ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS _______________________________ Regal-Beloit Corporation is a Wisconsin corporation founded in 1955. The Company's initial business was the production of special metalworking taps. Through 33 acquisitions and internal growth, the Company has become a prominent manufacturer of a diversified line of power transmission products and perishable, high-speed steel, rotary cutting tools.
The Company's power transmission products, manufactured by its Power Transmission Group, include standard and custom gearboxes, transmissions, rigid forklift axles, custom gearing, gear motors and manual valve actuators. These products are sold to distributors, original equipment manufacturers and end users across many industry segments.
Typical applications for the Company's power transmission products include material handling systems such as conveyors, palletizers and packaging equipment; off-highway vehicular equipment such as street pavers, graders, airport/fire/crash/rescue equipment; farm implements; center pivot irrigation systems; gas and liquid pipeline transmission systems; civic water and waste treatment facilities; open-pit mining; paper making machinery; high-performance, after-market automotive transmissions and ring/pinion sets; and transmissions for luxury inboard powered craft.
Effective January 1, 1995, the Company acquired selected net assets of the Marine and Industrial Transmission Division of Borg-Warner Automotive Transmission and Engine Components Corporation for approximately $9,192,000. This acquisition has been renamed the Velvet Drive Transmission Division of Regal-Beloit Corporation. This Division produces both marine and industrial transmissions.
The Company's perishable, high-speed steel, rotary cutting tool products are manufactured by its Cutting Tool Group. Principal cutting tool products include taps, drills, end mills, reamers and gages in thousands of standard and popular non-standard styles and sizes, as well as a wide range of specially designed products. Cutting tool products are sold to distributors on both open line and select bases and to select end users throughout the United States. Standard and most special items are shipped promptly, generally within 24 hours to a few days of receipt of orders. These products are mostly used in industrial metalworking applications where it is necessary to remove metal to shape product into finished form or to prepare a metal workpiece to receive a fastening device.
Regal-Beloit believes its consistent ability to provide products on a shorter delivery schedule than other manufacturers gives it a competitive selling advantage and that its extensive use of modern, up-to-date equipment which is best suited for the job, along with its continued product redesign and effective plant layout, often gives it a competitive cost advantage in both power transmission products and cutting tools.
MARKETING AND SALES ___________________ Power transmission products are sold to select distributors, original equipment manufacturers and end users through field sales personnel and manufacturers' representatives.
The Company's cutting tool products are sold through three distribution channels. The Regal Cutting Tools Division's products are sold on a non-exclusive, open line basis through independent industrial distributors nationwide. The Company is the only significant producer of cutting tools to employ the open line method of distribution. The balance of the cutting tools are sold to select distributors and end users through the National Twist Drill and New York Twist Drill Divisions, respectively.
Export sales accounted for approximately 3% of the Company sales in 1996, 1995 and 1994. No material part of the Company's business is dependent upon a single customer or a group of customers. In fiscal 1996, 1995 and 1994, no single customer accounted for as much as 5% of Company sales. Although the Company's sales are predominantly not seasonal, they tend to vary with general economic conditions and with the rate of industrial production, and are affected by business climates in the many markets in which the Company sells. However, because the Company's products are sold to many different markets, the effects of weaker markets are frequently offset by strengths in other markets.
Working capital requirements to properly serve the Company's customers are generally typical of capital goods manufacturers. Accounts receivable and inventory are generally not seasonal or at unusual levels by industry standards.
COMPETITION ___________ Competition in the power transmission equipment industry has historically been from old line and captive manufacturers. In recent years, competition, in general (including from foreign manufacturers), has intensified. Over the past several years, niche product market opportunities have become more prevalent due to changing market conditions described above and decisions by larger manufacturers not to compete in lower volume or specialized markets. Additionally, smaller companies have been sold due to lack of capital to invest in more modern productive equipment. Many captive producers have chosen, for economic reasons, to outsource their requirements to specialized manufacturers like Regal-Beloit who can produce more cost effectively. The Company has capitalized on this competitive climate by making acquisitions and increasing its manufacturing efficiencies. Some of these acquisitions have created new opportunities for the Company because the Company is now in new markets in which it was not previously involved. The Company has also continued to upgrade its manufacturing equipment and processes, including increasing its use of computer aided manufacturing systems and redesigning products to take full advantage of the more productive equipment along with redoing plant layout to improve product flow. In practice, the Company has sought out specific niche markets concentrating on a wide diversity of customers and applications. Because of this approach, the Company is often not the largest supplier in any specific market. The Company believes it competes primarily on the basis of the promptness of delivery, price and quality. Dominant domestic competitors in the power transmission equipment industry include Sundstrand Corporation (Falk), Emerson Electric, Reliance Electric, Winsmith, and IMO. Dominant foreign competitors would include SEW Eurodrive, Flender, Sumitomo and Zahnrad Fabrik.
The markets for most of the Company's cutting tool products are highly competitive. The domestic cutting tool industry is a mature industry which has been characterized for the past 10 to 15 years by excess capacity and declining sales. Selling price increases have been minimal and the Company believes that some additional but less severe contraction of the industry is likely in the years ahead. Despite a mature market, the Company has been able to minimize the effect this contraction has had on the Company, primarily by eliminating the production of unprofitable products, developing new products, adding new channels of distribution, improving manufacturing capability and efficiency and providing fast product delivery.
Cutting tools produced abroad and imported, according to recent government statistics, are estimated to represent less than 15% of the domestic industrial market; however, that share is growing slightly. Most imported tools are non-industrial quality and most are not sold in the commercial markets in which the Company sells.
Competition in the cutting tool industry is primarily on the basis of price, product quality and promptness of delivery. The Company competes primarily on the basis of promptness of delivery and quality including its expertise in assisting customers to solve specific cutting tool problems. The Company believes it is unique among the larger cutting tool manufacturers in its ability to ship orders promptly, generally within 24 hours to a few days of receipt of orders for standard and most special products. The Company is number two of the two leading domestic full line manufacturers in terms of dollar value of shipments of taps, end mills, reamers, gages and drills in total. The other competitor in the category is Greenfield Industries, which is larger than Regal-Beloit Corporation. The Company also has competition from other manufacturers; however, these companies are typically regional in sales and usually produce one or two types of products as opposed to a full line.
For further segment information required by Item 101 of Regulation S-K, reference is made to Note 10 of the Notes to Consolidated Financial Statements on page 14 of the Annual Report to Shareholders for the year ended December 31, 1996, and such information is incorporated herein by reference.
BACKLOG ________ As of December 31, 1996, the amount of the Company's power transmission backlog believed to be firm was approximately $41,100,000 compared to approximately $48,400,000 on December 31, 1995. Average delivery time for orders of the Company's power transmission equipment (except for large, specially designed products) varies from three days to two months. The Company believes that virtually all of the backlog is shippable in 1997.
Because the Company ships cutting tool orders promptly, generally within a few days of receiving the order, there are no material backlogs for cutting tools.
TRADEMARKS AND LICENSES _______________________ Regal-Beloit utilizes various registered and unregistered trademarks and the Company believes these trademarks are significant in the marketing of most of its products. However, the Company believes the successful manufacture and sale of its products generally depends more upon its technological, manufacturing and marketing skills. In addition, the Company believes its engineering, test and development capabilities are significant factors in the success of its business.
EMPLOYEES __________ As of December 31, 1996, the Company employed approximately 2,450 persons, of which approximately 23% are covered by collective bargaining agreements. The Company considers its employee relations to be very good.
RAW MATERIALS _____________ Base materials for the Company's products consist primarily of steel in various types and sizes, castings, bearings and weldments. The Company purchases its raw materials from many suppliers and is not dependent on any single supplier for any of its base materials.
ENVIRONMENTAL MATTERS ______________________ The Company is subject to Federal, State and local environmental regulations. The Company is currently involved with environmental cleanup proceedings related to certain of its facilities. Based on available information, it is believed that the outcome of these proceedings and future known environmental compliance costs will not have a material adverse effect on the Company's financial position or results of operations.
ITEM 2.

