<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarter Ended: June 30, 1995
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Transition Period from _____________ to ____________
Commission File Number: 0-8146
MOUNTAIN STATES RESOURCES CORPORATION
(Name of Small Business Issuer in its charter)
Utah 87-0280886
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
1935 East Vine Street, Salt Lake City, Utah 84121
(Address of principal executive offices and Zip Code)
(801) 278-9944
(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 preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. (1) Yes [ ] No [X] (2) Yes[ ]
No [X]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, Par Value $0.10 954,733
- ----------------------------- -----------
Title of Class Number of Shares Outstanding
as of November 20, 1996
NOTE: MOUNTAIN STATES RESOURCES CORPORATION (THE "COMPANY") HAS BEEN
DELINQUENT IN FILING ITS PERIODIC REPORTS SINCE SEPTEMBER 31, 1989. THIS
REPORT IS ONE OF SEVERAL REPORTS BEING FILED ESSENTIALLY SIMULTANEOUSLY IN
ORDER TO BRING THE COMPANY CURRENT IN ITS REPORTING OBLIGATIONS. THE REPORT
PROVIDES INFORMATION FOR THE PERIOD DESCRIBED IN THE COVER PAGE HEREOF TO
WHICH IT RELATES. SUCH INFORMATION SHOULD BE CONSIDERED IN LIGHT OF ALL OTHER
REPORTS FILED BY THE COMPANY, PARTICULARLY REPORTS BEING FILED FOR SUBSEQUENT
PERIODS.<PAGE>
<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MOUNTAIN STATES RESOURCES CORPORATION
FINANCIAL STATEMENTS
(UNAUDITED)
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
However, in the opinion of management, all adjustments (which include only
normal recurring accruals) necessary to present fairly the financial position
and results of operations for the periods presented have been made. These
financial statements should be read in conjunction with the accompanying
notes, and with the historical financial information of the Company.
<PAGE> 3
MOUNTAIN STATES RESOURCES CORPORATION
(A Development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
ASSETS
June 30,
1995 March 31,
(Unaudited) 1995
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 440 $ 22
----------- -----------
Total current assets 440 22
----------- -----------
TOTAL ASSETS $ 440 $ 22
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
June 30,
1995 March 31,
(Unaudited) 1995
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 34,850 $ 34,850
Related party payable (Note 5) 7,706 2,820
Accrued expenses 320,100 303,850
Interest payable (Note 3) 161,169 147,183
Current portion long-term liabilities 410,619 410,619
----------- ---------
Total Current Liabilities 934,444 899,322
----------- ---------
LONG-TERM LIABILITIES (Note 2) - -
----------- ---------
Total Liabilities 934,444 899,322
----------- ---------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock; authorized 10,000,000
shares at $2 par value; 39,473 shares
issued and outstanding 78,946 78,946
Common stock; authorized 50,000,000
common shares at $0.10 par value;
42,240,934 shares issued and
outstanding 4,224,093 4,224,093
Additional paid-in capital 619,255 619,255
Accumulated deficit (5,855,298) (5,820,594)
Cost of 10,000 shares of common stock
held by the Company (1,000) (1,000)
----------- ----------
Total Stockholders' Equity
(Deficit) (934,004) (899,300)
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 440 $ 22
=========== ==========
</TABLE>
<PAGE> 4
MOUNTAIN STATES RESOURCES CORPORATION
(A Development Stage Company)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
From Inception
On April 15,
For the Three 1969 Through
Months ended June 30, June 30,
1995 1994 1995
---- ---- ----
<S> <C> <C> <C>
REVENUES $ - $ - $ -
---------- ------------- -----------
EXPENSES - - -
---------- ------------- -----------
OPERATING LOSS - - -
---------- ------------- -----------
OTHER INCOME AND (EXPENSES)
Loss on discontinued
Operations (34,704) (38,742) (5,855,298)
---------- ------------- -----------
NET LOSS $ (34,704) $ (38,742) $(5,855,298)
========== ============= ===========
NET LOSS PER SHARE $ (0.00) $ (0.02)
========== =============
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 42,240,934 42,240,934
========== =============
</TABLE>
<PAGE>
<PAGE> 5
MOUNTAIN STATES RESOURCES CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Capital
Preferred Stock Common Stock In Excess of Accumulated Treasury
