SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): DECEMBER 8, 2000
COLUMBUS NETWORKS CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 0-27953 98-0187538
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
#100 - 1295 STEVENS ROAD, KELOWNA, BRITISH COLUMBIA, CANADA V1Z 2S9
(Address of principal executive offices) (Zip Code)
(250) 769-8099
Registrant's telephone number, including area code
GOLDEN RIVER RESOURCES INC.
2420 PANDOSY STREET, KELOWNA, BRITISH COLUMBIA, CANADA V1Y 1T8
(Former name or former address, if changed since last report)
Exhibit index on consecutive page 3
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
See the disclosure in Item 5 below.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
See the disclosure in Item 5 below.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not Applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not Applicable.
ITEM 5. OTHER EVENTS
On December 8, 2000, the registrant closed its acquisition of Columbus
Networks Corporation, a privately-held British Columbia corporation
("Columbus"), pursuant to the terms of a Share Exchange Agreement dated
October 30, 2000 (the "Share Exchange Agreement"). Columbus is now a
wholly-owned subsidiary of the registrant.
In connection with the acquisition, the registrant effected a 1-for-4
reverse stock split of its outstanding shares of common stock and
changed its name to Columbus Networks Corporation. The registrant's new
CUSIP number is 199463 10 0 and its new trading symbol is CLMK.
The registrant has issued 14,955,475 (post-reverse split) shares of its
common stock to the shareholders of Columbus. There are now 20,859,250
shares of common stock of the registrant issued and outstanding.
The registrant's management now consists of designees from Columbus,
with the exception of Mr. Watts:
Roger Watts - Chairman of the Board of Directors
Dan Collins - President and CEO and Director
Scott McLean - Vice President and CFO and Director
Greg Shannon - Corporate Secretary and Director
Mervyn Weiss - Director
Vern Berg - Director
2
<PAGE>
Effective December 11, 2000, the executive offices of the registrant
will be located at the facilities of Columbus in Kelowna, British
Columbia.
Columbus provides sector-specific electronic recruitment services to
educators, school districts, universities and private educational
employers in the education systems of Canada and United States.
Services include on-line resume services, job postings, a bookstore,
electronic application forms as well as other related services that
meet the needs of the client. Columbus intends to expand the scope of
services within their education networks by adding unique entry portals
for students, teachers and employers. These portals will be distinctive
storefronts to other resources, services and features that will benefit
both the employer and educators. Columbus also operates the Global ESL
Network that provides recruitment services to ESL (English as a Second
Language) institutes around the world.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired: The audited
statements for the year ended June 30, 2000, are filed
herewith. The unaudited statements for the three months ended
September 30, 2000, will be filed by amendment.
(b) Pro forma financial information: Filed herewith
(c) Exhibits
<TABLE>
<CAPTION>
REGULATION CONSECUTIVE
S-K NUMBER DOCUMENT PAGE NUMBER
<S> <C> <C>
2.1 Share Exchange Agreement dated October 30, 2000 (1) N/A
3.1 Certificate of Amendment to Articles of Incorporation 24
--------------------
(1) Incorporated by reference to the registrant's definitive
proxy statement filed November 7, 2000.
</TABLE>
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
3
<PAGE>
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 hereunto duly authorized.
COLUMBUS NETWORKS CORPORATION
December 8, 2000 By: /S/ DAN COLLINS
-------------------------------------
Dan Collins, President and CEO
4
<PAGE>
FINANCIAL STATEMENTS OF
COLUMBUS NETWORKS CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
YEAR ENDED JUNE 30, 2000
5
<PAGE>
AUITORS' REPORT TO THE STOCKHOLDERS
We have audited the accompanying balance sheet of Columbus Networks Corporation
(a development stage enterprise) as at June 30, 2000 and the related statements
of operations, stockholders' equity and comprehensive income and cash flows for
the year then ended. 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 auditing standards generally accepted
in the United States of America. 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 audit provides 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 the Company as at June 30, 2000
and the results of its operations and its cash flows for the year then ended, in
accordance with accounting principles generally accepted in the United States of
America.
