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 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-K
(Mark One)
þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, 2015 

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from______________________to______________________

Commission file number 1-7602 

Excalibur Industries
(Exact name of registrant as specified in its charter)
 
Utah   87-0292122
State or other jurisdiction of incorporation or organization   (I.R.S. Employer Identification No.)
 
Post Office Box 650, Hibbing, Minnesota   55746
(Address or principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code   (218) 262-6127 

Securities registered pursuant to Section 12 (b) of the Act:
 
Title of each class   Name of each exchange on which registered
Common Stock (par value $0.01 per share)   None
 
Securities registered pursuant to Section 12(g) of the Act:

None 
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ¨  NO þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: YES ¨  NO þ
 
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 ¨ NO þ
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ¨  NO þ

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.þ

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated files, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o Accelerated filer o
Non-accelerated filer o Smaller reporting company þ
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨   NO þ

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.  As of May 31, 2015, and as of the date of this report, there has been no bid or asked prices available, nor has there been any market for or trading of the Company’s stock for many years.
 
DOCUMENTS INCORPORATED BY REFERENCE

None
 
 

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 2
 
PART I

Item 1.  Business.

Excalibur Industries (“Excalibur”) is a Utah corporation formed by the consolidation of Tower Enterprises (formerly Moab Uranium Company) and The Thrifty Helper on June 1, 1971.  In January 1972, Excalibur purchased all of the issued and outstanding shares of capital stock of Mountain West Mines, Inc. (“Mountain West”), a Nevada corporation, which is now a wholly owned subsidiary of Excalibur.  Excalibur and Mountain West are hereinafter collectively referred to as Excalibur or Company.

Excalibur is a natural resource business enterprise focused on uranium, an industry that has languished for decades following the 1979 Three Mile Island power station incident, and, more recently, the 2011 earthquake and tsunami that severely damaged Japan’s Fukushima Daiichi power station.  However, most industry pundits are cautiously forecasting a positive future for the industry, including an increase in pricing of yellowcake, in the long term.

Excalibur’s uranium position in the Powder River Basin is maintained by royalty agreements held by Excalibur and Mountain West with uranium producers.  Uranium production on the North Butte property began in July 2013.  Uranium production began on the Nichols Ranch property in June 2014.  Excalibur is receiving royalty income from both operations.

The current Excalibur officers are Jay R. Mackie, President and Chief Executive Officer; and Michael P. Johnson, Secretary/Treasurer.  The Board of Directors is made up of Jay R. Mackie, Chairman, Howard W. Hilshorst, Michael P. Johnson, John T. Morrow, Alan E. Nugent, and Zachary A. Nugent.

Powder River Basin, Wyoming - History

Mountain West Mines, Inc.
 
Beginning in 1965, Mountain West Mines, Inc., a private corporation with extensive uranium property holdings in Utah, founded by Claude E. Nugent, Robert H. Ruggeri, and Joseph P. Hubert, operated the underground Betty Mine and the open pit Glade Mine in the Elk Ridge, Utah, uranium district.  Each operation was closed upon the completion of their respective Atomic Energy Commission contracts.

Joseph P. Hubert, CPG, conducted full-time uranium exploration in the 1960s.  In 1966, Mountain West Mines began its successful geologic exploration of the Powder River, Wyoming, uranium district.  A large scale mineral property acquisition program was begun, along with the initiation of the district reconnaissance drill hole fence project.

In 1967, the nuclear power industry revived its interest in uranium fuels, and the Powder River Basin began to attract major corporate attention.  Mountain West, in order to maintain viability, was forced to seek outside financial assistance.

Cliffs Natural Resources (formerly The Cleveland-Cliffs Iron Company)(“Cliffs”)
 
Mountain West and Cliffs entered into a series of contractual arrangements to provide financing for Excalibur, which included an Option and Agreement dated May 17, 1967, an Addendum dated August 29, 1968, an Addenda dated August 31, 1976, and a Deed and Agreement dated October 20, 1976 (the “Cliffs Option and Agreements”).  In 1969, Mountain West deeded the majority of its mining claims to Cliffs, reserving a future royalty interest.

Excalibur retained a 4% yellowcake royalty on all production resulting from the operations of Cliffs, its assigns and/or successors in interest within an Area of Interest (AMI) defined as Townships 33 through 50 North of Ranges 69 through 79 West of the 6th Principal Meridian.  The AMI was then understood to be a common business franchise restriction for protection of both principals.  The Collins Draw In Situ Leaching (ISL) pilot program produced a minor royalty credit to Excalibur.

In 1986, Cliffs sold its interest in the North Bing and Four Mile properties (now part of Cameco’s Ruby Ranch project) to Central Electricity Generating Board Exploration (“CEGB”), subject to the terms and conditions of the Cliffs Option and Agreements.  Cliffs retained reimbursement responsibility for the AMI royalty obligation to Excalibur payable by its successor in interest within the AMI, less subject lands.  In the event of project abandonment by CEGB (et al.), the properties would be returned to Cliffs.  In 1996, Power Resources, Inc., acquired these properties from CEGB.

