SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 10-KSB
Annual Report Pursuant to
the Securities Exchange Act of 1934
-------------------
For the fiscal year ended 12-31-94
Commission file number 012139
LEESBURG LAND & MINING, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Colorado 82-0379959
------------------------ ------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
c/o 10200 W. 44th Ave., #400, Wheat Ridge, CO 80033
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: None
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: None
----
Name of each exchange on which registered: N/A
----
Securities registered pursuant to Section 12(g) of the Act:
Title of each class: Common No Par Value
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 the filing
requirements for at least the past 90 days.
Yes No X
----- -----
Check if disclosure of delinquent filers pursuant 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.
-----
State issuer's revenues for its most recent fiscal year. $0
Transitional Small Business Disclosure Format:
______ Yes ___X____ No
<PAGE>
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 1994: $0
Number of outstanding shares of the registrant's no par value common stock, as
of December 31, 1994: 49,976,317*.
*Includes shares authorized by the Board in settlement of accounts but not
issued.
<PAGE>
PART 1
Item 1. Business
Leesburg Land & Mining, Inc. (the Company), was organized under the laws of
the State of Colorado on June 21, 1983. The Company is in the development
stage as defined in Financial Standards Board Statement No. 7.
In 1983, the Company sold 30,000,000 shares of no par value common stock in
an S-18 public offering. The offering price for each share was $.10. The
Company received $2,550,000, net of offering costs, from the sale of common
stock in the public offering. In 1985 the shareholders authorized and the
board implemented a one for forty share reverse split of the common shares.
From June 21, 1983 (Inception) to December 31, 1984, the Company was
engaged in the exploitation of a gold placer claim located near Salmon,
Idaho. As of December 31, 1984, the Company's only mining claim was
abandoned. Pursuant to a change in control of the company in April 1985,
the Company purchased an interest in a coal company. The Company sold its
interest in the coal company in November 1985. In December 1985, the
Company entered into a contract with a non-affiliated partnership to drill
and complete a geothermal well, construct a power plant and assist in
obtaining needed financing on a fixed-price basis. The geothermal well was
plugged and abandoned in 1986 when the underground resource was deemed
inadequate. The Partnership failed to make payments to the Company under
the contract. The Company has never derived significant revenues from any
of its attempted operations.
In 1987, the Company filed for a Chapter 11 bankruptcy, but voluntarily
withdrew the filing in 1988. Since 1988, the Company has been selling its
claims, property and equipment. In addition, the Company has been
eliminating its debt and seeking a private company with which to merge. No
such company has been identified or found.
No significant business activity was conducted by the Company during the
fiscal year. As a result, no income was realized by the Company in its last
fiscal year.
The Company was inactive and presently does not participate in any industry
segment. The Company had no material revenues, or operating profits or
identifiable assets attributable to its industry segment.
Item 2. Property
The Company does not have any formal offices at year end. Records are
maintained and mail received at 10200 W. 44th Ave., #400, Wheat Ridge, CO
80033. The company owns no property, but has three (3) pieces of surplus
and mining equipment of a value of less than $1,000.
<PAGE>
Item 3. Legal Proceedings
The Company is a party to no pending legal proceedings, nor is its property
subject to such proceedings, at year end 1994, except a judgment by
Halliburton for $26,000 which was settled in January of 1996 for $14,000.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted during the fiscal year covered by this report to
a vote of security holders of the Company, through the solicitation of
proxies or otherwise.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
As of the date of this report, management knows of no trading or quotation
of the Company's common stock. The range of high and low bid quotations for
each fiscal quarter since the last report, as reported by the National
Quotation Bureau Incorporated, was as follows:
1994 High Low
------------- ---- ---
First quarter * *
Second quarter * *
Third quarter * *
Fourth quarter * *
1993 High Low
-------------- ---- ---
First quarter * *
Second quarter * *
Third quarter * *
Fourth quarter * *
- -------------
* No quotations reported
The above quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commission and may not necessarily represent actual
transactions.
As of December 31, 1994 there were 1,059 record holders of the Company's
common Stock.
<PAGE>
The Company has not declared or paid any cash dividends on its common stock
and does not anticipate paying dividends for the foreseeable future.
Item 6. Management's Discussion and Analysis of
Financial Condition and Results of Operations
----------------------------------------------
Financial Condition and Changes in Financial Condition
------------------------------------------------------
No operations were conducted and no revenues were generated in the fiscal
year although the company received $2,883 in miscellaneous income in 1994
as compared with $6,834 in miscellaneous income in 1993. The Company at
year end had no capital, no cash, and a few pieces of miscellaneous mining
equipment. The Company at year end was totally illiquid and would have
needed cash infusions from shareholders to provide capital, or loans from
any sources.
