UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-KSB
(x ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended June 30, 1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File number 33-30743
PIERCE INTERNATIONAL DISCOVERY, INC.
(Exact name of registrant as specified in charter)
Colorado 84-1121360
State or other jurisdiction of incorporation (I.R.S. Employer I.D. No.)
or organization
6746 South Revere Parkway , Ste 130, Englewood, Colorado 80112
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code
1-303-792-0719
Securities registered pursuant to section 12 (b) of the Act:
Title of each class Name of each exchange on
which registered
None None
Securities registered pursuant to section 12 (g ) of the Act:
None
(Title of Class)
Check whether the Issuer (1 ) filed all reports required to be filed by
section 13 or 15 (d) of the Exchange Act 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.
(1) Yes [ ] No [x ] (2) Yes [x ] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the 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-
State the aggregate market value of the voting stock held by nonaffiliates of
the registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within the past 60 days.
At June 30, 1998, the aggregate market value of the voting stock held by
nonaffiliates is undeterminable and is considered to be 0.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Not applicable
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of October 27, 1998, the registrant had 750,000,000 shares of common
stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the
part of the form 10- KSB (e.g., part I, part II, etc.) into which the document
is incorporated: (1) Any annual report to security holders; (2) any proxy or
other information statement; and (3) Any prospectus filed pursuant to rule 424
(b) or (c) under the Securities Act of 1933: NONE
TABLE OF CONTENTS
PART I
Page
ITEM 1. DESCRIPTION OF BUSINESS 4
ITEM 2. DESCRIPTION OF PROPERTIES 4
ITEM 3. LEGAL PROCEEDINGS 4
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS 4
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 5
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 5
ITEM 7. FINANCIAL STATEMENTS 6
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 6
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT 6
ITEM 10. EXECUTIVE COMPENSATION 8
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 9
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 10
PART IV
ITEM 13. EXHIBITS 10
ITEM 1. DESCRIPTION OF BUSINESS
HISTORY AND ORGANIZATION
The Company was incorporated under the laws of the state of Colorado on April
19, 1989 with authorized common stock of 750,000,000 shares with no par value
and preferred stock of 10,000,000 shares with no par value.
The company has been engaged in the business of seeking mineral leases for
potential development. During 1997 the company transferred its remaining
assets in exchange for settlement of its liabilities and since that date has
remained inactive. (See Item 3. Legal Proceedings)
ITEM 2. DESCRIPTION OF PROPERTIES
The Company does not maintain any office nor does it own any property
ITEM 3. LEGAL PROCEEDINGS
The Company has been engaged in the business of seeking mineral leases for
potential development and had acquired interests in several mineral properties
including leases in Colorado and mining properties in Mexico.
The leases in Colorado were acquired from related parties by the issuance of
3,000,000 common shares and a note payable for $3,600,000. In March 1997 the
leases were returned to the former owner's, due to a default by the Company,
with mutual releases of all claims, which resulted in a loss to the Company
of $434,918.
After the acquisition of the Mexico properties the Company entered into a
contract with other parties to provide funds to develop the properties. In
1996 the Company started a legal action resulting from a default in the terms
of the development contract. In July 1997 the legal action was settled, and
by mutual agreement the Mexico properties were transferred and all claims were
released which resulted in a gain to the Company of $254,171.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during the
fiscal year ended June 30, 1998.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
During the past three years there has been no established trading market for
the company's common capital stock. Since its inception, the Company has not
paid any dividends on its common stock, and the Company does not anticipate
that it will pay dividends in the foreseeable future. At June 30, 1998, the
Company had 72 shareholders.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
The Company was incorporated under the laws of the state of Colorado on April
19, 1989 with authorized common stock of 750,000,000 shares with no par value
and preferred stock of 10,000,000 shares with no par value.
The Compnay has been engaged in the business of seeking mineral leases for
potenetial development and had acquired interests in several mineral properties
including leases in Colorado and mining properties in Mexico.
The leases in Colorado were acquired from related parties by the issuance of
3,000,000 common shares and a note payable for $3,600,000. In March 1997 the
leases were returned to the parties, due to a default by the Company, with
mutual releases of all claims, which resulted in a loss to the Company of
$434,917.
After the acquisition of the Mexico properties the Company entered into a
contract with other parties to provide funds to develop the properties. In
1996 the Company started a legal action resulting from a default in the terms
of the development contract. In July 1997 the legal action was settled, and
by mutual agreement the Mexico properties were transferred and all claims were
released which resulted in a gain to the Company of $254,171.