 
2

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 3
 
In 1987, Cliffs sold its interest in the Greasewood Creek and North Butte projects to Uranerz USA, Inc, subject to the terms and conditions of the Cliffs Option and Agreements.  Cliffs retained reimbursement responsibility for any AMI royalty obligations to Excalibur payable by its successor in interest within the AMI, less subject lands.  In the event of project abandonment by Uranerz USA, the properties would be returned to Cliffs.  In 1991, Uranerz USA assigned these properties to Pathfinder Mines Corporation.  In 2001, Power Resources, Inc., acquired these properties from Pathfinder.

Cliffs subsequently sold its rights to recover Excalibur’s advance royalty credit of $1,319,286.60 to Uranerz USA.  The right of recovery is now held by Pathfinder and was repaid in 1Q 2015.

The Cliffs Option and Agreements have been the basis for extended litigation between Mountain West and Cliffs.  Under the terms of a 2009 Settlement Agreement, Excalibur is to pay Cliffs $100,000.00 in two annual payments of $50,000.00 each from royalty proceeds from the North Butte and Ruby Ranch properties now under lease to Cameco.  The first installment is expected to be paid by December 31, 2015 and the second by December 31, 2016.

Item 1A.  Risk Factors.

1.
Market Effect of Fukushima Daiichi Power Station Disaster.  The market for uranium may continue to be affected by the events at Japan’s Fukushima Daiichi power station, which was heavily damaged in 2011.

2.
Future Regulations.  The nuclear power industry may be subject to further regulations with respect to existing  and future power plants, which could result in a decommissioning of existing plants and added expense for future power plants resulting in a decision by power producers to go to alternative sources of energy.

3.
Delay or Interruption of Anticipated Revenue.  Financing may be needed if the streams of royalty revenue anticipated by the Company from Cameco and Uranerz are delayed or interrupted, and such financing may not be available or available upon terms satisfactory to the Company.

4.
Environmental.  Operators in the mining operations are heavily regulated and are responsible for violating their permits with respect to air and water and general operations, and enforcement of such regulations may curtail production and reduce royalties.  In addition, lawsuits may be brought against the operator and/or the holder of the mineral rights by governmental agencies and/or private parties in some instances.  The Company has not operated a mine for many decades and has no intention of becoming an operator of a mine at this time.

Item 2.  Properties.

The principal assets of Excalibur are as follows:

1.
Mountain West holds a royalty interest in patented and unpatented mining claims held by Power Resources, Inc. (“Cameco”), including properties known as North Butte, Ruby Ranch, and Greasewood.  In 2013, the Company successfully negotiated a new royalty agreement with Cameco to replace the pricing methodology of an outdated agreement.  The royalty rate is 4%, and the new agreement bases the royalty calculation on Cameco’s quarterly average realized uranium price as reported in Cameco’s filings with the Securities and Exchange Commission.

2.
Excalibur and Uranerz Energy Corporation (“Uranerz”) exercised an Option and Purchase Agreement on December 9, 2005, on approximately 14,000 acres of mineral rights, including properties known as Nichols Ranch, Hank, Niles Ranch, Willow Creek, Verna Ann, and Doughstick (the “Agreement”).  Pursuant to the Agreement, Excalibur granted Uranerz an option on the properties, which it subsequently exercised in 2006 and paid an advance royalty to Excalibur of $250,000.  Under the Agreement, Uranerz is to pay royalty to Excalibur based on the spot price of yellowcake (U3O8) as reported by Ux per calendar quarter.  If the average spot price of uranium for any calendar quarter is $45.00 per pound or less, the royalty rate is 6%, and if the average sport price is $45.01 per pound or higher, the royalty rate is 8%.
 
 
 
3

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 4
 
3.
The August 22, 1973 Mining Deed (Part I and II) between Mountain West and American Nuclear Corporation (“ANC”), on mining claims reserving a 2.5% royalty interest to Mountain West.  The project became part of a joint venture between ANC and the Tennessee Valley Authority (“TVA”).   This project area was known as Brown-TVA.  At public auction in 1991, ANC/TVA sold this project, along with their entire holdings, to General Atomic.  In 1992, General Atomic sold this same project to Pathfinder.  On June 11, 1999, Pathfinder (Cogema) acknowledged ownership, with 2.5% royalty obligations to Mountain West.  In 2001, Pathfinder sold the Brown deposit to Power Resources.  Excalibur retains a 2.5% royalty from the ANC contract.

The 2,000,000 share warrants of Uranerz stock that Excalibur acquired in 2010 in exchange for its Powder River Drill Hole Library - strike price $3.00 - four-year term with schedule execution, expired June 30, 2014, after several unsuccessful attempts were made to extend the warrant expiration.  The extended depressed state of the uranium industry and resultant low stock price for Uranerz provided no opportunity to exercise the warrants under the Company’s current administration.
 
Cameco produced 494,191.9 pounds of yellowcake from the North Butte property in 2014 and 94,040.5 pounds in the first quarter of 2015.  Based on Cameco’s published production outlook for 2015, North Butte production is estimated to be about 329,000 pounds.  The timing and amount of production reported by Cameco are subject to change and are beyond the control of the Company.  After repayment of the advanced royalty of $1,319,286.60, Excalibur received royalty payments from Cameco totaling $288,031.97 through the first quarter of 2015.
 
