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 June 30, 1997
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 August 11, 1997
Common Stock, $0.10 par value 13,853,834
U.S. GOLD CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30, 1997
ASSETS
Current assets:
Cash and cash equivalents $28,836
Interest receivable 51,934
Note receivable, current portion 550,000
Federal tax refund 153,000
Other current assets 36,495
Total current assets 820,265
Investment in Tonkin Springs
Project Joint Venture 2,262,578
Note receivable, non-current portion 639,645
Investment in Gold Capital Common Stock 3,779,529
Deferred tax assets, net 86,520
Other assets, net of depreciation 84,732
$7,673,269
LIABILITIES, DEFERRED CREDITS AND SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable and accrued liabilities $97,082
Reserve for reclamation 640,000
737,082
Deferred gain on sale of Tonkin
Springs interest 1,789,100
Shareholders equity:
Common stock, $.10 par value, 15,000,000
shares authorized; 13,853,834 shares
issued and outstanding 1,385,418
Additional paid-in capital 31,976,902
Accumulated deficit (28,215,233)
5,147,087
$ 7,673,269
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Six Months Ended June 30, 1997 and 1996
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Installment gain on sale of
Tonkin Springs interest $0 $73,546 $0 $115,768
Interest income 24,163 34,392 52,334 73,731
Other income 0 1,215 0 1,215
24,163 109,153 52,334 190,714
Other costs and expenses:
General and administrative 177,825 167,520 374,932 495,220
Interest 1,039 53 2,525 120
Depreciation and amortization 2,964 2,924 5,918 5,588
Total expense 181,828 170,497 383,375 500,928
Income (loss) before income taxes (157,665) (61,344) (331,041) (310,214)
Provision for income taxes 0 0 0 0
Net income (loss) $(157,665)$(61,344)$(331,041)$(310,214)
Per share data:
Net income (loss) $(0.01) $(0.00) $(0.02) $(0.02)
Weighted average shares and
share equivalents outstanding 13,853,851 13,806,505 13,853,929 13,806,505
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1997 and 1996
(Unaudited)
June 30, 1997 June 30, 1996
Cash flows from operating activities:
Cash paid to suppliers and employees $(417,623) $(603,550)
Cash used in operating activities (417,623) (603,550)
Cash flows from investing activities:
Cash received from sale of Tonkin
Springs interest 311,431 191,844
Cash received for accrued interest
on note 129,569 195,572
Capital expenditures 0 (8,218)
Sale of assets 0 1,215
Cash provided by investing activities 441,000 380,413
Cash flows from financing activities: 0 0
Cash provided by (used in) financing
activities 0 0
Increase (decrease) in cash and
equivalents 23,377 (223,137)
Cash and equivalents, beginning 5,459 234,326
Cash and equivalents, ending $28,836 $11,189
Reconciliation of net income
(loss) to cash used in operating
activities:
Net income (loss) $(331,041) $(310,214)
Items not requiring (providing) cash:
Interest income (51,934) (70,063)
Depreciation, depletion and
amortization 5,918 5,588
Investment gain on sale of
Tonkin Springs interest 0 (115,768)
(Increase) decrease in current
assets related to operations (8,826) 159,313
Increase (decrease) in current
liabilities related to operations 29,953 (24,385)
Decrease (increase) in other assets,
long term (61,693) (248,021)
Cash used in operating activities $417,623 $ 603,550
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 the Company
and its wholly owned subsidiaries, as well as 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 June 30, 1997 and the results of
operations for the three and six months ended June 30, 1997 and 1996, and the
cash flows for the six month periods ended June 30, 1997 and 1996, 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 Companys consolidated financial statements in conformity
with generally accepted accounting principles requires the Companys 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 six month periods ended June 30,
1997 and 1996 are not necessarily indicative of the results to be expected for
the full years. These financial statements should be read in conjunction with
the Companys annual report on Form 10-KSB filed with the Securities and
Exchange Commission for the year ended December 31, 1996.
2. Sale of 60 Percent Interest in Tonkin Springs Project
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
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 (the 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 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 (the 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. Effective December 31, 1996, the Company converted its
Gold Capital Preferred Stock for 1,750,000 shares of Gold Capital common stock.
Through June 30, 1997 TSVLP has received $2,610,355 in principal payments on
the Promissory Note with a balance of $1,189,645 remaining due at June 30, 1997.
The Promissory Note, as amended June 21, 1995, is collateralized by Gold
Capitals 60% interest in the Properties and the Project Joint Venture and
accrues interest at a fixed rate of 7.5 percent on the unpaid principal balance.
