U. S. Securities and Exchange Commission Washington D. C. 20549 FORM 10-KSB Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1996 Commission File No. 33-28106 YAAK RIVER RESOURCES, INC. (Name of small business issuer) Colorado 84-1097796 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 830 S. Kline Way, Lakewood, Colorado 80226-7506 (Address of principal executive office) (Zip Code) Issuer's telephone number: (303) 985-3972 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None 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. Yes X No . State issuer's revenues for its most current fiscal year: $0 The aggregate market value of voting stock held by non-affiliates based upon the closing sale price as quoted on the OTC Bulletin Board on April 15, 1997, was $447,138. At April 15, 1997, 56,666,000 shares of the registrant's Series A Common Stock were outstanding. The average bid/asked price on that date was $.05. Documents incorporated by reference: None This Form 10-KSB consists of 26 pages. Exhibit Index is Located at Page Twenty-Six.
<PAGE> TABLE OF CONTENTS FORM 10-KSB ANNUAL REPORT YAAK RIVER RESOURCES, INC. PAGE Facing Page Index
Item 1. Description of Business..................... 3
Item 2. Description of Property..................... 5
Item 3. Legal Proceedings........................... 5
Item 4. Submission of Matters to a Vote of Security Holders........................ 5
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters......... 6
Item 6. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................. 7
Item 7 Financial Statements........................ 8
Item 8. Changes in and Disagreements on Accounting and Financial Disclosure................ 20
Item 9. Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(a) of the Exchange Act....... 20
Item 10. Executive Compensation...................... 21
Item 11. Security Ownership of Certain Beneficial Owners and Management................... 22
Item 12. Certain Relationships and Related Transactions............................ 23
Item 13. Exhibits and Reports of Form 8-K............ 24 SIGNATURES............................................. 25 -2-
Item 1. Description of Business The Company was organized under the laws of the State of Colorado on June 10, 1988, under the name Andraplex Corporation, for the primary purpose of creating a vehicle to obtain capital to take advantage of business opportunities which may have the potential for profit. From inception until December 12, 1991 the primary activity of the Company was directed to organizational efforts, obtaining initial financing, completion of its public offering on November 27, 1989 and identification of a business opportunity. As of the date of this report, the Company is principally engaged in the metals mining business. During the fiscal year ended December 31, 1996, the Company did not engage in any material business due primarily to a lack of available funds with which to develop its properties. The Company owns those certain mining properties discussed hereinbelow, but has not commenced development of these properties, except as described herein. The Company's mining properties include the following: a. Three patented mining claims and 22 lode and placer claims, all located in the Yaak Mining District, Lincoln County, Montana, adjoining the Company's properties discussed hereinbelow. These properties were acquired from Rio Bravo Resources, Ltd. and Troy Gold Resources, Ltd. by quit claim deed in November 1993. However, the sellers were unable to deliver proper title to these properties in 1993. Effective August 30, 1995, all title problems to these properties were resolved to the Company's satisfaction. Title to these properties was provided by the U.S. Bureau of Land Management. Included on each of the aforesaid properties is the Morning Glory gold vein, which has a long and prosperous mining production history dating back to the late 1800's, producing both gold and silver. It was mined intermittently from 1893 to 1937, with production out of a known short section producing 53,000 tons with indicated recovered grades of approximately 0.28 OPT Au and 1.0 OPT Ag. Noranda Mines, Ltd., Toronto Canada drilled the property during the 1970's and reported drill indicated reserves of in excess of 542,000 tons of .0.140 and 1.44 OPT Ag. within 2,000 feet of the Morning Glory Mine. The structure remained open in all directions. Wm. Ernest Simmons, President and a director of the Company, was employed as U.S. Manager of mine development for Mining Corp., Inc., a wholly owned subsidiary of Noranda, during the period of time when this drilling activity took place. b. Ninety three lode claims located in the Yaak River Valley in northwestern Montana, approximately 15 miles northwest of Troy, Montana. -3-
