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Utah Resources International Inc – ‘10KSB/A’ for 12/31/96 – EX-13

On: Wednesday, 11/12/97 · As of: 11/13/97 · For: 12/31/96 · Accession #: 950137-97-3749 · File #: 0-09791

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/13/97  Utah Resources International Inc  10KSB/A    12/31/96    3:169K                                   Bowne Boc/FA

Amendment to Annual Report — Small Business — Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB/A     Amendment No.1 to Form 10-Ksb                         39    234K 
 2: EX-13       Annual Report                                         23     86K 
 3: EX-27       Financial Data Schedule                                1      8K

EX-13 — Annual Report

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UTAH RESOURCES  
INTERNATIONAL, INC.   

CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES   

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UTAH RESOURCES INTERNATIONAL, INC.  
AND SUBSIDIARIES  

CONSOLIDATED FINANCIAL STATEMENTS   

                                                                [Download Table]

                   CONTENTS                      

                                            PAGE 
                                            ---- 
                                                 
Independent Auditors' Report                 F-1 

Consolidated balance sheet,                      
December 31, 1996                            F-2 

Consolidated statement of operations for         
the years ended December 31, 1996 and 1995   F-3 

Consolidated statement of stockholders'          
equity for the years ended December 31,          
1996 and 1995                                F-4 

Consolidated statement of cash flows for         
the years ended December 31, 1996 and 1995   F-5 

Notes to consolidated financial statements   F-8 

Consolidated schedule of supplemental            
information on oil and gas operations        F-19

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[TANNER + CO. LETTERHEAD]                                                       

                                                INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS OF                                                    
UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES                            

We have audited the accompanying consolidated balance sheet of UTAH RESOURCES   
INTERNATIONAL, INC., AND SUBSIDIARIES at December 31, 1996 and the related      
consolidated statements of operations, stockholders' equity and cash flows for  
the two years then ended. These consolidated financial statements are the       
responsibility of the Company's management.  Our responsibility is to express   
an opinion on these consolidated financial statements based on our audits.      

We conducted our audits in accordance with generally accepted auditing          
standards.  Those standards require that we plan and perform the audit to       
obtain reasonable assurance about whether the consolidated financial statements 
are free of material misstatement.  An audit includes examining, on a test      
basis, evidence supporting the amounts and disclosures in the consolidated      
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   
audits provide a reasonable basis for our opinion.                              

In our opinion, the consolidated financial statements referred to above present 
fairly, in all material respects, the consolidated financial position of UTAH   
RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES as of December 31, 1996 and the 
results of their operations and their cash flows for the two years ended        
December 31, 1996, in conformity with generally accepted accounting principles. 

Our audits were made for the purpose of forming an opinion on the basic         
financial statements taken as a whole. The supplementary information included   
in the Schedule of Supplementary Information on oil and gas operations is       
presented for the purposes of additional analysis and is not a required part of 
the basic financial statements. Such information, except for that portion       
marked "unaudited," on which we express no opinion, has been subjected to the   
auditing procedures applied in the audits of the basic financial statements     
and, in our opinion, is fairly stated in all material respects in relation to   
the basic financial statements taken as a whole.                                

/s/ TANNER + CO.    

Salt Lake City, Utah                                                            
April 4, 1997                                                                   
                                                                             F-1

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                             UTAH RESOURCES INTERNATIONAL INC., AND SUBSIDIARIES
                                                      CONSOLIDATED BALANCE SHEET
                                                               DECEMBER 31, 1996
--------------------------------------------------------------------------------

                                                                [Download Table]

          ASSETS                                                                
          ------                                                                
                                                                                
Cash and cash equivalents                                           $   517,858 
Accounts receivable from related parties                                262,668 
Notes receivable                                                        140,672 

Property and equipment, net of accumulated depreciation                         
 and amortization of $43,408                                             26,019 

Real estate held for resale                                             876,088 
Royalty interest in petroleum and mineral production, net                       
 of amortization of $44,382                                               5,828 

Other assets                                                            137,011 
                                                                    ----------- 
                                                                    $ 1,966,144 
                                                                    =========== 
------------------------------------------------------------------------------- 
     LIABILITIES AND STOCKHOLDERS' EQUITY                                       
     ------------------------------------                                       
Accounts payable                                                    $   252,464 
Accrued expenses                                                        546,070 
Earnest money deposits                                                   36,000 
Notes payable                                                           291,110 
                                                                    ----------- 

     Total liabilities                                                1,125,644 
                                                                    ----------- 