/s/ KPMG LLP
Kelowna, Canada
September 26, 2000
6
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Balance Sheet
June 30, 2000
$ United States
<TABLE>
<CAPTION>
ASSETS
Current assets
<S> <C>
Cash $ 31,986
Accounts receivable 7,239
Prepaid expenses and deposits 5,825
----------
45,050
Fixed assets (note 3) 51,271
Website development (note 4) 19,790
----------
$ 116,111
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 34,459
Unearned revenue 25,115
Payable to directors 825
----------
60,399
Subscription for shares (note 5(b)) 1,689
Stockholders' Equity
Capital stock (note 5) 293,178
Deficit accumulated during the development stage (241,191)
Accumulated other comprehensive income
Cumulative translation adjustment 2,036
----------
54,023
Commitment (note 6)
Subsequent events (note 7)
$ 116,111
==========
</TABLE>
See accompanying notes to financial statements.
Approved by the Board:
, Director
---------------------------------------------------------
, Director
---------------------------------------------------------
7
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Statement of Operations
$ United States
<TABLE>
<CAPTION>
Predecessor Business (note 2(a))
Year ended Period from Year ended
June 30, 2000 July 1, 1999 to June 30, 1999
December 15, 1999
(unaudited) (unaudited)
<S> <C> <C> <C>
Fee revenue $ 38,151 $ 53,850 $ 83,217
Interest and other income 1,796 - -
----------- ---------- ------------
39,947 53,850 83,217
Expenses
Advertising and promotion 17,280 893 1,527
Amortization - fixed assets 5,208 1,071 1,837
Amortization- website development 486 - -
Automotive 9,808 5,727 7,678
Bank charges 766 125 318
Conferences 7,906 - -
Inducement fee 18,996 - -
Insurance 1,224 - -
Internet fees 15,238 884 2,001
Licences, fees and dues 3,049 - -
Office 8,644 2,039 4,267
Professional fees 18,858 733 993
Rent 12,470 2,088 2,384
Repairs and maintenance 1,612 - -
Telephone 5,049 2,697 2,342
Training 1,022 - -
Travel 13,866 2,090 7,621
Wages and benefits 137,098 - -
Website development 2,558 16,488 20,990
----------- ---------- ------------
281,138 34,835 51,958
(Loss) net income $ (241,191) $ 19,015 $ 31,259
=========== ========== ============
Weighted average number of shares outstanding 3,732,500
Loss per share (note 2(d)) $ (0.06)
===========
See accompanying notes to financial statements.
</TABLE>
8
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Statement of Stockholders' Equity and Comprehensive Income
Year ended June 30, 2000
$ United States
<TABLE>
<CAPTION>
Deficit
Accumulated Accumulated
During the Other
CAPITAL STOCK Development Comprehensive
--------------------------
Shares Amount Stage Income Total
CLASS A SHARES
<S> <C> <C> <C> <C> <C>
Shares issued for acquisition
of assets on December 15,
1999 (note 1) 4,500,000 $ 1 $ - $ - $ 1
Shares issued for cash at Cdn
$0.25 (US $0.17) per share
on January 28, 2000 1,800,000 303,930 - - 303,930
Shares issued for cash at Cdn
$0.25 (US $0.17) per share
on June 16, 2000 80,000 13,508 - - 13,508
Share issue costs - (24,262) - - (24,262)
--------- ---------- ---------- ------ ----------
6,380,000 293,177 - - 293,177
CLASS B SHARES
Shares issued for acquisition
of assets on December 15,
1999 (note 1) 1,000,000 1 - - 1
--------- ---------- ---------- ------ ----------
7,380,000 293,178 - - 293,178
Comprehensive income
Loss - - (241,191) - (241,191)
Foreign currency
translation adjustment - - - 2,036 2,036
--------- ---------- ---------- ------ ----------
Comprehensive income (loss) - - (241,191) 2,036 (239,155)
--------- ---------- ---------- ------ ----------
Balance, June 30, 2000 7,380,000 $ 293,178 $(241,191) $2,036 $ 54,023
========= ========== ========== ====== ==========
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Statement of Cash Flows
Years ended June 30, 2000 and 1999
$ United States
<TABLE>
<CAPTION>
Predecessor Business (note 2(a))
Year ended Period from Year ended
June 30, 2000 July 1, 1999 to June 30, 1999
December 15, 1999
(unaudited) (unaudited)
<S> <C> <C> <C>
Cash provided by (used in):
Operating activities
Cash receipts from customers $ 44,269 $ 48,894 $ 73,129