<PAGE> c. A lease-option to purchase the mining and mineral rights for 6 lode and millsite claims and 1 patent, located in the Yaak River Valley, adjacent to the property referenced above. These properties together total approximately 2,000 acres. The lease- option requires annual payments of $7,500 and are payable to an unaffiliated party. The Company has paid all balances due under the lease-option agreement due as of the date of this report. The Company has not begun mining on its Montana properties and is currently seeking interested parties to join with the Company, either as limited partners and/or joint venture partners, for the purpose of mining its properties. There are no assurances that the Company will locate and reach agreement with any other independent party to provide the funding for commencement of mining operations. Further, the Company does not have sufficient funds available to commence mining operations on these properties for its own account, nor is such funding expected to become available to the Company in the future. Additionally, if such mining operations are commenced, there can be no assurances that the Company will recover any gold or silver under positive economic circumstances, or at all. Other Business Activities In addition, the Company is General Partner of the Yaak River Resources, Timber Division, L.P., a Colorado limited partnership (the "Partnership"), which intends to harvest timber located on properties presently owned by the United States government and to be patented (and subsequently owned) by the Company. The Partnership intends to harvest timber and develop certain mineral resources located on defined mining claims and patented claims presently owned or controlled by the Company. During the fiscal year ended December 31, 1996, the Partnership only engaged in administrative activities. Competition The Company is a small mining company which has not commenced mining activities as of the dates of this report. The Company is not competitive with other larger and better financed mining companies. Government Regulations The Company's operation is subject to numerous federal and state governmental regulations, including environmental laws, as they relate to mining activities, compliance to which will require considerable capital expenditures, the aggregate amount of which have not been calculated at the date of this report. Management of the Company believes that the Company is in compliance with all applicable governmental regulations as of the date of this report. -4-
<PAGE> Employees The Company's employees consist of Wm. Ernest Simmons, its President, who performs his services to the Company without compensation. See "Item 10, Executive Compensation" below. The Company does not have any other employees at the date of this report. The officers operate the Company under the direction of the Board of Directors. The Company does not contemplate retaining any employees until mining activities are commenced.
tem 2. Description of Property The Company's principal place of business is located at 830 S. Kline Way, Lakewood, Colorado 80226, which is the home of Mr. Simmons, President and a director of the Company. This property is provided to the Company on a rent free basis, except that the Company is obligated to pay for clerical functions, including copies, facsimile transmissions, telephone and other general and administrative matters, estimated by management not to exceed $200 per month. These premises include one office of approximately 280 square feet. Management of the Company believes that this space will be sufficient to meet the Company's needs during the next 12 months. The Company manages a group of 125 contiguous mining claims on properties located in the State of Montana. The Company's mining properties are located in Lincoln County, approximately 25 miles northwest of Troy, Montana, in Sections 8, 9, 16, 17, T28N, R33W, MPM, northwest of the deserted town of Sylvanite on the east side of Friday Hill, an offshoot of Keystone Mountain. Elevations of the properties are from approximately 2,500 to 4,800 feet above sea level. The properties are accessed by state and county roads and are heavily forested with larch, white fir, douglas fir and lodgepole pine. See "Item 1, Description of Business" for a more detailed description of the Company's mining properties.
Item 3. Legal Proceedings. There are no material pending legal proceedings to which the Company (or any of its officers and directors in their capacities as such) is a party or to which the property of the Company is subject and no such material proceeding is known by management of the Company to be contemplated as of the date of this report.