Minority interest                                                       110,903 

Commitment and contingencies                                                  - 

Stockholders' equity:                                                           
  Common stock; par value $.10 per share, 5,000,000                             
  shares authorized, 2,522,808 shares issued and outstanding            252,281 
  Additional paid-in capital                                          4,431,232 
  Note receivable from stock sale                                    (3,633,159)
  Retained deficit                                                     (320,757)
                                                                    ----------- 
     Total stockholders' equity                                         729,597 
                                                                    ----------- 
                                                                    $ 1,966,144 
                                                                    =========== 

------------------------------------------------------------------------------- 
See accompanying notes to consolidated financial statements.                 F-2


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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF OPERATIONS

                                                        YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                            1996         1995   
                                                        ------------------------
                                                                                
Sales                                                   $   451,406  $  587,663 
Cost of sales                                               139,175     156,250 
                                                        ------------------------
     Gross profit                                           312,231     431,413 

General and administrative expenses                       1,530,288   1,045,854 
                                                        ------------------------
     Loss from operations                                (1,218,057)   (614,441)
                                                        ------------------------
Other income (expense):                                                         
  Royalty income                                            153,051      61,006 
  Interest and dividend income                              156,895     102,794 
  Interest expense                                          (86,405)    (51,279)
  Other income (expense)                                     (8,772)     35,906 
                                                        ------------------------

     Total other income (expense)                           214,769     148,427 
                                                        ------------------------

Loss before minority interest and provision                                     
 for income taxes                                        (1,003,288)   (466,014)

Minority interest in net loss of subsidiaries                23,385      26,988 
                                                        ------------------------

Loss before provision for income taxes and                                      
 discontinued operations                                   (979,903)   (439,026)

Income tax benefit                                           54,000     179,000 
                                                        ------------------------

Loss from continuing operations                            (925,903)   (260,026)

Discontinued operations:                                                        
  (Loss) income from discontinued operations net of                             
   income taxes of $-0- and $48,000                         (19,365)     93,407 
  Income (loss) from disposal of discontinued operations                        
   net of income taxes benefit of $-0- and $247,000          93,066    (583,000)
                                                        ------------------------

     Total discontinued operations                           73,701    (489,593)
                                                        ------------------------

     Net loss                                           $  (852,202) $ (749,619)
                                                        ========================

     Loss per share - continued operations                    (0.45)      (0.16)
     Income (loss) per share - discontinued operation          0.04       (0.30)
                                                        ------------------------

       Total loss per share                             $     (0.41) $    (0.46)
                                                        ========================

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See accompanying notes to consolidated financial statements.                 F-3

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                          YEARS ENDED DECEMBER 31, 1996 AND 1995
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]


                                                                 NOTES                     
                         COMMON SHARES            ADDITIONAL   RECEIVABLE                  
                      --------------------         PAID-IN     FROM STOCK        RETAINED  
                       SHARES       AMOUNT         CAPITAL       SALES           EARNINGS  
                      -------------------------------------------------------------------- 
                                                                                           
Balance,                                                                                   
January 1, 1995        1,284,027   $ 128,403    $  127,174  $         -       $ 1,409,527  

Common stock issued                                                                        
to purchase subsidiary                                                                     
valued at book value of                                                                    
subsidiary               590,000      59,000       196,503            -                 -  

Common stock issued                                                                        
for services in                                                                            
acquisition of                                                                             
subsidiary                76,000       7,600        25,080            -                 -  

Repurchase of stock                                                                        
through land issuance   (102,429)    (10,243)            -            -                 -  

Common stock issued                                                                        
in settlement of dispute   3,600         360             -            -                 -  

Dividends                      -           -             -            -          (128,463) 

Net loss                       -           -             -            -          (749,619) 
                      -------------------------------------------------------------------- 
Balance,                                                                                   
December 31, 1995      1,851,198     185,120       348,757            -           531,445  

Common stock retired                                                                       
through split-off of                                                                       
subsidiary              (590,000)    (59,000)       59,000            -                 -  

Repurchase of                                                                              
common stock             (40,552)     (4,055)     (131,794)           -                 -  

Common stock issued                                                                        
for:                                                                                       
 Cash and note                                                                             
  receivable           1,275,912     127,591     4,146,714   (3,633,159)                -  
 Accounts payable         26,250       2,625         8,555            -                 -  

Net loss                       -           -             -            -          (852,202) 
                       --------------------------------------------------------------------
Balance,                                                                                   
December 31, 1996      2,522,808    $252,281    $4,431,232  $(3,633,159)      $  (320,757) 
                       =================================================================== 


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See accompanying notes to consolidated financial statements.                 F-4

