UNITED STATES
SECURITY AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the year ended December 31, 1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period
Commission File Number 1-5996
QUAD METALS CORPORATION
(Exact name of registrant as specified in its charter)
WASHINGTON 91-0835748
(State or Other Jurisdiction of (IRS Employer Id. Number)
Incorporation or Organization)
601 WEST MAIN AVENUE, SUITE 714 99201
(Address of principal executive offices and Zip Code)
(509) 455-9077
(Registrant's telephone number, including area code)
Securities Registered Under Section 12 (b) of the Act:
NONE
(Title of Class)
Securities Registered Under Section 12 (g) of the Act:
COMMON STOCK, NO 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
Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III or any amendment to this Form
10-K. (X)
The registrant had no revenue for the most recent fiscal year.
The registrant's Common Stock held by non-affiliates of the registrant is
currently not trading. The aggregate market value March 15, 2002 was nil. As
of March 15, 2002 there were 95,474,665 shares of the registrant's common stock
outstanding.
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QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
TABLE OF CONTENTS
PAGE
----
PART I
Item 1. Business 3
Item 2. Properties 3
Item 3. Legal Proceedings 3
Item 4. Submission of Matters to a Vote of Security Holders 3
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 3
Item 6. Selected Financial Data 4
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 4-5
Item 7A Quantitative and Qualitative Disclosures about Market Risk 5
Item 8. Financial Statements (Unaudited) 6-13
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures 14
PART III
Item 10. Directors and Executive Officers of the Registrant 14-15
Item 11. Executive Compensation 15
Item 12. Security Ownership of Certain Beneficial Owners and Management 16
Item 13. Certain Relationships and Related Transactions 17
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 17
Signatures 18
Exhibit 3.0 appended to filing
<page>
QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
PART I
ITEM 1 - BUSINESS
Quad Metals Corporation (the "Company") is a Washington corporation incorporated
in 1968. The Company was formed to acquire interests in mining properties and
explore for precious metals and other commercial minerals. The Company was
unsuccessful in its activities and has been substantially inactive since 1991.
During 1998, the Company reinstated its corporate charter in the State of
Washington and began efforts to favorably position itself to seek alternative
business opportunities.
ITEM 2 - PROPERTIES
As of December 31, 1998, the Company had no properties.
ITEM 3 - LEGAL PROCEEDINGS
The registrant has no legal actions pending against it and is not a party to any
suits in any court of law.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during 1998.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's common stock has been inactive for several years and there is
currently not a public trading market for the Company's common stock on any
organized exchange.
Holders. The number of stockholders of record on March 15, 2002 was
approximately 942.
Dividends. The Company has declared no cash or stock dividends on its common
stock since inception and does not anticipate declaring or paying cash or stock
dividends in the future.
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QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
ITEM 6 - SELECTED FINANCIAL DATA
The following data should be read in conjunction with the Company's financial
statements and the notes thereto:
Selected Income Statement Data:
Year Ended December 31,
------------------------------------------------
1994 1995 1996 1997 1998
-------- -------- -------- -------- --------
Net Revenues -0- -0- -0- -0- -0-
Net income (loss) -0- -0- -0- -0- (2,824)
Per share Nil Nil Nil Nil Nil
Cash dividends per share $ -0- -0- -0- -0- -0-
Selected Balance Sheet Data:
Year Ended December 31,
----------------------------------------------------------
1994 1995 1996 1997 1998
---------- ---------- ---------- ---------- ----------
Current Assets -0- -0- -0- -0- -0-
Current Liabilities -0- -0- -0- -0- 2,824
Working Capital -0- -0- -0- -0- (2,824)
Total Assets -0- -0- -0- -0- -0-
Long-term debt -0- -0- -0- -0- -0-
Stockholders' Equity
(Deficit) (2,192,824) (2,192,824) (2,192,824) (2,192,824) (2,195,648)
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
PLAN OF OPERATIONS
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. The primary method the Company will use to
find potential merger or acquisition candidates will be to run classified ads
seeking companies, which are looking to merge with a public shell.
Management of the Company, while not especially experienced in matters relating
to the new business of the Company, will rely primarily upon their own efforts
to accomplish the business purposes of the Company. It is not anticipated that
any outside consultants or advisors, other than the Company's legal counsel and
accountants, will be utilized by the Company to effectuate its business purposes
described herein
<page>
QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
FINANCIAL CONDITION AND LIQUIDITY
Total assets at December 31, 1998 were $0, no change from the prior year.
During the year ended December 31, 1998 no cash was generated or used by
operating activities of the Company. The Company has no recurring revenue
from operating activities and plans to fund its future operations through sales
of its unregistered common stock.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOURES ABOUT MARKET RISK
At December 31, 1998, the Company was not and currently is not exposed to
foreign currency, interest rate and securities price risks.