Item 4. Submission of Matters to a Vote of Security Holders. There were no matters submitted to a vote of the security holders during the fourth quarter of the fiscal year ended December 31, 1996. -5-
Item 5. Market for Common Equity and Related Stockholder Matters. The Company's Units, (comprised of one share of Series A Common Stock, one Class A Common Stock Purchase Warrant and one Class B Common Stock Purchase Warrant), and the Company's Series A Common Stock are traded on the over-the-counter market on the OTC "Electronic Bulletin Board" operated by the National Association of Securities Dealers, Inc. under the symbols YAAKU and YAAKA, respectively. The Company's securities began trading during the first quarter of the Company's fiscal year 1992. Prior, there was no trading market for the Company's securities. Below are the reported high and low bid prices for the Company's Units and Common Stock for each quarter since March 1995. The bid prices shown reflect quotations between dealers, without adjustment for markups, markdowns or commissions, and may not represent actual transactions in the Company's securities. Units: Bid Price Date High Low March 31, 1995 $.06 $.03 June 30, 1995 $.06 $.015 September 30, 1995 $.06 $.03 December 31, 1995 $.03 $.01 March 31, 1996 $.01 $.01 June 30, 1996 $.01 $.01 September 30, 1996 $.01 $.01 December 31, 1996 $.01 $.01 The Company's market maker for its securities is Paragon Capital. As of the date of this report, the Company had 42 shareholders, not including those persons holding their securities in "street name." The Company's securities are presently classified as "designated securities", which classification places significant restrictions upon broker-dealers desiring to make a market in such securities. As a result, it has been difficult for management to interest additional market makers in the Company's securities and it is anticipated that these difficulties will continue until such time as the Company is able to meet the criteria to qualify as a non-designated security to allow additional market makers to trade without complying with these stringent requirements. The Class A Warrant included in the Company's Units is exercisable at an exercise price of $.05 per share until July 6, 1997, unless otherwise extended by the Board of Directors. The Class B Warrant is exercisable at an exercise price of $.10 per -6-
<PAGE> share until July 6, 1997, unless otherwise extended by the Board of Directors. The exercise price of the Warrants may be lowered but not increased at the discretion of the Company's Board of Directors. The Board of Directors intend to extend the exercise period for the Class A and Class B Warrants to July 6, 1999. However, as of the date of this report, no action has been taken in this regard and there can be no assurance that the Board will so extend the exercise period of these Warrants. Dividends The Company has not declared or paid any dividends on its Class A Common Stock to date. Management anticipates that future earnings, if any, will be retained as working capital and used for business purposes. Accordingly, it is unlikely that the Company will declare or pay any dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition Plan of Operation In the fiscal year ended December 31, 1996, the Company did not generate any revenues from its operations and the Company is considered a development stage company. The plan of operation of the Company during the fiscal year ending December 31, 1997 generally involves the acquisition of additional mineral claims and the taking to patent of a number of the claims acquired and to be acquired by the Company in the future. This was the same plan which the Company's Board of Directors had established for the Company for the fiscal year ended December 31, 1996, but the extended moratorium by the Federal Government on disallowing the taking of claims to patent has impacted the Company's financial capabilities to generate timber resources and has caused the Company to change its short term operating plan. The Company is now seeking the acquisition of mineral claims in an attempt to develop an attractive exploration portfolio to present to potential joint venture partner candidates. The Company incurred an operating loss during fiscal year 1996 of $19,842. The operations of the Company during the fiscal year 1996 were financed primarily by cash of $242, and a loan from the President of the Company of $12,100, and by a lease payment from the Partnership of $7,500. Additional costs were incurred related to legal and auditing fees. See "Item 12 - Certain Relationships and Related Transactions." 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 expects to continue without any cash revenues for at least the fiscal year 1997 and will continue to satisfy its cash -7-
<PAGE> requirements for the next twelve months by loans and advances from the Partnership and/or officers and directors of the Company, providing that the Company does not commence mining activities. At present, the Company's financial resources are not sufficient to commence mining activities. In order to satisfy the Company's capital requirements for additional drilling and to develop a mining feasibility program, it will be necessary for the Company to obtain additional financing in the minimum estimated amount of $750,000. Management of the Company is continuing to seek possible interested partners to join with the Company in developing its mining claims. The Company is actively soliciting joint venture partners to expand its mining activities, based upon the valuation of the Company's claims and properties as reported in the independent engineering valuation report. The report also advised the Company to consolidate adjoining claims to make such joint ventures more attractive. 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 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.