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                            CONSOLIDATED STATEMENT OF CASH FLOWS

                                                        YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------

                                                                [Download Table]
                                                                                
                                                            1996        1995    
                                                          ---------   --------- 
CASH FLOWS FROM OPERATING ACTIVITIES:                                           
 Net loss                                                 $(852,202)  $(749,619)
 Add loss from discontinued operations                       19,365     (93,407)
 Loss (gain) from disposition of discontinued operation     (93,066)    583,000 
 Adjustments to reconcile net income (loss) to net                              
  cash provided by (used in) operating activities:                              
   Depreciation and amortization                             12,567      12,349 
   Minority interest in net income of subsidiaries          (23,385)    (26,988)
   Loss (gain) on disposition of assets                       1,221      (3,106)
   Bad debt expense                                               -      10,899 
   Common stock issued for services                               -      33,040 
   (Increase) decrease in:                                                      
    Accounts receivable                                     109,954    (118,310)
    Other assets                                            (32,935)       (775)
    Real estate held for resale                              87,834    (237,850)
    Income tax receivable                                   212,328    (212,529)
   (Decrease) increase in:                                                      
    Accounts payable                                        (23,982)    115,912 
    Accrued expenses                                        153,787      21,143 
    Deferred income tax                                           -    (300,000)
                                                          ---------   --------- 
    Net cash used in                                                            
     continued operations                                  (428,514)   (966,241)
    Net cash provided by (used in)                                              
     discontinued operations                                136,993    (104,846)
                                                          ---------   --------- 
      Net cash used in operating activities                (291,521) (1,071,087)
                                                          ---------   --------- 

CASH FLOWS FROM INVESTING ACTIVITIES:                                           
 Proceeds from disposition of assets                            500      18,140 
 Payments on notes receivable                               189,367     137,348 
 Purchase of property and equipment                               -      (2,690)
 Increase in notes receivable                              (151,050)   (112,137)
 Decrease in minority interest                              (17,825)     (4,020)
                                                          ---------   --------- 
 Cash from investing activities - continuing operations      20,992      36,641 
 Cash for investing activities - discontinued operations        (38)     76,839 
                                                          ---------   --------- 
      Net cash provided by investing activities              20,954     113,480 
                                                          ---------   --------- 

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See accompanying notes to consolidated financial statements.                 F-5

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                            CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                       CONTINUED
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                              Years Ended        
                                                              December 31,       
                                                           --------------------- 
                                                             1996        1995    
                                                           --------------------- 
                                                                                 
CASH FLOWS FROM FINANCING ACTIVITIES:                                            
 Payments of dividends                                            -     (128,463)
 Payments on notes payable                                 (419,449)     (90,129)
 Issuance of common stock                                   641,146            - 
 Retirement of common stock                                (135,849)           - 
                                                          ---------   ---------- 
 Cash from financing activities - continued operations       85,848     (218,592)
 Cash for financing activities - discontinued operations    (63,254)    (196,765)
                                                          ---------   ---------- 
   Net cash provided by (used in)                                                
   financing activities                                      22,594     (415,357)
                                                          ---------   ---------- 
Decrease in cash                                           (247,973)  (1,372,964)
Cash and cash equivalents, beginning of year                765,831    2,138,795 
                                                          ---------   ---------- 
Cash and cash equivalents, end of year                     $517,858     $765,831 
                                                          =========   ========== 

1996                                                                            

The Company issued 1,275,912 shares of stock in exchange for cash and a note    
receivable in the amount of $3,633,159.                                         

The Company issued 26,250 shares of stock as payment of a liability in the      
amount of $11,180.                                                              

The Company redeemed and retired 590,000  shares of stock in conjunction with   
the split-off of Midwest Railroad at no value.                                  

1995                                                                            

The Company purchased the assets of another company for common stock valued at  
$255,503.                                                                       

The Company financed the purchase of equipment with debt in the amount of       
$28,278.                                                                        

The Company purchased and retired 102,429 shares of common stock through the    
issuance of 10.6 acres of land under the terms of a prior year agreement.       

The Company disposed of debt in the amount of $3,933, which was assumed in the  
sale of land for which the Company received a note receivable.                  

