ITEM 1. BUSINESS"ITEM1.BUSINESS"l1
(a) The Registrant was incorporated under the laws of the State of Idaho on March 22, 1967 and until January 1992 operated as an exploratory mining company in the development stage.
Since its incorporation, the business activities of Allied Silver-Lead Company ("Allied") have been confined to the acquisition of mineral rights lying beneath the City of Mullan, Shoshone, County, Idaho, and seeking to identify a third-party partner to finance exploration and development of the property.
Registrant acquired by deed and/or lease the subsurface mineral rights to approximately 393 acres or 99.9% of the land area contained within the boundaries of the City of Mullan, County of Shoshone, Idaho, located in the Hunter Mining District. Included in the above are mineral rights to 3 acres owned by School District #392 and 200 acres owned by the City of Mullan, Idaho, under a lease agreement which has now expired.
On January 1, 1981, Registrant entered in to a lease agreement (the "Agreement") with Sunshine Mining Company, a Delaware corporation, with mining properties situated in Shoshone County, Idaho. On June 26, 1984, the lease was assigned by Sunshine to Hecla Mining Company ("Hecla"). The lease covers all of Registrant's properties north of the Osburn Fault as defined in the lease agreement. The lease is for a period of forty years with a right to renew for an additional forty years; however, on October 16, 1991, Hecla notified the Registrant that it was electing to terminate the Agreement on January 16, 1992. Hecla paid the final royalty check of $28,512 on December 31, 1991. At a later date, Hecla provided the Registrant with an inventory of the pipe, track and writing installed in Allied's property.
Effective January 15, 1996, Allied reincorporated in Delaware through a merger into Planet Resources, Inc. ("Planet" or the "Company"). The reincorporation resulted in (1) Allied's name being changed to Planet Resources, Inc., (2) shares of common stock of Allied being converted into the right to receive one share of common stock of Planet for each five shares of common stock of Allied as of the date of reincorporation, (3) elimination of the right to cumulative voting for the election of directors, (4) the persons serving as officers and directors of Allied continue to serve in their respective capacities, and (5) the Articles of Incorporation of Allied changed to (a) reduce the par value of the commons stock from $.01 to $.001, (b) reduce the number of shares of common stock the Company is authorized to issue from 50,000,000 to 10,000,000, and (c) authorized the Company to issue 1,000,000 preferred shares with a par value of $.001 per share.
The Company presently has no commercial operations although management is evaluating various future operating strategies, including the merger of the Company with operating entities.
(b) Not applicable.
(c) (1) (i) if the Registrant were to develop an ore body on its property, such ores would be processed through a floatation mill and the concentrates sold at prevailing market prices to a smelter under a negotiated smelter contract. The closest smelter to the Registrant's properties is the East Helena Smelter of ASARCO Incorporated, approximately 240 miles to the east. Any transportation of concentrates would be by truck.
(ii) Not applicable.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART I JUNE 30, 1996
ITEM 1. CONTINUED
(iii) The source and availability of raw materials essential to the Registrant's business are readily available from local suppliers.
(iv) Registrant holds no patents, trademarks, licenses franchise or concessions.
(v) The business of Registrant is not of a seasonal nature.
(vi) The business of Registrant does not require significant amounts of working capital at the present time.
(vii) See (c)(1)(i) above.
(viii) The Company does not have a backing of orders.
(ix) Registrant does not participate in any governmental contracts.
(x) Registrant is inactive and is not in direct competition with any other business.
(xi) Registrant's business is such that no expenditures are required for research and development.
(xii) See (c)(1)(i) above.
(xiii) There have been no material effects upon Registrant's business in complying with governmental provisions with respect to protection of the environment.
(xiv) Registrant has no employees and its current officers and directors serve without established compensation.
(d) Not applicable.
ITEM 2.
