U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: September 30, 1997
Commission File Number: 33-28106
YAAK RIVER RESOURCES, INC.
(Exact name of small business issuer as specified in its
charter)
Colorado
(State or other jurisdiction of incorporation or
organization)
84-1097796
(IRS Employer Identification No.)
830 S. Kline Way
Lakewood, Colorado
(Address of principal executive offices)
80226
(Zip Code)
(303) 985-3972
(Issuer's Telephone Number)
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: Yes __X__ No ____.
The number of shares of the registrant's only class of common stock
issued and outstanding, as of September 30, 1997, was 56,666,000
shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the nine month period
ended September 30, 1997, are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
Financial Statements and notes thereto included herein.
The Company generated no revenues from its operations during
the nine month period ended September 30, 1997, and the Company is
considered a development stage company. The plan of operation of
the Company during the nine month period ending September 30, 1997,
generally involves the acquisition of additional mineral claims and
the taking to patent of a number of the claims acquired and to be
acquired by the Company in the future; however, the extended
moratorium by the Federal Government on disallowing the taking of
claims to patent has materially impacted the Company's capability to
generate timber resources. Accordingly, the Company is also
attempting to develop an attractive exploration portfolio to attract
potential joint venture partner candidates.
The Company had minimal expenses during the nine month period
ending September 30, 1997. The Company is expected to operate at a
loss for the remainder of the fiscal year until earnings, if any,
are received from the harvesting of the metal and non-metal
resources known to exist within the boundaries of the Company's
properties.
The Company expects to continue without any cash revenues for
at least the present fiscal year and will satisfy its cash
requirements by loans and advances from the Timber Partnership
and/or officers and directors of the Company, providing that the
Company does not commence mining activities. At present, the
Company's financial resources are not sufficient to commence mining
activities. In order to satisfy the Company's capital requirements
for additional drilling and to develop a mining feasibility program,
it will be necessary for the Company to obtain additional financing
in the minimum estimated amount of $750,000. Management of the
Company is continuing to seek possible interested partners to join
with the Company in developing its mining claims. The Company is
actively soliciting joint venture partners to expand its mining
activities, based upon the valuation of the Company's claims and
properties as reported in the independent engineering valuation
report. The report also advised the Company to consolidate
adjoining claims to make such joint ventures more attractive. The
Company followed the advice of the independent engineering firm and
the Company now has control of 125 continuous claims covering the
known strike length of the "Morning Glory Structure" which is in
excess of 14,000 feet. As of the date of this report, management is
unaware of any third parties who are interested in joining with the
Company in this regard. Exploration and mining activities of other
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<PAGE>
mining companies in the surrounding area of Northern Montana and
Canada in similar geological settings provides a basis for
management to believe that it will be able to interest joint
venturers in its proposed mining ventures. However, in the event
the Company is unable to either solicit joint venture partners or
otherwise obtain the capital deemed necessary in order to commence
mining operations, it is possible that management will reconsider
the Company's business plan and begin to seek out other viable
business opportunities in order to provide the Company's
shareholders with liquidity.
The Company currently has no employees and relies upon the
unpaid services of its officers for the operation of the Company.
The contracted services of individuals will continue until it is
justifiable to employ a full time employee.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - None
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
NONE.
ITEM 5. OTHER INFORMATION - NONE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K - None.
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<PAGE>
<TABLE>
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
Unaudited
Balance Sheet
<CAPTION>
Unaudited Audited
September 30, December 31
1997 1996
_________ ___________
<S> <C> <C>
ASSETS
Current Assets
Cash $ 911 $ 911
Accounts Receivable-O'Hara Resources 2,200 2,200
Investment-Mining Properties 305,410 305,410
_________ ___________
Total Current Assets 308,521 308,521
Other Assets
Organizational Costs-
Net of Amortization 0 0
_________ ___________
Total Other Assets 0 0
_________ ___________
TOTAL ASSETS $ 308,521 $ 308,521
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Current Liabilities
Accounts Payable 24,225 24,225
Advance from (YRML) Purchase,
1.5 Units 20,000 20,000
Shareholder Loans 12,100 12,100
Current Portion-Long Term Debt 7,500 7,500
_________ ___________
Total Current Liabilities 63,825 63,825
Long-Term Liabilities
Long Term Debt 115,000 115,000
