FORM 10-QSB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal quarter ended March 31, 2000.
____ Transition Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the transition period from ____ to ____.
Commission File No. 0-26669
Can-Cal Resources, Ltd.
- --------------------------------------------------------------------------------
(Name of Small Business Issuer in its charter)
Nevada 88-0336988
- ----------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8221 Cretan Blue Lane, Las Vegas, NV 89128
- ----------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, ( 702 ) 243 - 1849
--------- -------------------- -------------------
1505 Blackcombe St., Bldg. 2, Unit #203, Las Vegas, Nevada 89128
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan by a court.
Yes_____ No_____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding on March 31, 2000
- --------------------------------------- ------------------------------------
Common Stock, Par Value $.001. 8,753,782
Transitional Small Business Disclosure Format (Check one): Yes____ No X
1
<PAGE>
CAN-CAL RESOURCES, LTD.
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Independent accountants' report 4
FINANCIAL STATEMENTS:
Interim balance sheets 5
Interim statements of operations 6
Interim statements of changes in stockholders' deficit 7
Interim statements of cash flows 8
Notes to interim financial statements 9-11
SUPPLEMENTARY SCHEDULE:
Supplemental Schedule I--
Operating, general and administrative expenses 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 13-14
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
Signatures 15
2
<PAGE>
PART I - FINANCIAL INFORMATION
In the opinion of the management of the Company, the following
condensed financial information as of March 31, 2000 and 1999, and for the three
month periods then ended, contain all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the financial condition of the
Company at these dates and for those periods. The balance sheet information as
of December 31, 1999, has been taken from the Company's audited financial
statements included in its Form 10-KSB.
3
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders
Can-Cal Resources, Ltd.
Las Vegas, Nevada
We have reviewed the accompanying condensed balance sheet of Can-Cal Resources,
Ltd., as of March 31, 2000, and the condensed statements of operations for the
three months ended March 31, 2000 and 1999, the condensed statements of cash
flows for the three months ended March 31, 2000 and 1999, and the condensed
statement of changes in stockholders' equity for the three months ended March
31, 2000. These financial statements are the responsibility of the company's
management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing standards,
the balance sheet as of December 31, 1999, and the related statement of changes
in stockholders' equity (deficit) for the year then ended, and the related
statements of operations for the year then ended (not presented herein); and in
our report dated March 2, 2000, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the
accompanying condensed balance sheet as of December 31, 1999 and the condensed
statement of changes in stockholders' equity for the year then ended, is fairly
stated in all material respects in relation to the balance sheet and statement
of changes in stockholders' equity (deficit) from which they have been derived.
MURPHY, BENNINGTON & CO.
/s/ Murphy, Bennington & Co.
Las Vegas, NV
May 10, 2000
4
<PAGE>
CAN-CAL RESOURCES, LTD.
BALANCE SHEETS
MARCH 31, 2000
(ROUNDED TO THE NEAREST HUNDRED, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------------- --------------
(UNAUDITED)
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash $ 353,700 $ 51,800
Accounts receivable - -
Notes receivable, related parties (note 2) 45,500 44,700
Prepaid expenses 3,200 1,200
Note receivable 53,000 48,000
------------- --------------
Total current assets 455,400 145,700
PROPERTY AND EQUIPMENT, NET (NOTE 3) 55,500 61,400
OTHER ASSETS (NOTE 4) 98,200 95,300
LONG-TERM INVESTMENTS (NOTE 5) 586,100 586,100
------------- --------------
$ 1,195,200 $ 888,500
============= ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable 11,400 $ 7,100
Accrued expenses 57,800 56,300
Note payable - related party (note 6) 41,800 14,800
Note payable, current portion (note 7) 4,300 6,800
------------- --------------
Total current liabilities 115,300 85,000
NOTE PAYABLE, NET OF CURRENT PORTION (NOTE 7) 55,000 55,000
NOTES PAYABLE, RELATED PARTIES - -
------------- --------------
170,300 140,000
------------- --------------
STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value; authorized, 15,000,000
shares; issued and outstanding, 8,753,782 shares 8,800 8,200
Preferred stock, $.001 par value; authorized, 10,000,000
shares; none issued or outstanding - -
Additional paid-in-capital 2,834,900 2,460,200
Cumulative translation adjustment - -
Accumulated deficit (1,818,800) (1,719,900)
------------- --------------
1,024,900 748,500
------------- --------------
$ 1,195,200 $ 888,500
============= ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
CAN-CAL RESOURCES, LTD.