Shares Amount Shares Amount Par Value Deficit Stock
------ ------ ------ ------ ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
April 15, 1969 - $ - - $ - $ - $ - $ -
Issuance/Cancellation
of outstanding stock - - 39,001,257 3,900,126 663,652 - (1,000)
Preferred stock issued
for cash at $2.00 per
share 39,473 78,946 - - - - -
Net (loss) from
inception on April 15,
1964 through
March 31, 1992 - - - - - (5,020,488) -
------- ------- ---------- --------- ----------- ---------- --------
Balance,
March 31, 1992 39,473 78,946 39,001,257 3,900,126 663,652 (5,020,488) (1,000)
Common stock issued
for services rendered
at approximately $0.01
per share - - 500,000 50,000 (44,397) - -
Net loss for the
year ended
March 31, 1993 - - - - - (83,285) -
------- ------- ---------- --------- ----------- ---------- --------
Balance,
March 31, 1993 39,473 78,946 39,501,257 3,950,126 619,255 (5,103,773) (1,000)
Common stock issued
for debt at $0.10 per
share - - 2,214,111 221,411 - - -
Net loss for the
year ended
March 31, 1994 - - - - - (603,210) -
------- ------- ---------- --------- ----------- ---------- --------
Balance,
March 31, 1994 39,473 78,946 41,715,368 4,171,537 619,255 (5,706,983) (1,000)
------- ------- ---------- --------- ----------- ---------- --------
Common stock
issued for debt at
$0.10 per share - - 525,566 52,556 - - -
Net loss for the
year ended
March 31, 1995 - - - - - (113,611) -
------- ------- ---------- --------- ----------- ---------- --------
Balance,
March 31, 1995 39,473 78,946 42,240,934 4,224,093 619,255 (5,820,594) (1,000)
Net loss for the
three months ended
June 30, 1995 - - - - - (34,704) -
------- ------- ---------- --------- ----------- ---------- --------
Balance,
June 30, 1995 39,473 $78,946 42,240,934 $4,224,093 $ 619,255 $(5,855,298) $ (1,000)
======= ======= ========== ========== ============ =========== ========
</TABLE>
<PAGE> 6
MOUNTAIN STATES RESOURCES CORPORATION
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From Inception
on April 15,
For the Three Months 1969 Through
Ended June 30, June 30,
1995 1994 1995
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (34,704) $ (38,742) $(5,855,298)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation - - 515
Increase (decrease) in accounts payable - 810 34,850
Increase (decrease) in related party payable 4,886 - 7,707
Increase (decrease) in interest payable 13,986 7,392 161,170
Increase (decrease) in accrued expenses 16,250 10,900 320,100
------------ ----------- -----------
Net Cash Provided (Used) by Operating
Activities 418 (19,640) (5,330,956)
------------ ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of leases and equipment - - (212,573)
Disposal of leases and equipment - 212,058 212,058
------------ ----------- -----------
Net Cash Provided (Used) by
Investing Activities - 212,058 (515)
------------ ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock for cash - - 4,842,346
New borrowings - 10,000 410,619
Preferred stock for cash - - 78,946
------------ ----------- -----------
Net Cash Provided (Used) by
Financing Activities - 10,000 5,331,911
------------ ----------- -----------
NET INCREASE (DECREASE) IN CASH 418 (9,640) 440
CASH AT BEGINNING OF YEAR 22 14,849 -
------------ ----------- -----------
CASH AT END OF YEAR $ 440 $ 5,209 $ 440
============ =========== ===========
Cash paid during the year for:
Interest $ - $ - $ -
Income Taxes $ - $ - $ -
</TABLE>
<PAGE>
<PAGE> 7
MOUNTAIN STATES RESOURCES CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1995 and March 31, 1995
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Mountain States Resources
Corporation (the "Company"). The Company was incorporated in the state of
Utah on April 15, 1969. The Company was incorporated for the purpose of
mining and mineral extraction and oil and gas exploration, development and
production activities, believed to hold a potential for profit. The Company
discontinued its operations in 1993 and is considered a development stage
company per Statement of Financial Accounting Standards #7.
b. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has selected a March 31 year end.
c. Loss Per Common Share
The computation of loss per share of common stock is based on the weighted
average number of shares outstanding at the date of the financial statements.
d. Provision for Taxes
No provision for taxes has been made due to operating losses at June 30, 1995.