ITEM 2. PROPERTIES
The Company currently operates a corporate office and 20 manufacturing and service/distribution facilities. Three each are located in Illinois and Wisconsin; two each are located in Indiana, South Carolina and South Dakota; and one each located in California, Massachusetts, New York, North Carolina, Pennsylvania, Texas, Newbury (England), Neu Anspach (Germany) and Legnano (Italy). The Company's present operating facilities contain a total of approximately 1,510,000 square feet of space of which approximately 147,000 square feet are leased. The Company believes its equipment and facilities are well maintained and adequate for its present needs. The Company currently owns one manufacturing facility with a total of 53,000 square feet that it intends to sell.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
The Company is not involved in any material legal proceedings.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the quarter ended December 31, 1996.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Certain information required by Item 201 of Regulation S-K is set forth on page 4 and the inside back cover of the Annual Report to Shareholders for the year ended December 31, 1996, and such information is incorporated herein by reference.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
Information required by Item 301 of Regulation S-K is set forth on page 4 of the Annual Report to Shareholders for the year ended December 31, 1996, and such information is incorporated herein by reference.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Information required by Item 303 of Regulation S-K is set forth on pages 5 and 6 of the Annual Report to Shareholders for the year ended December 31, 1996, and such information is incorporated herein by reference.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
In the Annual Report to Shareholders for the year ended December 31, 1996, there are set forth on pages 7 through 15, financial statements meeting the requirements of Regulation S-X and information specified by Item 302 of Regulation S-K and such financial statements are incorporated herein by reference.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has had no disagreements with its accountants subject to disclosure by Item 304 of Regulation S-K nor has it had a change of accountants within the last two fiscal years.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required by Item 401 of Regulation S-K is set forth on pages 3 through 5 of the definitive proxy statement for the Annual Meeting of Shareholders to be held on April 24, 1997, a copy of which has been filed within 120 days following the close of the fiscal year, and such information is incorporated herein by reference.
The names, ages, and positions of all of the executive officers of the Company as of March 7, 1997, are listed below along with their business experience during the past five years. Officers are elected annually by the Board of Directors at the Meeting of Directors immediately following the Annual Meeting of Shareholders in April. There are no family relationships among these officers, nor any arrangements of understanding between any officer and any other persons pursuant to which the officer was selected.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
Information required by Item 402 of Regulation S-K is set forth on pages 6 through 9 of the definitive proxy statement for the Annual Meeting of Shareholders to be held on April 24, 1997, a copy of which has been filed within 120 days following the close of the fiscal year, and such information is incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required pursuant to Item 403 of Regulation S-K is set forth on pages 2, 3, 4, 5, 9 and 10 of the definitive proxy statement for the Annual Meeting of Shareholders to be held on April 24, 1997, a copy of which has been filed within 120 days following the close of the fiscal year, and such information is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required pursuant to Item 404 of Regulation S-K is set forth on pages 5 and 7 of the definitive proxy statement for the Annual Meeting of Shareholders to be held on April 24, 1997, a copy of which has been filed within 120 days following the close of the fiscal year, and such information is incorporated herein by reference.
PART IV
ITEM 14.

ITEM 14. FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE, EXHIBITS AND REPORTS ON FORM 8-K
(a) 1. AND 2. FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Reference is made to the separate index to the Company's Consolidated Financial Statements and Schedule contained on Page 10 hereof.
3. EXHIBITS Reference is made to the separate exhibit index contained on Page 13 hereof.
(b) REPORTS ON FORM 8-K
There were no reports filed on Form 8-K by the Company during the quarter ended December 31,1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
REGAL-BELOIT CORPORATION
By: Robert C. Burress _________________ Robert C. Burress Secretary
March 7, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
James L. Packard __________________Chairman, President, Chief March 7, 1997 James L. Packard Executive Officer and Director
Kenneth F. Kaplan _________________ Vice President - CFO March 7, 1997 Kenneth F. Kaplan (Principal Accounting & Financial Officer)
Henry W. Knueppel ________________ Executive Vice President March 7, 1997 Henry W. Knueppel and Director
John A. McKay _______________ Director March 7, 1997 John A. McKay
John M. Eldred _______________ Director March 7, 1997 John M. Eldred
J. Reed Coleman ______________ Director March 7, 1997 J. Reed Coleman
Frank Bauchiero _______________ Director March 7, 1997 Frank Bauchiero
REGAL-BELOIT CORPORATION
AND FINANCIAL STATEMENT SCHEDULE Page(s) In Annual Report * __________ The following documents are filed as part of this report:
(1) Financial Statements: Consolidated Statements of Income for the three years ended December 31, 1996 7 Consolidated Balance Sheets at December 31, 1996 and 1995 8 Consolidated Statements of Shareholders' Investment for the three years ended December 31, 1996 9 Consolidated Statements of Cash Flows for the three years ended December 31, 1996 10 Notes to Consolidated Financial Statements 11 - 14 Report of Independent Public Accountants 15
* Incorporated by reference from the indicated pages of the Regal-Beloit Corporation 1996 Annual Report to Shareholders
Page In Form 10-K ___________
(2) Financial Statement Schedule: Report of Independent Public Accountants on Financial Statement Schedule 11 Consent of Independent Public Accountants 11 For the three years ended December 31, 1996, Schedule II - Valuation and Qualifying Accounts 12
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Regal-Beloit Corporation:
We have audited, in accordance with generally accepted auditing standards, the financial statements included in Regal-Beloit Corporation's Annual Report to Shareholders, incorporated by reference in this Form 10-K, and have issued our report thereon dated January 29, 1997. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed in the index to financial statements is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin, January 29, 1997
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Regal-Beloit Corporation:
As independent public accountants, we hereby consent to the incorporation of our reports, included and incorporated by reference in this Form 10-K, into Regal-Beloit Corporation's previously filed Registration Statements, File Nos. 33-25480, 33-25233, 33-82076 and 33-8934.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin, March 13, 1997
SCHEDULE II
REGAL-BELOIT CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
EXHIBITS INDEX
The following exhibits are required to be filed by Item 601 of Regulation S-K.
EXHIBIT 21 SUBSIDIARIES OF REGAL-BELOIT CORPORATION
Regal-Beloit International Sales Corporation, a Delaware Corporation 200 State Street Beloit, Wisconsin Acquired - May, 1979
Regal-Beloit Corporation FSC, a Virgin Islands Corporation 200 State Street Beloit, Wisconsin Acquired - December, 1984
New York Twist Drill, Inc., a Delaware Corporation 30 Montauk Boulevard, Suite B Oakdale, NY 11769 Acquired - March, 1988
Opperman Mastergear Limited Hambridge Road Newbury, Berkshire, United Kingdom (England) Acquired - July, 1991
Mastergear GmbH SiemensstraBe 16 Neu Anspach, Germany Acquired - July, 1991
Hub City, Inc. 2914 Industrial Drive Aberdeen, South Dakota Acquired - April, 1992
Costruzioni Meccaniche Legnanesi S.r.L. Via San Bernardino 129 Legnano, Italy Acquired - December, 1994