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(ROUNDED TO THE NEAREST HUNDRED, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
MARCH 31, MARCH 31,
2000 1999
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
SALES $ - $ -
COST OF GOODS SOLD - -
------------- -------------
GROSS PROFIT - -
OPERATING EXPENSES,
GENERAL AND ADMINISTRATIVE 103,400 255,000
------------- -------------
LOSS FROM OPERATIONS (103,400) (255,000)
OTHER INCOME (EXPENSES):
Other income 5,200 -
Interest income 1,000 300
Interest expense (1,700) (2,400)
------------- -------------
INCOME(LOSS) FROM CONTINUING OPERATIONS (98,900) (257,100)
------------- -------------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS:
Income (loss) from discontinued
automobile salvage division - 174,300
Gain on disposal of automobile
salvage division (net of taxes) - -
------------- -------------
NET INCOME (LOSS) $ (98,900) $ (82,800)
============= =============
NET INCOME (LOSS) PER SHARE OF COMMON
STOCK AND COMMON STOCK EQUIVALENTS:
BASIC EPS
Net loss from continuing operations $ (0.01) $ (0.01)
============= =============
Weighted average shares outstanding 8,308,727 7,005,161
============= =============
DILUTED EPS
Net loss from continuing operations $(0.01) $(0.01)
============= =============
Weighted average shares outstanding 8,308,727 7,005,161
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
CAN-CAL RESOURCES, LTD.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)
(ROUNDED TO THE NEAREST HUNDRED, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ADDITIONAL CUMULATIVE TOTAL
PAID-IN ACCUMULATED TRANSLATION STOCKHOLDERS'
COMMON STOCK CAPITAL DEFICIT ADJUSTMENT EQUITY
------------------------ ------------ --------------- ----------- -------------
SHARES AMOUNT
----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1997 6,447,652 $ 6,400 $ 1,676,400 $ (1,044,800) $ - $ 638,000
Issuance of common stock 557,509 600 211,200 - - 211,800
Foreign currency translation adjustment - - - - 8,500 8,500
Net income (loss) for the year - - - (353,000) - (353,000)
----------- -------- ------------ --------------- ----------- ------------
BALANCE, DECEMBER 31, 1998 7,005,161 7,000 1,887,600 (1,397,800) 8,500 505,300
Issuance of common stock 1,248,621 1,200 572,600 - - 573,800
Foreign currency translation - - - - (11,800) (11,800)
Realized foreign currency translation loss - - - - 3,300 3,300
Net income (loss) for the year - - - (322,100) - (322,100)
----------- -------- ------------ --------------- ----------- ------------
BALANCE, DECEMBER 31, 1999 8,253,782 8,200 2,460,200 (1,719,900) - 748,500
Issuance of common stock 500,000 600 374,700 - - 375,300
Net income (loss) for the period - - - (98,900) (98,900)
----------- -------- ------------ --------------- ----------- ------------
BALANCE, MARCH 31, 2000 8,753,782 $ 8,800 $ 2,834,900 $ (1,818,800) $ - $ 1,024,900
=========== ======== ============ =============== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
CAN-CAL RESOURCES, LTD.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(ROUNDED TO THE NEAREST HUNDRED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------
MARCH 31, MARCH 31,
2000 1999
----------------- -----------------
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
NET INCOME (LOSS) $ (98,900) $ (82,800)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 5,900 1,800
Gain on foreign currency translation - (3,300)
Bad debt expense - 150,000
Undistributed earnings of affiliate - (174,300)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable - (34,700)
(Increase) decrease in inventory - 72,500
(Increase) decrease in prepaid expenses (2,000) 5,900
(Increase) decrease in other assets (2,800) (2,100)
Increase (decrease) in accounts payable and
other current liabilities 1,400 (14,300)
-------------- --------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (96,400) (81,300)
-------------- --------------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment - (50,700)
Proceeds from sale of facility - 65,300
-------------- --------------
NET CASH PROVIDED BY INVESTING ACTIVITIES - 14,600
-------------- --------------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (decrease) in related party debt 29,200 (55,400)
Principal payments on note payable - (7,100)
Proceeds from issuance of common stock 375,000 70,400
Increase in (5,900) -
Proceeds from debt issuance - 35,300
-------------- --------------
NET CASH USED BY FINANCING ACTIVITIES 398,300 43,200
-------------- --------------
NET INCREASE (DECREASE) IN CASH 301,900 (23,500)
CASH AT BEGINNING OF PERIOD 51,800 41,600
-------------- --------------
CASH AT END OF PERIOD $ 353,700 $ 18,100
============== ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR:
Interest $ - $ -
============== ==============
Income taxes $ - $ -
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
CAN-CAL RESOURCES, LTD.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
1. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS:
These unaudited interim financial statements of Can-Cal Resources, Ltd
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission. Such rules and regulations allow the
omission of certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles as long as the statements are not
misleading.