_________ ___________
Total Long-Term Liabilities 115,000 115,000
_________ ___________
Total Liabilities $ 178,825 $ 178,825
Shareholder's Equity
Series A Common Stock, Par Value
$.0001 Per Share; 250,000,000 Shares
Authorized; Issued and Outstanding -
56,666,000 Shares 5,666 5,666
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<PAGE>
Series B Common Stock, Par Value
$.0001 Per Share; 250,000,000 Shares
Authorized; Issued and Outstanding -
None 0 0
Preferred Stock, Par Value $.0001 Per
Share; 50,000,000 Shares Authorized;
Issued and Outstanding - None 0 0
Capital Paid in Excess of Par Value 304,663 304,663
Deficit Accumulated During
the Development Stage (180,633) (180,633)
_________ ___________
Total Shareholders' Equity $ 129,696 $ 129,696
_________ ___________
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 308,521 $ 308,521
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
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<PAGE>
<TABLE>
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
Unaudited
Statement of Operations
<CAPTION>
For the June 10, 1988
Nine Months For the (Inception)
Ended Year Ended Thru
September 30, December 31, September 30,
1997 1996 1997
____________ ____________ _________________
<S> <C> <C> <C>
Income $ 0 $ 0 $ 0
Expenses
Amortization 0 0 1,500
Bank Charges 0 51 321
Legal and Accounting 0 6,360 40,993
Director Fees 0 0 800
Office 0 0 6,898
Stock Fees and Other Costs 0 950 9,982
Administration/Consulting 0 0 34,111
Mining Assessments and Fees 0 12,481 69,815
Bad Debt 0 0 4,000
Rent/Telephone 0 0 12,213
____________ ____________ _________________
Total Expenses 0 19,842 180,633
Net (Loss) Accumulated During
the Development Stage $ 0 (19,842) (180,633)
Weighted Average Number of
Shares Outstanding 56,666,000 56,666,000 56,666,000
Net Loss Per Share $ (*) $ (*) $ (*)
*Less than $0.01 Per Share.
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
<TABLE>
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
Unaudited
Cash Flow Statement
<CAPTION>
For the June 10, 1988
Nine Months For the (Inception)
Ended Year Ended Thru
September 30, December 31, September 30,
1997 1996 1997
____________ ____________ ______________
<S> <C> <C> <C>
Cash Flows From
Operating Activities:
Net (Loss) Accumulated
During Development Stage $ 0 $ (19,842) $ (180,633)
Amortization and Depreciation 0 0 1,500
Organization Costs 0 0 (1,500)
Decrease (Increase) in
Accounts Payable 0 6,360 24,225
Decrease (Increase) in
Accounts Receivable 0 0 (2,200)
Decrease (Increase) in
Loans to Shareholder 0 12,100 12,100
____________ ___________ _____________
Net Cash Flows Used
By Operating Activities 0 (1,382) (146,508)
Cash Flows From
Investing Activities:
Investment Purchase 0 0 (305,410)
____________ ___________ _____________
Net Cash Flows Used
By Investing Activities 0 0 (305,410)
Cash Flows From
Financing Activities:
Issuance of Common Stock 0 0 1,800
Loans from LP Investors 0 0 20,000
Proceeds From Long-Term Debt 0 0 167,500
Payment of Long-Term Debt 0 (7,500) (45,000)
Proceeds From Sale of Stock 0 7,500 308,529
____________ ____________ ______________
Net Cash Flows Provided
By Financing Activities 0 0 452,829
____________ ____________ ______________
Net Increase (Decrease) in Cash 0 (1,382) 911
____________ ___________ _____________
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<PAGE>
Cash at Beginning of Period 911 2,293 0
____________ ____________ ______________
Cash at End of Period $ 911 $ 911 $ 911
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
<TABLE>
YAAK RIVER RESOURCES, INC.
(A Development Stage)
Unaudited
Statement of Shareholders' Equity
<CAPTION>
Deficit
Accumulated
Number of Additional During the
Shares Common Paid In Development
Common Stock Stock Capital Stage Total
____________ ______ __________ ___________ ________
<S> <C> <C> <C> <C> <C>
Balance at
June 10, 1988 0 $ 0 $ 0 $ 0 $ 0
Stock issued for services
January 6, 1989 10,000,000 1,000 500 0 1,500
Stock issued for cash
January 6, 1989 5,000,000 500 0 0 500
Public offering
November 27, 1989 2,666,000 266 12,353 0 12,619
Net Loss for year ended
December 31, 1989 (3,765) (3,765)
Net Loss for year ended
December 31, 1990 (10,129) (10,129)
Net Loss for year ended
December 31, 1991 (300) (300)
Stock issued for assets
(YRML) January 10,
1992 30,000,000 3,000 134,910 0 137,910
Net Loss for year ended
December 31, 1992 (47,589) (47,589)
Stock issued for cash
June 30, 1993 6,000,000 600 149,400 0 150,000
Stock issued for services
June 30, 1993 3,000,000 300 0 0 300
Net Loss for year ended
December 31, 1993 (54,951) (54,951)
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<PAGE>
Net Loss for year ended
December 31, 1994 (26,293) (26,293)
Net Loss for year ended
December 31, 1995 (17,764) (17,764)
Net Loss for year ended
December 31, 1996 7,500 (19,842) (12,342)
Net Loss for nine months
ended September 30,
1997 0 0
____________ ______ __________ ___________ ________
Balance at
September 30, 1997 56,666,000 $5,666 $ 304,663 $ (180,633) $129,696
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 1997
(Unaudited)
Note 1 - Organization and Summary of Significant Accounting Policies:
Organization:
On June 10, 1988, Yaak River Resources, Inc. (the Company) was incorporated
under the laws of Colorado under the name of Andraplex Corporation. The name
was changed at the Annual Shareholder's Meeting on January 10, 1992. The
Company's primary purpose is to engage in selected acquisitions and development
of mineral and mining properties.
