<PAGE>
SECURITIES & EXCHANGE COMMISSION
WASHINGTON D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
FOR THE TRANSITION PERIOD FROM TO
---- ----
COMMISSION FILE NO. 1-9904
VANDERBILT GOLD CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 88-0224117
(State of incorporation) (I.R.S. employer identification no.)
4625 WYNN ROAD, SUITE 103, LAS VEGAS, NV 89103
(Address of principal offices) (Zip code)
Telephone: (702) 362-3152
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No .
---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PROCEEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by the court. Yes X No .
--- ---
As of November 10, 1997 there were 39,080,515 shares outstanding.
<PAGE>
VANDERBILT GOLD CORPORATION
Index
Page No
Item 1. Financial Statements
Consolidated Balance Sheet 3
Consolidated Statement of Operations 4-5
Consolidated Statement of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Part 11 - Other Information
Item 1. Legal Proceedings 8
Signatures 9
<PAGE>
VANDERBILT GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
IN THOUSANDS SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
ASSETS
Current Assets
Cash and cash equivalents $ - $ 8
Accounts receivable - Trade 2 2
Employee advances receivable 52 35
Due from related parties 1 1
Inventories 619 837
Prepaid and other assets 11 11
---------- --------
Total Current Assets 685 894
---------- --------
Property, Plant and Equipment 2,673 2,677
---------- --------
Total Assets $ 3,358 $ 3,571
---------- --------
---------- --------
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 1,387 $ 1,300
Accrued expenses 136 136
Accounts payable - Related parties 18 158
Accrued payroll 664 547
Notes payable - Other 12 3
Deferred revenue - Gold sales 95 95
Gold loan payable 38 38
---------- --------
Total Current Liabilities 2,350 2,277
---------- --------
Long Term Liabilities 45 45
---------- --------
Stockholder's Equity: (shares in 000's)
Capital stock (authorized 45,000,000; issued 377 343
37,747,823 in 1997 and 33,977,000 in 1996)
Other capital 25,631 25,313
Accumulated deficit (25,045) (24,407)
---------- --------
Stockholder's Equity 963 1,249
---------- --------
Total Liabilities and Equity $ 3,358 $ 3,571
---------- --------
---------- --------
<PAGE>
VANDERBILT GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
IN THOUSANDS (EXCEPT SHARE AMOUNTS)
1997 1996
---------- --------
Revenue from Sales:
Bullion sales $ - $ -
Other revenue - 32
---------- --------
Total Revenue from Sales - 32
---------- --------
Mining Expenses:
Mine maintenance costs 15 24
Depreciation, depletion and amortization 50 50
Inventory adjustment 218 -
Exploration costs 11 16
---------- --------
Total Mining Expenses 294 91
General & Administrative 345 291
---------- --------
Total Expenses 639 382
---------- --------
(Loss) From Operation (639) (350)
---------- --------
Other Income and Expense:
Debt cancellation income - 56
Dividend income - -
Interest expense - 1
---------- --------
Total Other Income and Expense - 55
Net (Loss) $ (639) $ (295)
---------- --------
---------- --------
Net loss per share $ 0.02 $ 0.01
---------- --------
---------- --------
Weighted average shares outstanding 37,300 34,033
---------- --------
---------- --------
<PAGE>
VANDERBILT GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
IN THOUSANDS (EXCEPT SHARE AMOUNTS)
1997 1996
---------- --------
Revenue from Sales:
Bullion sales $ - $ -
Other revenue - 2
---------- --------
Total Revenue from Sales - 2
---------- --------
Mining Expenses:
Mine maintenance costs 1 4
Depreciation, depletion and amortization 17 17
Inventory adjustment 218 -
Exploration costs 11 14
---------- --------
Total Mining Expenses 247 35
General & Administrative 133 98
---------- --------
Total Expenses 380 133
---------- --------
(Loss) From Operation (380) (131)
---------- --------
Other Income and Expense:
Dividend income - -
Interest expense - -
Debt Cancellation income - -
Gain (loss) fixed assets - -
Gain on joint venture sale - -
---------- --------
Total Other Income and Expense - -
---------- --------
Net (Loss) $ (380) $ (131)
---------- --------
---------- --------
Net loss per share $ 0.01 $ 0.003
---------- --------
---------- --------
Weighted average shares outstanding 37,300 34,282
---------- --------
---------- --------
<PAGE>
VANDERBILT GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED JUNE 30, 1997 AND 1996
IN THOUSANDS 1997 1996
------- -------
OPERATING ACTIVITIES:
Net (Loss) $(639) $(163)
Reconciliation to net cash provided (used) for operating
activities:
Depreciation, depletion and amortization 50 33
Receivables - trade - -
Receivables - related parties (17) 1
Inventories 218 -
Expenses paid with stock 256 -
Non-cash inventory adjustment (218) -
Prepaids and other assets - 4
Accounts payable and accrued liabilities 73 28
------- ------
Net cash used by operations (277) (97)
------- ------
INVESTING ACTIVITIES;
Additions to property, plant and equipment (14) (3)
------- ------
Net cash used for investing activities (14) (3)
------- ------
FINANCING ACTIVITIES
Proceeds from sale of stock 283 111
------- ------
Net cash provided by financing activities 283 111
------- ------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (8) 11
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 8 1
CASH AND EQUIVALENTS, END OF PERIOD $ - $ 12
------- ------
------- ------
Interest paid - -
Payment of expenses with stock 256 10
Purchase mineral property with stock - 131
<PAGE>
VANDERBILT GOLD CORPORATION
Notes to Consolidated Financial Statements
NOTE 1: INTERIM FINANCIAL STATEMENTS
The accompanying consolidated interim financial statements have not been
audited. In the opinion of the Company's management, the interim financial
statements include all adjustments necessary for the fair presentation of the
results for the interim periods. These adjustments are of a normal recurring
nature. The financial statements, prepared in accordance with the
regulations of the Securities and Exchange Commission (the "SEC"), should be
read in conjunction with the Company's 1995 Annual Report on Form 10-K.