ITEM 1. BUSINESS
GENERAL/HISTORY
Auric Metals Corporation (the "Company") is a Nevada Corporation which holds interests in several natural resource properties, and a minority interest in a hotel operation in New Mexico. Over the past several years, the Company has principally been engaged in the acquisition, exploration and development of interests in various natural resource properties, primarily through participation with other parties in natural resource joint ventures or other arrangements.
The Company was originally organized under the laws of the state of Utah. In 1985, the Company became a Nevada corporation by merging with a wholly-owned Nevada corporation created solely for the purpose of changing the Company's state of domicile. The Company has one wholly-owned subsidiary, Auric Minerals Corporation.
The Company was organized in 1969 for the purpose of engaging in mineral exploration (principally silver, copper, gold, lead and zinc) on a mining property located in Beaver County, Utah. In February 1970, the Company completed a public offering under Regulation A of the Securities Act of 1933, as amended, from which it raised approximately $350,327 in net proceeds for its proposed exploration. In 1979, the Company's exploration activities on its Beaver County mining claims were terminated, following the determination by the Company that further exploration would be unproductive.
Since the termination of exploration activities in Beaver County, Utah, in 1979, the Company has participated in a number of natural resource joint ventures, and has performed limited exploration and assessment work on other natural resource properties, with a view towards evaluating such properties for future exploration and development.
The Company holds interests in a number of natural resource properties in Utah, Nevada, Oklahoma, and California. The Company presently holds a working interest in one oil and gas well near Oklahoma City, Oklahoma, which has provided the Company with nominal revenue over the past few years. The Company also holds a working interest in various patented and unpatented mining claims in the Tintic Mining District of Utah. The Company subleases forty-five (45) mining claims to USX, formerly United States Steel Corporation. These claims have, in turn, been assigned to other parties which have conducted limited exploration on these claims.
In the fiscal year ended March 31, 1994, Auric Minerals Corporation, the Company's wholly-owned subsidiary, acquired from an unrelated third party, a 50% interest in 7 patented mining claims and 11 unpatented claims in the Tintic mining area west of the Company's Rex claims. The 7 patented mining claims were terminated during the fiscal year ended March 31, 1995, due to title problems. The Company has maintained its interest in the 11 unpatented claims. Over the past several years, the Company has additionally held a 19% interest in a limited partnership which holds certain sulfur and gold property in Inyo County, California. Mining operations on this property were abandoned during the fiscal year due primarily to a loss in demand for sulfur products. (See "BUSINESS," under this caption).
During the fiscal year ended March 31, 1991, the Company purchased, in a private transaction, a total of 89,600 shares of restricted common stock of Dynamic Oil Limited, at an average price of $1.98 per share. Dynamic Oil Limited is a publicly-held British Colombia corporation which is engaged in oil and gas exploration. The Company has now held such securities in excess of two years, and is, therefore, able to dispose of this investment subject to compliance with the requirements of Rule 144 of the Securities Act of 1933, as amended. As of July 3, 1996, the market value of these securities was approximately $44,775.
In addition to its natural resource investments, described above, the Company is a principal shareholder in Corporation de La Fonda, Inc., a corporation which owns the La Fonda Hotel in Santa Fe, New Mexico. This investment has generated dividend revenues to the Company for the past several years. Dividend revenue from this investment of $12,000 during the past fiscal year, represents a decrease in dividend revenue from $15,000 in dividend revenue for the 1995 fiscal year, and $27,000 in dividend revenue for the 1994 fiscal year.
BUSINESS
During the fiscal year, the Company limited its activities to required maintenance of its unpatented mining claims in the Tintic Mining District near Eureka, Utah, and the continued search for suitable natural resource opportunities for acquisition, participation or other involvement by the Company. In September, 1995, the Company acquired a minority interest in 107 unpatented lode mining claims on Bureau of Land Management land, located close to the Company's Ivanho claims near Elko, Nevada. (See "Acquisition of Interest in Robbie Claims," below).
The Company conducted no exploration activities during the fiscal year, and has realized no income from its mineral exploration activities to date. The Company has realized most of its income from its interests in properties developed and explored by other firms, and from lease payments and dividend payments on the Company's equity holdings. The following is a general description of the Company's holdings and business activities during the fiscal year.
Hillcrest Claims
Since 1981, the Company has subleased forty-five (45) unpatented mining claims covering approximately 600 acres north west of Elko, Nevada, to USX, formerly United States Steel Corporation. The Company acquired this lease from Hillcrest Mining Company ("Hillcrest") in 1981. The Company obtained the lease for an initial term of three years, ending August 31, 1984, in consideration of the agreement to do all the assessment work on the lease during its term at a cost of $100 per claim per year, and to actively market the property during such term. The lease grants to the Company the option to extend the lease year by year for an additional twenty years by making advance royalty payments of $6,000 to Hillcrest. The lease further provides that the Company will pay to Hillcrest a royalty equal to 50% of the Company's earnings from the property, after deducting all direct costs incurred by the Company in the development of the property, exclusive of the Company's overhead.
USX acquired the claims from the Company for a primary term of two years, expiring December 31, 1983, for which the Company received $9,000, $4,500 of which was paid to Hillcrest. USX has the right to renew the options for twenty additional one year terms by paying an advance royalty of $25,000 in 1984 and 1985 and $50,000 per year thereafter for the term of the lease or as long as there is production. USX has paid the advance royalty for each year to and including fiscal year ended March 31, 1992, and has paid for all assessment work required during the term of the sublease. Pursuant to the terms of a modification of the lease between Auric and Hillcrest, resulting in an equal interest between Auric and Hillcrest, the Company and Hillcrest each now receive a 1% royalty interest for gold, calculated on the basis of net smelter returns, and a 3% royalty interest on other metals, calculated on the same basis.
Since January 1987, Cornucopia Resources, Ltd. ("Cornucopia"), a Canadian corporation listed on the Vancouver Stock Exchange and the Toronto Stock Exchange, has held all of the leasehold interest of USX in the Hillcrest Claims, subject to its obligation to comply with the terms of USX's sublease. Cornucopia subsequently entered into a joint venture with Galactic Resources, Ltd. ("Galactic"), providing for the mining and exploration of the Hillcrest claims and adjacent properties. Under the terms of the joint venture, Galactic earned a 50% interest in the project by providing a feasibility study and by funding an initial phase of mining on the project.
In 1992, Newmont Mining Company ("Newmont") acquired the leasehold interest held by the Company in its Ivanho property near Elko, Nevada,
covering 85,000 acres. In the past three years, a deep drilling program with drillsites on the Ivanho property, has been conducted. In 1995, Newmont and Cornucopia entered into a joint venture arrangement providing for the joint development of the Ivanho property. Newmont has recently advised its joint venture partner that it is withdrawing from the Ivanho property, and Cornucopia is presently seeking a new joint venture partner. If Cornucopia is unsuccessful in finding a new partner, the leasehold interest may be reclaimed. Accordingly, the Company does not know when the Company's leased acreage will be developed, or the extent of such development.
The Company has been advised that a substantial amount of capital has been expended for initial mining and exploration activities on the Ivanho property, of which the Company's property is a part. A 1992 report from Galactic and Cornucopia indicates that in 1991 the joint venture produced 60,000 ounces of gold from the USX pit located on a portion of the Ivanho property. The Company has been further advised that gold and other minerals have been extracted by the joint venture parties and their operator, Touchstone, on claims adjoining the Company's claims. In August, 1994, a high-grade vein was drilled near the western margin of the Clementine prospects of the Ivanho property. Cornucopia has reported in a letter to its shareholders that preliminary analysis of the drilling encompassing the Clementine, Velvet and Butte prospects has developed a geologic resource of 9,106,000 tons grading 0.035 ounces of gold per ton, or 320,000 ounces of gold. As indicated, the Company cannot predict at this time what further exploration and development, if any, will be undertaken on these properties.
Tintic Claims
The Company holds a 52% working interest in eighteen (18) unpatented mining claims located in the Tintic Mining District, near Eureka, Utah. The Company will retain its interest in the claims as long as it makes required annual payments on such claims, which the Company has paid through the fiscal year ended March 31, 1996. Applicable government regulations increased the annual fee for assessment and related work to $200 per claim during the fiscal year ended March 31, 1993. These claims, acquired in 1984, have been held since 1965 by directors and shareholders of the Company.
During the 1996 fiscal year, the Company paid the required lease payment to the Bureau of Land Management of $100 per claim, as required in lieu of exploration by drilling. The Company has reduced the number of its claims from 43 to 18, to reduce its annual fees associated with these claims.
The Company's claims are located on the south side of a caldera, or ancient volcano. Sunshine Mining Company operates the Bergen Mine on the north side of the caldera, which is located approximately twelve miles from the Company's claims. The Company has been advised that Cornucopia Resources has conducted exploration west of the Company's claims. The Company has also been advised that Centurion Mines Corporation has staked adjoining claims. The Company is aware of exploration activity in the area, there is no such activity close to the Company's claims.
