10-K 1 excalibur10k.txt EXCALIBUR 10-K 05-31-2002 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 May 31, 2002 Commission file Number 1-7602 EXCALIBUR INDUSTRIES ------------------------------------------------------ (Exact name of registrant as specified in its charter) Utah 87-0292122 ------------------------------- --------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) P.O. Box 3551, Duluth, MN 55803 ----------------------------------------- ---------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 218-724-4711 ------------ E-Mail Address: mhubert1@msn.com Securities registered pursuant to Section 12 (b) of the Act: Name of each exchange Title of Each Class on which registered ------------------- ------------------- Common stock (Par value None $.01 per share) Securities registered pursuant to Section 12 (g) of the Act: None 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 requirement for the past 90 days. Yes X No ------------- ------------ State the aggregate market value of the voting stock held by non-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within 60 days prior to the date of filing. As of May 31, 2002, no bid or asked prices are available. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. As of May 31, 2002, the registrant had total outstanding shares of 5,987,261, $0.01 par value common stock. 1 Securities and Exchange Commission - Form 10K Excalibur Industries - May 31, 2002 Page 2 ITEM 1 - BUSINESS ----------------- Excalibur Industries is a Utah corporation formed by the consolidation of Tower Enterprises (formerly Moab Uranium Company) and The Thrifty Helper on June 1, 1971. In January 1972, Excalibur purchased all of the issued and outstanding shares of capital stock of Mountain West Mines, Inc., a Nevada corporation, which is now a wholly owned subsidiary of Excalibur. Excalibur Industries' business is natural resources and is primarily involved in the uranium mining industry. The domestic uranium outlook is suffering its most depressed state in its history. Current open market prices for yellow cake are at all time lows and uranium production in the United States has all but disappeared. The majority of the major mines and their United States Producers have closed and abandoned the industry. Excalibur throughout this period has been able to maintain its royalty position in the most valuable of its uranium reserves located in the Powder River District of Wyoming. With the limited resources available to Excalibur, it is not in a position to actively participate in a mining program and must rely on its lease owners and an improved market. URANIUM REPORT -------------- POWDER RIVER BASIN-WYOMING - HISTORY ------------------------------------ A. Mountain West Mines, Inc. Beginning in 1965, Mountain West Mines Inc., a private corporation founded by Claude E. Nugent, Robert H. Ruggeri and Joseph P. Hubert, operated the underground Betty Mine and the open pit Glade Mine in the Elk Ridge, Utah uranium district, each operation ending upon the completion of their respective AEC contracts. During the dormant years of the domestic uranium industry, MWM continued full-time uranium exploration. In 1966, Mountain West Mines began its successful geologic exploration of the Powder River, Wyoming Uranium District. A large scale mineral property program was begun, along with the beginning of the district reconnaissance drill hole fence project. In 1967, the Nuclear Power Industry revived interest in uranium fuels and the Powder River Basin began to attract major corporate attention. MWM in order to maintain viability was forced to seek outside financial assistance. B. The Cleveland-Cliffs Iron Company Excalibur (Mountain West Mines Inc.) entered into an Option and Agreement dated May 17, 1967, an Addendum dated August 29, 1967, an Addendum dated August 31, 1968, and a Deed and Agreement dated October 20, 1976 with the Cleveland-Cliffs Iron Company. Excalibur (MWM) retains a 4% yellow cake royalty on all production resulting from the operations of the Cleveland-Cliffs Iron Company, its assigns and/or its Successor in Interest within an Area of Interest defined as Townships 33 through 50 North of Ranges 69 through 79 West, 6th principal meridian. 