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, 1996
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, 1996, was 56,666,000 shares.
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the nine month period ended
September 30, 1996, 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 ending September 30, 1996, and the Company is considered a
development stage company. The plan of operation of the Company during the
nine month period ending September 30, 1996, 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.
The Company incurred an operating loss during the nine month period
ending September 30, 1996. The Company is expected to continue to operate at
a loss 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 believes the income which it derives from its role as
General Partner of the Timber Partnership and related activities will satisfy
its cash requirements for the next six months, 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 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
2
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.
3
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
Unaudited
Balance Sheet
Unaudited Audited
September 30 December 31
1996 1995
_________ ___________
ASSETS
Current Assets
Cash $ 2,293 $ 2,293
Accounts Receivable-O'Hara Resources 2,200 2,200
Investment-Mining Properties 305,410 305,410
_________ ___________
Total Current Assets 309,903 309,903
Other Assets
Organizational Costs-
Net of Amortization 0 0
_________ ___________
Total Other Assets 0 0
_________ ___________
TOTAL ASSETS $ 309,903 $ 309,903
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Current Liabilities
Accounts Payable 17,865 17,865
Advance from (YRML) Purchase,
1.5 Units 20,000 20,000
Current Portion-Long Term Debt 7,500 7,500
_________ ___________
Total Current Liabilities 45,365 45,365
Long-Term Liabilities
Long Term Debt 122,500 122,500
_________ ___________
Total Long-Term Liabilities 122,500 122,500
_________ ___________
Total Liabilities $ 167,865 $ 167,865
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
4
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 297,163 297,163
Deficit Accumulated During
the Development Stage (160,791) (160,791)
_________ ___________
Total Shareholders' Equity $ 142,038 $ 142,038
_________ ___________
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 309,903 $ 309,903
The accompanying notes are an integral part of these financial statements.
5
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
Unaudited
Statement of Operations
For the June 10, 1988
Nine Months For the (Inception)
Ended Year Ended Thru
September 30, December 31, September 30,
1996 1995 1996
____________ ____________ _________________
Income $ 0 $ 0 $ 0
Expenses
Amortization 0 0 1,500
Bank Charges 0 0 270
Legal and Accounting 0 3,780 34,633
Director Fees 0 0 800
Office 0 116 6,898
Stock Fees and Other Costs 0 930 9,032
Administration/Consulting 0 352 34,111
Mining Assessments and Fees 0 12,464 57,334
Bad Debt 0 0 4,000
Rent/Telephone 0 122 12,213
____________ ____________ _________________
Total Expenses 0 17,764 160,761
Net (Loss) Accumulated During
the Development Stage $ 0 (17,764) (160,791)
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.
The accompanying notes are an integral part of these financial statements.
6
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
Unaudited
Cash Flow Statement
For the June 10, 1988
Nine Months For the (Inception)
Ended Year Ended Thru
September 30, December 31, September 30,
1996 1995 1996
____________ ____________ ______________
Cash Flows From
Operating Activities:
Net (Loss) Accumulated
During Development Stage $ 0 $ (17,764) $ (160,791)
Amortization and Depreciation 0 0 1,500
Organization Costs 0 0 (1,500)
Decrease (Increase) in
Accounts Payable 0 (640) 17,865
Decrease (Increase) in
Accounts Receivable 0 2,200 (2,200)
Decrease (Increase) in
Loans to Shareholder 0 0 0
____________ ___________ _____________
Net Cash Flows Used
By Operating Activities 0 (16,204) (145,126)
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 20,000 20,000
Proceeds From Long-Term Debt 0 0 167,500
Payment of Long-Term Debt 0 (7,500) (37,500)
Proceeds From Sale of Stock 0 0 301,029
____________ ____________ ______________
Net Cash Flows Provided
By Financing Activities 0 12,500 452,829
____________ ____________ ______________
Net Increase (Decrease) in Cash 0 (3,704) 2,293
____________ ___________ _____________
7
Cash at Beginning of Period 2,293 5,997 0
____________ ____________ ______________
Cash at End of Period $ 2,293 $ 2,293 $ 2,293
The accompanying notes are an integral part of these financial statements.
8
YAAK RIVER RESOURCES, INC.
(A Development Stage)
Unaudited
Statement of Shareholders' Equity
Deficit
Accumulated
Number of Additional During the
Shares Common Paid In Development
Common Stock Stock Capital Stage Total
____________ ______ __________ ___________ ________
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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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 nine months
ended September 30, 1996 0 0
____________ ______ __________ ___________ ________
Balance at
September 30, 1996 56,666,000 $5,666 $ 297,163 $ (160,791) $142,038
The accompanying notes are an integral part of these financial statements.
10
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 1996
(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.
Note 3 - Yaak River Resources Timber Division, Limited Partnership:
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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 09/2014, 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, 1996:
1996 $ 7,500
1997 7,500
1998 7,500
1999 7,500
2000 7,500
________
37,500
Remaining 85,000
________
$122,500
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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 14, 1996
By: Wm. Ernest Simmons
Wm. Ernest Simmons
President
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YAAK RIVER RESOURCES, INC.
Exhibit Index to Quarterly Report on Form 10-QSB
For the Quarter Ended September 30, 1996
EXHIBITS Page No.
EX-27 Financial Data Schedule . . . . . . . . . . . . . . . . . . . . .15
14
5
9-MOS
DEC-31-1996
SEP-30-1996
2293
0
2200
0
305,410
309,903
0
0
309,903
45,365
122,500
0
0
5,666
136,372
309,903
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