In October, 1993, Auric Minerals Corporation, the Company's wholly-owned subsidiary, acquired by lease from unrelated third parties, a 50% working interest in 7 patented mining claims, and a 50% interest in 11 additional unpatented mining claims located in the Tintic Mining District approximately 15 miles west of the Company's Rex claims. The Company's interest in the 7 patented mining claims terminated in the fiscal year ended March 31, 1995, due to certain title and related problems. The Company has maintained its interest in the 11 unpatented mining claims, by payment of the required annual fee to the BLM of $100 per claim. Any profits on the claims are to be shared equally between the Company and the lease holder.
Inyo Claims
For the past several years, the Company has held an interest in the Crater Limited Partnership, a California limited partnership (the "Partnership".) During the fiscal year ended March 31, 1989, the Company paid an additional $12,000 to increase its interest in the Partnership from 14% to 19%. The Partnership owns a sulfur and gold property in Inyo County, Nevada, located northwest of Death Valley.
Subsequent to its organization, the Partnership subleased the property to an independent third party for extraction of sulfur for agricultural use. During the 1993 and 1994 fiscal years, the Company earned a nominal profit from its interest in the Partnership. However, during 1993, the government has prohibited the use of sulfur as a fertilizer for grapes. Additionally, during the 1994 fiscal year, an access road to the property was closed to protect a wilderness area, which has resulted in a loss of the market for sulfur products in Nevada. Moreover, during the fiscal year ended March 31, 1995, the Company lost its contractor on the property, resulting in no profit to the Partnership. Flooding in California in 1995 has also resulted in a major loss of market demand for sulfur in 1995. As a result of these developments, continuation of sulfur extraction on the property is no longer viable, and these mining efforts have been abandoned.
Investment in Dynamic Oil Limited
During the fiscal year ended March 31, 1991, the Company purchased, in two private transactions, a total of 89,600 shares of restricted common stock of Dynamic Oil Limited, an unaffiliated publicly traded British Columbia corporation ("Dynamic"), at a total purchase price of $175,880, or an average cost of $1.98 per share. The Company's holdings in Dynamic represented, at the time of purchase, approximately 1% of the outstanding common stock of Dynamic. The stock was purchased at a price of 15% below the market value of Dynamic common stock on the respective dates of purchase. In connection with these transactions, Auric was granted a warrant with each share of Dynamic purchased, which warrants have expired.
Dynamic is a publicly held corporation incorporated in British Columbia, which is engaged in oil and gas exploration. Auric has been advised that Dynamic is a party to a joint venture agreement with Conoco Oil and British Columbia Gas, providing for the development of a source of gas for Vancouver, Canada. In 1994 and 1995, Dynamic reported that it participated in drilling three successful horizontal oil wells in S.E. Saskatchewan, a new gas well in N.W. Alberta, and doubled its landholdings in the Boundary Bay prospect area of S.W. British Columbia. Dynamic has additionally reported that it has conducted an extensive geochemistry program and successfully obtained permission from the British Columbia government to drill two new Fraser Delta gas exploration wells in 1995. In 1994, Dynamic reported that it purchased an additional 20% interest in its St. Albert 01-30 gas project near Edmonton, Alberta, increasing its interest in the project to 70%. More recently, Dynamic reported the drilling of a dry hole on its Frazier Valley leases, which caused, in large part, a sharp drop in the price of Dynamic's stock over the past few months.
During the fiscal year ended March 31, 1996, the Company sold a total of 10,000 shares of Dynamic, at a price of $14,608, or a loss of approximately $5,021. The Company continues to own 79,600 shares of Dynamic. The common stock of Dynamic is quoted on NASDAQ under the symbol "DYOLF." As of July 3, 1996, the market value of the common stock of Dynamic held by the Company, was approximately $44,775, based on the bid prices of Dynamic's stock.
Acquisition of Interest in Robbie Claims
In September, 1995, the Company entered in a partnership agreement with Hi-Tech Exploration, Ltd. ("Hi-Tech"), Hillcrest Mining Company ("Hillcrest"), and James Fouts ("Fouts"), the Company's President, pursuant to which the Company, Hillcrest and Fouts each purchased from Hi-Tech a 25% interest in 107 unpatented lode mining claims, known as the "Robbie Claims," for the sum of $3,566.67 each. The Robbie claims are located within one-half mile of the Company's Ivanho claims near Elko, Nevada, on Bureau of Land Management land. These claims are believed to be deep gold prospects. The partnership agreement requires the parties to maintain the mining claims, and make required annual payments to the BLM, for a minimum period of 20 years. The interest held by each of the parties cannot be assigned without approval by the other partners, and any such assignment shall carry with it the obligation to share in the annual maintenance of the claims. Each party is required to notify the other parties on or before June 15 of each year, as to whether such party will pay his or its share of the required annual fee to the BLM for the following year. Failure to notify the other parties will result in a default of such failing party's interest in the claims.
The partners are presently evaluating the Robbie claims, and do not have any present intention to explore or develop the claims.
La Fonda Investment
For the past several years, the Company has owned a total of 12,000 shares of restricted common stock, or approximately 12% of the presently outstanding stock, of Corporation de La Fonda, Inc. ("La Fonda"), a New Mexico corporation which owns and operates the historic La Fonda Hotel in Santa Fe, New Mexico.
The operations of La Fonda have been profitable for the past several years. La Fonda reported net earnings, after taxes, of $1,022,451, $990,261 and $1,180,000 for its fiscal years ended October 31, 1995, 1994 and 1993, respectively, as compared to net earnings, after taxes, of $841,695 for its fiscal year ended October 31, 1992. The majority of the profits of La Fonda have been reinvested in improvements to the hotel. Over the past three years, La Fonda has undertaken substantial renovations and improvements to the hotel, including a major addition to the hotel, the installation of security, fire sprinkler and heating and cooling systems, at a cost of several million dollars. In 1991, La Fonda expended approximately $3,000,000 for the construction of a large banquet hall, which has received a considerable amount of recognition and national attention. Similarly, in 1987 and 1988, La Fonda expended in excess of $560,000 to complete a renovation of its hotel rooms. La Fonda has reported that these improvements have contributed to the continued operating success of La Fonda.
During the fiscal years ended March 31, 1996, 1995, 1994, 1993, 1992, 1991 and 1990, the Company earned dividend income from its investment in La Fonda of $12,000, $15,000, $27,000, $30,000, $6,000, $38,400 and $36,600, respectively. Dividends during the 1996, 1995 and 1994 fiscal years decreased from 1993 as a result of La Fonda's reinvestment of profits into improvements in the hotel, and its decision to reduce improvements loans before undertaking a future expansion planned for the hotel.
James Fouts, president, is a director and holder of 705 shares of La Fonda. In addition, Elizabeth B. Fouts has recently been elected a director of La Fonda. In October, 1989, the Company and the other shareholders holding a total of approximately 45% of the outstanding common stock of La Fonda, entered into a Voting Trust Agreement with Samuel Ballen, James Fouts and James Russell, trustees, under the terms of which all of the voting rights of La Fonda held by such shareholders were assigned to the trustees until December 31, 1999. The purpose of the Voting Trust is to protect the assets of La Fonda and to reduce the likelihood of an unfriendly takeover attempt.
OTHER ACTIVITIES
All of the Company's oil and gas exploration, development and production is conducted through various joint ventures in which the Company is a participant.
During the fiscal year, the Company did not conduct any exploration activities, and did not incur any expenditures in connection with oil and gas exploration activities.
During the fiscal year ended March 31, 1989, the Company formed Auric Minerals Corporation, a wholly-owned Nevada subsidiary, to hold the Company's interest in the Hugoton Joint Venture, a joint venture organized to acquire oil and gas lease options in western Oklahoma. In 1989, Petroleum Consultants Energy Corporation ("Petroleum Consultants"), a joint venture partner located in Northfield, Illinois, assumed control of the joint venture under an arrangement whereby it has agreed to assume all future expenditures of the project in exchange for an interest in the project equal to its pro rata share of the entire investment in the project since inception. The Company's interest in the joint venture, as well as the interest of other parties, has been and will continue to be reduced as Petroleum Consultants expends sums on behalf of the joint venture. The Company currently holds a net revenue interest of approximately 10% in the joint venture. >page 7>
The Company is advised that the Hugoton Joint Venture presently held lease options covering approximately 35,000 acres in Texas County, Oklahoma. In 1991, the Joint Venture commenced a lawsuit in an attempt to reduce the spacing required between oil wells or drill sites, in order to make the purchase and exploration of the venture's lease options more attractive. In addition, the Joint Venture initiated a lawsuit against the venture's former attorney's, seeking damages for malpractice. During the 1993 fiscal year, this lawsuit was settled, and the Company received the sum of $52,650 as its portion of the settlement proceeds. During the 1993 fiscal year, the Company paid the sum of $5,000 for a 10% interest in a proposal to drill horizontal wells in old shallow oil fields, for the purpose of extending the useful life of the nearly-depleted oil field. In recent years, the Company's investment in this project had been reduced on the accounting records of the Company to recognize impairment in the value of the property interest. During the fiscal year ended March 31, 1996, the Company reduced the remaining value of its interest to zero, reflecting its assessment that there is no realistic recoverable value.
EMPLOYEES
The Company has no regularly paid employees. The Company paid The Fremont Corp., a corporation of which James Fouts is president and a principal, a total of $12,000 during the fiscal year for secretarial services, office space and clerical services. In addition, the Company has reimbursed James F. Fouts for his expenses incurred on behalf of the Company. In the past, the Company has also engaged the part-time services of others in connection with exploration work conducted on its mining claims.
ITEM 2.

