FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
or
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from to
Commission file number 0-9137
U.S. GOLD CORPORATION
(Exact name of small business issuer as specified in its charter)
COLORADO 84-0796160
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Madison, Suite 700
Denver, Colorado 80206
(Address of principal executive offices)
(303) 322-8002
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) 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 filing
requirements for the past 90 days.
Yes X No
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Class Outstanding as of November 11, 1996
Common Stock, $0.10 par value 13,854,505
U.S. GOLD CORPORATION
CONSOLIDATED BALANCE SHEET (Unaudited)
ASSETS September 30, 1996
Current assets:
Cash and cash equivalents $ 37,438
Accounts receivable 211,849
Interest receivable 101,192
Federal tax refund receivable 79,324
Note receivable, current portion 668,156
Other current assets 12,522
Total current assets 1,110,481
Investment in Tonkin Springs Project Joint Venture 2,262,578
Note receivable, non-current portion 851,920
Investment in Gold Capital Common Stock 517,500
Investment in Gold Capital Preferred Stock 3,000,000
Deferred tax assets, net 239,520
Other assets, net of depreciation 77,329
$8,059,328
LIABILITIES, DEFERRED CREDITS AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 21,072
Reserve for reclamation 640,000
Deferred gain on sale of Tonkin Springs interest 2,695,623
Shareholders' equity:
Common stock, $.10 par value, 15,000,000 shares
authorized; 13,854,505 shares issued and
outstanding 1,385,451
Additional paid-in capital 31,977,219
Accumulated deficit (28,660,037)
Total Shareholders' equity 4,702,633
$8,059,328
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Nine Months Ended September 30, 1996 and 1995 (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Installment gain on sale
of Tonkin Springs
interest $143,128 $ 89,460 $258,896 $ 613,351
Interest income 38,132 40,348 111,863 163,435
Dividend income 0 67,500 0 202,500
Other income 0 197,644 1,215 206,680
Total 181,260 394,952 371,974 1,185,966
Other costs and expenses:
General and administrative 153,035 196,895 648,255 598,411
Interest 467 832 587 35,121
Depreciation and
amortization 2,964 1,267 8,552 3,913
Total expense 156,466 198,994 657,394 637,445
Income (loss) before
income taxes 24,794 195,958 (285,420) 548,521
Provision for income taxes 0 0 0 0
Net income (loss) $24,794 $195,958 $(285,420) $548,521
Per share data:
Net income (loss) $0.00 $0.01 $(0.02) $0.04
Weighted average shares
and share equivalents
outstanding 14,643,068 14,694,986 13,807,215 14,545,737
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1996 and 1995 (Unaudited)
September 30, September 30,
1996 1995
Cash flows from operating activities:
Cash paid to suppliers and employees $(817,301) $(645,843)
Cash used in operating activities (817,301) (645,843)
Cash flows from investing activities:
Cash received from sale of Tonkin
Springs interest 431,844 1,148,080
Cash received for accrued interest
on note 195,572 234,158
Capital expenditures (8,218) (5,301)
Sale of assets 1,215 262,210
Cash provided by investing activities 620,413 1,639,147
Cash flows from financing activities:
Payment on income tax obligation 0 (534,152)
Exercise of stock options for cash 0 10,605
Repay borrowings under note payable 0 (330,016)
Cash provided by (used in) financing
activities 0 (853,563)
Increase (decrease) in cash and
equivalents (196,888) 139,741
Cash and equivalents, beginning 234,326 18,257
Cash and equivalents, ending $37,438 $157,998
Reconciliation of net income (loss) to
cash used in operating activities:
Net income (loss) $(285,420) $548,521
Items not requiring (providing) cash:
Interest income (101,192) (157,594)
Dividend income 0 (202,500)
Depreciation, depletion and amortization 8,552 3,913
Investment gain on sale of Tonkin Springs
interest (258,896) (613,351)
(Increase) decrease in current assets
related to operations (122,256) 4,509
Increase (decrease) in current
liabilities related to operations (24,099) (134,790)
Decrease (increase) in other assets,
long term (33,990) (94,551)
Cash used in operating activities $(817,301) $(645,843)
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Summary of Significant Accounting Policies
The consolidated financial statements include the accounts of U.S. Gold
Corporation (the "Company") and its wholly owned subsidiaries including
the accounts of Tonkin Springs Venture Limited Partnership ("TSVLP").
Significant intercompany accounts and transactions have been eliminated.