Results of operations for the interim periods are not necessarily indicative
of results for the full year.
NOTE 2. PROPERTY, PLANT, EQUIPMENT AND MINING PROPERTIES - NET:
Property, plant, equipment and mining properties, accumulated depreciation
and amortization and range of estimated lives as of September 30, 1997 and
December 31, 1996 is as follows (in thousands):
Lives 1997 1996
----- ---- ----
Units of
Mining properties production $ 8,669 $ 8,631
Plant and equipment 5-10 1,095 1,086
------- ------
9,764 9,717
Less: Accumulated depreciation and
amortization (7,091) (7,040)
------- ------
Net property, plant and equipment $ 2,673 $ 2,677
------- ------
------- ------
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The company has focused its efforts on bringing the Las Coloradas mine into
production. Prior to April 1, 1997 the company had a carried interest in
development of the mine. Subsequent to that date the company is responsible for
funding its percentage of any cash required to complete development and commence
production.. Production from the mill has commenced at approximately 30 to 40
tons per day and will continued at this level while operating supplies were
available. Access to the mine with supplies is on hold due to road conditions
during the rainy season. Shipments of concentrates to the smelter will begin in
the near future pending road conditions. The company has executed agreements to
extend the option period of both the Rosarence agreement and the Las Coloradas
joint venture agreement to April 30, 1998. The extension to the Rosarence
agreement requires the company to enter into a exploration program expending
minimum of $100,000 by April 30, 1998, maintaining the La Sierra concession in
good standing with governmental agencies and make monthly payments of $3,000 per
month commencing September 1, 1997 until the purchase option is fulfilled on or
before April 30, 1998. The extension to the Las Coloradas joint venture
agreement requires the company to make cash requirements promptly and to make
monthly payments of $3,000 per month commencing September 1, 1997 until the
purchase option is fulfilled on or before April 30, 1998.
On October 3, 1997 the Company entered into a letter of intent with Nevada
Manhattan Mining Inc., a publicly traded company, for the sale of part interest
of the Morning Star Mine in San Bernardino County, California with the Company
retaining a fifteen percent net profits interest. The letter of intent
establishes a sixty-day due diligence period and is subject to the approval by
the Boards of Directors of both Companies.
The Company adjusted the carrying value of the gold in process inventory at the
Morning Star Mine to reflect current market value resulting in a write down of
$218,000.
RESULTS OF OPERATIONS:
Comparison of nine months ended September 30, 1997 to nine months ended
September 30, 1996.
The Company realized a net loss of $639,000 ($0.02 per share) for the nine
months ended September 30, 1997 which is $344,000 greater than the $295,000
($0.01 per share) net loss for the nine months ended September 30, 1996. These
quarterly losses reflect the fact that the Company was concentrating on
reclamation and remediation activities at the Morning Star Mine ("Mine") and
consolidating its property position in Mexico and the adjustment in carrying
value of the inventory located at the Morning Star Mine.
LIQUIDITY AND CAPITAL RESOURCES:
The Company's net working capital deficit increased by $282,000 over that of
December 31, 1996 of which $218,000 was a result of the inventory write down.
During the nine months ended September 30,1997 operating losses and additions to
property were funded primarily through issuance of stock for cash and property.
The company has sustained recurring losses from operations and has a significant
working capital deficit. Although the Company raised equity capital from
private placements in 1996 and the first nine months of 1997, there can be no
assurance of the Company's ability to continue as a going concern due to the
uncertainties regarding its ability to develop and attain profitable operations
and raise capital in the future.
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS.
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form 10-Q to be signed on its
behalf by the undersigned, thereunto duly authorized.
VANDERBILT GOLD CORPORATION
(Registrant)
Dated: November 18, 1997
by /s/ Keith Fegert
Keith Fegert
President and Chief
Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 55
<ALLOWANCES> 0
<INVENTORY> 619
<CURRENT-ASSETS> 685
<PP&E> 9764
<DEPRECIATION> 7091
<TOTAL-ASSETS> 3358
<CURRENT-LIABILITIES> 2350
<BONDS> 0
0
0
<COMMON> 377
<OTHER-SE> 625
<TOTAL-LIABILITY-AND-EQUITY> 3358
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 294
<TOTAL-COSTS> 294
<OTHER-EXPENSES> 345
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (639)
<INCOME-TAX> 0
<INCOME-CONTINUING> (639)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (639)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> 0
</TABLE>
