCM holdings.
The Registrant is currently seeking to acquire an interest in an as
yet unidentified 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.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements of the Company for the fiscal years ended December
31, 1997, and 1996, which have been 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
During the registrant's two most recent fiscal years and the subsequent
interim period, no independent accountant who was previously engaged as
the principal accountant to audit the registrant's financial statements,
or independent accountant who was previously engaged to audit a
significant subsidiary and on whom the principal accountant expressed
reliance in its report, has resigned (or indicated it has declined to
stand for re-election after the completion of the current audit) or was
dismissed.
DOCUMENT PAGE: 5 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT
Directors and Executive Officers
(a) Identification of Directors
Set forth below is the name, age and length of service of the Company's
present directors:
<TABLE>
Name (age) (1) Position Length of Service
_________________________ __________ _____________________
<C> <S> <S>
William R. Green (59) Director Since 1993
Gregory B. Lipsker (47) Director Since 1993
Eunice R. Campbell (52) Director 1992 and 1994
(1) T. Glover Patterson served as a director of the Company from 1981 until
the time of his death in February, 1998.
</TABLE>
The directors are elected for a one-year term 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
________________________ _______________________________ _________________
<C> <S> <S>
Gregory B. Lipsker (47) President Since 1994
William R. Green (59) Vice President/Asst. Secretary Since 1994
Eunice R. Campbell (52) Secretary/Treasurer Since 1992(1)
(1) T. Glover Patterson served as secretary of the Company until the time
of his death in February, 1998
</TABLE>
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.
DOCUMENT PAGE: 6 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
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 Cimarron-
Grandview Group, Inc., a publicly-held, inactive mining exploration company.
Dr. William R. Green - Dr. Green is a professional engineer and geologist
with more than 30 years experience in exploration and the management of
U.S. and Canadian Junior resource companies. Dr. Green is an Executive
Officer and Director of Cimarron-Grandview Group, Inc., a publicly-held,
inactive mining exploration company.
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 Cimarron-Grandview Group, Inc., 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.
DOCUMENT PAGE: 7 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company to
its Chief Executive Officer and the four other highest paid officers and
executive officers whose total annual salary and bonus exceeded $100,000
during the past three calendar years ("Executive Officers"). Except as
set forth below, no officer or Executive Officer of the Company received
compensation in excess of $100,000 during the past three calendar years.
This information includes the dollar value of base salaries, bonus awards
and number of stock options granted, and certain other compensation, if any.
SUMMARY COMPENSATION TABLE
<TABLE>
Long-Term Compensation
Annual Compensation Awards Payouts
____________________________________________ _________________ ______________________
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Other Restricted Securities
and Annual Stock Underlying LTIP All Other
Principal Year Salary Bonus Comp. Awards(1) Options/ Payouts Comp.
Position ($) ($) ($) ($) SARs(#) ($) ($)
____________ ____ _______ _______ _______ __________ __________ ________ _________
<C> <S> <S> <S> <S> <S> <S> <S> <S>
Gregory B.
Lipsker 1995 $0 $0 $0 $50 -0- $0 $0
President
and Director 1996 $0 $0 $0 $150 -0- $0 $0
1997 $0 $0 $0 $80 -0- $0 $500
T. Glover
Patterson 1995 $0 $0 $0 $50 -0- $0 $0
Secretary
and Director 1996 $0 $0 $0 $150 -0- $0 $0
1997 $0 $0 $0 $80 -0- $0 $500
William R.
Green 1995 $0 $0 $0 $50 -0- $0 $0
Vice Presi-
dent and 1996 $0 $0 $0 $150 -0- $0 $0
Director 1997 $0 $0 $0 $80 -0- $0 $500
Eunice R.