ITEM 2. PROPERTIES"ITEM2.PROPERTIES"l1
(a) The Company is the owner of subsurface mineral rights on approximately 190 acres located in the City of Mullan, Idaho. Title was acquired by issuance to real property owners of one share of capital stock for each 25 square feet of surface owned. In acquiring such mineral rights, the Company issued 361,739 shares of capital stock as adjusted for subsequent stock splits and the Planet merger. Conveyance of title included, free of any additional stock issue, all subsurface rights lying beneath adjacent streets and alleys where ownership rested with the grantor. The acquisition of such mineral rights was completed in November of 1985.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART I JUNE 30, 1996
ITEM 2. CONTINUED
(b) Property Being Leased to Allied
(1) Allied entered into an agreement dated May 1, 1981, with the City of Mullan (which supersedes a previous agreement dated December 31, 1971) whereby the Company, as Lessee, has the right to mine subsurface minerals on approximately 200 acres owned by the City north of Osburn Fault for a period of 25 years (subject to a renewal option for an additional 25 years), The City, as lessor, received 20% of all royalty payments or other consideration received by Allied from Hecla. In the event Allied enters in to a lease agreement for the exploration and development of "City Property" south of the Osburn Fault, the City shall receive 15% of the royalties received. No royalties have been paid on "City Property" south of the fault.
(c) The Registrant has no competitive economic position in the mining industry as no mineral production has ever been realized.
(d) Registrant has no oil and gas operations.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS"ITEM3.LEGALPROCEEDINGS"l1
There are no legal proceedings pending.
ITEM 4.
ITEM 4. MATTERS SUBMITTED TO A VOTE OF SECURITIES HOLDERS"ITEM4.MATTERSSUBMITTEDTOAVOTEOFSECURITIESHOLDERS"l1
None
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART II JUNE 30, 1996
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
ATTERS"ITEM5.MARKETFORTHEREGISTRANT'SCOMMONSTOCKANDRELATEDSTOCKHOLDERMATTER "l1
(a) Price Range of Common Stock
The following table shows the range of closing bid prices for the Common Stock as reported by the Spokane Quotation Bureau Service.
Quarter Period 07/01/94 Period 07/01/95 Ended to 06/30/95 to 06/30/96 High Low High Low September 30 $.24 $.16 * * December 31 .18 .10 * * March 31 .16 .12 * * June 30 .16 .12 * *
(b) Approximate number of Equity Security Holders
Number of Record Owners Title of Class at September 20, 1996 Common Capital Stock 1,583
(c) No cash dividends have been paid by the Registrant since inception.
* Quarterly prices are not readily available, this information will be provided as a supplement to this Form 10-K upon receipt of the information necessary to complete this table.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART II JUNE 30, 1996
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA"ITEM6.SELECTEDFINANCIALDATA"l1
The selected financial data for each of the five years ended June 30, 1996, 1995, 1994, 1993 and 1992 were derived from the audited financial statements for such periods. The selected financial data should be read in conjunction with, and are qualified by, such financial statements and notes thereto, including the auditor's report thereon.
Selected Income Statement Data: YEAR ENDED JUNE 30 1996 1995 1994 1993 1992 Revenues: Advance royalties $ -0- $ -0- $ -0- $ -0- $ 28,512 Other Income 3,776 3,412 6,685 3,744 4,891 Total Revenues 3,776 3,412 6,685 3,744 33,403
Expenses: General and Administrative (25,143) (18,730) (34,161) (21,045) (17,566) Property write-down -0- -0- -0- -0- (66,484) Income tax (expense) benefit -0- 25 2,895 4,117 (3,104)
Net Loss (21,367) (15,293) (24,581) (13,184) (53,751)
Net Income (loss) per common share ( .01) ( .01) ( .02) ( .01) ( .01)
Selected Balance Sheet Data:
Current Assets: 154,364 146,447 158,238 182,338 94,680 Mineral rights and depreciable property net (1) 10,000 10,027 10,529 11,089 11,712 Total Assets 164,364 156,474 168,767 193,427 106,392
Current Liabilities: -0- -0- -0- 79 3,860
Long-term debt -0- -0- -0- -0- -0- Commitments Stockholders' equity 164,364 156,474 168,767 193,348 102,532 Cash dividends N/A N/A N/A N/A N/A Working Capital 154,364 146,447 158,238 182,259 90,820
(1) See Note 2 to Financial Statements.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART II JUNE 30, 1996
ITEM 7.
