<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from:
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Commission file number 333-3074
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TURTLEBACK MOUNTAIN GOLD CO., INC.
(Exact name of Registrant as specified in its charter.)
ARIZONA 86-0790266
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
528 Fon du Lac Drive
East Peoria, Illinois 61611
(Address of principal executive offices including zip code.)
(309) 699-8725
(Registrant's telephone number, including area code.)
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
Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.
YES x NO
The number of shares outstanding of the Registrant's Common Stock,
$.00001 par value per share, at September 30, 1997 was 898,000,000
shares.
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<PAGE> 2
PART I
ITEM 1. FINANCIAL STATEMENTS.
TURTLEBACK MOUNTAIN GOLD CO. INC.
FINANCIAL INFORMATION
PAGE
INDEX NUMBER
Accountants' Report F-1
Balance Sheet as September 30, 1997 and
December 31, 1996 F-2
Statement of Loss and accumulated deficit
for the period from inception (March 22, 1995)
through September 30, 1997 F-3
Statement of Changes in Stockholders' Equity
for the period from inception (March 22, 1995)
through September 30, 1997 F-4
Statement of Cash Flows for the period from
inception (March 22, 1995) through
September 30, 1997 F-5
Notes to Financial Statements F6-F7
<PAGE> 3
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Turtleback Mountain Gold Co., Inc.
We have audited the accompanying balance sheet of Turtleback Mountain
Gold Co., Inc. (A Development Stage Company) as of December 31, 1996,
and the related statements of operations, changes in stockholders'
equity and cash flows for the period ended December 31, 1996. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Turtleback Mountain Gold Co., Inc. (A Development Stage Company) at
December 31, 1996, and the results of its operations, changes in
stockholders' equity and its cash flows for the period ended December
31, 1996, in conformity with generally accepted accounting
principles.
We have not audited the balance sheet as of September 30, 1997, or
the related statements of loss and accumulated deficit and cash flows
for the nine months ended September 30, 1997, and accordingly, do not
express an opinion or any other form of assurance on them.
Robert Moe & Associates, P.S.
Certified Public Accountants
Spokane, Washington
February 21, 1997
F-1
<PAGE> 4
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
BALANCE SHEET
September 30, 1997 and December 31, 1996
ASSETS
<TABLE>
<CAPTION> 09-30-97
(Unaudited) 1996
<S> <C> <C>
CURRENT ASSETS
Cash $ 1,767 $ 3,536
Accounts receivable
-------- ---------
Total current assets 1,767 3,536
OTHER ASSETS
Organization costs (net of $137
amortization 548 548
Mining claims 79,076 79,076
-------- ---------
$ 81,391 $ 83,160
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 40,400 $ 11,000
-------- --------
OTHER CURRENT LIABILITIES
Baragan Mountain (accrued
Royalty Fee) 50,000 0
-------- ---------
STOCKHOLDERS' EQUITY
Common stock - $.00001 par value,
3,000,000,000 shares authorized,
898,000,000 shares issued 8,980 8,980
Preferred Stock - $.00001 par value,
400,000,000 shares authorized, 0
shares issued -- --
Additional paid in capital 77,708 77,708
-------- --------
86,688 86,688
Deficit accumulated during the
development stage (95,698) (14,528)
-------- --------
Total Stockholders' Equity (9,009) 72,160
-------- --------
$ 81,391 $ 83,160
======== ========
</TABLE>
See accompanying notes to financial statements
F-2
<PAGE> 5
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
for the period from inception (March 22, 1995)
through September 30, 1997
<TABLE>
<CAPTION>
Cumulative
during
development
Three Nine stage from
Months Months Inception inception
Ended Ended (3-22-95) (3-22-95)
09-30-97 09-30-97 through through
(Unaudited) (Unaudited) 12-31-96 09-30-97
<S> <C> <C> <C> <C>
INCOME $ -- $ -- $ 383 $ 383
OPERATING EXPENSES 66,331 81,168 14,911 96,079
-------- --------- --------- ---------
NET INCOME (LOSS) $(66,331) $ (81,168) $ (14,528) $ (95,696)
======== ========= ========= =========
NET INCOME PER
SHARE $ NIL $ NIL $ NIL $ NIL
======== ========= ======== =========
</TABLE>
The Company is in the development stage and has not commenced
operations.