Uranerz produced 190,845 pounds of yellowcake from the Nichols Ranch property in 2014 and 60,935.0 pounds in the first quarter of 2015.  Based on Uranerz’ published production figures, Nichols Ranch production is estimated to be about 377,000 pounds.   The timing and amount of production reported by Uranerz are subject to change and are beyond the control of the Company.  After repayment of the advanced royalty of $250,000.00, Excalibur received royalty payments from Uranerz totaling $268,879.26 through the first quarter of 2015.

Item 3.  Legal Proceedings.

None

Item 4.  Mine Safety Disclosures.

Not applicable
 
 
4

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 5
 
PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

(a)
Lack of Market:  The stock of Excalibur was formerly traded on the Intermountain Stock Exchange in Salt Lake City, Utah, until October 31, 1986, when it was delisted.  Since such date, there has been no established public trading market for Excalibur securities.

(b)
Securities Issued During the Last Three Years:  Securities were issued to directors and officers in consideration for services performed and to be performed (see Item 11, Executive Compensation).  The securities issued were common stock and warrants to purchase common stock.  The shares issued and the warrants issued were non-transferrable except pursuant to registration or exemption from registration under the Securities Act of 1933 and applicable state security laws and shares issuable upon the exercise of the warrants were also non-transferable except for registration or exemption from registration under the Securities Act of 1933 and applicable state security laws.  All shares and warrants to purchase shares and shares issuable upon exercise of a warrant bear a restrictive legend restricting transfer except upon registration or exemption from registration and require a reasoned opinion of the record owner’s legal counsel and the consent of the Company to transfer.  Each of the officers and directors being issued shares has signed a letter of investment intent stating that they are acquiring the shares and/or warrants as an investment and not with a view for resale.  The exemption claimed for the issuance of the warrants and the shares to the officers and directors is pursuant to an exemption claimed under Section 4(2) of the Securities Act of 1933 for the issuance of securities not involving a public offering.  See Item 11, Executive Compensation, for further details regarding the issuance of such securities.

 
The Company has not repurchased any of its securities.

Item 6.  Selected Unaudited Financial Data.
 
   
2015
   
2014
   
2013
 
Total Revenues
  $ 556,911     $ 0     $ 0  
                         
Total Operating Expenses
    291,107       326,665       105,938  
Income/(Loss) from Operations
    265,804       (326,665 )     (105,938 )
                         
Other Income (Expense)
    7,985       3,465       8,259  
     Income/(Loss) Before Income Taxes
    273,789       (323,200 )     (97,679 )
                         
Provision for Income Taxes
    100       444       133  
                         
     Net Income/(Loss) Before Extraordinary Gain
    273,689       (323,644 )     (97,812 )
                         
Extraordinary Gain
    0       0       0  
                         
     Net Income/(Loss)
    273,689       (323,644 )     (97,812 )
                         
Retained Earnings/Deficit) Beginning of Year
  $ (311,625 )   $ 12,019     $ 109,831  
                         
Retained Earnings/(Deficit) End of Year
  $ (37,936 )   $ (311,625 )   $ 12,019  
                         
Average Shares of Common Stock Outstanding
    6,012,361       6,012,361       6,012,361  
                         
Net Income/(Loss) Per Share of Common Stock
  $ 0.0455     $ (0.0538 )   $ (0.0163 )
                         
Total Assets - End of Year
  $ 424,601     $ 192,852     $ 249,211  
                         
Long-Term Obligations
  $ 0     $ 0     $ 0  
                         
Cash Dividends Declared Per Share of Common Stock
  $ 0     $ 0     $ 0  
 
 
5

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 6
 
Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operation
 
Excalibur, for the past approximately 20 years, has adopted a policy designed to husband the Company’s assets and retain as much of its mineral interests as possible taking into account the depressed market for uranium and Excalibur’s limited resources.  The Company recognized that it would have to rely on royalty income from its most promising properties and that it had little if any control over when uranium producers with which it had royalty agreements would commence mining.  The records show that during the period of 1993 to January 31, 2015, with exception of 2006, the Company had zero royalty income.  Form 10-K of the Company for 2006 indicates that the Company received advanced royalty from Uranerz Energy Corporation of $250,000.  The lack of royalties was noted in Excalibur’s 10-K Annual Report for 1998, wherein it is stated that “…advanced payments ended in May 1992 after which time no additional payments will be received until production commences.  Other than interest income, no other continuing material cash inflows are known to management or anticipated at this time based on current agreements.”  The husbanding policy of the Company was a survival policy which may have worked.  However, one consequence is that the Company has not had audited financial statements since 1988 and cannot have a market for its shares without first attaining necessary financial audits for multiple years and compliance with all reporting standards of the Securities and Exchange Commission at considerable expense.  Compliance measures are underway.
 
The Company’s administrative and leasehold affairs are managed by Meriden Engineering LLC, a Minnesota limited liability company, situated in Hibbing, Minnesota (“Meriden”).  With the commencement of royalty income, Meriden’s management fee will be 5% of the gross royalty revenue received by the Company.  Extraordinary events or issues beyond the scope of the budget will be negotiated between Meriden and the Company as additional compensation.  In addition, as an incentive, 5% of actual gross increase in the Company’s consolidated revenues during each calendar year from all sources other than royalties shall be paid to Meriden.  In the event the Company is sold, all deferred compensation will be paid in full, and in addition, a one-time termination fee in the amount of $250,000 will be paid to Meriden.
 