ITEM 7. MANAGEMENT'S DISSCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
PERATIONS"ITEM7.MANAGEMENT'SDISSCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRE ULTSOFOPERATIONS"l1
(a) Results of Operations for the Year Ended June 30, 1996 The Registrant showed a net loss of $21,367 for the year. The only income was from interest; whereas, the expenses of $25,143 were for professional fees and general and administrative expenses.
(b) Results of Operations for the Year Ended June 30, 1995 The Registrant showed a net loss of $15,293 for the year. The only income was from interest; whereas, the expenses of $18,730 were for professional fees and general and administrative expenses.
(c) Results of Operations for Year Ended June 30, 1994 The Registrant showed a net loss of $24,581 for the year. The only income was from interest, dividends and gain on sale of securities; whereas, the expenses of $34,161 were for professional fees and general administrative expenses.
(d) Results of Operations for Year Ended June 30, 1993 The Registrant showed net loss of $13,184 for the year. The only income was from interest and dividends; whereas, the expenses of $21,045 were for general and administrative expenses.
(e) Comparison of Operations - June 30, 1996 versus June 30, 1995 The Registrant had no operations for year ended June 30, 1996. The principal difference between expenses for the two years was an increase in legal fees of $7,168.
(f) Comparison of Operations - June 30, 1995 versus June 30, 1994 The Registrant had no operations for year ended June 30, 1995. The principal difference between expenses for the two years was a reduction in geological, accounting and legal fees of $15,572.
(g) Comparison of Operations - June 30, 1994 versus June 30, 1993 The Registrant had no operations for year ended June 30, 1994. The differences between expenses for the two years were increased professional fees incurred in the audit of the years ended June 30, 1992 and 1993 together with preparation and filing of the annual 10-K report with the Securities and Exchange Commission and the preparation of an independent geological assessment of the Company's mineral rights.
(h) Liquidity and Capital Resources The Registrant's working capital increased from $146,447 at June 30, 1995 to $154,364 at June 30, 1996. The increase was due primarily to the issuance of shares for cash in the amount of $36,000 for the year ended June 30, 1996, offset by expenses exceeding revenues and the purchase of treasury shares. The Company does not have any present commitments for capital expenditures. Management believes that the present working capital balance will provide adequate funds to pay ongoing administrative costs for several years.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART II JUNE 30, 1996
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA"ITEM8.FINANCIALSTATEMENTSANDSUPPLEMENTARYDATA"l1
Filed as part of the Annual Report on Form 10-K June 30, 1996
Page
Independent Auditor's Report 8
FINANCIAL STATEMENTS: Balance Sheets, June 30, 1996 and 1995 9
Statements of Operations for the Years Ended June 30, 1996, 1995, and 1994 10
Statements of Changes in Stockholders' Equity for the Years Ended June 30, 1996, 1995 and 1994 11
Statements of Cash Flows for the Years Ended June 30, 1996, 1995 and 1994 12
Notes to Financial Statements for the Years Ended June 30, 1996, 1995 and 1994 13
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders Planet Resources, Inc. Houston, Texas
We have audited the accompanying balance sheet of Planet Resources, Inc. (formerly Allied Silver-Lead Company) as of June 30, 1996, and the related statements of operations, changes in stockholders' equity and cash flows for the year then ended. 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. The financial statements of Allied Silver-Lead Company as of and for the years ended June 30, 1995 and 1994, were audited by other auditors whose report dated September 7, 1995, expressed an unqualified opinion on those statements.
