<PAGE>
SECURITIES & EXCHANGE COMMISSION
WASHINGTON D. C. 20549
FORM 1O-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
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 209, 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 March 31, 1998 there were 40,929,754 shares outstanding.
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VANDERBILT GOLD CORPORATION
Index
<TABLE>
<CAPTION>
Page No
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet 3
Consolidated Statement of Operations 4
Consolidated Statement of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
Part 11 - Other Information
Item 1. Legal Proceedings 8
Signatures 9
</TABLE>
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VANDERBILT GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 31, 1998 AND DECEMBER 31, 1997
<TABLE>
<CAPTION>
IN THOUSANDS MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 0 $ 1
Accounts receivable - Trade 2 2
Employee advances receivable 104 104
Due from related parties - 1
Inventories 619 619
Prepaid and other assets 10 11
----------- ------------
Total Current Assets 735 738
----------- ------------
Property, Plant and Equipment 2,631 2,647
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Total Assets $ 3,366 $ 3,385
----------- ------------
----------- ------------
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 1,380 $ 1,319
Accrued expenses 136 136
Accounts payable - Related parties 49 50
Accrued payroll 703 703
Notes payable - Other 17 12
Deferred revenue - Gold sales 45 45
Gold loan payable 38 38
----------- ------------
Total Current Liabilities 2,368 2,303
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Long Term Liabilities 45 45
----------- ------------
Stockholder's Equity: (shares in 000's)
Capital stock (authorized 45,000,000;
40,929,754 issued in 1998 and
40,842,370 in 1997) 409 408
Other capital 25,791 25,767
Accumulated deficit (25,247) (25,138)
----------- ------------
Stockholder's Equity 953 1,037
----------- ------------
Total Liabilities and Equity $ 3,366 $ 3,385
----------- ------------
----------- ------------
</TABLE>
<PAGE>
VANDERBILT GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
IN THOUSANDS (EXCEPT SHARE AMOUNTS)
1998 1997
-------- ---------
<S> <C> <C>
Revenue from Sales:
Bullion sales $ - $ -
Other revenue - -
-------- ---------
Total Revenue from Sales - -
-------- ---------
Mining Expenses:
Mine maintenance costs 7 12
Depreciation, depletion and amortization 17 17
Exploration costs - -
-------- ---------
Total Mining Expenses 24 29
General & Administrative 85 125
-------- ---------
Total Expenses 109 154
-------- ---------
(Loss) From Operation (109) (154)
-------- ---------
Other Income and Expense:
Dividend income -
Interest expense - -
-------- ---------
Total Other Income and Expense - -
-------- ---------
Net Income $ (109) $ (154)
-------- ---------
-------- ---------
Net loss per share $0.003 $0.004
------ ------
------ ------
Weighted average shares outstanding 40,886 36,137
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------ ------
</TABLE>
<PAGE>
VANDERBILT GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
IN THOUSANDS 1998 1997
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net (Loss) $ (109) $ (154)
Reconciliation to net cash provided (used) for
operating activities:
Depreciation, depletion and amortization 17 17
Receivables - trade - -
Receivables - related parties 1 3
Inventories - -
Prepaids and other assets (1) 1
Expenses paid with stock - 146
Accounts payable and accrued liabilities 65 (56)
--------- ---------
Net cash used by operations (27) (43)
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INVESTING ACTIVITIES;
Additions to property, plant and equipment (-) (-)
--------- ---------
Net cash used for investing activities (-) (-)
--------- ---------
FINANCING ACTIVITIES
Proceeds from sale of stock 26 44
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Net cash provided by financing activities 26 44
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NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (1) 1
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 1 1
CASH AND EQUIVALENTS, END OF PERIOD $ 0 $ 2
--------- ---------
--------- ---------
Interest paid - -
</TABLE>
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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 1997 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 March 31, 1998 and
December 31, 1997 are as follows (in thousands):
<TABLE>
<CAPTION>
Lives 1998 1997
------- -------- ---------
<S> <C> <C> <C>
Units of
Mining properties production $ 8,668 $ 8,668
Plant and equipment 5-10 1,085 1,085
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9,753 9,753
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Less: Accumulated depreciation and amortization (7,122) (7,106)
--------- ---------
Net property, plant and equipment $ 2,631 $ 2,647
--------- ---------
--------- ---------
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The company has focused its efforts on negotiations with Cosalteca regarding the
Las Coloradas joint venture and the La Sierra concession; acquisitions of other
properties in Mexico with the capabilities of near term production. The Company
is negotiating with two Companies interested in purchasing or entering into a
joint venture to put the Morning Star Mine into production. The Company is
continuing its efforts to comply with governmental agencies requirements related
to the mine.
The company has ceased all payments to Cosalteca awaiting the outcome of the
negotiations. The negotiations are pertaining to extending the option period
for both Rosarence and the company's interest in the Las Coloradas joint
venture and increasing the company's interest in the Las Coloradas mine. If
the company is not successful in these negotiations the company may elect or
be forced to relinquish its interest in these properties.
The company is negotiating with another landholder in Mexico on the
acquisition of a property with near term production capabilities. Completion
of the negotiations and work on the site is expected in the second quarter of
1998.
The company is responding to the State of California regarding a penalty
assessed by the California Department of Conservation on the Morning Star
Mine. The company has completed a report required by the California Water
Board and is negotiating a settlement on penalties for late filing of the
report with the Board.
RESULTS OF OPERATIONS:
Comparison of three months ended March 31, 1998 to three months ended March
31, 1997:
The Company realized a net loss of $109,000 ($0.003 per share) for the three
months ended March 31, 1998 which is $45,000 less than the$154,000 ($0.004
per share) net loss for the three months ended March 31, 1997. 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
LIQUIDITY AND CAPITAL RESOURCES:
The Company's net working capital deficit increased by $68,000 over that of
December 31, 1998. During the three months ended March 31,1998 operating
losses were funded primarily through issuance of stock for cash.
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 1997 and the first quarter of 1998, due to
the uncertainties regarding its ability to develop and attain profitable
operations and raise capital in the future, there can be no assurance of the
Company's ability to continue as a going concern.
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS. None
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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: May 15, 1998
by /s/ Keith Fegert
Keith Fegert
President and Chief
Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 106
<ALLOWANCES> 0
<INVENTORY> 619
<CURRENT-ASSETS> 735
<PP&E> 9753
<DEPRECIATION> 7122
<TOTAL-ASSETS> 3366
<CURRENT-LIABILITIES> 2368
<BONDS> 0
0
0
<COMMON> 409
<OTHER-SE> 544
<TOTAL-LIABILITY-AND-EQUITY> 3366
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 24
<TOTAL-COSTS> 24
<OTHER-EXPENSES> 85
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (109)
<INCOME-TAX> 0
<INCOME-CONTINUING> (109)
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> (109)
<EPS-PRIMARY> (.003)
<EPS-DILUTED> (.003)
</TABLE>
