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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended April 30, 2000
Commission file Number 0-9558
INTERMOUNTAIN RESOURCES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 84-0817164
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
P. O. Box 51600
Sparks, Nevada 89435
(Address of principal executive offices)
Registrant's telephone number, including area code (775) 359-2884
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
Yes X No_____
The market value of the 7,859,000 common shares held by
nonaffiliates was not determinable as of June 30, 2000, because
there were no bid or asked prices available.
At June 30, 2000, there were 13,700,000 common shares (the
Registrant's only class of voting stock) outstanding.
Documents incorporated by reference: None
Page 1 of 25 pages. There are no exhibits filed herewith.
Part I
------
Item 1. Business.
General
-------
Intermountain Resources, Inc. (the "Company"), was organized
under Nevada law on May 12, 1980, for the primary purpose of
acquiring, developing, and if economically warranted achieving
production of precious minerals, primarily silver and gold. As
of this date the Company has no quantifiable ore reserves.
Because of a lack of working capital (see Items 7 and 8 herein)
and because of the capital intensive nature of mining, the
Company must attract funds for exploration, testing and
development (if warranted) of its property interests via leases
to third parties of the Company's prospects, operating agreements
or the formation of joint ventures with others who agree to
provide the funds required in order to earn an interest in a
particular property or prospect.
The Company's operations have been oriented toward the
acquisition of possessory, leasehold, or fee simple interests in
nonproducing mineral prospects. In light of the Company's
limited financial resources, there are no present plans to
acquire interests in additional nonproducing mineral properties.
Recent Activities
-----------------
During the years from 1982 to 1988, the Company conducted a
grass roots reconnaissance exploration program in portions of the
Western United States. This program identified several precious
metals prospects which were acquired (see Item 2). Since 1988
the Company's limited resources have precluded significant new
exploration and activities have been limited to the maintenance
and leasing of existing prospects. Significant amounts of
exploratory work and capital would be required with respect to
existing prospects before a decision to conduct mining operations
could be made.
The Company attempts to lease its exploration prospects to
large companies actively engaged in exploration for, development
and production of precious metals. The Company's leases
generally provide for an initial cash payment to the Company with
additional amounts due periodically if the lessee desires to
maintain the lease prior to the commencement of production. In
the event production is commenced, the Company would be entitled
to production royalties of varying percentages of the "net
smelter returns" as defined by the particular lease. The leases
are typically subject to cancellation by the lessee upon thirty
days' notice. It has been the Company's experience that a lessee
usually cancels its lease shortly after completion of any
contracted work commitment.
During the year ended April 30, 1997, the Company negotiated
a lease of its Iron Point prospect to Newcrest Resources, Inc.
Newcrest terminated the lease as of August 31, 1999.
On June 13, 2000, the Company sold its patented mining claims
located in the Aurora Mining District, Mineral County, NV for $80,000.
Other Matters
-------------
The Company anticipates that future revenues, if any, would
be derived from rent or advance minimum royalty payments or
production royalty payments earned as a result of leasing its
mineral prospects to other entities. Various recent proposals
for a Federal royalty on mineral production could result in
diminution or elimination of production royalty payments which
might otherwise be attainable by the Company.
The existence of precious metals in commercial quantities is
integral to the realization of value from the Company's
properties. See Management's Discussion and Analysis of
Financial Condition and Results of Operations in Item 7 hereof.
Hence, precious metals may be considered raw materials essential
to the Company's business. However, the acquisition,
exploration, development, production and sale of precious metals
is subject to many factors which are outside of the Company's
control. These factors include national and international
economic conditions, availability of milling facilities,
availability of water, the supply and price of other precious
metals and the regulation of prices, production, transportation
and marketing by federal, state, and local governmental
authorities.
The Company has engaged in only one industry segment, the
exploration and development of mineral prospects for silver and
gold. The Company has no plans to enter into any new industry
segment.
The Company's business in the areas in which it holds
property is generally not seasonal in nature although operations
are subject to periodic interruptions due to weather conditions.