We conducted our audit 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 Planet Resources, Inc. at June 30, 1996 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
HARPER & PEARSON COMPANY
Houston, Texas September 17, 1996
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) BALANCE SHEETS JUNE 30, 1996 AND 1995
ASSETS 1996 1995
CURRENT ASSETS Cash and cash equivalents $154,364 $145,947 Receivables and prepaids -0- 500
Total current assets 154,364 146,447
PROPERTY Mineral rights 10,000 10,000 Depreciable property 15,963 15,963
Total 25,963 25,963
Accumulated depreciation 15,963 15,936
Net property 10,000 10,027
TOTAL ASSETS $164,364 $156,474
LIABILITIES AND STOCKHOLDERS' EQUITY
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY Preferred stock - par value $.001, 1,000,000 shares authorized, none issued or outstanding Common stock 1996 - par value $.001; 10,000,000 shares authorized, 1,605,147 shares issued 1995 - par value $.01; 50,000,000 shares authorized, 6,825,737 shares issued $ 1,605 $ 68,257 Additional paid-in capital 252,184 149,532 Retained earnings (deficit) (46,241) (24,874) Less treasury stock, at cost, 21,475 and 39,944 shares, respectively (43,184) (36,441)
Total stockholders' equity 164,364 156,474
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $164,364 $156,474
See notes to financial statements.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30 1996, 1995 AND 1994
1996 1995 1994
INCOME Interest income $ 3,776 $ 3,412 $ 4,094 Gain on sale of marketable securities -0- -0- 2,551 Dividends and other -0- -0- 40
Total income 3,776 3,412 6,685
EXPENSES Professional fees 10,940 10,478 26,050 Office rent, related party 4,500 6,000 6,000 Depreciation 27 502 560 Stock transfer, filing fees and permits 2,471 1,496 1,307 Legal fees 7,168 -0- -0- Insurance -0- -0- 125 Other 37 254 119
Total expenses 25,143 18,730 34,161
LOSS BEFORE INCOME TAX BENEFIT (21,367) (15,318) (27,476)
INCOME TAX BENEFIT -0- (25) (2,895)
NET LOSS $(21,367) $(15,293) $(24,581)
NET LOSS PER SHARE OUTSTANDING $ (.01) $ (.01) $ (.02)
WEIGHTED AVERAGE SHARES OUTSTANDING 1,485,147 1,351,814 1,337,159
See notes to financial statements. -10- PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED JUNE 30, 1996, 1995 AND 1994
Number Additional Retained Total of Shares Common Paid-In Earnings Treasury Stockholders' Issued Stock Capital (Deficit) Stock Equity
BALANCES, JUNE 30, 1993 6,683,504 $ 66,835 $ 147,954 $ 15,000 $ (36,441) $ 193,348
ADJUSTMENT TO OUTSTANDING SHARES 42,233 422 (422) -0- -0- -0-
NET LOSS -0- -0- -0- (24,581) -0- (24,581)
BALANCES, JUNE 30, 1994 6,725,737 67,257 147,532 (9,581) (36,441) 168,767
SHARES ISSUED FOR CASH 100,000 1,000 2,000 -0- -0- 3,000
NET LOSS -0- -0- -0- (15,293) - -0- (15,293)
BALANCES, JUNE 30, 1995 6,825,737 68,257 149,532 (24,874) (36,441) 156,474
SHARES ISSUED FOR CASH 1,200,000 12,000 24,000 -0- -0- 36,000
FIVE FOR ONE REDUCTION IN SHARES OUTSTANDING (6,420,590) (78,652) 78,652 -0- -0-
TREASURY SHARES PURCHASED -0- -0- -0- -0- (6,743) (6,743)
NET LOSS -0- -0- -0- (21,367) -0- (21,367)
BALANCES, JUNE 30, 1996 1,605,147 $ 1,605 $ 252,184 $(46,241) $ (43,184) $ 164,364
See notes to financial statements.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30 1996, 1995 AND 1994
1996 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(21,367) $(15,293) $(24,581) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation 27 502 560 Net gains on sales of marketable securities -0- -0- (2,551) (Increase) decrease in receivables and prepaids 500 7,012 (3,270) (Decrease) increase in accounts and other payables -0- -0- (79)
Total adjustments 527 7,514 (5,340)
Cash used by operating activities (20,840) (7,779) (29,921)
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of marketable securities -0- -0- 10,377
Cash provided by investing activities -0- -0- 10,377
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the issuance of common stock 36,000 3,000 -0- Purchase of treasury stock (6,743) -0- -0-
Cash provided by financing activities 29,257 3,000 -0-
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 8,417 (4,779) (19,544)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 145,947 150,726 170,270
CASH AND CASH EQUIVALENTS AT END OF YEAR $154,364 $145,947 $150,726
