ITEM 1. DESCRIPTION OF BUSINESS
General
Apex Minerals Corporation (the "Company") was incorporated in the State of Delaware on July 10, 1995. The Company presently has no assets and no business operations. The Company's mailing address is 57 West 200 South, Suite 310, Salt Lake City, Utah 84101. Its telephone number is (801) 359-9309.
During the year ended June 30, 1997, the Company filed a registration statement on Form SB-2 with the U.S. Securities and Exchange Commission to raise up to $200,000 through the sale of up to 800,000 shares at $0.25 per share. During the year ended June 30, 1998, the Company raised $76,450 through the sale of 305,800 shares.
The Company, through its former majority owned subsidiary, Apex Minerals of Utah, Inc., a Utah corporation incorporated on June 7, 1996, (hereinafter the " Former Subsidiary"), had previously located certain unpatented lode mining claims in the Tutsagubet Mining District in Washington County, Utah. In August 1998 the Company did not have sufficient funds to pay the annual assessments on the claims and management decided to abandon them. In addition, the Company's interest in the Former Subsidiary was transferred to Gaylon W. Hansen, a former shareholder of the Company, for services rendered to the Company. At the time of transfer, the Former Subsidiary had no interest in any mining claims or any other assets.
Proposed Activities
The Company is currently seeking potential business acquisitions or opportunities to enter into in an effort to commence new business operations. The Company does not propose to restrict its search for a business opportunity to any particular industry or geographical area and may, therefore, engage in essentially any business in any industry. The Company has unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors.
The selection of a business opportunity in which to participate is complex and risky. Additionally, as the Company has only limited resources, it may be difficult to find good opportunities. There can be no assurance that the Company will be able to identify and acquire any business opportunity based on management's business judgement.
The activities of the Company are subject to several significant risks which arise primarily as a result of the fact that the Company has no specific business and may acquire or participate in a business opportunity based on the decision of management which potentially could act without the consent, vote, or approval of the Company's shareholders. The risks faced by the Company are further increased as a result of its lack of resources and its inability to provide a prospective business opportunity with significant capital.
The Company has no employees.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY
The Company's offices are furnished at no cost by the president of the Company and are shared with other unrelated companies.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings or government actions, including any material bankruptcy, receivership, or similar proceedings. Management of the Company does not believe that there are any material proceedings to which any director, officer or affiliate of the Company, any owner of record of beneficially of more than five percent of the common stock of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during the fourth quarter of the fiscal year ended June 30, 1999.
PART II
ITEM 5.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is presently no public trading market for the common stock of the Company, and there has been no reported bid price of the Company's common stock.
Since its inception the Company has not paid any dividends on its common stock and the Company does not anticipate that it will pay dividends in the foreseeable future.
At September 27, 1999, the Company had approximately 18 shareholders of record. The Company acts as its own transfer agent.
ITEM 6.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company has had no revenues from operations during the fiscal year ended June 30, 1999, and has had no significant revenues from operations since its inception in July 1995.
During the year ended June 30, 1999, the Company held interests in a number of unpatented mining claims, each of which required payment of annual maintenance fees principally to the Bureau of Land Management in the aggregate amount of approximately $15,000, which fees were due on or before August 31, 1998. The Company had attempted without success to locate joint venture partners to develop the claims or potential purchasers of such claims. The Company did not have sufficient funds to pay the annual fees and Mr. Oveson, who had previously loaned money to the Company, determined not to advance additional funds for this purpose. Management decided to abandon the interest of the Company in such claims and did not pay the annual fees.
The Company has no plans to raise or seek additional funding, but intends to seek a new business venture or enterprise for the Company. The Company has no significant operating costs or capital obligations.