The balance sheet of the Company as of September 30, 1996 and the results
of operations for the three and nine month periods ended September 30, 1996
and 1995, and cash flows for the nine month periods ended September 30, 1996
and 1995, have not been examined by independent certified public accountants.
However, in the opinion of management, the accompanying unaudited consolidated
financial statements contain all necessary adjustments in order to make the
financial statements not misleading.
The preparation of the Company's consolidated financial statements in conformity
with generally accepted accounting principles requires the Company's management
to make estimates and assumptions that affect the amounts of assets and
liabilities, the disclosure 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.
The results of operations for the three and nine month periods ended September
30, 1996 and 1995 are not necessarily indicative of the results to be expected
for the full years. These financial statements should be read in conjunction
with the Company's annual report on Form 10-KSB filed with the Securities and
Exchange Commission for the year ended December 31, 1995.
2. Sale of 60% Interest in Tonkin Springs Project
On December 31, 1993 (the "Closing"), TSVLP, a partnership owned by subsidiaries
of the Company, sold a 60 percent undivided interest in the Tonkin Springs
Properties and Obligations (the "Properties") to Gold Capital Corporation
("Gold Capital"). TSVLP retained a 40 percent undivided interest in the
Properties. Immediately after the conveyance to Gold Capital, TSVLP and Gold
Capital each made their respective interest in the Properties subject to a
mining joint venture, the Tonkin Springs Project Joint Venture ("Project Joint
Venture"), to operate and manage the Properties. Ownership in the Project Joint
Venture is: TSVLP- 40 percent, Gold Capital- 60 percent. Gold Capital is
manager of the Properties under the Project Joint Venture.
Gold Capital purchased its 60 percent undivided interest in the Properties from
TSVLP for a purchase price and other consideration of approximately $7,830,000
representing the estimated fair market value of the assets. The purchase price
included $200,000 in cash at Closing, delivery of a mortgage note in the amount
of $3.8 million (the "Promissory Note"); 300,000 shares of unregistered Gold
Capital's Series A Preferred Stock ("Gold Capital Preferred Stock") having an
assigned value of $3 million, and the assumption of 60 percent of a reclamation
obligation recorded at $960,000.
Through September 30, 1996, TSVLP has received $2,279,924 in principal payments
on the Promissory Note with a balance of $1,520,076 remaining due at September
30, 1996. The Promissory Note, as amended June 21, 1995, is collateralized by
Gold Capital's 60% interest in the Properties and the Project Joint Venture and
accrues interest at a fixed rate of 7.5% on the unpaid principal balance.
Interest on the Promissory Note for fiscal year 1995 in the amount of $195,572
was received in full in March, 1996. A portion of the August,1996 and all of
the September, 1996 monthly note payments from Gold Capital are currently past
due.
Remaining principal balance of the Promissory Note is due in monthly
installments of $50,000 until Gold Capital has raised an aggregate of $4,000,000
in new financing, or until paid in full, increasing to $75,000 per month until
the note is paid in full subsequent to Gold Capital raising $4,000,000 in new
financing.
The future annual minimum principal payments (at the $50,000 per month level)
are as follows:
1996 $218,156
1997 600,000
1998 600,000
1999 101,920
Total $1,520,076
Effective June 22, 1995, TSVLP entered into the Commitment and Agreement to
Convert, under which TSVLP agreed to convert its 300,000 shares of Gold Capital
Preferred Stock into 1,500,000 shares of Gold Capital common stock at some time
after November 30, 1995. Under this arrangement, the mandatory 9% annualized
stock dividend requirement under the Preferred Stock terminated November 30,
1995. The 1994 dividend ($270,000) was satisfied with the issuance of 127,702
shares of common shares of Gold Capital and the 1995 dividend ($247,500 through
November 30, 1995) was satisfied by the issuance of 147,816 shares issued to the
Company in February, 1996.
Also effective June 22, 1995, the Company entered into the Shareholders'
Agreement under which:
Royalstar Resources Ltd. ("Royalstar"), as majority owner of
Gold Capital, agreed for a period of five years to support the
nomination and election of certain individuals to Gold Capital's
board of directors, including a member recommended by TSVLP.
TSVLP granted a proxy to Mr. John Young, the President and
Chief Executive Officer of Royalstar, which continues until
June, 2000 and provides that Mr. Young can vote all common
shares of Gold Capital standing in the name of TSVLP or the
Company in all matters submitted to shareholders of Gold
Capital. This proxy terminates as to any shares sold or
transferred to third parties and in addition, terminates if
Mr. Young is no longer president of Royalstar or Gold Capital.