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See accompanying notes to consolidated financial statements.                 F-6

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                            CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                       CONTINUED
--------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                               

                                                                [Download Table]


                                          1996           1995                   
                                      ---------------------------               
                                                                                
             Interest                 $  51,301       $  62,427                 
                                      ===========================               
             Income taxes             $       -       $       -                 
                                      ===========================               

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See accompanying notes to consolidated financial statements.                 F-7


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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          YEARS ENDED DECEMBER 31, 1996 AND 1995
--------------------------------------------------------------------------------

1. SUMMARY OF      BUSINESS                                                     
SIGNIFICANT     Utah Resources International, Inc., and consolidated      
ACCOUNTING      entities (the Company) is engaged primarily in the        
POLICIES        development of real estate including the sale of developed
            and undeveloped real estate.  The Company's assets are
located in the Rocky Mountain West.       

PRINCIPLES OF CONSOLIDATION               
       The consolidated financial statements include the
             financial statements of Utah Resources, Inc., Tonaquint
            Inc. and a number of limited partnerships of which the
           Company has ownership in excess of 50 percent and has
           management responsibility.  All material intercompany
       transactions and balances have been eliminated in
      consolidation of the Companies and partnerships.

              The Company is both a general and limited partner in the
following limited partnerships.           

                                                                [Download Table]

                                              PERCENT
PARTNERSHIP                                    OWNED 
-----------                                   -------
                                                     
Country Club Partnership                       84.04%
URI-MGO Partnership                            70.00%
Southgate Palms Ltd. Partnership              100.00%
Southgate Plaza Ltd. Partnership               52.50%
Southgate Resort Partnership                  100.00%
Resources Limited Partnership                  83.63%
Tonaquint Indian Hills Partnership             75.86%
Service Station Partnership                    79.00%

      Discontinued operations include Midwest Railroad
                  Construction and Maintenance Corporation (Midwest) from June
                  13, 1995 ( date of acquisition) through March 31, 1996 (date
                 of disposition).  The Company disposed of Midwest effective
                 March 31, 1996, see notes 7 and 8.  Discontinued operations
                in 1995 also included those of a Service Station which was
closed in 1993.                           

METHOD OF RECOGNITION OF INCOME           
Real Estate                     
-----------                     
            Profits on sale of developed lots, developed
                   land and raw land are recognized in accordance with
                  standards established for the real estate industry
                      which generally provide for deferral of all or part of
                       the profit on a sale if the buyer does not meet certain
                       down payment requirements or certain other tests of the
                    buyer's financial commitment to the purchase, or the
                     seller is required to perform significant obligations
subsequent to the sale.         

           Cost of sales include a pro rata portion of
                      acquisition and development costs (including estimated
                costs to complete) along with sales commissions,
                     closing costs and other costs specifically related to
the sale.                       

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

--------------------------------------------------------------------------------

1. SUMMARY OF      METHOD OF RECOGNITION OF INCOME                              
SIGNIFICANT        Other                                                  
ACCOUNTING         -----                                                  
POLICIES           Royalty income is recognized when received.  The       
CONTINUED          Company has overriding mineral and oil and gas royalty 
            interests and thus exercises no control over the
                   activities of the royalty payers and is notified of the
               amounts or royalties due when the cash is received.

                  The Company follows the full-cost accounting method of
              capitalizing all exploration and development costs
            including nonproductive drilling expenses, lease
                    abandonments, and other related costs. Under this method
                     of accounting, no gains or losses are recognized from the
                sale or disposition of properties with insignificant
                    proved oil and gas reserves. If capitalized costs exceed
                     the present value of future net operations, the excess is
charged to expense.                 

PROPERTY AND EQUIPMENT                    
             Property and equipment is carried at cost. Depreciation
               is computed using the straight-line method based upon the
following useful lives:                   

                     Building                              15-30 years
                     Furniture and equipment                3-10 years

REAL ESTATE HELD FOR RESALE               
          Real estate held for resale includes developed lots,
                land under development and raw land.  Real estate held for
                 resale is carried at the lower of cost or market.  The cost
               of development of building lots includes the land and the
                 related costs of development (planning, survey, engineering
                 and other) which are capitalized.  The cost of interest and
property taxes are expensed.              

          ROYALTY INTEREST IN PETROLEUM AND MINERAL PRODUCTION
            The cost of identifiable intangible assets, consisting
               of royalties, is being amortized on a straight-line basis
                 over the expected productive life of the asset of 15 years.

INCOME TAXES                              
   Deferred income taxes are provided in amounts
                sufficient to give effect to temporary differences between
          financial statement and tax reporting purposes.  The
                differences are primarily a result of differing methods of
                accounting for land sales and depreciation of property and
equipment.                                

EARNINGS PER SHARE                        
          The weighted average of outstanding common shares is
                 approximately 2,072,105 shares and 1,619,000 shares for the
           years ended December 31, 1996 and 1995, respectively.
            Common stock equivalents have not been included as the
             exercise price is in excess of the market price and the
amounts are antidilutive.                 