In the opinion of management, all adjustments necessary for a fair
presentation of these interim statements have been included and are of a
normal recurring nature. These interim financial statements should be
read in conjunction with the financial statements of the Company included
in its 1999 Annual Report on Form 10-KSB. Interim results are not
necessarily indicative of results for a full year.
In the course of its activities, the company has sustained continuing
operating losses and expects such losses to continue for the foreseeable
future. The company plans to continue to finance its operations with
stock sales and, in the longer term, revenues from sales. The company's
ability to continue as a going concern is dependent upon future stock
sales and ultimately upon achieving profitable operations.
2. NOTES RECEIVABLE (RELATED PARTIES):
Notes receivable, related parties, at March 31, 2000 consisted of the
following:
<TABLE>
<S> <C>
Note receivable from S&S Mining, Inc., a joint venture partner,
unsecured, interest imputed at 8%, due on demand $ 27,800
Note receivable from an individual, unsecured, interest imputed
at 8%, due on demand 12,000
Accrued interest receivable 11,400
-----------
51,200
Allowance for uncollectible accounts 5,700
-----------
$ 45,500
===========
</TABLE>
9
<PAGE>
CAN-CAL RESOURCES, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
3. PROPERTY AND EQUIPMENT:
Property and equipment at March 31, 2000 consisted of the following:
Machinery and equipment $ 81,700
Office equipment and furniture 4,000
-------------
85,700
Less accumulated depreciation (30,200)
-------------
$ 55,500
=============
Depreciation expense for the three months ended March 31,2000 totaled
$5,900.
4. OTHER ASSETS:
Other assets at March 31, 2000 consisted of the following:
<TABLE>
<S> <C>
Note receivable from Tyro, Inc., and principals, a corporation, secured by
equipment, interest accrued at 6% per annum, due on demand $ 53,300
Deposits 7,100
Mining claims 37,800
-----------
$ 98,200
===========
</TABLE>
5. LONG-TERM INVESTMENTS:
Long-term investments at March 31, 2000 consisted of the following:
<TABLE>
<S> <C>
Pisgah property $ 567,100
Investment in S&S Mining joint venture 19,000
-----------
$ 586,100
===========
</TABLE>
6. NOTE PAYABLE, RELATED PARTIES:
Note payable, related parties, at March 31, 2000 consisted of the
following:
<TABLE>
<S> <C>
Note payable to shareholder; unsecured; interest $ 41,800
at prime plus 1.00% per annum, due on demand ===========
</TABLE>
10
<PAGE>
CAN-CAL RESOURCES, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
7. NOTE PAYABLE:
Note payable at March 31, 2000 consisted of the following:
<TABLE>
<S> <C>
Note payable to lender; secured by 1st deed of trust; interest $ 55,000
at 8.00% per annum, matures July 31, 2001
Note payable to lender; unsecured; interest 3,400
at prime plus 1.00% per annum, matures September, 2000
Note payable to lender; unsecured; interest
at prime plus 1.00% per annum; matures October, 1999 900
------------
59,300
Less current portion 4,300
------------
$ 55,000
============
</TABLE>
8. STOCKHOLDERS' EQUITY:
Common stock:
On February 27, 2000, the Board of Directors approved the Sale of 500,000
shares of Can-Cal common stock to various investors.
9. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following table presents the carrying amounts and estimated fair
value of the Company's financial instruments at March 31, 2000:
<TABLE>
<CAPTION>
CARRYING FAIR
AMOUNT VALUE
------------ ------------
Financial assets:
<S> <C> <C>
Note receivable-related party $ 45,500 $ 45,500
Note receivable 53,000 53,000
Property and equipment 55,500 55,500
Other assets 98,200 98,200
Long-term investments 586,100 586,100
Financial liabilities:
Note payable, related parties 41,800 41,800
Note payable 59,300 59,300
</TABLE>
The carrying amounts of cash, prepaid expenses, accounts payable and
accrued expenses approximate fair value because of the short maturity of
those instruments.
The fair value of notes payable is based upon the borrowing rates
currently available to the Company for bank loans with similar terms and
average maturities.
11
<PAGE>
CAN-CAL RESOURCES, LTD.