Uranium production began at the North Butte property (Cameco) in 2013 and at the Nichols Ranch (Uranerz) in 2014.  The Company received its first royalty payment in January 2015 after repaying over $1.6 million in advance royalty, most of which dated back to the 1960s.
 
In light of these recent developments, management has a reasonable expectation that there will be an income stream to the Company to provide liquidity.  In the event the stream of revenue does not occur, the Company will, if necessary, attempt to secure loans or sell assets.
 
 
6

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 7

Item 8.   Financial Statements and Supplementary Data.
 
Accountant’s Compilation Report
 
To the Board of Directors and Stockholders
Excalibur Industries

We have compiled the accompanying consolidated balance sheets of Excalibur Industries (Corporation) and its wholly owned subsidiary, Mountain West Mines, Inc. as of May 31, 2015, 2014, and 2013, and the related consolidated statements of income, retained earnings, and cash flows for the year then ended.  We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or provide any assurance about whether the financial statements are in accordance with accounting principles generally accepted in the United States of America.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

Our responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The objective of a compilation is to assist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements.

The companying financial statements do not meet requirements of Article 8 of Regulation S-X.


Maxfield Peterson, P.C.
Grand Junction, Colorado
August 26, 2015

 
7

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 8
 
See accompanying Notes and Accountant’s Compilation Report.

CONSOLIDATED BALANCE SHEETS
MAY 31, 2015, 2014, 2013
(Unaudited)

ASSETS
 
For the Period Ended:
 
CURRENT ASSETS
 
2015
   
2014
   
2013
 
        Cash and Cash Equivalents
  $ 288,880     $ 7,417     $ 17,120  
        Marketable Securities
    22,263       68,875       115,791  
        Total Prepaid Insurance
    13,398       16,500       16,240  
Total Current Assets
    324,541       92,792       149,151  
                         
        Fixed Assets
                       
        Interest in Mining Properties
    100,000       100,000       100,000  
                         
         Deposits
    60       60       60  
                         
         TOTAL ASSETS
  $ 424,601     $ 192,852     $ 249,211  
                         
LIABILITIES AND STOCKHOLDERS’ EQUITY
                       
                         
CURRENT LIABILITIES
                       
        Accounts Payable
  $ 302,288     $ 325,263     $ 68,844  
                         
        TOTAL LIABILITIES
  $ 302,288     $ 325,263     $ 68,844  
                         
STOCKHOLDERS’ EQUITY
                       
        Common Stock $.01 Par Value, Authorized 10,000,000 Shares 6,012,361 Shares issued including shares in Treasury
  $ 60,124     $ 60,124     $ 60,124  
        Paid-In Capital in excess of Par
    83,810       83,810       83,810  
        Retained Earnings
    (37,936 )     (311,625 )     12,019  
        Accumulated Other Comprehensive Income
    16,420       35,385       24,519  
        Treasury Stock
    (105 )     (105 )     (105 )
                         
         TOTAL SHAREHOLDERS’ EQUITY
  $ 122,313     $ (132,411 )   $ 180,367  
                         
         TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY
  $ 424,601     $ 192,852     $ 249,211  
 
See accompanying Notes and Accountant’s Compilation Report.

 
8

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 9
 
CONSOLIDATED SATEMENTS OF INCOME, EXPENSE
AND RETAINED EARNINGS
FOR THE FISCAL YEARS ENDED MAY 31, 2015, 2014, 2013
(Unaudited)

INCOME
 
2015
   
2014
   
2013
 
         Royalty Income
  $ 556,911     $ 0     $ 0  
                         
         TOTAL INCOME
  $ 556,911     $ 0     $ 0  
                         
OPERATING EXPENSES
                       
        General and Administrative
  $ 201,424     $ 173,479     $ 34,631  
        Professional Services
    89,683       153,186       71,307  
        TOTAL OPERATING EXPENSES
  $ 291,107     $ 326,665     $ 105,938  
                         
 OTHER INCOME (EXPENSE)
                       
         Interest Expense
    0       0       0  
         Interest and Dividend Income
    3,080       7,408       4,865  
         Gain (Loss) on Sale of Marketable Securities
    4,905       (3,943 )     3,394  
         TOTAL OTHER INCOME
    7,985       3,465       8,259  
                         
         INCOME /(LOSS) BEFORE INCOME TAXES
  $ 273,789     $ (323,200 )   $ (97,679 )
                         
         Provision for Income Taxes
    100       444       133  
                         
         NET INCOME (LOSS)
  $ 273,689     $ (323,644 )     (97,812 )
                         
                 Retained Earnings Beginning of Year
  $ (311,625 )   $ 12,019     $ 109,831  
                         
                 Retained Earnings End of Year
  $ (37,936 )   $ (311,625 )   $ 12,019  
 
                       
         Average Shares Outstanding During Period
    6,012,361       6,012,361       6,012,361  
                         
NET GAIN (LOSS) PER SHARE
  $ 0.0455     $ (.0518 )   $ (.0163 )
 
See accompanying Notes and Accountant’s Compilation Report.