As of June 30, 1995, the Company has approximately $5,800,000 of net operating
loss carryover. This net operating loss will start expiring in 1997 and will
continue until 2011.
e. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
f. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.<PAGE>
<PAGE> 8
MOUNTAIN STATES RESOURCES CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1995 and March 31, 1995
(Unaudited)
NOTE 2 - LONG-TERM LIABILITIES
Long-term liabilities consisted of the following (long-term liabilities are
stated at the original note amount, the accrued interest is summarized in Note
3:
June 30, March 31,
1995 1995
--------- --------
Note payable to Margaret Bullick, unsecured, dated
October 26, 1989 at 15% for 120 days after which
interest is 17% (see Note 7) $ 1,700 $ 1,700
Note payable to Margaret Bullick, unsecured, dated
September 1, 1989 at 8% for 120 days after which
interest is 10% (see Note 7) 36,251 36,251
Note payable to Kruse, Landa and Maycock, unsecured,
dated September 1, 1989 at 8% for 120 days after
which interest is 10% 47,171 47,171
Note payable to Ray Albrechtsen, unsecured, dated
September 1, 1989 at 8% for 120 days after which
interest is 10% (see Note 7) 38,716 38,716
Note payable to Jackie Long, unsecured, dated
September 1, 1989 at 8% for 120 days after which
interest is 10% (see Note 7) 5,000 5,000
Note payable to Robert Pruitt, Jr., unsecured, dated
September 1, 1989 at 8% for 120 days after which
interest is 10% 17,188 17,188
Default judgement payable to Copely Real Estate
Advisors, dated November 4, 1991 at 12% interest 42,893 42,893
Convertible debentures 111,700 111,700
Notes payable to various parties, secured by a lien
on the Indian Queen Marble Project, dated September
29, 1993 at interest of 50% of the First Project
Proceeds as defined in these promissory notes, due
March 1995, to be converted to common shares (Note 7) 110,000 110,000
-------- --------
410,619 410,619
Less current portion (410,619) (410,619)
-------- --------
Long-Term Liabilities $ - $ -
======== ========
<PAGE> 9
MOUNTAIN STATES RESOURCES CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1995 and March 31, 1995
(Unaudited)
NOTE 3 - INTEREST PAYABLE
Interest payable is based on the balance of the note payable at the end of
each year. The respective interest payable on each note payable found in Note
2 is summarized below.
June 30, March 31,
1995 1995
--------- ---------
Note payable to Margaret Bullick of $1,700, at
17% interest $ 2,446 $ 2,277
Note payable to Margaret Bullick of $36,251, at 10%
interest 26,750 25,213
Note payable to Kruse, Landa and Maycock of $47,171,
at 10% interest 40,553 32,744
Note payable to Ray Albrechtsen of $38,716, at 10%
interest 28,266 26,632
Note payable to Jackie Long of $5,000, at 10% interest 3,683 3,471
Note payable to Robert Pruitt, Jr. of $17,188,
at 10% interest 12,658 11,931
Convertible debentures of $111,700 at 15% interest,
expired, to be converted to common stock 24,533 24,533
Default judgement payable to Copely Real Estate
Advisors of $42,893, at 12% interest 22,280 20,382
--------- --------
Total Interest Payable $ 161,169 $147,183
========= ========
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern.
It is the intent of the Company to seek a merger with an existing, operating
company.
NOTE 5 - RELATED PARTY TRANSACTIONS
The former president and other officers of the Company have paid certain
expenses of the Company, incurred during its dormant state. On September 1,
1989 and October 26, 1989 these expenses were converted to notes payable (see
Note 2). The amounts due to these related parties were subsequently settled
with these parties (See Note 7).
.
<PAGE> 10
MOUNTAIN STATES RESOURCES CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1995 and March 31, 1995
(Unaudited)
NOTE 6 - DISCONTINUED OPERATIONS
During 1993 the Company discontinued its operations and was reclassified as a
development stage company. All revenues generated by the Company have been
netted against the expenses and are grouped into the discontinued operations
line on the statement of operations. The liabilities and assets of the
Company have been adjusted to their net realizable values
NOTE 7 - SUBSEQUENT EVENTS
The Company settled on much of its outstanding debt in the month of September,
1996. The Company issued an additional 51,660,000 shares of its common stock
as settlement of these debts. On August 27, 1996 the outstanding preferred
stock of the Company, 39,473 shares, was canceled in conjunction with a
Settlement and Release. The preferred shares and a release of debt were
transferred to the Company in exchange for 2,000,000 common shares of the
Company.