Cash receipts from interest and other income 1,796 - -
Cash paid to suppliers and employees (235,052) (34,059) (51,759)
----------- ---------- ------------
(188,987) 14,835 21,370
Financing activities
Increase in payable to directors 825 - -
Issuance of shares 293,176 - -
Subscription for shares 1,689 - -
Partners' draws - (4,614) (29,399)
Bank indebtedness - (364) 364
----------- ---------- ------------
295,690 (4,978) (29,035)
Investing activities
Purchase of fixed assets (56,477) (9,857) (1,578)
Website development costs capitalized (20,276) - -
----------- ---------- ------------
(76,753) (9,857) (1,578)
Foreign currency translation adjustment 2,036 - -
----------- ---------- ------------
Increase (decrease) in cash 31,986 - (9,243)
Cash, beginning of year - - 9,243
----------- ---------- ------------
Cash, end of year $ 31,986 $ - $ -
=========== ========== ============
See accompanying notes to financial statements.
Supplementary information
Interest paid $ - $ - $ -
Income taxes paid - - -
Non-cash financing and investing activities
Common shares issued for fixed assets 2 - -
=========== ========== ============
</TABLE>
10
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Notes to Financial Statements
Year ended June 30, 2000
$ United States
1. OPERATIONS:
The Company was incorporated under the laws of the Province of British
Columbia on March 3, 1999 and was inactive until December 1, 1999. On
December 15, 1999 the Company purchased the undernoted assets from a
partnership, the partners of which are now directors of the Company and
currently own 4,265,000 class A common shares and 1,000,000 class B common
shares of the Company. As the controlling partner of the partnership
acquired a controlling interest in the Company on this transaction and
control of the underlying assets has not changed on the acquisition, this
transaction is accounted for as a common control transaction. Accordingly,
the purchase of the assets has been recorded in the accounts of the Company
at an amount equal to the net book value in the accounts of the partnership
at the transaction date.
<TABLE>
<CAPTION>
<S> <C>
Assets Purchased
Fixed assets $17,783
=======
Consideration Paid
Non-interest bearing demand promissory note $17,781
Issuance of 4,500,000 class A common shares 1
Issuance of 1,000,000 class B common shares 1
-------
$17,783
=======
</TABLE>
The promissory note was repaid during the year ended June 30, 2000.
The major activity of the Company is developing electronic recruitment
websites including the Education Canada Network.
2. ACCOUNTING POLICIES:
(a) Basis of Presentation
In accordance with the rules and regulations of the Securities and
Exchange Commission, the partnership described in note 1 is considered
to be a predecessor entity as the Company's operations are a
continuation of the operation of the partnership. As such, the
predecessor entity's financial statements are required to be presented
in specified U.S. Securities filing documents. Accordingly, the
amounts presented for the period from July 1, 1999 to December 15,
1999 and for the year ended June 30, 1999 in the statements of
operations and cash flows are those of a predecessor partnership.
These amounts are unaudited, however, in the opinion of management,
all adjustments (consisting of normal recurring items) necessary for
the fair presentation of these unaudited amounts in conformity with
accounting principles generally accepted in the United States have
been made.
11
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Notes to Financial Statements
Year ended June 30, 2000
$ United States
2. ACCOUNTING POLICIES (CONTINUED):
(b) Translation of Financial Statements
The Company operates in Canada and its operations, and therefore its
functional currency, are conducted in Canadian currency.
These financial statements have been translated into United States
dollars. The method of translation applied is as follows:
i) Assets and liabilities are translated at the rate of exchange in
effect at the balance sheet date, being U.S. $1.00 per Cdn.