2 POWDER RIVER BASIN - WYOMING (Continued) ---------------------------------------- The Collins Draw ISL pilot program produced a minor royalty credit to Excalibur. In 1986, failing the contractual obligation of furnishing Excalibur with prior written notification, the Cleveland-Cliffs Iron Company assigned its operating rights to the Ruby ranch project subject to the terms and conditions of MWM/Cliffs agreements to Magnox Electric plc (UK) subsidiary Central Electricity Generating Board Exploration (America) (CEGB). Cliffs retained reimbursement responsibility for Area of Interest royalty obligation to Excalibur payable by its Successor in Interest within the Area of Interest, less subject lands. In the event of project abandonment by CEGB (et al), properties must be reassigned to Cliffs. In 1987, failing the contractual obligation of furnishing Excalibur with prior written notification, the Cleveland-Cliffs Iron Company assigned its operating rights to the Greasewood Creek and North Butte projects subject to the terms and conditions of the MWM and Cliffs agreements to Uranez USA, Inc. (Germany). Cliffs retained reimbursement responsibility for Area of Interest royalty obligations to Excalibur payable by its Successor in Interest within the Area of Interest less subject lands. In the event of project abandonment by Uranez, properties must be reassigned to Cliffs. Failing the contractual obligation of furnishing Excalibur with prior written notification, Cliffs sold Excalibur's advance royalty credit of some $1,319,287 to Uranez. C. Cameco Corporation, (Canada), (Power Resources Inc., a member of the Cameco Group of Companies) Cameco Corporation contends it is the world's largest producer of uranium and the largest supplier of combined uranium and conversion services. Through a series of transactions, Cameco with its subsidiary Power Resources Inc., purports to have acquired the Powder River Basin operating assets of CEGB and Uranez/Cogema. Excalibur has not received proper documentation of either acquisition. The following projects subject to Area of Interest royalty obligations are listed in the Cameco Corporation 2001 Annual report:
Reserve Site Million Lbs. U308 ------------ ----------------- Proven Probable Indicated Inferred ------ -------- --------- -------- Highland 5.1 .9 2.9 2.5 North Butte/Brown 8.4 4.3 6.0 6.1 Ruby Ranch 3.1 1.7 Taylor Ranch 10.0 Note: 1) The Greasewood deposit was not listed. 2) The Grade/Thickness (GT) factor for reserve estimates was not revealed.
D. Quivira Mining Company (Rio Algom Ltd. - Canada) Rio Algom Ltd. was purchased by BHP Billiton (England) in 2001 and reduced its uranium participation. In 2001 Quivira Mining Company quitclaim re-assignment and conveyances by and among Quivira Mining and Everest Exploration their sum total of 5,000 acres of unpatented mining claims to Excalibur. Excalibur retained 100% claims ownership to six (6) known potential ISL reserves. These reserves are independently owned by Excalibur and not subject to the Cliffs/MWM agreements. 3 Securities and Exchange Commission - form 10-K Excalibur Industries - May 31, 2002 Page 4 POWDER RIVER BASIN - WYOMING (Continued) ---------------------------------------- E. Excalibur's 7,000,000-foot (+) drill hole library covering over 500 square miles of the Powder River Basin could prove invaluable in a profitable uranium market. SILVER REPORT Excalibur owns approximately 162 acres of patented lode mining claims in Ouray County, Colorado. BUSINESS Excalibur is natural resource oriented. In the past its activities have consisted of acquisition, mining and sale of mineral properties. The Corporation's resources are extremely limited for a corporation of this character. Under the present depressed market conditions it has no alternative but to await a change. At the present time the corporation is inactive, except for overseeing its leases and maintaining corporate viability. ITEM 2 - PROPERTIES ------------------- Mountain West Mines, Inc. (Mountain West) a wholly owned subsidiary of Excalibur, owns a royalty interest in approximately 85 patented lode mining claims, and numerous unpatented lode mining claims in the Powder River Basin in Johnson and Campbell Counties, Wyoming. These properties had capitalized costs of $347,032, and are directly related to the advance royalties received from Cliffs as described in Item 1 of this Form 10-K. The extent of any ore bodies and related possible collection of production royalties is not determinable at this time. The Board of Directors had determined, however, that a more realistic value should be placed on the books for financial reporting and elected to reduce the reported value for financial statement purposes to $100,000. In May 1986, Cliffs conveyed, subject to the MWM/Cliffs agreements, to Magnox Electric plc subsidiary, Central Electricity