See notes to financial statements.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 1996, 1995 AND 1994
1. ORGANIZATION AND BUSINESS
Allied Silver-Lead Company ("Allied") was incorporated under the laws of the State of Idaho on March 22, 1967 and has been a company operating in the exploratory stage initially engaged in the business of exploring for non-ferrous and precious metals, principally silver, lead and zinc. Allied's principal operating asset is the ownership of mineral rights under the City of Mullan, Idaho ("the City"). In January 1992, the lease with Hecla Mining Company ("Hecla") relating to Allied's mineral rights was terminated, at which time management determined that Allied could no longer fund its exploratory stage activities and that its initial development stage had ended. Accordingly, management commenced a program to obtain additional capital for Allied from unrelated third-party investors and to pursue other business opportunities. In October 1992, discussions were commenced with Houston Resources Corporation ("HRC") which culminated in April 1993 with HRC's purchase of 2,000,000 shares of Allied's common stock for $100,000.
Effective January 15, 1996, Allied reincorporated in Delaware through a merger into Planet Resources, Inc. ("Planet" or the "Company"). The reincorporation resulted in (1) Allied's name being changed to Planet Resources, Inc., (2) shares of common stock of Allied being converted into the right to receive one share of common stock of Planet for each five shares of common stock of Allied as of the date of reincorporation, (3) elimination of the right to cumulative voting for the election of directors, (4) the persons serving as officers and directors of Allied continue to serve in their respective capacities; and (5) the Articles of Incorporation of Allied changed to; (a) reduce the par value of the common stock from $.01 to $.001, (b) reduce the number of shares of common stock the Company is authorized to issue from 50,000,000 to 10,000,000, and (c) authorized the Company to issue 1,000,000 preferred shares with a par value of $.001 per share.
The Company presently has no commercial operations although management is evaluating various future operating strategies, including the merger of the Company with operating entities.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) 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 could differ from those estimates.
Continued
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 1996, 1995 AND 1994
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Accounting Method - The Company uses the accrual method of accounting and in accordance with Statement No. 7 of the Financial Accounting Standards Board for development stage companies (which classification includes exploration stage mining companies) charges all costs to operations except those exploration costs which in the opinion of management have a continuing value. See Notes 1 and 2d.
(c) Equipment and Leasehold Improvements - The costs of equipment and leasehold improvements are capitalized and charged to earnings utilizing the straight-line method of depreciation, with useful lives ranging from three to ten years. The costs of routine maintenance are charged to earnings as incurred. When assets are sold or retired, any resulting gain or loss is reflected in operations.
(d) Realization of the Carrying Cost of Mining Property and Exploration Costs - Following termination of the Hecla lease agreement in January 1992, the Board of Directors wrote down the mineral rights and capitalized exploration costs to their best estimate of their net realizable value of $10,000. The ultimate realization of the Company's carrying costs in these assets is dependent upon the discovery and the ability of the Company to finance successful exploration and development of commercial ore deposits, if any, in the mining properties in sufficient quantity for the Company to recover its recorded value.
(e) Loss Per Share - Net loss per share of common stock is based on the weighted average number of shares outstanding during each period, adjusted for the 5 for 1 reduction in the number of shares authorized, issued and outstanding resulting from the merger.