ITEM 2. PROPERTIES
NATURAL RESOURCE PROPERTIES
As discussed in "ITEM 1 - BUSINESS", the Company holds interests in various natural resource properties in Utah, Nevada, California and Oklahoma. For a more detailed discussion of the Company's interest in these properties and exploration and development activities relating to such properties, reference is made to "ITEM 1 - BUSINESS: Business Activities During Fiscal Year".
SHARES OF LA FONDA
The Company is the holder of 12,000 shares or approximately 12% of the outstanding common stock of Corporation de La Fonda, Inc., a corporation which owns the La Fonda Hotel in Santa Fe, New Mexico. (See "ITEM 1 - BUSINESS".)
OKLAHOMA OIL AND GAS INTERESTS
The Company currently has a working interest in one producing oil and gas well located near Oklahoma City, Oklahoma. This oil well has negligible reserves and, therefore, no estimates of proved oil and gas reserves is available or material. Production from the well has declined to a nominal amount over the past five years. All other oil and gas wells in which the Company has had a working interest are no longer productive.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings, and to the best of its knowledge, no such proceedings by or against the Company have been threatened.
ITEM 4.

ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report.
PART II
ITEM 5.

ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The common stock of the Company is traded in the over-the-counter market. There is currently a very limited trading market for the Company's common stock. The Company's shares of common stock are eligible for quotation on the NASD Electronic Bulletin Board under the symbol "AMLS." The following sets forth, for the respective periods indicated, the high and low bid prices of the Company's common stock in the over-the-counter market, based on inter-dealer bid prices, without retail markup, markdown, commissions or adjustments (which do not represent actual transactions), as reported by the National Quotation Bureau's "Pink Sheets".
Quarter Ended High Bid Low Bid
1991 Fiscal Year:
June 30, 1991 $.375 $.25 September 30, 1991 .375 .25 December 31, 1991 .375 .25 March 31, 1991 .375 .25
1992 Fiscal Year:
June 30, 1991 $.50 $.25 September 30, 1991 .50 .50 December 31, 1991 .50 .50 March 31, 1992 .50 .50
1993 Fiscal Year:
June 30, 1992 $.25 .25 September 30, 1992 .25 .25 December 31, 1992 .25 .25 March 31, 1993 .25 .25
1994 Fiscal Year:
June 30, 1993 $.25 .25 September 30, 1993 .25 .25 December 31, 1993 .25 .25 March 31, 1994 .25 .50
1995 Fiscal Year:
June 30, 1994 $.625 .50 September 30, 1994 .625 .625 December 31, 1994 .625 .625 March 31, 1995 .75 .625
1996 Fiscal Year:
June 30, 1995 $.875 .625 September 30, 1995 .875 .625 December 31, 1995 .875 .625 March 31, 1996 .875 .625
On July 8, 1996, the average high and low bid prices quoted by broker-dealer firms effecting transactions in the Company's common stock, were $.875 and $.625, respectively.
Since inception, no dividends have been paid on the Company's common stock, and the Company does not anticipate paying dividends in the foreseeable future.
At July 8, 1996, there were approximately 726 holders of record of the Company's common stock.
ITEM 6.

ITEM 6.
SELECTED FINANCIAL DATA
The following selected financial data of the Company is covered by an opinion of a certified public accountant and should be read in conjunction with the financial statements and related notes thereto.
INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED MARCH 31 1996 1995 1994 1993 1992
Total Revenue $37,481 $40,851 $52,507 $56,320 $36,073
Revenues from natural resource investments 25,402 25,786 $25,507 25,698 26,145
Net Income (loss) 37,662 (12,868) (12,995) 13,183 (5,081) Net Income (loss) per common share (.0387) (.0131) ($.0132) $0.013 $0.005
BALANCE SHEET INFORMATION
AS OF MARCH 31 1996 1995 1994 1993 1992
Total Assets $229,309 $314,694 $351,071 $407,474 $490,513
Long-term debt 0 0 0 0 0
Cash dividends declared per common share 0 0 0 0 0
ITEM 7.

ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's current assets as of March 31, 1996 of $29,261 represents an increase in current assets of $11,779 from current assets of $17,482 one year earlier. Total assets at March 31, 1996, of $229,309, represents a decrease in total assets of $85,385 from total assets of $314,696 one year earlier, which is attributable in large part to certain write-offs of interests in natural resource properties, and a reduction in value of approximately $45,594 of the marketable value of the securities of Dynamic Oil Ltd. held by the Company. Similarly, stockholders' equity of $228,795 at March 31, 1996 represents a decrease in stockholders' equity of $85,006 from stockholders' equity of $313,640 at March 31, 1995. As indicated, this decrease can be attributed in large part to a reduction in value of marketable securities and write-offs in natural resource properties.
The Company does not have sufficient liquidity or capital resources to finance any major developments by the Company. Should ongoing exploration produce favorable results, any adequate exploration or development would require substantial additional financing or the participation of a larger, better-financed company.
RESULTS OF OPERATIONS
During the fiscal year ended March 31, 1996, the Company had total revenue of $37,481, and expenses of $75,143, resulting in a net pre-tax loss of $37,662, as compared to a net pre-tax loss of $12,868 for the fiscal year ended March 31, 1995. The Company's decrease in revenue is a result of a reduction in dividends received on shares of stock of Corporation De La Fonda held by the Company over the past two years. While total revenue during the fiscal year ended March 31, 1996, was only $3,370 less than total revenue in the fiscal year ended March 31, 1995, expenses during the fiscal year ended March 31, 1996 were $21,424 greater than the fiscal year ended March 31, 1995, due to losses on a natural resource property, and a valuation allowance on an unproved property ($19,443).
During the fiscal years ended March 31, 1996 and 1995 and 1994, operating revenues from the Company's interest in oil wells in Oklahoma was nominal. The Company received a $25,000 advance royalty payment during the fiscal year on its leased mining claims in Nevada, after paying the same amount to Hillcrest under the terms of the Company's lease with Hillcrest. Dividend income of $12,000 from the Company's investment in La Fonda during the year represents a decrease in dividend income of $3,000 and $15,000 from the fiscal years ended March 31, 1995 and 1994, respectively.
Management does not believe that the Company's operations have been more adversely impacted by inflation than other similar businesses, although increased expenses have affected the cost of minerals exploration.
ITEM 8.

ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are included beginning at page.
ITEM 9.

ITEM 9.
CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
During the fiscal year there has been no disagreement with accountants on any matter of accounting principles or practices or financial statement disclosure as provided in Regulation S-K, Item 304.
PART III
ITEM 10.

ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
LIST AND TERMS OF OFFICE
The table below sets forth the name, age, and position of each executive officer and director of the Company.
Officer or Name Age Position Director Since(1)
James F. Fouts 77 Director, President 1969 and Chief Executive Officer
George W. Wortley 84 Director, Vice President 1974 and Assistant Secretary/ Treasurer
Dan Ligino 72 Director and Vice President 1974
Elizabeth F. White 46 Director 1985(2)
Elizabeth B. Fouts 68 Secretary/Treasurer and 1975(2) Principal Financial Officer
____________ (1) All directors and executive officers serve for a term of one year or until their successors are chosen and qualified.
(2) James F. Fouts is the father of Elizabeth F. White and the husband of Elizabeth B. Fouts. There are no other family relationships among any of the above-named directors, executive officers, or nominees. - -------------
James F. Fouts. Mr. Fouts has been president of the Company since 1975. From 1969 to 1975, he served as secretary/treasurer of the Company and has served as director of the Company since its incorporation in 1969. Since 1967 he has also been employed as president of Fremont Corporation, a private corporation and an affiliate of the Company engaged in holding and managing investments (chiefly real estate), with its principal office and place of business in Louisiana. Mr. Fouts graduated from Texas A&M University in 1940 with a bachelor's degree in chemical engineering. From 1940 to 1959, he was employed as division superintendent for Bariod Division of the National Lead Company, supervising oil well logging operations in the western United States and Canada, with headquarters in Casper, Wyoming. From 1940 through 1966, he was engaged in the business of technical reproduction and oil well log distribution in Canada and the United States. He is a member of the American Association of Petroleum Geologists; Intermountain Association of Petroleum Geologists; and a past vice president of the Wyoming Geological Association. He was formerly a director of the Rocky Mountain Oil & Gas Association. He is presently a director of Corporation de La Fonda, an affiliate of the Company engaged in the hotel business. Mr. Fouts and his wife also own 3,000 shares of the common stock of La Fonda. Mr. Fouts is also a director of High Plains Natural Gas Company, a pipeline company serving five counties in the Texas Panhandle.
George W. Wortley. Mr. Wortley is retired. He continues to devote part-time as vice president, assistant secretary/treasurer and director of the Company, positions he has held since 1974. Prior to his retirement, he was active in independent mining exploration services for 27 years. Mr. Wortley is also a director of Gold Ventures, Inc., a publicly-held company subject to the reporting requirements of Section 15(d) of the Securities Exchange Act of 1934.
Dan Ligino. Mr. Ligino has served as vice president and a director of the Company since 1974. He is and has been for approximately the past sixteen years a director of State Bank of East Moline, Illinois, and is a director of the Colona Avenue State Bank in East Moline. He is a retired businessman. Prior to his retirement, he had 23 years of experience in the Dairy Queen business; 20 years of experience, including serving as president of Hub City Implement Company, as a John Deere equipment distributor; and over 25 years of experience in real estate.
Elizabeth F. White. Mrs. White as been a director of the Company since 1985. She graduated from Newcomb College of Tulane University, New Orleans, Louisiana, in 1971. She was employed by Traveler's Insurance Company for five years, where she was resident agent at Houma, Louisiana specializing in investigations in oil exploration and offshore drilling accidents. In 1977, she moved with her family to California and presently resides in Monte Sereno, California with her husband and two children. She has founded, owned and operated a successful business importing and selling European chocolate candy. Since 1981, she has been a computer consultant for children's education and has had several children's programs authored by her published. She has consulted for Apple Computer and has served on the Apple Computer Grant Committee. Mrs. White was a director of a science and computer school located in San Jose, California. Mrs. White was a partner in Empower-Net, a business consulting firm. Presently, Mrs. White is an instructor in AVATAR, a business program.
Elizabeth B. Fouts. Mrs. Fouts has served as secretary/treasurer of the Company since 1975. She is a graduate of Newcomb College of Tulane University, New Orleans, Louisiana. She obtained a master of science degree in psychology from Northeast Louisiana University of Monroe, Louisiana. For a period of fifteen years until July, 1987, when she retired, she was employed as a psychology consultant by the County School System of Ouachita Parish to July 1987. In December, 1993, Mrs. Fouts was elected a director of La Fonda. Mrs. Fouts is also secretary/treasurer for Fremont Corporation, an affiliate of the Company, and has held similar positions in other companies.
ITEM 11.