Interest on the Promissory Note for fiscal year 1996 in the amount of $129,569
was received in full in January, 1997.
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:
1997 $250,000
1998 600,000
1999 339,645
$1,189,645
Effective March 13, 1997, Gold Capital and Globex Mining Enterprises, Inc.
(Globex), a Canadian corporation with shares traded on the Toronto and Montreal
stock exchanges (symbol: GMX) entered into an Agreement and Plan of Merger (the
Gold Capital Merger). Subject to the completion of the Gold Capital Merger, the
Company has conditionally agreed to amend the Project Joint Venture Agreement.
Under the terms of the proposed amendment, Gold Capital would immediately pay
off the balance of the Promissory Note to TSVLP, finance capital requirements
of the Company after Commencement of Commercial Production, and pay TSVLP
$60,000 per month as minimum distributions of cash flow during a 36 month period
commencing 12 months after the effective date of the amendment. The amendment
would give Gold Capital the right to borrow up to 100 percent of TSVLPs cash
flow from the Project to support Gold Capitals debt service for third party
project financing with any net borrowings from TSVLPs cash flow due and payable
upon payoff of any third party project financing, increase the amount of
Reimbursable Costs from $6 million to $11.25 million and further provide for
limited increases to the amount of Reimbursable Costs for additional
exploration costs in excess of $750,000 but not more than $1,500,000 prior
to Commencement of Commercial Production, and provide expanded definitions of
Commencement of Commercial Production.
On January 16, 1997, Gold Capital and Globex entered into a loan agreement (the
Globex Loan). Globex agreed, as long as it is progressing satisfactory towards
the potential merger of Globex and Gold Capital, or until August 30, 1997, to
make advances under the Globex Loan to Gold Capital to be used, among other
things, to reasonably maintain, preserve and protect the Tonkin Springs
property, and service the Promissory Note to TSVLP at the rate of $50,000 per
month commencing February 1, 1997. The Company agreed to share its security
interest in the assets of Gold Capital as provided under the Promissory Note,
pari passu, with Globex as provided in an Intercreditor Agreement, and in
addition, the Company and Globex entered into the Stock Purchase Option
Agreement, Agreement Not To Sell Shares, And Agreement To Vote Shares For Merger
with Globex, each dated January 16, 1997.
As provided in the Intercreditor Agreement, the Company agreed to share, pari
passu with Globex, the security interest held by the Company under the Security
Agreement dated December 31, 1993, by and between the Company, TSVLP and Gold
Capital. The Company agreed not to give Gold Capital notice of payment default
under the Promissory Note so long as the $50,000 per month payments are made.
If a foreclosure action is jointly undertaken, Company and Globex agree to
jointly bid not less than the lesser of the fair market value of the collateral
or the combined balance then owing under the applicable loan agreements. Upon
any foreclosure action which results in the Company and Globex acquiring the
collateral from Gold Capital, the Company has the right, for 90 days thereafter,
to pay to Globex the amount owed to Globex by Gold Capital, and thus to acquire
all the rights to the collateral from Globex.
Under the Stock Purchase Option Agreement, Agreement Not To Sell Shares, And
Agreement To Vote Shares For Merger, the Company agreed to support the proposed
merger of Gold Capital and Globex, to vote its shares owned by the Company in
Gold Capital in favor of the proposed merger, and agreed, subject to the
completion of that merger, to exchange its 2,287,547 shares of Gold Capital for
632,094 shares of Globex, being the same exchange ratio for Gold Capital shares
under the Merger Agreement between Gold Capital and Globex.
The various agreements between the Company, Gold Capital and Globex generally
terminate August 30, 1997, unless extended thereafter by the parties, but may
be terminated earlier, under certain conditions. If the merger of Gold
Capital and Globex is completed, there will be a change of control within Gold
Capital and new management for the manager of the Tonkin Springs Project Joint
Venture. This new management will be responsible for establishing the plan
and schedule for commencement of production, if any, at the Properties.
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
(the 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 June 30, 1997, Gold Capital has reported that it has incurred
approximately $4,179,000 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. The balance of the deferred gain is associated with the shares of
Gold Capital common stock received effective December 31, 1996 by the Company
through the conversion of its Gold Capital Preferred Stock, and is anticipated
to be recognized as income as provided under the installment method of
accounting.
3. Tonkin Springs Venture Limited Partnership
The Company holds its interest in the Project Joint Venture through TSVLP, a
partnership which is owned by subsidiaries of the Company, Tonkin Springs
Gold Mining Company (TSGMC) (99.5 percent general partner) and U.S.