Generating Board Exploration Inc. 63.688 acres of patented claims and 12 unpatented mining claims (Ruby Ranch project). In 1989, Magnox Electric through its subsidiaries CEGB and Power Resources Inc. acquired 75% interest in the Highland Uranium Project (HUP) from Everest Exploration (et al). HUP is subject to the terms and conditions of the May 17, 1967 Option and Agreement and Addenda between MWM/Cliffs. According to newspapers and other published accounts, HUP uranium production by Magnox Electric subsidiaries indicates a multi-million dollar royalty payment is due Excalibur. In January 1997, Cameco Corporation (Canada) purchased the assets of CEGB and Power Resources from Magnox Electric plc (UK) along with the obligations and conditions set forth in the May 17, 1967 Option and Agreement and Addenda between MWM/Cliffs. The HUP production royalties have not been paid by Cameco's operator, its wholly owned subsidiary Power Resources Inc. The right of reassignment of all uranium mineral properties within the Area of Interest is retained by Excalibur as set forth by the May 17, 1967 Option and Agreement. In April 1987, Excalibur had not received the contractual obligation of prior written notice when Uranez USA (Germany) purchased unpatented claims and the below cited patented claims along with the remaining portion of MWM advance royalty from Cliffs. The transaction subjected Uranez to the obligations as conditions set forth in the May 17, 1967 Option and Agreement and Addenda between MWM/Cliffs. 4 ITEM 2 - PROPERTIES (continued) ------------------------------- North Butte Deposit Area ------------------------ Pfister Patent - 49-77-0019 222.420 acres Brown Patent - 49-77-0022 730.016 acres ------- 952.436 acres Surface acres included with mineral acres 309.000 acres Greasewood Creek Deposit Area ----------------------------- Greasewood Creek Patent - 49-75-0068 646.596 acres Surface acres 0.000 acres In May 1991, failing the contractual obligation of furnishing Excalibur with prior written notification, Pathfinder Mines, Inc., subsidiary of Cogema-France, purchased Uranez' Powder River Uranium holdings along with the remaining portion of MWM advance royalty. This transaction subjected Pathfinder to the terms and conditions as outlined in the May 17, 1967 Option and Agreement and Addenda between MWM/Cliffs. Subsequently, Pathfinder assumed the Christianson Ranch ISL operation and failed to make Area of Interest royalty payments to Excalibur. Between the delinquent royalty payments from the HUP and the Christianson Ranch operations, the advance royalty payment obligation of $1,319,287.00 has been satisfied. In 1973, Excalibur sold mining claims in Campbell and Johnson Counties, Wyoming to American Nuclear Corporation. The project became a part of a joint venture between American Nuclear and the Tennessee Valley Authority. At public auction in 1991, they sold this project along with their entire holdings to General Atomic. In 1992, General Atomic sold this same project to Pathfinder. Excalibur retains a 2 1/2 % yellow cake royalty from the ANC contract and an additional 4% yellow cake royalty from the MWM/Cliffs Area of Interest royalty provision. In 2001, failing the contractual obligation of furnishing Excalibur with prior written notification, Pathfinder Mines Inc. (Cogema) executed Special Warranty Deeds with Cameco Corporation (Canada) through its wholly owned subsidiary Power Resources Inc., transferring Pathfinder's Powder River uranium holdings. Camecos' acquisition of that portion of Pathfinder's mineral properties acquired from the Uranez/Cliffs contract, commits Cameco and its wholly owned subsidiary Power Resources Inc. to a second acknowledgment to the terms and conditions in the May 17, 1967 Option and Agreement and Addenda between MWM/Cliffs. These mineral lands are within the Area of Interest and are subject to a 4% yellow cake gross royalty in addition to the royalty obligations inherent in their title. In July 1983, Cliffs quitclaimed 436 unpatented lode mining claims and 1,042 net acres of fee mineral leases to Texas Eastern Nuclear, Inc., of Houston, Texas. In August 1986, Texas Eastern Nuclear, Inc., reassigned said properties to Mountain West, who, in turn, conveyed and assigned its interest in said property to Everest Minerals, subject to a variable overriding royalty reservation which ranges 2% to 6%. Everest Minerals determined to abandon a portion of the property and offered to re-convey it to Excalibur. Excalibur has since abandoned said property. On June 28, 1990, Everest Minerals sold the remaining 270 claims to Quivira Mining Company, 6305 Waterford Boulevard, Suite 325, Oklahoma City, Oklahoma 73118, a subsidiary of Rio Algom Ltd., a Canadian based world producer of uranium and other metals. Excalibur retained the right of reassignment. 5 Securities and Exchange Commission - Form 10-K Excalibur Industries - May 31, 2002 ITEM 2 - PROPERTIES (Continued) ------------------------------- In 2001, Quivira Mining company reassigned the 270 claims to Excalibur. 100% ownership of six (6) potential ISL reserves is held by Excalibur. The following uranium reserve estimates are Texas Eastern Nuclear Inc., calculatons:
Deposit Area Average Depth Indicated Reserves Potential Reserves ------------ ------------- ------------------ ------------------ Verna Ann 580' 701,000# 1,500,000# Niles Ranch 450' 270,000# 600,000# Hank 420' 600,000# 2,000,000# Willow Creek 600' 850,000# 2,000,000# Doughstick 540' -0- 6,000,000# Nichols Ranch 590' 3,500,000# 4,500,000#
Excalibur owns patented mining claims in Ouray county, Colorado with capitalized costs of $8,106. These properties were purchased as silver prospects and are not active. The company also owned one patented mining claim in Lake County, Colorado which was sold during the year ended May 31, 2000. ITEM 3 - LEGAL PROCEEDINGS -------------------------- Management of the Registrant knows of no litigation that would materially affect the financial statements of Excalibur or Mountain West Mines, Inc. ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ------------------------------------------------------------ (a-d) No matters were submitted to a vote of security holders during the quarter ended May 31, 2002 through solicitation of proxies or otherwise. The last annual shareholder's meeting of the Company was held November 19, 2001. ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS -------------------------------------------------- (a) Principal Market: The stock of the Corporation was formerly traded on the Intermountain Stock Exchange in Salt Lake City, Utah. At the present time the stock is not traded on a listed stock exchange and the Company knows of no market maker. (b) Approximate number of shareholders of record as of May 31, 2002 is 425. (c-1) No dividends have been paid or declared in the past 5 fiscal years. (c-2) Management anticipates no payment of dividends in the near future. 6 Securities and Exchange commission - Form 10-K Excalibur Industries - May 31, 2002 Page 7 ITEM 6 - SELECTED FINANCIAL DATA FOR THE YEARS ENDED MAY 31: ------------------------------------------------------------
2002 2001 2000 1999 1998 ----------- ----------- ----------- ----------- ----------- Total Revenues $ 0 $ 0 $ 0 $ 0 $ 0 Total Operating Expense 17,372 12,813 17,176 14,928 29,483 ----------- ----------- ----------- ----------- ----------- Loss From Operations (17,372) (12,813) (17,176) (14,928) (29,483) Other Income 0 0 7,188 201 1,280 ----------- ----------- ----------- ----------- ----------- Income (Loss) - Before Income Taxes (17,372) (12,813) (9,988) (14,727) (28,203) Provision For Income Taxes 100 100 100 100 100 ----------- ----------- ----------- ----------- ----------- Net Income (Loss) (17,472) (12,913) (10,088) (14,827) (28,303) Retained Earnings (Deficit) Beginning of Year (44,349) (31,436) (21,348) (6,521) 21,782 ----------- ----------- ----------- ----------- ----------- Retained Earnings (Deficit) End of Year $ (61,821) $ (44,349) $ (31,436) $ 21,348 $ (6,521) =========== =========== =========== =========== =========== Average Shares of Common Stock Outstanding 5,987,261 5,987,361 5,987,361 5,987,361 5,987,361 =========== =========== =========== =========== =========== Net Income (Loss) Per Share of Common Stock $ (0.0029) $ (0.0022) $ (0.0017) $ (0.0025) $ (0.0047) =========== =========== =========== =========== =========== Total Assets - End of Year $ 110,958 $ 108,435 $ 112,348 $ 122,436 $ 137,369 =========== =========== =========== =========== =========== Long-Term Obligations $ 29,000 $ 9,000 $ 0 $ 0 $ 0 =========== =========== =========== =========== =========== Cash Dividends Declared Per Share of Common Stock $ 0 $ 0 $ 0 $ 0 $ 0 =========== =========== =========== =========== ===========