Results of Operations
---------------------
During the fiscal year ended December 31, 1994, the Company incurred
$28,072 general and administrative expenses, $14,680 in interest expense,
and $10,000 for services contributed by officers. In 1993 the Company
incurred $13,685 in General and Administrative expenses, $59,283 in
interest expense, and $30,000 for services contributed by officers. At
present, the Company has no business income or operations. Accordingly, the
reported financial information herein may not be indicative of future
operating results.
Item 7. Financial Statements and Supplementary Data
--------------------------------------------
Please refer to pages F-1 through F-13.
Item 8. Changes in and Disagreements on Accounting and Financial Disclosure
-------------------------------------------------------------------
In connection with audits of two most recent fiscal years and any interim
period preceding resignation, no disagreements exist with any former
accountant on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope of procedure, which disagreements
if not resolved to the satisfaction of the former accountant would have
caused him to make reference in connection with his report to the subject
matter of the disagreement(s).
The principal accountant's report on the financial statements for any of
the past two years contained no adverse opinion or a disclaimer of opinion
nor was qualified as to uncertainty, audit scope, or accounting principles
except for the "going concern" qualification.
PART III
Item 9. Directors and Executive Officers of the
Registrant and Compliance with Section 16(a)
--------------------------------------------
The directors and executive officers of the Company as of December 31,
1994, are as follows:**
Name Age Position
---- --- --------
Robert Beaton 47 President, Director
James Poulos 68 Vice President, Director
Michael Schranz 52 Secretary, Treasurer, Director
<PAGE>
The term of office of each director and executive officer ends at, or
immediately after, the next annual meeting of shareholders of the Company.
Except as otherwise indicated, no organization by which any director or officer
has been previously employed is an affiliate, parent or subsidiary of the
Company.
Robert Beaton, age 47, received his BA in Business from the University of
Alabama in 1970. Mr. Beaton has acted as President and a director of registrant
since 1985. In 1987 during Mr. Beatons term as President and director, the
company filed a chapter 11 Bankruptcy Petition. The Petition was voluntarily
dismissed in 1988. Mr. Beaton has acted as an independent consultant for mergers
and acquisitions by public companies, for his own account since 1988.
James Poulos, age 68, acted as a mining engineer for his career. He has
acted as an officer and director of the Company since 1988. He is otherwise
retired.
Michael Schranz, age 52, obtained his B.S. in Civil Engineering from Purdue
University in 1965 and received his MBA at the University of Denver in 1975. He
is a Certified Public Accountant in Colorado. He has been a Vice President and
Director of Registrant since 1988. Mr. Schranz has been a Vice President and
Director of One Capital Corp. from 1982-96 and Vice President and Director of
Overthrust Resources, Ltd. from 1980-96. He has been Managing Director of
Polaris Coal Co., from 1988-96.
Section 16(a) Reporting Delinquencies
- -------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than 10% shareholders are required by the Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) filings.
1. The following persons did not file reports under Section 16(a) during
the most recent fiscal year or prior years:
a. Robert Beaton President and Director
b. James Poulos Secretary and Director
c. Michael Schranz Vice President and Director
2. For each person, listed by subparagraph letter above:
<PAGE>
Number of
transactions not
Number of late reported on a Known failures
reports timely basis to file forms
- ------- ------------ -------------
a. 1991 to 1994(5) 1 (1994) i) Annual Form 5(x4)
ii)Form 4
b. 1991 to 1994(5) 1 (1994) i) Annual Form 5(x4)
ii)Form 4
c. 1991 to 1994(6) 1 (1994) i) Annual Form 5(x4)
ii)Forms 4, 3
Item 10. Executive Compensation
----------------------
The Company accrued a total of $10,000 compensation to the executive
officers as a group for services contributed to the Company in all capacities
during the 1994 fiscal year. No one executive officer received, or has accrued
for his benefit, in excess of $60,000 for the year. No cash bonuses were or are
to be paid to such persons.
The Company does not have any employee incentive stock option plans.
There are no plans pursuant to which cash or non-cash compensation was paid
or distributed during the last fiscal year, or is proposed to be paid or
distributed in the future, to the executive officers of the Company except that
certain accruals for officer's services were settled with stock issued as more
particularly set forth in "Certain Transactions". No other compensation not
described above was paid or distributed during the last fiscal year to the
executive officers of the Company. There are no compensatory plans or
arrangements, with respect to any executive office of the Company, which result
or will result from the resignation, retirement or any other termination of such
individual's employment with the Company or from a change in control of the
Company or a change in the individual's responsibilities following a change in
control.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE OF EXECUTIVES
Annual Compensation Awards
==================================================================================================================================
Name and Year Salary Bonus Other Annual Restricted Securities
Principal ($) ($) Compensation Stock Underlying
Position ($) Award(s) Options/
($) SARs (#)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1992 0 0 0 0 0
----------------------------------------------------------------------------------------------------------
Robert Beaton, 1993 0 0 0 0 0
President
----------------------------------------------------------------------------------------------------------
1994 9,200* 0 0 0 0
**
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
1992 0 0 0 0 0
----------------------------------------------------------------------------------------------------------
James Poulos, 1993 0 0 0 0 0
Secretary
----------------------------------------------------------------------------------------------------------
1994 3,000* 0 0 0 0
**
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
1992 0 0 0 0 0
----------------------------------------------------------------------------------------------------------
Michael 1993 0 0 0 0 0
Schranz,
Vice
President
----------------------------------------------------------------------------------------------------------
1994 0** 0 0 0 0
===================================================================================================================================
</TABLE>
* Designates unpaid accruals for management services.