The Company is not dependent upon a single customer or a few
customers, the loss of any one or more of whom would have an
adverse effect on the Company's business.
The exploration for, and development and production of,
precious metals is subject to intense competition. The principal
methods of competition in the mining industry for the acquisition
of mineral leases are payment of bonus payments at the time of
acquisition of leases, payment of delay rentals and advance
royalties, use of differential royalty rates, and amounts of
annual rental payments and stipulations requiring exploration and
production commitments by the lessee. Companies with greater
financial resources, larger existing staffs and labor forces,
greater equipment for exploration and vast experience are in a
significantly better position than the Company to compete for
mineral leases and explore and develop the leases. There are
many of these larger companies and the Company is at a distinct
disadvantage in competing against and negotiating with such
entities. There are also many small mining entities, who,
because of their particular area of expertise, may have an
advantage over the Company in competing for mineral leases in
certain areas in which the Company has or may have an interest.
All operations of the Company involving the exploration for,
or the production of, any minerals are subject to existing laws
and regulations relating to exploration procedures, employee
health and safety, air quality standards, pollution of stream and
fresh water sources, odor, noise, dust and other environmental
protection controls adopted by federal, state, and local
governmental authorities as well as the rights of adjoining
property owners. Although not deemed likely by management, the
Company may be required to prepare and present to federal, state
or local authorities data pertaining to the effect or impact of
any proposed exploration for or production of minerals upon the
environment. Requirements imposed by such authorities may be
costly and time consuming and could delay commencement or
continuation of exploration or production operations. Such laws
and regulations may require substantial increases in equipment
and operating costs to the Company and delays, interruptions or
termination of operations, the extent of which cannot now be
predicted. This may have a substantial impact upon the capital
expenditures required by the Company to deal with such problems
and could substantially reduce earnings or increase losses. To
date, however, the Company has not been required to expend
significant funds or efforts in connection with such activities.
Practices with respect to working capital items are not
material to an understanding of the Company's business. The
Company does, however, require working capital to maintain an
adequate inventory of suitable mineral prospects.
The Company does not currently engage in any research and
development activities. The Company does not own any patents,
trademarks, licenses, franchises or concessions. Backlog is not
material to an understanding of the Company's business. No
portion of the Company's business is subject to renegotiation of
profits or termination of contracts at the election of the
federal government. The Company has no operations in foreign
countries and no sales or revenues derived from customers in
foreign countries. The Company has no full time employees.
Item 2. Properties.
The Company's significant property interests are as set
forth below. The properties were acquired and are held because
they are believed to be prospective for precious metals. See
Item 7 herein for a discussion of the Company's limited working
capital which may result in the dropping of all or portions of
certain prospects.
The Company owns twelve patented lode mining claims in the
Aurora Mining District, Mineral County, Nevada. On June 13, 2000
these claims were sold for $80,000 cash paid at the closing.
The Iron Point Prospect consisting of some 17 full or
fractional unpatented claims owned by the Company is located in
Humboldt County, Nevada.
Four unpatented claims at the MD Prospect owned by the
Company are located in Esmeralda County, Nevada.
On November 9, 1998, the Company staked eight unpatented claims
at the Elizabeth Prospect in Esmeralda County, Nevada.
Substantial additional work on the prospects and outside
capital would be required before the Company, a lessee, or
venture partner would be in a position to proceed with a plan of
development on any of the prospects.
Each of the prospects is burdened with overriding royalty
interests (ORRI's) granted to consulting geologists instrumental
in identifying and locating the prospects. The ORRI's generally
provide that, in the event of commercial production from a
Prospect, the geologist would be entitled to a specified "net
smelter return" interest (generally 1%) in production from the
Prospect.
Item 3. Legal Proceedings.