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDUCTION AND RESULTS OF OPERATIONS ---------------------------------------------------------------------- Excalibur Industries experienced substantial fluctuations in its consolidated net income over the past several years. The Company maintained its mineral properties and interest throughout that period of fluctuation despite a large drain on its financial resources. Management is now working to retain as much of its mineral rights and interests as possible, considering its limited resources and the depressed market conditions. 7 The Board of Directors has adopted a policy designed to husband its resources and retain as much of its mineral interests as possible, taking into account the depressed market for minerals and the Company's limited resources. The consolidated financial statements contained herein under ITEM 8 should be read in conjunction with this ITEM 7, with particular emphasis on the Notes to Consolidated Financial Statements. Additional information pertaining to the fluctuation of the Company's income and expenses is detailed. ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 8 ACCOUNTANTS' COMPILATION REPORT ------------------------------- To the Board of Directors and Stockholders Excalibur Industries We have compiled the accompanying consolidated balance sheets of Excalibur Industries (Corporation) and its wholly owned subsidiary, Mountain West Mines, Inc. as of May 31, 2002, 2001, and 2000, and the related consolidated statements of operations and changes in retained earnings (deficit), and cash flows for the years then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of financial statements information that is the representation of management. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them. /S/ Maxfield and Co., P.C. ---------------------------- Maxfield and Co., P.C. Certified Public Accountants Grand Junction, Colorado July 15, 2002 9 Consolidated Balance Sheets May 31, 2002, 2001 and 2000 (Unaudited)
2002 2001 2000 --------- --------- --------- ASSETS ------ Current Assets Cash $ 2,752 $ 229 $ 4,142 --------- --------- --------- Property and Equipment Mining properties and interests 108,106 108,106 108,106 Furniture and fixtures 2,354 2,354 2,354 Mining equipment 1,347 1,347 1,347 --------- --------- --------- 111,807 111,807 111,807 Accumulated depreciation (3,661) (3,661) (3,661) --------- --------- --------- Total Property and Equipment 108,146 108,146 108,146 --------- --------- --------- Other Assets Deposits 60 60 60 --------- --------- --------- Total Assets $ 110,958 $ 108,435 $ 112,348 ========= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities Income tax payable $ 100 $ 100 $ 100 --------- --------- --------- Other Liabilities Loans from stockholder 29,000 9,000 -- --------- --------- --------- Stockholders' Equity Common stock - $.01 par value, authorized 10,000,000 shares, Issued 5,997,361 shares including shares in treasury 59,974 59,974 59,974 Capital received in excess of par value 83,810 83,810 83,810 Retained earnings (deficit) (61,821) (44,349) (31,436) Treasury stock, 10,100 shares, (10,000 shares 1999 - 2001) at cost (105) (100) (100) --------- --------- --------- Total Stockholders' Equity 81,858 99,335 112,248 --------- --------- --------- Total Liabilities and Stockholders' Equity $ 110,958 $ 108,435 $ 112,348 ========= ========= =========
See accompanying notes and accountants' compilation report. 10
Consolidated Statements of Operations and Changes in Retained Earnings (Deficit) Years Ended May 31, 2002, 2001 and 2000 (Unaudited) 2002 2001 2000 ----------- ----------- ----------- Revenues Royalties $ -- $ -- $ -- ----------- ----------- ----------- Operating Expenses Mining and related expenses -- -- -- General and administrative 17,372 12,813 17,176 ----------- ----------- ----------- Total Operating Expenses 17,372 12,813 17,176 ----------- ----------- ----------- Loss From Operations (17,372) (12,813) (17,176) ----------- ----------- ----------- Other Income Gain from sale of mining claim -- -- 7,173 Interest -- -- 15 ----------- ----------- ----------- Total Other Income -- (12,813) 7,188 ----------- ----------- ----------- (Loss) Before Income Taxes (17,372) (12,813) (9,988) Provision For Income Taxes 100 100 100 ----------- ----------- ----------- Net (Loss) (17,472) (12,913) (10,088) Retained Earnings (Deficit) - Beginning of Year (44,349) (31,436) (21,348) ----------- ----------- ----------- Retained Earnings (Deficit) - End of Year $ (61,821) $ (44,349) $ (31,436) ========== ========== =========== Net (Loss) Per Share of Common Stock $ (0.0029) $ (0.0022) $ (0.0017) ========== ========== =========== Outstanding Number of Common Shares 5,987,261 5,987,361 5,987,361 ========== =========== =========== See accompanying notes and accountants' compilation report.