** Restricted common stock shares totalling 47,600,000 were issued for the
unpaid accruals for services and forgiveness of debt.(See "Certain Relationships
and Related Transactions") The shares had no market value and a negative net
tangible book value at the time of the award.
Option/SAR Grants Table (None)
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR
value (None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
(Except for compensation of Officers who are also Directors which Compensation
is listed in Summary Compensation Table of Executives)
Cash Compensation Security Grants
==================================================================================================================================
Name Annual Meeting Consulting Number Number of
Retainer Fees ($) Fees/Other of Securities
Fees ($) Fees ($) Shares Underlying
(#) Options/SARs
(#)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A. Director 0 0 0 0 0
Robert Beaton
- ----------------------------------------------------------------------------------------------------------------------------------
B. Director 0 0 0 0 0
James Poulos
- ----------------------------------------------------------------------------------------------------------------------------------
C. Director 0 0 0 0 0
Michael Schranz
==================================================================================================================================
</TABLE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The following table sets forth information, as of December 31, 1994, with
respect to the beneficial ownership of the Company's no par value common stock
by each person known by the Company to be the beneficial owner of more than five
percent of the outstanding common stock.
<TABLE>
<CAPTION>
Amount and
Nature of
Stock Names and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- -------------- ------------------- --------- --------
<S> <C> <C> <C>
Common American International 1,185,700 2.3%*
Systems, Inc. (see note 1)
12002 W. 14th Avenue (see note 2)
Golden, CO 80401
(Note 1: Robert Beaton owns 44% of the
shares of American International
Systems, Inc.)
Common Robert Beaton 28,500,000 57%*
12002 W. 14th Avenue
Golden, CO 80401
Common James Poulos 19,000,000 38%
4065 Easley Rd.
Golden, CO 80403
(Note 2: James Poulos owns 15.95% of American
International Systems, Inc. which if combined
with his personal holding, would result in
40.3% ownership)
* combined 59.3%
</TABLE>
<PAGE>
Security Ownership of Certain Beneficial Owners and
Management (Continued)
The following table sets forth information, as of December 31, 1994, with
respect to the beneficial ownership of the Company's no par value common stock
by the directors and officers of the Company, both individually and as a group.
<TABLE>
<CAPTION>
Amount and
Nature of
Stock Names and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- -------------- ------------------- --------- --------
<S> <C> <C> <C>
Common Robert Beaton, Pres. & Dir.
as 44% shareholder of
American International 1,185,700 2.3%*
Systems, Inc.
12002 W. 14th Avenue
Golden, CO 80401
(Note 1: Robert Beaton owns 44% of the
shares of American International
Systems, Inc.)
Common Robert Beaton, Pres & Dir. 28,500,000 57%*
12002 W. 14th Avenue
Golden, CO 80401
Common James Poulos, Secy. & Dir. 19,000,000 38%
4065 Easley Rd.
Golden, CO 80403
(Note 2: James Poulos owns 15.95% of American
International Systems, Inc. which if combined
with his personal holding, would result in
40.3% ownership)
Common Michael Schranz, V.P. & Dir. 244,254 .5%
**
410 17th Street, Ste. 1940
Denver, CO 80202
* combined 59.3%
** through Capital One and Polaris Resources of which he is a control party.
Officers and Directors as a group 97.3%
</TABLE>
Item 12. Certain Relationships and Related Transactions
----------------------------------------------
The Company agreed to and did issue shares to certain officers, directors
and shareholders as compensation and for forgiveness of certain claims for
services rendered as follows:
a. Robert M. Beaton & James F. Poulos for wages accrued from 1987 to
1994;
<PAGE>
i. Robert M. Beaton: 28.5 million shares for $750 value and waiver
of all other amounts;
ii. James F. Poulos: 19 million shares for $500 value and waiver of
all other amounts
iii. Michael Schranz was issued 100,000 shares for services rendered
as an officer.
PART IV
Item 13. Exhibits and Reports on Form 8-K
---------------------------------
The following documents are filed as part of this report:
1. Reports on Form 8-K: None
2. Exhibits:
Form 10-K
Regulation Consecutive
S-K Number Exhibit Page Number
- ---------- ------- -----------
3.1 Articles of Incorporation * Incorporated by reference
to Registration Statement
#2-87742-D
3.3 Bylaws * Incorporated by reference
to Registration Statement
#2-87742-D
27.1 Financial Data Schedule 13-16
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LEESBURG LAND & MINING, INC.