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

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1. SUMMARY OF      STATEMENT OF CASH FLOWS                                      
SIGNIFICANT     For purposes of the statement of cash flows, the          
ACCOUNTING      Company considers all highly liquid debt instruments      
  POLICIES        purchased with a maturity of three months or less to be cash
CONTINUED       equivalents.                                              

CONCENTRATION OF CREDIT RISK              
         Financial instruments which potentially subject the
                  Company to concentration of credit risk consist primarily of
               trade receivables.  In the normal course of business, the
     Company provides credit terms to its customers.
                  Accordingly, the Company performs ongoing credit evaluations
            of its customers and maintains allowances for possible
                losses which, when realized, have been within the range of
management's expectations.                

             The Company maintains its cash in bank deposit accounts
                which, at times, may exceed federally insured limits.  The
                Company has not experienced any losses in such account and
                  believes it is not exposed to any significant credit risk on
cash and cash equivalents.                

                 USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
           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 amount of revenues and
                 expenses during the reporting period.  Actual results could
differ from those estimates.              

2. ACCOUNTS        Accounts receivable at December 31, 1996, include            
RECEIVABLE      $120,086 which is due from an entity which has some       
FROM RELATED    shareholders in common with the Company and $142,582 which
PARTIES         is due from various related partnerships.                 

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

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3. NOTES           The Company has the following notes receivable at            
RECEIVABLE      December 31, 1996:                                        

            Note receivable from an individual with interest
           at 9%, secured by real estate and due when real
                     estate is sold                                   $131,642

           Note receivable from a company due in 1997 with
                     interest at 8.5%                                    9,030
                                                                      --------
                                                                      $140,672
                                                                      ========

           Future maturities of notes receivable are as follows:

                          YEAR                                        AMOUNT
                           ----                                       --------
                           1997                                       $  9,030
                           1998                                        131,642
                                                                      --------
                           Total                                      $140,672
                                                                      ========

4. REAL ESTATE     Real estate held for resale consists of the following        
  HELD FOR        real estate located in the St. George, Utah area at December
RESALE          31, 1996:                                                 

RAW LAND AND PARTIALLY DEVELOPED LAND     
            The Company has approximately 410 acres of real estate
               of which approximately 390 acres is currently planned for
             single family dwelling lots, commercial development and
              multiple housing. The aggregate cost of the raw land and
partially developed land is $766,987.     

            Property related to the Service Station, which is held
              for resale, amounts to $109,101. Also, included in other
                  assets is $92,773 of assets relating to the Service Station.

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

--------------------------------------------------------------------------------

5. ACCRUED         Accrued expenses at December 31, 1996 consist of the         
EXPENSES        following:                                                

                      Deficit in investment in partnerships             $225,661
                      Accrued interest                                   120,358
                      Unearned interest received                          98,869
                      Accrued costs for clean up                          50,533
                      Accrued payroll and payroll taxes                    7,978
                      Other accrued expenses                              42,671
                                                                        --------

                             Total                                      $546,070
                                                                        ========

6. NOTES           The Company has the following notes payable at December      
PAYABLE         31, 1996:                                                 

         Notes payable to a shareholder of the Company
                      with interest rates ranging from 7.5% to 9.5%     $110,932

            Notes payable to a governmental entity requiring
         annual payments of approximately $15,000 plus
                      interest at 5.94%, secured by real estate           91,551

            Note payable to entity requiring annual payments
           of $10,386 including interest at 9%, secured by
                      real estate                                         67,282

             Note payable to a financial institution requiring
          monthly payments of $491 including interest at
                      10.5%, secured by a vehicle                         20,074

                      Other                                                1,271
                                                                        --------

                      Total                                             $291,110
                                                                        ========

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

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6. NOTES           Future maturities of notes payable are as follows:           
PAYABLE                                                                   
CONTINUED              YEAR                                      AMOUNT   
                     ----                                     --------

                     1997                                     $142,219
                     1998                                       25,490
                     1999                                       25,992
                     2000                                       27,057
                     2001                                       23,481
                     Thereafter                                 46,871
                                                              --------

                                                              $291,110
                                                              ========

         None of the Company's debt instruments are held for
                  trading purposes.  The Company estimates that the fair value
                 of all financial instruments at December 31, 1996, does not
                 differ materially from the aggregate carrying values of its
                financial instruments recorded in the accompanying balance
sheet.                                    