11 Consolidated Statements of Cash Flows Years Ended May 31, 2002, 2001 and 2000 (Unaudited)
2002 2001 2000 -------- -------- -------- Cash Flows From Operating Activities Net (loss) $(17,472) $(12,913) $(10,088) Adjustments to reconcile net loss to net cash provided by operating activities (Gain) on sale of assets -- -- (7,173) (Increase) decrease in: Notes receivable -- -- 993 -------- -------- -------- Net Cash Used By Operating Activities (17,472) (12,913) (16,268) -------- -------- -------- Cash Flows From Investing Activities Proceeds from U. S. Treasury Bills -- -- 7,600 -------- -------- -------- Cash flows From Financing Activities Proceeds from loans from stockholders 20,000 9,000 -- Capital Stock transactions: Share repurchases (5) -- -- -------- -------- -------- Net Cash Provided By Financing Activities 19,995 9,000 -- -------- -------- -------- Net Increase (Decrease) In Cash 2,523 (3,913) (8,668) Cash - Beginning of Year 229 4,142 12,810 -------- -------- -------- Cash - End of Year $ 2,752 $ 229 $ 4,142 ======== ======== ======== Supplemental Disclosures Income taxes paid $ 100 $ 100 $ 100
See accompanying notes and accountants' compilation report. 12 Notes to Consolidated Financial Statements (Unaudited) Note 1 - Summary of Significant Accounting Policies --------------------------------------------------- Consolidation ------------- The consolidated financial statements presented herein include the accounts of Excalibur Industries (Excalibur) and its wholly owned subsidiary, Mountain West Mines, Inc., (Mountain West), a Nevada corporation, qualified to do business in the states of Utah and Wyoming. All significant intercompany transactions have been eliminated from these statements. Mining Properties and Interests ------------------------------- Mining claims, leases, and royalty interests are stated at cost, unless in the judgement of the Directors a lesser amount is felt to be more appropriate due to a permanent decline in value. No depletion has been charged against income for financial statement purposes, but is deducted for Federal income tax purposes when allowable. The full carrying value is charged against income at the time of sale of disposition of an asset. If a perpetual overriding royalty is retained the recorded costs of the asset are treated the same for financial statement purposes as for income tax purposes and are not reduced in value until production royalties are received. Depreciable Property and Equipment ---------------------------------- Depreciable property and equipment are stated at cost. Depreciation for income tax purposes is consistent with that used for financial statement purposes and has been computed using the straight-line method. Deferred Income Taxes --------------------- Deferred income taxes are provided as a result of timing differences in reporting income for financial statement and tax purposes. Currently no deferred income taxes payable (or receivable) are recognized. Earnings Per Share ------------------ Earnings per share of common stock are computed using the weighted average number of common shares outstanding during the period. Primary and full diluted earnings per share are shown as the same figure if the dilative effect of any common stock equivalents or convertible securities are less than three percent. The Company currently has no dilative equivalents. Note 2 - Mining Properties and Interests ---------------------------------------- Uranium ------- The Company owns various royalty and other interests in patented and unpatented mining claims and mineral leased acreage, located in the Powder River Basin, Johnson and Campbell Counties, Wyoming. Future earned royalties are subject to offset by the amount of certain advance minimum royalty revenues. These properties were assigned a value of $347,032 following the acquisition of Mountain West by Excalibur. Various acreage has been dropped during the past years as such acreage was determined to be of no value. The capitalized costs of these properties have been reallocated to the remaining acreage still retained by the Company. The Board of Directors determined that a more realistic value should be placed on the books and elected to reduce the reporting value for financial statement purposes by $247,032. 