SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended December 31, 1999 Commission File No. 0-6034
-----------
STANSBURY HOLDINGS CORPORATION
(Exact Name as Specified in Its Charter)
STATE OF UTAH 87-0281239
------------- ----------
(State of Incorporation) (I.R.S. Employer
Identification Number)
8801 East Hampden Avenue Suite 200, Denver, CO 80231 UNITED STATES
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Country)
Registrant's telephone number, including area code:
---------------------------------------------------
(720) 748-1407
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 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__X__ NO ____
-
Indicate the number of shares outstanding of the issuer's classes of common
stock as of the latest practicable date.
At December 31, 1999, there were outstanding 53,627,197 common shares, $0.001
par value.
<PAGE>
STANSBURY HOLDINGS CORPORATION
INDEX TO FORM 10-QSB
Item Page
- -------------- ----
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Plan of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Under Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports of Form 8-K
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1- FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
Dec 31, '99 Jun 30, '99
------------- -------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . $ 625 $ -
Prepaid expenses. . . . . . . . . . . . . . . . . . . . 19,440 9,645
Due from related party. . . . . . . . . . . . . . . . . 20,298 20,298
Other . . . . . . . . . . . . . . . . . . . . . . . . . - 4,130
------------- -------------
Total Current Assets. . . . . . . . . . . . . . . . . 40,363 34,073
Property and Equipment at cost:
Undeveloped mineral claims and
projects, using the full-cost method. . . . . . . . . 19,208,576 19,030,333
Buildings . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000
Other property and equipment. . . . . . . . . . . . . . 4,107 1,800
Development costs other projects. . . . . . . . . . . . 153,466 29,123
------------- -------------
19,466,149 19,161,256
Less: accumulated depreciation . . . . . . . . . . . . (26,437) (25,767)
------------- -------------
Net Property and Equipment. . . . . . . . . . . . . . 19,439,712 19,135,489
Deposits. . . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
------------- -------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . 19,500,075 19,189,562
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Bank overdraft. . . . . . . . . . . . . . . . . . . . . - 7,648
Elk Creek acquisition obligations . . . . . . . . . . . 1,355,500 1,422,500
Current Installment of long-term debt . . . . . . . . . 1,303,303 1,607,739
Convertible notes payable to officers
and shareholders. . . . . . . . . . . . . . . . . . . 401,700 460,500
Convertible note to related party . . . . . . . . . . . 130,000 130,000
Accrued Interest. . . . . . . . . . . . . . . . . . . . 906,786 948,507
Trade accounts payable. . . . . . . . . . . . . . . . . 577,407 478,251
------------- -------------
Total Current Liabilities . . . . . . . . . . . . . . 4,674,696 5,055,145
Long-Term Debt. . . . . . . . . . . . . . . . . . . . . . - -
------------- -------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . 4,674,696 5,055,145
Stockholders' Equity:
Common stock, par value $0.001, authorized 100,000,000,
issued and outstanding 53,627,197 and 43,828,773 at
December 31, 1999 and June 30, 1999 respectively. . . 88,481 43,829
Paid-in capital . . . . . . . . . . . . . . . . . . . 21,433,246 19,077,092
Deferred interest . . . . . . . . . . . . . . . . . . (337,731) (337,731)
Accumulated deficit . . . . . . . . . . . . . . . . . (6,358,617) (4,648,773)
------------- -------------
Total Stockholders' Equity. . . . . . . . . . . . . . 14,825,379 14,134,417
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . $ 19,500,075 $ 19,189,562
============= =============
</TABLE>
<TABLE>
<CAPTION>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Six Months
Ended December 30 Ended December 30
---------------------- ----------------------
1999 1998 1999 1998
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net Income. . . . . . . . . . . . . . . (738,083) 1,864,420 (1,699,332) 1,512,706
Adjustments to reconcile Net Income
to net cash provided by operations:
Prepaid Expenses. . . . . . . . . . . (6,988) (5,665)
Accounts Payable. . . . . . . . . . . 33,980 58,599 107,342 104,747
Accrued Int. Payable. . . . . . . . . (82,370) (1,654,113) (41,721) (1,649,313)
Due from related party. . . . . . . . (38,243) (41,849)
---------- ----------- ----------- -----------
Net cash provided by Operating Activities (793,461) 230,663 (1,639,377) (73,709)
INVESTING ACTIVITIES
Other Property and Equipment. . . . . (2,307)
Accumulated Depreciation. . . . . . . 670
Undeveloped Mineral Claims. . . . . . (148,887) (3,985) (245,067) (8,371)
Development Costs Other Projects. . . (65,889) (2,816) (124,517) (2,816)
Net cash provided by Investing Activities (214,776) (6,801) (371,221) (11,187)
FINANCING ACTIVITIES
Notes Payable . . . . . . . . . . . . (203,600) (480,962) (381,936) (441,961)
Note Payable to a Related Party . . . 130,000 130,000
Common Stock. . . . . . . . . . . . . 4,976 113 44,652 215,074
Common Stock to Issue . . . . . . . . 125,000 75,000
Capital in Excess of Par. . . . . . . 1,203,940 2,356,154 50,000
Correction P/Y Acctng Entry . . . . . 56,000
---------- ----------- ----------- -----------
Net cash provided by Financing Activities 1,005,316 (225,850) 2,018,870 84,113
---------- ----------- ----------- -----------
Net cash increase for period. . . . . . . (2,920) (1,988) 8,272 (783)
Cash at beginning of period . . . . . . . 3,545 2,889 (7,647) 1,684
---------- ----------- ----------- -----------
Cash at end of period . . . . . . . . . . 625 901 625 901
========== =========== =========== ===========
</TABLE>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED OPERATING STATEMENT
THREE AND SIX MONTHS ENDING DECEMBER 31, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
THREE MONTHS ENDING SIX MONTHS ENDING
DEC. 1999 DEC. 1998 DEC. 1999 DEC. 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ - $ - $ - $-
Development Costs . . . . . . . . . . - 75,704 10,260 143,668
Expenses:
Sales and Commissions . . . . . . . 22,260 51,743 78,314 114,285