ITEM 7.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company are set forth immediately following the signature page of this annual report. The financial statements of the company have not been audited in reliance upon Rule 3-11 of Regulation S-X, but have been completed my management. The company maintains that it meets the requirements of this rule and provides the following specific information:
(a) Its gross receipts from all sources for the fiscal year covered in the financial statements were not in excess of $100,000; (b) the company had not purchased or sold any of its stock, granted any options therefor, or levied assessments upon any outstanding stock; (c) expenditures for all purposes for the fiscal year were not in excess of $100,000; (d) there was no material change in the business of the company occurring during the fiscal year, including any bankruptcy, reorganization, readjustment or succession or any material acquisition or disposition of plants, mines, mining equipment, mine rights, or leases; and (e) the shares of the company are not listed upon any exchange and it is not subject to any government authority which requires the furnishing to it or publication of audited financial statements.
ITEM 8.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Crouch, Bierwolf, & Chisholm were previously the principal accountants for the Company. The Board of Directors decided to rely upon Rule 3-11 of Regulation S-X and audited financial statements were not completed for the year ended June 30, 1999.
PART III
ITEM 9.
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
General
The sole officer and director of the Company is Howard M. Oveson. Mr. Oveson has been a director and the secretary/treasurer of Apex Minerals Corporation since July 1995. He has been the President of the Company since June 1998. Since 1980 Mr. Oveson has been self-employed as a business consultant to private and public companies. Age 66.
Each director of the Company is elected to hold office until the next annual meeting of the shareholders and until his or her successor is elected and duly qualified. Each officer of the Company is appointed to hold office until the first meeting of the Board of Directors immediately following the annual meeting of shareholders.
Compliance with Section 16(a) of the Exchange Act
The Company's common stock is not registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended, and therefore no disclosure is required pursuant to this item.
ITEM 10.
ITEM 10. EXECUTIVE COMPENSATION
There has been no compensation awarded to, earned by, or paid to any of the executive officers of the Company or its Former Subsidiary during the years ended June 30, 1999, 1998 or 1997, except during the year ended June 30, 1998, the Company paid $10,000 to Gaylon W. Hansen, an officer and director of the Former Subsidiary, for services rendered to the Company.
The Company has no written employment contract with Mr. Oveson.
Under Utah law the Company is entitled to pay compensation to its directors, unless the articles or bylaws provide otherwise. The Company has not adopted a policy of compensating its directors, and neither the Company's Articles of Incorporation, nor the current Bylaws prohibit such payments. The Company has agreed to reimburse its officers and directors for out-of-pocket expenses relating to their activities as officers or directors.
ITEM 11.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information furnished by current management concerning the ownership of common stock of the Company as of September 27, 19998, of (i) each person who is known to the Company to be the beneficial owner of more than 5 percent of the Common Stock; (ii) all directors and executive officers; and (iii) directors and executive officers of the Company as a group:
Amount and Nature Name and Address of Beneficial of Beneficial Owner Ownership(1) Percent of Class
Howard M. Oveson 3,300,000(2) 65.27% 57 West 200 South Suite 310 Salt Lake City, Utah 84101
Ronald N. Vance 1,000,000 19.78% 57 West 200 South Suite 310 Salt Lake City, UT 84101
Executive Officers and Directors as a Group (1 Person) 3,300,000 65.27%
(1) Unless otherwise indicated, this column reflects amounts as to which the beneficial owner has sole voting power and sole investment power.
(2) Of the shares listed, 1,650,000 are held of record by Gaylon W. Hansen. Mr. Oveson acquired the shares from Mr. Hansen but has not transferred them to his own name.
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. However, the Company is currently seeking a new business venture and the acquisition of such new venture will likely result in a change of control of the Company.
ITEM 12.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The founders of the Company were Gaylon W. Hansen, an officer and director of the Former Subsidiary, and Howard M. Oveson, an officer, a director, and the principal shareholder of the Company. On or about July 11, 1995, each of the organizers of the Company paid $1,650 cash consideration for 1,650,000 shares each of the Common Stock of the Company.