(f) Cash Equivalents - The company considers cash equivalents to be highly liquid investments purchased with an original maturity of three months or less. Substantially all of the Company's cash and cash equivalents are held by one financial institution and is therefore subject to the risks inherent in the financial industry.
3. PROPERTY - MINERAL RIGHTS AND LEASES
(a) The Company is the owner of subsurface mineral rights on approximately 190 acres located in the City of Mullan, Idaho. Title was acquired by issuance to real property owners of one share of capital stock for each 25 square feet of surface owned. In acquiring such mineral rights, the Company issued 361,739 shares of capital stock as adjusted for subsequent stock splits and the Planet merger. Conveyance of title included, free of any additional stock issue, all subsurface rights lying beneath adjacent streets and alleys where ownership rested with the grantor. The acquisition of such mineral rights was completed in November of 1985.
Continued
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 1996, 1995 AND 1994
3. PROPERTY - MINERAL RIGHTS AND LEASES (CONTINUED)
(b) Property Leased by Allied
Allied entered into an agreement dated May 1, 1981, with the City of Mullan (which supersedes a previous agreement dated December 3, 1971), whereby the Company, as lessee, has the right to mine subsurface minerals on approximately 200 acres owned by the City north of the Osburn Fault for a period of 25 years. The City, as lessor, will receive 20% of all royalty payments or other consideration received by Planet from Hecla. In the event Allied enters into a lease agreement for the exploration and development of "City Property" south of the Osburn Fault, the City shall receive 15% of the royalties received. No royalties have been received or paid on "City Property' south of the fault.
4. RELATED PARTY TRANSACTIONS
Prior to April 1993, the Company rented its office and building in Mullan, Idaho from its president, Marjorie Almquist for $300 per month. Mrs. Almquist has direct ownership of 69,004 shares (adjusted for the 5 for 1 reduction resulting from the merger) of the Company's common stock. In March 1993, the Company entered into a new lease agreement with Mrs. Almquist at a rental rate of $500 per month for a period of three years. This lease expired in March 1996 and was not renewed.
Mr. Michael Branstetter, a Director of the Company, performs routine legal services for the Company for which his firm was paid $94 (1996), $53 (1995), and $1,253 (1994).
As the prior Treasurer for the Company, Mr. Paul Morris performed various accounting and tax services for the Company for which he was paid $4,500 (1996), $5,425 (1995), and $7,725 (1994).
5. COMMON STOCK
During the year ended June 30, 1994, the Board of Directors authorized an adjustment in the number of shares outstanding per the financial statements to that reflected in the stock ledger maintained by the transfer agent. This adjustment resulted in $422, representing the par value of the additional shares, being transferred from additional paid-in capital to common stock.
On July 28, 1994, the Board of Directors granted options to purchase an aggregate of 645,000 (of which 240,000 shares were sold during fiscal 1996) shares of the Company's common stock, as adjusted for the Planet merger, to certain officers and directors. The options are exercisable for a period of five years at $.15 per share, which amount was in excess of net book value per share at June 30, 1994 and is deemed to represent fair market value at the date of grant.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 1996, 1995 AND 1994
6. INCOME TAXES
The components of the Company's tax provision (benefit) for the years ended June 30, 1996, 1995 and 1994 are as follows:
1996 1995 1994
Federal $ -0- $ -0- $ (2,567) State -0- (25) (328)
Total $ -0- $ (25) $ (2,895)
The income tax provision (benefit) for the years ended June 30, 1996, 1995 and 1994 are different than which would be provided by applying the statutory federal tax rate to the income (loss) before income taxes. The reasons for the differences are as follows:
1996 1995 1994
Financial statement net loss before income taxes $(21,367) $(15,318) $(27,476) Book gains on sale of securities not taxable -0- -0- (2,505)
Taxable loss (21,367) (15,318) (29,981) State tax -0- 25 444 Federal dividend received deduction -0- -0- (28)
Federal taxable loss $(21,367) $(15,293) $(29,565)
Federal tax at 15% $ -0- $ -0- $ (2,567)
The Company has a net operating loss carryforward for federal income tax purposes in the amount of $49,144. This carryforward will expire periodically through the year 2011, if not previously utilized.