$1.4806.
ii) Revenue and expenses are translated at the exchange rate in
effect at the transaction date.
iii) The net adjustment arising from the translation is recorded as a
separate component of stockholders' equity called "cumulative
translation adjustment" which is included in "accumulated other
comprehensive income."
(c) Use of Estimates
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 disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(d) Loss Per Share
Loss per share has been calculated using the weighted average number
of common shares outstanding during the period.
(e) Fixed assets
Fixed assets are stated at cost. Amortization is provided using the
straight-line method at the annual rates set out in note 3.
(f) Website Development
Website development costs incurred in the planning stage are expensed
as incurred. The costs of application and infrastructure development
incurred subsequent to the preliminary project stage, and that have
received management approval for further development, and are
capitalized and amortized on the straight-line method over their
estimated useful life (estimated to be three years). Once developed,
operating costs are expensed as incurred.
12
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Notes to Financial Statements
Year ended June 30, 2000
$ United States
2. ACCOUNTING POLICIES (CONTINUED):
(g) Revenue recognition
Revenue earned in connection with website subscriptions is recognized
over the term of the subscription. Revenue received in advance of
reaching the recognition point is recorded as unearned revenue.
(h) Income taxes
The Company accounts for income taxes by the asset and liability
method. Under the asset and liability method, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and their respective tax bases, and
operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. Although the Company has
loss carryforwards available, no amount has been reflected on the
balance sheet for deferred income taxes as any deferred income tax
asset has been fully offset by a valuation allowance.
(i) Financial instruments
The fair values of cash, accounts receivable, accounts payable and
accrued liabilities and payable to directors approximate their
carrying values due to the relatively short periods to maturity of
these instruments. The maximum credit risk exposure for all financial
assets is the carrying amount of that asset.
(j) Accounting Standards Change
In June 1998 the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities."
Adoption of this statement is not expected to impact the Company's
results of operations or financial position as the Company has not, to
date, entered into any derivative contracts.
(k) Stock option plan
During the year the Company adopted a stock option plan whereby
directors, officers, employees and consultants can be granted the
right to subscribe for common shares of the Company. The maximum
number of shares subject to the plan and the exercise price shall be
determined by the directors, but shall be subject to the rules of any
stock exchange on which the common shares are then listed or other
regulatory body having jurisdiction. The vesting period and expiry
date of options shall be determined by the board of directors. As at
June 30, 2000 there are no options outstanding under the plan.
13
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Notes to Financial Statements
Year ended June 30, 2000
$ United States
2. ACCOUNTING POLICIES (CONTINUED):
(k) Stock option plan (continued)
The Company applies APB Opinion No. 25 in accounting for stock options
granted to employees whereby compensation cost is recorded only to the
extent that the market price exceeds the exercise price at the date of
grant. Options granted to non-employees are accounted for at their
fair value at the date of grant.
3. FIXED ASSETS:
<TABLE>
<CAPTION>
Accumulated Net Book
Rate Cost Amortization Value
<S> <C> <C> <C> <C>
Office furniture and equipment 20% $ 12,025 $ 801 $ 11,224
Computer equipment 33% 33,619 3,495 30,124
Computer software 33% 7,213 701 6,512
Leasehold improvements 20% 3,622 211 3,411
------------ ------------ ------------
$ 56,479 $ 5,208 $ 51,271
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
4. WEBSITE DEVELOPMENT:
<S> <C>
Capitalized costs $ 20,276
Accumulated amortization 486
------------
$ 19,790
============
</TABLE>
14
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Notes to Financial Statements
Year ended June 30, 2000
$ United States
5. CAPITAL STOCK:
a) Authorized:
100,000,000 Class A common shares with no par value
1,000,000 Class B common non-voting shares with no par value
1,000,000 Class C common non-voting shares with no par value
1,000,000 Class D common non-voting shares with no par value
1,000,000 Class E redeemable non-voting preferred shares with a par
value of $100 and a redemption value of $100 each
10,000,000 Class F redeemable, retractable non-voting preferred
shares with a par value of $0.01 each
10,000,000 Class G redeemable, retractable non-voting preferred
shares with a par value of $0.01 each
1,000,000 Class H redeemable, retractable non-voting preferred
shares with a par value of $0.01 and a redemption value of $100
each
The Class F and G shares shall only be issued as consideration for the
acquisition of property. The redemption value of the shares shall be
determined by formula at the time of issuance. The Class F and G
shares are only entitled to non-cumulative dividends as described
below unless the Company fails to redeem the shares at the request of
the holder(s). In this event, the Class F and G shares are entitled to
a 9% annual cumulative dividend based on the redemption amount of the
shares.