Environmental Corporation (0.5 percent limited partner). The following is the
unaudited condensed balance sheet and statement of operations for TSVLP as of
and for the six months ended June 30, 1997.
BALANCE SHEET June 30, 1997
Assets:
Current assets
Cash $63
Interest receivable 51,934
Note receivable, current portion 550,000
601,997
Investment in Project Joint Venture 3,283,875
Note receivable, non-current portion 639,645
Investment in Gold Capital Common Stock 3,537,500
Intercompany account 1,017,320
Other assets 2,096
Total Asset $9,082,433
Reserve, Deferred Gain and Partners Interest:
Reserve for reclamation $640,000
Deferred gain on sale of Tonkin Springs
interest 1,108,901
1,748,901
Partners interest
Subsidiaries of U.S. Gold-
Initial interest 3,309,902
Allocation of withdrawn interests 3,515,384
Accumulated earnings 508,246
Partners Interest 7,333,532
Total Reserve, Deferred Gain and
Partners Interest $9,082,433
STATEMENT OF OPERATIONS Six Months Ended
June 30, 1997
Revenues:
Interest income $51,934
Costs and expenses:
General, administrative and other 162,175
Net loss $(110,241)
Note A. 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
percent basis, totals approximately $1.47 million of which the Company reflects
$640,000 on its balance sheet related to its 40 percent 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. Gold Capital is manager of the Properties under the Project
Joint Venture. The following is the unaudited condensed statement of
operations and balance sheet of the Project Joint Venture as of and for the
six months ended June 30, 1997. All costs and expenditures associated with the
Properties have been funded by Gold Capital.
STATEMENT OF OPERATIONS Six Months Ended
June 30, 1997
Revenues $0
Property maintenance costs 207,649
Interest expense 6,301
Net loss $(213,950)
BALANCE SHEET June 30, 1997
Assets:
Current assets $1,810
Property, plant, equipment &
development costs 12,814,803
Prepaid royalties 694,604
Other assets 8,457
Total assets $13,519,674
Liabilities, Reserves and Project
Joint Venturers Interest:
Current liabilities $488,946
Intercompany account-Gold Capital 4,179,082
Reserve for reclamation 1,469,900
6,137,928
Venturers Interest-
Gold Capitals interest 4,946,568
TSVLPs interest 2,435,178
Total venturers interest 7,381,746
Total liabilities, reserves and
venturers interest $13,519,674
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 percent 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.
PART II
MANAGEMENTS 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
Corporation (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 (the 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 Capitals Series A Preferred Stock (the 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. Effective December 31, 1996,
the Company converted the Gold Capital Preferred Stock into 1,750,000 shares of
Gold Capital common stock.
Through June 30, 1997, the Company has received $2,610,355 in principal payments
on the Promissory Note with $1,189,645 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. If the merger of Gold
Capital and Globex is completed, and in conjunction with certain amendments to
the Joint Venture agreement, Gold Capital is required to pay off the Promissory
Note. The Promissory Note as amended, is collateralized by Gold Capital's 60
percent interest in the Properties and the Project Joint Venture and accrues
interest at a fixed rate of 7.5 percent on the unpaid principal balance.
Interest on the Promissory Note for 1996 in the amount of $129,569 and was
received in full during January, 1997.
The aggregate carrying value of the total 2,287,547 common shares of Gold
Capital owned by the Company is $3,779,529 ($1.65/share) and the market price
of such shares as of August 8, 1997 was bid $0.75 and ask $0.88. At June 30,
1997, there remains $1,789,100 in deferred gain associated with the sale of
interest in Tonkin Springs to Gold Capital which is anticipated to be realized
in the future as provided under installment sale accounting. Excluding the
deferred gain balance which is included in the aggregate carrying value of the
Gold Capital common shares, the average carrying value is reduced to $0.87 per
share. Pursuant to the Registration Rights Agreement dated March 27, 1995,
Gold Capital has agreed to use its best efforts to register all common stock
of the Company and TSVLP.
Gold Capital is required to fund 100 percent of the holding, development and
administrative costs relating to the Properties until commencement of
commercial production. Through June 30, 1997, Gold Capital has reported that
it has incurred approximately $4,179,000 in 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.