------------------------------------
(Registrant)
Date: October 31, 1996 /S/ ROBERT BEATON
------------------------------------
President, Chief Executive Officer
Pursuant to the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
LEESBURG LAND & MINING, INC.
(Registrant)
Date: October 31, 1996
/S/ ROBERT BEATON
------------------------------------
Director
/S/ MICHAEL SCHRANZ
------------------------------------
Director
/S/ JAMES POULOS
------------------------------------
Director
<PAGE>
CONTENTS
Page
----
Independent Auditors' Report 1
Financial Statements:
Balance Sheets 2
Statements of Operations 3
Statements of Stockholders' Equity 4
Statements of Cash Flows 5 - 6
Notes to Financial Statements 7 - 13
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Leesburg Land & Mining, Inc.
Golden, Colorado
We have audited the accompanying balance sheets of Leesburg Land & Mining, Inc.
(a development stage company) as of December 31, 1994 and 1993, and the related
statements of operations, stockholders' equity 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 audits. The financial statements of Leesburg Land &
Mining, Inc. (a development stage company) for the period June 21, 1983
(Inception) to December 31, 1985 were audited by other auditors, whose report
dated April 11, 1986 on those statements included explanatory paragraphs that
questioned the Company's ability to continue as a going concern.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 Leesburg Land & Mining, Inc. (a
development stage company) as of December 31, 1994 and 1993, and the results of
its operations and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
As described in Note 1 to the financial statements, the accompanying financial
statements have been prepared assuming that the Company will continue as a going
concern. As shown in the financial statements, the Company has incurred
cumulative net losses of $4,144,692 since inception. At December 31, 1994,
liabilities exceeded assets by $64,151. These factors raise substantial doubt
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
the above uncertainties.
In addition, Notes 1, 2 and 3 to the financial statements describe management's
elimination of certain payables based on the expiration of the statute of
limitations pursuant to legal opinions from the Company's attorneys.
HOLBEN, BOAK, COOPER & CO.
March 18, 1996
Denver, Colorado
Page F-1
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1994 AND 1993
1994 1993
--------- --------
ASSETS
CURRENT ASSETS:
Cash $ - $ 2,159
Accounts Receivable - 17,300
--------- --------
TOTAL CURRENT ASSETS 19,459
PROPERTY AND EQUIPMENT
Vehicle 20,818 20,818
Less: Accumulated Depreciation (20,818) (20,818)
-------- --------
TOTAL PROPERTY AND EQUIPMENT - -
-------- --------
TOTAL ASSETS $ - $ 19,459
========= =========
LIABILTIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts Payable (Note 3) $ 39,517 $ 33,787
Accounts Payable to officers (Note 6) - 108,151
Interest Payable (Note 3) 24,634 89,580
--------- ---------
TOTAL CURRENT LIABILITIES 64,151 231,518
NOTE PAYABLE (Note 2) - 62,386
--------- ---------
TOTAL LIABILITIES 64,151 293,904
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, 1,000,000 shares of
no par value authorized, none issued
Common Stock, No Par Value;
Authorized, 100,000,000 Shares;
Issued and Outstanding, 49,976,317
Shares in 1994 and 2,476,317 shares
in 1993 4,080,541 3,820,378
(Deficit) Accumulated During the
Development Stage (4,144,692) (4,094,823)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (64,151) (274,445)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ - $ 19,459
========= =========
See notes to financial statements Page F-2
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
AND FROM JUNE 21, 1983 (INCEPTION) TO DECEMBER 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Cumulative
During
Development Stage
Unaudited) 1994 1993
------------------- -------- --------
<S> <C> <C> <C>
REVENUE:
Interest Income $ 92,753 $ - $ -
Geo Contract 90,000 - -
Equipment Rental Income 13,500
Miscellaneous Income 14,014 2,883 6,834
--------- --------- ---------
TOTAL REVENUES 210,267 2,883 6,834
EXPENSES:
Exploration Costs 867,048 - -
General & Administrative 1,203,475 28,072 13,685
Interest Expense 424,667 14,680 59,283
Depreciation Expense 790,967 - -
Abandonment of Claims and leases 626,637 - -
Loss - Sale of Mining Equipment 287,173 - -
Loss - Sale of Polaris Coal Co. 228,000 - -
Write Down of Mining Equipment 127,664 - -
Bad debts 196,985 - -
Services contributed by officers 60,000 10,000 30,000
-------- -------- --------
TOTAL COSTS & EXPENSES 4,812,616 52,752 102,968
--------- -------- --------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS (4,602,349) (49,869) (96,134)
EXTRAORDINARY ITEM, Reduction of