By letter dated March 10, 1994, the Forest Service notified
the Company that the Forest Service has determined a release of
hazardous substances covered under the Comprehensive
Environmental Response, Compensation, and Liability Act occurred
at Siskon Mine, located on the Klamath National Forest. The
Company was named as a potentially responsible party along with
six other corporations or individuals. By letter dated March 31,
1994, the Company advised the Forest Service that the Company at
one time had an option to lease the property and during the
option period performed assessment work required by the 1872
Mining Law. However, at no time did the Company have an
ownership interest (or even an interest as lessee) in either the
Siskon Mine or the mining claims that covered the subject lands
nor had the Company ever attempted to operate the property.
In a letter dated May 24, 1994, the Forest Service stated,
". . . we believe it is possible a court of law could find such
activities to be "operations" within the liability provisions of
CERCLA 107(a)." That letter transmitted a series of questions
concerning the activities of the Company and other entities and
individuals with respect to the property. The Company responded
to the questions of the Forest Service by letter dated July 7,
1994. On November 27, 1996, the Company received a letter from
the Forest Service inviting the submission by November 29, 1996
of an offer to settle the matter. The Company requested an
extension of time to January 15, 1997 to respond. By letter dated
January 13, 1997, the Company denied any responsibility for the
matters described by the Forest Service, and advised them that the
Company has neither the technical expertise nor financial capability
to conduct the response actions contemplated by them. The Company
has had no further substantive contact from the Forest Service or
any of the other six named potentially responsible parties.
The Company knows of no other pending legal proceedings or
governmental investigations or proceedings to which the Company
is or may be a party or of which any of its properties may be
subject.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the fourth quarter of the
Company's fiscal year ended April 30, 2000 to a vote of
shareholders, through the solicitation of proxies or otherwise.
Part II
-------
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
The Company's common stock, $.01 par value, is traded
sporadically in the over-the-counter market. There is no active
market for the stock and so far as is known to management all
trades during the last two fiscal years were at $.01 per share or
less.
The Company has not, since inception, paid dividends on its
common stock, nor does the Company contemplate paying dividends
in the foreseeable future. The Company intends to utilize any
profits it may generate for its business operations.
As of April 30, 2000, there were approximately 800
shareholders of record of the Company's common stock.
Item 6. Selected Financial Data.
Year Ended April 30,
Operating Summary 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total income $ 5,049 $ 23,694 $172,154 $ 18,146 $ 51,471
Net earnings (loss)(50,498) (35,476) 36,932 (24,709) (12,317)
Net earnings (loss)
per common share -- -- -- -- --
Balance Sheet April 30,
Summary 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Current assets $ 20,832 $ 75,123 $ 117,281 $ 2,606 $ 27,315
Current liabilities -- 3,794 10,000 -- --
Total assets 27,345 81,637 123,319 76,387 101,096
Total liabilities -- 3,794 10,000 -- --
Equity 27,345 77,843 113,319 76,387 101,096
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The following discussion should be read in conjunction with
the Company's financial statements contained in Item 8 of this
report.
Liquidity and Capital Resources
- -------------------------------
At April 30, 2000, the Company had working capital of
$21,000. This is not a significant amount of money in the
mining industry. Therefore, the Company's activities will
probably continue to be essentially limited to property
maintenance and compliance with regulatory matters during fiscal
2001.
Assets at April 30, 1999 and 2000 consisted of cash and
deferred costs associated with nonproducing mineral properties.
The existence of mineral reserves in commercial quantities on the
Company's properties has not been determined.
Recovery of the Company's investment in mineral properties
is uncertain because it is dependent on the discovery of minerals
in commercial quantities.
As described elsewhere herein (see Item 3), the Company was
named a potentially responsible party along with six other
corporations or individuals with respect to Siskon Mine in 1994.
To date the Company has received no information which would
permit a realistic assessment of its monetary exposure, if any,
as a result of this potentially material matter.
The Company has not engaged in any transaction involving
"derivatives" nor does the Company expect to do so; thus,
exposure to the volatility of these investment instruments is
nonexistent.
