SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 10-KS B
Annual Report Pursuant to
the Securities Exchange Act of 1934
---------------
For the fiscal year ended 12-31-95
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. X
---
State issuer's revenues for its most recent fiscal year. $0
Transitional Small Business Disclosure Format:
Yes No X
----- -----
<PAGE>
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 1995: $0
Number of outstanding shares of the registrant's no par value common stock, as
of December 31, 1995: 52,476,317*.
*Includes shares authorized by the Board in settlement of accounts but not
issued at the transfer agent as of December 31, 1995.
<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 1995, 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:
1995 High Low
-------------- ---- ---
First quarter * *
Second quarter * *
Third quarter * *
Fourth quarter * *
1994 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, 1995 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
------------------------------------------------------
1995 Compared to 1994
No operations were conducted and no revenues were generated in the fiscal
year and the company received no income in 1995 as compared with $2,883 in
miscellaneous income in 1994. 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 needed cash infusions from shareholders,
or loans from others to provide capital.
1994 Compared to 1993
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
---------------------
1995 Compared to 1994
During the fiscal year ended December 31, 1995, the Company incurred $5,415
in general and administrative expenses, $1,100 in interest expense, and
$18,200 for services contributed by officers. This compares to 1994 in
which the Company incurred $28,072 in general and administrative expenses,
$14,680 in interest expenses, and $10,000 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. Total costs and expenses for 1995
were $24,715 as compared to $52,752 in 1994. The net loss for 1995 was
($24,715) and for 1994 the net loss was ($49,869). In 1995 the Company
recognized an extraordinary item in reduction of payables of $38,626 which
adjusted its net income to $13,911.
1994 Compared to 1993
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 rendered 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.
<PAGE>
Item 7. Financial Statements and Supplementary Data
-------------------------------------------
Please refer to pages F-1 through F-12.
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,
1995, are as follows:**
Name Age Position
---- --- --------
Robert Beaton 48 President, Director
James Poulos 69 Vice President, Director
Michael Schranz 53 Secretary, Treasurer, Director
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 48, received his BA in Business from the University of
Alabama in 1970. Mr. Beaton has acted as President and a director of
Leesburg since 1985. He has acted as an independent consultant for mergers
and acquisitions by public companies, for his own account since 1988.
<PAGE>
James Poulos, age 69, acted as a mining Engineer for his career with only
informal on the job training. He has acted as an officer and director of
the Company since 1985. He is otherwise retired.
Michael Schranz, age 53, 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) 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 people did not file any 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:
Number of late Number of Known failures
reports transactions not to file forms
- --------------- reported on a ----------------
timely basis
-----------------
a. 1991 to 1995(6) 1 (1995) i) Annual Form
5(x5)(1991-1995)
ii)Form 4 (1995)
b. 1991 to 1995(6) 1 (1995) i) Annual Form
5(x5)(1991-1995)
ii)Form 4 (1995)
c. 1991 to 1995(8) 2 (1995) i) Annual Form
5(x5)(1991-1995)
ii)Forms 4 (1995), 3
<PAGE>
The Company officers and Directors have represented in writing that they
filed all known reports due under Section 16(a) for 1994 and 1995.
Item 10. Executive Compensation
The Company accrued a total of $18,300 in compensation to the executive
officers as a group for services rendered to the Company in all capacities
during the 1995 fiscal year. Robert Beaton, who had accrued the
compensation, chose to contribute the entire amount as of December 31, 1995
to capital. 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>
Robert 1993 0 0 0 0 0
Beaton,
President
--------------------------------------------------------------------------------------------------------
1994 9,200 0 0 0 0
***
--------------------------------------------------------------------------------------------------------
1995 1,800 0 0 0 0
***
- --------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
James 1993 0 0 0 0 0
Poulos,
Secretary
--------------------------------------------------------------------------------------------------------
1994 3,000 0 0 0 0
***
--------------------------------------------------------------------------------------------------------
1995 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Michael 1993 0 0 0 0 0
Schranz,
Vice
President
--------------------------------------------------------------------------------------------------------
1994 0** 0 0 0 0
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
1995 100** 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 Relationship
and Related Transactions") The shares had no market value and a negative net
tangible book value at the time of the award. In 1995 2,500,000 restricted
common shares were issued for services rendered by Michael Schranz in 1995. The
shares had no market value and a negative net tangible book value at the time of
the issuance.