The company has become inactive since the transfer of its remaining assets.
The Company intends to take advantage of any reasonable business proposal
presented which management believes will provide the Company and its
stockholders with a viable business opportunity. The board of directors will
make the final approval in determining whether to complete any acquisition,
and unless required by applicable law, the articles of incorporation or bylaws
or by contract, stockholders' approval will not be sought.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and
other instruments will require substantial management time and attention and
will require the Company to incur substantial costs for payment of
accountants, attorneys, and others. If a decision is made not to participate
in or complete the acquisition of a specific business opportunity, the costs
incurred in a related investigation will not be recoverable. Further, even if
an agreement is reached for the participation in a specific business
opportunity by way of investment or otherwise, the failure to consummate the
particular transaction may result in the loss to the Company of all related
costs incurred. In the past the board of directors has approved a resolution
authorizing the Company to issue shares of its common stock as consideration
for monies advanced or services rendered on behalf of the Company.
Currently, management is not able to determine the time or resources that will
be necessary to complete the participation in or acquisition of any future
business prospect.
Liquidity and Capital Resources
As of June 30, 1998, the Company had no assets to pay its liabilities.
Results of Operations
Since the Company ceased operations in 1997, its only activity to date
involves the investigation of potential business opportunities.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company are included following the signature
page to this form 10-KSB.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
For the fiscal years ending after June 30, 1994 the registrant changed
accountants. The former accountant was Doran W. Peck, 288 Clayton St, Ste 300,
Denver, Colorado, 80206 and the present accountants are Andersen Andersen and
Strong, 941 E 3300 S #202, Salt Lake City, Utah, 84106. The Company has had no
disagreements with its former or present certified public accountants with
respect to accounting practices or procedures in the financial statement
disclosures.
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The following table sets forth as of June 30, 1998, the name, age, and
position of each executive officer and director and the term of office of each
director of the Company.
Name Age Position Director and/or Officer Since
Pierce D. Parker 71 President and Director 1997
Mark S. Cooper 38 Vice President and Director 1997
Nancy A. Cooper 39 Secretary and Director 1997
Each director of the Company serves for a term of one year and until his
successor is elected at the Company's annual shareholders' meeting and is
qualified, subject to removal by the Company's shareholders. Each officer
serves, at the pleasure of the board of directors, for a term of one year and
until his successor is elected at the annual meeting of the board of directors
and is qualified.
Set forth below is certain biographical information regarding each of the
Company's executive officers and directors.
Pierce D. Parker Mr. Parker received a Phd degree in geology from the
University of Wisconsin in 1956 and has since been
working as a geologist in the natural resources and
industrial real estate areas
Mark S. Cooper Mr Cooper received a Bachelors degree in communications
from the university of Miami in 1983 and has been
working in the real estate field.
Nancy A. Cooper Ms. Cooper received a bachelors degree in human
resources from the Colorado State university
Except as indicated below, to the knowledge of management, during the past
five years, no present or former director, executive officer or person
nominated to become a director or an executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer appointed
by a court for the business or property of such person, or any partnership
in which he was a general partner at or within two years before the time of
such filing;
(2) was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from or otherwise limiting, the
following activities:
(I) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, associated person of any of the
foregoing, or as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliate person, director or
employee of any investment company, or engaging in or continuing
any conduct or practice in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase or sale
of any security or commodity or in connection with any violation
of federal or state securities laws or federal commodities laws;
(4) was the subject of any order, judgment, or decree, not subsequently
reversed, suspended, or vacated, of any federal or state authority barring,
suspending or otherwise limiting for more than 60 days the right of such
person to engage in any activity described above under this Item, or to be
associated with persons engaged in any such activity;
(5) was found by a court of competent jurisdiction in a civil action or by
the Securities and Exchange Commission to have violated any federal or state
securities law, and the judgment in such civil action or finding by the
Securities and Exchange Commission has not been subsequently reversed,
suspended, or vacated.
(6) was found by a court of competent jurisdiction in a civil action or by
the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgement in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Since the Company ceased operations in 1990, the Company knows of no person,
who at any time during the subsequent fiscal years, was a director, officer,
beneficial owner of more than ten percent of any class of equity securities
of the registrant registered pursuant to Section 12 ("Reporting Person"), that
failed to file on a timely basis any reports required to be furnished pursuant
to Section 16 (a). Based upon a review of Forms 3 and 4 furnished to the
registrant under Rule 16a-3(d) during its most recent fiscal year, other than
disclosed below, the registrant knows of no Reporting Person that failed to
file the required reports during the most recent fiscal year or prior years.
