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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, 1996
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 (702) 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, 1996, because
there were no bid or asked prices available.
At June 30, 1996, there were 13,700,000 common shares (the
Registrant's only class of voting stock) outstanding.
Documents incorporated by reference: None
Page 1 of 23 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. At April 30, 1996, the only property
under lease was the Sonrisa claim block.
The Company's Sonrisa claims in Kern County, California, are
leased to a wholly owned subsidiary of Glamis Gold Ltd. This
claim group is located within the confines of an old mining
district with complex and conflicting land ownership positions.
(See Item 2). Glamis has announced a write-down of $1.8 million
because unoxidized ore placed on the Baltic heap leach pad did
not respond at the anticipated recovery rate. They have
suspended mining at the Baltic Pit. Consequently, the Company
expects to receive little or no additional production royalty
income from this source in the near term.
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.
Various amendments to the Mining Law of 1872 and related
laws and regulations have been proposed or enacted at the Federal
level which increased the cost to hold an unpatented claim. As
a result, the Company reduced the number of claims included in
certain prospects and relinquished certain prospects in their
entirety during fiscal 1994.
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 eleven unpatented lode claims (the Sonrisa
claims) located in Kern County, California. These claims are
within the confines of an old mining district. In some cases the
claims overlap onto senior claims and in other instances claims
junior to the claims overlap onto them. As a result of these
complex land ownership positions, the Company can not provide
definitive information on the net acreage of the Sonrisa claims
or their relationship to the ore bodies that have been defined by
the lessee of the claims.
The Company owns twelve patented lode mining claims in the
Aurora Mining District, Mineral County, Nevada. The Wildcard
Prospect consisting of five unpatented lode claims owned by the
Company is also located in Mineral County.
The Iron Point Prospect consisting of some 31 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.
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 other than the Sonrisa.
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, and has had no further 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, 1996 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, 1996, there were approximately 800
shareholders of record of the Company's common stock.
Item 6. Selected Financial Data.
Year Ended April 30,
Operating Summary 1992 1993 1994 1995 1996
---- ---- ---- ---- ----
Total income $ 33,000 $ 49,000 $ 25,000 $ 72,293 $ 51,471
Net earnings (loss) 4,236 19,059 9,946 32,442 (12,317)
Net earnings (loss)
per common share -- -- -- -- --
Balance Sheet April 30,
Summary 1992 1993 1994 1995 1996
---- ---- ---- ---- ----
Current assets $ 8,183 $ 12,242 $ 9,690 $ 43,546 $ 27,315
Current liabilities 30,000 15,000 2,500 3,914 --
Total assets 81,966 86,025 83,471 117,327 101,096
Total liabilities(1) 30,000 15,000 2,500 3,914 --
Equity 51,966 71,025 80,971 113,413 101,096
(1) Consists solely of amounts due to officer except in 1995.
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, 1996, the Company had working capital of
$27,000. This is not a significant amount of money. As
described elsewhere herein, the Lessee of the Sonrisa claims has
announced suspension of mining operations at the Baltic Pit, the
principal source of the Company's royalty income. Therefore, the
Company's activities will probably continue to be essentially
limited to property maintenance and compliance with regulatory
matters during fiscal 1997.
Assets at April 30, 1995 and 1996 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) are erratic. 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.
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 1996
- ----------
Mining revenes (derived from production royalties on the
Sonrisa claims) decreased to $51,000. As noted elsewhere herein,
the Lessee has announced the shutdown of the Baltic Pad.
Consequently, the Company expects production royalties, if any,
in fiscal 1997 will be minimal.
General and administrative expenses increased some $25,000
due to payment of officer's salary, related payroll taxes and the
engaging of a consultant to evaluate the Lessee's commingling
procedures at Sonrisa.
Fiscal 1995
- -----------
Mining revenues (all derived from production royalties on
the Sonrisa claims) increased to $72,000. This tripling of
revenue over the prior year is in no way predictive of what
production royalties, if any, may be in fiscal 1996.