 
9

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 10
 
CONSOLIDATED SATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED MAY 31, 2015, 2014, 2013
(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES
 
2015
   
2014
   
2013
 
         Net Income/(Loss)
  $ 273,689     $ (323,644 )   $ (97,812 )
        Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:
                       
        Decrease in Prepaid Insurance
    3,102       (260 )     (16,240 )
        (Decrease) in Accounts Payable
    (22,975 )     256,419       68,844  
        Other
    -       -       (1,464 )
        (Gain)/Loss on Other Equity Investments
    (4,905 )     3,943       (3,394 )
                         
         Net Cash Provided/ (Used) by Operating Activities
    248,911       (63,542 )     (50,066 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
        Purchase of Investment Securities
    -       -       -  
        Proceeds from Sale of Investment Securities
    32,552       53,839       55,283  
                         
        Net Cash Provided/(Used) by Financing Activities
    32,552       53,839       55,283  
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
        Net Cash Provided/(Used) by Financing Activities
    -       -       -  
                         
        Net Increase/(Decrease) in Cash
    281,463       (9,703 )     5,217  
                         
CASH - BEGINNING OF YEAR
  $ 7,417     $ 17,120     $ 11,903  
                         
CASH - END OF YEAR
  $ 288,880     $ 7,417     $ 17,120  
 
                       
SUPPLEMENTAL DISCLOSURES
                       
        Income Taxes Paid
    -       444       133  
        Interest Paid
    -       -       -  
 
See accompanying Notes and Accountant’s Compilation Report.

 
10

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 11
 
Notes to Consolidated Financial Statements
(Unaudited)

Note 1 - Summary of Significant Accounting Policies Consolidation
 
The consolidation financial statements presented herein include the accounts of Excalibur Industries (“Excalibur”) and its wholly owned subsidiary, Mountain West Mines, Inc. (“Mountain West”), a Nevada corporation, qualified to do business in the state of Wyoming.  All significant intercompany transactions have been eliminated from these statements.

Cash and Cash Equivalents
 
For the purposes of the consolidated statement of cash flows, Excalibur considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents.

Marketable Securities
 
Excalibur classifies its marketable equity securities as available for sales and are carried in the financial statements at fair market value.  Recognized gains and losses are included in earnings as determined by the first-in, first-out method.  Unrealized holding gains and losses are reported in other comprehensive income.

Mining Properties and Interests
 
Mining claims, leases, and royalty interests are stated at cost, unless in the judgment of the Directors a lesser amount is felt to be more appropriate due to a permanent decline in value.  No depletion has been charged against income for financial statement purposes, but is deducted for federal income tax purposes when allowable.  The full carrying value is charged against income at the time of sale or disposition of an asset.  If a perpetual overriding royalty is retained, the recorded costs of the asset are treated the same for financial statement purposes as for income tax purposes and are not reduced in value until production royalties are received.

Depreciable Property and Equipment
 
Depreciable property and equipment are stated at cost.  Depreciation for income tax purposes is consistent with that used for financial statement purposes and has been computed using the straight-line method.

Deferred Income Taxes
 
Deferred income taxes are provided as a result of timing differences in reporting income for financial statement and tax purposes.  Currently no deferred income taxes payable (or receivable) is recognized.

Use of Estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.

Earnings per Share
 
Earnings per share of common stock are computed using the weighted average number of common shares outstanding during the period.  Primary and fully diluted earnings per share are shown as the same figure if the dilutive effect of any common stock equivalents or convertible securities is less than three percent.  Excalibur currently has no dilutive equivalents against income for financial statement purposes.

 
11

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 12
 
Note 2 - Marketable Securities
 
Cost and fair value of marketable securities at May 31, are as follows:
 
   
2015
   
2014
   
2013
 
Cost
  $ 5,843     $ 33,490     $ 91,272  
Fair Value
    22,263       68,875       115,791  
Total Gains in Accumulated Other Comprehensive Income
  $ 16,420     $ 35,385     $ 24,519  
 
Note 3 - Mining Properties and Interests
 
Uranium
 
Excalibur owns various royalty and other interests in patented and unpatented lode mining claims and mineral leased acreage located in the Powder River Basin, Johnson and Campbell Counties, Wyoming.  These properties were assigned a value of $347,032 following the acquisition of Mountain West by Excalibur. Various acreages have been dropped during the past years as such acreage was determined to be of no value.  The capitalized costs of these properties have been reallocated to the remaining acreage still retained by Excalibur.  The Board of Directors determined that a more realistic value should be placed on the books and elected to reduce the reporting value for financial statement purposes by $247,032.
 
A summary of capitalized costs of the above properties as of May 31, 2015, 2014, and 2013 follows:
 
   
2015
   
2014
   
2013
 
Uranium
  $ 100,000     $ 100,000     $ 100,000  
 
Note 4 - General and Administrative Expense
 
General and administrative expenses for the years ended May 31, 2015, 2014, and 2013 follows:
 
   
2015
   
2014
   
2013
 
Reports and Publications
  $ 152     $ 4,707     $ 555  
Professional
    165,281       70,873       24,728  
Office Expense and Travel
    35,991       97,899       9,348  
Total
  $ 201,424     $ 173,479     $ 34,631  
 
Note 5 - Income Taxes
 
Currently, no deferred income taxes payable (or receivable) are recognized as a result of timing differences; in reporting income for financial accounting and tax purposes.