In addition, TSVLP and the Company gave to Royalstar a first
right of refusal as relates to sales by TSVLP or the Company
of shares of Gold Capital common stock to third parties.
Gold Capital is required to fund 100% of the holding, development and
administrative costs relating to the Properties until commencement of commercial
production. Gold Capital shall be reimbursed for expenditures, up to $6 million
("Reimbursable Costs"), from a preferential portion of cash flows from the
operations of the Properties, if any. Expenditures in excess of $6 million will
be considered contributions to the Project Joint Venture by Gold Capital.
Through September 30, 1996, Gold Capital has reported that it has incurred
approximately $3,538,000 in net Reimbursable Costs.
The Company is recognizing the gain from the sale of the 60% interest in the
Tonkin Springs Properties to Gold Capital using the installment method of
accounting. For the nine month period ended September 30, 1996, 5.5% ($258,896)
of the gain was recognized, while in the comparable period of 1995, 13%
($613,351) of the gain was recognized.
3. Tonkin Springs Venture Limited Partnership
The Company holds its interest in the Project Joint Venture through Tonkin
Springs Venture Limited Partnership ("TSVLP"), a partnership which is owned by
subsidiaries of the Company, Tonkin Springs Gold Mining Company ("TSGMC")
(99.5% general partner) and U.S. Environmental Corporation (0.5% limited
partner).
The following is the unaudited statement of operations and condensed balance
sheet for TSVLP as of and for the nine months ended September 30, 1996.
Nine Months Ended
STATEMENT OF OPERATIONS September 30, 1996
Revenues:
Installment gain on sale of
Tonkin Springs interest $160,466
Interest income 104,830
Other income 1,165
Total revenues 266,461
Costs and expenses:
General, administrative and other 185,255
Net income $81,206
BALANCE SHEET September 30, 1996
Assets:
Current assets
Cash $729
Interest receivable 101,192
Accounts receivable 20,000
Note receivable, current portion 668,156
Total current assets 790,077
Investment in Project Joint Venture 3,283,875
Note receivable, non-current portion 851,920
Investment in Gold Capital Common Stock 517,500
Investment in Gold Capital Preferred Stock 3,000,000
Intercompany account 774,798
Other assets 1,702
Total Assets $9,219,872
Liabilities and Partners' Interest:
Reserve for reclamation $640,000
Deferred gain on sale of Tonkin
Springs interest 1,670,777
Partners' interest
Subsidiaries of U.S. Gold-
Initial and allocation of
withdrawn interests 6,825,286
Accumulated earnings 83,809
Partners' Interest 6,909,095
Total Liabilities, Deferred Gain
and Partners' Interest $9,219,872
Note A. The partnership agreement has been amended to, among other things,
eliminate the requirement that the general partner fund TSVLP activities
through contributions. The amended agreement provides at the option of the
general partner, the ability to make secured loans to TSVLP to fund activities.
Note B. TSVLP and Gold Capital are jointly responsible for reclamation of
disturbance of the Properties, proportionate to their respective interest in
the Project Joint Venture. The current estimate of reclamation cost, on a
100% basis, totals approximately $1.47 million of which the Company reflects
$640,000 on its balance sheet related to its 40% share. Actual reclamation,
generally, will be commenced upon the completion of operations at the
Properties. Bonding of reclamation under various Nevada and Federal Bureau
of Land Management agencies, currently set at $1.3 million, is the
responsibility of Gold Capital under the terms of the Project Joint Venture.
4. Condensed Financial Information of Tonkin Springs Project
Joint Venture
As noted in Footnote 2 above, effective December 31, 1993, TSVLP sold a 60
percent undivided interest in the Properties to Gold Capital and the parties
each made their respective interest in the Properties subject to the Project
Joint Venture with Gold Capital as manager of the Properties. The following
is the unaudited condensed statement of operations and balance sheet of the
Project Joint Venture as of and for the nine months ended September 30, 1996,
as reported by Gold Capital. All costs and expenditures associated with the
Properties have been funded by Gold Capital.