Results of Operations
- ---------------------
General
- -------
The Company's mining revenues (production royalties and
advance minimum royalties except in 1998 when the sale of the
Sonrisa claims for $150,000 was recorded) are erratic. (It should
also be noted that subsequent to April 30, 2000, the patented
mining claims in the Aurora Mining District were sold for $80,000.
The Company does not anticipate any other asset sales of this
significance in the coming year.) Historically, the monies
received in any one year have been a result of new leases
signed during a year which are, in turn, a function of fluctuating
industry interest in geographic areas in which the Company's
prospects are located. Amounts received in any one year are not
necessarily predictive of amounts (if any) which may be received
in the future.
Gold prices have been depressed below $300 per ounce for some
time. At such price levels, it is difficult to engender much interest
on the part of major mining companies in leasing undeveloped
exploration prospects such as those owned by the Company.
Various amendments to the Mining Law of 1872 have been
proposed in recent years. Such proposals have included Federal
production royalties, changes in reclamation laws, changes in
land patenting rules, etc. These proposals have caused a
deterioration in the business climate for the domestic industry.
As a result, the Company expects to find less interest among
operating mining companies in leasing the Company's prospects.
Fiscal 2000
- -----------
Mining revenuse declined to $3,400, representing a final
adjustment on the Iron Point lease.
Unallocated exploration expense increased by $5,200
primarily due to the payment of Federal claim rentals on the
Iron Point claims and a small amount of exploratory work
performed on the MD claims.
General and administrative expenses declined $8,800
principally due to reductions in legal fees.
Fiscal 1999
- -----------
Mining revenues declined to $20,000, representing the
advance minimum royalty received on the Iron Point prospect
General and administrative expenses were comparable to
the prior fiscal year and there were no property write-downs or
state income tax expenses during the year.
Fiscal 1998
- -----------
Mining revenues increased to $170,000 as a result of the
sale of the Sonrisa claims for $150,000 during the fiscal year.
The Company does not anticipate any other asset sales of this
significance so mining revenues (if any) will probably be less
next fiscal year.
General and administrative expenses were higher principally
due to a $10,000 increase in officer's salary and legal fees
incurred in connection with the sale of the Sonrisa claims. The
sale of the Sonrisa claims generated a state income tax liability
of some $10,800.
The decline in gold prices to the $300 level prompted the
Company to write down the carrying value of its patented claim
block in the Aurora Mining District to $6,000 (assessed value for
property tax purposes) during the year.
Effect of Price Changes
- -----------------------
Inflation has not significantly affected the cost of
exploring for precious metals. Prices of these commodities have
fluctuated widely during the year and may continue to do so.
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements and Supplemental Schedules
Page
----
INDEPENDENT AUDITOR'S REPORT on Financial Statements for
the year ended April 30, 2000, 1999, and 1998 11
Financial Statements for the Years Ended
April 30, 2000, 1999, and 1998
Balance Sheets 12
Statements of Operations and Accumulated Deficit 13
Statements of Cash Flows 14
Notes to Financial Statements 15
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and
Stockholders of Intermountain Resources, Inc.
We have audited the accompanying balance sheets of Intermountain Resources,
Inc. (a Nevada corporation) as of April 30, 2000 and 1999, and the related
statements of operations, accumulated deficit, and cash flows for each of the
three years in the period ended April 30, 2000. 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 audit.
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 well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Intermountain Resources,
Inc. as of April 30, 2000 and 1999, and the results of its operations and its
cash flows for each of the three years in the period ended April 30, 2000,
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company's significant operating losses and minimal
working capital raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
KAFOURY, ARMSTRONG & CO.
Reno, Nevada
July 5, 2000
INTERMOUNTAIN RESOURCES, INC.
