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 November 30, 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)
Colorado 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 December 18, 1997 there
were 490,000 shares of the Registrant's Common Stock outstanding.
<PAGE>
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 position
and results of operations 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.
<PAGE>
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Balance Sheets
ASSETS
November 30, May 31,
1997 1997
(unaudited) (audited)
Total Assets $ - $ -
STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 11,000 $ 6,679
Accounts payable - Related party 9,027 -
20,027 6,679
Stockholders' Equity
Common stock $.001 par value, 50,000,000
shares authorized, 490,000 shares
issued and outstanding 490 490
Capital in excess of par 505,664 505,664
Retained (deficit) accumulated since
the development stage (526,181) (512,833)
Total (20,027) (6,679)
Total Liabilities and Stockholders' Equity
$ - $ -
<PAGE>
YELLOW GOLD OF CRIPPLE CREEK, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the
Period
During the
Development
Stage from
For the Three Months For the Six Months August 1953
Ended November 30, Ended November 30, Through November 30,
1997 1996 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 12,339 - 13,348 - 146,161
Other
general and
administrative - - - - 180,065
Depreciation - - - - 158,699
Net Income
from
Operations $(12,339) $ - $(13,348) $ - $ (1,086,108)
Other income
(expenses)
Interest
income - - - - 59,438
Interest
expense - - - - (299,859)
Gain (loss)
on sale of
assets - - - - 237,573
Gain on
relief of
indebtedness 732,885
Loss on
abandonment
of
subsidiaries (181,900)
Other - - - - 11,790
Net (loss)
before
income
taxes (12,339) - (13,348) - (526,181)
Taxes - - - - -
Net income
(loss) $(12,339) $ - $(13,348) $ - $ (526,181)
Net income
(loss) per
share $ (.02) $ - $ (.02) $ - $ (1.27)
Average
weighted
shares
outstanding 490,000 490,000 490,000 490,000 411,232
<PAGE>
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,
$.003/share 250,000 $ 250 $ 7,250 $ - $ -
Issued for
cash,
$1.60/share 12,500 12 19,988 - -
Net loss,
inception
to 5/31/78 - - - (8,383) -
August 1978:
Issued for
cash,
$4 per share
net of issue
costs of
$68,596 125,000 125 431,279 - -
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 $1.60
per share 2,500 3 3,997 - -
March 1980,
issued for
cash at
option price
of $1.60 per
share 2,500 2 3,998 - -
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
<PAGE>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 100,000 100 19,900 - -
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 (2,500) (2) (3,998) - 4,000
Net loss
FYE 5/31/97 - - - (6,679) -
Balance
5/31/97 490,000 490 505,664 (512,833) $ -
Net loss for
the Period
ended
November 30,
1997 - - - (13,348) -
Balance
11/30/97 490,000 $ 490 $ 505,664 $ (526,181) $ -
<PAGE>
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 Six months ended 1953 Through
November 30, November 30,
1997 1996 1997
Cash Flow from Operating
Activities:
Net (loss) income $ (13,348) $ - $ (526,181)
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 13,348 - 39,596
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 $ - $ - $ -
<PAGE>
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 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, 1997 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, 1997 and 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 1997 and $50,000 at May 31, 1995 have been
offset by valuation reserves of the same amount. The net change
in deferred tax asset and offsetting valuation reserve amounted
to $0 for 1996 and 1997 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.
<PAGE>
Yellow Gold of Cripple Creek, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1997
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 November 30,
1997 1996 1997
Interest $ - $ - $ 146,325
Taxes - - -
NOTE 4 - SHAREHOLDERS' ACTIONS
On October 6, 1997, by vote of the shareholders of the company, the
articles of incorporation were amended to change the capital
structure of the company to 50,000,000 shares authorized and
$.001 par value from 20,000,000 shares authorized and $.0025 par
value. The shareholders also voted to effect a 1 for 40 reverse
split on the common stock of the company. These changes have been
made retroactive to August 1953 in these financial statements.
<PAGE>
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 and its
stockholders with 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.
On October 6, 1997, by vote of the shareholders of the company, the
articles of incorporation were amended to change the capital structure of the
company to 50,000,000 shares authorized and $.001 par value from 20,000,000
shares authorized and $.0025 par value. The shareholders also voted to effect
a 1 for 40 reverse split on the common stock of the company.
Liquidity and Capital Resources
As of November 30, 1997, the Company had no assets and $20,027 in
accounts payable. For the period during the development stage of the Company,
from August 1953 through November 30, 1997, the Company had an accumulated
loss of $526,181. 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
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
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 ($9,027)
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. The company also has $11,000 in outstanding
accounts payable for professional services. There can also be no guarantees
that the Company will receive any benefits from the efforts of management to
locate such business opportunities.
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 six months ended November 30,
1997, and has not had any significant operations since discontinuing day to
day operations in 1993.
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, 1997, 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 has prepared and filed 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.
None
(b) Reports on Form 8-K:
None
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: December 19, 1997 By /s/ Howard M. Oveson
Howard M. Oveson, President and
Principal Financial Officer