Campbell 1995 $0 $0 $0 $50 -0- $0 $0
Treasurer
and Director 1996 $0 $0 $0 $150 -0- $0 $0
1997 $0 $0 $0 $80 -0- $0 $500
</TABLE>
(See note to table on next page)
DOCUMENT PAGE: 8 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
1) During fiscal year 1995, each Director of the Registrant received a
grant of 50,000 shares. The common equity, for which there is no public
trading market, was valued at $.001 per share, representing an annual
compensation equivalent of $50 per Director. No other compensation was
paid to any Director or Executive Officer of the Registrant, except for
a $50 Director's fee for each Director's meeting attended during 1995.
2) During fiscal year 1996, each Director of the Registrant received a grant
of 150,000 shares. The common equity, for which there is no public
trading market, was valued at $.001 per share, representing an annual
compensation equivalent of $150 per Director.
3) During fiscal year 1997, each Director of the Registrant received a
grant of 80,000 shares. The common equity, for which there is no public
trading market, was valued at $.001 per share, representing an annual
compensation equivalent of $80 per Director. In addition, each director
received an annual directors' fee in the amount of $500.
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 7,073,730.
<TABLE>
Amount and Nature of
Beneficial Ownership
Name of Person (all direct unless
or Group (1) otherwise noted) % of class
_______________________________________ _____________________ __________
<S> <C> <C>
Principal Shareholders:
T. Glover Patterson Estate 606,000 8.33%
10 W. Salmon
Spokane, WA 99218-1949
Directors and Executive Officers:
Greg Lipsker 1,001,500 13.76%
714 Washington Mutual Financial Center
601 W. Main Avenue
Spokane, WA 99201
William Green 896,000 12.31%
905 W. Riverside, Ste. 311
Spokane, WA 99201
Eunice R. Campbell 595,000 8.18%
301 S. Chestnut, Ste. #6
Spokane, WA 99204
All executive officers and 2,503,500 34.25%
directors as a group (3 persons)
(1) The positions of those persons who are directors or executive
officers of the Registrant are set out in Item 10.
</TABLE>
DOCUMENT PAGE: 9 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions with Management and Others
In December, 1997, two Directors, William Green and Greg Lipsker, each
exercised options to acquire 500,000 shares of the Company's common stock
at a price of $.005 per share. The options were granted in 1994 in
consideration of services performed by the individuals on behalf of the
Registrant. Each of optionees paid the $2,500 option price with a 12 month
non-recourse 8% promissory note. The shares purchased are held by the
Registrant as collateral for the promissory notes.
(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
Accountants' Report
Balance Sheet, December 31, 1997 and 1996
Statement of Income (Loss) and Retained Earnings (Deficit)
For The Years Ended December 31, 1997, 1996, and 1995
Statement of Cash Flows
For The Years Ended December 31, 1997, 1996, and 1995
Statement of Stockholders' Equity
2. Financial Statement Schedules
Schedule 1 - Marketable Securities-Other Investments
For The Years Ended December 31, 1997 and 1996
3. Exhibits required by Item 601
(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. (1)
(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.
(24) Power of Attorney. (1)
(99) Additional Exhibits. (1)
(1) These items have either been omitted or are not applicable
(2) Incorporated by reference to previous filing
DOCUMENT PAGE: 10 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (continued)
(b) No reports have been filed on Form 8-K during the last fiscal
quarter covered by this report.
(c) Exhibit (23), Consent of Account, 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
EXHIBIT 1.