ITEM 11.
EXECUTIVE COMPENSATION
REMUNERATION DURING FISCAL YEAR
During the fiscal year ended March 31, 1996, no officer or director received compensation exceeding $60,000.
The following table sets forth the compensation paid by the Company during the fiscal year to all officers and directors as a group:
Name/Position Cash Compensation*
All officers and directors as a group (5 persons) $14,396*
* Consists of $12,000 paid to Fremont Corporation, a corporation of which James Fouts is an officer and principal shareholder, for office use and bookkeeping, secretarial and clerical services; and $2,396 paid in directors' fees.
The directors are compensated $500 per year for board membership, and are paid $100 per meeting attended, plus expenses. The Company has held only one formal board meeting per year for the past several years.
ITEM 12.

ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows, as of July 8, 1996, the number of shares of common stock, par value $.01, of the Company owned of record or beneficially by each person who owned of record, or was known by the Company to own beneficially, more than 5% of the Company's common stock, and the name and shareholdings of each officer and director, and all officers and directors of the Company as a group:
Amount and Nature of Ownership(1) --------------------------------------------------- Sole Voting Shared and Voting and Percent Name of Person Investment Investment of or Group Power Power Class(1)
Principal Shareholders:
Alan E. Fouts(2)(4) 96,250 9.63 4002 Bon Aire Drive Monroe, Louisiana 71203 12,800(2) 1.28
Donovan B. Fouts(2)(4) 96,250 9.63 4002 Bon Aire Drive Monroe, Louisiana 71203 0 0.00
James F. Fouts(2)(4) 33,500 3.35 4002 Bon Aire Drive Monroe, Louisiana 71203 76,250(3) 7.63
Elizabeth B. Fouts(2)(4) 0 0.00 4002 Bon Aire Drive Monroe, Louisiana 71203 76,250(3) 7.63
Dan Ligino 87,425 8.74 1407 19th Street East Moline, IL 61244 43,500(5) 4.35
Elizabeth F. White(2)(4) 122,400 12.24 243 Via la Posada Los Gatos, CA 95030 0 0.00
George W. Wortley 0 0.00 1781 Texas Street Salt Lake City, Utah 84108 0 0.00
Amount and Nature of Ownership(1) ----------------------------------------------- Sole Voting Shared and Voting and Percent Name of Person Investment Investment of or Group Power Power Class(1)
Officers and Directors:
James F. Fouts ------------------------See Above---------------
Elizabeth B. Fouts ------------------------See Above---------------
Dan Ligino ------------------------See Above---------------
Elizabeth F. White ------------------------See Above---------------
George W. Wortley ------------------------See Above--------------
All officers and directors 236,975 23.70 as a group (5 persons)(3)(4)(5) 119,750(3) 11.98 - ------------
(1) The percentages are calculated based on the number of outstanding shares (1,000,000) of the Company as of the Record Date, after deducting a total of 15,511 shares held by the Company in treasury.
(2) Alan E. Fouts, Donovan B. Fouts and Elizabeth F. White are the sons and daughter, respectively, of James F. Fouts and Elizabeth Fouts, husband and wife. With respect to Alan E. Fouts, of the shares reflected under "Shared Voting and Investment Power", 12,800 shares are held in a family trust.
(3) Consists of 76,250 shares owned directly by James F. Fouts and Elizabeth B. Fouts, his wife, in joint tenancy.
(4) In addition to the beneficial stock ownership of Mr. Fouts and his immediate family, described above, other relatives of Mr. Fouts own the following interests: 12,800 shares owned by a brother; 800 shares owned by a sister; 38,325 shares owned by a brother-in-law; and 1,800 owned by a sister-in-law. No agreement or understanding exists with respect to the voting of these shares; however, it is anticipated that they will be voted as Mr. Fouts recommends or that Mr. Fouts will be designated as proxy with respect to the shares.
(5) These shares are held in joint tenancy by Mr. Ligino and his brother.
There are no arrangements known to the Company the operation of which may at a subsequent date result in a change of control of the Company.
ITEM 13.

ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company employs officers and principal shareholders in the performance of exploration work on its mineral claims and in evaluating new properties. Compensation paid in connection with these services has been determined by the Company to compare favorably with amounts which could be expected to be paid to third parties. No amounts were paid during the last fiscal year.
No director, officer, nominee for director, or any associate of such director, officer or nominee, has been indebted to the Company at any time during the past several fiscal years.
The Company owns 12,000 shares or approximately 12% of the outstanding common stock of Corporation de La Fonda. James F. Fouts, President, is also a shareholder and director of Corporation de La Fonda. Because of these relationships, any transaction between the Company and this entity cannot be deemed to be at arm's length.
In August, 1993, the Company authorized the grant of options to purchase a total of 12,000 shares of common stock to each of the Company's officers and directors. These options are exercisable at a price of $.60 per share at any time on or before August 14, 1996. Although the exercise price of the optioned shares is higher than the bid price of the Company's common stock as of the date of grant, and as of the present date, this transaction cannot be considered the result of arms' length negotiations. During the fiscal year ended March 31, 1995, options to purchase a total of 12,000 shares of the Company's common stock were exercised by Elizabeth B. Fouts, a director and wife of the Company's president.
On October 1, 1986, the Company loaned the sum of $100,000 in cash to Suite Simpatica, Ltd. ("Debtor"), a New Mexico corporation, under the terms of a Promissory Note (the "Note") of such date. The Note was payable on or before October 1, 1989. Although the original terms of the Note provide for interest at the rate of 8.1% per annum from October 1, 1986, the Company subsequently verbally agreed to forego interest on the Note. The Note was subordinated to all other indebtedness of the Debtor, including secured and unsecured debt. In the end of 1990, the Company agreed to accept a discounted note in the amount of $75,000. As a result of this transaction, a $25,000 loss to the Company was recognized. In 1994, the discounted note had been paid in full. The Company determined that it would discount the note because of the poor financial condition of the Debtor. A majority of the equity of the Debtor is owned by management of La Fonda, an affiliate of the Company. In addition, James Fouts, President and a director of the Company, and a director of La Fonda, is also a shareholder of approximately 5% of the Debtor, and the president of La Fonda holds in excess of 50% of the Debtor. Therefore, the terms of the loan transactions between the Company and the Debtor cannot be considered to be the result of arm's length negotiations.
During the fiscal year ended March 31, 1996, the Company entered into a partnership agreement whereby the Company acquired a 25% interest in the "Robbie Claims," 107 unpatented mineral claim owned by Hi-Tech Exploration, at a cost of $3,567. James F. Fouts, the Company's President, also acquired a 25% interest in such mining claims in the same transaction, at the same cost. Therefore, this transaction cannot be considered the result of arms' length negotiations.
PART IV
ITEM 14.