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>
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)
<TABLE>
<CAPTION>
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, 1995, 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>
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 2.2%*
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 54.3%*
12002 W. 14th Avenue
Golden, CO 80401
Common James Poulos 19,000,000 36.2%
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
38.4% ownership)
Common Michael Schranz, V.P. & Dir. 244,254 .4%
Polaris Resources
410 17th Street, Ste. 1940
Denver, CO 80202
Common Capital One, Inc. of which Mr. Schranz is an 2,500,000 4.8%
officer, director and shareholder
* combined 56.5%
</TABLE>
<PAGE>
Security Ownership of Certain Beneficial Owners and
Management (Continued)
----------------------------------------------------------------------
The following table sets forth information, as of December 31, 1995, 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>
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 2.2%*
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 54.3%*
12002 W. 14th Avenue
Golden, CO 80401
Common James Poulos, Secy. & Dir. 19,000,000 36.2%
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
38.4% ownership)
Common Michael Schranz, V.P. & Dir. 244,254 .4%
Polaris Resources
410 17th Street, Ste. 1940
Denver, CO 80202
Common Capital One, Inc. of which Mr. Schranz is an 2,500,000 4.8%
officer, director and shareholder
* combined 56.5%
Officers and Directors as a group 97.9%
</TABLE>
Item 12. Certain Relationships and Related Transactions
----------------------------------------------
The Company agreed to issue and authorized issuance of shares to certain
shareholders as compensation and for forgiveness of certain claims for
services rendered to Robert M. Beaton & James F. Poulos for wages accrued
from 1987 to 1994; The company agreed to issue to Robert M. Beaton: 28.5
million shares for $750 value and waiver of all other amounts; and the
company agreed to issue to James F. Poulos: 19 million shares for $500
value and waiver of all other amounts. In 1995 the Company issued 2,500,000
restricted common shares to the nominee of Michael Schranz, Capital One,
Inc. for services rendered by Mr. Schranz valued at $100. The shares had no
market value and negative net tangible book value at date of issue.
<PAGE>
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:
INDEX
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
3.2 Bylaws *Incorporated by reference
to Registration Statement
#2-87742-D
27.1 Financial Data Schedule 14-25
Form 10-K
<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: 10-31-96 /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: 10-31-96 /S/ ROBERT BEATON
-------- ----------------------------------
Director
/S/ MICHAEL SCHRANZ
-----------------------------------
Director
/S/ JAMES POULOS
------------------------------------
Director
<PAGE>
LEESBURG LAND & MINING
FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
<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 - 12
<PAGE>
HOLBEN, BOAK, COOPER & CO.
- -------------------------------------------------------------------------------
Certified Public Accountants 1720 S. Bellaire Street, Suite 500
Professional Corporation Denver, Colorado 80222
(303) 759-2727 Fax (303) 759-2728
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, 1995 and 1994, 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.
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, 1995 and 1994, 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 $4,130,781 since inception. At December 31, 1995,
liabilities exceeded assets by $26,176 and the Company had no cash. 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 uncertainty.
HOLBEN, BOAK, COOPER & CO.
