10-K 1 arp10k02.txt 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, 2002 Commission file Number 0-9558 INTERMOUNTAIN RESOURCES, INC. (Exact name of registrant as specified in its charter) NEVADA 84-0817164 (State or other jurisdiction of (I.R.S.Employer incorporation or organization) Identification No.) P. O. Box 51600 Sparks, Nevada 89435 (Address of principal executive offices) Registrant's telephone number, including area code (775) 359-2884 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 Par Value (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes X No_____ The market value of the 7,859,000 common shares held by nonaffiliates was not determinable as of May 31, 2002, because there were no bid or asked prices available. At May 31, 2002, there were 13,700,000 common shares (the Registrant's only class of voting stock) outstanding. Documents incorporated by reference: None 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. A Board of Directors meeting was held May 1, 2002, to consider the future of the Company. A consensus was reached that the Company should seek some individual or group who would be interested in taking control of the Company and recapitalizing it. 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. On June 13, 2000, the Company sold its patented mining claims located in the Aurora Mining District, Mineral County, NV for $80,000. Other Matters ------------- The Company anticipates that future revenues, if any, would be derived from rent or advance minimum royalty payments or production royalty payments earned as a result of leasing its mineral prospects to other entities. Various recent proposals for a Federal royalty on mineral production could result in diminution or elimination of production royalty payments which might otherwise be attainable by the Company. The existence of precious metals in commercial quantities is integral to the realization of value from the Company's properties. See Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 hereof. Hence, precious metals may be considered raw materials essential to the Company's business. However, the acquisition, exploration, development, production and sale of precious metals is subject to many factors which are outside of the Company's control. These factors include national and international economic conditions, availability of milling facilities, availability of water, the supply and price of other precious metals and the regulation of prices, production, transportation and marketing by federal, state, and local governmental authorities. The Company has engaged in only one industry segment, the exploration and development of mineral prospects for silver and gold. The Company's business in the areas in which it holds property is generally not seasonal in nature although operations may be subject to periodic interruptions due to weather conditions. The Company is not dependent upon a single customer or a few customers, the loss of any one or more of whom would have an adverse effect on the Company's business. The exploration for, and development and production of, precious metals is subject to intense competition. The principal methods of competition in the mining industry for the acquisition of mineral leases are payment of bonus payments at the time of acquisition of leases, payment of delay rentals and advance royalties, use of differential royalty rates, and amounts of annual rental payments and stipulations requiring exploration and production commitments by the lessee. Companies with greater financial resources, larger existing staffs and labor forces, greater equipment for exploration and vast experience are in a significantly better position than the Company to compete for mineral leases and explore and develop the leases. There are many of these larger companies and the Company is at a distinct disadvantage in competing against and negotiating with such entities. There are also many small mining entities, who, because of their particular area of expertise, may have an advantage over the Company in competing for mineral leases in certain areas in which the Company has or may have an interest. All operations of the Company involving the exploration for, or the production of, any minerals are subject to existing laws and regulations relating to exploration procedures, employee health and safety, air quality standards, pollution of stream and fresh water sources, odor, noise, dust and other environmental protection controls adopted by federal, state, and local governmental authorities as well as the rights of adjoining property owners. Although not deemed likely by management, the Company may be required to prepare and present to federal, state or local authorities data pertaining to the effect or impact of any proposed exploration for or production of minerals upon the environment. Requirements imposed by such authorities may be costly and time consuming and could delay commencement or continuation of exploration or production operations. Such laws and regulations may require substantial increases in equipment and operating costs to the Company and delays, interruptions or termination of operations, the extent of which cannot now be predicted. This may have a substantial impact upon the capital expenditures required by the Company to deal with such problems and could substantially reduce earnings or increase losses. To date, however, the Company has not been required to expend significant funds or efforts in connection with such activities. Practices with respect to working capital items are not material to an understanding of the Company's business. The Company does, however, require working capital to maintain an adequate inventory of suitable mineral prospects. The Company does not currently engage in any research and development activities. The Company does not own any patents, trademarks, licenses, franchises