Office Expenses . . . . . . . . . . 115,439 12,381 229,254 15,334
Professional Services . . . . . . . 302,438 38,656 455,358 112,048
Other General and administrative. . 1,612 567 25,350 1,910
Mining Expenses . . . . . . . . . . - - 16,100 12,400
Taxes . . . . . . . . . . . . . . . - 517 - 1,257
Interest. . . . . . . . . . . . . . 296,358 12,485 884,786 142,865
------------ ------------ ------------ ------------
Total Expenses. . . . . . . . . . . . 738,107 192,053 1,699,422 543,767
Loss from operations. . . . . . . . . (738,107) (192,053) (1,699,422) (543,767)
Other income. . . . . . . . . . . . . 25 2,056,474 90 2,056,474
------------ ------------ ------------ ------------
Net Loss. . . . . . . . . . . . . . . $ (738,082) $ 1,864,421 $(1,699,332) $ 1,512,707
Basic and diluted earnings per share:
Loss from continuing operations . . (0.01) (0.01) (0.03) (0.02)
Net Loss. . . . . . . . . . . . . . (0.01) 0.07 (0.03) 0.06
Basic and diluted weighted average
shares outstanding. . . . . . . . . 52,146,410 24,899,585 49,596,409 24,524,515
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Stansbury Holdings Corporation ("Stansbury") was incorporated in 1969 under the
name Stansbury Mining Corporation. In 1990, Stansbury changed its name to
Stansbury Holdings Corporation. During June 1999, Stansbury acquired Elk Creek
Vermiculite, Inc. ("Elk Creek"), and its wholly owned subsidiary, Dillon
Vermiculite, LLC ("Dillon"). Stansbury, Elk Creek, and Dillon are referred to
collectively herein as the "Company". The Company's business is the
acquisition, exploration, and development of vermiculite mineral sites.
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
-------------------------------------
Basis of Presentation
-----------------------
The consolidated financial statements have been prepared assuming that the
Company will continue as a going concern. These statements do not include any
adjustments that might result from the outcome of this uncertainty.
Principles of Consolidation
-----------------------------
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All intercompany balances and transactions are
eliminated in consolidation.
Cash and Cash Equivalents
----------------------------
The Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.
Undeveloped Mineral Claims and Projects
- -------------------------------------------
The Company follows the full-cost method of accounting for its mineral claims
and projects. Accordingly, all costs associated with the acquisition,
exploration, and development of mineral properties, including directly related
overhead costs, are capitalized. Once these properties are developed, the
capitalized costs will be amortized on the unit-of-production method using
estimates of proved reserves.
In addition, the capitalized costs are separated into cost centers on a
state-by-state basis. The capitalized costs for each cost center are subject to
a "ceiling test", which limits such costs to the aggregate of the estimated
present value of future net revenues from proved reserves, plus the lower of
cost or fair market value of undeveloped and unproved properties.
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
--------------------------------------------------
Other Property and Equipment
-------------------------------
Other property and equipment, consisting of two buildings and office equipment,
are record at cost. Depreciation is calculated using the straight-line method
over the estimated useful lives of the assets, which are 20 years for the
buildings and 5 years for the office equipment.
Income Taxes
-------------
The Company uses the asset and liability method of accounting for income taxes.
Under the asset and liability method, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. This method also requires the
recognition of future tax benefits such as net operating loss carryforwards, to
the extent that realization of such benefits is more likely than not. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled.
Earnings (Loss) Per Share
----------------------------
Basic earnings (loss) per share are based on the weighted average shares
outstanding. Outstanding stock options and convertible debt obligations are
generally treated as common stock equivalents for purposes of computing diluted
earnings per share. However, since the Company reported net losses for the
years ended June 30, 1999 and 1998, these common stock equivalents are excluded
from the computation of diluted earnings per share because their effect on net
loss per share would be anti-dilutive.
Use of Estimates
- ------------------
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
--------------------------------------------------
Reclassifications
-----------------
Certain reclassifications were made to the June 30, 1998 financial statements to
conform to the June 30, 1999 classification. These reclassifications also
permitted comparability for the December 31, 1998 and December 31, 1999
statements presented herein.
Summary of Share Issuances
-----------------------------
The following amounts represent shares issued during the fiscal year by the
Company in satisfaction of convertible notes, accrued interest and other
obligations.
<TABLE>
<CAPTION>
Three Months
Ending 12/31/99
Dollars Shares
<S> <C> <C>
Retirement of Convertible
Notes to Shareholders
or Vendors: . . . . . . . . $ 360,600 1,442,400
Interest on Notes or Vendor
Agreements: . . . . . . . . $ 376,229 1,576,146
Acquisition and Development
Costs:. . . . . . . . . . . $ 151,088 604,352
Commissions and Investor
Consulting: . . . . . . . . $ 183,500 734,000
Expenses Settled and Recorded
in Current Period, but
Incurred in Prior Periods:. $ 137,500 550,000
------------- ---------
Total . . . . . . . . . . . . $ 1,208,917 4,906,898
============= =========
</TABLE>
"Expenses Settled and Recorded in Current period, but Incurred in Prior Periods"
refers to a settlement with two prior Directors. The expenses were in
settlement of a combined $118,019 in Director's Fees and $19,481 in Rent Expense
reimbursed to one of these Directors. Although these expenses were incurred in
prior periods (1994 - 1997), due to their settlement with a stock issuance in
the current period, these expenses are being recognized in the current period.