The class H shares are non-participating as to dividends unless the
Company fails to redeem the shares at the request of the holder(s). In
this event, the Class H shares are entitled to a 9% annual cumulative
dividend based on the redemption amount of the shares.
The Class A, B, C, D, E, F and G shares are entitled to dividends at
the discretion of the directors, but dividends shall not be declared
if doing so would reduce the value of the net assets of the Company
below the aggregate redemption amounts of the issued Class F,G and H
shares.
b) Subscription for shares:
During the year, the Company received a subscription for 10,000 Class
A common shares at CDN $0.25 (US $0.17) per share. The shares were
issued subsequent to June 30, 2000.
6. COMMITMENT:
The Company rents its premises under a lease expiring on October 31, 2001.
Future minimum annual lease payments over the remaining term of the lease
are:
2001 $ 25,384
2002 8,461
15
<PAGE>
COLUMBUS NETWORKS CORPORATION
(A Development Stage Enterprise)
Notes to Financial Statements
Year ended June 30, 2000
$ United States
7. SUBSEQUENT EVENTS:
a) On September 15, 2000 the Company entered into a letter of intent
which proposes that all of the shareholders of the Company will
exchange their common shares for approximately 70% of the common
shares of Golden River Resources Inc., the shares of which are listed
and posted for trading on the facilities of the over the counter
bulletin board market in the United States. The shares of Golden River
Resources Inc. received by the shareholders of the Company may be
subject to escrow. This proposed transaction is subject to both
shareholder and regulatory approval.
b) Subsequent to June 30, 2000, the Company issued 543,800 Class A common
shares for aggregate cash proceeds of $91,821.
c) On August 30, 2000, the Company issued 100,000 Class A common shares
in exchange for ownership of a website and associated domain names.
The fair value of the shares issued, aggregating $16,885, approximated
the fair value of the assets acquired.
d) Subsequent to June 30, 2000, the Company loaned $18,236 to the
President and two directors of the Company. The loans do not bear
interest, are unsecured and are demand in nature.
8. STATEMENT OF CASH FLOWS:
Cash flows from operating activities prepared under the indirect method are
as follows:
<TABLE>
<CAPTION>
Predecessor Business (note 2(a))
Year ended Period from Year ended
June 30, 2000 July 1, 1999 to June 30, 1999
December 15, 1999
(unaudited) (unaudited)
<S> <C> <C> <C>
(Loss) net income $ (241,191) $ 19,015 $ 31,259
Non-cash item:
Amortization 5,694 1,071 1,837
Accounts receivable (7,239) 4,545 1,512
Prepaid expenses and deposits (5,825) - -
Accounts payable and accrued liabilities 34,459 (295) (1,638)
Unearned revenue 25,115 (9,501) (11,600)
------------- ---------- ------------
$ (188,987) $ 14,835 $ 21,370
============= ========== ============
</TABLE>
16
<PAGE>
Unaudited Pro Forma Consolidated and
Combined Financial Information for
GOLDEN RIVER RESOURCES INC.
and subsidiaries
(A Development Stage Enterprise)
17
<PAGE>
GOLDEN RIVER RESOURCES INC.
and subsidiaries
Unaudited pro forma consolidated and combined financial information
The following unaudited pro forma consolidated and combined financial
information gives effect to the acquisition of Columbus Networks Corporation
("Columbus") by Golden River Resources Inc. ("Golden River"), effective November
30, 2000. Under the proposed terms, the Columbus stockholders will obtain
control of Golden River through the exchange of their shares of Columbus for
shares of Golden River. Accordingly, the acquisition of Columbus has been
accounted for in these unaudited pro forma consolidated and combined financial
statements by the purchase method as a reverse acquisition in accordance with
APB Opinion No. 16.