August 23, 1996
Denver, Colorado
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
1995 1994
----------- -----------
ASSETS
PROPERTY AND EQUIPMENT
Vehicle $ 20,818 $ 20,818
Less: accumulated depreciation (20,818) (20,818)
----------- -----------
TOTAL PROPERTY AND EQUIPMENT - -
----------- -----------
TOTAL ASSETS $ - $ -
=========== ===========
LIABILTIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable (Note 2) $ 26,176 $ 39,517
Interest payable (Note 2) - 24,634
----------- -----------
TOTAL CURRENT LIABILITIES 26,176 64,151
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, 52,476,317
shares in 1995 and 49,976,317 shares
in 1994 4,104,605 4,080,541
Accumulated (deficit) during the
development stage (4,130,781) (4,144,692)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (26,176) (64,151)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ - $ -
=========== ===========
See notes to financial statements Page 2
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
AND FROM JUNE 21, 1983 (INCEPTION) TO DECEMBER 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
Cumulative
During
Development Stage
(Unaudited) 1995 1994
------------------ ----------- -----------
<S> <C> <C> <C>
REVENUE:
Interest income $ 92,753 $ -- $ --
Geo contract 90,000 -- --
Equipment rental income 13,500 -- --
Miscellaneous income 14,014 -- 2,883
----------- ----------- -----------
TOTAL REVENUES 210,267 -- 2,883
EXPENSES:
Exploration costs 867,048 -- --
General & administrative 1,208,890 5,415 28,072
Interest expense 425,767 1,100 14,680
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 78,200 18,200 10,000
----------- ----------- -----------
TOTAL COSTS & EXPENSES 4,837,331 24,715 52,752
----------- ----------- -----------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS (4,627,064) (24,715) (49,869)
EXTRAORDINARY ITEM,
Reduction of payables ( Note 2) 496,283 38,626 --
----------- ----------- -----------
NET INCOME (LOSS) $(4,130,781) $ 13,911 $ (49,869)
=========== =========== ===========
NET INCOME (LOSS) PER SHARE:
Income (loss) before
extraordinary item $ (.81) $ -- $ (.02)
Extraordinary item 0.09 -- --
----------- ----------- -----------
NET INCOME (LOSS) $ (.72) $ -- % (.02)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 5,683,297 49,983,166 2,606,454
=========== =========== ===========
See notes to financial statements Page 3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LEESBURG LAND AND MINING CO., INC
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(See Note 4)
(Deficit)
Accumulated
Common Stock During the
------------------------------ Development
Shares Amount Stage Total
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balances, December 31, 1993 2,476,317 $ 3,820,378 $ (4,094,823) $ (274,445)
Management services
contributed by officers/shareholders
- 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)
Management services
contributed by officers/shareholders
- 18,200 - 18,200
Operating expenses paid
by officer/shareholder
- 5,764 - 5,764
Stock issued to shareholder in
exchange for services at
$ .00004 per share
2,500,000 100 - 100
Net Income
- - 13,911 13,911
----------- ---------- ---------- ----------
Balances, December 31, 1995 52,476,317 $ 4,104,605 $ (4,130,781) $ (26,176)
============ =========== ============ ==========
See notes to financial statements Page 4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
AND FROM JUNE 21, 1983 (INCEPTION) TO DECEMBER 31, 1995 (Unaudited)
Cumulative
Since
Inception
(Unaudited) 1995 1994
------------ ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(4,130,781) 13,911 (49,869)
Items not requiring cash:
Depreciation 790,967 -- --
Contributed services 78,200 18,200 10,000
(Gain) loss on disposal of mining claims
and equipment 1,040,147 -- (2,883)
Other (5,443) 5,864 --
Contingency recorded as note payable 62,386 -- --
Loss on investment in Polaris Coal Company 228,000 -- --
Additional payables transfered to equity 187,777 -- 187,777
(Increase) decrease in accounts receivable -- -- 17,300
Increase (decrease) in accounts payable 26,176 (37,975) (167,367)
----------- ----------- -----------
Cash (used) by operating activities (1,722,571) -- (5,042)
----------- ----------- -----------
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
----------- ----------- -----------
Cash provided (used) by investing activities (1,264,177) -- 2,883
----------- ----------- -----------
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) -- --
----------- ----------- -----------
Cash provided by financing activities 2,986,748 -- --
----------- ----------- -----------
Increase (decrease) in cash & cash equivalents -- -- (2,159)
Cash & cash equivalents - beginning of year -- -- 2,159
----------- ----------- -----------
Cash & cash equivalents - end of year $ -- $ -- $ --
=========== =========== ===========
See notes to financial statements Page 5
</TABLE>
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(Continued)
Non-Cash Activities
- -------------------
Capital transactions
- --------------------
During 1995, the Company issued of 2,500,000 shares of common stock for payment
of services of $100 to a shareholder (see Note 4).