METALINE MINING & LEASING COMPANY
CONTENTS
PAGE
Accountants' Report 1
Balance Sheet 2
Statement of Income 3
Statement of Cash Flows 4-5
Statement of Stockholders' Equity 6
Notes to Financial Statements 7-10
Accountants' Report on Supplemental Information 11
Schedule of Marketable Securities 12
DOCUMENT PAGE: 11 OF 25
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Metaline Mining & Leasing Company
Spokane, Washington
We have audited the accompanying balance sheet of METALINE MINING AND
LEASING COMPANY (A Washington Corporation) as of December 31, 1997 and 1996,
and the related statements of income, 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 METALINE MINING & LEASING
COMPANY 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, PS
Spokane, Washington
March 24, 199
1
DOCUMENT PAGE: 12 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
(A Development Stage Company)
BALANCE SHEET
December 31, 1997 and 1996
<TABLE>
ASSETS
1997 1996
____________ ____________
<C> <S> <S>
CURRENT ASSETS
Cash in bank $ 8,490 $ 256
Murphy Favre - Composite Cash Fund 1,613 1,536
Accounts Receivable - 2,220
____________ ____________
Total current assets 10,103 4,012
____________ ____________
SECURITIES - 873
PARTNERSHIP INTERESTS 4,043 4,116
____________ ____________
Total assets $ 14,146 $ 9,001
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 21,932 $ 4,667
Deposit 9,784 -
____________ ____________
31,716 4,667
____________ ____________
STOCKHOLDERS' EQUITY
Common stock - No par value 15,000,000
shares authorized 7,277,834 - 1997;
4,693,834 - 1996; issued and outstanding 145,072 93,564
Paid in capital 287,411 325,999
Unrealized loss, marketable securities (5,773) (4,900)
Retained earnings (deficit) accumulated
during the development stage (444,280) (410,329)
____________ ____________
Total stockholders' equity (17,570) 4,334
____________ ____________
Total liabilities and stockholders' equity $ 14,146 $ 9,001
============= =============
</TABLE>
2
The accompanying notes are an integral part of these financial statements
DOCUMENT PAGE: 13 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
(A Development Stage Company)
STATEMENT OF INCOME (LOSS)
for the years ended December 31, 1997, 1996 and 1995
<TABLE>
1997 1996 1995
_____________ _____________ _____________
<C> <S> <S> <S>
INCOME
Dividend & interest income $ 124 $ 122 $ 137
EXPENSES
Directors' fees 10,420 300 3,300
Professional fees 23,165 1,500 1,500
Office expense 99 98 75
Taxes, licenses, and fees 272 259 323
_____________ _____________ _____________
Total expenses 33,956 2,157 5,198
_____________ _____________ _____________
(LOSS) BEFORE OTHER
INCOME AND (EXPENSES) (33,832) (2,035) (5,061)
OTHER INCOME AND (EXPENSES)
Income (loss) from
Partnership interests (119) 522 (6)
Loss on disposal of krugerrands - (463) -
_____________ _____________ _____________
(119) 59 (6)
_____________ _____________ _____________
(LOSS) BEFORE PROVISION FOR
FEDERAL INCOME TAXES (33,951) (1,976) (5,067)
PROVISION FOR FEDERAL INCOME
TAXES - - -
_____________ _____________ _____________
NET (LOSS) $ (33,951) $ (1,976) $ (5,067)
============= ============= =============
EARNINGS PER SHARE (Based upon
weighted average shares
outstanding) $ (0.01) $ NIL $ NIL
============= ============= =============
</TABLE>
3
The accompanying notes are an integral part of these financial statements
DOCUMENT PAGE: 14 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for the years ending December 31, 1997, 1996 and 1995
<TABLE>
1997 1996 1995
_____________ _____________ _____________
<C> <S> <S> <S>
INCOME
Dividend & interest income $ 124 $ 122 $ 137
CASH FLOWS PROVIDED (USED) IN
OPERATING ACTIVITIES:
Net (Loss) $ (33,951) $ (1,976) $ (5,067)
Noncash expenses included
in income:
Loss on disposition of krugerrands - 463 -
Income from partnership interest 73 (573) (57)
Stock issued for services 12,920 - -
Increase/decrease in current
assets and liabilities:
Accounts payable 17,265 300 4,100
_____________ _____________ _____________
Net cash provided by
operating activities (3,693) (1,786) (1,024)
_____________ _____________ _____________
CASH FLOWS PROVIDED (USED) IN
INVESTING ACTIVITIES:
Deposit received 9,784 - -
Proceeds from disposition of krugerrands 2,220 - -
_____________ _____________ _____________
Net cash provided by
investing activities 12,004 - -
_____________ _____________ _____________
NET INCREASE (DECREASE) IN CASH 8,311 (1,786) (1,024)
CASH AT BEGINNING OF PERIOD 1,792 3,578 4,602
_____________ _____________ _____________
CASH AT END OF PERIOD $ 10,103 $ 1,792 $ 3,578
_____________ _____________ _____________
</TABLE>
4
The accompanying notes are an integral part of these financial statements
DOCUMENT PAGE: 15 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for the years ending December 31, 1997, 1996 and 1995
<TABLE>
1997 1996 1995
_____________ _____________ _____________
<C> <S> <S> <S>
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash and cash equivalents:
Cash in bank - checking $ 8,490 $ 256 $ 2,113
Composite cash fund 1,613 1,536 1,465
_____________ _____________ _____________
$ 10,103 $ 1,792 $ 3,578
============= ============= =============
Cash Paid For:
Income taxes $ - $ - $ -
Interest - - -
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Additional common stock issued
for directors fees $ 12,920 $ - $ -
Increase (decrease) in investment
in partnership interests (73) 573 57
</TABLE>
The Company has adopted Statement of Financial Accounting Standards No. 95,
Statement of Cash Flows. For purposes of this Statement short term
investments which have an initial maturity of ninety days or less are
considered cash equivalents.