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - GOING CONCERN STATEMENT
-------------------------
The Company emerged from Chapter 11 bankruptcy proceedings during 1985, and has
been non-operating since that time. At December 31, 1999, its negative working
capital was approximately ($4.63) million and accumulated deficit was
approximately ($6.36) million.
During 1999, the Company hired a new president who also now serves as chairman
of the Board of Directors and chief executive officer.
The Company's current management team recognizes the need to develop its mineral
properties and place those properties into production. To accomplish these
goals, management has been attempting to secure long-term financing for the
development of its properties and form joint ventures with established mining
companies.
For example, the Company's shareholders approved participation in a new joint
venture company, International Vermiculite Limited LLC, during April 1999. As
currently structured, the Company will be a 50% participant in the new company.
The other 50% partner will be Nevada Vermiculite LLC; see Notes 7 and 10.
Nevada Vermiculite has undertaken the primary responsibility of obtaining the
working capital necessary to develop the Company's mineral claims.
During June 1999, the Company acquired Elk Creek and its subsidiary in a stock
and cash transaction. The Company believes that the mineral claims held by Elk
Creek and Dillon, which are also located in the State of Montana, enhance the
Company's ability to obtain long-term development financing and its ability to
participate in joint venture arrangements with major mining interests.
Management is also reviewing several additional proposals regarding long-term
financing and participation in other joint venture arrangements. In the
interim, management is in the process of acquiring other producing natural
resource properties for purposes of providing cash flow to fund general and
administrative costs. In the past, these costs have generally been funded by
loans from the Company's officers, directors and shareholders.
During August 1998, the Company successfully restructured the debt with its
largest single creditor. That creditor held a first mortgage on the Company's
mineral claims and projects. In recent years, the Company also has converted a
significant amount of its other debt to common stock. As a result of these
efforts, total liabilities decreased approximately $2.1 million from June 30,
1998 to June 30, 1999, exclusive of the Elk Creek acquisition obligations which
the Company incurred during June of 1999.
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - GOING CONCERN STATEMENT (CONTINUED)
--------------------------------------
There can be no assurances that the Company or its joint venture partner will be
successful in obtaining the financing necessary to develop its mineral reserves.
Nor can there be any assurances that other sources of funds can be obtained to
cover general and administrative costs.
The Company's independent public accountants have included a "going concern"
emphasis paragraph in their audit report accompanying the June 30, 1999
consolidated financial statements, and reported the Company's 10K-SB for that
reporting period. The paragraph states that the Company's recurring losses and
negative working capital raise substantial doubt about the Company's ability to
continue as a going concern and cautions that the financial statements do not
include adjustments that might result from the outcome of this uncertainty.
Management believes that, despite the financial and funding difficulties going
forward, it now has a business plan that, if successfully funded and executed,
will result in the development of its mining claims thereby improving operating
results.
NOTE 3 - UNDEVELOPED MINING CLAIMS AND PROJECTS
------------------------------------------
The Company's undeveloped mining claims and projects are located in the state of
Montana. Substantially all of these assets are subject to security interests
granted in favor of various creditors of the Company.
During June 1999, the Company capitalized $3.99 million of undeveloped mining
claims and projects related to its acquisition of Elk Creek and Dillon (see Note
4). Additionally, the Company capitalized approximately $97,000 and $68,000
during the years ended June 30, 1999 and 1998, respectively, for mine
development costs. At December 31, 1999 a total of $4.18 million had been
capitalized as costs related to this acquisition.
<PAGE>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - ACQUSITION OF ELK CREEK VERMICULITE, INC.
------------------------------------------------
During June 1999, Stansbury acquired all of the outstanding shares of Elk Creek
Vermiculite, Inc. and its wholly-owned subsidiary, Dillon Vermiculite, LLC. The
acquisition was accounted for as a purchase and the results of Elk Creek's
operations (and its subsidiary) were included in the Company's 1999 consolidated
statements of operations from the date of acquisition.
Total consideration included the issuance of 7.85 million common shares valued
at $2.22 million and the assumption of $1,752,500 in debt. As of December 31,
1999, the $1,752,500 in debt assumed has been reduced by $597,000 by a
combination of stock and cash payments, leaving a balance of $1,155,500. As of
December 31, 1999, Stansbury was also liable to the sellers for an additional
$200,000, to be paid either in cash or shares of the Company's common stock.
The assets of Elk Creek and Dillon represent various undeveloped mining claims
and projects, and an office and warehouse building, located in the state of
Montana. The total consideration of $4.04 million was allocated $50,000 to the
office and warehouse building, and the remainder to the undeveloped mining
claims and projects.
Elk Creek was acquired from an entity that is controlled by an individual who
was a former officer and director of Stansbury. At December 31, 1999, this
individual also owned 30,050 shares of the Company's common stock.
The $37,500 commission was paid by the issuance of 150,000 shares of the
Company's common stock to an individual who is the vice-president, chief
operating officer, a director and shareholder of Stansbury. Additionally, this
individual received a commission from the seller in the amount of $90,000. The
seller paid its commission by transferring to this individual 225,000 shares of
the Company's common stock it received for the sale of Elk Creek.
Debt obligations assumed by Stansbury included a $940,000 note payable due to a
creditor of Elk Creek and a $812,500 purchase debt obligation to a third-party
entity. Simultaneous with the acquisition, Stansbury entered into a settlement
agreement with the holder of the note payable. Pursuant to the agreement, the
note holder agreed to cancel the note payable in exchange for $100,000 cash, the
issuance of 1.95 million shares of the Company's common stock valued at
$390,000, and the issuance of four promissory notes from the Company with an
aggregate principal of $450,000.