BALANCE SHEETS
April 30, 2000 and 1999
- -----------------------------------------------------------------------------
ASSETS 2000 1999
--------- ---------
Current asset - Cash $ 20,832 $ 75,123
Mineral Properties (notes 1 and 3) 6,513 6,514
------- -------
$ 27,345 $ 81,637
======= =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities--Accrued expense $ -- $ 3,794
------- -------
Contingency (note 5)
Stockholders' equity:
Common stock, par value $.01
per share. Authorized
25,000,000 shares; issued
and outstanding 13,700,000
shares. 137,000 137,000
Additional paid-in capital 1,351,318 1,351,318
Accumulated deficit (1,460,973) (1,410,475)
--------- ---------
27,345 77,843
--------- ---------
$ 27,345 $ 81,637
========= =========
The accompanying notes are an integral part of these financial statements.
INTERMOUNTAIN RESOURCES, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
For the years ended April 30, 2000, 1999, and 1998
- -----------------------------------------------------------------------------
2000 1999 1998
--------- ----------- -----------
REVENUES:
Mining revenues $ 3,417 $ 20,000 $170,000
Interest income 1,632 3,694 2,154
------- ------- ------
Total 5,049 23,694 172,154
------- ------- ------
EXPENSES:
Write down of mineral property 1 -- 67,743
Unallocated exploration 7,260 2,028 1,150
General 48,286 57,142 55,529
State income taxes -- -- 10,800
------- ------- ------
Total 55,547 59,170 135,222
------- ------- ------
NET INCOME (LOSS) (50,498) (35,476) 36,932
ACCUMULATED DEFICIT:
Beginning of year (1,410,475) (1,374,999) (1,411,931)
--------- --------- ---------
End of year $(1,460,973) $(1,410,475)$(1,374,999)
========= ========= =========
NET INCOME (LOSS)
PER COMMON SHARE $ -- $ -- $ --
========== ========== ==========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 13,700,000 13,700,000 13,700,000
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
INTERMOUNTAIN RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the years ended April 30, 2000, 1999, and 1998
- -----------------------------------------------------------------------------
2000 1999 1998
---- ---- ----
CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES:
Net income (loss) $(50,498) $(35,476) $ 36,932
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Increase (decrease)
in accounts payable
and accruals (3,794) (6,206) 10,000
Write down of mineral property 1 -- 67,743
------ ------ ------
Net cash provided by
(used in) operating
activities (54,291) (41,682) 114,675
CASH (USED) IN INVESTING ACTIVITY -- ( 476) --
CASH AND CASH
EQUIVALENTS -
Beginning of year 75,123 117,281 2,606
------- ------- ------
End of year $ 20,832 $ 75,123 $117,281
======= ======= ======
The accompanying notes are an integral part of these financial statements.
INTERMOUNTAIN RESOURCES, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended April 30, 2000, 1999, and 1998
- -----------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations: Intermountain Resources, Inc. was
incorporated under Nevada law on May 12, 1980, for the
primary purpose of acquiring, developing, and, if economically
warranted, achieving production of precious minerals, primarily
gold and silver. Currently, the Company's main function is the
leasing of its mineral prospects to third parties that have the
resources to develop the property.
Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results may differ from
those estimates.
Fair Value of Financial Instruments: Unless otherwise disclosed,
the carrying amount of financial instruments approximates their
fair value due to the short maturity of these instruments.
Cash and Cash Equivalents: For purposes of preparing the statement
of cash flows, the Company considers money market funds and
certificates of deposit with a maturity of three months or less to
be cash equivalents.
Mineral Properties: Acquisition and exploration costs are initially
capitalized and will be, in general, amortized ratably over
production or will be charged to expense upon disposition of the
properties.
Unallocated Exploration Expenses: Expenses incurred in general
exploration and evaluation of properties for potential acquisition
and cost of completing required assessment work as well as Federal
delay rentals are charged to expense unless a property is actually
acquired.
Dividends: In accordance with Nevada Revised Statutes, the Company's
dividend policy prohibits payments of dividends in excess of its
retained earnings.