[The balance of this page left intentionally blank.]
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QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
ITEM 8 - FINANCIAL STATEMENTS (UNAUDITED)
INDEX TO FINANCIAL STATEMENTS
Page
----
Balance Sheets, December 31, 1998, 1997 and 1996 7
Statements of Operations for the years ended
December 31, 1998, 1997 and 1996 8
Statements of Changes in Stockholders' Deficit
for the years ended December 31, 1998, 1997 and 1996 9
Statements of Cash Flows for the years
ended December 31, 1998, 1997 and 1996 10
Notes to Financial Statements 11-13
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QUAD METALS CORPORATION
BALANCE SHEETS (UNAUDITED)
December 31, 1998, 1997 and 1996
ASSETS
1998 1997 1996
------------ ------------ ------------
TOTAL ASSETS $ 0 $ 0 $ 0
============ ============ ============
LIABILITES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 2,824 $ 0 $ 0
------------ ------------ ------------
TOTAL LIABILITIES 2,824 0 0
------------ ------------ ------------
Stockholders' deficit:
Common stock, no par value,
40,000,000 shares authorized,
35,474,665 shares issued and
outstanding 2,192,824 2,192,824 2,192,824
Accumulated deficit (2,195,648) (2,192,824) (2,192,824)
------------ ------------ ------------
Total stockholders' deficit (2,824) 0 0
------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 0 $ 0 $ 0
============ ============ ============
The accompanying notes are an integral part of these financial statements.
<page>
QUAD METALS CORPORATION
STATEMENTS OF OPERATIONS (UNAUDITED)
For the years ended December 31, 1998, 1997 and 1996
1998 1997 1996
------------ ------------ ------------
Operating expenses:
Legal expense $ 2,824 $ 0 $ 0
------------ ------------ ------------
NET LOSS $ (2,824) $ 0 $ 0
============ ============ ============
Net loss per common share $ Nil $ Nil $ Nil
============ ============ ============
Weighted average common
shares outstanding-basic 35,474,665 35,474,665 35,474,665
============ ============ ============
The accompanying notes are an integral part of these financial statements.
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QUAD METALS CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (UNAUDITED)
For the years ended December 31, 1998, 1997 and 1996
COMMON STOCK
-------------------------- ACCUMULATED
SHARES AMOUNT DEFICIT TOTAL
------------ ------------ ------------ ------------
BALANCE,
December 31, 1995 35,474,665 $ 2,192,824 $(2,192,824) $ 0
Net loss
------------ ------------ ------------ ------------
BALANCE,
December 31, 1996 35,474,665 $2,192,824 $(2,192,824) $ 0
Net loss
------------ ------------ ------------ ------------
BALANCE,
December 31, 1997 35,474,665 $ 2,192,824 $(2,192,824) $ 0
Net loss (2,824) (2,824)
------------ ------------ ------------ ------------
BALANCE,
December 31, 1998 35,474,665 $ 2,192,824 $(2,195,648) $ (2,824)
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
<page>
QUAD METALS CORPORATION
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the years ended December 31, 1998, 1997 and 1996
1998 1997 1996
------------ ------------ ------------
Cash flows from operating activities:
Net loss $ (2,824) $ 0 $ 0
Change in:
Accounts payable 2,824 0 0
------------ ------------ ------------
Net cash used by operating activities 0 0 0
------------ ------------ ------------
Net change in cash 0 0 0
Cash, beginning of year 0 0 0
------------ ------------ ------------
Cash, end of year $ 0 $ 0 $ 0
============ ============ ============
The accompanying notes are an integral part of these financial statements.
<page>
QUAD METALS CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Quad Metals Corporation (the "Company") is a Washington corporation incorporated
in 1968. The Company was formed to acquire interests in mining properties and
explore for precious metals and other commercial minerals. The Company was
unsuccessful in its activities and has been substantially inactive since 1991.
During 1998, the Company reinstated its corporate charter in the State of
Washington and began efforts to favorably position itself to seek alternative
business opportunities.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
- ------------------
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.
Income Taxes
- -------------
Income taxes are recognized in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," whereby deferred income tax
liabilities or assets at the end of each period are determined using the tax
rate expected to be in effect when the taxes are actually paid or recovered. A
valuation allowance is recognized on deferred tax assets when it is more likely
than not that some or all of these deferred tax assets will not be realized.
Fair Values of Financial Instruments
- ----------------------------------------
The carrying amounts of financial instruments, including accounts payable,
approximated their fair values as of December 31, 1998, 1997, and 1996.
Loss Per Share
- ----------------
Such amounts, representing basic and diluted loss per share, are computed based
on the weighted average number of shares outstanding during the years ended
December 31, 1998, 1997, and 1996.