5
The accompanying notes are an integral part of these financial statements
DOCUMENT PAGE: 16 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
*Begin 9 pt type*
<TABLE>
Number of Capital Loss in Retained
Shares Common Excess of Marketable Earnings
Outstanding Stock Par Value Securities (Deficit) Total
___________ ___________ ___________ ___________ ___________ ___________
<C> <S> <S> <S> <S> <S> <S>
Balance at
Dec. 31, 1992 4,549,834 $ 90,693 $ 327,430 - $ (404,416) $ 13,707
Net Loss - 1993 - - - - (519) (519)
___________ ___________ ___________ ___________ ___________ ___________
Balance at
Dec. 31, 1993 4,549,834 90,693 327,430 - (404,935) 13,188
Shares issued to
Directors for
services; 6/27/94 144,000 2,871 (1,431) 1,440
Unrealized gain in
Marketable Securities - - - $ 763 - 763
Cumulative effect of
change in accounting
principle; unrealized
loss in marketable
securities; net of
income tax effect - - - (6,048) 6,048 -
Net Loss - 1994 - - - - (4,399) (4,399)
___________ ___________ ___________ ___________ ___________ ___________
Balance at
Dec. 31, 1995 4,693,834 93,564 325,999 (5,285) (403,286) 10,992
Net Loss - 1995 - - - - (5,067) (5,067)
___________ ___________ ___________ ___________ ___________ ___________
Balance at
Dec. 31, 1996 4,693,834 93,564 325,999 (5,285) (408,353) 5,925
Unrealized gain in
Marketable Securities - - - 385 - 385
Net Loss-1996 - - - - (1,976) (1,976)
___________ ___________ ___________ ___________ ___________ ___________
Balance at
December 31, 1996 4,693,834 93,564 325,999 (4,900) (410,329) 4,334
Shares issued to
directors for services
1/6/97 1,120,000 22,325 (16,725) - - 5,600
8/6/97 144,000 2,871 (2,151) - - 720
12/31/97 1,320,000 26,312 (19,712) - - 6,600
Unrealized loss in
Marketable Securities - - - (873) - (873)
Net loss-1997 - - - - (33,951) (33,951)
___________ ___________ ___________ ___________ ___________ ___________
Balance at
December 31, 1997 7,277,834 $ 145,072 $ 287,411 $ (5,773) $ (444,280) $ (17,570)
=========== =========== =========== =========== =========== ===========
*end 9 pt type*
</TABLE>
The accompanying notes are an integral part of these financial statement
DOCUMENT PAGE: 17 OF 25 6
<PAGE>
METALINE MINING & LEASING COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1 - ORGANIZATION
The Company is currently in the development stage and is currently
negotiating with major mining companies for development of all of their
properties.
The Company was organized on December 14, 1927. The Articles of
Incorporation stated the term of the corporation's existence shall be fifty
years. The expiration date of the corporation's existence was
December 13, 1977.