Nine Months Ended
STATEMENT OF OPERATIONS September 30, 1996
Property maintenance costs $687,199
Net loss $687,199
BALANCE SHEET September 30, 1996
Assets:
Current assets, cash $4,970
Property, plant, equipment and
development costs 12,539,364
Prepaid royalties and other assets 537,498
Total assets $13,081,832
Liabilities, Reserves and Project Joint Venturers' Interest:
Current liabilities $326,070
Intercompany account-Gold Capital 3,538,161
Reserve for reclamation 1,469,900
Subtotal 5,334,131
Venturers' Interest-
Gold Capital's interest 5,312,523
TSVLP's interest 2,435,178
Total venturers' interest 7,747,701
Total liabilities, reserves and
venturers' interest $13,081,832
Gold Capital, the manager of the Joint Venture is responsible for all funding
for the Tonkin Springs Project until commencement of commercial production, as
defined in the agreement. Gold Capital has commenced constrcution of the
reusable bio-oxidation pad at the Tonkin Springs Project and has informed the
Company of their intent to commence operations at the project subject to
securing adequate additional financing and the timely receipt of remaining
governmental permits and authorization for operations. Commercial production
is defined under the agreement as the last day of a period of 90 consecutive
days during which, for not less than 80 days, the mill processed ore and
obtained gold recovery of at least 80% of its rated capacity. Subsequent to
commercial production, the Company is responsible for its share of operations
and is entitled to its calculated distributions of cash.
5. Loan Settlement Agreement
On February 21, 1992, in a Loan Settlement Agreement with its senior secured
lender, The French American Banking Corporation ("FABC"), the Company discharged
its debt to FABC. As part of the consideration to FABC under the Loan
Settlement Agreement, the Company entered into an agreement between TSGMC and
FABC entitled "Agreement To Pay Distributions." Under the terms of this
agreement, TSGMC is required to pay to FABC (i) the first $30,000 of
distributions, as defined in such agreement, received from TSVLP, plus (ii) an
amount equal to 50% of such retained distributions after TSGMC has first
received and retained $500,000 of such retained distributions. This obligation
to FABC shall terminate after FABC has been paid a total of $2,030,000
thereunder.
6. Short-term Borrowing
Effective August 23, 1993, the Company entered into an unsecured loan
agreement with Placer Dome U.S. Inc. ("PDUS") under which PDUS loaned $300,000
to U.S. Gold. On July 14, 1995, the Company repaid this loan along with accrued
interest of $30,016. PDUS is beneficial owner of approximately 7% of the
outstanding shares of common stock of U.S. Gold.
PART II
MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Changes in Financial Condition
On December 31, 1993 (the "Closing"), TSVLP, a partnership owned by subsidiaries
of U.S. Gold Corporation (the "Company"), sold a 60 percent undivided interest
in the Tonkin Springs Properties and Obligations (the "Properties") to Gold
Capital. TSVLP retained a 40 percent undivided interest in the Properties.
Immediately thereafter, TSVLP and Gold Capital each made their respective
interest in the Properties subject to the Tonkin Springs Project Joint Venture
("Project Joint Venture") to operate and manage the Properties. Ownership in
the Project Joint Venture is: TSVLP- 40 percent, Gold Capital- 60 percent. Gold
Capital is manager of the Properties under the Project Joint Venture.
Gold Capital purchased its 60 percent undivided interest in the Properties from
TSVLP for a purchase price and other consideration of approximately $7,830,000
representing the estimated fair market value of the assets purchased. The
purchase price included $200,000 in cash at Closing; delivery of a mortgage
note in the amount of $3.8 million (the "Promissory Note"); 300,000 shares of
unregistered Gold Capital's Series A Preferred Stock ("Gold Capital Preferred
Stock") having an assigned value of $3 million, and the assumption of 60
percent of a reclamation obligation recorded at $960,000.
Through September 30, 1996, the Company has received $2,279,924 in principal
payments on the Promissory Note with $1,520,076 remaining due. The Promissory
Note as amended, requires monthly payments by Gold Capital of $50,000 until
Gold Capital has raised an aggregate of $4,000,000 in new financing, or until
paid in full, and $75,000 per month until the note is paid in full subsequent
to Gold Capital raising an aggregate of $4,000,000 in new financing. The
Promissory Note as amended, is collateralized by Gold Capital's 60% interest
in the Properties and the Project Joint Venture and accrues interest at a fixed
rate of 7.5% on the unpaid principal balance. Interest on the Promissory Note
for 1995 in the amount of $195,572 and was received in full during March, 1996.