or concessions. Backlog is not material to an understanding of the Company's business. No portion of the Company's business is subject to renegotiation of profits or termination of contracts at the election of the federal government. The Company has no operations in foreign countries and no sales or revenues derived from customers in foreign countries. The Company has no full time employees. Item 2. Properties. The Company's significant property interests are as set forth below. The properties were acquired and are held because they are believed to be prospective for precious metals. See Item 7 herein for a discussion of the Company's limited working capital which may result in the dropping of all or portions of certain prospects. The Company owned twelve patented lode mining claims in the Aurora Mining District, Mineral County, Nevada. On June 13, 2000 these claims were sold for $80,000 cash paid at the closing. The Iron Point Prospect consisting of some 13 full or fractional unpatented claims owned by the Company is located in Humboldt County, Nevada. Four unpatented claims at the MD Prospect owned by the Company are located in Esmeralda County, Nevada. On November 9, 1998, the Company staked eight unpatented claims at the Elizabeth Prospect in Esmeralda County, Nevada. Substantial additional work on the prospects and outside capital would be required before the Company, a lessee, or venture partner would be in a position to proceed with a plan of development on any of the prospects. Each of the prospects is burdened with overriding royalty interests (ORRI's) granted to consulting geologists instrumental in identifying and locating the prospects. The ORRI's generally provide that, in the event of commercial production from a Prospect, the geologist would be entitled to a specified "net smelter return" interest (generally 1%) in production from the Prospect. Item 3. Legal Proceedings. By letter dated March 10, 1994, the Forest Service notified the Company that the Forest Service has determined a release of hazardous substances covered under the Comprehensive Environmental Response, Compensation, and Liability Act occurred at Siskon Mine, located on the Klamath National Forest. The Company was named as a potentially responsible party along with six other corporations or individuals. By letter dated March 31, 1994, the Company advised the Forest Service that the Company at one time had an option to lease the property and during the option period performed assessment work required by the 1872 Mining Law. However, at no time did the Company have an ownership interest (or even an interest as lessee) in either the Siskon Mine or the mining claims that covered the subject lands nor had the Company ever attempted to operate the property. In a letter dated May 24, 1994, the Forest Service stated, ". . . we believe it is possible a court of law could find such activities to be "operations" within the liability provisions of CERCLA 107(a)." That letter transmitted a series of questions concerning the activities of the Company and other entities and individuals with respect to the property. The Company responded to the questions of the Forest Service by letter dated July 7, 1994. On November 27, 1996, the Company received a letter from the Forest Service inviting the submission by November 29, 1996 of an offer to settle the matter. The Company requested an extension of time to January 15, 1997 to respond. By letter dated January 13, 1997, the Company denied any responsibility for the matters described by the Forest Service, and advised them that the Company has neither the technical expertise nor financial capability to conduct the response actions contemplated by them. The Company received a letter dated July 31, 2001, from the Forest Service which stated in part, "Based on information currently available, the Forest Service has no plans to seek recovery of its response costs from Intermountain Resources, Inc." 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, 2001 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. There is no active market for the Company's common stock, $.01 par value. 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, 2002, there were approximately 800 shareholders of record of the Company's common stock. Item 6. Selected Financial Data.

Year Ended April 30, Operating Summary 2002 2001 2000 1999 1998 ~~1997~~ ---- ---- ---- ---- ---- Total income $ 299 $ 82,322 $ 5,049 $ 23,694 $172,154 ~~$ 18,146~~ Net earnings (loss)(31,308) 11,015 (50,498) (35,476) 36,932 ~~(24,709)~~ Net earnings (loss) per common share -- -- -- -- -- Balance Sheet April 30, Summary 2002 2001 2000 1999 1998 ~~1997~~ ---- ---- ---- ---- ---- Current assets $ 6,539 $ 37,847 $ 20,832 $ 75,123 $117,281 ~~$ 2,606~~ Current liabilities -- -- -- 3,794 10,000 -- Total assets 7,052 38,360 27,345 81,637 123,319 ~~76,387~~ Total liabilities -- -- -- 3,794 10,000 -- Equity 7,052 38,360 27,345 77,843 113,319 ~~76,387~~

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, 2002, the Company had working capital of $6,500. This is not a significant amount of money in the mining industry. Therefore, the Company's activities will probably continue to be essentially limited to property maintenance and compliance with regulatory matters during fiscal 2003 unless some individual or group takes control of the Company and recapitalizes it. Assets at April 30, 2002 and 2001 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. The Company has not engaged in any transaction involving "derivatives" nor does the Company expect to do so; thus, exposure to the volatility of these investment instruments is nonexistent. Results of Operations --------------------- General ------- The Company's mining revenues (production royalties and advance minimum royalties except in 1998 when the sale of the Sonrisa claims for $150,000 was