ITEM 14.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
A. INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
The index (table of contents) to the financial statements and schedules appears at page 19.
B. EXHIBITS:
None.
C. REPORTS ON FORM 8-K
During the fiscal year ended March 31, 1996, the Company did not file any reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
REGISTRANT:
AURIC METALS CORPORATION
By /s/ James F. Fouts James F. Fouts, President
Date: July 12, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
/s/ James F. Fouts Director and President Date: July 12, 1996 James F. Fouts (Principal Executive Officer)
/s/ Elizabeth B. Fouts Secretary-Treasurer Date: July 12, 1996 Elizabeth B. Fouts (Principal Financial Officer)
/s/ Dan Ligino Vice President and Director Date: July 12, 1996 Dan Ligino
/s/ Elizabeth F. White Vice President and Director Date: July 12, 1996 Elizabeth F. White
AURIC METALS CORPORATION AND SUBSIDIARY
Report of Independent Accountants. 1
Consolidated Balance Sheets for the years ended March 31, 1995 and 1995. 2
Statements of Consolidated Income for the years ended March 31, 1996, 1995 and 1994 3
Statement of Consolidated Stockholders' Equity for the years ended March 31, 1996, 1995 and 1994. 4
Statements of Consolidated Cash Flows for the years ended March 31, 1996, 1995 and 1994. 5
Notes to Financial Statements. 6 - 12
REPORT OF INDEPENDENT ACCOUNTANTS
Shareholders and Board of Directors Auric Metals Corporation Salt Lake City, Utah
We have audited the accompanying balance sheets of Auric Metals Corporation as of March 31, 1996 and 1995, and the related statements of income, stockholders' equity, and cash flows for the years ended March 31, 1996, 1995, and 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as will 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 consolidated financial position of Auric Metals Corporation as of March 31, 1996 and 1995, and the results of its operations and its cash flows for the years ended March 31, 1996, 1995 and 1994, in conformity with generally accepted accounting principles.
Salt Lake City, Utah July 5, 1996
AURIC METALS CORPORATION AND SUBSIDIARY ------------------------------------------------ FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS -------------------------------------------------------------
March 31, 1996 March 31, 1995
AURIC METALS CORPORATION AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS MARCH 31, 1996 AND 1995
The accompanying notes are an integral part of these consolidated financial statements
AURIC METALS CORPORATION AND SUBSIDIARY STATEMENTS OF CONSOLIDATED INCOME (LOSS) YEARS ENDED MARCH 31, 1996, 1995, 1994
The accompanying notes are an integral part of these consolidated financial statements
AURIC METALS CORPORATION AND SUBSIDIARY STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY YEARS ENDED MARCH 31, 1996, 1995 AND 1994
The accompany notes are an integral part of these consolidated financial statements
AURIC METALS CORPORATION AND SUBSIDIARY STATEMENT OF CONSOLIDATED CASH FLOWS YEARS ENDED MARCH 31, 1996, 1995 AND 1994
The accompanying notes are an integral part of these consolidated financial statements
AURIC METALS CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 1996, 1995 AND 1994
(1) Operations:
Auric Metals Corporation (the "Company") was incorporated in Utah in May of 1969 to engage in mineral exploration. In subsequent years, the Company has also engaged in oil and gas exploration, development and production activities. The Company holds working interests in various patented and unpatented mining claims in the Tintic Mining District of Utah. The Company leases mining claims near Elko, Nevada from Hillcrest Mining Company of Denver and has subleased the claims to United States Steel Corporation. The Company presently holds a working interest in one oil and gas well near Oklahoma City, Oklahoma which provides nominal revenue.
(2) Significant Accounting Policies:
Cash Equivalents:
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months to be cash equivalents.
Principles of consolidation:
The consolidated financial statements include the accounts of Auric Minerals Corporation. Intercompany accounts and transactions have been eliminated in consolidation.
Investment in unconsolidated affiliates:
Investments in affiliated companies in which ownership is 20% or more are carried at the Company's original cost plus equity in earnings since date of acquisition.
Investments in less than 20% owned affiliates are carried at cost or estimated net realizable amounts, whichever is lower.
Mining:
Exploration and development expenditures are generally charged to expenses as incurred until a decision is made to develop a mineral reserve. Expenditures to bring new properties into production and major expenditures of a nonrecurring nature are deferred and amortized ratable over production benefitted. Expenditures for continuing development required to maintain production are charged to expenses as incurred.
AURIC METALS CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 1996, 1995 AND 1994 (Continued)
(2) Significant Accounting Policies - continued: Oil and gas properties:
Costs to acquire mineral interests in oil and gas properties, to drill exploratory wells which find proved reserves, and to drill and equip development wells are capitalized. Geological and geophysical costs and costs to drill exploratory wells which do not find proved reserves are expensed.
Unproved oil and gas properties which are individually significant are periodically assessed for impairment of value and a loss is recognized at the time of impairment by providing an impairment allowance. The remaining unproved oil and gas properties are aggregated and an overall impairment allowance is provided based on the Company's prior experience. Capitalized costs of proved oil and gas properties are depreciated and depleted by the unit-of-production method based on proved oil and gas reserves as estimated by the Company's engineers.
The Company's oil and gas investment included $40,215 invested in unproved and undeveloped properties. The investment was made by the Company's wholly owned subsidiary, Auric Minerals Corporation, as a joint venture partner in the Hugoton Joint Venture. The Joint Venture was organized to acquire oil and gas lease options in western Oklahoma. In previous years, this investment had been reduced by additions to an offsetting valuation allowance to recognize impairment in the value of this property interest. During the current fiscal year, the Company reduced the remaining value to zero, reflecting its assessment of recoverable value.
Other equipment is recorded at cost and depreciated on a straight-line method over a five year estimated useful life.
(3) Investments consist of the following at March 31, 1996 and 1995:
Crater investment
The Company has a 19% limited partner interest in the Crater Limited Partnership. Crater engaged in sulfur mining in Inyo County, California. The Company carried this investment at cost or estimated net realizable value, whichever was lower. During the current fiscal year, Crater abandoned its mining operations, therefore, the Company reduced the value of this investment to zero.
AURIC METALS CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 1996, 1995 AND 1994 (Continued)
(3) Investments - continued:
Robbie claims investment During the current fiscal year, the Company acquired a 25% interest in the "Robbie" gold prospect claims owned by Hi-Tech Exploration at a cost of $3,567. The Company's President, Mr. James F. Fouts also a owner a 25% interest in these claims.
La Fonda investment The Company owned, as of March 31, 1996, 12,000 shares of the common stock of Corporation De La Fonda, Inc., or approximately 12% of that company's outstanding shares. De La Fonda, Inc. is a New Mexico hotel operation. Prior to 1984, the Company owned more than 20% of De La Fonda and accounted for its investment by the equity method. Since 1983, the Company's investment has been less than 20% and the cost method of accounting has been used. The carrying value of the investment includes $123,177 of cumulative undistributed earnings of La Fonda added to the investment under the equity method. Income taxes have been recognized under the assumption that undistributed earnings would eventually be distributed as dividends, thereby qualifying for dividends- received deductions. If the undistributed earnings are eventually received in taxable transactions other than as dividends, an unrecognized tax of approximately $41,880 under current rates could result. The Company's equity in the underlying net assets of La Fonda exceeds the carrying value of the investment. Since the Company's President, Mr. James F. Fouts, has positions, interests or shareholdings, in La Fonda, any transaction between the Company and this entity cannot be deemed to be at arm's length.
1996 1995
Crater investment $ - $ 15,750 Ro bbie claims investment 3,567 La Fonda investment 150,789 150,789
Other investments $154,356 $166,53
AURIC METALS CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 1996, 1995 AND 1994 (Continued)
(3) Investments - continued: Dynamic Oil Ltd. Effective April 1, 1994, the Company adopted SFAS No. 115 on accounting for certain investments in debt and equity securities. This new standard requires that available-for-sale investments in securities that have readily determinable fair values be measured at fair value in the balance sheet and that unrealized holding gains and losses for these investments be reported in a separate component of stockholders' equity until realized. At March 31, 1996 and 1995 marketable investments classified as available for sale included the following: 1996 1995
Dynamic Oil Ltd. shares at cost $156,251 $175,880
Dynamic Oil Ltd. shares at market *$ 44,985 *$110,208
Gross unrealized holding loss $111,266 $ 65,672 *Carrying values
(4) Stock options: During the 1994 fiscal year, the Company granted stock options to each officer and director for 12,000 shares of the Company's common stock at $.60 per share. Options expire on August 14, 1996. As of March 31, 1996, 12,000 of these options had been exercised.
(5) Related party transactions: The amounts paid to officers and directors have not been, in any sense, negotiated at arm's length. Payments of $12,000 were made during the current fiscal year to The Fremont Corp., a corporation in which the Company's president is principal shareholder. These payments are for office use, bookkeeping and clerical services. Refer to Note (3) for additional related party transactions related to the Robbie claims investment and the La Fonda investment.
(6) Federal and state income tax: Effective April 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. The cumulative effect of the change in accounting principle is immaterial. At March 31, 1996, the Company had, for federal tax reporting purposes, an operating loss carryforward of approximately $251,000. This carryforward begins to expire in 2004. No benefit has been reported in the 1996 financial statements, however, because the Company believes there is at least a 50% chance that the carryforward will expire unused. Accordingly, the tax benefit of the loss carryforward has been offset by a valuation allowance of the same amount.
AURIC METALS CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 1996, 1995 AND 1994 (Continued)
(7) Subsequent event: As of July 3, 1996, the market value of the Company's investment in Dynamic Oil Ltd. was $44,775 resulting in an increase in the unrealized loss of $210.
(8) Commitments and contingencies: The Company is required to pay the Bureau of Land Management $100 annually on 29 leased mining claims for $2,900. Rates are subject to change and failure to pay results in loss of mining rights. The payments to BLM are in lieu of assessment work which was required previously. The leases are cancelable annually upon notice to lessor.
AURIC METALS CORPORATION AND SUBSIDIARY SUPPLEMENTAL OIL AND GAS INFORMATION (unaudited)
Oil and gas exploration, development and production is conducted through various joint ventures. At March 31, 1996, the Company's oil and gas properties were located in Oklahoma, U.S.A.
The following schedule represents the Company's capitalized oil and gas property costs at the dates indicated:
March 31, 1996 1995 -------- ------- Unproved oil and gas properties $40,215 $40,215 Proved oil and gas properties - - 40,215 40,215
Accumulated depreciation, depletion and amortization, and valuation allowances 40,215 20,772
Net capitalized costs $ - $19,443
The Company retains an interest in one oil producing property which has negligible reserves, therefore, no estimates of proved oil and gas reserves is available or material, and information regarding standardized measure of discounted future net cash flows and changes therein relating to proved oil and gas properties is not presented. Net capitalized costs relating to proved oil and gas properties is zero.
Costs Incurred in Oil and Gas Property Acquisition Exploration and Development Activities For The Years Ending March 31, 1996, 1995 And 1994
United States March 31, 1996: Acquisition of properties $ -
March 31, 1995: Acquisition of properties $ -
March 31, 1994: Acquisition of properties $4,000
AURIC METALS CORPORATION AND SUBSIDIARY SUPPLEMENTAL OIL AND GAS INFORMATION (Unaudited)
Results of Operations From Production Activities For The Years Ending March 31, 1996, 1995 And 1994
United States March 31, 1996 Revenues - sales $ 402 Production costs - Exploration expenses - Depreciation, depletion and amortization - Results of operations from producing activities (excluding corporate overhead and interest costs) $ 402
March 31, 1995 Revenues - sales $ 786 Production costs ( 82) Exploration expenses - Depreciation, depletion and amortization - Results of operation from producing activities (excluding corporate overhead and interest costs) $ 704
March 31, 1994 Revenues - sales $ 507 Production costs ( 88) Exploration expenses - Depreciation, depletion and amortization - Results of operations from producing activities (excluding corporate overhead and interest costs) $ 419