See accompanying notes to financial statements
F-3
<PAGE> 6
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
March 22, 1995 (Inception) through September 30, 1997
<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid-in Earnings
Shares Amount Capital (Deficit)
<S> <C> <C> <C> <C>
BALANCE
Inception March 22, 1995 -- $ -- $ -- $ --
ADD:
Sale of 188,000,000 shares
of common stock for
$44,450 cash 188,000,000 1,880 42,570
Sale of 310,000,000 shares
of common stock for mining
claims at a value of
$13,000 310,000,000 3,100 9,900
Net loss for the period (10,094)
----------- ------- --------- --------
BALANCE, December 31, 1995 498,000,000 4,980 52,470 (10,094)
ADD:
Sale of 400,000,000
shares of common stock
for mining claims at a
value of $66,076 400,000,000 4,000 62,076
Deferred registration costs
charged to paid-in-capital (36,838)
Net loss for 1996 (4,434)
----------- ------- --------- --------
Balance, December 31, 1996 898,000,000 8,980 77,708 (14,528)
Net loss for the nine
months ended September 30,
1997 (Unaudited) (81,168)
----------- ------- -------- --------
BALANCE, September 30, 1997
(Unaudited) 898,000,000 $ 8,980 $ 77,708 $(95,696)
=========== ======= ======== ========
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE> 7
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for the period from inception (March 22, 1995)
through September 30, 1997
<TABLE>
<CAPTION> Cumulative
during
development
Three Nine stage from
Months Months Inception inception
Ended Ended (3-22-95) (03-22-95)
09-30-97 09-30-97 through through
(Unaudited) (Unaudited) 12-31-96 09-30-97
<S> <C> <C> <C> <C>
CASH FLOWS PROVIDED (USED)
IN OPERATIONS
Net loss for the period $ (66,331) $ (81,168) $ (14,528) $ (95,696)
Noncash expense included:
Amortization of
organization costs -- 137 137
(Increase) decrease
in accounts receivable -- -- -- --
Increase in accounts payable 67,600 79,400 11,000 90,400
-------- --------- --------- ---------
1,269 (1,768) (3,391) (5,296)
-------- --------- --------- ---------
CASH FLOWS PROVIDED (USED) IN
INVESTING ACTIVITIES -- -- -- --
-------- --------- --------- ---------
CASH FLOWS PROVIDED (USED) IN
FINANCING ACTIVITIES
Proceeds from sale of stock -- -- 44,450 44,450
Payment of deferred registration
and organization costs -- -- (37,523) (37,523)
-------- --------- --------- ---------
-- -- 6,927 6,927
-------- --------- --------- ---------
NET INCREASE (DECREASE)
IN CASH 1,269 (3,037) 3,536 1,768
CASH BEGINNING OF PERIOD 499 3,536 -- --
-------- --------- --------- ---------
CASH END OF PERIOD $ 1,768 $ 1,768 $ 3,536 $ 1,768
======== ======== ========= =========
</TABLE>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ -0- $ -0- $ -0- $ -0-
Income taxes $ -0- $ -0- $ -0- $ -0-
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES
Mining claims were transferred to the Company during 1995, in exchange for
310,000,000 shares of common stock and is reflected in the balance sheet
at the transferor cost of $13,000. The mining claims were appraised in
October 1986 for an amount that exceeds the value reflected in the balance
sheet by Marston & Marston, Inc. (engineers to the mining industry).
Mining claims were transferred to the Company during 1996 in exchange
for 400,000,000 shares of common stock and is reflected in the balance
sheet at the transferor cost of $66,076.
See accompanying notes to financial statements
F-5
<PAGE> 8
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization: The Turtleback Mountain Gold Co., Inc. was
incorporated on March 22, 1995, under the laws of the State of
Arizona. The Company has adopted a year ending on December 31.
The Company was organized to use the limited funding it obtained from
its original shareholders for organizational matters and preparation
of an offering. The Company exchanged stock for mining claims.
Because of the speculative nature of the Company, there are
significant risks which are summarized as follows:
Newly formed company with no operating history and minimal
assets.
Limited funds available for acquisition.
Management is inexperienced and offers limited time commitment.
Conflict-of-interest, as all employees have other part-time or
full-time employment.
The Company is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7.
There have been no operations since incorporation.
Summary of Significant Accounting Principles: Organization costs
will be amortized over sixty (60) months beginning January 1, 1996.
Mining claims transferred to the Company were recorded at the
transferor cost basis.
Mining claims are reviewed annually by management for continued
valuation or impairment. Management will consider the estimated
undiscounted future cash flows and write off claims abandoned or
impaired. Management elected to adopt Financial Accounting Standards
No. 121 effective January 1, 1996. The adoption did not impact the
financial statements at December 31, 1995.