Under the purchase method of accounting for reverse acquisitions, the fair value
of the purchase consideration issued is allocated to the assets acquired and
liabilities assumed based on their estimated fair values. As Columbus, the
accounting acquirer, is a closely held private company with no quoted market
price for its shares, the purchase price has been estimated based on the fair
value of Golden River's net assets. Management has estimated that there is no
material difference between the book values and the fair values of Golden
River's net assets and, accordingly, the transaction has been recorded at the
net book value of Golden River's net assets at September 30, 2000.
The unaudited pro forma consolidated balance sheet as at September 30, 2000
gives effect to the acquisition as if it occurred on September 30, 2000. The
Golden River and Columbus balance sheet information was derived from their
unaudited September 30, 2000 balance sheets. The unaudited pro forma combined
statements of operations for the year ended June 30, 2000 and the three month
period ended September 30, 2000 give pro forma effect to the acquisition as if
the transaction was consummated as of July 1, 1999. The Golden River and
Columbus statement of operations information for the year ended June 30, 2000
was derived from their audited statements of operations for the year then ended.
The Golden River and Columbus statement of operations information for the three
month period ended September 30, 2000 was derived from their unaudited
statements of operations for the period then ended.
The unaudited pro forma consolidated and combined financial information has been
prepared by management and is not necessarily indicative of the consolidated
financial position or combined results of operations in future periods or the
results that actually would have been realized had Golden River and Columbus
been a combined company during the specified periods. The pro forma combined
statements of operations do not include any material non-recurring charges or
credits directly attributable to the transaction. The unaudited pro forma
consolidated and combined financial information, including the notes thereto,
should be read in conjunction with, the historical consolidated financial
statements of Golden River included in its June 30, 2000 Form 10-KSB filed
October 13, 2000 and its September 30, 2000 Form 10-QSB filed November 14, 2000
with the Securities and Exchange Commission and the historical financial
statements of Columbus attached to this Form 8K.
18
<PAGE>
GOLDEN RIVER RESOURCES INC.
(A Development Stage Enterprise)
Unaudited Pro Forma Consolidated Balance Sheet
September 30, 2000
$ United States
<TABLE>
<CAPTION>
===================================================================================================================
Historical Pro Forma
Golden River Columbus Adjustments Consolidated
(note 2)
-------------------------------------------------------------------------------------------------------------------
Assets
<S> <C> <C> <C> <C>
Current assets
Cash $ 9,532 $ 26,273 $ 500,000 (d) $ 535,805
Accounts receivable - 68,477 - 68,477
Receivable from directors - 18,758 - 18,758
Prepaid expenses and deposits 4,474 3,419 - 7,893
-------------------------------------------------------------------------------------------------------------------
14,006 116,927 500,000 630,933
Fixed assets 7,705 55,559 - 63,264
Website development - 48,407 - 48,407
-------------------------------------------------------------------------------------------------------------------
$ 21,711 $ 220,893 $ 500,000 $ 742,604
===================================================================================================================
Liabilities and Stockholders' Equity (Deficiency)
Current liabilities
Accounts payable and
accrued liabilities $ 137,146 49,795 - 186,941
Due to stockholders 10,577 - - 10,577
Debt 60,350 - - 60,350
Interim financing payable 75,000 - - 75,000
Unearned revenue - 127,759 - 127,759
-------------------------------------------------------------------------------------------------------------------
283,073 177,554 - 460,627
Subscription for shares 100,000 - - 100,000
Stockholders' Equity (Deficiency)
Capital stock 17,845 395,833 356,529 (a)
(356,529) (a)
1 (b)
(17,845) (c)
500,000 (d)
(192,000) (e)
(683,167) (f) 20,667
Additional paid in capital 1,983,262 - (1,983,262) (c)
192,000 (e)
683,167 (f) 875,167
Deficit accumulated during the
development stage (2,375,391) (355,181) (361,363) (b)
2,375,391 (c) (716,544)
Accumulated other comprehensive
income:
Cumulative translation adjustment 12,922 2,687 (12,922) (c) 2,687
-------------------------------------------------------------------------------------------------------------------
(361,362) 43,339 500,000 181,977
-------------------------------------------------------------------------------------------------------------------
$ 21,711 $ 220,893 $ 500,000 $ 742,604
===================================================================================================================
</TABLE>
See accompanying notes to financial information.