Subsequent to the year ended June 30, 1998, the Company transferred all of its interest in the Former Subsidiary to Gaylon W. Hansen, an officer and director of the Former Subsidiary, a founder of the Company, and a former principal shareholder of the Company. The transfer of interest was accomplished by transferring all of the shares of the Former Subsidiary owned by the Company to Mr. Hansen. At the time of transfer the Former Subsidiary had no assets. The only assets previously owned by the Former Subsidiary were the mining claims located in Tutsagubet Mining District in Washington County, Utah, for which the Company failed to pay the maintenance fees and were thus abandoned as of August 31, 1998.
ITEM 13.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
(a)(1) Financial Statements. The following financial statements are included in this report:
Balance Sheet at June 30, 1999 Statements of Operations for the fiscal years ended June 30, 1999 and 1998, and for the period from inception (July 10, 1995) through June 30, 1999 Statements of Stockholders' Equity from July 10, 1995, through June 30, 1999 Statement of Cash Flows for the fiscal years ended June 30, 1999 and 1998, and for the period from inception (July 10, 1995) through June 30,1999 Notes to Financial Statements
(a)(2) Exhibits. The following exhibits are included as part of this report:
Exhibit No. Description of ExhibitPage
3.1 Certificate of Incorporation *
3.2 By-Laws of the Company currently in effect *
4.1 Form of certificate evidencing shares of Common Stock *
*Incorporated by reference from the Company's registration statement on Form SB-2 filed with the Securities and Exchange Commission, file no.333-5302-D.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the fourth quarter of the fiscal year ended June 30, 1999.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Apex Minerals Corporation
Date: September 27, 1999 By: /s/ Howard M. Oveson, President, Chief Executive Officer and Chief Financial Officer
In accordance with the Exchange Act, this report has been signed below by the following person on behalf of the registrant and in the capacitates and on the dates indicated.
By: /s/ Howard M. Oveson, Director September 27, 1999
Apex Minerals Corporation (a development stage company) Balance Sheet
ASSETS
CURRENT ASSETS June 30, 1999
Cash $ 1,900
Total Current Assets 1,900
OTHER ASSETS
Organizational costs (Note 1) 210
Total Other Assets 250
TOTAL ASSETS $ 2,110
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related party $ 15,000 Accrued expenses and accounts payable -
Total Current Liabilities 15,000
STOCKHOLDERS' EQUITY
Common stock, authorized 50,000,000 shares at $.001 par value 5,055,800 shares issued and outstanding 5,056 Capital in excess of par value 74,060 Retained deficit (accumulated during the development stage) (92,006)
Total Stockholders' Equity (12,890)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,110
Apex Minerals Corporation (a development stage company) Statement of Operations For the Period from July 10, 1995 For the Year (Inception) ended June 30, to June 30, REVENUE 1999 1998 1999
Consulting Revenue $ - $ - $ 7,250
Total Revenue - - 7,250
EXPENSES
General and Admin. Expense 4,587 42,063 92,213 Loss from Abandonment of Mining Leases - 12,122 12,122
Total Expenses 4,587 54,185 104,335
OTHER INCOME (EXPENSES)
Loss attributable to minority interests - 338 1,250 Gain on Sale of Stock - - 4,129 - 338 5,379
Net (loss) before provision for taxes (4,587) (53,847) (91,706)
Provision for Taxes 100 100 400
Net income (loss) (4,687) (53,947) (92,106)
Loss Per Share (.01) (.01) (.01)
Average shares outstanding 5,055,800 5,004,833 4,903,375
Apex Minerals Corporation (a development stage company) Statement of Stockholders' Equity
Capital in Common Stock Excess of Retained Shares Amount Par Value (Deficit)
Balance, July 10, 1995 - $ - $ - $ -
Issuance of shares for cash at $.001 3,300,000 3,300 - -
Issuance of shares for services at $.001 (Note 2) 1,300,000 1,300 - -
Issuance of shares for services at $.0134 (Note 2) 150,000 150 1,863 -