2. GOING CONCERN
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As
shown in the financial statements, the Company has achieved minimal
earnings or incurred operating losses for several years and has
minimal working capital at April 30, 2000. These factors, among
others, may indicate that the Company may be unable to continue as
a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of
recorded asset amounts or the amount and classification of liabilities
that might be necessary should the Company be unable to continue
as a going concern. The Company's continuation as a going concern
is dependent upon its ability to generate sufficient cash flow to
meet its obligations on a timely basis and, ultimately, to attain
successful operations. Significant activity beyond property
maintenance would be contingent on generating additional funds
through sales or leases of existing mineral prospects or through
production on a property currently under lease. There is no assurance
that leases can be negotiated on existing prospects and production
royalties to be received during fiscal 2001, if any, are expected to
be minimal. Therefore, the Company's activities may continue to be
essentially limited to property maintenance and compliance with
regulatory matters during fiscal 2001.
3. MINERAL PROPERTIES
The following tabulation shows the mineral prospect inventory of
the Company and the capitalized cost associated with each prospect:
2000 1999
---- ----
Aurora $6,000 $6,000
Elizabeth 476 476
Iron Point 1 1
MD 36 36
Wildcard -- 1
----- ------
Total $ 6,513 $ 6,514
===== ======
As with most natural resource prospects, the economic worth of the
above assets bears no particular relationship to their recorded cost.
4. INCOME TAXES
The Company provides for deferred income taxes on temporary differences
between amounts reported for financial statement and income tax purposes.
The Company's total deferred tax asset and deferred tax liability at
April 30, 2000 and 1999 is as follows:
2000 1999
---- ----
Total deferred tax asset $116,000 $360,000
Total deferred tax liability -- --
------- -------
116,000 360,000
Deferred tax asset valuation allowance (116,000) (360,000)
------- -------
$ -- $ --
======= =======
The deferred tax asset as of April 30, 2000 and 1999 resulted from
Federal net operating loss carryforwards and the write-down in the
carrying value of one of the Company's mineral prospects. For the
years ended April 30, 2000 and 1999, $730,000 and $231,000 respectively
in Federal net operating losses expired and the losses will continue
to expire through the year ending April 30, 2014. As the Company does
not anticipate the ability to utilize the net operating losses before
they expire, nor does it anticipate the ability to utilize the benefit
of the write-down of the property when it is sold, a valuation
allowance has been established to offset the net deferred tax asset.
As mentioned above, the Company has Federal net operating losses from
prior years which it is able to use to offset taxable income.
Application of the Federal net operating losses for the year ended
April 30, 1998 resulted in no Federal taxable income, thus no Federal
income tax expense. However, as reported on the statement of operations
and accumulated deficit, the Company did incur state income tax expense
in the amount of $10,800 for the year ended April 30, 1998.
5. CONTINGENCY
By letter dated March 10, 1994, the Forest Service notified the
Company that the Forest Service has determined a release of hazardous
substances covered under the Comprehensive Environmental Response,
Compensation, and Liability Act occurred at Siskon Mine, located on
the Klamath National Forest. The Company was named as a potentially
responsible party along with six other corporations or individuals.
By letter dated March 31, 1994, the Company advised the Forest Service
that the Company at one time had an option to lease the property and
during the option period performed assessment work required by the 1872
Mining Law. However, at no time did the Company have an ownership
interest (or even an interest as lessee) in either the Siskon Mine or
the mining claims that covered the subject lands nor had the Company
ever attempted to operate the property.
In a letter dated May 24, 1994, the Forest Service stated, ". . . we
believe it is possible a court of law could find such activities to
be "operations" within the liability provisions of CERCLA 107(a)."
That letter transmitted a series of questions concerning the
activities of the Company and other entities and individuals with
respect to the property. The Company responded to the questions of
the Forest Service by letter dated July 7, 1994. On November 27,
1996, the Company received a letter from the Forest Service inviting
the submission by November 29, 1996 of an offer to settle the matter.