<PAGE>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - ACQUSITION OF ELK CREEK VERMICULITE, INC. (CONTINUED)
-------------------------------------------------------------
THE FOLLOWING UNAUDITED PRO FORMA INFORMATION REFLECTS THE CONSOLIDATED RESULTS
OF OPERATIONS AS IF THE ACQUISITION HAD TAKEN PLACE AS OF THE BEGINNING OF THE
RESPECTIVE PERIODS. THIS INFORMATION UTILIZES AUDITED INFORMATION FOR STANSBURY
AND UNAUDITED INFORMATION FOR ELK CREEK AND ITS SUBSIDIARY.
<TABLE>
<CAPTION>
Years ended June 30,
1999 1998
------------ ------------
<S> <C> <C>
Revenues. . . . . . . . . . . . $ 0 $ 0
============ ============
Loss before extraordinary items $(3,354,664) $(1,399,176)
============ ============
Net loss. . . . . . . . . . . . $(1,298,190) $(1,399,176)
============ ============
Loss per share. . . . . . . . . $ (0.04) $ (0.05)
============ ============
</TABLE>
NOTE 5 - ELK CREEK ACQUISITION OBLIGATIONS
--------------------------------------
Obligations remaining from the Elk Creek acquisition (see Note 4) at December
31, 1999 consisted of the following:
Four promissory notes payable $ 393,000
Purchase debt obligation 762,500
Due to Elk Creek seller 200,000
------------
$1,355,500
==========
The four promissory notes each bear interest at the rate of 12%, and are due as
follows: $50,000 plus accrued interest on June 30, 1999; $150,000 plus accrued
interest on August 12, 1999; and $200,000 plus accrued interest on November 24,
1999. As of December 31, 1999, $7,000 had been paid towards the June 30 Note.
The purchase debt obligation assumed in the Elk Creek acquisition is evidenced
by an asset purchase agreement by which Elk Creek acquired its interests in
mining claims and projects. Elk Creek was in default of the payment terms of
this agreement as of the date of Stansbury's acquisition. The original
principal balance of the obligation was $812,500, and the Company had made
payments totaling $50,000 through December 31, 1999.
<PAGE>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - CONVERTIBLE NOTES PAYABLE TO OFFICERS HAREHOLDERS
------------------------------------------------------
Convertible notes payable to officers and shareholders at December 31, 1999 and
1998 consisted of the following:
<TABLE>
<CAPTION>
1999 1998
--------- ----------
<S> <C> <C>
90-Day Notes. (12%) $ 24,000 $348,800
180-Day Notes (10%) 377,700 10,000
-------- --------
$ 401,700 $358,800
========= ========
</TABLE>
Both classes of notes provide that the Company, at its option, can convert the
principal and accrued interest to shares of its common stock. The Company
issued common shares to the holders of both classes of notes as an inducement to
make these loans. The value of such inducement shares charged to interest
expense during the year ended June 30, 1999 was $996,328 and $436,250 for the
six months ending December 31, 1999.
NOTE 7 - CONVERTIBLE NOTE PAYABLE TO RELATED PARTY
The convertible note payable, issued in connection with the debt restructuring
described in Note 10, was dated August 25, 1998 and bears interest at 10%.
Principal and accrued interest are due on demand after October 28, 1999.
The holder (Nevada Vermiculite LLC; see Notes 2 and 10) has the option at any
time prior to October 28, 1999 to convert the entire amount due into common
shares of the Company's common stock on the basis of one share for each $0.25 of
debt.
<PAGE>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - LONG-TERM DEBT
---------------
<TABLE>
<CAPTION>
Long-term debt at December 31, 1999 and 1998 consisted of the following:
1999 1998
-------------- -------------
<S> <C> <C>
Officers, directors and shareholders:
- ----------------------------------------
Promissory notes bearing interest
at rates from 12% to 15%. . . . . . . $ 432,385 $ 1,131,221
Mortgages payable, interest
Prepaid. . . . . . . . . . . . . . . 429,000 449,000
Other:
- ----------------------------------------
Other promissory notes and
obligations payable. . . . . . . . . 441,918 896,285
-------------- -------------
Long-term debt. . . . . . . . . . . . 1,303,303 2,476,506
Less current installments . . . . . . 1,303,303 2,476,506
-------------- -------------
Long-term portion . . . . . . . . . . $ 0 $ 0
============== =============
</TABLE>
The promissory notes and mortgages payable to officers, directors, and
shareholders were past due as of September 30,1999. Interest on the mortgages
payable was prepaid, and amortization of that prepaid interest was complete
prior to July 1, 1997. Conversion of these two debts to the Company's common
shares is expected to occur in February 2000.
Other notes payable and obligations represent amounts payable to former trade
creditors of the Company. The Company is in default of these amounts, and
interest accrues on the outstanding principal balances at rates that average
approximately 12%. The Company will seek to settle these obligations with a
combination of cash and common stock.
NOTE 9 - STOCKHOLDERS' EQUITY
- ---------------------------------
On April 30, 1999, the Company's stockholders approved an increase in the number
of authorized common shares from 25 million to 100 million, and restated the par
value of each common share from $0.25 to $0.001. At December 31, 1999, there
were 53,627,197 shares of the Company's common stock outstanding.
<PAGE>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - DEBT RESTRUCTURING
-------------------
On August 25, 1998, the Company entered into an agreement with one of its
creditors, a liquidator for a corporation in receivership, to satisfy amounts
owed by the Company. Pursuant to the terms of the agreement, the creditor
agreed to cancel all debt owed, relinquish ownership of 760,556 shares of the
Company's common stock, and release all collateral it held, in exchange for a
$130,000 cash payment.