F-6
<PAGE> 9
TURTLEBACK MOUNTAIN GOLD CO., INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
2. STOCKHOLDERS' EQUITY
Incorporation shares: Upon incorporation, the Company had a total of
498,000,000 shares subscribed.
Public stock offering: On November 16, 1996, the Company issued four
hundred million (400,000,000) units in exchange for one hundred
twenty eight (128) mining claims located in La Paz, Maricopa, and
Yuma counties, Arizona. Each Unit consists of one share of Common
Stock; one warrant to purchase one share of Common Stock at an
exercised price of $0.01 per warrant ("Class A Warrants"); and, one
warrant to purchase one share of Common Stock at an exercise price of
$0.02 per warrant ("Class B Warrants"). The Warrants may be redeemed
by the Company at any time upon thirty (30) days written notice to
the holders thereof at redemption price of $0.00001 per warrant. The
Warrants are immediately detachable and separately tradable. The
Warrants are exercisable up to five (5) years from the effective
date of the offering unless called sooner.
3. EMPLOYEES
The Company currently has no full-time employees.
4. MINING CLAIMS
Eight mining claims were transferred to the Company on June 30, 1995
by "Quitclaim Deed" in exchange for 310,000,000 shares of common
stock. The mining claims are reflected in the balance sheet at the
transferor cost of $13,000.
One hundred twenty-eight mining claims were transferred to the
Company on November 16, 1996 by "Quitclaim Deed" in exchange for
400,000,000 shares of common stock. The mining claims are reflected
in the balance sheet at the transferor cost of $66,076.
The Four (4) Red Raven II claims purchased from Maxam Gold
Corporation has a Royalty Fee clause attached to them. The royalty
fee is Five (5) percent of the net income from operations on the
claims or $50,000.00 annually (which ever is greater) starting July
1, 1997.
F-7
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company is considered to be in the development stage as
defined in the Statement of Financial Accounting Standards No. 7.
There have been no operations since incorporation.
Liquidity and Capital Resources
The Company sold 498,000,000 shares of its Common Stock to
nineteen persons and two corporations for $44,450 in cash and
property. The cash has been used for organizational matters.
Eight mining claims were transferred to the Company on June 30,
1995 by "Quitclaim Deed" in exchange for 310,000,000 shares of common
stock. The mining claims are reflected in the balance sheet at the
transferor cost of $13,000.
One hundred twenty-eight mining claims were transferred to the
Company on November 16, 1996 by "Quitclaim Deed" in exchange for
400,000,000 shares of common stock. The mining claims are reflected
in the balance sheet at the transferor cost of $66,076.
The Company plans to hire a person to be the President and Chief
Executive Officer and to assume the normal duties of that position.
The President will be responsible for all reporting, budgeting,
planning and operations of the Company following the Board of
Directors' guidance and approval of the Plan of Operations and annual
budget.
The Company plans on developing a program to evaluate the
mineral content of certain claims to determine the economic value of
the claim. This will be done by a controlled plan of drilling and
trenching for samples along with laboratory testing and assaying the
samples for content. Estimated cost of this program is $690,320.00.
The Company must obtain additional capital in order to fully
develop its claims. The Company intends to raise additional capital
in the future through loans or the sale of common stock. On August
1, 1997, the Company established a line of credit for one million
($1,000,000) dollars with Phoenix International Mining, Inc. (a
principle stockholder), with interest to be at one percent (1%) per
month of the outstanding balance. The Company has no operating
history.
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Response: None
ITEM 2. CHANGES IN SECURITIES
Response: None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Response: None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Response: None
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated this 12th day of November, 1997.
TURTLEBACK MOUNTAIN GOLD CO., INC.
(the "Registrant")
BY: /s/ Dale L. Runyon,
Secretary/Treasurer, Chief Financial
Officer and, a member of the Board of
Director
<PAGE> 13
EXHIBIT INDEX
Exhibit
No. Description
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at September 30, 1997 (Unaudited) and
the Statement of Income for the Nine Months ended September 30, 1997
(Unaudited) and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<CASH> 1,768
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,768
<PP&E> 79,624
<DEPRECIATION> 0
<TOTAL-ASSETS> 81,391
<CURRENT-LIABILITIES> 90,400
<BONDS> 0
0
0
<COMMON> 8,980
<OTHER-SE> (9,009)
<TOTAL-LIABILITY-AND-EQUITY> 81,391
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 66,331
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (81,168)
<INCOME-TAX> 0
<INCOME-CONTINUING> (81,168)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (81,168)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