tem 7. Financial Statements. -8-
<PAGE> YAAK RIVER RESOURCES, INC. (A Development Stage Company) FINANCIAL STATEMENTS December 31, 1996 -9-
<PAGE> Michael B. Johnson & Co., P.C. (A Professional Corporation) Certified Public Accountants 9175 East Kenyon Ave., Suite 100 Denver, Colorado 80237 Michael B. Johnson C.P.A. Telephone: (303) 796-0099 Member: A.I.C.P.A. Fax: (303) 796-0137 Board of Directors Yaak River Resources, Inc. We have examined the accompanying balance sheet of Yaak River Resources, Inc. (A Development Stage Company) as of December 31, 1996 and December 31, 1995, and the related statements of operations, cash flows, and changes in stockholders' equity for the period June 10, 1988 (inception), through December 31, 1996, and the fiscal years ended December 31, 1996 and 1995. 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. These 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 significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Yaak River Resources, Inc. at December 31, 1996 and December 31, 1995, and the results of its operations and its cash flows for the period June 10, 1988 (inception), through December 31, 1996, and the fiscal years ended December 31, 1996 and 1995, in conformity with generally accepted accounting principles. s/Michael B. Johnson & Co., P.C. Denver, Colorado March 10, 1997 -10-
<TABLE> YAAK RIVER RESOURCES, INC. (A Development Stage Company) Balance Sheet <CAPTION> December 31 December 31 1996 1995 _________ ___________ <S> <C> <C> ASSETS: Current Assets: Cash $ 911 $ 2,293 Accounts Receivable-O'Hara Resources 2,200 2,200 Investment-Mining Properties 305,410 305,410 _________ ___________ Total Current Assets 308,521 309,903 Other Assets: Organizational Costs- Net of Amortization 0 0 _________ ___________ Total Other Assets 0 0 _________ ___________ TOTAL ASSETS $ 308,521 $ 309,903 LIABILITIES AND SHAREHOLDERS' EQUITY: Current Liabilities: Accounts Payable 24,225 17,865 Advance from (YRML) Purchase, 1.5 Units 20,000 20,000 Shareholder Loans 12,100 0 Current Portion-Long Term Debt 7,500 7,500 _________ ___________ Total Current Liabilities 63,825 45,365 Long-Term Liabilities: Long Term Debt 115,000 122,500 _________ ___________ Total Long-Term Liabilities 115,000 122,500 _________ ___________ TOTAL LIABILITIES $ 178,825 $ 167,865 Stockholders' 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 Series B Common Stock, par value $.0001 per Share; Authorized 250,000,000 Shares. Issued and outstanding, None 0 0 Preferred Stock, par value $.0001 per share; Authorized 50,000,000 Shares. Issued and outstanding, none 0 0 -11-
<PAGE> Capital paid in excess of par value 304,663 297,163 Deficit accumulated during the development stage (180,633) (160,791) _________ ___________ TOTAL SHAREHOLDERS' EQUITY $ 129,696 $ 142,038 _________ ___________ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 308,521 $ 309,903 <FN> The accompanying notes are an integral part of these financial statements. </TABLE>
<TABLE> YAAK RIVER RESOURCES, INC. (A Development Stage Company) Statement of Operations <CAPTION> 10-Jun-88 For the For the (Inception) Year Ended Year Ended thru December 31, December 31, December 31, 1996 1995 1996 ____________ ____________ _________________ <S> <C> <C> <C> Revenue $ 0 $ 0 $ 0 Expenses: Amortization 0 0 1,500 Bank Charges 51 0 321 Legal and Accounting 6,360 3,780 40,993 Director Fees 0 0 800 Office 0 116 6,898 Stock Fees and Other Costs 950 930 9,982 Administration/Consulting 0 352 34,111 Mining Assessments and Fees 12,481 12,464 69,815 Bad Debt 0 0 4,000 Rent/Telephone 0 122 12,213 ____________ ____________ _________________ Total Expenses 19,842 17,764 180,633 Net (Loss) Accumulated During the Development Stage $ (19,842) $ (17,764) $ (180,633) Net Loss per Common Share is less than $.002 $ * $ * $ * <FN> The accompanying notes are an integral part of these financial statements. </TABLE>