The Company obtained the $130,000 by issuing a convertible note payable (see
Note 7) to Nevada Vermiculite, LLC, a limited liability company owned 25% by two
of the Company's officers and directors. In addition, the Company issued
500,000 of its common shares and granted an option to obtain 5 million
additional common shares to Nevada Vermiculite as an inducement to make the
loan. The option expires October 26, 2004, and the option price is 25 cents per
share. The Company valued the stock and option issued to Nevada Vermiculite at
$125,000.
The shares relinquished by the creditor were issued to persons who assisted the
Company in this debt restructuring. The Company has recorded these shares at
their approximate fair market value of 25 cents per share. The relinquishment
of the shares represented additional gain from the debt restructuring, while the
issuance of the shares represented an additional cost thereof.
The gain from the restructuring was as follows:
<TABLE>
<CAPTION>
<S> <C>
Principal amount of mortgages and
other promissory notes payable
cancelled . . . . . . . . . . . . . . $ 645,961
Accrued interest on debt cancelled. 1,665,513
Value of shares relinquished by the
creditor. . . . . . . . . . . . . . . 190,139
------------------------
Subtotal. . . . . . . . . . . . . . 2,501,613
------------------------
Cash payment by Company . . . . . . 130,000
Stock issued to Nevada Vermiculite. 125,000
Value of relinquished shares issued 190,139
------------------------
Subtotal. . . . . . . . . . . . . . 445,139
------------------------
Gain from restructuring . . . . . . $ 2,056,474
========================
</TABLE>
<PAGE>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - INCOME TAXES
-------------
The Company incurred net operating losses for the years ended June 30, 1999 and
1998. At June 30, 1999, the Company has approximately $9.9 million of net
operating loss carry-forwards, which expire in varying amounts through the year
ending June 30, 2019.
A deferred tax asset resulting from the benefit of current and carryforward net
operating losses is offset by a valuation allowance because realization of that
asset is not assured. Realization of a deferred tax asset is dependent on
generating sufficient taxable income prior to the expiration of the loss
carryovers. Accordingly, no current or deferred tax benefit for the fiscal and
tax years ended June 30, 1999 and 1998 was recognized, nor for the current
period.
NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS
---------------------------------------
The debt obligations of the Company represent the financial instruments for
which fair value disclosure is required under SFAS 107. Management does not
believe it is practicable to estimate the fair value of its debt.
A substantial portion of the Company's debt obligations at September 30, 1999
was owed directly to its officers, directors, and shareholders (or to entities
controlled by them). All other debt is owed to non-financial institutions.
Accordingly, there is no market available to estimate the fair value of this
debt.
NOTE 13 - RELATED PARTIES
----------------
For the years ended June 30, 1999 and 1998, the Company shared office space and
certain personnel with a company controlled by one of the Company's officers,
directors, and shareholders. Common costs are allocated to the Company based on
actual usage and allocable overhead. At June 30, 1999, the related entity owed
the Company $20,298, and at June 30, 1998, the Company owed this entity $20,650.
The December 31, 1999 balance remained at $20,298.
Substantially all of the creditors who have converted their debt and interest
into shares of the Company's stock have been officers, directors, or
shareholders of the Company. These individuals also received shares of the
Company's stock as an inducement for conversion of their debt.
<PAGE>
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - COMMITMENTS AND CONTINGENCIES
-------------------------------
Effective June 1, 1999, the Company entered into a 37-month lease agreement
for office space in Denver, Colorado. Rent is payable in advance in six-month
increments. Rent expense for the year ended June 30, 1999 was $2,000. Minimum
future annual rent payments are $24,000 for each of the years ending June 30,
2000 and 2001, and $22,000 for the year ending June 30, 2002.
The Company is obligated to the federal government for approximately
$16,100 per year to maintain the ownership of its mineral claims. The Company
has approximately $42,000 in payroll taxes due to various state, local and
federal agencies. These are included in the Company's accounts payable.
Various legal proceedings and claims are pending against the Company. Some
of the plaintiffs in these matters are certain of the Company's shareholders and
former officers, and others are trade creditors.
Actions brought by shareholders and former officers generally pertain to
default in the repayment terms of amounts loaned to the Company. The Company is
accruing interest on these amounts pursuant to the terms of the underlying
obligations. At December 31, 1999, the principal amount of these obligations is
included in long-term debt under the caption "officers, directors and
shareholders" (see Note 8).
Actions brought by certain trade creditors and others have resulted in the
Company issuing promissory notes payable to those creditors. The Company is
accruing interest on these amounts pursuant to the terms of the promissory
notes. At December 31, 1999, the principal amount of these promissory notes is
included in long-term debt under the caption "other" (see Note 8).
Amounts due other trade creditors who have brought action against the
Company are included in trade accounts payable. The total of these amounts
included in the balance of accounts payable at December 31, 1999 was
approximately $42,000.
An action has also been brought with respect to the purchase debt
obligation that resulted from the Elk Creek acquisition. Management believes
that the matter will be settled for an amount not greater than the recorded
amount of that obligation at December 31, 1999 ($772,500; see Note 5).
<PAGE>
PART I
ITEM 2 - PLAN OF OPERATIONS
PLAN OF OPERATIONS
GENERAL
The Company is currently directing its efforts to:
(1) through the International Vermiculite joint venture, conducting mining
and milling operations on the Dillon Vermiculite Project; this project is
expected to be in full operation during the first calendar quarter of the year
2000. About 20 tons of ore were mined and concentrated to an adequate product
for shipment to a customer, in December, 1999, as a test run of a portion of the
mill. The operation is permitted for a production
(2) on its own, initiate a re-assessment of its resources at its Hamilton
Vermiculite property, and through International Vermiculite, commence a high
grade mining operation with limited milling, utilizing if possible the Dillon
Project Mill for final grade concentration, The Company's mining experts have
recommended that mining and milling operations at the Hamilton property be
incrementally phased in with the first stage being a small pilot plant designed
to produce up to 1,000 tons per month of coarse-sized vermiculite concentrates.