As of May 31, 2015, Excalibur has loss carry forwards of approximately $400,000 for federal tax and state purposes and  that may be offset against future taxable income (expiring on various dates through 2027).  A deferred tax benefit has not been recognized in the accompanying balance sheet due to the uncertainty of any future taxable income.  In addition, deferred income taxes are not affected as a result of statutory percentage depletion deductions taken for tax purposes.

Note 6 – Litigation and Contingencies

Contingency liabilities include:
 
(A)
$100,000 in two payments of $50,000 each owed to Cliffs from production royalty on North Butte and Ruby Ranch properties under the 2009 Settlement Agreement, with payments to be made in 2015 and 2016.
 
 
12

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 13

Note 7 - Operating Funds
 
Management has developed a plan to reduce or delay administrative costs to insure that Excalibur will continue to meet its obligations during the coming year.

In 2012, Excalibur entered into a Management Services Agreement with Meriden Engineering LLC (Meriden) to perform certain management and consulting services with respect to mine performance and progress and royalty payment determinations, among others.  Meriden has agreed to defer payments under this agreement until such a time that Excalibur has adequate funds.  At May 31, 2015, Meriden was owed $141,037.82.

In December 2013, Excalibur entered into Employment Agreements with its President/CEO and Secretary/Treasurer (the Officers) for base salaries totaling $12,250 per month.  At May 31, 2015, the Officers were owed $61,250.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None

Item 9A. Controls and Procedures

The Chief Executive Officer and Chief Financial Officer, in consultation with its administrative support company, Meriden Engineering LLC, evaluated its financial controls in fiscal year ending May 31, 2015, and made certain adjustments which are appropriate for a business the size of the Company.

The Chief Executive Officer and Chief Financial Officer recognize that the Company must improve its financial controls due to management’s expectation that during fiscal year 2016 the Company will receive significant royalty income.
 
 
13

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 14
PART III

Item 10.  Directors, Executive Officers and Corporate Governance.

(a)(b) & (e)

Name
 
Age
 
Position
Jay R. Mackie
 
72
 
President, Chief Executive Officer, and Chairman of Board of Directors
Michael P. Johnson
 
59
 
Secretary, Treasurer, and Director
Alan E. Nugent
 
70
 
Director
John T. Morrow
 
72
 
Director
Howard W. Hilshorst
 
68
 
Director
Zachary A. Nugent
 
33
 
Director

Jay R. Mackie,President and Chief Executive Officer, Chairman of the Board of Directors
 
Mr. Mackie was elected to the Board of Directors and appointed to these positions in 2012.  He graduated from St. Olaf College (B.A., 1964) and has 50 years of mining related experience in areas of exploration, mine engineering, mine operations, automated mine and maintenance systems, IT systems, marketing and greenfield project development.  Employed by Reserve Mining Company in engineering and operations departments (1964-1986), Caterpillar Venture Corp. 1987 as a field engineer in area of automated mining and maintenance management systems, self-employed mining/management consultant 1988 to present, Cyprus Northshore Mining as Mine Manager (1989-1994), Cliffs Northshore Mining (1994-1997) as Mine Manager, Cleveland-Cliffs (1997-2002) as Manager of Special Projects and market development, Bending Lake Iron Corp. (2006-2009) as Project Manager, and Bending Lake Iron Group Ltd. (2009-2012) as Chief Operating Officer and Director.  Jay is a member of the Society for Mining, Metallurgy and Exploration (SME) and Canadian Institute of Mining (CIM).

Michael P. Johnson, Secretary and Treasurer, Director
 
Mr. Johnson was elected to serve in these positions in 2012.  He graduated with a B.S. in Electrical Engineering from Lehigh University and was granted his Professional Engineers License in 1981.  He has worked in the natural resource industry for 37 years; 25 years with Pickands Mather and Cleveland-Cliffs and 11 years for various engineering firms and junior miners as an independent consultant.  Mr. Johnson is a long standing member of the Society for Mining, Metallurgy and Exploration (SME) and a member of the Canadian Institute of Mining (CIM).

Alan E. Nugent, Director
 
Mr. Nugent is a partner and founder of the Salt Lake City based The Foresight Group LLC.  He has been actively engaged in the financial services industry for 38 years, licensed and doing business in eight states.  Mr. Nugent obtained his B.S. Degree in Geography from the University of Utah in 1968.

John T. Morrow, Director
 
Mr. Morrow was elected to the Board in 2010.  He is a CPA and private investor.  He served at the Chicago office of the Securities and Exchange Commission from 1987 through 2006.  Mr. Morrow attended Loyola University Chicago to obtain an Accounting degree and has worked for Arthur Anderson, American Cyanamid, Touche Ross, a Wall Street bank subsidiary of CIT, and was Audit Manager of an industrial gas subsidiary of Houston Natural Gas.  He also served 27 years in the Navy/Army Reserves.