payables ( Note 2) 457,657 - 457,657
--------- -------- --------
NET INCOME (LOSS) $(4,144,692) $(49,869) $361,523
========= ======== ========
NET INCOME (LOSS) PER SHARE:
Income (loss) before
extraordinary item $ (2.15) $ (.02) $ (.04)
Extraordinary item .21 - .19
NET INCOME (LOSS) $ (1.94) (.02) .15
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 2,139,307 2,606,454 2,476,317
========== ========== =========
See notes to financial statements Page F-3
</TABLE>
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
(See Note 4)
<TABLE>
<CAPTION>
(Deficit)
Accumulated
Common Stock During the
-------------------------------- Development
Shares Amount Stage Total
--------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Balances, December 31, 1992 2,476,317 $ 3,790,378 $ (4,456,347) $ (665,969)
Management services
contributed by officers - 30,000 - 30,000
Net Income
- - 361,524 361,524
--------- --------- --------- --------
Balances, December 31, 1993 2,476,317 3,820,378 (4,094,823) (274,445)
Management services
contributed by officers - 10,000 - 10,000
Involuntary conversion of
shareholders' debt - 142,012 - 142,012
Debt forgiven by shareholders - 106,901 - 106,901
Stock issued shareholders
in exchange for debt at
$ .00003 per share 47,500,000 1,250 - 1,250
Net (Loss) - - (49,869) (49,869)
---------- ---------- ----------- -------
Balances, December 31, 1994 49,976,317 $ 4,080,541 $(4,144,692) $(64,151)
========== ========== ========== ========
See notes to financial statements Page F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
AND FROM JUNE 21, 1983 (INCEPTION) TO DECEMBER 31, 1994 (Unaudited)
Cumulative
Since
Inception
(Unaudited) 1994 1993
---------------- -------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (4,144,692) $ (49,869) $ 361,523
Items Not Requiring Cash:
Depreciation 790,967 - -
Contributed Services 60,000 10,000 30,000
(Gain) Loss on Disposal of Mining Claims
and Equipment 1,040,147 (2,883) (6,834)
Other (11,307) - -
Contingency Recorded as Note Payable 62,386 - -
Loss on Investment in Polaris 228,000 - -
Additional Payables Transfered to Equity 187,777 187,777 -
(Increase) Decrease in Accounts Receivable
- 17,300 (17,300)
Increase (Decrease) in Accounts Payable 64,151 (167,367) (413,283)
--------- --------- ---------
Cash provided (used) by operating activities (1,722,571) (5,042) (45,894)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Mining Claims (72,301) - -
Purchase of Vehicles (103,614) - -
Purchase of Mining Equipment (1,319,676) - -
Purchase of Other Equipment (9,996) - -
Purchase of Polaris Coal Company (6,500) - -
Proceeds - Sale of Mining Equipment 247,910 2,883 44,700
---------- --------- ---------
Cash provided (used) by investing activities (1,264,177) 2,883 44,700
---------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Note Payable Payments (110,130) - -
Proceeds from Sale of Common Stock and
Warrants, net of Registration Costs 3,111,194 - -
Purchase of Treasury Stock
(14,316) - -
---------- --------- ---------
2,986,748 - -
---------- --------- ---------
Increase (Decrease) in Cash & Cash Equivalents - (2,159) (1,194)
Cash & Cash Equivalents - Beginning of Year - 2,159 3,353
---------- --------- ---------
Cash & Cash Equivalents - End of Year $ - $ - $ 2,159
========== ========= =========
(Statement Continues)
See notes to financial statements Page F-5
</TABLE>
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
AND FROM JUNE 21, 1983 (INCEPTION) TO DECEMBER 31, 1994 (Unaudited)
(Continued)
Non-Cash Activities
- -------------------
Capital transactions
- --------------------
During 1994, officers contributed $108,151 to the Company, for amounts due them
for past services, $1,250 of which was exchanged for 47,500,000 shares of common
stock. Also during 1994, the Company unilaterally eliminated principal and
interest payable of $142,012 and transferred the amount to equity (see Note 4).
Mining claims
- -------------
In 1983, the Company acquired claims valued at approximately $2,000,000 from
certain stockholders in exchange for debt and common stock. In 1984, the claims
were returned and the debt terminated. The common stock (525,000 shares) was
retained by the stockholders.
Polaris Resources, Inc.
- -----------------------
In 1985, the Company acquired all of the outstanding common stock of Polaris
Coal Company ("Polaris") in exchange for 750,000 shares of its common stock
(valued at $293,500), assumption $1,200,000 of Polaris debt and $6,500 in cash.
Later in 1985, the Company sold the stock of Polaris back to the seller in
exchange for cancellation of the $1,200,000 debt and forgiveness of $53,000 in
interest. The Company's common stock was retained by the original seller and the
Company realized a loss of $228,000 on the sale.