TSVLP entered into the Commitment and Agreement to Convert with Gold Capital
dated June 22, 1995, whereby it agreed to convert its 300,000 shares of Gold
Capital Preferred Stock at some time in the future into 1,500,000 shares of Gold
Capital common stock. The Preferred Stock accrued a mandatory 9% dividend
(based on the $10 per share stated value which totals $3 million aggregate
valuation) through November 30, 1995. The 1994 dividend in the amount of
$270,000 was satisfied with the issuance of 127,702 shares of Gold Capital
common stock, and the 1995 dividend (through November 30, 1995) in the amount
of $247,500 was satisfied by the issuance of 147,816 shares of common stock of
Gold Capital received by TSVLP in February, 1996. The aggregate carrying value
of the 275,518 shares of Gold Capital common shares received as dividends is
$517,500 ($1.88/share), and the market price of such shares as of November 11,
1996 was bid $1.50 and ask $1.81. Pursuant to the Registration Rights
Agreement dated March 27, 1995, Gold Capital has agreed to use its best efforts
to register all common stock received by TSVLP.
Gold Capital is required to fund 100% of the holding, development and
administrative costs relating to the Properties until commencement of
commercial production. Through September 30, 1996, Gold Capital has reported
that it has incurred approximately $3,538,000 in net costs for the Project
Joint Venture. Gold Capital shall be reimbursed for expenditures, up to $6
million ("Reimbursable Costs"), from a preferential portion of cash flows from
the operations of the Properties, if any. Expenditures in excess of $6 million
will be considered contributions to the Project Joint Venture by Gold Capital.
After commencement of commercial production and until Gold Capital has
recovered the Reimbursable Cost, the Company will recieve 16% of the cash
distributions from the Project, whereas subsequent to recover by Gold Capital,
the Company is expected to receive its 40% share of distributions.
During 1996, Gold Capital retained Behre Dolbear & Company, Inc., international
consultants to the mining industry, to perform a technical audit of the
feasibility study for the Tonkin Springs Project incorporating the initial 5
year plan of operations. The feasibility study incorporated estimates,
projections and assumptions related to various items including ore grade, gold
recovery rates and operating and capital costs. These projections are by their
nature forward-looking and therefore actual results could differ from those
estimates. The audit was completed in April, 1996, and the
Conclusion/Recommendation section of the Executive Summary of the report
indicated that the project, "on a 100 percent basis and pre-tax, has strong
economics and a quick payback of capital". Behre Dolbear projected average
cash operating costs for the initial 5 years of operations at $243.43 per ounce
of gold and concluded that the project economics and technical factors indicate
the project should proceed to commercial production.
The feasibility study included an updated estimate of gold ore reserves as
summarized below by operating processes:
Strip Contained
Ore Tons Grade Ratio Ounces
(000's) (OPT)
Sulfide Milling 2,568 0.102 260,900
Sulfide Heap Leaching 3,575 0.045 160,700
Oxide Heap Leaching 3,690 0.036 132,100
Total 9,833 0.056 2.84 553,700
The Company anticipates that Gold Capital will put the Tonkin Springs Project
into production upon Gold Capital obtaining the necessary funding and issuance
of final operating permits.
Liquidity and Capital Resources
During the remainder of 1996, TSVLP anticipates receipt of a minimum of $218,156
in principal payments from Gold Capital plus accrued interest due December 31,
1996 under the Promissory Note, as well as approximately $192,000 in staff
charges, overhead and out of pocket expenses charged to Gold Capital under an
office support agreement. These payments are the only significant source of
working capital anticipated during 1996. Therefore, the sufficiency of the
Company's working capital is dependent upon Gold Capital's continuing
performance under the terms of various agreements. Management plans to monitor
Gold Capital's performance under the various terms of the agreements and, if
required, to exercise its rights as provided in a security agreement dated
December 31, 1993, under which the Company holds a security interest in Gold
Capital's 60% interest in the Properties and Project Joint Venture. The
Company is also evaluating and pursuing financing alternatives which could
include debt, equity, or a combination thereof.
For the nine months ended September 30, 1996, net cash used in operations
increased from $645,843 in the 1995 period to $817,301 during the 1996 period,
reflecting the increase in cash paid to suppliers and employees. Cash flow
from investing activities decreased to $620,413 for the 1996 period from
$1,639,147 in 1995, primarily reflecting receipt of higher payments in the 1995
period under the Promissory Note from Gold Capital, and the sale by the Joint
Venture of surplus equipment with distributions of net proceeds to the
participants. During the three month period ended September 30, 1996,
executive management of the Company exercised stock options to purchase 64,000
shares of the Company's stock with 16,000 shares retained by the Company as
payment of the exercise price of the option with cancellation and return to the
status of authorized but unissued for those shares retained.