The Company requested an extension of time to January 15, 1997 to
respond. By letter dated January 13, 1997, the Company denied any
responsibility for the matters described by the Forest Service, and
advised them that the Company has neither the technical expertise nor
financial capability to conduct the response actions contemplated
by them. The Company has had no further substantive contact from the
Forest Service or any of the other six named potentially responsible
parties.
6. SUBSEQUENT EVENT
On June 13, 2000, the Company sold its patented mining claims located
in the Aurora Mining District, Mineral County, NV for $80,000. This
transaction will result in a gain of approximately $74,000 for
financial statement purposes but only about $6,000 for income tax
purposes. The Company has no current expectation that any other
similar transaction will occur.
----------------------------------------------------------------------
Item 9. Disagreements on Accounting and Financial Disclosure.
There have been no disagreements between the Company and its
independent auditors concerning any matter of accounting principle or
practice or financial statement disclosure which would be required to
be reported under this item.
Part III
--------
Item 10. Directors and Executive Officers of the Registrant.
The following table sets forth certain information with
respect to the directors and executive officers of the Company:
Period of
Service as
Position(s) an Officer
Name Age With the Company or Director Term Expires
- ---- --- ---------------- ----------- ------------
Lewis W.
Watson(1) 58 Pres., Treas. May, 1980 to Next Annual
and Director date Meeting
Thomas C.
Pool 58 Sec. and Director May, 1980 to Next Annual
date Meeting
Maurice O.
Reiber(1) 69 Director May, 1980 to Next Annual
August, 1982; Meeting
and June, 1984
to date
Gerald G.
Reiber(1) 63 Director May, 1980 to Next Annual
August, 1982; Meeting
and June, 1984
to date
(1) May be deemed a "parent" or "founder" of the Company
All directors of the Company will hold office until the next
annual meeting of shareholders and until their successors have
been elected and qualified. The officers of the Company, who are
elected at the annual meeting of the Board of Directors, hold
office until their successors are chosen and qualified, or until
their death, resignation or removal.
There is no family relationship between or among directors
and officers of the Company, except that Maurice O. Reiber and
Gerald G. Reiber are brothers.
The following are brief accounts of the business experience
of each director and officer of the Company:
Lewis W. Watson has been President, Treasurer and a director
of the Company since its inception. He is a certified public
accountant.
Thomas C. Pool has been a director of the Company since
October, 1982. He is a registered professional engineer in the
State of Colorado who has worked in various capacities in the
mining industry since his graduation from Colorado School of
Mines in 1968. Mr. Pool has advised the Company that Colorado
does not register engineering specialties.
Maurice O. Reiber was employed by the City and County of
Denver Building Inspection Division from 1966 to his retirement
in February, 1988.
Gerald G. Reiber was employed by Adolph Coors Company as a
metal worker from 1969 until his retirement May 1, 1995.
No director of the Company serves as a director of any
other company with a class of securities registered pursuant
to the Securities Exchange Act of 1934 or subject to the
requirements of Section 15(d) of that Act or any company
registered as an investment company under the Investment
Company Act of 1940.
Item 11. Executive Compensation.
Compensation paid to Lewis W. Watson during the three years
ended April 30, 2000 is set forth in the following tabulation.
Year Amount
---- ------
2000 $40,000
1999 40,000
1998 40,000
Pursuant to a resolution of the Board of Directors dated
January 1, 1995, Mr. Watson has been compensated at a rate of
$40,000 per year subject to the Company's ability to pay. This
arrangement has been acceptable to Mr. Watson and is deemed by
the Board of Directors to be reasonable for the time and effort
expended by him.
Services performed by the president during the three fiscal
years ended in 2000 included quarterly, annual and other
periodic filings with Federal and state tax and regulatory
authorities and presentation of data on properties and
negotiations with prospective lessees and/or purchasers.
None of the officers or directors are paid any fees for
attending board of directors meetings. However, all of the
officers and directors are reimbursed for any out-of-pocket
expenses incurred in connection with the Company's business
including travel expenses.