On May 12, 1977, Spokane Superior Court appointed a trustee to represent
the missing shareholders at a special meeting of shareholders held on May 17,
1977. At the special meeting the shareholders and the trustee unanimously
approved a resolution to enable the corporation to amend its Articles of
Incorporation to extend the corporate life perpetually.
2 - ACCOUNTING POLICIES
A. The Company's records are maintained on the accrual method of
accounting.
B. The Company capitalizes all acquisition and exploration costs on all
non-operating 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
pro rata portion of the unamortized acquisition costs.
C. Capitalized costs are charged to operations when title to the property
has expired or when management feels the properties are not
economically
feasible to develop or hold for future development.
D. Accounting Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and 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.
3 - MARKETABLE SECURITIES
At December 31, 1997, the Company owned 1,477,239 shares of Metaline Contact
Mines whose asset carrying value has been written off. Metaline Contact
Mines is owned 51% by the Bunker Hill Company, a subsidiary of Gulf Resources
Chemical Corporation. Management felt that the minority stockholders of the
company would never realize a return on their investment. Since there is no
known ready market for the securities, management was of the opinion that
$100,410 of cost should not be reflected in the financial statement.
The Company owned 25,000 shares of Capitol Silver Mines, Inc. Capitol Silver
Mines, Inc. is in the development stage and as of this date is unproductive.
The Company owned 31,151 shares of Carson Industries Corporation. Carson
Industries Corporation is currently involved in oil and gas.
7
DOCUMENT PAGE: 18 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
3 - MARKETABLE SECURITIES (Continued)
The Corporation has adopted Statement of Financial Accounting Standards
(SFAS) No. 115, Accounting for Certain Investments in Debt and Equity
Securities. SFAS No. 115 establishes generally accepted accounting
principles for the financial accounting and measurement and disclosure
principles for (1) investments in equity securities that have
readily determinable fair market value and (2) all investments in debt
securities. The change had no effect on prior years' results. All of the
marketable securities held by METALINE MINING & LEASING COMPANY consists of
securities "available-for-sale" as defined by SFAS No. 115. The basis on
which cost is determined in computing realized gain or loss is the specific
identification method.
The following information is as of December 31, 1997 and 1996:
<TABLE>
1997 1996
____________ ____________
<C> <S> <S>
Aggregate fair value of marketable securities $ 0 $ 873
Gross unrealized holding losses 5,773 4,900
Amortized cost basis 5,773 5,773
</TABLE>
Changes in marketable securities for the twelve months ended December 31,
1997 and 1996 are as follows:
<TABLE>
1997 1996
____________ ____________
<C> <S> <S>
Cost as of January 1, $ 5,773 $ 8,456
Sale of Krugerrands 0 (2,683)
Unrealized loss, as of December 31, (5,773) (4,900)
____________ ____________
Fair market value, as of December 31, $ 0 $ 873
============ ============
</TABLE>
4 - MINING CLAIMS
On June 5, 1981 the Company purchased twenty-seven (27) mining claims in the
Coeur d'Alene district for $5,400.00.
In July of 1985 the Company purchased two units of Pondera Partners, LTD., a
drilling project located in Teton County, Montana. Total cost for the 5.714%
interest was $12,000. The Partnership has elected to treat intangible drilling
costs as a current expense deductible in the year in which paid or incurred.
On September 9, 1987, the Company approved the purchase of ten (10) unpatented
mining claims in Valley County, Idaho. The purchase price was $2,000 cash and
100,000 shares of Metaline Mining and Leasing Company restricted stock which
was issued in 1988.
In December of 1990 the Company abandoned the Valley County, Idaho Mining
Claims (10 claims) and the Shoshone County Coeur d'Alene District Mining
Claims (27 claims).