Results of Operations - 1996 Compared to 1995
Nine Month Periods Ended September 30, 1996 and 1995:
The Company is recognizing the gain from the sale of the 60% interest in the
Tonkin Springs Properties to Gold Capital using the installment method of
accounting as the purchase price consideration from Gold Capital becomes
reasonably assured. For the nine month period ended September 30, 1996, 5.5%
($258,896) of the gain was recognized reflecting principal payment received on
the Promissory Note while in 1995 period, 13% ($613,351) of the gain was
recognized. At September 30, 1996, $2,695,623 of the gain remains deferred
and is anticipated to be recognized as income in the future as provided under
installment sale accounting. During the 1996 period, $102,981 in interest
income related to the Promissory Note was recorded, compared to interest
income of $157,594 during the 1995 period as well as dividend income of
$202,500 related to the Gold Capital Preferred Stock. Dividends on the
preferred stock ceased to accrue effective November 30, 1995.
General and Administrative expenses increased approximately $49,844 in the
1996 period compared to 1995, reflecting higher office rental costs as well as
salaries and bonuses paid to employees, offset, in part, by higher allocations
of staff and overhead expense to Gold Capital under a contractual arrangement.
Interest expense during the 1995 period was $35,121,and related primarily to
the Federal tax liability, and interest on the unsecured note in favor of PDUS
paid in full in 1995. For the nine months ended September 30, 1996, the net
loss was $285,420 ($0.02/share) compared to a net income of $548,521
($0.04/share) for the same nine month period of 1995.
Three Month Periods Ended September 30, 1996 and 1995
For the three months ended September 30, 1996, the net income totaled $24,794
compared to a net income of $195,958 for the comparable period of 1995,
reflecting primarily greater installment gain income related to the sale of the
Tonkin Springs interest during the 1995 period as well as dividend income on
the Gold Capital Preferred Stock (which dividends ceased to accrue effective
November 30, 1995), offset, in part, by reduced general and administrative
expenses during the 1996 period.
Other
Except for the historical information contained herein, the statements in this
report which relate to the Company's plans, objectives or future performance
may be deemed to be forward-looking statements. Such statements are based on
current expectations of management. Actual strategies and results may differ
materially from those currently expected because of factors including gold
price, ore grades, metallurgical recovery, operating costs, market valuation,
and project operator's performance under the Project Joint Venture, as well as
other risks and uncertainties. This report should be read in conjunction with
the Company's annual report on Form 10-KSB filed with the Securities & Exchange
Commission for the year ended December 31, 1995.
PART II
1. No report required.
2. No report required.
3. No report required.
4. No report required.
5. No report required.
6.a Exhibit 11 - Statement of Computation of Weighted
Average Shares Outstanding.
6.b Reports on Form 8-K. None
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
U.S. GOLD CORPORATION
Dated: November 11, 1996 By /s/ William W. Reid
William W. Reid, President and
Chairman of the Board
Dated: November 11, 1996 By /s/ William F. Pass
William F. Pass, Vice President and
Chief Financial Officer
U.S. GOLD CORPORATION
EXHIBIT 11 TO FORM 10-QSB
For the Three and Nine Months ended
September 30, 1996 and 1995
Computation of Weighted Average Shares Outstanding
Used in Earnings Per Share Calculations:
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
(1)
Total shares issued,
beginning 13,806,505 13,775,505 13,805,505 13,768,800
Weighted average of
common stock issued with
exercise of stock otions,
$.28/share 2,133 15,522 710 11,097
Weighted average shares
issued 13,808,638 13,791,027 13,807,215 13,779,897
Weighted average of
common stock
equivalents (2):
Unexercised stock
options 1,145,495 1,212,295 0 1,212,295
Less: Buy back of common
shares under treasury
stock method using
average price. (311,065) (308,336) 0 (446,455)
14,643,068 14,694,986 13,807,215 14,545,737
(1) Common stock equivalents not considered since their effect would be
antidilutive.
(2) Fully diluted computations not made as total shares and share equivalents
outstanding would be effected by less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS FINANCIAL DATA SCHEDULE CONTAINS INFORMATION EXTRACTED FROM THE FORM
10-QSB FOR THE PERIOD ENDED September 30, 1996, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
<CIK> 0000314203
<NAME> U. S. GOLD CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
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