Mining Properties
- ------------------
In prior years the Company owned or controlled properties on private and public
lands in several states in the Western United States for purposes of exploring
for and developing commercial mineral deposits. The Company's exploration
efforts on its properties proved unsuccessful, and as of December 31, 1991, the
Company had abandoned all of its interests in mineral and mining properties.
The Company and its properties have been subject to a variety of federal and
state regulations governing land use and environmental matters. The Company's
management believes it has been in substantial compliance with all such
regulations, and is unaware of any pending action or proceeding relating to
regulatory matters that would affect the financial position of the Company.
<page>
QUAD METALS CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
New Accounting Pronouncements
- -------------------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." The Statement requires the Company to recognize all
derivatives on the balance sheet at fair value. The Company anticipates that the
adoption of this statement will not have a material affect on its financial
statements.
3. INCOME TAXES
At December 31, 1998, 1997, and 1996 the Company had federal tax-basis net
operating loss carryforwards totaling approximately $1,420,000 which will expire
in various amounts from 1999 through 2018. The deferred tax asset associated
with these operating loss carryforwards is approximately $483,000 for the years
ended December 31, 1998, 1997, and 1996 and has been fully reserved for each of
the years then ended, as management believes it is more likely than not that the
deferred tax assets will not be utilized.
4. STOCKHOLDERS' DEFICIT
Common Stock
- -------------
The Company has one class of no par value common stock authorized and
outstanding. During a meeting of shareholders on March 15, 1984, the Company's
Articles of Incorporation were amended to increase the number of shares
authorized for issue from 10,000,000 to 40,000,000. During an annual meeting of
shareholders ordered by the Superior Court of the State of Washington on
September 17, 1998, the articles of incorporation were again amended to increase
the number of shares authorized for issue to 100,000,000. The amendment took
effect upon its filing with the Secretary of the State of Washington in December
of 2001. In prior years the Company's stock was traded on the Spokane Stock
Exchange in Spokane, Washington. Since 1990, however, very little trading has
taken place, and there is essentially no active market for the Company's stock.
Preferred Stock
- ----------------
During the annual meeting of shareholders on September 17, 1998, the Company's
Articles of Incorporation were amended to authorize 10,000,000 shares of no par
value preferred stock. The preferred stock is entitled to preference over
common stock of the Company with respect to the distribution of assets in the
event of liquidation or dissolution. The preferred stock may be divided into
and issued in designated series as determined by the Company's board of
directors. The amendment took effect upon its filing with the Secretary of the
State of Washington in December of 2001.
<page>
QUAD METALS CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. RELATED PARTY TRANSACTIONS
The Company has been furnished with certain unreimbursed management,
administrative, accounting and consulting services by various related parties,
which are not reflected in these financial statements and not material to the
financial statements. For the years ended December 31, 1998 the Company expended
$2,824 for legal services relating to reinstating the Company's corporate
charter and amending its Articles of Incorporation. The services were provided
by Gregory B. Lipsker, the Company's legal counsel and an officer and director
up until June 1, 2001, at which time Mr. Lipsker tendered his resignation as an
officer and a director of the Company. At December 31, 1998 the Company had
accrued $ 2,824 to Mr. Lipsker for legal services provided.
<page>
QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors and Executive Officers.
The names, ages, business experience and positions of our directors and
executive officers as of December 31, 1998 are set out below. The Company's
board of directors consisted of three members at such date. All directors serve
until their successors are elected and qualified.
NAME AGE POSITION
- -------------------------- ----- -------------------------------------------
Gregory B. Lipsker 48 President and a director
Eunice R. Campbell 53 Secretary, Treasurer and a director
William R. Green 60 Vice-President and a director
Each Officer serves in the position indicated after his name for a period of one
year or until his successor is elected and qualified.
Biographies of Directors, Executive Officers, and Key Individuals.
Gregory B. Lipsker.
- ---------------------
Mr. Lipsker is a practicing attorney in Spokane, Washington. Mr. Lipsker's
practice emphasizes corporate and securities matters. Mr. Lipsker is an
executive officer of Metaline Mining and Leasing Company and Cimarron-Grandview
Group, Inc., both publicly held, inactive mining exploration companies.
Eunice R. Campbell.
- ---------------------
Mrs. Campbell is a retired businesswoman. Prior to her retirement in 1987, Mrs.
Campbell was the owner of Spokane Guaranty Company, a stock transfer agency.
Mrs. Campbell is an executive officer and director of Metaline Mining and
Leasing Company and Cimarron-Grandview Group, Inc., both publicly held, inactive
mining exploration companies.
Dr. William R. Green.
- ------------------------
William R. Green is a mining engineer and geologist, and was a professor of
mining engineering at the University of Idaho from 1965-1983. He has been
actively involved in the mining business since 1962 and is a former officer and
director of Yamana Resources and currently an officer and director of Canadian
public companies: Maya Gold Limited and Petromin Resources, Ltd., and US
Companies Mines Management, Inc., Metaline Mining and Leasing, Co., and
Cimarron-Grandview Group, Inc., all publicly held companies, the latter two
being inactive mining exploration companies.
