SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 10549
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission file number
March 31, 1999 0-2 0217
(Exact name of registrant as appended in its charter)
COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer identification No.)
Nevada 84-068750
(Address of principal executive offices) (Zip Code)
2205 Purple Majesty Court
Las Vegas, Nevada 89117
(Registrant's telephone number, including area code)
(702) 240-4408
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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 report), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
Title of Class March 31, 1999
Common Class "A" 90,250,877
Common Class "B" 5,266,960
COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
Index Page
Part I FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income and Retained 4
Earnings
Notes to Consolidated Financial Statements 5
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II OTHER INFORMATION
Item 1 Legal Proceedings 8
Item 2 Changes in Securities 8
Item 3 Defaults upon Senior Securities 8
Item 4 Submission of Matters to a Vote of Security Holders 8
Item 5 Other Information 8
Item 6 Exhibits and Reports on Form 8-K 9
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COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
BALANCE SHEETS
March 31, 1999 and March 31, 1998
March 31, March 31,
1999 1998
(Dollars In Thousands)
ASSETS
Cash (Note 9) $ 4,449 $
Gold in storage (Note 13) 22,072 22,098
Cash equivalents (Note 10) 1,100,000
Accounts receivable- net 20,326
Deferred charges and other assets (Note 2)
Deferred mining exploration costs and
Deferred operating expenses 4,813 4,813
Property and equipment - net 17
Proven reserves (Notes 4 and 14)
Gold- net of mining costs 1,414,000 1,416,380
Silver- net 102,600 112,955
Deferred taxes 43
Unamortized exchange loss 504
Total assets $ 2,648,498 1,556,246
LIABILITIES AND STOCKHOLDERS' EQUITY
Loans payable 23,761
Accrued expenses 9,955
Other payables 748
Common stock, Class "A" $0.003 par value
Authorized shares-500,000,000
Issued and outstanding-90,250,877 271 271
Common stock, Class "B" no par value,
with a stated value of $1.00 per share.
Authorized shares-50,000,000
Issued and outstanding- 5,266,960 5,266 5,266
Capital in excess of par 2,589,113 1,550,709
Retained earnings (19,384)
Total Liabilities and Stockholders'
Equity $ 2,648,498 $ 1,556,246
See accompanying notes to Financial Statements.
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COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
Statement of Income and Retained Earnings
For the year ended December 31, 1998
(Dollars in Thousands)
Operating revenues $ -0-
Operating expenses 1,711
General and administrative expenses 2,772
Operating gain (loss) (4,483)
Loss on exchange (5,016)
Net gain (loss) (9,499)
Retained earnings, beginning (9,885)
Retained earnings, ending (19,384)
See accompanying notes to Financial Statements
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COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business - The Company is engaged in mining development
in the United States and equipment leasing business in China. Since October 22,
1974, the Company has owned and operated thirty nine (39) mines and one (1)
mill site at Quincy, Plumas County, California, and engaged in the exploration
of said mines for the production of precious metals like gold and silver.
The Company has applied for a license in Las Vegas, Nevada to conduct Life
Extension programs and to operate hotels and casinos.
Development Costs - The Company will not capitalize property taxes on its
mining properties until the mines are ready for operation and development.
2. DEFERRED CHARGES AND OTHER ASSETS
In Thousand Dollars
Deferred Mining Exploration Costs $ 3,253
Deferred mining exploration costs were incurred
in prior years with the amounts being estimated
based on the prevailing costs of mining exploration
at that time due to the absence of supporting
documentation. On April 13, 1996, the Company
issued shares of stocks valued at $3,252,669 to
pay for its obligation arising thereto.
Deferred Operating Expenses
Related to additional sale of Common "A" shares $ 1,480
Prior years expenses 81
Total Operating Expenses 1,560
Total Deferred Charges and Other Assets $ 4,813
3. RELATED PARTY TRANSACTIONS
Grand American Bank Trust owns approximately 60% of the Company's Class
"A" common stock as of December 31, 1998.
4. PROVEN GOLD AND SILVER RESERVE
The process of estimating mineral reserves is very complex, requiring
significant subjective decision in the evaluation of available
geological, engineering, and economic data for each reserve. The data
for a given reserve may change substantially over time as a result of
additional development activity, production under varying economic
conditions, etc.
Consequently, material revision to the existing reserve estimates may
occur in the future. Although, every reasonable effort was made to
ensure that the reserve estimates reported represent the most
accurate assessment possible, the significance of the ubjective
decision required, the variances in the available data for various
reserves, make these estimates generally less precise than other
estimates in connection with financial disclosure. Proven reserves
are estimated quantities of gold and silver which geological and
engineering data demonstrate, with reasonable certainty,
to be recoverable in future years from known reserves under existing
economic and operating conditions.