The Company was required to adopt in fiscal 1994, the provisions of Statement of Financial Accounting Standards No, 109, "Accounting for Income Taxes" ("FASB 109"), which amends or supersedes most prior authoritative literature on the subject, and has as its basic objective the recognition of current and deferred income tax liabilities or assets based upon all events that have been recognized in the financial statements as measured by the provision of enacted tax laws. The impact of adopting FASB 109 was not material. At June 30, 1996 and 1995, the Company had deferred tax assets in the amounts of $16,709 and $9,722, respectively, applicable to its net operating loss carryforward. As the Company has no ongoing operations, these amounts have been fully reserved.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART II JUNE 30, 1996
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
ISCLOSURE"ITEM9.CHANGESINANDDISAGREEMENTSWITHACCOUNTANTSONACCOUNTINGANDFINA CIALDISCLOSRE"l1
(a) The Company has changed the certifying independent accountant for the Company from Deloitte & Touche, LLP to Harper & Pearson Company. In connection with such change of certifying accountant, the Company states that:
(i) The former accountant was dismissed effective July 25, 1996.
(ii) The accountant's report on the prior financial statements did not contain an adverse opinion or a disclaimer of opinion or was qualified or modified as to an uncertainty, audit scope, or accounting principals.
(iii) The decision to change accountants was approved by the Board of Directors.
(iv) There were no disagreements between the Registrant and the former accountant preceding such dismissal.
(v) With respect to the Company's former principal accountant, Deloitte & Touche, LLP, the Company states that none of the events described in Item 304(a)(1)(v) of Regulation S-K occurred within the time specified in Item 304(a)(1)(v) of Regulation S-K.
(b) The new independent accountant, Harper & Pearson Company, was engaged by the Company on the 25th day of July, 1996. There was no consultation between the Registrant and the newly engaged accountant regarding any of the matters described in Item 304(a)(2)(i) or 304(a)(2)(ii) of Regulation S-K prior to engaging Harper & Pearson Company.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART III JUNE 30, 1996
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT"ITEM10.DIRECTORSANDEXECUTIVEOFFICERSOFTHEREGISTRANT"l1
PRINCIPAL OCCUPATION AND FIVE-YEAR BUSINESS HISTORY SHARES OF CAPITAL STOCK OWNED AS OF JUNE 30, 1996 NAMES OF OFFICERS AND POSITIONS HELD AGE TERM EXPIRES A.W. DUGAN** 68 Next Annual Meeting Oil & Gas Operator -0- President, Director JACQUE N. YORK** 50 Next Annual Meeting Corporate Officer - -0- Secretary, Director MICHAEL K. BRANSTETTER 42 Next Annual Meeting Attorney 200 Director ** Officer and director of Houston Resources Corp. which owns 400,000 shares (24.919%) of the Registrant. Officer and director of Anglo Exploration Corporation which owns 240,000 shares (14.952%) of the Registrant.
The City of Mullan is also entitled to have a representative on the Board pursuant to the lease between the Company and the City but has not requested same.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART III JUNE 30, 1996
ITEM 11.