Unallocated exploration expense increased $2,000 principally
due to the necessity of paying Federal delay rentals on the Iron
Point claims. General and administrative expenses increased some
$20,000 due to payment of officer's salary.
Fiscal 1994
- -----------
Mining revenues (advance minimum royalties) decreased to
$25,000 representing a lease payment from the lessee of the
Sonrisa claim group. No other prospects were under lease during
the year.
Unallocated exploration expense declined $10,000 because the
size of some claim blocks was reduced and required Federal
rentals were paid by the lessees of the Sonrisa and Iron Point
prospects.
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
Financial Statements for the Years Ended ----
April 30, 1996, 1995, and 1994 (unaudited):
Balance Sheets 11
Statements of Operations and Accumulated Deficit 12
Statements of Cash Flows 13
Notes to Financial Statements 14
The Registrant meets the requirements of Rule 3-11 of
Regulation S-X for the years ended April 30, 1996, 1995, and
1994. Therefore, the financial statements for such years are not
required to be audited.
INTERMOUNTAIN RESOURCES, INC.
BALANCE SHEETS
April 30, 1996 and 1995 (Unaudited)
- -----------------------------------------------------------------------------
ASSETS 1996 1995
---- ----
Current asset - Cash $ 27,315 $ 43,546
Mineral Properties (notes 1 and 2) 73,781 73,781
------- -------
$101,096 $117,327
======= =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Due to officer $ -- $ 1,500
Accrued expenses -- 2,414
------- -------
-- 3,914
------- -------
Contingency (note 4)
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 (1,387,222) (1,374,905)
--------- ---------
101,096 113,413
--------- ---------
$ 101,096 $ 117,327
========= =========
See accompanying notes to unaudited financial statements.
INTERMOUNTAIN RESOURCES, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
For the years ended April 30, 1996, 1995, and 1994 (Unaudited)
- -----------------------------------------------------------------------------
1996 1995 1994
---- ---- ----
REVENUES:
Mining royalties $51,471 $72,293 $25,000
------ ------ ------
EXPENSES:
Unallocated exploration 4,318 4,140 1,835
General 57,058 32,497 12,515
State franchise taxes 2,412 3,214 704
------ ------ ------
Total 63,788 39,851 15,054
------ ------ ------
NET INCOME (LOSS) (12,317) 32,442 9,946
ACCUMULATED DEFICIT:
Beginning of year (1,374,905) (1,407,347) (1,417,293)
--------- --------- ---------
End of year $(1,387,222) $(1,374,905)$(1,407,347)
========= ========= =========
NET INCOME (LOSS)
PER COMMON SHARE $ -- $ -- $ --
========== ========== ==========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 13,700,000 13,700,000 13,700,000
========== ========== ==========
See accompanying notes to unaudited financial statements.
INTERMOUNTAIN RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the years ended April 30, 1996, 1995, and 1994 (Unaudited)
- -----------------------------------------------------------------------------
1996 1995 1994
---- ---- ----
CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES:
Net income (loss) $(12,317) $32,442 $9,946
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Increase (decrease)
in accounts payable
and accruals (3,914) 1,414 (12,500)
------ ------ ------
Net cash provided by
(used in) operating
activities (16,231) 33,856 (2,554)
CASH AND CASH
EQUIVALENTS -
Beginning of year 43,546 9,690 12,244
------ ------ ------
End of year $27,315 $43,546 $9,690
====== ====== ======
See accompanying notes to unaudited financial statements.
INTERMOUNTAIN RESOURCES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
For the years ended April 30, 1996, 1995, and 1994 (Unaudited)
- -----------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General - The Company has a substantial investment in
mineral properties. Existence of mineral reserves in
commercial quantities on these properties has not been
determined. Recovery of the investment is dependent on
the discovery of minerals in commercial quantities.
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, 1996. 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 1997,
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 1997.
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.
Cash and Cash Equivalents - For purposes of 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.
2. MINERAL PROPERTIES
The following tabulation shows the mineral prospect
inventory of the Company and the capitalized cost
associated with each prospect:
1996 1995
---- ----
Sonrisa $ 1 $ 1
Aurora 73,742 73,742
Iron Point 1 1
MD 36 36
Wildcard 1 1
------ ------
Total $73,781 $73,781
====== ======
As with most natural resource prospects, the economic
worth of the above assets bears no particular
relationship to their recorded cost.