The following table sets forth as of June 30, 1998, the name and position of
each Reporting Person that failed to file on a timely basis any reports
required pursuant to Section 16(a) during the most recent fiscal year or
prior years.
Name Position Report to be Filed
Pierce D. Parker President and Director Form 3
Mark S. Cooper Vice President and Director Form 3
Nancy A. Cooper Secretary and Director Form 3
ITEM 10. EXECUTIVE COMPENSATION
CASH COMPENSATION
There was no cash compensation paid to any director or executive officer of
the Company during the fiscal years ended June 30, 1998, 1997, and 1996.
BONUSES AND DEFERRED COMPENSATION
None.
COMPENSATION PURSUANT TO PLANS
None.
PENSION TABLE
None.
OTHER COMPENSATION
None
COMPENSATION OF DIRECTORS
None.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENT
There are no compensatory plans or arrangements, including payments to be
received from the Company, with respect to any person named in Cash
Compensation set out above which would in any way result in payments to any
such person because of his resignation, retirement, or other termination of
such person's employment with the Company or its subsidiaries, or any change
in control of the Company, or a change in the person's responsibilities
following a changing in control of the Company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 30, 1998, the name and address and
the number of shares of the Company's Common Stock, with no par value, held of
record or beneficially by each person who held of record, or was known by the
Company to own beneficially, more than 5% of the issued and outstanding
shares of the Company's Common Stock, and the name and shareholdings of each
director and of all officers and directors as a group.
NATURE OF NUMBER OF
NAME OF PERSON OR GROUP OWNERSHIP (1) SHARES OWNED PERCENT
Officers and Directors and
Principal Shareholders:
Pierce D. Parker Direct 21,838,820 27.5
Mark S. Cooper Direct 4,877,544 6.1
Nancy A. Cooper Direct 707,000 8.9
All Officers and Directors
as a Group (3 persons) Direct 27,423,364 42.5
(1) All shares owned directly are owned beneficially and of
record, and such shareholder has sole voting, investment,
and dispositive power, unless otherwise noted.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Except as indicated below, and for the periods indicated, there were no
material transactions, or series of similar transactions, since the beginning
of the Company's last fiscal year, or any currently proposed transactions, or
series of similar transactions, to which the Company was or is to be party, in
which the amount involved exceeds $60,000, and in which any director or
executive officer, or any security holder who is known by the Company to own
of record or beneficially more than 5% of any class of the Company's common
stock, or any member of the immediate family of any of the foregoing persons,
has an interest.
INDEBTEDNESS OF MANAGEMENT
There were not material transactions, or series of similar transactions, since
the beginning of the Company's last fiscal year, or any currently proposed
transactions, or series of similar transactions, to which the Company was or
is to be a party, in which the amount involved exceeds $60,000 and in which
any director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than 5% of any class of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, has an interest.
TRANSACTIONS WITH PROMOTERS
The Company was organized more than five years ago therefore transactions
between the Company and its promoters or founders are not deemed to be material.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS. The following financial statements are included
in this report:
Title of Document Page
Report of Andersen, Andersen & Strong,
Certified Public Accountants 12
Balance Sheets as of June 30, 1998
and June 30, 1997 13
Statements of Operations for years
ended June 30, 1998, 1997 and 1996 14
and the period from April 19, 1989
to June 30, 1998
Statements of Changes in Stockholders'
Equity for the period from April 19,
1989 to June 30, 1998 15
Statements of Cash Flows for the
years ended June 30, 1998, 1997 and 1996 17
and the period from April 19, 1989 to
June 30, 1998
Notes to Financial Statements 18
(a)(2) FINANCIAL STATEMENT SCHEDULES. The following financial statement
schedules are included as part of this report:
None.
(a)(3) EXHIBITS. The following exhibits are included as part of this report
by reference:
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
PIERCE INTERNATIONAL DISCOVERY, INC.
Date: By
Pierce D. Parker, President and Director
Date: By
Nancy A. Cooper, Secretary and Director
Board of Directors
Pierce International Discovery, Inc.