Net (loss) for the year - - - (6,373)
Balance, June 30, 1996 4,750,000 4,750 1,863 (6,373)
Net (loss) for the year - - - (27,199)
Balance, June 30, 1997 4,750,000 4,750 1,863 (33,572)
Issuance of shares for cash at $.25 per share, net of $3,947 offering costs (Note 4) 305,800 306 72,197 -
Net (loss) for the year - - - (53,947)
Balance, June 30, 1998 5,055,800 5,056 74,060 (87,519)
Net (loss) for the year - - - (4,587)
Balance, June 30, 1999 5,055,800 $ 5,056 $ 74,060 $ (92,106)
Apex Minerals Corporation (a development stage company) Statement of Cash Flows For the Period from July 10, 1995 For the Year Ended (Inception) June 30, June 30, to June 30, 1999 1998 1999 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (4,587) $ (53,947) $ (92,106) Items not requiring cash flow: Amortization 162 8,660 17,562 Increase in accrued expenses and accounts payable (4,400) 16,970 15,000 Issuance of stock for services - - 3,688 Minority share of net loss - (338) (1,250) Loss from abandonment of lease - 12,122 12,122 Adjustment in retained earnings for accrued expenses 100 - 100 Net Cash (Used) by Operating Activities (8,725) (16,533) (44,884)
CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for: Mining claims - - (9,944) Prepaid mining leases - (8,440) (18,518) Organization costs - - (557) Prepaid offering costs - - (3,947) Net cash (used) by Investing Activities - (8,440) (32,966)
CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock - 76,450 79,750 Loans from related parties - (41,100) - Net Cash provided by Financing Act. - 35,350 79,750
NET INCREASE (DECREASE) IN CASH (8,725) 10,378 1,900
CASH AT BEGINNING OF PERIOD 10,625 247 -
CASH AT END OF PERIOD $ 1,900 $ 10,625 $ 1,900
Apex Minerals Corporation (a development stage company) Statement of Cash Flows (continued) For the Period from July 10, 1995 For the Year Ended (Inception) June 30, June 30, to June 30, 1999 1998 1999 Supplemental Cash Flow Information Cash paid for: Interest $ - $ - $ - Taxes 100 100 400
Non Cash Flow Information Stock issued for: Services $ - $ - $ 3,688 Organization costs - - 250 Mining claims - - 625
Apex Minerals Corporation (a development stage company) Notes to the Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated in the State of Delaware on July 10, 1995 for the primary purpose of acquiring mining claims. In July and August 1995 the Company located 45 unpatented lode mining claims known as the Dix Apex #1 through #45 inclusive, in the Tutsagubet Mining District in Washington County, Utah. An additional 25 unpatented lode mining claims known as the Dix Apex #46 through #70 inclusive, were located in the same mining district in December 1995. Another ten claims (#71 to #80) were added in December 1996.
Apex Minerals of Utah, Inc. was incorporated in June 1996 for the purpose of holding title to the Utah mining claims and was a 90% owned subsidiary of the Company. These claims were transferred in June 1996.
The Company exchanged all of its interest in the mining claims and the prepaid mining leases for 9,000 shares of the subsidiary. Another 1,000 shares were issued to other parties for various services rendered and two state mining leases (See Note 2).
In 1998, The Company chose to abandon its leasehold properties and wrote off all of its investment made into the project.
Loss Per Share
The computations of loss per share of common stock are based on the weighted average number of shares outstanding at the date of the financial statements.
Provision for Income Taxes
The Company adopted Statement of Financial Standards No. 109 "Accounting for Income taxes" in the fiscal year ended June 30, 1996.
Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" requires an asset and liability approach for financial accounting and reporting for income tax purposes. This statement recognizes (a) the amount of taxes payable or refundable for the current year and (b) deferred tax liabilities and assets for future tax consequences of events that have been recognized in the financial statements or tax returns.