The Company believes that this will allow for a much more rapid and cost
effective way to begin producing vermiculite concentrates to market and to use
as feed material at such time as the Company becomes involved in the processing
of vermiculite into end user products. It will be the Company's intent to
perform additional drilling programs on the claims on the Hamilton property as
part of the joint venture. Current ore deposit estimates are based solely on the
results of a drilling program performed in 1986. Although the results of this
program are considered valid, the area covered by the drilling program was only
a fraction of the mapped and inferred vermiculite deposit.
(3) on its own or through International Vermiculite, continue the
acquisition of other vermiculite deposits and related businesses that will
provide a significant market presence in the vermiculite industry. Situations
that are currently being investigated include the acquisition of an active mine
and mill in Brazil and the acquisition of an exfoliating plant in California. It
is the intent of the Company to engage, through International Vermiculite, in
the exfoliation of vermiculite concentrates and the preparation and marketing of
vermiculite products.
(4) investigating non-vermiculite natural resource investment
opportunities with the goal of establishing a cash flow to support the general
and administrative overhead of the Company. Among these investigations are oil
and gas programs in Texas, and electric power projects abroad.
DESCRIPTION OF PROPERTIES
Under the terms of the Operating Agreement of International Vermiculite
Limited, all vermiculite operations of either principal shall be conducted
through International Vermiculite Limited. International Vermiculite is
concentrating its efforts initially on the Dillon Vermiculite Project, where an
existing mill represents a significant capital investment that would have to be
replicated at the Hamilton Project.
(1) THE DILLON VERMICULITE PROJECT MINE AND MILL
(A) PRIVATE LAND AND IMPROVEMENTS: As part of the Dillon Vermiculite
Project, the Company's wholly owned subsidiary Dillon Resources Limited is
acquiring under a contract a warehouse and ancillary office space at a
railsiding in Dillon, Montana. The site is a lease from a Montana railroad to
the seller, who has the obligation to assign the land lease upon the completion
of payment for the improvements. The warehouse is currently used to store
equipment to be utilized in the mill located upon the unpatented mining claims,
and can be utilized as an assay laboratory, field office, and rail loading site
for vermiculite concentrate. The Company's Montana counsel has opened
negotiations with the railroad respecting the purchase of the land covered by
the land lease.
(B) UNPATENTED LODE MINING CLAIMS:
The mining property consists of 65 unpatented lode mining claims of
approximately 20 acres each, or a total of 1300 acres (slightly over two square
miles). The claims were originally located with respect to a nickel anomaly
identified on the property, and early exploration focused on that mineral. It
was during this effort that widespread occurrences of vermiculite were
encountered.
One of the original locators, Dr. Koehler P. Stout, professional engineer
and professor (retired) from Montana Tech in Butte, Montana, who supervised
exploratory drilling operations on the property as part of his annual assessment
work, has records of over 100 drill holes which encountered ore. Additional
exploration work done by companies which took options on the property include
nine 100 foot long trenches, all of which encountered vermiculite at commercial
grades.
About 1990, Lowell Thomas as principal of a lessee of the claims,
established a mining operation near a vermiculite surface manifestation on the
west end of the property, where he also built a concentration mill. During the
winter of 1991, he shipped several carload equivalents of concentrated product
which was well received by the industry. Thereafter, he brought in an investor
who enhanced the mill, and took product shipments to his exfoliating plant in
Canada. The operation remained undercapitalized, however, and reverted back to
Dr. Stout and his associates.
<PAGE>
In 1996, an option on the project was granted to Resource Vermiculite LLC,
of which Company director James R. Hindman was then a member. A substantial
investment was made in rehabilitating the mill, and some vermiculite concentrate
was again shipped to the industry.
Resource Vermiculite assigned its option on the project to Dillon
Vermiculite LLC in 1998. Mr. Thomas was again involved in the project as a
principal, with Simon Grant-Rennick, a former Company director (years 1994-5?)
and others. In 1998, Dillon Vermiculite exercised its option and became the
owner of the project, following which it undertook a drilling program to
identify ore sources for a plan of operations. The Mining Permit (which included
milling) was applied for in 1998, and granted to Dillon Vermiculite in 1999. The
permit application indicated that drilling had confirmed sufficient ore at a 25%
grade to support the mill at 30,000 tons of concentrate output a year for a
period of twenty years.
(C) CONCENTRATION MILL: The concentration mill consist of a building
(former airplane hangar) of approximately 60 by 40 feet, with a thirty foot
ceiling. Outside the building, the mill "front-end" consists of certain gross
screening processes to remove large waste rock, a dryer to remove moisture, and
a pre-feed storage bin. Inside the mill are four double screened shaker screens
feeding six winnowing boxes. An additional six winnowing boxes are in storage at
the warehouse facility in Dillon, and will be re-installed in the mill.
Concentrated product from the winnowers is stored in three silos adjacent to
the mill. Fuel tanks and a power plant are located outside the mill building. As
designed, the mill is expected to be able to take up to 35 tons an hour of ore
feed, and yield 4 to 5 tons per hour of concentrate. Tailings are returned to
the open pit from whence the ore is mined, and reclaimed in place by contouring
and seeding the surface.
(2) THE HAMILTON VERMICULITE PROJECT
(A) FEE LAND AND IMPROVEMENTS: The Company owns a small office building
and surrounding land (1.25 acres) at Victor Siding, Montana (southwestern
Montana), which can be used for a field office (the "Field Office Property"),
and which building is adequate to use presently to expand exploration
activities. The Field Office Property is owned in fee simple. The Company
believes that the condition of the Field Office Property is acceptable for its
purpose, should the Company be able to commence construction activities.