SUPPLEMENTAL SCHEDULE I --
OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
(ROUNDED TO THE NEAREST HUNDRED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED MARCH 31, ENDED MARCH 31,
2000 1999
--------------- ----------------
OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES:
<S> <C> <C>
Bad debt expense $ - $ 152,100
Mine exploration 30,100 46,700
Consulting 5,500 34,100
Accounting and legal 17,200 4,200
Travel and entertainment 8,200 3,600
Miscellaneous 2,400 3,300
Depreciation and amortization 5,900 1,800
Office rent 9,200 2,000
Office expense 3,500 3,700
Insurance 15,700 1,500
Telephone 1,800 600
Advertising and promotion 800 -
Equipment rental 2,600 1,100
Utilities 300 200
Bank charges 200 100
--------------- ---------------
$ 103,400 $ 255,000
=============== ===============
</TABLE>
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
A) PLAN OF OPERATION
The Company is continuing and expanding its current programs of testing
volcanic cinders from its property at Pisgah, California to determine whether
they contain any precious metals, and if they do contain any precious metals,
whether they can be profitably extracted. The Company is continuing its testing
program pursuant to its December 6, 1999 Agreement with two individuals who
represented that they had developed proprietary processes for the extraction of
precious metals. In addition, the Company is engaged in testing programs with
other persons utilizing different methods and procedures of precious metal
extraction. The testing programs are carried out on behalf of the Company
pursuant to a "care and custody" program by Bruce Ballantyne, the Company's
independent geologist and geochemist consultant. Under this program, the
material being tested is selected by Mr. Ballantyne and is in his care, custody,
and control at all times. The material obtained from the testing procedures is
sent by Mr. Ballantyne to a recognized laboratory for assaying. In the event
that the Company, through its current testing programs, is successful at
identifying and extracting precious metals from its volcanic cinders, the
Company anticipates that it would dedicate the bulk of its efforts toward
additional testing on the volcanic cinders and, if warranted, production.
However, there is no assurance that precious metals exist in commercial
quantities in the volcanic cinders or, if they do, that they can be profitably
extracted and Can-Cal is currently testing in this regard. The Company is
encouraged by the assay results to date. However, those results must be
considered as preliminary and a significant amount of additional testing will be
required.
The Company has completed the drilling and trenching programs at the S
& S Joint Venture's Owl Canyon property in which it owns a 50 percent interest.
The Company has received a report from its consulting geologist, S. Bruce
Ballantyne. The Company has initiated discussions with several mining companies
to determine whether it is able to enter into an agreement in which another
mining company would fund the costs of the recommended drilling program on the
Papa Hill prospect (with an estimated cost of approximately $70,000) in exchange
for an interest in the Owl Canyon property or such similar agreement. No such
agreement has been reached to date and there is no assurance that any such
agreement will be reached. In the event such an agreement can be reached on
terms acceptable to the Company, it is likely that the Company would enter into
such agreement. In the event that the Company is unable to enter into such an
agreement with another mining company, the Company would then determine whether
or not to pursue the proposed drilling program on its own or to seek to sell an
interest in the property.
Work on the Cerbat and Erosion properties has been delayed as a result
of the expanded testing programs on the Pisgah property. Depending upon the
success of the results of the testing of its volcanic cinders and its efforts
with respect to obtaining another company to participate in its Owl Canyon Joint
Venture, the Company may conduct a drilling program on its Cerbat properties,
which it leases with an option to purchase. The purpose of such a drilling
program would be to determine the nature and extent of mineralization existing
on the property. Since the Company has not performed any drilling operations on
that property, it is as yet unable to state the nature and extent or cost of the
drilling it will undertake.
Subject to the results of the testing on its volcanic cinders and the
determination of a course of action on the Owl Canyon property, the Company also
intends to concentrate various placer material available to it using its
"concentrator." The Company has conducted a significant number
13
<PAGE>
of "in-house" assays on various placer materials available to it and, based upon
those assays, believes that the placer material contains precious metals that
the Company believes may exist in sufficient amounts to be mined commercially.
If the testing continues to be promising, the Company may seek to claim other
placer properties. However, since its concentrating activities have only
recently been initiated, there is no assurance that precious metals exist in the
placer material in commercial quantities, or that the Company can produce it at
a profit.
It is not anticipated that the Company will purchase (or sell) any
significant amount of equipment or other assets, or experience any significant
change in the number of personnel who work for the Company, during the 12 months
ending March 2001.
(B) LIQUIDITY AND CAPITAL RESOURCES AND RESULTS OF OPERATIONS
The Company's working capital increased to $340,100 as of March 31,
2000, as a result of the sale of 500,000 restricted shares of its common stock
for proceeds of $375,000 in that quarter. Working capital was $65,700 at
December 31, 1999.