<TABLE> YAAK RIVER RESOURCES, INC. (A Development Stage Company) Statement of Cash Flows <CAPTION> 10-Jun-88 For the For the (Inception) Year Ended Year Ended thru December 31, December 31, December 31, 1996 1995 1996 ____________ ____________ ______________ <S> <C> <C> <C> Cash Flows From Operating Activities: Net (Loss) Accumulated During Development Stage $ (19,842) $ (17,764) $ (180,633) Amortization and Depreciation 0 0 1,500 Organization Costs 0 0 (1,500) Decrease (Increase) in Accounts Payable 6,360 (640) 24,225 Decrease (Increase) in Accounts Receivable 0 2,200 (2,200) Decrease (Increase) in Loans to Shareholder 12,100 0 12,100 ____________ ___________ _____________ Net Cash Flows Used By Operating Activities (1,382) (16,204) (146,508) Cash Flows From Investing Activities: Investment Purchase 0 0 (305,410) ____________ ___________ _____________ Net Cash Flows Used By Investing Activities 0 0 (305,410) Cash Flows From Financing Activities: Issuance of Common Stock 0 0 1,800 Loan from LP Investors 0 20,000 20,000 Proceeds From Long-Term Debt 0 0 167,500 Payment of Long-Term Debt (7,500) (7,500) (45,000) Proceeds From Sale of Stock 7,500 0 308,529 ____________ ____________ ______________ Net Cash Flows Provided By Financing Activities 0 12,500 452,829 ____________ ____________ ______________ Net Increase (Decrease) in Cash (1,382) (3,704) 911 ____________ ___________ _____________ -14-
<PAGE> Cash at Beginning of Period 2,293 5,997 0 ____________ ____________ ______________ Cash at End of Period $ 911 $ 2,293 $ 911 <FN> The accompanying notes are an integral part of these financial statements. </TABLE>
<TABLE> YAAK RIVER RESOURCES, INC. (A Development Stage) Statement of Stockholders' Equity <CAPTION> Deficit Accumulated Capital Paid During the Common in Excess of Development # of Shares Stock Par Value Stage Totals ___________ ______ __________ ___________ ________ <S> <C> <C> <C> <C> <C> ISSUANCE OF COMMON STOCK: January 6, 1989 (for services) 10,000,000 1,000 500 0 1,500 January 6, 1989 (for cash) 5,000,000 500 0 0 500 November 27, 1989 (Public offering) 2,666,000 266 12,353 0 12,619 Net Loss for the year ended 12/31/89 (3,765) (3,765) Net Loss for the year ended 12/31/90 (10,129) (10,129) Net Loss for the year ended 12/31/91 (300) (300) January 10, 1992 (for assets YRML) 30,000,000 3,000 134,910 0 137,910 Net Loss for the year ended 12/31/92 (47,589) (47,589) June 30, 1993 (for cash) 6,000,000 600 149,400 0 150,000 June 30, 1993 (for services) 3,000,000 300 0 0 300 Net Loss for the year ended 12/31/93 (54,951) (54,951) Net Loss for the year ended 12/31/94 (26,293) (26,293) Net Loss for the year ended 12/31/95 (17,764) (17,764) -16-
<PAGE> Net Loss for the year ended 12/31/96 7,500 (19,842) (12,342) ___________ ______ __________ ___________ ________ Balance - December 31, 1996 56,666,000 $5,666 $ 304,663 $ (180,633) $129,696 <FN> The accompanying notes are an integral part of these financial statements. </TABLE>
<PAGE> YAAK RIVER RESOURCES, INC. (A Development Stage Company)
Notes to Financial Statements December 31, 1996 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. -18-
<PAGE> YAAK RIVER RESOURCES, INC. (A Development Stage Company) Notes to Financial Statements December 31, 1996 Note 3 - Yaak River Resources Timber Division, Limited Partnership: On August 14, 1992, the Company formed a limited partnership, Yaak River Resources Timber Division L.P. (the Partnership), a Colorado limited partnership, with subscriptions for 40 Units at $5,000.00 per Unit for an aggregate price of $200,000.00. Each Unit contains 1/40th interest in the Partnership and 150,000 shares of Series A Common Stock of the Company. The Company is the general Partner of the Partnership. As a part of the formation of the Partnership, the Company agreed to reserve 6,000,000 shares of its Series A Common Stock for the Partnership. Said 6,000,000 shares of Series A Common Stock represents the shares offered in the Units issued by the Partnership. The Partnership was formed for the purpose of developing certain available natural resources on properties under the management of the Company. On June 30, 1993, the Company sold Six Million (6,000,000) shares of its $.0001 par value Series Common Stock for the issuance to the purchasers of the Limited Partnership interests in the Yaak River