recorded and in 2001 when the patented mining claims in the Aurora Mining District were sold for $80,000)are erratic. (The Company does not anticipate any other asset sales of this significance in the coming year.) Historically, the monies received in any one year have been a result of new leases signed during a year which are, in turn, a function of fluctuating industry interest in geographic areas in which the Company's prospects are located. Amounts received in any one year are not necessarily predictive of amounts (if any) which may be received in the future. Gold prices have been in the $300 per ounce range (or less) for some time. At such price levels, it is difficult to engender much interest on the part of major mining companies in leasing undeveloped exploration prospects such as those owned by the Company. Various amendments to the Mining Law of 1872 have been proposed in recent years. Such proposals have included Federal production royalties, changes in reclamation laws, changes in land patenting rules, etc. These proposals have caused a deterioration in the business climate for the domestic industry. As a result, the Company expects to find less interest among operating mining companies in leasing the Company's prospects. Fiscal 2002 ----------- There were no mining revenues during the year. Unallocated exploration expense (primarily Federal delay rentals on unpatented claims) amounted to $2,688 for the year. General and administrative expenses decreased $32,000. Salary expense was $20,000 less than in the prior year; professional fees (primarily audit expense) were $8,000 less than in the prior year; the remainder of the decrease consisted of small miscellaneous items. Fiscal 2001 ----------- Mining revenues amounted to $80,000, the gross proceeds received from the sale of the patented claims in the Aurora Mining District. Unallocated exploration expense decreased by $3,400 because no exploratory work was performed during the year. General and administrative expenses increased $13,000. Fees for auditing services and quarterly reviews comprised $9,000 of the increase; and the remainder consisted of small miscellaneous items. The $6,000 carrying value of the patented claims in the Aurora Mining District was written off as a result of the sale of those claims. Fiscal 2000 ----------- Mining revenues declined to $3,400, representing a final adjustment on the Iron Point lease. Unallocated exploration expense increased by $5,200 primarily due to the payment of Federal claim rentals on the Iron Point claims and a small amount of exploratory work performed on the MD claims. General and administrative expenses declined $8,800 principally due to reductions in legal fees. Effect of Price Changes ----------------------- Inflation has not significantly affected the cost of exploring for precious metals. Prices of these commodities have fluctuated widely during the year and may continue to do so. Item 8. Financial Statements and Supplementary Data. Index to Financial Statements and Supplemental Schedules Page ---- INDEPENDENT AUDITOR'S REPORT on Financial Statements for the years ended April 30, 2002 and 2001 11 INDEPENDENT AUDITOR'S REPORT on Financial Statements for the year ended April 30, 2000 12 Financial Statements for the Years Ended April 30, 2002, 2001, and 2000 Balance Sheets 13 Statements of Operations and Accumulated Deficit 14 Statements of Cash Flows 15 Notes to Financial Statements 16 INDEPENDENT AUDITOR'S REPORT To the Board of Directors Intermountain Resources, Inc. I have audited the accompanying balance sheets of Intermountain Resources, Inc. as of April 30, 2002 and 2001, and the related statements of operations and accumulated deficit and cash flow for each of the two years then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the Company's financial position as of April 30, 2002 and 2001, and the results of its operations and its cash flow for each of the two years then ended in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company's significant operating losses and minimal working capital raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. DALE W. MCGHIE Reno, Nevada May 17, 2002 INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders of Intermountain Resources, Inc. We have audited the accompanying balance sheet of Intermountain Resources, Inc. (a Nevada corporation) as of April 30, 2000, and the related statements of operations, accumulated deficit, and cash flows for the year ended April 30, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our 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 Intermountain Resources, Inc. as of April 30, 2000, and the results of its operations and its cash flows for the year ended April 30, 2000, in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company's significant operating losses and minimal working capital raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. KAFOURY, ARMSTRONG & CO. Reno, Nevada July 5, 2000 INTERMOUNTAIN RESOURCES, INC. BALANCE SHEETS April 30, 2002 and 2001 -----------------------------------------------------------------------------

ASSETS 2002 2001 ~~2000~~ --------- --------- Current asset - Cash $ 376,~~847~~539 $ 2037,~~832~~847 Mineral Properties (notes 1 and 3) 513 6,513 ------- ------- $ 387,~~360~~052 $ 2738,~~345~~360 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Contingent liabilities (note 5) $ -- $ -- ------- ------- Stockholders' equity: Common stock, par value $.01 per share. Authorized 25,000,000 shares; issued and outstanding 13,700,000 shares. 137,000 137,000 Additional paid-in capital 1,351,318 1,351,318 Accumulated deficit (1,~~449~~481,~~958~~266) (1,~~460~~449,~~973~~958) --------- --------- 7,052 38,360 ~~27,345~~ --------- --------- $ 387,~~360~~052 $ 2738,~~345~~360 ========= ========= The accompanying notes are an integral part of these financial statements.