Page F-6
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 and 1993
Note 1 - Operations and Summary of Significant Accounting Principles
Leesburg Land & Mining, Inc. (the "Company" or "Leesburg") was
incorporated on June 21, 1983. From June 21, 1983 (Inception) to
December 31, 1984, the Company was engaged in the exploitation of a
gold placer claim located near Salmon, Idaho. As of December 31, 1984,
the Company's only mining claim was abandoned. Pursuant to a change in
control of the Company in April 1985, the Company purchased an
interest in a coal company. The Company sold its interest in the coal
company in November 1985. In December 1985, the Company entered into a
contract with a non-affiliated partnership to complete a geothermal
well, construct a power plant and assist in obtaining needed financing
on a fixed-price basis. The geothermal well was plugged and abandoned
in 1986 when the underground resource was deemed inadequate. The
Partnership failed to make payments to the Company under the contract.
The Company has never derived significant revenues from any of its
attempted operations.
In 1987, the Company filed for a Chapter 11 bankruptcy, but
voluntarily withdrew the filing in 1988. Since 1988, the Company has
been selling its claims, property and equipment. In addition, the
Company has been eliminating its debt (Notes 2 and 3) and seeking a
private company with which to merge. No such company has been
identified or found.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. However, the Company has
incurred cumulative net losses of $4,144,692 since inception. At
December 31, 1994, liabilities exceeded assets by $64,151. In
addition, the Company has recently eliminated amounts due to creditors
based on the tolling of the statute of limitations. As described in
Notes 2 and 3, the statue of limitations does not preclude creditors
from threatening or bringing litigation, which would be costly for the
Company to defend. In view of these matters, the future of the Company
is dependent upon management's ability to find a company with which to
merge and a favorable final outcome regarding the elimination of
debts.
Property and equipment
----------------------
Property and equipment are stated at cost and depreciated on a
straight line basis over the estimated useful lives of the asset (10
years for mining equipment, 4-7 years for vehicles and 5-10 years for
furniture and fixtures). Maintenance and repairs are expensed as
incurred. When assets are sold or retired, the cost and related
accumulated depreciation is removed from the accounts and the
resulting gain or loss is included as income. As of December 31, 1993
all of the mining equipment had been sold and the costs and
accumulated depreciation had been written off against the sales price.
The remaining asset on the balance sheet at December 31, 1994 and 1993
has been fully depreciated.
Page F-7
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 and 1993
(CONTINUED)
Note 1 - Operations and Summary of Significant Accounting Principles
(Continued)
Statement of cash flows
-----------------------
For statement of cash flows purposes, the Company considers short-term
investments with original maturities of three months or less to be
cash equivalents.
Earnings per common share
-------------------------
Net income or (loss) per common share is based on the weighted average
number of shares of common stock outstanding during the periods
presented. The cumulative weighted average number of shares
outstanding do not include shares issued to a Belgian company and then
later rescinded and canceled by the Company (Note 4).
Note 2 - Accounts Payable
In 1985, the Company contracted to drill a geothermal well and
construct a power plant in central Nevada. In 1986, the Company's
consulting engineer determined that the well was unsuccessful and, as
a result of the Partnership's failure to pay the Company, the Company
did not have cash to pay its own creditors, most of whom had supplied
services and supplies connected with the well. The payables amounted
to approximately $277,000. In 1987, the Company filed to reorganize
under Chapter 11 of the Bankruptcy Code, listing approximately
$330,000 as payable to creditors. In 1988, the Company voluntarily
withdrew the bankruptcy filing, without having yet repaid the
creditors. The only creditor to reduce its receivable to a note and
judgment was Halliburton Energy Services ("Halliburton"). The Company
made several payments on this debt, but interest continued to accrue
through 1993 after which an agreement on settlement was reached.
At December 31, 1993, on the advice of Counsel, the Company eliminated
a substantial amount of accounts payable and reported $457,657 as an
extraordinary gain. The Company, based on the advice of its legal
counsel, determined that the claims of these creditors were outside
the time limitations of the statutes of the States of Colorado and
Nevada for causes of action most likely to be pled by such creditors.
The statute expired for these claims in December 1993. As a result,
management and its attorney believe that the Company would most likely
have a defense that would be reasonably based upon fact and law and
that the probability of these creditors successfully overcoming such a
defense is substantially remote. It is not impossible that a creditor
could seek a jurisdiction other that Colorado or Nevada in which to
commence collection and the Company would then be forced to defend or
compromise such claim at some expense. Legal Counsel to the Company
has opined that the chance of such successful litigation by a creditor
is substantially remote, although such an outcome cannot be absolutely
determined with certainty at this time.
Page F-8
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 and 1993
(CONTINUED)
Note 2 - Accounts Payable (continued)
In late 1994, the Company reopened negotiations with Halliburton, a
creditor. The Company and Halliburton agreed to a settlement of
approximately $15,000 in early 1995. Since that settlement was
substantially less than the amount plus interest then recorded as a
liability, the Company ceased to accrue interest. In January 1996, the
Company settled its debt to Halliburton by paying $14,000. At that
time, the Company will recognize $38,620, the amount of debt forgiven,
as extraordinary income.