DOCUMENT PAGE: 19 OF 25 8
<PAGE>
METALINE MINING & LEASING COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
4 - MINING CLAIMS (Continued>
PARTNERSHIP INTERESTS
December 31, 1995, 1996 and 1997
<TABLE>
Capital
Contri-
buted Ordinary
Beginning During Income Distri- Ending
Capital Year (loss) butions Capital
__________ __________ __________ __________ __________
<C> <S> <S> <S> <S> <S>
Pondera Partner Ltd., 1995 $ 3,486 $ - $ 57 $ - $ 3,543
__________ __________ __________ __________ __________
Balance at December, 1995 $ 3,486 $ - $ 57 $ - $ 3,543
========== ========== ========== ========== ==========
Pondera Partner Ltd., 1996 $ 3,543 $ - $ 573 $ - $ 4,116
__________ __________ __________ __________ __________
Balance at December, 1996 $ 3,543 $ - $ 573 $ - $ 4,116
========== ========== ========== ========== ==========
Pondera Partner Ltd., 1997 $ 4,116 $ - $ (73) $ - $ 4,043
__________ __________ __________ __________ __________
Balance at December 31, 1997$ 4,116 $ - $ (73) $ - $ 4,043
========== ========== ========== ========== ==========
</TABLE>
5 - COMMON STOCK
At December 31, 1997, the Company's independent transfer agent reported that
7,277,834 shares of common stock were outstanding.
The Articles of Incorporation were amended December 31, 1983 to reclassify
shares and reduce capital to $299,000. The capitalization of the Company shall
be divided into 15,000,000 shares of no par value common non-assessable stock.
None of these shares shall have preemptive rights. Each and every share of
stock shall have the same rights and privileges as those enjoyed by each and
every other share.
The Board of Directors of Metaline Mining & Leasing Company passed unanimously
to compensate the directors for services rendered in the form of Metaline Mining
& Leasing Company Stock. The Board of Directors were each issued shares of
Metaline Mining & Leasing Company Stock for services performed. A total of
174,000 shares were issued to Directors for Services with beneficial interest
date of June 30, 1994. During 1995, a total of 520,000 shares were authorized
by the Board of Directors, to be issued in the future, to compensate directors
for services performed. During 1996 600,000 shares were authorized by the board
of directors, to be issued in the future, to compensate directors for services
performed. During 1997 1,464,000 shares were issued to Directors for services.
The shares authorized by the Board of Directors to compensate Directors for
1995 and 1996 were issued during 1997. The issue of stock for services is valued
using the stock quotation price on the date of issue less 50% due to the fact
that it is restricted stock.
9
DOCUMENT PAGE: 20 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
6 - FEDERAL INCOME TAXES
At December 31, 1997 the Company had net operating loss carryforward of
$211,584 which is available to offset future taxable income.
Expiration dates are as follows:
<TABLE>
Amount Expiration Date
__________ _______________
<C> <S>
$ 74,275 2000
17,779 2001
13,118 2002
13,496 2003
14,386 2004
19,263 2005
7,497 2006
6,268 2007
1,509 2008
3,462 2009
5,067 2010
1,513 2011
33,951 2012
__________ _______________
$ 211,584
=========
</TABLE>
An unused general business tax credit carryforward of $471 is available to
reduce future Federal income taxes to the extent permitted under the Internal
Revenue Code. This credit expires 1999.
The Company adopted SFAS No. 109 for its calendar year 1993. This has no
effects on the financial statements due to the fact that there are no material
timing differences which would produce a deferred income tax liability or asset.
Based on the pattern of net losses, management believes that it is not prudent
to assume that net operating loss carryforwards will provide future tax
benefits that should be recorded as a deferred tax asset.
7 - ABANDONED LEASES
In December of 1990 the Company abandoned the Valley County, Idaho Mining
Claims (10 claims recorded at $4,000) and the Shoshone County Coeur d'Alene
District Mining Claims (27 claims recorded at $5,400). The claims were
abandoned due to the depressed metals market and results of geological
work performed.
Mining leases on land leased from the State of Idaho, Department of Lands were
abandoned in November of 1989 due to the depressed metals market and results of
geological work performed.