Howard W. Hilshorst, Director
 
Mr. Hilshorst has Bachelor (1970) and Master (1972) Degrees in Metallurgical Engineering from Michigan Technological University, and has more than 40 years of leadership experience in the mining industry.  He is currently an independent management consultant.  He most recently served as President and CEO of Encore Natural Resources from 2012 to May 1, 2015.  From 2009 to 2012, he served as President and CEO of Superior Mineral Resources.  His past positions include Executive Vice President of Minnesota Steel Industries LLC and President and CEO of EVTAC Mining, a 5 million ton iron ore mining and pellet plant operation in northeastern Minnesota.  Mr. Hilshorst has also held various management positions at three other iron ore mines in northeastern Minnesota, as well as copper producing mines in Michigan and Arizona. He is a member of the Society for Mining, Metallurgy and Exploration (SME).
 
 
14

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 15
 
Zachary A. Nugent, Director
 
On May 18, 2015, the Company’s Board selected Zachary Nugent to serve as a director.  Mr. Nugent is the Chief Executive Officer of Scalar Group, Inc, where he manages the day-to-day operations of the firm. Prior to joining Scalar Group, Inc., Mr. Nugent was the President and Chief Executive Officer of America Home Today. Prior to joining America Home Today, Mr. Nugent was the Director of Marketing for Foresight Wealth Management. Mr. Nugent began his career at Cardinal Health in their Presource Products Division. Mr. Nugent has a B.S. in Economics from the University of Utah.

(c)
Excalibur has two employees, Jay R. Mackie and Michael P. Johnson.

(d)
Director Zachary A. Nugent is the son of Director Alan E. Nugent.

(f)
We are not aware of any of our executive officers or directors being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set forth under Item 401 of Regulation S-A with the exception of the following matter:

 
Jay R. Mackie was a Director and Chief Operating Officer of Bending Lake Iron Group Ltd., an Ontario, Canada, corporation (“Bending Lake Iron”), during 2009 and until his resignation on December 20, 2012.  Bending Lake Iron was engaged in the development of an iron mine in Ontario, Canada.  A request for the appointment of a receiver was brought by 2430177 Ontario Inc. which holds a mortgage and security interest upon certain of the assets of Bending Lake Iron and on September 11, 2014, a receiver was appointed for Bending Lake Iron by the Ontario Superior Court of Justice appointing A.  Farber & Partners Inc., a receiver of all of the assets, undertakings and properties of Bending Lake Iron Group Ltd. in accordance with Section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended in Section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43 as amended.

Item 11.  Executive Compensation.

The Company has two employees.

Directors and Officers Compensation Summary
 
Name and Principal Position
 
Year
 
Stock Awards
(no market value, value established at par of $0.01)
   
Warrant Awards1
(no market value, value established at par $0.01 per share)
   
All Other Compensation
   
Total
 
Jay R. Mackie, CEO, Director   2013     2,500    
25,000 @ strike price $1.00 per share
      -     $ 275  
   
2014
    -       -    
$11,000/month2
   
$132,000/year
 
    2015     -       -    
$11,000/month2
   
$132,000/year
 
Michael P. Johnson,   2013     2,500    
25,000 @ strike price $1.00 per share
      -     $ 275  
Secretary/Treasurer, Director   2014     -       -    
$1,250/month2
   
$15,000/year
 
   
2015
    -       -    
$1,250/month2
   
$15,000/year
 
John T. Morrow, Director
 
2013
    2,500    
25,000 @ strike price $1.00 per share
      -     $ 275  
Alan E. Nugent, Director
 
2013
    2,500    
25,000 @ strike price $1.00 per share
      -     $ 275  
Howard W. Hilshorst, Director
 
2013
    2,500    
25,000 @ strike price $1.00 per share
      -     $ 275  
Zachary A. Nugent, Director
 
2015
    -       -       -       -  

Notes:

1
May not be exercised until Excalibur stock is tradable in a broker transaction.

2
2014 compensation was paid on May 15, 2015, and 2015 compensation is deferred to December 15, 2015.  As of May 31, 2015, Jay R.Mackie is owed $ $55,000 and Michael P. Johnson is owed $6,250.

3
Jay R. Mackie and Michael P. Johnson each are entitled to severance payments under their December 31, 2013 Employment Agreements in the event they are terminated by the Company without cause or by death or disability which include unpaid base salary through the date of termination provided if such base salary is deferred, such base salary shall remain payable only upon the authorized date of payment under the deferral.  The severance shall be equal to 80% of their respective base salary for the preceding year payable in three equal annual installments commencing on the next anniversary date of their respective Employment Agreements following the date of termination provided such termination date shall be no earlier than the third anniversary date of their respective Employment Agreements provided any rights the executive may have to severance payments shall be in accordance with their respective December 31, 2013 Employment Agreement and not on the severance policy then in effect.  Severance benefits are conditioned upon executive signing and not revoking a separation agreement that includes a general release and that complies with state and federal law releasing the Company and its subsidiaries and their respective successors and assigns, officers, managers, employees, agents, attorneys and representatives of any claims relating to executives employment or termination thereof.
 