Resources, Timber Division L.P., for $150,000. Note 4 - Income Taxes: The Company has made no provision for income taxes because there have been no operations to date causing income for financial statement or tax purposes. Note 5 - Net (Loss) Per Common Share The net (loss) per common share of the Series A Common Stock is computed based on the weighted average number of shares outstanding. Note 6 - Long-Term Debt Note Payable to the Roy Grush Estate in annual installments of $7,500, 0%, due September 2014, secured by the Properties, (Note 2). The Company has agreed to pay the minimum annual assessment costs of maintenance and improvements on claims in lieu of interest. Following is a summary of long-term debt at December 31, 1996: 1997 7,500 1998 7,500 1999 7,500 2000 7,500 2001 7,500 ________ 37,500 After 2001 85,000 ________ $122,500 -19-
tem 8. Changes and Disagreements With Accountants on Accounting and Financial Disclosures. None.
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act. The Directors and Executive Officers of the Company are as follows: Name Age Title Wm. Ernest Simmons 58 President and Director Adolph Lee Amundson 50 Secretary and Director Harry G. Titcombe, Jr. 66 Director The above listed officers and directors will serve until the next annual meeting of the shareholders or until their death, resignation, retirement, removal, or disqualification, or until their successors have been duly elected and qualified. Vacancies in the existing Board of Directors are filled by majority vote of the remaining Directors. Officers of the Company serve at the will of the Board of Directors. Resumes Wm. Ernest Simmons currently is, and has been since December 12, 1991, the President and a Director of the Company. Also, since January 1996, Mr. Simmons has been Director General of "Bumbat" Co., Ltd., a Mongolian-Canadian joint venture mining operation based in Zaamar Sum, Mongolia, where his responsibilities include acquisition and mobilization of all equipment and supplies, preparation and construction of mill site and mine site operations and other managerial matters associated with the exploration and development of hard rock gold. Prior, from 1991 through December 1995, Mr. Simmons was a life and health insurance agent in Denver, Colorado with New York Life Insurance Company. From 1978 to 1990, Mr. Simmons served as Manager of U.S. Operations for Mining Corporation, Inc., of Lakewood, Colorado. From February 1987 through December 1989 Mr. Simmons was president and a director of Bluestone Capital, Inc., a publicly held "blind pool" Colorado corporation. From March, 1986 through July, 1994, Mr. Simmons was president and a director of Yaak River Mines, Ltd., a Colorado corporation also defined as a public "shell" company. Mr. Simmons received a Bachelor's of Science Degree in Business Administration from Regis University, Denver, Colorado in 1987 and received the Degree of Mining Technologist from Haileybury School of Mines in 1973. Mr. Simmons devotes approximately 20 hours per month to the -20-
<PAGE> business of the Company. It is anticipated that the time devoted to the business of the Company by Mr. Simmons will increase if and when the Company commences mining operations. Adolph Lee Amundson, P.E., currently is, and has been since December 1991, the Vice President and a Director of the Company. In September 1995, he was also appointed as Secretary of the Company. He has been Vice President for Goodson & Associates, Denver, Colorado, since 1984, managing drilling, mine backfilling, and grouting operations. From 1983 to 1984, he was Project Superintendent for Mining Corporation, Great Falls, Montana. From 1975 to 1983 he was Chief Engineer for Western Slope Carbon administering exploration, reserve evaluation, feasibility studies, economic evaluations, property acquisition, mine planning, coal quality evaluation, site selection and surface layout for new properties. He holds a B.S. Degree in Mining Engineering from the Colorado School of Mines, 1971. His certifications include Professional Engineer, Colorado; Underground Coal Mine Foreman Certificate