<page>
QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (CONTINUED)
Involvement in Certain Legal Proceedings
None of the Officers and Directors of the Registrant has been involved in any
bankruptcy, insolvency or receivership proceedings as an individual or a member
of any partnership or corporation; none has been convicted in a criminal
proceeding.
ITEM 11 - EXECUTIVE COMPENSATION
(a) (1) Cash Compensation:
None of the Officers and Directors received any compensation for acting as such
in 1998.
(a) (2) Bonuses and Deferred Compensation:
There are no bonuses or deferred compensation.
(b) (1) Compensation Pursuant to Plans:
There are no compensation plans. There are no pension plans, stock options, or
stock appreciation rights, and none is proposed for the future.
(c) Other Compensation:
None
(d) Compensation of Directors:
----------------------------
(1) Standard Arrangements.
There are no standard arrangements for compensating Directors.
(2) Other Arrangements.
There are no other arrangements for compensating Directors.
(e) Termination of Employment and Change of Control Arrangements.
There are no compensatory plans or arrangements for compensation in the event of
termination of employment, resignation, retirement etc.
<page>
QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth as of December 31, 1998, the names of, and number
of shares beneficially owned, by persons known to us to own more than five
percent (5%) of our common stock; the names of, and number of shares
beneficially owned by each of our directors and executive officers; and the
number of shares beneficially owned by all of our directors and executive
officers as a group. At such date, there were 35,474,665 outstanding shares.
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP
(ALL DIRECT UNLESS PECENT
NAME OF OWNER OTHERWISE NOTED OF CLASS
- ------------------------------------- ------------------------ ------------
The Estate of Dr. Tibor Klobusicky(1) 15,750,000 44.40%
E.3612 16th Ave.
Spokane, WA 99203
Stanley Harrison 10,000,000 28.19%
E. 10900 Wolf Lodge Bay Road
Coeur d' Alene, ID 83814
Elizabeth Klobusicky Mailender 2,250,000 6.34%
Haupstrasse 58
7401 Remmingsheim
West Germany
Iris Momber 2,250,000 6.34%
E. 3612 16th Avenue
Spokane, WA 99203
Nadine Young 2,250,000 6.34%
3804 Indigo
Plano, TX 75075
Eunice R. Campbell (2) 1,268,000 3.57%
301 S. Chestnut #7
Spokane, WA 99204
All directors and executive
Officers as a group (1 person) 1,268,000 3.57%
(1) Includes 3,000,000 shares of held of record and owned beneficially by
the Estate of Tibor Klobusicky and 12,750,000 as to which Tibor Klobusicky
claims beneficial ownership through the shares held of record by the Family of
Dr. Tibor Klobusicky, The Klobusicky Family Trust, and the Klobusicky Family
Partnership as set forth in Item 12(a) above.
(2) Director and Secretary/Treasurer
<page>
QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions with Management and Others.
See note 5 to the financial statements.
(b) Certain Business Relationships.
There have been no relationships during the last fiscal year of the Registrant
between the Registrant, or affiliates as described in Item 404(b) (1-6) of the
Regulation S-K.
(c) Indebtedness of Management.
No Director or Executive Officer of the Registrant, nor any member of the
immediate family of any such, nor any corporation, nor any trust or estate or
any other entity is indebted in any amount to the Registrant.
(d) Transactions with Promoters.
Not applicable.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) Financial Statements and Schedules
Not applicable.
(b) Exhibits
3(i) Amended and restated Articles of Incorporation dated September 18, 1998.
(c) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the last quarter
of 1998.
<page>
QUAD METALS CORPORATION
FORM 10-K ANNUAL REPORT
DECEMBER 31, 1998
SIGNATURES
Pursuant to the requirements of Section 13 OR 15(D) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.
QUAD METALS CORPORATION INC.
By:/s/ Robert W. O'Brien
---------------------
Robert W. O'Brien
President
Date: March 25, 2002
By:/s/ Michael L. McLaughlin
-------------------------
Michael L. McLaughlin
Vice-President
Date: March 25, 2002
By:/s/ Martyn A. Powell
---------------------
Martyn A. Powell
Secretary/Treasurer
Date: March 25, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By:/s/ Robert W. O'Brien
---------------------
Robert W. O'Brien
Director and President
Date: March 25, 2002
By:/s/ Michael L. McLaughlin
-------------------------
Michael L. McLaughlin
Director and Vice-President
Date: March 25, 2002
By: /s/ Martyn A. Powell
---------------------
Martyn A. Powell
Director and Secretary/Treasurer
Date: March 25, 2002