<PAGE>
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
- -------
OVERVIEW
Since discontinuing operations in 1993, the Company has had no
operations. The Company was organized for the purpose of mining and mineral
extraction and oil and gas exploration, development and production activities,
however, the Company does not have significant cash or other material assets,
nor does it have an established source of revenues sufficient to cover
operating costs and to allow it to continue as a going concern. The Company
intends to take advantage of any reasonable business proposal presented which
management believes will provide the Company and its stockholders with a
viable business opportunity. The board of directors will make the final
approval in determining whether to complete any acquisition, and unless
required by applicable law, the articles of incorporation or bylaws or by
contract, stockholders' approval will not be sought.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and
other instruments will require substantial management time and attention and
will require the Company to incur costs for payment of accountants, attorneys,
and others. If a decision is made not to participate in or complete the
acquisition of a specific business opportunity, the costs incurred in a
related investigation will not be recoverable. Further, even if an agreement
is reach for the participation in a specific business opportunity by way of
investment or otherwise, the failure to consummate the particular transaction
may result in the loss to the Company of all related costs incurred.
Currently, management is not able to determine the time or resources that
will be necessary to locate and acquire or merge with a business prospect.
There is no assurance that the Company will be able to acquire an interest in
any such prospects, products or opportunities that may exist or that any
activity of the Company, regardless of the completion of any transaction, will
be profitable. If and when the Company locates a business opportunity,
management of the Company will give consideration to the dollar amount of that
entity's profitable operations and the adequacy of its working capital in
determining the terms and conditions under which the Company would consummate
such an acquisition. Potential business opportunities, no matter which form
they may take, will most likely result in substantial dilution for the
Company's shareholders due to the issuance of stock to acquire such an
opportunity.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1995, the Company had current assets consisting of cash of
$440 and current liabilities of $934,444, for a working capital deficit of
$934,004. For the three months ended June 30, 1995, the Company's loss from
discontinued operations was $34,704. From inception (April 15, 1969) through
June 30, 1995, the Company has an accumulated loss of $5,855,298. Since
discontinuing operations the Company has not generated revenue and it is
unlikely that any revenue will be generated until the Company locates a
business opportunity with which to acquire or merge. Management of the Company
will be investigating various business opportunities. These efforts may cost
the Company not only out of pocket expenses for its management but also
expenses associated with legal and accounting cost.
<PAGE> 12
The Company has had no employees since discontinuing operations and does
not intend to employ anyone in the future, unless its present business
operations were to change. The president of the Company is providing the
Company with a location for its offices on a "rent free basis." The Company
is not paying salaries or other form of compensation to any officers or
directors of the Company for their time and effort. Unless otherwise agreed to
by the Company, the Company does intend to reimburse its officers and
directors for out of pocket cost.
RESULTS OF OPERATIONS
The Company has not had any operations during the quarter ended June 30,
1995, and has not had any operations since discontinuing operations in 1993.
Since that time, the Company's only operations to date have involved the
negotiation of settlements of the Company's outstanding liabilities.
Management anticipates that the Company will incur more cost including
legal and accounting fees to locate and complete a merger or acquisition. At
the present time the Company does not have the assets to meet these financial
requirements.
If and when the Company locates a business opportunity, management of the
Company will give consideration to the dollar amount of that entity's
profitable operations and the adequacy of its working capital in determining
the terms and conditions under which the Company would consummate such an
acquisition. Potential business opportunities, no matter which form they may
take, will most likely result in substantial dilution for the Company's
shareholders as it has only limited capital and no operations.
PART II - OTHER INFORMATION
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
None.
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
---------
Exhibit 27, Financial Data Schedule
No exhibits are included as they are either not required or not applicable.
(b) Reports on Form 8-K.
--------------------
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MOUNTAIN STATES RESOURCES CORPORATION
[Registrant]
Dated: November 20, 1996 By/S/Kip Eardley, President and
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000068619
<NAME> MOUNTAIN STATES RESOURCES CORPORATION
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> JUN-30-1995
<CASH> 440
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 440
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 440
<CURRENT-LIABILITIES> 934,444
<BONDS> 0
0
78,946
<COMMON> 4,843,348
<OTHER-SE> (5,856,298)
<TOTAL-LIABILITY-AND-EQUITY> 440
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 34,704
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (34,704)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (34,704)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