3. INCOME TAXES
The Company's operations for 1995 and 1994 resulted in net
income of $32,442 and $9,946 respectively, which were offset
by a net operating loss carryforward resulting in no Federal
tax liability for the year.
The Company has approximately $1,370,000 of net
operating loss carryforwards which are available to
offset future Federal taxable income. These
carryforwards begin to expire in 1997.
4. 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, and has had no further
contact from the Forest Service or any of the other six
named potentially responsible parties.
_______________________________________________________________
Item 9. Disagreements on Accounting and Financial Disclosure.
The Company's financial statements for each of the two most
recent fiscal years are unaudited pursuant to the exemption
provided by Rule 3-11 of Regulation S-X. Therefore this item is
not applicable.
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 54 Pres., Treas. May, 1980 to Next Annual
and Director date Meeting
Thomas C.
Pool 54 Sec. and Director May, 1980 to Next Annual
date Meeting
Gary E.
Butts 50 Asst. Secretary October, 1982 Next Annual
and Director to date Meeting
Maurice O.
Reiber(1) 65 Director May, 1980 to Next Annual
August, 1982; Meeting
and June, 1984
to date
Gerald G.
Reiber(1) 59 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. Mr Watson also serves as a director of OEA, Inc., a
company with a class of equity securities registered under the
Securities Exchange Act of 1934. OEA, Inc. is engaged in the
manufacture of automobile air bag components and also designs and
manufactures explosive-actuated devices utilized in personnel
escape systems in high speed aircraft, separation and release
devices for space vehicles, missiles and aircraft.
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.
Gary E. Butts has been a director of the Company since
October, 1982. He has been a consulting metallurgical engineer
from 1987 to 1993 when he was employed as regional manager of
minerals for Inchcape Testing Services.
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.
Other than Mr. Watson, 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, 1996 is set forth in the following tabulation.
Year For Current Services For Old Unpaid Contract
1996 $40,000 $ --
1995 20,000 1,000
1994 5,100 12,500
The Company had an employment agreement with Lewis W. Watson
under which Mr. Watson agreed to serve as President and Chief
Executive Officer until December 31, 1986. That contract provided
for an annual salary of $75,000 with an inflation cost of living
adjustment. Mr. Watson voluntarily waived the cost of living
adjustments and has accepted payments from time to time on the
base amount based on the Company's ability to pay. The Company's
liability under this agreement was fully accrued during the
fiscal year ended April 30, 1987. Mr. Watson has continued to
serve on a part time basis since the expiration of his contract.
Services performed by the president during the three fiscal years
ended in 1996 included performing or supervising required
assessment work on unpatented claims; quarterly, annual and other
periodic filings with Federal and state tax and regulatory
authorities; and presentation of data on properties and lease
negotiations with prospective lessees.
Mr. Watson's compensation during the past three fiscal years
has been based on the Company's ability to pay and is deemed by
the board of directors to be reasonable for the time and effort
expended by him.
There is no line graph comparing yearly percentage changes
in total shareholder return with other benchmark indices because
the Company has paid no dividends during its existence and there
has been no active trading market in the stock during the past
five years.
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, 1996
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 Gary E. Butts --
$.01 par value 8262 Ammons Circle
Arvada, CO 80005
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, 1996,
1995, and 1994 (unaudited):
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, 1996.
(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 15, 1996 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 15, 1996 /s/ L. W. Watson
L. W. Watson, President and
Director (PrincipalExecutive
Officer, Principal Financial
and Accounting Officer)
July 17, 1996 /s/ Gary E. Butts
Gary E. Butts, Director
July 16, 1996 /s/ Thomas C. Pool
Thomas C. Pool, Director
July 16, 1996 /s/ Maurice O. Reiber
Maurice O. Reiber, Director
July 17, 1996 /s/ Gerald G. Reiber
Gerald G. Reiber, Director