(B) UNPATENTED LODE MINING CLAIMS AND MILL SITE CLAIMS:
The Company is the holder of 96 unpatented lode mining claims in Ravalli
County, Montana, which were formerly managed and developed under the name of
"Western Vermiculite". These claims and the development of a mining and milling
project to exploit the Skalkaho Mountain vermiculite deposit covered by these
claims is referred to as the "Hamilton Vermiculite Project". A "mineral deposit"
or "mineralized material" is a mineralized body which has been delineated by
appropriately spaced drilling and/or underground sampling to support a
sufficient tonnage and average grade of metal(s). Such a deposit does not
qualify as a reserve, until a comprehensive evaluation based upon unit cost,
grade, recoveries, and other material factors conclude legal and economic
feasibility.
Under the original Western Vermiculite Project, the Company proposed to
build an open pit vermiculite mine, haul road, ore beneficiation plant, host
rock waste stockpile, water storage tanks, sedimentation ponds and
administrative and maintenance buildings. The Company has commenced construction
on this original project proposed as part of the Environmental Impact Statement
study. At this current point in time, the Company's mining experts have
recommended that, as part of the new Hamilton Vermiculite Project, mining and
processing on the vermiculite property be commenced with a small mill designed
to produce the larger sized vermiculite concentrates (Sizes 0, 1, and 2).
The Company believes that the smaller scale of the Hamilton Vermiculite
Project's initial phase will allow for a more cost effective means to develop
the initial market for Hamilton vermiculite concentrates as well as to gather
critical data for the design of a larger mill. It is possible that the Hamilton
Vermiculite Project will be expanded in a stepwise manner until it eventually
achieves the overall size and production capacity originally proposed in the
Plan of Operation discussed in the Final Environmental Impact Statement. It is
expected that the smaller initial development of the property will fall within
the scope of the Environmental Impact Statement.
The Company's 96 unpatented mining and mill site claims, comprising
approximately 1,750 acres, are located about 11 air miles East and slightly
North of Hamilton, Montana. Access to the property is by an improved, private
road. The nearest rail siding, located on the Montana Rail Link Railroad, is an
additional 9 miles North of Hamilton, Montana, at Victor Crossing, Montana.
The mining and mill site claims lie near the crest of the south end of
the Sapphire Mountains at an elevation of approximately 7,000 feet. The area is
part of the Bitterroot National Forest. The claims are also found within the
Skalkaho igneous complex on the western flank of Skalkaho Mountain and in the
upper portion of the Saint Clair Creek drainage area. The Skalkaho igneous
complex is an elongated igneous body about four miles long and one mile wide
with its major axis tending East-West.
The zone of interest in the Skalkaho igneous complex consists of
biotite pyroxenite exposures which contain vermiculite. Biotite is a sheet
silicate mineral that alters to vermiculite during the geologic weathering
process. The altered mineral, vermiculite, has desirable properties of ion
exchange and thermal exfoliation which are not present in the original biotite
mineral. Principal exploration of the Company's claims to date has been
conducted on the ABM Ridge and Horse Ridge. These ridges are the most accessible
areas of the deposit and have outcrops of ore which were first studied. The
average depth of the vermiculite deposit thus far evaluated by drilling is 42
feet on the ABM Ridge and 62 feet on the Horse Ridge.
The mine proposed in the Environmental Impact Statement ("EIS") would
be located on ABM Ridge and would involve disturbance of up to approximately 77
acres. A portion of the permit area is comprised of unreclaimed land disturbed
by previous mining activities. Prior mining operations at the proposed project
site are documented in the EIS, and remnants of these operations are evident on
the site. At the request of the US Forest Service, the Company performed
reclamation work at the proposed mine site in September 1995.
The Company's vermiculite deposit near Hamilton, Montana was first
identified as a potential deposit in the 1930s. Sporadic attempts have been made
to develop a mine at the property, with the most recent prior to the Company's
involvement being in the late 1970s. Over the years, it has been referred to as
the Mt. Skalaho deposit, the Western Vermiculite deposit, the Grid Creek deposit
and, most recently, as the Stansbury Hamilton Vermiculite deposit.
During the summer of 1986 the Company conducted a drilling program on the
Hamilton vermiculite deposit. The drilling was performed by Boyles Brothers
Drilling Company of Spokane, Washington, and consisted of 90 diamond core drill
holes covering the ABM Ridge and Horse Ridge areas. The drilling program
produced over 9,500 feet of core. The core was split and representative samples
of each five-foot section of core were analyzed by an independent laboratory for
vermiculite content.
Two estimates of the contained vermiculite deposit in the Company's
Hamilton property have been made based on the analyses of the drilling program
samples. The first was made in 1987 by Western Resources Company and indicated
proven and probable ore reserves of 6.3 million tons of ore containing 628,000
tons of vermiculite. The second estimate of vermiculite deposits based on the
same drill hole and analytical data was made by Dr. James R. Hindman, now a
Director of the Company, in 1992. This estimate indicated proven and probable
deposits of 6.5 million tons of ore containing 656,000 tons of vermiculite. The
Company considers these two independent calculations to be essentially
identical.
The Company is aware that there are a number of variables and assumptions
that enter into the calculation of proven (verified by drilling) and probable
(extrapolated from nearby drilling) ore deposits. These include assumptions of
in-ground ore density and the limitation of an acceptable ore grade cutoff.
There are other exposures of vermiculite ore outside ABM Ridge and Horse Ridge
and the Company notes that the area covered by the 1986 drilling program was
only 33 acres compared to a total 1,750 acres currently under claim. The Company
assumes that additional drilling will verify additional deposits
within the ore body.