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 of $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.
See Notes to financial statements Page 6
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(CONTINUED)
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 development 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 $4,130,781 since
inception. At December 31, 1995, liabilities exceeded assets by
$26,176. 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,
1995 and 1994 has been fully depreciated.
Page 7
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(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).
Use of estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could differ from
those estimates. Significant estimates have been made with regards
to estimates of contributed services.
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 legal 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.
Page 8
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(CONTINUED)
Note 2 - Accounts Payable(continued)
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.
In late 1994, the Company reopened negotiations with Halliburton, a
creditor. The Company and Halliburton agreed to a settlement of
approximately $14,000 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 1995, the
Company recognized $38,626, the amount of debt forgiven, as
extraordinary income. In January 1996, the Company settled its debt
to Halliburton by paying $14,000.
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 despite the fact that legally there may be no 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 additional paid-in capital. The 128,000
shares of common stock sold to Rio Delta currently remain issued
and outstanding.
It is not impossible that this 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 9
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(CONTINUED)
Note 4 - Stockholders' Equity
The Company amended its Articles of Incorporation to 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 December 31, 1995, 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, 1993 are summarized in the schedule below. The
transactions from inception through December 31, 1995 have been
audited by other auditors. The transactions from January 1, 1986 to
December 31, 1992 have not been audited.
[GRAPHIC OMITTED]
Page 10
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(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
$18,200 and $10,000 during 1995 and 1994, respectively. During
1995, the Board of Directors approved issuing 2,500,000 shares of
common for $100 of services to One Capital. 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.
During 1995, the Company's President and Shareholder paid operating
expenses and creditors $5,764 and contributed those amounts to the
Company. During 1996, the President has also paid expenses and
creditors of the Company.
Note 5 - Income Taxes
At December 31, 1995, the Company has a net operating loss (NOL)
carry-forward for tax purposes of approximately $3,620,000
(expiring in the years 1998 to 2010). In addition, the Company has
a tax credit carry-forward of approximately $20,000 (expiring in
the years 1999 to 2000).
Page 11
<PAGE>
LEESBURG LAND AND MINING CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(CONTINUED)
Note 5 - Income Taxes (continued)
Deferred tax assets (liabilities) at December 31, 1995 and 1994 are
as follows:
1995 1994
Deferred tax assets due to:
Payables $ 10,182 $ 9,922
Receivables - -
Net operating loss carry-forward 1,407,844 1,405,925
---------- ----------
1,418,026 1,415,847
Valuation allowance for deferred
tax assets (1,418,026) (1,415,847)
---------- ----------
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.
There were no income tax expenses or benefits for the years ended
December 31, 1995 and 1994.
Note 6 - Related Party Transactions
The Company utilizes office space provided free by the President
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. In addition,
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).
Page 12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> OTHER 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> DEC-31-1995 DEC-31-1995
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 20,818
<DEPRECIATION> 0 (20,818)
<TOTAL-ASSETS> 0 0
<CURRENT-LIABILITIES> 0 26,176
<BONDS> 0 0
0 0
0 0
<COMMON> 0 4,104,605
<OTHER-SE> 0 (4,130,781)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 210,267 0
<CGS> 0 0
<TOTAL-COSTS> 4,837,331 24,715
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 425,767 1,100
<INCOME-PRETAX> (4,627,064) (24,715)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 438,626<F2> 38,626<F3>
<CHANGES> 0 0
<NET-INCOME> (4,130,781) 13,911
<EPS-PRIMARY> (.73) 0
<EPS-DILUTED> (.73) 0
<FN>
<F1>Retained Earnings Deficit.
<F2>Reduction of Payables.
<F3>Reduction of Payables.
</FN>
</TABLE>