Note 3 - Notes Payable
In 1986, the Company sold 128,000 shares of its common stock to Rio
Delta Land Company ("Rio Delta"). The Company planned to work in a
venture with Rio Delta to develop a mining property. However, in 1987,
after expending approximately $70,000 on the project, the Company
terminated the venture with Rio Delta and agreed to pay Rio Delta
approximately $60,000 plus interest in exchange for return of the
common stock issued to Rio Delta. The Company never received its stock
from Rio Delta but nonetheless maintained the debt on its books as a
contingency despite the fact that legally there may be a valid claim
against the Company. The Company has unsuccessfully tried to contact
Rio Delta and its controlling shareholder to resolve the matter.
Interest was accrued at 12% per annum from 1987 through December 31,
1994 and amounted to approximately approximately $80,000.
As of December 31, 1994, the Company, based on the advice of its legal
counsel, determined that any claim by Rio Delta, if valid, lies
outside the time limitations of the statutes of the limitation of
Colorado and Nevada. The Company believes that it would most likely
have a defense that would be reasonably based upon fact and law and
that the probability of this creditor successfully overcoming such a
defense is substantially remote. The statute of limitations is six
years on the debt due to Rio Delta, and that limitation expired in
December, 1994. As a result of the above determination, on December
31, 1994, the Company wrote off the principal, plus accrued interest
and estimated legal expenses, totaling $142,012, to equity. The
128,000 shares of common stock sold to Rio Delta currently remain
issued and outstanding.
It is not impossible that a creditor could seek a jurisdiction other
than Colorado or Nevada in which to commence collection and the
Company would then be forced to defend or compromise such claim at
some expense. Legal Counsel to the Company has opined that chance of
such successful litigation by this creditor is substantially remote,
although such an outcome cannot be absolutely determined with
certainty at this time.
Page F-9
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 and 1993
(CONTINUED)
Note 4 - Stockholders' Equity
The Company amended its Articles of Incorporation authorize the
issuance of 1,000,000 shares of preferred stock with no par value. The
preferred stock may be issued from time to time with such designation,
rights, preferences and limitations as the Board of Directors may
determine by resolution. As of September 30, 1994, no shares of
preferred stock have been issued.
The Company has been in the development stage since its inception in
1983 and the stockholders' equity transactions from inception through
December 31, 1992 are summarized in the schedule below. The
transactions in that schedule from January 1, 1986 to December 31,
1992 have not been audited.
<TABLE>
<CAPTION>
Common Stock
-------------------------- Cumulative
Shares Amount (Deficit)
----------- ---------- ----------
<S> <C> <C> <C>
Initial stockholder private
placements for cash 329,167 $ 492,500 $ -
Issuance of common stock
for mining claims 525,000 380,000 -
Public offering, net of offering costs 750,000 2,490,594 -
Issuance of common stock warrants - 100 -
Retirement of treasury stock (6,250) (14,316) -
Issuance of common stock for
Polaris Coal Company 750,000 293,500 -
Net (losses) Inception to
December 31, 1985 - - (2,945,073)
--------- ---------- ----------
Balances,
December 31, 1985 (Audited) 2,348,317 3,642,378 (2,945,073)
Issuance of common stock for cash 128,000 128,000 -
Services contributed by shareholders - 20,000 -
Net (losses), January 1, 1986
to December 31, 1992 - - (1,511,274)
--------- ---------- ----------
Balances,
December 31, 1992 (Unaudited) 2,476,317 $3,790,378 $(4,456,347)
========= ========== ===========
Page F-10
</TABLE>
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 and 1993
(CONTINUED)
Note 4 - Stockholders' Equity (continued)
In 1989, the Company sold 2,500,000 shares of the Company's common
stock to a Belgian company, N.V. Handels-Kreditkantoor/Comtoir de
Credit s.a. ("HKCC") in exchange for 7,500,000 fine art prints. In
addition, the Company issued 650,000 shares to Asher Investments
Limited ("Asher") as a finder's fee. As part of the sales agreement,
HKCC agreed to loan the Company $300,000. The Company valued the
combined transaction at $2,520,000. However, HKCC never delivered the
prints or made the loan. As a result, in 1990, the Company negotiated
the recission of the stock issuance. Since the transaction was never
fully executed, it has not been included in the schedule above or in
calculation of weighted average shares outstanding for determining
earnings (loss) per share. The stock transfer agent canceled the
outstanding shares in 1994.
The Company's officers contributed management services valued at
$30,000 and $10,000 during 1993 and 1994, respectively. During 1994,
The President waived $62,618 owed to him for past services rendered in
exchange for 28,500,000 shares of common stock for which $750 was
deemed consideration. During 1994, the Vice President waived $45,532
owed to him for past services rendered in exchange for 19,000,000
shares of common stock for which $500 was deemed consideration. These
transactions were authorized by the Board of Directors and the amounts
were credited to stockholders' equity.