13 Notes to Consolidated Financial Statements (Unaudited) Note 2 - Mining Properties and Interests (Continued) ---------------------------------------------------- Silver ------ The Company owns various interests in patented mining claims located in the Red Mountain and Uncompahgre Mining Districts, Ouray, Colorado. During the year ended May 31, 2000, one claim was sold for $7,600. A summary of capitalized costs in the above properties as of May 31, 2002, 2001 and 2000 follows: 2002 2001 2000 -------- -------- -------- Uranium $100,000 $100,000 $100,000 Silver 7,957 7,957 7,957 Other 149 149 149 -------- -------- -------- Total $108,106 $108,106 $108,106 ======== ======== ======== Note 3 - General and Administrative Expense ------------------------------------------- General and administrative expenses for the years ended May 31, 2002, 2001 and 2000 follows: 2002 2001 2000 ------- ------- ------- Salaries $ -- $ -- $ -- Reports and publications 1,764 1,069 933 Professional 3,816 4,593 5,619 Telephone, office supplies and other 11,792 7,151 10,624 ------- ------- ------- Total $17,372 $12,813 $17,176 ======= ======= ======= Note 4 - Income Taxes --------------------- Currently, no deferred income taxes payable (or receivable) are recognized as a result of timing differences in reporting income for financial accounting and tax purposes. 14 Deferred income taxes on unrealized losses in the amount $247, 032 due to the reduction in value of royalty interests has not been recognized in the financial statements due to the uncertainty of any future tax benefit. Likewise, deferred income taxes are not affected as a result of statutory depletion deductions taken for tax purposes. Notes to Consolidated Financial Statements (Unaudited) Note 4 - Income Taxes (Continued) --------------------------------- At May 31, 2002 the Company has loss carryforwards of approximately $245,000 for Federal tax purposes and $160,000 for State tax purposes that may be offset against future taxable income (expiring on various dates through 2017). Note 5 - Operating Funds ------------------------ Company management has developed a plan to reduce or delay administrative costs to insure that the Company will continue to meet its obligations during the coming year, as well as a plan to obtain additional operating funds, if needed, through the sale of certain of its mining properties. In the interim, Joseph P. Hubert, President and major shareholder of Company, has agreed to advance operating funds, as needed, until other funds become available. 15 ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES -------------------------------------------------------------- None ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ------------------------------------------------------------ (a, b & e) Name Age Position --------------------- --- -------------------------------------- Joseph P. Hubert 70 President, Chief Executive Officer and Chairman of Board of Directors Jack D. Powers 76 Vice-President and Director Charles O. Spielman 68 Treasurer and Director Marguerite Emanuel 68 Secretary Joseph P. Hubert is President and Chief Executive Officer. He received his B.S. Degree in Geology from the University of Minnesota Duluth. He has been a self-employed registered mining geologist for many years. He served on the Board of Directors of Mountain West Mines, Inc. from 1966 until 1971, either as President or Vice-President during that period. Mr. Hubert was elected to the Presidency and Board of Directors of Excalibur at the 1982 annual meeting and following Directors' meeting. Jack D. Powers is Vice-President. He obtained a BA Degree in business and accounting from the University of Minnesota and a B.S. Degree in mechanical engineering from Michigan Tech. He has worked as a manager for Longyear Drilling Co., Boyles Bros. and Joy for many years and presently is a self-employed drilling consultant. Charles O. Spielman was elected Treasurer and to the Board of Directors at a special meeting of the Board effective July 1, 1999. He received his B.S. degree in Geological Engineering from Colorado School of Mines in 1955 and is a consulting mining geologist. Marguerite H. Emanuel replaced Charles O. Spielman as Secretary on March 1, 2001. She received her BS Degree in Business and accounting from the University of Minnesota. She was a department manager with the Marriott Corporation and an