INTERMOUNTAIN RESOURCES, INC. STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT For the years ended April 30, 2002, 2001, and 2000 --------------------------------------------------------------------------- 2002 2001 2000 --------- ----------- ----------- REVENUES: Mining revenues $ -- $ 80,000 $ 3,417 Interest income 299 2,322 1,632 ------- ------- ------ Total 299 82,322 5,049 ------- ------- ------ EXPENSES: Write down of mineral property -- 6,000 1 Unallocated exploration 2,688 3,860 7,260 General 28,919 61,447 48,286 ------- ------- ------ Total 31,607 71,307 55,547 ------- ------- ------ NET INCOME (LOSS) (31,308) 11,015 (50,498) ACCUMULATED DEFICIT: Beginning of year (1,449,958) (1,460,973) (1,410,475) --------- --------- --------- End of year $(1,481,266) $(1,449,958)$(1,460,973) ========= ========= ========= NET INCOME (LOSS) PER COMMON SHARE $ -- $ -- $ -- ========== ========== ========== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 13,700,000 13,700,000 13,700,000 ========== ========== ========== The accompanying notes are an integral part of these financial statements.

INTERMOUNTAIN RESOURCES, INC. STATEMENTS OF CASH FLOWS For the years ended April 30, 2001, 2000, and 1999 -----------------------------------------------------------------------------

2002 2001 2000 ~~1999~~ ---- ---- ---- CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net income (loss) $(31,308) $ 11,015 $(50,498) ~~$(35,476)~~ Adjustments to reconcile net income to net cash provided by operating activities: Increase (decrease) in accounts payable and accruals -- -- ( 3,794) ~~( 6,206)~~ Write down of mineral property -- 6,000 1 -- ------ ------ ------ Net cash provided by (used in) operating activities (31,308) 17,015 (54,291) ~~(41,682)~~ CASH (USED) IN INVESTING ACTIVITY -- -- (-- ~~476)~~ CASH AND CASH EQUIVALENTS - Beginning of year 37,847 20,832 75,123 ~~117,281~~ ------- ------- ------ End of year $ 6,539 37,847 20,832 ~~75,123~~ ======= ======= ====== The accompanying notes are an integral part of these financial statements.

INTERMOUNTAIN RESOURCES, INC. NOTES TO FINANCIAL STATEMENTS For the years ended April 30, 2002, 2001, and 2000 ----------------------------------------------------------------------------- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations: Intermountain Resources, Inc. was incorporated under Nevada law on May 12, 1980, for the primary purpose of acquiring, developing, and, if economically warranted, achieving production of precious minerals, primarily gold and silver. Currently, the Company's main function is the leasing of its mineral prospects to third parties that have the resources to develop the property. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Comprehensive Income Items: Companies are required to present comprehensive income (consisting primarily of net income plus other direct equity charges and credits) and its components as part of the basic financial statements. The Company's financial statements do not contain any changes in equity that are required to be reported separately in comprehensive income. Fair Value of Financial Instruments: Unless otherwise disclosed, the carrying amount of financial instruments approximates their fair value due to the short maturity of these instruments. Cash and Cash Equivalents: For purposes of preparing the statement of cash flows, the Company considers money market funds and certificates of deposit with a maturity of three months or less to be cash equivalents. Mineral Properties: Acquisition and exploration costs are initially capitalized and will be, in general, amortized ratably over production or will be charged to expense upon disposition of the properties. Unallocated Exploration Expenses: Expenses incurred in general exploration and evaluation of properties for potential acquisition and cost of completing required assessment work as well as Federal delay rentals are charged to expense unless a property is actually acquired. Dividends: In accordance with Nevada Revised Statutes, the Company's dividend policy prohibits payments of dividends in excess of its retained earnings. 2. GOING CONCERN The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, the Company has achieved minimal earnings or incurred operating losses for several years and has minimal working capital at April 30, 2002. 