UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended August 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to __________
Commission File Number: 0-9015
YELLOW GOLD OF CRIPPLE CREEK, INC.
(Exact name of Registrant as specified in charter)
Utah 84-0768695
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
57 West 200 South, Suite 310, Salt Lake City, Utah 84101
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 359-9309
Indicate by check whether the Issuer (1) has filed all reports required to be
filed by section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such fling requirements for the past
90 days. (1) Yes [X ] No [ ] (2) Yes [X] No [ ]
Indicate the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At October 10, 1997 there
were 19,600,000 shares of the Registrant's Common Stock outstanding.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles nave been condensed or omitted. However, in
the opinion of management, all adjustments (which include only normal
recurring accruals) necessary to present fairly the financial posittions for
the periods presented have been made. These financial statements
should be read in conjunction with the accompanying notes, and with the
historical financial information of the Company.
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Balance Sheets
ASSETS
August 31, May 31,
1997 1997
(unaudited) (audited)
Total Assets $__________ $__________
STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ - $ 6,679
Accounts payable - Related party 7,688 -
Stockholders' Equity
Common stock $.0025 par value,
20,000,000 shares authorized,
19,600,000 shares issued and outstanding 49,000 49,000
Capital in excess of par 457,154 457,154
Retained (deficit) accumulated since
the development stage (513,842 ) (512,833 )
Total (7,688 ) (6,679 )
Total Liabilities and Stockholders'
Equity $ - $ -
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Statements of Operations
(unaudited)
For the
Period During
the Development
Stage from
August 1953
For the Three Months Ended Through
August 31, August 31,
1997 1996 1997
Revenues:
Sale of minerals and
tailings $ - $ - $ 92,556
Expenses:
Mine development costs - - 134,730
Salaries and related
expenses - - 559,009
Professional services 1,009 - 133,822
Other general and
administrative - - 180,065
Depreciation - - 158,699
Net Income from
Operations $ (1,009 ) $ - $ (1,073,769)
Other income (expenses)
Interest income - - 59,438
Interest expense - - (299,859)
Gain (loss) on sale of
assets (Note 4) - - 237,573
Gain on relief of
indebtedness (Note 4) - - 732,885
Loss on abandonment of
subsidiaries (Note 3) - - (181,900)
Other - - 11, 790
Net (loss) income
before taxes $ (1,009) $ - $ (513,842)
Taxes (Note 1) - - -
Net income (loss) $ (1,009) $ - $ (51 3,842)
Net income (loss)
per common share $ - $ - $ (.03)
Average weighted
shares outstanding 19,600,000 19,600,000 16,097,286
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development Treasury
Shares Amount Capital Stage Stock
August 1953:
Issued for cash,
$.0025/share 10,000,000 $ 25,000 $ (17,500) $ - $ -
Issued for cash,
$.04/share 500,000 1,250 18,750 - -
Net loss,
inception to
5/31/78 - - - (8,383) -
August 1978:
Issued for cash,
$10 per share
net of issue
costs of $68,596 5,000,000 12,500 418,904 - -
Sale of warrants,
500,000 shares - - 50 - -
Net loss FYE
5/31/79 - - - (61,759) -
June 1979:
Purchase 100,000
shares of
treasury stock - - - - (4,000)
January 1980,
issued for cash at
option price of
$.04 per share 100,000 250 3,750 - -
March 1980, issued
for cash at option
price of $.04 per
share 100,000 250 3,750 - -
Net loss FYE
5/31/80 - - - (99,561) -
Net loss FYE
5/31/81, 82, 83 (217,641)
Capital contributed
through the
Rittenhouse Project 23,200
Net loss FYE
5/31/84, 85, 86 (234,569)
Net income FYE
5/31/87 89,534
Continued
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
(Continued)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development Treasury
Shares Amount Capital Stage Stock
Net loss FYE
5/31/88 - - - (70,767) -
July 1988,
stock issued in
exchange for
note due 4,000,000 10,000 10,000 - -
Net loss FYE
5/31/89 - - - (61,242) -
Net loss FYE
5/31/90 - - - (56,726) -
Net loss FYE
5/31/91 - - - (65,708) -
Net loss FYE
5/31/92 - - - (55,621) -
Net loss FYE
5/31/93 - - - (52,962) -
Net loss, FYE
5/31/94 - - - (69,581) -
Net income FYE
5/31/95 458,832