Salt Lake City, Utah
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheets of Pierce International
Discovery ( a development stage company), Inc. at June 30, 1998, and June 30,
1997 and the statements of operations, stockholders' equity, and cash flows
for the years ended June 30, 1998 , 1997, and 1996 and the period from April
19, 1989 (date of inception) to June 30, 1998. 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 audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and 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 Pierce International
Discovery, Inc. at June 30, 1998, and June 30, 1997, and the results of
operations, and cash flows for the years ended June 30, 1998, 1997 and 1996,
and the period from April 19, 1989 (date of inception) to June 30, 1998, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The company has suffered recurring
losses from operations since its inception and does not have sufficient
assets to pay its liabilities, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note 4. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Salt Lake City, Utah
October 26, 1998
PIERCE INTERNATIONAL DISCOVERY, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
JUNE 30, 1998, AND JUNE 30, 1997
JUNE 30, JUNE 30,
1998 1997
ASSETS
CURRENT ASSETS
Cash $ - $ 65
Total Current Assets - 65
OTHER ASSETS
Undeveloped mineral properties
4,000 382,829
$ 4,000 $382,894
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts payable $ 9,000 $ 609,846
Accounts payable - related parties 216,680 216,680
Total Current Liabilities 225,680 826,526
STOCKHOLDERS' EQUITY
Preferred stock
10,000,000 shares authorized,
no par value, non outstanding - -
Common stock
750,000,000 shares authorized, no par value,
79,393,100 shares issued and outstanding
1,039,962 1,039,962
Accumulated deficit during development stage
(1,261,642) (1,483,594)
Total Stockholder's Deficiency (221,680) (443,632)
$ 4,000 $ 382,894
The accompanying notes are an integral part of these financial statements.
PIERCE INTERNATIONAL DISCOVERY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
AND THE PERIOD FROM APRIL 19, 1989 (DATE OF INCEPTION) TO JUNE 30, 1998
APRIL 19, 1989
(DATE OF INCEPTION)
1998 1997 1996 TO JUNE 30, 1998
REVENUES $ - $ - $ - 51,016
EXPENSES 32,219 77,522 24,631 1,134,836
NET LOSS - before other income$ (32,219)$ (77,522) $ (24,631) (1,083,820)
OTHER INCOME
Net gain (loss) from transfer of
assets for payment of liabilites 254,171 (434,918) - (177,822)
NET INCOME (LOSS) 221,952 (512,440) (24,631) (1,261,642)
GAIN ( LOSS) PER COMMON SHARE
Basic
Loss before other income $ - $ - $ -
Other income (loss) .003 (.006) -
Net income (loss)$ .003 $(.006) $ -
AVERAGE OUTSTANDING SHARES
Basic 79,393,100 79,393,1007 9,393,100
The accompanying notes are an integral part of these financial statements.
PIERCE INTERNATIONAL DISCOVERY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM APRIL 19, 1989 (DATE OF INCEPTION) TO JUNE 30, 1998
COMMON STOCK ACCUMULATED
SHARES AMOUNT DEFICIT
BALANCE APRIL 19, 1989 (date of inception) - - -
Issuance of common shares for cash at $.002 -
related parties - April through June 1989 28,250,000 43,375 -
Net operating loss from April 19, to June 30, 1989 - - (7,083)
Net operating loss for the year ended June 30, 1990 - - (214,251)
Issuance of common shares for cash ( net of
offering costs) at $.05 - 1991 4,117,120 168,938 -
Issuance of common shares for cash at $.03 -
related parties - 1991 3,963,333 118,900 -
Net operating loss for the year ended June 30, 1991 - - (291,658)
Issuance of common shares for services at
$.001 - 1992 1,830,000 2,300 -
Issuance of common shares for payment of
debt at $.012 - 1992 17,398,836 216,958 -
Issuance of common shares for cash at $.015 -
related parties - 1992 5,328,811 82,251 -
Net operating loss for the year ended June 30 ,1992 - - (123,793)
Net operating profit for the year ended June 30, 1993 - - 2,116
Issuance of common shares for assets
at $.09 - related parties - recorded 3,000,000 268,990 -
at predecessor cost - 1994
Issuance of common shares for services
at $.001 - related parties - 1994 9,000,000 9,000 -
Net operating loss for the year ended June 30, 1994 - - (85,805)
Issuance of common shares for cash at $.05 - 1994 2,000,000 100,000 -
Issuance of common shares for services at $.006 4,505,000 29,250 -
Net operating loss for the year ended June 30, 1995 - - (226,049)
BALANCE JUNE 30, 1995 79,393,100 1,039,962(946,523)
PIERCE INTERNATIONAL DISCOVERY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - continued
PERIOD FROM APRIL 19, 1989 (DATE OF INCEPTION) TO JUNE 30, 1998
COMMON STOCK ACCUMULATED
SHARES AMOUNT DEFICIT
Net operating loss for the year ended
June 30, 1996 - - (24,631)
BALANCE JUNE 30, 1996 79,393,100 1,039,962 (971,154)
Net operating loss for the year
ended June 30, 1997 - - (512,440)
BALANCE JUNE 30, 1997 79,393,100 1,039,962 (1,483,594)
Net operating profit for the year
ended June 30, 1998 - - 221,952
BALANCE JUNE 30, 1998 79,393,100 1,039,962 (1,261,642)
The accompanying notes are an integral part of these financial statements.