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 2003, 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 2003 unless some individual or group takes control of the Company and recapitalizes it. 3. MINERAL PROPERTIES The following tabulation shows the mineral prospect inventory of the Company and the capitalized cost associated with each prospect: 2002 2001 ---- ---- Elizabeth $ 476 $ 476 Iron Point 1 1 MD 36 36 ----- ------ Total $ 513 $ 513 ===== ====== As with most natural resource prospects, the economic worth of the above assets bears no particular relationship to their recorded cost. 4. INCOME TAXES The Company provides for deferred income taxes on temporary differences between amounts reported for financial statement and income tax purposes. The Company's total deferred tax asset and deferred tax liability at April 30, 2002 and 2001 is as follows: 2002 2001 ---- ---- Total deferred tax asset $105,000 $ 85,000 Total deferred tax liability -- -- ------- ------- 105,000 85,000 Deferred tax asset valuation allowance (105,000) ( 85,000) ------- ------- $ -- $ -- ======= ======= The deferred tax asset as of April 30, 2002 and 2001 resulted from Federal net operating loss carryforwards. For the years ended April 30, 2002 and 2001, $25,000 and $88,000 respectively in Federal net operating losses expired and the losses will continue to expire through the year ending April 30, 2022. As the Company does not anticipate the ability to utilize the net operating losses before they expire, a valuation allowance has been established to offset the net deferred tax asset. As mentioned above, the Company has Federal net operating losses from prior years which it is able to use to offset taxable income. 5. CONTINGENCY By letter dated March 10, 1994, the Forest Service notified the Company that the Forest Service has determined a release of hazardous substances covered under the Comprehensive Environmental Response, Compensation, and Liability Act occurred at Siskon Mine, located on the Klamath National Forest. The Company was named as a potentially responsible party along with six other corporations or individuals. By letter dated March 31, 1994, the Company advised the Forest Service that the Company at one time had an option to lease the property and during the option period performed assessment work required by the 1872 Mining Law. However, at no time did the Company have an ownership interest (or even an interest as lessee) in either the Siskon Mine or the mining claims that covered the subject lands nor had the Company ever attempted to operate the property. In a letter dated May 24, 1994, the Forest Service stated, ". . . we believe it is possible a court of law could find such activities to be "operations" within the liability provisions of CERCLA 107(a)." That letter transmitted a series of questions concerning the activities of the Company and other entities and individuals with respect to the property. The Company responded to the questions of the Forest Service by letter dated July 7, 1994. On November 27, 1996, the Company received a letter from the Forest Service inviting the submission by November 29, 1996 of an offer to settle the matter. The Company requested an extension of time to January 15, 1997 to respond. By letter dated January 13, 1997, the Company denied any responsibility for the matters described by the Forest Service, and advised them that the Company has neither the technical expertise nor financial capability to conduct the response actions contemplated by them. The Company received a letter dated July 31, 2001, from the Forest Service which stated in part, "Based on information currently available, the Forest Service has no plans to seek recovery of its response costs from Intermountain Resources, Inc." ---------------------------------------------------------------------- Item 9. Disagreements on Accounting and Financial Disclosure. There have been no disagreements between the Company and its independent auditors concerning any matter of accounting principle or practice or financial statement disclosure which would be required to be reported under this item. Part III -------- Item 10. Directors and Executive Officers of the Registrant. The following table sets forth certain information with respect to the directors and executive officers of the Company: Period of Service as Position(s) an Officer Name Age With the Company or Director Term Expires ---- --- ---------------- ----------- ------------ Lewis W. Watson(1) 60 Pres., Treas. May, 1980 to Next Annual and Director date Meeting Thomas C. Pool 60 Sec. and Director May, 1980 to Next Annual date Meeting Maurice O. Reiber(1) 71 Director May, 1980 to Next Annual August, 1982; Meeting and June, 1984 to date Gerald G. Reiber(1) 65 Director May, 1980 to Next Annual August, 1982; Meeting and June, 1984 to date (1) May be deemed a "parent" or "founder" of the Company All directors of the Company will hold office until the next annual meeting of shareholders and until their successors have been elected and qualified. The officers of the Company, who are elected at the annual meeting of the Board of Directors, hold office until their successors are chosen and qualified, or until their death, resignation or removal. There is no family relationship between or among directors and officers of the Company, except that Maurice O. Reiber and Gerald G. Reiber are brothers. The following are brief accounts of the business experience of each director and officer of the Company: Lewis W. Watson has been President, Treasurer and a director of the Company since its inception. He is a certified public accountant. Thomas C. Pool has been a director of