10
DOCUMENT PAGE: 21 OF 25
<PAGE>
ACCOUNTANTS' REPORT ON SUPPLEMENT INFORMATION
Board of Directors
Metaline Mining & Leasing Company
Spokane, Washington
Our report on our audits of the basic financial statements of Metaline Mining
& Leasing Company for 1997 and 1996 appears on page two. Those audits were
made for the purpose of forming an opinion on the basic financial statements
taken as a whole. The schedule of Marketable Securities and Gold Krugerrands
for the years ended December 31, 1997 and 1996 is presented for purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the examination 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/ ROBERT MOE & ASSOCIATES, PS
Spokane, Washington
March 24, 1998
11
DOCUMENT PAGE: 22 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
SCHEDULE 1 - MARKETABLE SECURITIES -
OTHER INVESTMENTS
for the years ended December 31, 1997 and 1996
<TABLE>
December 31, 1997
______________________________________________________
Column A Column B Column C Column D Column E
___________________ ____________ ____________ ____________ ____________
Amount at
Number Market Which Issue
of Shares Cost of Value is Carried on
Issuer and Units Issue of Issue Balance Sheet
___________________ ____________ ____________ ___6_________ ____________
<C> <S> <S> <S> <S>
Capitol Silver
Mines, Inc. 25,000 $ 583 $ - $ -
Carson Industries
Corporation 31,151 5,190 - -
___________________ ____________ ____________ ____________ ____________
$ 5,773 $ - $ -
============ ============ ============
</TABLE>
<TABLE>
December 31, 1996
______________________________________________________
Column A Column B Column C Column D Column E
___________________ ____________ ____________ ____________ ____________
Amount at
Number Market Which Issue
of Shares Cost of Value is Carried on
Issuer and Units Issue of Issue Balance Sheet
___________________ ____________ ____________ ____________ ____________
<C> <S> <S> <S> <S>
Capitol Silver
Mines, Inc. 25,000 $ 583 $ 250 $ 250
Carson Industries
Corporation 31,151 5,190 623 623
___________________ ____________ ____________ ____________ ____________
$ 5,773 $ 873 $ 873
============ ============ ============
</TABLE>
12
See accountants' report on supplemental information
DOCUMENT PAGE: 23 OF 25
<PAGE>
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Metaline Mining & Leasing Company
Spokane, Washington
We hereby consent to the use of our opinion, dated March 24, 1998 on the
financial statements of Metaline Mining & Leasing Company, for the years
ended December 31, 1997 and 1996 in the Form 10-KSB
/s/ ROBERT MOE & ASSOCIATES, P.S.
Spokane, Washington
March 24, 1998
DOCUMENT PAGE: 24 OF 25
<PAGE>
METALINE MINING & LEASING COMPANY
Annual Form 10-K
December 31, 1997
*************************************************************************
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.
METALINE MINING & LEASING COMPANY
(Registrant)
By: /s/Gregory B. Lipsker Date: April 14, 1998
__________________________________________
GREGORY B. LIPSKER, President
(Principal Executive Officer)
By: /s/ Eunice R. Campbell Date: April 14, 1998
__________________________________________
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: April 14, 1998
__________________________________________
GREGORY B. LIPSKER
Director
/s/ William R. Green Date: April 14, 1998
__________________________________________
WILLIAM R. GREEN
Director
/s/ Eunice Campbell Date: April 14, 1998
__________________________________________
EUNICE CAMPBELL
Director
DOCUMENT PAGE: 25 OF 25
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statements of Financial Condition for Metaline Mining & Leasing Company
at December 31, 1997 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 10,103
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,103
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,146
<CURRENT-LIABILITIES> 31,716
<BONDS> 0
0
0
<COMMON> 145,072
<OTHER-SE> (162,642)
<TOTAL-LIABILITY-AND-EQUITY> 14,146
<SALES> 0
<TOTAL-REVENUES> 124
<CGS> 0
<TOTAL-COSTS> 33,956
<OTHER-EXPENSES> (119)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (33,951)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (33,951)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>