in Colorado, Utah and Montana; and Underground Coal Mine Electrician in Colorado and Utah. His publications include U. S. Bureau of Mines IC 8857, 1981, and U.S. Bureau of Mining Research Contract Report No. J0145032, 1985. Mr. Amundson devotes only such time as necessary to the business of the Company. Harry G. Titcombe, Jr. has been a director of the Company since September 1995, when he was appointed by the remaining Board to replace Bruce McMillen, who had past away. Since 1984, Mr. Titcombe has engaged in the practice of law as a sole practitioner in Denver, Colorado. Prior to that, Mr. Titcombe was a partner and associate at the Denver law firm of Burnett, Horan & Hilgers and was a Deputy District Attorney in the offices of the Denver County District Attorney. Mr. Titcombe is also an officer and director of Genesis Companies Group, Inc., a public "shell" company which is a reporting company under the Securities Exchange Act of 1934, as amended. Mr. Titcombe received a degree of L.L.B. in 1960 from the University of Denver College of Law. Mr. Titcombe devotes only such time as necessary to the business of the Company. The Company does not have any of its securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 and as such, shareholders and management of the Company are not required to file any reports pursuant to Section 16(a) of the aforesaid Act.
Item 10. Executive Compensation. Remuneration The following table reflects all forms of compensation for services to the Company for the year ended December 31, 1996 of the chief executive officer of the Company. -21-
<TABLE> SUMMARY COMPENSATION TABLE <CAPTION> Long Term Compensation ____________________________ Annual Compensation Awards Payouts _____________________ ____________________ _______ Securities Other Under- All Name Annual Restricted lying Other and Compen- Stock Options/ LTIP Compen- Principal Salary Bonus sation Award(s) SARs Payouts sation Position Year ($) ($) ($) ($) (#) ($) ($) __________ ____ ______ _____ ______ ________ _______ _______ ______ <S> <C> <C> <C> <C> <C> <C> <C> <C> Wm. Ernest Simmons, (1)(2) President & 1995 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0 Director 1996 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0 _________________________ <F1> (1) Mr. Simmons did not receive any salary during the fiscal year ended December 31, 1996 from the Company. <F2> (2) It is not anticipated that any executive officer of the Company will receive compensation exceeding $100,000 during 1996. </TABLE>
In addition to the cash compensation set forth above, the Company reimburses each executive officer for expenses incurred on behalf of the Company on an out-of-pocket basis. The Company cannot determine, without undue expense, the exact amount of such expense reimbursement. However, the Company believes that such reimbursements did not exceed, in the aggregate, $1,000 during fiscal year 1995. No executive officer or director of the Company holds any option to purchase any of the Company's securities. The Company has not adopted any pension or stock options plans.
Item 11. Security Ownership of Certain Beneficial Owners and Management. The following tables set forth information, as of December 31, 1996, with respect to the beneficial ownership of the Company's Series A Common Stock by (a) each person known by the Company to be the beneficial owner of five percent or more of the Company's -22-
<PAGE> Series A Common Stock, and (b) the stock ownership of each officer and director individually and all directors and officers of the Company as a group of the Company's Series A Common Stock. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown. (a) Security Ownership of Certain Beneficial Owners.
<TABLE> <CAPTION> Name and Amount and Address of Nature of Title Beneficial Beneficial Percent of Class Owner Owner of Class <S> <C> <C> <C> Series A Wm. Ernest Simmons 6,966,120 12.3% Common Stock 830 S. Kline Way Lakewood, CO 80226 Series A Helen L. Tolman 4,031,040 7.1% Common Stock Trust 10251 W. 44th Ave #4-105 Wheat Ridge, CO 80033 </TABLE>
(b) Security Ownership of Management.