The Company has no retirement, pension or profit-sharing
programs. However, the Company, at its discretion, may adopt one
or more of such programs or may adopt health insurance or term
life insurance at some time in the future.
Other than as set forth above, no director or officer of the
Company, or any 5% or more security holder or any relative or
spouse of any of the foregoing persons, has had any material
transactions since the beginning of the Company's last fiscal
year or has any presently proposed material transactions with the
Company.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
Set forth below is certain information as of April 30, 2000
concerning the beneficial ownership of the Company's common stock
by those persons known to the Company to be the beneficial owner
of more than five percent of the common stock, by its directors
and by its officers and directors as a group:
Name, Address of
Beneficial Owner/ Number Type of % of
Title of Class Number of Persons of Shares Ownership Class
- -------------- ----------------- --------- --------- -----
Common Stock Lewis W. Watson 3,233,000 Direct(1) 23.6%
$.01 par value P. O. Box 51600
Sparks, NV 89435
Common Stock Maurice O. Reiber 1,250,000 Direct(1) 9.1%
$.01 par value 5051 W. Geddes Cir.
Littleton, CO 80123
Common Stock Gerald G. Reiber 1,250,000 Direct(1) 9.1%
$.01 par value 1860 24th Ave.
Greeley, CO 80631
Common Stock Thomas C. Pool 108,000 Direct(1) .8%
$.01 par value 2024 Golden Vue Dr.
Golden, CO 80401
Common Stock All officers and
$.01 par value directors as a group
(five persons) 5,841,000 42.6%
(1) Includes shares over which the named individual exercises sole voting
and investment powers.
The Company knows of no arrangements, including any pledge
of securities, which might at a subsequent date result in a
change of control of the Company.
Item 13. Certain Relationships and Related Transactions.
The information required by this item is contained in Item
11 above.
Part IV
-------
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) (1) Financial Statements The following financial
statements of the Company are included in Part II, Item 8 of this
Report:
Financial Statements for the Years Ended April 30, 2000,
1999, and 1998:
Balance Sheets
Statements of Operations and Accumulated Deficit
Statements of Cash Flows
Notes to Financial Statements
(2) Exhibits The following exhibits are filed herewith
pursuant to Item 601 of Regulation S-K or are incorporated by
reference to previous filings:
Exhibit
Table No. Document Reference
- --------- -------- ---------
( 3) Articles of Incorporation and Bylaws (1)
( 4) Instruments defining the rights of security
holders, including indentures None
( 9) Voting Trust Agreement None
(10) Material Contracts None
(11) Stmt re: Computation of per share earnings (2)
(12) Statement re: Computation of ratios None
(13) Annual Report to security holders, Form 10-Q or
quarterly report to security holders None
(18) Letter re: Changes in accounting principles None
(19) Previously unfiled documents None
(22) Subsidiaries of the Registrant None
(23) Published report regarding matters submitted to
vote of security holders None
(24) Consents of experts and counsel None
(25) Power of Attorney None
(28) Additional exhibits None
(1) Filed with Registration Statement No. 2-69700 (under the
Securities Act of 1933) as Exhibits 3.1 and 3.2, respectively
and incorporated herein by reference.
(2) Not required since information is ascertainable from financial
statements.
(b) No reports on Form 8-K were filed by the Company during
the three months ended April 30, 2000.
(c) See subitem (a) (3) above.
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Company has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
INTERMOUNTAIN RESOURCES, INC.
July 18, 2000 By/s/ L. W. Watson
L. W. Watson, President
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on
behalf of Intermountain Resources, Inc. and in the capacities and
on the dates indicated.
July 18, 2000 /s/ L. W. Watson
L. W. Watson, President and
Director (PrincipalExecutive
Officer, Principal Financial
and Accounting Officer)
July 23, 2000 /s/ Thomas C. Pool
Thomas C. Pool, Director
July 21, 2000 /s/ Maurice O. Reiber
Maurice O. Reiber, Director
July 22, 2000 /s/ Gerald G. Reiber
Gerald G. Reiber, Director