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Stickel and Associates, independent consultants in applied geology,
geophysics and engineering, has estimated 7,000,000 troy ounces of
gold and 19,000,000 troy ounces of silver. The values of these
reserves based on average market prices as of March 31, 1999 and
March 31, 1998 are as follows;
3/31/99 3/31/98
(Dollars in Thousands)
Gold 7,000,000 troy ounces
@$290.00/troy ounce $2,030,000
@$290.34/troy ounce $2,032,380
Silver 19,000,000 troy ounces
@$5.40/troy ounce 102,600
@$5.94/troy ounce 112,955
TOTAL $2,132,600 $2,145,335
5. STOCKHOLDERS' EQUITY:
The Company is authorized to issue 50,000,000 shares of no par value
Class "B" shares. The Company gave authority to its Board of Directors
to issue such Class"B" stock in one or more series, and to fix the
number of shares in each series, and all designations, relative rights,
preferences and limitations of the stock issued in each series. As of
April 13, 1994, the Board of Directors had exercised the authority
granted.
6. CONTINGENCIES.
The Company is not involved in any legal proceeding which is considered
to be ordinary routine litigation incident to its business.
7. CHANGE OF NAME.
The name of the Company was changed from Continental Wellness Casinos
Trust to Countryland Wellness Internet Network Trust. The Company
adopted a revised trust indenture discontinuing its real estate
investment trust status. On February 6, 1999, the Company formally
merged with China International Packaging Leasing Co., Ltd., an
equipment leasing company in Beijing, China.
8. HOTEL ACQUISITION.
The Company is in the process of purchasing a hotel and casino in
Las Vegas, Nevada, with at least 1008 rooms.
9. CASH.
Cash consists of: Dollars in Thousands
Cash on hand $ 2
Cash in bank 4,447
Total 4,449
10. CASH EQUIVALENTS.
Eleven (11) Bank Guarantees (No. BG1735/KB/98, BG1730/KB/98,
BG1734/KB/98, BG1736/KB/98, BG1777/KB/98, BG1732/KB/98, BG1738/KB/98,
BG1737/KB/98, BG1739/KB/98, BG 1775/KB/98, BG 1779/KB/98) each for
$100,000,000 US, issued by PT Bank Negra Indonesia (persero) Tbk. Head
Office, Treasury Division, Jakarta, Indonesia.
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11. CONSOLIDATED REPORT.
Continental Wellness Casinos Trust, U.S.A., and China International
Packaging and Leasing Co., Ltd., of Beijing, China, merged on December
16, 1998, and became Countryland Wellness Internet Network Trust. The
financial statements presented in this report are a consolidation of
the two companies.
12. STATEMENT OF INCOME AND RETAINED EARNINGS.
The Statement of Income and Retained Earnings for the year ended
December 31, 1998 were from the operations of China International
Packaging and Leasing Co., Ltd.
13. GOLD IN STORAGE AT BONDED WAREHOUSE.
On October 9, 1990, the Company deposited at NDS, United States Custom
Warehouse, currently located at 19801 So. Santa Fe Avenue, Rancho
Dominguez, California 90221, six (6) fifty-five (55) gallon drum-
containers of gold dust (powder form) 999.5% pure, weighing 76,112 troy
ounces. The market value of gold per troy ounce was $290.34 as of
March 31, 1998, and $ 290.00 per troy ounce as of March 31, 1999. At
these prices, the gold in storage carried a fair market value of
$22,072,480 on March 31, 1999, and $22, 098,358 on March 31, 1998.
14. COST OF PRODUCTION
Management estimates that the current cost of recovery of gold from
the Plumas County, California deposits is $88.00 per troy ounce of
gold recovered. Silver is a by product of the gold recovery, and has
no added cost. The total cost of recovery, therefor, is $616,000,000,
for the 7,000,000 troy ounces of gold, and 19,000,000 troy ounces of
silver. This amount has been deducted from the fair market value of
the gold indicated in Note 4.
COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Summary of significant Accounting Policies
Nature of the Business: Countryland Wellness Internet Network Trust, a Nevada
trust was originally incorporated in Colorado on October 29, 1974,
as Minerals Mining Corporation. The name was first changed to Grand American
International Corporation, then Continental Wellness Casinos Corp., and then,
on December 22, 1997, to Continental Wellness Casinos Trust, a real estate
investment trust. On December 16, 1998 the Company merged with China Internat-
ional Packaging and Leasing Co., Ltd., and the present name was adopted. The
Company had been engaged in the discovery and development of precious metals
with mining properties located at Quincy, Plumas County, California. The
Company has 750 acres of land where 39 unpatented mineing claims are located.
All assessment work has been done at the mines and all reports have been filed
with the Bureau of Land Management, Sacramento, California and the County of
Plumas in accordance with the mining rules and regulations. The Company has
permits to operate the mines from the United States Forestry Department, Quincy,
California. The Company presently does not intend to re-open mining operations
to recover the gold and silver in the proven reserves, and will not do so until
the price of gold increases significantly.