PIERCE INTERNATIONAL DISCOVERY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
AND THE PERIOD FROM APRIL 19, 1989 (DATE OF INCEPTION) TO JUNE 30, 1998
APRIL 19, 1989
(DATE OF INCEPTION)
TO JUNE 30, 1998
1998 1997 1996
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net profit (loss) $ 221,952 $ (512,440) $ (24,631) (1,261,642)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Common shares issued
for services - - - 40,550
Depreciation
- 2,000 2,000 28,755
(Profit) loss on
transfer of assets (254,171) 434,918 - 177,821
for payment of liabilities
Changes in accounts
payable (5,046) 75,136 24,359 246,894
Net used in
operations (37,265) (386) 1,728 (767,622)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of assets - - (20,789)
Proceeds from sale
of assets 37,200 - - 37,200
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common
shares for payment of debt - - - 216,958
Proceeds from issuance of
common stock - - - 513,464
Net Increase
(Decrease) in Cash (65) (386) (19,061) -
Cash at Beginning of Period 65 451 19,512 -
Cash at End of Period $ - $ 65 $ 451 -
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Issuance of 11,300 common shares for services - 1992 and 1994 $ 40,550
Issuance of 3,000,000 common shares for assets - 1994 $ 268,990
The accompanying notes are an integral part of these financial statements.
PIERCE INTERNATIONAL DISCOVERY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the state of Colorado on April
19, 1989 with authorized common stock of 750,000,000 shares with no par value
and preferred stock of 10,000,000 shares with no par value.
The Company has been engaged in the business of seeking mineral leases for
potential development and had acquired interests in several mineral properties
including leases in Colorado and mining properties in Mexico.
The leases in Colorado were acquired from related parties by the issuance of
3,000,000 common shares and a note payable for $3,600,000. In March 1997 the
leases were returned to the parties, due to a default by the Company, with
mutual releases of all claims, which resulted in a loss to the Company of
$434,917.
After the acquisition of the Mexico properties the Company entered into a
contract with other parties to provide funds to develop the properties. In
1996 the Company started a legal action resulting from a default in the terms
of the development contract. In July 1997 the legal action was settled, and
by mutual agreement the Mexico properties were transferred and all claims were
released which resulted in a gain to the Company of $254,171.
The company has become inactive since the transfer of its remaining assets.
Since inception the Company has been in the development stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
At June 30, 1998, the Company had a net operating loss carry forward of
$1,261,642. The tax benefit from the carry forward have been fully offset
by a valuation reserve because the use of the future tax benefit is
undeterminable since the Company has no operations. The loss carryforward
expires starting in the years 200 through 2013.
PIERCE INTERNATIONAL DISCOVERY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Earnings (Loss) Per Share
Earnings (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding using the treasury stock method in
accordance with FASB statement No. 128..
Financial Instruments
The carrying amounts of financial instruments, including undeveloped mineral
properties and accounts payable, are considered by management to be their
estimated fair values. These values are not necessarily indicative of the
amounts that the Company could realize in a current market exchange.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Actual results could vary from the estimates that were assumed
in preparing these financial statements.
3. RELATED PARTY TRANSACTIONS
The statement of changes in stockholder's equity shows a total of 79,393,100
shares of common stock issued and outstanding of which 44,405,723 shares
were issued to related parties. See note 5 (subsequent events) for additional
shares issued to related parties.
The officers and directors of the Company are involved in other business
activities and they may, in the future, become involved in additional business
ventures which also may require their attention. If a specific business
opportunity becomes available, such persons may face a conflict in selecting
between the Company and their other business interests. The Company has
formulated no policy for the resolution of such conflicts.
PIERCE INTERNATIONAL DISCOVERY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. GOING CONCERN
The Company intends to acquire interests in various business opportunities
which, in the opinion of management, will provide a profit to the Company.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a
strategy, which it believes will accomplish this objective through additional
equity funding which will enable the Company to operate in the future.
Management recognizes that, if it is unable to raise additional capital, it
cannot conduct any operations in the future.
5. SUBSEQUENT EVENTS
On August 28, 1998 the Company issued 670,606,900 common shares as payment of
debt due to related parties.
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