 
15

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 16
 
Severance Pay.  At the Company’s October 16, 2013 meeting, the Board approved a severance payment of $100,000 for former Company Secretary/Treasurer Marguerite H. Emanuel, and $300,000 for the Company’s long standing President & CEO Joseph P. Hubert.  Ms. Emanuel served as Secretary/Treasurer of the Company from 2001 to 2012, without monetary compensation.  Mr. Hubert was elected President & CEO in 1982 and received no monetary compensation from 1999 to his retirement in 2012.  These severance payments are deferred until the Company’s financial position allows payment.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

(a)           Security Ownership of Certain Beneficial Owners:

Title of class
 
Name and address of beneficial owner
 
Amount and nature of beneficial ownership1
 
Percent of class
Common
 
Joseph P. Hubert
 
1,179,000 Direct
 
19.61
    1800 Lakeview Drive        
    Duluth, MN 55803        
             
Common
 
Alan E. Nugent
 
1,447,328 Direct3
 
24.07
    1900 E 5685 S        
    Salt Lake City, UT 84121        
             
Common
 
Service Credit Corporation
 
300,000 Direct
 
4.99
    377 North Main Street        
    Layton, UT 84041        

(b)           Security Ownership of Management

Title of class
 
Name and address of beneficial owner
 
Amount and nature of beneficial ownership1,2
 
Percent of class
Common
 
Jay R. Mackie
 
12,500 Direct
 
0.21
Common
 
Michael P. Johnson
 
2, 500 Direct
 
0.04
Common
 
Alan E. Nugent
 
1,447,328 Direct3
 
24.07
Common
 
John T. Morrow
 
2,500 Direct
 
0.04
Common
 
Howard W. Hilshorst
 
2,500 Direct
 
0.04
Common
 
Zachary A. Nugent
 
-
 
-

1
Information as to beneficial ownership is based upon statements furnished by each Director.  Information with such ownership rests peculiarly within their knowledge and the registrant disclaims responsibility for the accuracy and completeness thereof.

2
Does not include warrants to purchase common stock of the Company as shown in Item 11, Executive Compensation..

3
Includes 24,000 shares held by Alan E. Nugent’s wife.

(c)           Changes in Control:
 
 
No arrangements are known to registrant which may at a subsequent date result in a change in control of the registrant.

 
16

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 17
 
Item 13.  Certain Relationships and Related Transactions, and Director Independence.
 
(a)
Transactions with Management and Others:
 
None except as reported in Item 11. Executive Compensation

(b)
Certain Business Relationships:
 
In February 2010 Excalibur initiated management discussions with Superior Mineral Resources LLC (“SMR”) and its wholly owned subsidiary, Meriden Engineering LLC, of Hibbing, Minnesota.  SMR has over a century of mineral resource management experience, largely positioned in the historic Lake Superior iron ore region.  In February 2012, Excalibur contracted with SMR to manage Excalibur’s mineral lease and administrative affairs.  Director Howard Hilshorst was employed by SMR until October 1, 2012, when he retired, and thereafter he engaged in the business of being an independent management consultant.

Item 14.  Principal Accounting Fees and Services.

 
Audit/Audit-Related Fees
 
 
There were no audit or audit-related fees as the Company does not have audited financial statements for all of the years shown.

 
Tax Fees
 
 
Annual tax return preparation:
 
2014 - $1,347.05
 
2013 - $1,208.50

 
All Other Fees
 
 
Financial statement compilation:
 
2014 - $1,923.25
 
2013 - $2,577.75

In 2015, Excalibur designated an Audit Committee, Nominating Committee and Compensation Committee.

 
17

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 18
 
PART IV

Item 15.  Exhibits, Financial Statement Schedules.
 
(a) 1. Unaudited Consolidated Financial Statements for the fiscal years ended May 31, 2015, 2014, and 2013, including:
       
      Accountant’s Compilation Report
      Consolidated Balance Sheets
      Consolidated Statements of Income, Expense, and Retained Earnings
      Consolidated Statement of Cash Flows
      Notes to Consolidated Financial Statements
       
(b) (31)(1) Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  (32)(1) Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (contains exception for lack of audited financial statements)
       
(c) Not applicable
 
 
 
 
18

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 19
 
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.
 
Registrant Excalibur Industries    
 
By: /s/ Jay R. Mackie   August 28, 2015    
  Jay R. Mackie   Date    
  President, Chief Executive Officer (Principal Executive Officer)
         
By: /s/ Michael P. Johnson   August 28, 2015  
  Michael P. Johnson   Date  
  Secretary and Treasurer (Principal Financial 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 on the dates indicated.
 
By: /s/ Jay R. Mackie   August 28, 2015  
  Jay R. Mackie, Director   Date  
         
By: /s/ Michael P. Johnson   August 28, 2015  
  Michael P. Johnson, Director   Date  
         
By: /s/ John T. Morrow   August 28, 2015  
  John T. Morrow, Director   Date  
         
By: /s/ Alan E.Nugent   August 28, 2015  
  Alan E. Nugent, Director   Date  
 
The above signatures constitute a majority of the Board members.
 
 
19

 
EXCALIBUR INDUSTRIES
Form 10-K
May 31, 2015
Page 20
 
Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants
Which Have Not Registered Securities Pursuant to Section 12 of the Act

(a)           Not applicable

(b)           Not applicable

(c)
No such annual report or proxy material has been sent to security holders.  If such report or proxy material is to be furnished to security holders subsequent to the filing of the annual report of this Form, the registrant shall furnish copies of such material to the Commission when it is sent to security holders.
 
 
 
 
20