7. INVESTMENT      Effective June 13, 1995, the Company acquired 100%           
 IN MIDWEST      ownership of Midwest through the issuance of 590,000 shares
              of the Company's common stock for all of the outstanding
                 stock of Midwest.  The   acquisition was accounted for as a
                purchase.  The fair market value of the Midwest assets and
                liabilities approximated the historical cost of the assets
                 and liabilities and no goodwill was therefore recorded. The
          net equity of Midwest at the date of acquisition was
$255,503.                                 

               Effective March 31, 1996, the Company spun off Midwest to
                  its former owner. The Company returned to the former Midwest
            owner all of the common stock of Midwest and in return
                received 590,000 shares of its restricted common stock and
                  agreed to forgive net cash advances made to Midwest over the
                  ownership period. The return of the 590,000 shares of common
                  stock to the Company was recorded at no value as the Company
              exchanged its ownership in Midwest for the return of the
                  shares of the Company. The 1995 financial statements reflect
           a pretax write down of approximately $752,000 for its
                  investment in Midwest to its estimated realizable value. The
            write down in 1995, was a result of the forgiveness of
               approximately $384,000 of intercompany debt from 1995 and
          the write-off of the approximate $368,000 of Midwest
investment at December 31, 1995.          

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

--------------------------------------------------------------------------------

7. INVESTMENT      In 1996, the aggregate loss on the disposal of Midwest was   
IN MIDWEST      reduced by $93,066 due primarily to the offsetting of     
 CONTINUED       certain costs against the advances made to Midwest incurred
on behalf of Midwest.                     

            For the three months ended March 31, 1996, Midwest had
               loss of $19,365 resulting in a net gain on disposition in
              1996 of $73,701. The Company realized an aggregate total
  loss of $659,934 on the disposal of Midwest.

8. DISCONTINUED    Condensed financial information for Midwest, which was       
OPERATIONS      discontinued, is as follows for the periods June 13, 1995 
                 (date of acquisition) through December 31, 1995 and January
           1, 1996 through March 31, 1996 (date of disposition).

                                                                [Download Table]
                                          June 13, 1995  
                     January 1, 1996        (Date of     
                     through March 31,     Acquisition)  
                       1996 (Date of        Through      
                       Disposition)     December 31, 1995
                     ------------------------------------
                                                         
Revenues                $2,690,730           $5,598,542  

Costs and expenses       2,710,095            5,457,135  
                        -------------------------------  
Net (loss)  income                                       
before income tax          (19,365)             141,407  

Income tax expense              -                48,000  
                        -------------------------------  

Net income (loss)       $  (19,365)          $   93,407  
                        ===============================  

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

--------------------------------------------------------------------------------

9. INCOME          The benefit for income taxes is as follows:                  
TAXES                                                                     
Continuing Operations                     
---------------------                     

                                                                [Download Table]

                                     1996        1995 
                                   -------------------
                                                      
Current                            $ 54,000   $106,000
Deferred                                 -      73,000
                                   -------------------

   Total continuing operations     $ 54,000   $179,000
                                   ===================

Discontinued Operations                   
-----------------------                   

                                                                [Download Table]

                                     1996        1995 
                                   -------------------
                                                      
Current                            $     -   $      - 
Deferred                                 -     227,000
                                   -------------------

   Total continuing operations     $     -   $ 227,000
                                   ===================

          The benefit for income taxes differs from the amount
        computed at the federal statutory rate as follows:

Continuing Operations                     
---------------------                     

                                                                [Download Table]

                                     1996        1995  
                                   ------------------- 
                                                       
Income tax benefit at federal                          
  statutory rates                  $333,000   $158,000 
State income taxes                   49,000     23,000 
Valuation allowance                (328,000)        -  
Other                                    -      (2,000)
                                   ------------------- 

   Total current income taxes      $ 54,000   $179,000 
                                   =================== 

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

--------------------------------------------------------------------------------

9. INCOME          Discontinued Operations                                      
TAXES           -----------------------                                   
CONTINUED                                                                 

                                                                [Download Table]

                                   1996            1995  
                                 ----------------------- 
                                                         
Income tax (expense) benefit                             
at federal statutory rates       $ (11,000)     $227,000 
State income taxes                  (4,000)       20,000 
Other                               15,000       (20,000)
                                 ----------------------- 

   Total                         $      -       $227,000 
                                 ======================= 

            Deferred income taxes have been established to reflect
               timing differences between financial reporting and income
           tax purposes. The primary differences are as follows:

                                                                [Download Table]

                                   1996            1995  
                                 ----------------------- 
                                                         
Condemnation sales               $      -       $300,000 
Discontinued operations                 -       (227,000)
Net operating loss carryforward   (328,000)      (73,000)
Valuation allowance                328,000            -  
                                 ----------------------- 

   Total                         $      -       $     -  
                                 ======================= 

          The Company has a net operating loss carryforward of
                 approximately $952,000, which expires in 2011.  The benefit
                of the net operating loss (NOL) carryforwards available to
            offset future taxes will be limited by the tax laws in
                effect at the time such NOL's can be utilized. Significant
               changes in the ownership of the Company or tax laws could
limit the amount of NOL benefit.          