On behalf of the Board:
"ROGER D. WATTS" Director
--------------------------------------
"R. BRUCE MANERY" Director
--------------------------------------
19
<PAGE>
GOLDEN RIVER RESOURCES INC.
(A Development Stage Enterprise)
Unaudited Pro Forma Combined Statement of Operations
Year ended June 30, 2000
$ United States
<TABLE>
<CAPTION>
===================================================================================================================
Historical Pro Forma
Golden River Columbus Adjustments Combined
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fee revenue $ - $ 38,151 $ $ 38,151
Interest and other income - 1,796 1,796
-------------------------------------------------------------------------------------------------------------------
- 39,947 39,947
Expenses
Advertising and promotion - 17,280 17,280
Amortization - fixed assets 2,342 5,208 7,550
Amortization - website development - 486 486
Automotive - 9,808 9,808
Bank charges - 766 766
Conferences - 7,906 7,906
Consulting fees 226,425 - 226,425
Exploration of mineral properties 42,065 - 42,065
Foreign exchange (10,588) - (10,588)
General and administrative 47,044 - 47,044
Inducement fee - 18,996 18,996
Insurance - 1,224 1,224
Interest on long term debt 6,667 - 6,667
Internet fees - 15,238 15,238
Licenses, fees and dues - 3,049 3,049
Management fees 57,104 - 57,104
Office - 8,644 8,644
Option payments to acquire mineral
properties 30,000 - 30,000
Professional fees 103,576 18,858 122,434
Rent - 12,470 12,470
Repairs and maintenance - 1,612 1,612
Telephone - 5,049 5,049
Training - 1,022 1,022
Travel and promotion 73,949 13,866 87,815
Wages and benefits - 137,098 137,098
Website development - 2,558 2,558
-------------------------------------------------------------------------------------------------------------------
578,584 281,138 859,722
-------------------------------------------------------------------------------------------------------------------
Loss $ (578,584) $ (241,191) $ $ (819,775)
===================================================================================================================
Weighted average number of shares 16,284,097 20,276,499
Loss per share $ (0.04) $ (0.04)
===================================================================================================================
</TABLE>
See accompanying notes to financial information.
20
<PAGE>
GOLDEN RIVER RESOURCES INC.
(A Development Stage Enterprise)
Unaudited Pro Forma Combined Statement of Operations
Three month period ended September 30, 2000
$ United States
<TABLE>
<CAPTION>
===================================================================================================================
Historical Pro Forma
Golden River Columbus Adjustments Combined
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fee revenue $ - $ 28,066 $ $ 28,066
Interest and other income - 175 175
-------------------------------------------------------------------------------------------------------------------
- 28,241 28,241
Expenses
Advertising and promotion - 3,875 3,875
Amortization - fixed assets - 4,503 4,503
Amortization - website development - 1,239 1,239
Automotive - 7,325 7,325
Bank charges - 433 433
Conferences - 6,112 6,112
Consulting fees - 5,667 5,667
Depreciation 469 - 469
Foreign exchange (9,918) - (9,918)
General and administrative 22,923 - 22,923
Insurance - 36 36
Interest on long term debt 4,000 - 4,000
Internet fees - 5,437 5,437
Licenses, fees and dues - 3,877 3,877
Office 71 71
Professional fees 38,523 12,911 51,434
Rent - 6,339 6,339
Repairs and maintenance - 1,751 1,751
Telephone - 2,356 2,356
Travel and promotion 29,451 4,086 33,537
Wages and benefits - 76,213 76,213
-------------------------------------------------------------------------------------------------------------------
85,448 142,231 227,679
-------------------------------------------------------------------------------------------------------------------
Loss $ (85,448) $ (113,990) $ $ (199,438)
===================================================================================================================
Weighted average number of shares 17,702,444 20,631,086
Loss per share (note 3) $ (0.00) $ (0.01)
===================================================================================================================
</TABLE>
See accompanying notes to financial information.