Net loss FYE
5/31/96 - - - - -
Cancellation
of treasury
stock (100,000) (250) (3,750) - 4,000
Net loss FYE
5/31/97 - - - (6,679) -
Balance
5/31/97 19,600,000 49,000 457,154 (512,833) $ -
Net loss for
the Quarter - - - (1,009) -
Balance
8/31/97 $ 19,000,000 $ 49,000 $457,154 $ (513,842) $ -
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Statements of Cash Flows
For the
Period
During the
Development
Stage from
August
For the Quarter ended 1953 Through
August 31, August 31,
1997 1996 1997
Cash Flow from
Operating Activities:
Net (loss) income $ (1,009) $ - $ (513,842)
Adjustments to
reconcile net income
to net cash provided
by operating activities:
Depreciation 158,699
Gain/loss on sale of
assets/subsidiaries - - (450,659)
Increase (decrease)
in accounts payable
and accrued expenses 1,009 - 27,257
Net cash used by
operating activities - - (778,545)
Cash Flow from Investing
Activities:
Proceeds from sale of
equipment - - 44,838
Capital expenditures - - (196,037)
Acquisition of mineral
properties - - (71,887)
Investment in subsidiaries - - (181,900)
Net Cash (Used)
Provided by
Investing Activities - - (404,986)
Cash Flow from Financing
Activities:
Net borrowing from
stockholder/director and
others - - 677,377
Net proceeds, sales of
common stock - - 510,154
Purchase of treasury stock - - (4,000)
Net Cash
(Used)/Provided by
Financing Activities - - 1,183,531
Net Cash Provided (Used) - - -
Cash at Beginning of
the Year - - -
Net Cash at the End of
the Year $ - $ - $ -
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Notes to Financial Statements
August 31, 1997
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The Company was incorporated under the laws of the State of Colorado on
August 24, 1936 . The Company was involved in various mining activities
over the years, none of which proved successful. During the year 1953, the
Company discontinued all operations and has had no significant revenues from
any activity since that time and is classified as a development stage
company per SFAS #7.
b. Income Taxes
The Company adopted Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" in the fiscal year ended May 31, 1995 and
has applied the provisions of the statement on a retroactive basis to the
previous fiscal year which resulted in no significant adjustment.
Statement on Financial Accounting Standards No. 109 "Accounting for Income
Taxes" requires an asset and liability approach for financial accounting and
reporting for income tax purposes. This statement recognizes (a) the amount
of taxes payable or refundable for the current year and (b) deferred tax
liabilities and assets for future tax consequences of events that have been
recognized in the financial statements or tax returns.
Deferred income taxes result from temporary differences in the recognition
of accounting transactions for tax and financial reporting purposes. There
were no temporary differences at May 31, 1996 and earlier years; accordingly,
no deferred tax liabilities have been recognized for all years.
The Company has cumulative net operating loss carryforwards of approximately
$148,000 at May 31, 1996 and 1995 and $607,000 at May 31, 1994. No effect
has been shown in the financial statements for the net operating loss
carryforwards as the likelihood of future tax benefit from such net operating
loss carryforwards is not presently determinable. Accordingly, the potential
tax benefits of the net operating loss carryforwards, estimated based upon
current tax rates of $0 at May 31, 1996 and $50,000 at Ma
set by valuation reserves of the same amount. The net change in deferred
tax asset and offsetting valuation reserve amounted to $0 for 1996 and
$(156,000) for 1995.
The Company has available $148,000 in federal income tax carryforwards that
will begin to expire in the year 2004.
c. Loss Per Share
The computation of loss per share of common stock is based on the weighted
average number of shares outstanding during the period less shares held in
treasury.
d. Cash and Cash Equivalent
For the purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments with maturity of three months or less to be
cash equivalents.
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Notes to Financial Statements
August 31, 1996
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern.
It is the intent of the Company to seek a merger with an existing, operating
company.
NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
From August
1953
to August 31,
1997 1996 1997
Interest $ - $ - $ 146,325
Taxes - - -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Since discontinuing regular business activities in 1993, the Company has had
no operations. The Company was organized for the purpose of engaging in
mining activities; however, the Company does not have any cash or other
material assets, nor does it have an established source of revenues
sufficient to cover operating costs and to allow it to continue as a going
concern. The Company intends to take advantage of any reasonable business
proposal presented which management believes will provide the Company a
a viable business opportunity. The board of directors will make the final
approval in determining whether to complete any acquisition, and, unless
required by applicable law, the articles of incorporation, or the bylaws, or
by contract, stockholders' approval will not be sought.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and
other instruments will require substantial management time and attention and
will require the Company to incur costs for payment of accountants, attorneys,
and others. If a decision is made not to participate in or complete the
acquisition of a specific business opportunity, the costs incurred in a related
investigation will not be recoverable. Further, even if an agreement is
reached for the participation in a specific business opportunity by way of
investment or otherwise, the failure to consummate the particular transaction
may result in a the loss to the Company of all related costs incurred.
Currently, management is not able to determine the time or resources that will
be necessary to locate and acquire or merge with a business prospect. There
is no assurance that the Company will be able to acquire an interest in any
such prospects, products, or opportunities that may exist or that any activity
of the Company, regardless of the completion of any transaction, will be
profitable. If and when the Company locates a business opportunity, management
of the Company will give consideration to the dollar amount of that entity's
profitable operations and the adequacy of its working capital in determining
the terms and conditions under which the Company would consummate such an
acquisition. Potential business opportunities, no matter which form they may
take, will most likely result in substantial dilution for the Company's
shareholders due to the possible reverse split of the outstanding shares of
common stock, or the increase in the number of authorized shares of common
stock, and the issuance of stock to acquire such an opportunity.
Liquidity and Capital Resources
As of August 31, 1997, the Company had no assets and $7,688 in a payable to
a related party. For the period during the development stage of the Company,
from August 1953 through August 31, 1996, the Company had an accumulated loss
of $513,842. Since discontinuing day to day business activities in 1993, the
Company has not generated revenue and it is unlikely that any revenue will be
generated until the Company locates a business opportunity with which to
acquire or merge. Management of the Company will be investigating various
business opportunities. These efforts may cost the Company not only
out-of-pocket expenses for its management, but also expenses associated with
legal and accounting costs. To date such expenses ($7,688) have been advanced
by the president of the Company, but there is no arrangement or assurance that
the president will continue to advance such costs on behalf of the Company.
There can also be no guarantees that the Company will receive any benefits
from the efforts of management to locate such business opportunities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
The Company has had no employees since discontinuing its operations and does
not intend to employ anyone in the future, unless its present business
operations were to change. The president of the Company is providing the
Company will a location for its offices on a "rent free" basis. The Company
is not paying salaries or other forms of compensation to any officers or the
sole director of the Company for their time and effort. Unless otherwise
agreed to by the Company, the Company does intend to reimburse its officers and
director for out-of-pocket expenses.
Results of Operations
The Company had no operations during the quarter ended August 31, 1997, and
has not had any significant operations since discontinuing day to day
operations in 1993. Since that time, the Company's only operations have
involved the negotiation of settlement of the Company's outstanding
liabilities, primarily to its former president and director, Mr. Charles A.
Dager.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On October 6, 1996, the Company held a special meeting of shareholders to
consider and vote upon the following proposals:
1. To reverse split the outstanding shares of common stock of the
Company at the rate of one share for each forty shares outstanding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS(continued)
2. To amend Article IV of the Articles of Incorporation of the Company
to increase the authorized number of shares of common stock of the
Company from 20,000,000 to 50,000,000 and to change the par value
of the common stock of the Company from $0.0025 per share to $0.001
per share.
Each of the proposals was approved by the shareholders. Of the
total shares outstanding (19,600,000), 10,501,000 voted for the
proposals,and no shares voted against the proposals or abstained
from voting. In addition, there were no broker non-votes. The
reverse split was effective at the close of business on October 6,
1997. Management is preparing and filing articles of amendment to
effect the change in capitalization approved by the shareholders.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibits are included as part of this report:
Exhibit No. Description of Exhibit Page
3.1 Articles of Incorporation, as amended *
3.2 By-Laws of the Company currently in effect *
4.1 Form of certificate evidencing shares of Common Stock *
*Incorporated by reference from the Company's registration statement on
Form 10 filed with the Securities and Exchange Commission, file no. 0-9015.
(b) Reports on Form 8-K: A report dated July 8, 1997, on Form 8-K was filed
by the Company during the quarter ended August 31, 1997. This report described
an arrangement which may result in a change in control of the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Yellow Gold of Cripple Creek, Inc.
Date: October 9, 1997 By /s/ Howard M. Oveson
Howard M. Oveson, President and
Principal Financial Officer