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

--------------------------------------------------------------------------------

10. STOCK          The Company has a promissory note receivable at              
SUBSCRIPTION   December 31, 1996 in the amount of $3,633,159.  The note 
 RECEIVABLE     bears interest at the short-term  Federal Internal Revenue
                Service rate (6.77% at December 31, 1996). Interest is due
                  annually in July of each year with the principal balance due
                August 1, 2001.  The note is second by 1,285,912 shares of
the Company's common stock.               

11. CONTINGENCIES  The Company is aware of certain unasserted claims which      
                could result in claims in excess of amounts accrued in the
             financial statements. Management believes that any such
                  claim, if asserted, will not result in any adverse effect on
the financial position of the Company.    

         The Company is in the process of remediation of the
                  service station property.  It is not known if any additional
               costs over what the Company has accrued will be needed to
complete the remediation.                 

          The Company, in connection with the execution of the
                  stock purchase agreement, agreed to enter into an employment
                 agreement with the majority shareholder of the Company with
                 a salary not to exceed $200,000 per year. The agreement has
                not been entered into and no accrual has been made for the
salary at December 31, 1996.              

12. COMMITMENTS    The Company leases its office facility under a year          
               lease requiring monthly payments of $500 which expires in
1997.  Lease expense was $10,230 in 1996. 

13. SIGNIFICANT    The Company had land sales of $106,000 and $152,000 to       
CUSTOMERS      a significant customer in 1996 and 1995, respectively:   

14. STOCK OPTION   In 1994, the Company established a stock option plan         
  PLAN           wherein the five directors and the Company's president were
          each granted options to acquire 25,000 shares of the
              Company's stock at $2.50 per share.  The options vest as
                follows:  9,000 shares at the option date and 8,000 shares
in 1995 and 8,000 shares in 1996.         

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                       CONTINUED

--------------------------------------------------------------------------------

15. SUBSEQUENT     The Company filed with the Securities and Exchange           
EVENT          Commission in February 1997, documents to have the       
          shareholders of the Company consider and vote upon a
                  proposal to amend the Company's Articles of Incorporation to
        effect a reverse split of the Company's issued and
              outstanding stock on the basis that each 1,000 shares of
              common stock then outstanding will be converted into one
            share, at $3.35 per share prereverse-split price, with
                fractional shareholders given the option to either receive
                  cash in lieu of their resulting fractional share of purchase
                 additional fractional shares to round up to one whole share
following the reverse split.              

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UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES  
CONSOLIDATED SCHEDULE OF SUPPLEMENTARY INFORMATION ON OIL AND GAS OPERATIONS  

------------------------------------------------------------------------------- 

The information on the Company's oil and gas operations as shown in this        
schedule is based on the full-cost method of accounting and is presented in     
conformity with the disclosure requirements of Statement of Financial           
Accounting Standards NO. 69 "Disclosures about Oil and Gas Producing            
Activities."                                                                    

COSTS INCURRED IN OIL AND GAS PROPERTY ACQUISITION, 
EXPLORATION AND DEVELOPMENT ACTIVITIES  

                                                                [Download Table]


                                                                   DECEMBER 31,
                                                                       1996    
                                                                   ------------
                                                                               
Acquisition of proved properties                                   $          -
                                                                   ============

Exploration and affiliate costs                                    $          -
                                                                   ============

Development costs                                                  $          -
                                                                   ============

RESULTS OF OPERATIONS FOR PRODUCING ACTIVITIES  

                                                                [Download Table]


                                                                   DECEMBER 31, 
                                                                       1996     
                                                                   ------------ 
                                                                                
Royalty income                                                     $    153,051 

Production costs                                                              - 
Exploration costs                                                             - 
Depreciation, depletion, amoritization, and valuation provisions         (3,348)
                                                                   ------------ 
Results of operations from producing activities before taxes            149,703 

Income tax expense                                                      (51,000)
                                                                   ------------ 
Results of operations from producing activities (excluding                      
  corporate overhead and interest costs)                           $     98,703 