CURRENT VERMICULITE MARKET AND COMPETITION
All of the vermiculite that is now being mined in the United States comes
from mines in Virginia and South Carolina. W.R. Grace & Company has a large
vermiculite operation near Enoree, South Carolina, which is capable of producing
approximately 100,000 short tons of vermiculite concentrate per year. Virginia
Vermiculite Ltd. produces vermiculite from a mine near Woodruff, South Carolina,
and from a mine near Louisa, Virginia. The Company believes that the combined
output of Virginia Vermiculite Ltd. is approximately 90,000 tons per year. Both
Grace and Virginia Vermiculite consider their reserve and production data to be
confidential so the Company's estimates of their production are approximations.
There is one other small mining operation in South Carolina. This operation
was for many years known as Patterson Vermiculite and was recently sold to
Palmetto Vermiculite. This operation has historically produced vermiculite at
the rate of 15,000 tons per year. The sum total of all three companies is an
estimated maximum production capacity of 205,000 short tons per year.
The Company believes that vermiculite produced from its joint venture at
the Dillon property will be competitive with South Carolina and Virginia sources
throughout the western United States and Canada. There is no vermiculite mine
currently active in the western United States.
At one time, Grace also operated a mine and mill near Libby, Montana. The
Libby operation was the largest vermiculite mine and mill in the history of
commercial vermiculite and had annual production exceeding 225,000 tons of
concentrate. The Libby operation was terminated and the land reclaimed over 10
years ago.
Currently, substantially all of the vermiculite imported into the United
States and Canada comes from either the Peoples Republic of China or the
Republic of South Africa. The amount of vermiculite arriving at ports in
California and Washington is quite small and relatively high priced. Although
the possibility of larger and lower cost shipments of imported vermiculite
landing on the Pacific Coast is possible, the Company believes that the
information available at this time is insufficient to allow it to reasonably
predict its potential impact on the marketability of Hamilton vermiculite.
EXPLORATION STAGE ACTIVITIES
Nevada Vermiculite LLC has located 16 unpatented mining claims in Nevada,
and has filed a plan of operations with the BLM to conduct exploratory drilling
on the project. The Company would expect to participate in this project should
the drilling program prove successful, since actual mining and milling would be
conducted through the International Vermiculite joint venture. The drilling
program is anticipate to occur in the first quarter of calendar year 2000.
The Company also contemplates a re-evaluation of its ore reserve position
in Hamilton, and contemplates a drilling or other exploration program outside
the currently established ore deposits.
<PAGE>
LIQUIDITY AND FINANCE
The Company has been inactive and non-operating for years;
consequently, it is questionable as to whether or not it can remain a going
concern. The primary activity in the past few years has been to preserve and
maintain mineral leases and claims. No actual mining has occurred since the
Company acquired such properties in 1984, other than the operations commenced in
December, 1999. The Company has had no income since 1991, and has utilized
proceeds of loans from shareholders and the issuance of capital stock for
meeting its operating capital commitments. The Company has entered into a joint
venture to facilitate the development of its assets, and the Company anticipates
that the joint venture partner will provide the working capital needed to fund
mining and milling operations of the joint venture. Funding for Company general
and administrative expenses is not expected to be satisfied by this source, and
further funding from shareholders is expected to be required in the 1999-2000
fiscal year.
YEAR 2000 COMPLIANCE
The Company experienced no Year 2000 Compliance issues.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
A pending action against the Company was broguth by Ellsworth, Wiles &
Chalphin, P.C., filed in the Court of Common Pleas, Bucks County, Pennsylvania,
on September 14, 1998. James G. Wiles ("Wiles") acted as former counsel to
theCompany as partner in Ellsworth, Wiles & Chalphin, P.C. The complaint alleges
$69,654.95 is due for legal services rendered by Wiles on behalf of the Company.
This matter has been settled in principle, and the company will commence funding
the settlement in the first quarter of the year 2000.
Judgments of record affecting title to the Hamilton Project include:
(1) a claim of lien filed by the State of Montana in January, 1993, for
$658, reflected on the financial statements as an account payable,
(2) judgment obtained by Dorsey & Whitney, a general partnership, in
December, 1994, for $52,683 in principal, along with prejudgment interest of
$32,527, the total amount of which is $85,210 is accruing at 12% interest from
December 1994; This matter has been settled in principle, and the company will
commence funding the settlement in the first quarter of the year 2000.
Other judgments against the Company, which appear in the financial
statements as accounts payable, include a judgment obtained by Mike Bauernfiend,
in Bergen County, New Jersey for $7,000, a judgment obtained by Martineau &
Co.,in Salt Lake City, Utah, for $8,000, and a judgment obtained by Bruce
Blessington, in Salt Lake County, Utah, for $26,293. These judgments remain due
and payable by the Company as of June 30, 1998.
A Judgment was obtained against the Company in November, 1999, by Southampton
Metals, a Bermuda corporation, as a creditor of its Dillon Vermiculite, LLC, and
Elk Creek Vermiculite, Inc., subsidiaries, in the amount of $400,000. The
company has taken steps to raise money to satisfy this judgment and expects to
do so in the first quarter, 2000.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
None, other than those disclosed in the financial statements and notes
thereto: see specifically notes 8, 9 and 10.
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) 27.1 Financial Data Schedule
(b) There were no reports on Form 8-K filed during the three months
ended December 31, 1999
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DATED: FEBRUARY 10, 2000 STANSBURY HOLDINGS CORPORATION
BY: /s/ ALDINE J. COFFMAN, JR.
--------------------------------------
ALDINE J. COFFMAN, JR., CHIEF
EXECUTIVE OFFICER AND PRESIDENT
BY: /s/ JEFFERY L. WERTZ
--------------------------------------
JEFFERY L. WERTZ, CHIEF
FINANCIAL OFFICER AND VICE PRESIDENT
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