21
<PAGE>
GOLDEN RIVER RESOURCES INC.
(A Development Stage Enterprise)
Notes to Unaudited Pro Forma Consolidated and Combined Financial Information
$ United States
--------------------------------------------------------------------------------
1. BASIS OF PRESENTATION:
These pro forma consolidated and combined financial statements have been
prepared in accordance with generally accepted accounting principles in the
United States.
Golden River acquired Columbus effective November 30, 2000. Immediately
prior to the transaction, Golden River's outstanding common stock will be
rolled back on the basis of one common share for each four outstanding
common shares. Golden River will then issue 14,955,475 shares of its common
stock to the Columbus stockholders for all of the outstanding common stock
of Columbus.
The acquisition will be accounted for under the purchase method of
accounting for reverse acquisitions in accordance with APB Opinion No. 16.
Under the purchase method of accounting for reverse acquisitions, the
purchase price is allocated to the assets acquired and liabilities assumed
based on their estimated fair values. As Columbus, the accounting acquirer,
is a closely held private company with no quoted market price for its
shares, the purchase price is based upon the fair value of Golden River's
net assets. Management has estimated that there is no material difference
between the book values and the fair values of Golden River's net assets.
Accordingly, the book values of Golden River's assets and liabilities have
been combined with the historical values of the assets and liabilities of
Columbus in the unaudited pro forma consolidated balance sheet.
The actual measurement and allocation of the purchase price will depend on
Golden River's net assets on the closing date. Consequently, the actual
measurement and allocation of the purchase price could differ from that
presented in the unaudited pro forma consolidated balance sheet.
2. PRO FORMA ADJUSTMENTS:
The unaudited pro forma consolidated balance sheet gives effect to the
following transactions as if they had occurred on September 30, 2000:
(a) To reflect the issuance of 2,097,232 Columbus Class A common shares at
a deemed value of $0.17 per share for brokerage services immediately
prior to the share exchange.
(b) To reflect the issuance of 14,955,475 shares of Golden River common
stock for all of the outstanding common stock of Columbus. As Golden
River has a net asset deficiency, the amount of this deficiency has
been recorded as a capital transaction in stockholders' equity.
(c) To reflect the elimination of the stockholders' deficiency of Golden
River upon consummation of the transaction.
22
<PAGE>
GOLDEN RIVER RESOURCES INC.
(A Development Stage Enterprise)
Notes to Unaudited Pro Forma Consolidated and Combined Financial Information
(continued)
$ United States
-------------------------------------------------------------------------------
2. PRO FORMA ADJUSTMENTS (CONTINUED):
(d) To reflect stock subscriptions for 1,250,000 common shares of Golden
River for aggregate cash proceeds of $500,000 received prior to the
share exchange in anticipation of the transaction, which shares will be
issued on completion of the transaction.
(e) To reflect the fair value of 1,250,000 share purchase warrants granted
in conjunction with the share issuance described in note 2 d). The
warrants have an exercise price of $0.40 per share and are exercisable
for one year from the date of grant. The warrants are assumed to be
granted immediately subsequent to the share exchange.
The fair value of $192,000 of these warrants has been determined using
the Black Scholes Method assuming the expected life to be equal to the
life of the warrants, volatility factor of 95%, risk free rate of 6.0%
and no assumed dividend rate. The fair value of the warrants has been
recorded as a share issuance cost for purposes of these pro forma
financial statements.
(f) To restate capital stock to equal par value of common stock
outstanding.
3. PRO FORMA LOSS PER SHARE:
The unaudited pro forma combined loss per share is based upon the weighted
average number of outstanding shares of common stock of Golden River during
each period presented adjusted for the roll back, plus the following share
issuances as if the acquisition occurred July 1, 1999:
i) the number of shares issued to consummate the acquisition of Columbus
described in note 2 b); and
ii) the common shares issued for cash described in note 2 d).
23