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The Company is in the process of getting its live longer center, a longevity
members association, with the purpose of making people live longer by using
preventive medicine with genes testing for discovery of predominant illness
in the different subjects and repair defective genes by genetic engineering
followed with a program of exercise and nutrition. The hotel's guests sign a
long term rental agreement for a room or suite at the Company's resort hotel
and casino for a week or two per year for a period of ten years, payable in
advance, and also receive one week of care at the center. The rental cost is
$ 1,000.00 per week per year per guest.
Liquidity and Capital Resources
The expansion and diversification of the Registrant's business has occurred
selectively for the past two years through the development of the Registrant's
mines for the production of gold and silver and other precious metals. The
Registrant is organizing its longevity center, a wellness resort for life
extension. The strategic and aggressive growth program enables the Registrant
to provide future earnings for the Company. The Registrant is confident that
the program of long term room rentals in a resort hotel and casino
in conjunction with a longevity center, will increase sales and produce
a positive cash flow.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As of September 30, 1998 the Company was not a party to any material
legal proceedings other than ordinary routine litigations incidental
to its business.
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
"A" Geological Evaluation of Gold Claims Reserves.
(b) Reports on Form 8-K
(1) Amendment No. 8, dated April 8, 1999
SIGNATURES
Pursuant to the requirements of Section 13 of 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
By (S) FRED CRUZ DATED: May 15, 1999
Fred Cruz
President and Chief Executive Officer
By (S) RICK ERIKSEN DATED: May 15, 1999
Rick Eriksen
Vice President and Chief Financial Officer
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Exhibit "A"
GEOLOGIC EVALUATION OF GOLD CLAIMS
IN
PLUMAS COUNTY, CALIFORNIA
STICKEL & ASSOCIATES
P.O. Box 91, Tustin, CA 92681
(714) 751-4742
May 14, 1985
Minerals, Mining and Energy Corp.
7750 El Camino Real, Suite K
Rancho La Costa, California 92008
Attention: Stewart Douglas, President
Subject: Review of Literature and Inspection of Gold Claims in Plumas
County, California, Black-hawk, Alan, MMC and Dean Lode Claims
conconsisting of 750 acres.
References: 1) Geology of the Pulga and Bucks Lake Quadrangles, Butte and
Plumas Counties, California, USGS Prof. Paper 731, date 1973.
2) Examination and Sampling of the Blackhawk and Section 13
Claims, Plumas County, California, by Win. H. Bird, date
June 1, 1976.
3) Bucks Lake Quadrangle, Map, USGS, 1:62,500, DATE 1950.
Gentlemen
This letter presents our present geological engineering evaluation of the
subject gold and silver claims that are located in Plumas County, California.
We visited and inspected the property on April 19 and 20, 1985. The property
consists of approximately 750 acres of lode claims with a reported overlying of
a few placer claims. The properties lie about 5 and 11 miles directly west of
Quincy on the Bucks Lake Road.
The claims are named Blackhawk, Alan, MMC, and Dean. The Blackhawk, Alan and
MMC claims lie in the northwest corner of Section 13, T24N, R8E.
GEOLOGY
These claims lie along the southwest and northwest borders of a northwest
trending zone or band of highly fractured peridotite altered to serpentine.
Broad fault zones bound the peridotite bodies or bands and there are no
indications of heat alteration. There has been no production from hard rock
mining, however, significant placer hydraulicking and sluicing has occurred.
The placer deposits occur in two periods of erosion, the Present and the
Tertiary. Although, concentrations of gold have only been found in the
Blackhawk and Dean claims, it does occur scattered throughout the peridotite.
PRESENCE OF GOLD AND SILVER
Reference 2 indicates that there is a conservative
10,000,000 tons of hard rock ore reserves. Rock Chip and channel samples were
obtained from 10 to 50 foot sections of road cuts and outcrops on these claims
and it is reported - assayed high in gold (Au). The highest gold value was
2.80 oz /ton, however, the overall average was .7 oz/ton. Silver
(Ag) ranged from a trace to 2.62 oz/ton. These values varied greatly, depending
upon the freshness of the outcrop. Assays also indicated the presence of
platinoid metals.
Total amount of gold and silver in these claims is 7,000,000 oz. of gold and
19,000,000 oz. of silver. These figures were compiled from data presented
in Reference 2.
It is reported that during the summer of 1983, approximately $30,000 worth of
placer gold was dredged from one of the creeks flowing through the Blackhawk
claims. This gold was dredged from an area of the creek about 100 yards long.
Stickel 7 Associates warrant that our services are performed within the limits
prescribed by our clients, with the usual thoroughness and competence of the
geological engineering profession. No other warranty or representation, either
expressed or implied, is included or intended in our proposals or reports or
contracts.
We appreciate the opportunity of presenting this report. If you have any
questions, please contact this office.
Very truly yours,
STICKEL & ASSOCIATES
By (S) J. F. STICKEL
J.F. STICKEL RG 2999
JFS/hr
April 25, 1986
It is our opinion that the described and proven indicated ore reserves are
based on data as described above.
STICKEL & ASSOCIATES
By (S) J.F. STICKEL
J.F. STICKEL,
RG 2999