Deferred income taxes result from temporary differences in the recognition of accounting transactions for tax and financial reporting purposes. There were no temporary differences at June 30, 1999 and earlier years; accordingly, no deferred tax liabilities have been recognized for all years. Provision for Income Taxes
The Company has cumulative net operating loss carryforwards of approximately $92,000 at June 30, 1999. No effect has been shown in the financial statements for the net operating loss carryforwards as the likelihood of future tax benefit from such net operating loss carryforwards is not presently determinable. Accordingly, the potential tax benefits of the net operating loss carryforwards, estimated based upon current tax rates of $31,000 at June 30, 1999 have been offset by valuation reserves of the same amount. The net change in deferred tax asset and offsetting valuation reserve amounted to $1,000 for 1999.
The Company has available $92,000 in net operating loss carryforwards that will begin to expire in the year 2016. The Company has accrued minimum state income taxes of $100.
Cash and Cash Equivalents
For the purposes of the statements of cash flows, cash and cash equivalents are defined as demand deposits at banks and certificates of deposits with maturities less than three months.
Organization Costs
Organization costs of the Company are being amortized over 60 months. Total amortization costs for the year 1999 was $162.
Development Stage Company
The Company has yet to fully develop any material income from its stated primary objective and it is classified as a development stage company. All income, expenses, cash flows and stock transactions are reported since inception.
Mining Claims
The Company has acquired several mining claims in Washington county in the state of Utah. The Company has expended funds in staking the claims and making the proper filings with the appropriate county, state and federal agencies.
In 1998, The Company chose to abandon its leasehold properties and wrote off all of its investment made into the project.
Spinoff of Subsidiary
In September 1998, the Company chose to spinoff its 90% owned subsidiary, Apex Minerals of Utah.
Prepaid Mining Leases
Each year, the Bureau of Land Management charges $100 per mining claim which is to be paid in advance for the fiscal year September 1 to August 31. The Company had prepaid its lease on the mining claims to August 31, 1997. The State of Utah also charges for leases on mining claims within the state. State leases were prepaid through December 31, 1997. In 1998, The Company chose not to renew the leases for the fiscal year ended August 31, 1999, and, subsequently, the Company took a loss of its entire investment in the mining properties as of June 30, 1998.
NOTE 2 - RELATED PARTY TRANSACTIONS
During 1998, a shareholder provided legal services of $15,000 to the Company.
During 1997, two shareholders provided loans and legal services for the Company. Total contributions made to the Company during 1997 was $26,100 ($15,000 in services and $11,100 in cash). The loan is non-interest bearing and payable on demand.
During 1996, 450,000 shares of the parent corporation (Apex) and 800 shares of the subsidiary corporation (Apex-Utah) were issued to various officers and directors for services rendered including the staking of two state mining leases in the same district as the BLM mining claims. 300,000 shares of Apex were issued at a stated value of $.001 for total consideration of $300 for services rendered and 150,000 shares were issued at a stated value of $.0134 for total consideration of $2,013 for services rendered. The fair value of the services rendered was the estimated value of the stock issued. The 800 shares of Apex-Utah were issued at a value of $1.25 per share, the same value placed on the 9,000 shares issued for the mining claims and prepaid leases (book value).
During the year ended June 30, 1996, a shareholder/officer/director sold stock to the Company for total consideration of $100. The Company sold the stock for $4,229.
NOTE 3 - USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. In these financial statements, assets, liabilities and earnings involve extensive reliance on management's estimates. Actual results could differ from those estimates.
NOTE 4 - PUBLIC STOCK OFFERING
In August 1997, the Company completed a public offering of 305,800 shares at $0.25 per share for total consideration of $76,450. The Company expended $3,947 in accounting, legal, registration and other miscellaneous costs in preparation of the registration.