Also during 1994, the Company unilaterally transferred the debt and
accrued interest owed to Rio Delta, a major shareholder, to equity
(see Note 3). The principal and interest totaled $142,012 and was
transferred after the time period for the statute of limitations
expired.
Note 5 - Income taxes
At December 31, 1993, the Company has approximately $3,628,865 of net
operating loss and $20,000 of investment tax credit carryforward
available to offset the future federal taxable income. If not
utilized, the carryforwards will expire beginning in 1999.
The Company adopted Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes", as of January 1, 1993. There was
no material cumulative effect of this change in accounting for income
taxes as of January 1, 1993. At December 31, 1994, the Company had net
operating loss ("NOL") carry-forwards for tax purposes of
approximately $3,647,884 (expiring in the years 1999 to 2013). In
addition, the Company had tax credit carry-forwards of approximately
$20,000 (expiring in the years 1999 to 2000).
Page F-11
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 and 1993
(CONTINUED)
Note 5 - Income taxes (continued)
Deferred tax assets (liabilities) at December 31, 1994 and 1993 are as
follows:
1994 1993
--------- ---------
Deferred tax assets due to:
Payables $ 9,922 $ 88,430
Receivables - 2,595
Net operating loss
carry-forward 1,405,925 1,398,507
--------- ---------
1,415,847 1,489,532
Valuation allowance for
deferred tax assets (1,415,847) (1,489,532)
---------- ----------
Net deferred tax asset $ - $ -
========== =========
Deferred income taxes are recorded to reflect the tax consequences on
future years of differences between the tax basis of assets and
liabilities and their financial reporting amounts at each year end.
Deferred income tax assets are recorded to reflect the tax
consequences on future years of income tax carry-forward benefits,
reduced by benefit amounts not expected to be realized by the Company.
The components of income tax expenses for the years ended December 31,
1994 and 1993 are as follows:
Current tax liability $ - $ 124,243
Benefits of net operating
loss carryforward - (124,243)
Deferred - -
--------- -----------
Net income tax expense $ - $ -
========= ==========
Page F-12
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 and 1993
(CONTINUED)
Note 5 - Income taxes (continued)
The effective income tax rate applicable to the current provision
before applying the tax carry-forward benefit was 0% and 34% for the
years ended December 31, 1994 and 1993, respectively.
Note 6 - Related party transactions
The Company utilizes office space provided free by an officer and
shareholder. The Company provides an automobile for the president's
use. In prior years, the Company paid for the vehicle's maintenance
and operating costs. The president currently pays for all of the
vehicle's maintenance and operating costs. The officers have
contributed management services to the Company without compensation
(Note 4). In 1994, the Company's officers contributed past amounts
owed to them in exchange for a substantial number of shares of the
Company's common stock (Note 4).
Note 7 - Subsequent events
In 1995 and 1996, the Company's president personally borrowed and
loaned approximately $20,000 to the Company. The Loan is due upon
demand and bears interest at 8% per annum. The Company used
approximately $5,000 of the loan to pay legal and accounting fees and
approximately $14,000 to settle the debt owed to Halliburton.
As of December 31, 1995, the Company issued 2,500,000 shares to a
shareholder and member of the board of directors in exchange for $100
of management services.
Page F-13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
10-KSB for inception to December 31, 1995 and for the years ended
December 31, 1994 and 1993.
Column 1 "OTHER" refers to cumulative during development stage.
</LEGEND>
<S> <C> <C> <C>
<PERIOD-TYPE> OTHER 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994 DEC-31-1993
<PERIOD-END> DEC-31-1994 DEC-31-1994 DEC-31-1993
<CASH> 0 0 2,159
<SECURITIES> 0 0 0
<RECEIVABLES> 0 0 17,300
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 0 0 0
<PP&E> 0 20,818 20,818
<DEPRECIATION> 0 (20,818) (20,818)
<TOTAL-ASSETS> 0 0 19,459
<CURRENT-LIABILITIES> 0 64,151 231,518
<BONDS> 0 0 62,386
0 0 0
0 0 0
<COMMON> 0 4,080,541 3,820,378
<OTHER-SE> 0 (4,144,692) (4,084,823)
<TOTAL-LIABILITY-AND-EQUITY> 0 0 19,459
<SALES> 0 0 0
<TOTAL-REVENUES> 201,267 2,883 6,834
<CGS> 0 0 0
<TOTAL-COSTS> 867,048 0 0
<OTHER-EXPENSES> 3,323,916 38,072 43,685
<LOSS-PROVISION> 196,985 0 0
<INTEREST-EXPENSE> 424,667 14,680 59,283
<INCOME-PRETAX> 0 0 0
<INCOME-TAX> 0 0 0
<INCOME-CONTINUING> 0 0 0
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 457,657 0 457,657
<CHANGES> 0 0 0
<NET-INCOME> (4,144,692) (49,869) 361,523
<EPS-PRIMARY> (1.94) (.02) .15
<EPS-DILUTED> 0 0 0
</TABLE>