Item 1. Business.
GENERAL
Merit Medical Systems, Inc. (the "Company") was formed in 1987 by members of its current management for the purpose of producing single use medical products of high quality and superior value primarily for use in diagnosis and treatment of cardiovascular disease. The Company's products are designed to provide physicians and other health care professionals with devices that enable them to perform interventional and diagnostic procedures safely and effectively. Initially, the Company's expertise in innovative product design and its proprietary technology and skills in injection and insert molding enabled it to introduce innovative new products and capture significant market share. The Company subsequently combined its plastics molding capability with the application of proprietary electronics and sensor-based technologies to develop a line of angioplasty inflation products with electronic sensing and display features. These devices are now included in a series of sensor-based products that address a broad range of needs related to diagnostic and interventional catheterization procedures performed in hospitals.
The Company's strategy is to offer a broad line of innovative, disposable products for use in angiography, angioplasty and similar procedures and to increase market acceptance and penetration for both its existing and new products in the U.S. and in international markets. Longer term, the Company's strategy is to extend the application of its plastics molding, electronic and sensor-based technologies to develop products for diagnostic and interventional procedures in additional markets such as neuroradiology, urology and critical care. The Company's sales of products in combination and in custom kits have increased as additions have been made to the Company's product lines. In 1996, approximately 60% of the Company's sales were made directly to U.S. hospitals and approximately 16% of sales were made to custom packagers who also distribute to U.S. hospitals. Approximately 24% of the Company's sales in 1996 were made in international markets.
The Company was organized in July 1987 as a Utah corporation. In July 1994 the Company purchased controlling interest in Sentir, Inc., a California-based manufacturer of silicon sensors. The Company has also organized subsidiaries in Ireland, Germany, France, the United Kingdom, Belgium, and the Netherlands to conduct its international business. On January 31, 1997 the Company purchased the operating assets and product lines of Universal Medical Instrument Corp.("UMI"). The Company also leased from UMI a 32,000 square foot factility in Saratoga Springs New York. The Company's principal offices are located in a manufacturing and office facility at 1600 West Merit Parkway, South Jordan, Utah 84095, and its telephone number is (801) 253-1600. See "Item 2.

Item 2. Properties.
The Company is the owner of approximately 35 acres of real property situated in South Jordan City, Utah, which surrounds the site of its 175,000 square foot office and manufacturing facility where it relocated and consolidated its operations in November 1994. The Company sold to the developer ten acres of land on which the facility was constructed and entered into a 25-year lease agreement to finance the new facility. Monthly lease payments are approximately $108,000. The Company also holds an option to purchase the facility, exercisable at market value after ten years and, if not exercised, after 25 years. The new facility has been constructed to the Company's specifications and is presently utilized to the extent of approximately 75% on a single-shift basis. The facility is deemed adequate for the Company's present level of operations and for anticipated increases in the level of operations.
The Company continues to lease approximately 25,000 square feet at its former location which are being subleased to third parties.
The Company is leasing a building of approximately 26,500 square feet in Galway County Galway, Republic of Ireland, as its principal office and future manufacturing and research and development facility for European operations. The property has been leased and is being improved and equipped on terms deemed favorable to the Company in connection with economic development incentives and grants provided by the Irish Government. This lease is for 20 years at approximately $156,000 per year less a 50% subsidy from the Irish government for 3 years. The Company also has a perpetual purchase option available at favorable terms through the term of the lease.
The Company has also acquired approximately 1 1/2 acres and a building of approximately 25,000 square feet in Castlerea, County Roscommon, Republic of Ireland.
The Company also entered into a short term (18 months, with options to extend for three additional two year terms) lease of a 32,000 square foot facility in Saratoga Springs New York with very favorable terms.
Item 3.

Item 3. Legal Proceedings.
On February 4, 1994, an action was filed in the Third District Court of Salt Lake County, State of Utah by an individual claiming to be a shareholder of the Company and naming the Company, Fred P. Lampropoulos, President of the Company, and Sentir, a company founded by Mr. Lampropoulos, as defendants. The complaint asserts claims on behalf of the Company (derivative claims) against Mr. Lampropoulos and Sentir, alleging breach of fiduciary duty, and the improper taking of a corporate opportunity in connection with the formation of Sentir. The relief sought in connection with the derivative claims included disgorgement, costs, and attorney's fees. The Company appointed an independent Special Litigation Committee of the Board to determine the Company's course of action on the derivative claims which engaged counsel separate from the Company's usual counsel for purposes of the derivative claims. On November 7, 1995, pursuant to a Motion filed on behalf of the Company's Special Litigation Committee, the Court made a minute entry granting the motion to Dismiss the derivative claims, without prejudice. On November 4, 1996, the Special Litigation Committee delivered its report essentially concluding that the derivative claims were not well founded. Nevertheless, on November 22,1996, the plaintiff refiled the derivative claims in the Third District court of Salt Lake County, State of Utah and on January 22, 1997, a motion to dismiss was filed on behalf of the Company, seeking to terminate the litigation and asserting that the report of the Special Litigation Committee is entitled to deference under the law. Plaintiff has not yet responded
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.
PART II
Item 5.

Item 5. Market for Registrant's Common Stock and Related Shareholder Matters.
The "Market Information" included in the Company's Annual Report to Shareholders for the year ended December 31, 1996 furnished herewith to the Commission as Exhibit 13.1 to this report on Form 10-K, is incorporated herein by reference.
Item 6.

Item 6. Selected Financial Data.
The "Selected Financial Data" included in Company's Annual Report to Shareholders for the year ended December 31, 1996 furnished herewith to the Commission as Exhibit 13.1 to this report on Form 10-K, is incorporated herein by reference.
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The "Management's Discussion and Analysis of Financial Condition" included in the Company's Annual Report to Shareholders for the year ended December 31, 1996 furnished herewith to the Commission as Exhibit 13.1 to this report on Form 10-K, is incorporated herein by reference.
Item 8.

Item 8. Financial Statements and Supplementary Data.
The Company's financial statements and notes included in the Company's Annual Report to Shareholders for the year ended December 31, 1996 furnished herewith to the Commission as Exhibit 13.1 to this report on Form 10-K are incorporated herein by reference.
Item 9.

Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure.
There has been no Form 8-K filed reporting a change of accountants or reporting disagreements on any matter of accounting principle, practice, financial statement disclosure or auditing scope or procedure.
PART III
Item 10, 11, 12 and 13.
These items are incorporated by reference to the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders scheduled for May 21, 1997. The definitive Proxy Statement will be filed with the Commission not later than 120 days after December 31, 1996, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended.
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) Documents Filed as Part of this Report:
Financial Statements. The following financial statements are incorporated by reference as provided in Item 8 of this report:
-- Independent Auditors' Report
-- Balance Sheets as of December 31, 1996 and 1995
-- Statements of Operations for the Years Ended December 31, 1996, 1995 and 1994
-- Statements of Stockholders' Equity for the Years Ended December 31, 1996, 1995 and 1994
-- Statements of Cash Flows for the Years Ended December 31, 1996, 1995 and 1994
-- Notes to Financial Statements
(b) Reports on Form 8-K:
None.
(C) Exhibits:
The following exhibits required by Item 601 of Regulation S-K are filed herewith or have been filed previously with the Commission as indicated below:
- -------- -----------------
* These exhibits are incorporated herein by reference.
(d) Financial Statement Schedules: There are no financial statement schedule required to be filed with this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 27, 1997.
MERIT MEDICAL SYSTEMS, INC.
By:______________________________________ Fred P. Lampropoulos, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 27,1997.
Signature Capacity in Which Signed
____________________________ President, Chief Executive Officer and Director Fred P. Lampropoulos
____________________________ Chief Financial Officer, Secretary, Treasurer and Director (Principal Kent W. Stanger financial and accounting officer)
____________________________ Director Richard W. Edelman
- ---------------------------- Rex C. Bean Director
- ---------------------------- James J. Ellis Director
- ---------------------------- Michael E. Stillabower Director