The Company had no operating income or cash flow from its mineral
operations for the three months ended March 31, 2000 or the three months ended
March 31, 1999. The Company sustained a loss from operations of $98,900 for the
three month period ended March 31, 2000, compared to $82,800 for the three
period ended March 31, 1999. However, the loss for the three months ended March
31, 1999 included losses and income from Scotmar Industries, Inc., the
discontinued automobile salvage subsidiary.
During the three month period ended March 31, 2000, the accounting and
legal expenses increased to $17,200 from $4,200 for the three month period ended
March 31, 1999. The increase was due to the costs of being a reporting company
and legal fees in connection with the collection process of the judgment entered
against the principals of Tyro, Inc. Consulting costs decreased to $5,500 from
$34,100. Travel and entertainment costs increased to $8,200 from $3,600.
Insurance costs increased from $1,500 to $15,700 as a result of additional
insurance coverage obtained by the Company. Mine exploration costs decreased
from $46,700 to $30,100 as a result of the completion of the drilling and
trenching programs at the S&S Joint Venture's Owl Canyon property. Unless the
Company is able to establish the economic viability of its mining properties,
the Company will continue writing off its expenses of exploration and testing of
its properties. Therefore, losses will continue unless the Company locates and
delineates reserves. If that occurs, the Company may capitalize certain of those
expenses. There is no assurance that this will occur.
The Company has no material commitments for capital expenditures other
than expenditures it chooses to make with respect to testing and/or exploration
of its mineral properties.
The Company believes it has sufficient funds to satisfy its cash
requirements through March 31, 2001. Should it be necessary for the Company to
obtain additional funds, the Company may attempt to sell an interest in one or
more of its properties or borrow funds from outside sources. The Company
believes that it may be possible for it to borrow additional funds, using its
Volcanic Cinders property as collateral, but there are no loan facilities in
place to date.
14
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
During the three months ended March 31, 2000, the Company sold an
aggregate of 500,000 shares of its common stock for proceeds of $375,000. The
stock was sold at $0.75 per share, which reflects a discount from market prices
at the time, due to the restricted status of the shares sold (see below). Three
of the purchasers are directors of the Company and are citizens and residents of
Canada. One purchaser is an offshore trust. One purchaser is a member of the
Schwarz family (who works for the Company on a full time basis), which is a 50
percent owner of the Company's Owl Canyon property. No underwriter was involved
in these transactions.
For those sales to the three directors and the offshore trust, the
Company relied on the exemption from the 1933 Act provided by Regulation S
promulgated pursuant to the 1933 Act and Section 4(2) of the 1933 Act. For the
sale to the member of the Schwarz family, the Company relied on the exemption
provided by Section 4(2) of the Securities Act of 1933. All shares are subject
to the investment restrictions of Rule 144 and/or the provisions of Regulation
S. The certificates are legended and appropriate instructions have been issued
to the Company's transfer agent. Theses shares may be resold only pursuant to an
effective registration statement under the 1933 Act or pursuant to an exemption
from registration.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
Exhibit No. Description Page No.
----------- ----------------------------------- --------
11. Computation of Earnings Per Share 16
27. Financial Data Schedule 17
(b) Reports on Form 8-K. There were no reports filed by the Company
on Form 8-K during the quarter ended March 31, 2000.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CAN-CAL RESOURCES, LTD.
(Registrant)
Date: May 12, 2000 /s/ Ronald D. Sloan
-------------------- ----------------------------------
RONALD D. SLOAN, President
15
<PAGE>
EXHIBIT 11.
COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS ENDED MARCH 31, 2000
(ROUNDED TO THE NEAREST HUNDRED DOLLARS, EXCEPT SHARE DATA)
Weighted average number of common shares outstanding 8,308,727
------------
Common stock equivalents - stock options 0
Common stock equivalents - preferred stock 0
------------
Average common and common stock equivalents outstanding 8,308,727
------------
Net income (loss) $ (98,900)
------------
Earnings per share(1) $ (0.01)
------------
(1) Fully diluted earnings per share have not been presented because the
effects are not material.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
accompanying financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0001083848
<NAME> CAN-CAL RESOURCES LTD.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 353,700
<SECURITIES> 0
<RECEIVABLES> 45,500
<ALLOWANCES> (5,600)
<INVENTORY> 0
<CURRENT-ASSETS> 455,400
<PP&E> 55,500
<DEPRECIATION> 5,900
<TOTAL-ASSETS> 1,195,200
<CURRENT-LIABILITIES> 115,300
<BONDS> 0
0
0
<COMMON> 8,800
<OTHER-SE> 1,016,100
<TOTAL-LIABILITY-AND-EQUITY> 1,195,200
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 103,400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 170
<INCOME-PRETAX> (98,900)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (98,900)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