administrative assistant with the Village of Lincolnshire, Illinois. (c) Excalibur has no full time employees. (d) Mrs. Marguerite Emanuel was elected Corporate Secretary at the November 19, 2001 Annual Meeting. Mrs. Emanuel is the sister of Joseph P. Hubert, President and CEO. There are no other family relationships between any Director and Executive Officer and/or any other Director or Executive officer or nominee for Director. (f) No Officer, Director or nominee for Director has been involved in any legal proceedings involving Federal bankruptcy laws, or any State insolvency laws, or has been convicted or named in a criminal proceeding, or is the subject of any order, judgement, or decree limiting him in any activity, or from engaging in any type of business practice, or from engaging in any activity in connection with the purchase or sale of any security, or in connection with any violation of Federal or State security laws. 16 ITEM 11 - MANAGEMENT REMUNERATION --------------------------------- Excalibur and Mountain West Mines, Inc., has no employees or payroll and pays no compensation to management. However, it does pay medical insurance for its President and management for reimbursement of expenses. ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ------------------------------------------------------------------------ (a) Security Ownership of Certain Beneficial Owners:
*Amount and Percent Nature of of class Name and Address Beneficial as of Title of Class of Beneficial owner Ownership 5/31/02 -------------- ----------------------------------------- -------------- ------- Common Joseph P. Hubert 1,179,000 19.69% 1800 Lakeview Drive Direct Duluth, MN 55803 Common Allen E. Nugent, Trustee of the *868,000 14.50% Claude E. Nugent Trust Direct 10238 South 2375 East Sandy, UT 84092 Common Robert H. Ruggeri 336,683 5.62% 3314 Music Lane Direct Grand Junction, CO 81506 Common Jack D. Payne 302,540 5.05% Box 2951 Direct Grand Junction, CO 81501 Common Service Credit Corp. 377 N. Main 300,000 5.01% Layton, UT 84041 Direct *Includes 24,000 shares owned by Allen Nugent's wife, and 24,000 shares owned by Allen E. Nugent, son of Claude E. Nugent. (b) Security Ownership of Management: *Amount and Percent Nature of of class Name and Address Beneficial as of Title of Class of Beneficial Owner Ownership 5/31/02 -------------- ---------------------------------------- -------------- ------- Common Joseph P. Hubert 1,179,000 19.69% Common Jack D. Powers 25,000 .42% Common Charles O. Spielman 50,000 .84% Common Marguerite Emanuel 100,000 1.68% Common Directors and Officers Group 1,354,000 22.63%
17 ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, (Continued) ------------------------------------------------------------------------------- *Information as to beneficial ownership is based upon statements furnished by each Director. Information with such ownership rests peculiarly within their knowledge and the Registrant disclaims responsibility for the accuracy and completeness thereof. (c) Changes in Control: No arrangements are known to Registrant which may at a subsequent date result in a change in control of the Registrant. ITEM 13 - CERTAOM RELATIONSHIPS AND RELATED TRANSACTIONS (a) Transactions with Management and Others None (b) Certain Business Relationships None (c) Indebtedness of Management None (d) Transactions with Promoters None ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 10-K --------------------------------------------------------------------------- (a) 1. Unaudited Consolidated Financial Statements for the fiscal years ended May 31, 2002, 2001 and 2000, including: Accountants' Compilation Report Consolidated Balance Sheets Consolidated Statements of Operations and Changes in Retained Earnings (Deficit) Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements 2. None 3. None (b) No reports on Form 8-K have been filed during the quarter ended May 31, 2002. (c) None (d) None 18 SIGNATURES ---------- 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. Date By /S/ Joseph P. Hubert -------------------- --------------------------------------------- Joseph P. Hubert President, Chief Executive Officer and Chairman of Board of Directors Date By /S/ Jack D. Powers -------------------- --------------------------------------------- Jack D. Powers Vice-President and Director 19