<TABLE> <CAPTION> Name and Amount and Address of Nature of Title Beneficial Beneficial Percent of Class Owner Owner of Class <S> <C> <C> <C> Series A Wm. Ernest Simmons 6,966,120 12.3% Common Stock 830 S. Kline Way Lakewood, CO 80226 Series A Adolph Lee Amundson 775,200 1.4% Common Stock 11797 W. Aqueduct Littleton, CO 80127 Series A Harry G. Titcombe, Jr. 180,000 0.3% Common Stock 3003 E. 3rd Ave., Ste. 201 Denver, CO 80206 Series A All Officers 7,921,320 14.0% Common Stock and Directors as a Group (3 persons) </TABLE>
Item 12. Certain Relationships and Related Transactions. During the fiscal year ended December 31, 1995, the Company received a loan in the aggregate of $20,000 from the Yaak River Resources, Inc., Timber Division, L.P., a Colorado limited partnership (the "Partnership"), to which the Company is General Partner. The limited partnership also loaned an additional $7,500 to the Company during the fiscal year ended December 31, 1996. These loans are due upon demand and do not accrue interest and were issued pursuant to the terms of the applicable Limited Partnership Agreement. These loans were approved by a majority vote of the limited partners of the Partnership. See "Item 6, Management's Discussion and Analysis of Financial Condition and Results of Operations." In September 1995, Mr. Harry J. Titcombe, Jr. was appointed as a director of the Company by the remaining members of the Company's Board of Directors pursuant to the terms of the Company's Bylaws upon the death of Bruce McMillen.
Item 13. Exhibits and Reports on Form 8-K (a) Exhibits EX-27 Financial Data Schedule The following exhibits are incorporated by reference to the Company's Registration Statement on Form S-18, SEC file no. 33- 28106, effective July 21, 1989: 3.1 Articles of Incorporation and Certificate 3.2 Bylaws The following exhibit is incorporated by reference to the Company's Form 10-KSB annual report for the fiscal year ended December 31, 1992: 3.3 Amendment to Articles of Incorporation and Certificate (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the fiscal year ended December 31, 1996, or subsequent thereto through the date of this report. -24-
SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on April 15, 1997. YAAK RIVER RESOURCES, INC. (Registrant) By: s/Wm. Ernest Simmons Wm. Ernest Simmons, President By: s/Al Amundson Al Amundson, Secretary In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on April 15, 1997. s/William Ernest Simmons William Ernest Simmons, President and Director s/Adolph Lee Amundson Adolph Lee Amundson, Secretary and Director s/Harry G. Titcombe, Jr. Harry G. Titcombe, Jr., Treasurer and Director -25-
EXHIBIT INDEX Page Exhibit No. No. Description - 3.1* Articles of Incorporation - 3.2* Bylaws - 3.3** Amendment to Articles of Incorporation and Certificate 27 27 Financial Data Schedule * Incorporated by reference to the Company's Registration Statement on Form S-18, SEC File No. 33-28106, effective July 21, 1989. ** Incorporated by reference to the Company's Form 10-KSB for the fiscal year ended December 31, 1992.
<TABLE> <S> <C> <ARTICLE> 5 <LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED FINANCIAL STATEMENTS FILED WITH FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. </LEGEND> <S> <C> <PERIOD-TYPE> YEAR <FISCAL-YEAR-END> DEC-31-1996 <PERIOD-END> DEC-31-1996 <CASH> 911 <SECURITIES> 0 <RECEIVABLES> 2200 <ALLOWANCES> 0 <INVENTORY> 305,410 <CURRENT-ASSETS> 308,521 <PP&E> 0 <DEPRECIATION> 0 <TOTAL-ASSETS> 308,521 <CURRENT-LIABILITIES> 63,825 <BONDS> 115,500 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 5,666 <OTHER-SE> (124,030) <TOTAL-LIABILITY-AND-EQUITY> 308,521 <SALES> 0 <TOTAL-REVENUES> 0 <CGS> 0 <TOTAL-COSTS> 0 <OTHER-EXPENSES> 19,842 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> 0 <INCOME-TAX> (19,842) <INCOME-CONTINUING> 0 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 0 <EPS-PRIMARY> 0 <EPS-DILUTED> 0 </TABLE>