the Company since October, 1982. He is a registered professional engineer in the State of Colorado who has worked in various capacities in the mining industry since his graduation from Colorado School of Mines in 1968. Mr. Pool has advised the Company that Colorado does not register engineering specialties. Maurice O. Reiber was employed by the City and County of Denver Building Inspection Division from 1966 to his retirement in February, 1988. Gerald G. Reiber was employed by Adolph Coors Company as a metal worker from 1969 until his retirement May 1, 1995. No director of the Company serves as a director of any other company with a class of securities registered pursuant to the Securities Exchange Act of 1934 or subject to the requirements of Section 15(d) of that Act or any company registered as an investment company under the Investment Company Act of 1940. Item 11. Executive Compensation. Compensation paid to Lewis W. Watson during the three years ended April 30, 2001 is set forth in the following tabulation. Year Amount ---- ------ 2002 $20,000 2001 40,000 2000 40,000 Pursuant to a resolution of the Board of Directors dated January 1, 1995, Mr. Watson has been compensated at a rate of $40,000 per year subject to the Company's ability to pay. This arrangement has been acceptable to Mr. Watson and is deemed by the Board of Directors to be reasonable for the time and effort expended by him. Services performed by the president during the three fiscal years ended in 2002 included quarterly, annual and other periodic filings with Federal and state tax and regulatory authorities and presentation of data on properties and negotiations with prospective lessees and/or purchasers. None of the officers or directors are paid any fees for attending board of directors meetings. However, all of the officers and directors are reimbursed for any out-of-pocket expenses incurred in connection with the Company's business including travel expenses. The Company has no retirement, pension or profit-sharing programs. However, the Company, at its discretion, may adopt one or more of such programs or may adopt health insurance or term life insurance at some time in the future. Other than as set forth above, no director or officer of the Company, or any 5% or more security holder or any relative or spouse of any of the foregoing persons, has had any material transactions since the beginning of the Company's last fiscal year or has any presently proposed material transactions with the Company. Item 12. Security Ownership of Certain Beneficial Owners and Management. Set forth below is certain information as of April 30, 2002 concerning the beneficial ownership of the Company's common stock by those persons known to the Company to be the beneficial owner of more than five percent of the common stock, by its directors and by its officers and directors as a group: Name, Address of Beneficial Owner/ Number Type of % of Title of Class Number of Persons of Shares Ownership Class -------------- ----------------- --------- --------- ----- Common Stock Lewis W. Watson 3,233,000 Direct(1) 23.6% $.01 par value P. O. Box 51600 Sparks, NV 89435 Common Stock Maurice O. Reiber 1,250,000 Direct(1) 9.1% $.01 par value 5051 W. Geddes Cir. Littleton, CO 80123 Common Stock Gerald G. Reiber 1,250,000 Direct(1) 9.1% $.01 par value 1860 24th Ave. Greeley, CO 80631 Common Stock Thomas C. Pool 108,000 Direct(1) .8% $.01 par value 2024 Golden Vue Dr. Golden, CO 80401 Common Stock All officers and $.01 par value directors as a group (five persons) 5,841,000 42.6% (1) Includes shares over which the named individual exercises sole voting and investment powers. The Company knows of no arrangements, including any pledge of securities, which might at a subsequent date result in a change of control of the Company. However, in the event of a purchase of control by other persons, or a merger, the shareholders and management listed above would no longer own the percentages set forth above, and shareholders would then be subject to decisions by the new control parties. 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, 2002, 2001, and 2000: 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 (16) Letter re: Change in certifying accountants None (18) Letter re: Changes in accounting principles None (21) Subsidiaries of the Registrant None (22) Published report regarding matters submitted to vote of security holders None (23) Consents of experts and counsel None (24) Power of Attorney None (99) 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, 2002. 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. May 31, 2002 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. May 31, 2002 /s/ L. W. Watson L. W. Watson, President and Director (Principal Executive Officer, Principal Financial and Accounting Officer) May 31, 2002 /s/ Thomas C. Pool Thomas C. Pool, Director Maurice O. Reiber, Director May 30, 2002 /s/ Gerald G. Reiber Gerald G. Reiber, Director

Filing Compare · INTERMOUNTAIN RESOURCES INC