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS"ITEM11.MANAGEMENTREMUNERATIONANDTRANSACTIONS"l1
(a) The following table sets forth all remuneration paid by the Company on an accrual basis during the fiscal years ended June 30, 1996, 1995 and 1994 for the services in all capacities to all directors and executive officers of the Company:
SECURITIES OR PROPERTY, INSURANCE BENEFITS OR REIMBURSEMENTS PERSONAL BENEFITS NAME AND CAPACITY IN WHICH REMUNERATION WAS RECEIVED SALARIES, FEES, DIRECTORS' FEES, COMMISSIONS AND BONUSES AGGREGATE OF CONTINGENT FORMS OF REMUNERATION All executive officers and directors as group (4 to 6 persons in group) $4,594 (1996) None See Note 4 to Financial Statements $5,478 (1995) None $8,978 (1994) None
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT"ITEM12.SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENT"l1
(a) As to voting securities of the Registrant owned of record or beneficially by each person who owns of record, or is known by the Registrant to own beneficially, more than five percent (5%) of any class of such securities:
Marjorie P. Almquist $.001 Common Record and 68,984** 4% 254 Copper Street Non-Assessable Shares Beneficial Mullan, Idaho
Houston Resources Corp. $.001 Common Record and 400,000 25% 1415 Louisiana, Suite 3100 Non-Assessable Shares Beneficial Houston, Texas 77002
Anglo Exploration Corporation $.001 Common Record and 240,000 15% 1415 Louisiana, Suite 3100 Non-Assessable Shares Beneficial Houston, Texas 77002
** An additional 29,592 shares of the Registrant are owned of record by family members related to Marjorie P. Almquist. Mrs. Almquist disclaims any beneficial ownership of these shares.
(b) As to each class of equity securities of the Registrant other than directly or indirectly by all directors and officers of the Registrant, as a group, without naming them:
TITLE OR CLASS AMOUNT BENEFICIALLY OWNED PERCENT OF CLASS $.01 par value common 640,000 40% Non-assessable shares
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART III JUNE 30, 1996
ITEM 12. CONTINUED
(c) On July 28, 1994, the following options were granted for a period of 5 years at $.15 per share (which was in excess of book value on June 30, 1994) for 645,000 shares of the unissued common stock to the following officers and directors:
A.W. Dugan and/or assignees - President, CEO and Director 600,000 shares P.V. Morris - Treasurer and Director, Deceased 40,000 shares Michael K. Branstetter - Director 5,000 shares
During fiscal 1996, 240,000 of the option shares were sold to a corporate entity controlled by A.W. Dugan.
Upon exercise of the remaining 360,000 share options by A.W. Dugan, he and his assignees would control 51% of the outstanding shares.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS"ITEM13.CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONS"l1
The corporation previously rented a building and office from its former President, Marjorie Almquist, for $500 per month through March 31, 1996. Upon expiration on March 31, 1996, the lease was not renewed.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCEHDULES AND RECORDS ON FORM 8-K"ITEM14.EXHIBITS,FINANCIALSTATEMENTSSCEHDULESANDRECORDSONFORM8-K"l1
(a) 1. Financial Statements Page No. See Item 8, Index to Financial Statements of this Report 7
Other schedules are omitted because of the absence of conditions under which they are required, or because the required information is given in the financial statements or notes thereto.
3. Exhibits No new exhibits required.
PLANET RESOURCES, INC. (FORMERLY ALLIED SILVER-LEAD COMPANY) FORM 10-K -- PART IV JUNE 30, 1996
ITEM 14. CONTINUED
(b) Reports on Form 8-K
The following reports on Form 8-K were filed during fiscal 1996:
DATE PURPOSE January 16, 1996 On December 31, 1995, the Company entered into a Plan and Agreement of Merger with Allied Silver-Lead Company for the purpose of reincorporating the Company into Delaware.
July 25, 1996 Changes in Registrant's Certifying Accountants.
July 31, 1996 Amendment No. 1 to Form 8-K Amending Item 4 to include letter from former independent auditors.
SIGNATURES"SIGNATURES"l1
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf by the undersigned, thereunto duly authorized.
PLANET RESOURCES, INC. Registrant
/s/Jacque N. York By: /s/A.W. Dugan Jacque N. York, Secretary A.W. Dugan, President
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, in the capacities and as of the date indicated.
Date: September 30, 1996 A.W. Dugan A.W. Dugan, Director
Date: September 30, 1996 /s/Jacque N. York Jacque N. York, Director
Date: September 30, 1996 /s/Michael K. Branstetter Michael K. Branstetter, Director