                                                                   ============ 

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                            UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                            CONSOLIDATED SCHEDULE OF SUPPLEMENTARY INFORMATION
                                                                     CONTINUED
------------------------------------------------------------------------------- 

CAPITALIZED COSTS RELATING TO OIL AND GAS PRODUCING ACTIVITIES  

                                                                [Download Table]


                                                                    YEAR ENDED  
                                                                   DECEMBER 31, 
                                                                       1996     
                                                                   ------------ 
                                                                                
Proved oil and gas properties                                      $     50,210 
Accumulated depreciation, depletion, amortization and                           
  valuation allowances                                             $    (44,382)
                                                                   ------------ 
     Net capitalized costs                                         $      5,828 
                                                                   ============ 

ESTIMATED QUANTITIES OF RESERVES (UNAUDITED)  

The estimated quantities of proved oil and gas reserves disclosed in the table  
below are based upon estimates prepared by American Energy Advisors, Inc.,      
petroleum engineers. Such estimates are inherently imprecise and may be subject 
to substantial revisions.                                                       

All quantities shown in the table are proved developed reserves and are located 
within the United States.                                                       

                                                                [Download Table]

                                                               YEAR ENDED      
                                                            DECEMBER 31, 1996  
                                                           ------------------- 
                                                            BARRELS      MCF   
                                                           ------------------- 
                                                                               
Proved oil and gas reserves:                                                   
     Balance at beginning of year                          $ 51,000   $488,000 
     Revisions of previous estimates                              -    (40,000)
     Improved recovery and acquisition of minerals in place       -          - 
     Extensions and discoveries                                   -          - 
     Production                                              (6,000)   (11,000)
                                                           ------------------- 
Balance at end of year                                     $ 45,000   $437,000 
                                                           =================== 

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                          UTAH RESOURCES INTERNATIONAL, INC., AND SUBSIDIARIES
                            CONSOLIDATED SCHEDULE OF SUPPLEMENTARY INFORMATION
                                                                     CONTINUED
------------------------------------------------------------------------------- 

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS  
RELATING TO PROVED OIL AND GAS RESERVES (UNAUDITED)   

                                                                [Download Table]


                                                                    YEAR ENDED  
                                                                   DECEMBER 31, 
                                                                       1996     
                                                                   ------------ 
                                                                                
Future cash in flows                                               $  1,830,000 
Future production and development costs                                 (70,000)
Future income tax expenses                                             (598,000)
                                                                   ------------ 
Future net cash flows                                                 1,162,000 

10% annual discount for estimated timing of cash flows                 (508,000)
                                                                   ------------ 
Standardized measure of discounted future net cash flows           $    654,000 
                                                                   ============ 

CHANGES RELATING TO STANDARDIZED MEASURE OF DISCOUNTED  
FUTURE NET CASH FLOWS (UNAUDITED)   

                                                                [Download Table]


                                                                    YEAR ENDED  
                                                                   DECEMBER 31, 
                                                                       1996     
                                                                   ------------ 
                                                                                
Sales, net of production costs                                     $   (153,000)
Net changes in prices                                                         - 
Acquisition and improved recover, less related costs                          - 
Revisions of previous quantity estimates                                (85,000)
Accretion of discount                                                    74,000 
Net change in income taxes                                               80,000 
                                                                   ------------ 
    Net change                                                     $    (84,000)
                                                                   ============ 

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10KSB/A’ Filing	Date	First	Last	Other Filings

	8/1/01	19
Filed as of:	11/13/97
Filed on:	11/12/97			10KSB/A
	4/4/97	3
For Period End:	12/31/96	2	23	10KSB, NT 10-K
	3/31/96	10	16	10QSB, 10QSB/A
	1/1/96	16
	12/31/95	2	16	10KSB, 10KSB/A
	6/13/95	10	16
				List all Filings

↑Top

Filing Submission 0000950137-97-003749 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Utah Resources International Inc – ‘10KSB/A’ for 12/31/96 – EX-13

On: Wednesday, 11/12/97 · As of: 11/13/97 · For: 12/31/96 · Accession #: 950137-97-3749 · File #: 0-09791

Previous ‘10KSB’: ‘10KSB/A’ on 11/12/97 for 12/13/95 · Next: ‘10KSB’ on 3/30/98 for 12/31/97 · Latest: ‘10KSB’ on 4/15/99 for 12/31/98

Amendment to Annual Report — Small Business — Form 10-KSBFiling Table of Contents

EX-13 — Annual Report

Dates Referenced Herein and Documents Incorporated by Reference

Amendment to Annual Report — Small Business — Form 10-KSB
Filing Table of Contents