Initial Public Offering:
In the Company's initial public offering, which was closed on November 27, 1989,
the Company sold 2,580,000 units (the Units). 86,000 additional shares were
issued to the underwriters. Each Unit consisted of one (1) share of Series A
Common Stock, one (1) A Warrant exercisable at $.05, one (1) B Warrant
exercisable at $.10.
Costs, consisting of $9,444 and 86,000 shares of Series A Common Stock, incurred
to complete the registration were offset against the gross proceeds.
The Company's fiscal year end is December 31.
Note 2 - Purchase of Mineral Properties:
On January 10, 1992, at the Annual Meeting of Shareholders, the shareholders
voted unanimously to purchase certain mineral and mining properties (the
Properties) located in the State of Montana, including leases, drawings,
engineering studies and other tangible and intangible assets associated with the
Properties. The seller of the Properties was Yaak River Mines, Ltd.
They received 30,000,000 shares of Series A Common Stock. The issuance of the
30,000,000 shares of Series A Common Stock was exempt from registration under
the exemption provided in Section 4(2) of the Securities Act of 1933, as
amended.
The Company is the beneficiary of 16,000,000 of the above shares which are being
held in the Con Tolman Memorial Trust C. 8,000,000 additional shares of the
Company were placed in the trust as part of the original purchase of the
Company. These 24,000,000 shares are expected to be used to acquire additional
mining properties.
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<PAGE>
Note 3 - Yaak River Resources Timber Division, Limited Partnership:
On August 14, 1992, the Company formed a limited partnership, Yaak River
Resources Timber Division L.P. (the Partnership), a Colorado limited
partnership, with subscriptions for 40 Units at $5,000.00 per Unit for an
aggregate price of $200,000.00. Each Unit contains 1/40th interest in the
Partnership and 150,000 shares of Series A Common Stock of the Company. The
Company is the general partner of the Partnership. As a part of the formation
of the Partnership, the Company agreed to reserve 6,000,000 shares of its Series
A Common Stock for the Partnership. Said 6,000,000 shares of Series A Common
Stock represents the shares offered in the Units issued by the Partnership. The
Partnership was formed for the purpose of developing certain available natural
resources on properties under the management of the Company.
On June 30, 1993, the Company sold six million (6,000,000) shares of its $.0001
par value Series A Common Stock for the issuance to the purchasers of the
Limited Partnership interests in the Yaak River Resources, Timber Division L.P.,
for $150,000.
Note 4 - Income Taxes:
The Company has made no provision for income taxes because there have been no
operations to date causing income for financial statement or tax purposes.
Note 5 - Net (Loss) Per Common Share
The net (loss) per common share of the Series A Common Stock is computed based
on the weighted average number of shares outstanding.
Note 6 - Long-Term Debt
Note Payable to the Roy Grush Estate in annual installments of $7,500, 0%, due
September 2014, secured by the Properties (Note 2). The Company has agreed to
pay the minimum annual assessment costs of maintenance and improvements on
claims in lieu of interest.
Following is a summary of long-term debt at September 30, 1997:
1997 $ 7,500
1998 7,500
1999 7,500
2000 7,500
2001 7,500
________
37,500
Remaining 77,500
________
$115,000
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
YAAK RIVER RESOURCES, INC.
(Registrant)
Dated: November 18, 1997
By: s/Wm. Ernest Simmons
---------------------------
Wm. Ernest Simmons
President
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<PAGE>
YAAK RIVER RESOURCES, INC.
Exhibit Index to Quarterly Report on Form 10-QSB
For the Quarter Ended September 30, 1997
EXHIBITS Page No.
EX-27 Financial Data Schedule . . . . . . . . . . . . . 15
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 1997, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 911
<SECURITIES> 0
<RECEIVABLES> 2,200
<ALLOWANCES> 0
<INVENTORY> 305,410
<CURRENT-ASSETS> 308,521
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 308,521
<CURRENT-LIABILITIES> 63,825
<BONDS> 0
0
0
<COMMON> 5,666
<OTHER-SE> 124,030
<TOTAL-LIABILITY-AND-EQUITY> 308,521
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