Subject to the completion of the Gold Capital Merger, the Company has
conditionally agreed to amend the Project Joint Venture Agreement. Under the
terms of the proposed amendment, Gold Capital would immediately pay off the
balance of the Promissory Note to TSVLP, finance capital requirements of the
Company after Commencement of Commercial Production, and pay TSVLP $60,000 per
month as minimum distributions of cash flow during a 36 month period commencing
12 months after the effective date of the amendment. The amendment would give
Gold Capital the right to borrow up to 100 percent of TSVLPs cash flow from the
Project to support Gold Capitals debt service for third party project financing
with any net borrowings from TSVLPs cash flow due and payable upon payoff of
any third party project financing, increase the amount of Reimbursable Costs
from $6 million to $11.25 million and further provide for limited increases to
the amount of Reimbursable Costs for additional exploration costs in excess of
$750,000 but not more than $1,500,000 prior to Commencement of Commercial
Production, and provide expanded definitions of Commencement of Commercial
Production.
In April, 1996, Gold Capital obtained an audit of the project feasibility study
from an outside engineering firm, which study confirms the economic viability
and recommends development of the project to produce gold from a milling and
heap leach operation at Tonkin Springs. Subject to certain conditions and
assumptions set forth therein, the feasibility study concludes that gold can be
successfully mined over the estimated five-year initial phase of the Project.
At various times, the Project has engaged the consulting firm Ore Reserves
Engineering (ORE) to provide estimates of the open pit minable reserves from the
Project. The open-pit reserve estimate done by ORE and completed in October,
1996, is summarized in the table below:
Tons Grade Ounces
above above Contained Strip
Deposit Cutoff Cutoff Cutoff Gold Ratio
(opt Au) (1,000) (opt Au) (1,000) (W:O)
TSP-1
Milling 0.055 1,470 0.099 146 3.4
Bioheap 0.025 1,159 0.040 46 2.0
2,629 192
Rooster
Oxide Heap 0.015 3,692 0.037 136 1.3
Bioheap 0.027 1,805 0.051 92 1.3
5,497 228
O-15
Milling 0.055 969 0.107 103 11
Bioheap 0.025 601 0.040 24 3
1,570 127
TSP-6
Milling 0.055 90 0.117 11 2.4
Bioheap 0.025 86 0.039 3 2.4
176 14
TSP-8
Milling 0.055 48 0.081 4 8.2
Bioheap 0.025 61 0.041 2 8.2
109 6
F-Grid
Milling 0.055 247 0.094 23 7.0
Bioheap 0.025 407 0.037 15 7.0
654 38
Total 10,635 0.057 605 3.1
Liquidity and Capital Resources
During the remainder of 1997, TSVLP anticipates receipt of a minimum of $250,000
in principal payments from Gold Capital plus accrued interest under the
Promissory Note which is due December 31, 1997. If the Gold Capital Merger is
completed, the remaining balance of the Promissory Note is required to be paid
off. These payments are the only source of working capital anticipated during
1997. Therefore, the sufficiency of the Companys working capital is dependent
upon Gold Capitals continuing performance under the terms of various agreements.
Management plans to monitor Gold Capitals 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.
For the six months ended June 30, 1997, net cash used in operations decreased
from $603,550 in the 1996 period to $417,623 during 1997, reflecting the
decrease in cash paid to suppliers and employees. Cash flow from investing
activities increased to $441,000 for 1997 from $380,413 in 1996, primarily
reflecting increased payments received on the note from Gold Capital offset,
in part, by lower amounts of interest received on the note.
Results of Operations
The Company is recognizing the gain from the sale of the 60 percent 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. As of December 31, 1996, the remaining deferred gain
represented by the balance due under the Promissory Note was recognized. At
June 30, 1997, $1,789,100 of the gain, related to the shares of Gold
Capital common stock received in conversion of the Gold Capital Preferred
Stock, remains deferred and is anticipated to be recognized as income in the
future as provided under installment sale accounting.
Three Months Ended June 30, 1997 Compared to 1996
For the three month period ended June 30, 1996, $73,546 of the deferred gain
related to the sale of the interest in the Tonkin Springs Properties was
recognized reflecting principal payment received on the Promissory Note.
During the 1997 period, $24,163 in interest income, primarily related to the
Promissory Note, was recorded, compared to interest income of $34,392 during
the 1996 period, reflecting the larger average balance outstanding under the
Promissory Note. General and Administrative expenses increased a modest
$10,305 in the 1997 period compared to 1996.
Six Months Ended June 30, 1997 Compared to 1996
For the six month period ended June 30, 1996, $115,768 of the deferred gain
related to the sale of the interest in the Tonkin Springs Properties was
recognized reflecting principal payment received on the Promissory Note.
During the 1997 period, $52,334 in interest income, primarily related to
the Promissory Note, was recorded, compared to interest income of $73,731
during the 1996 period reflecting the larger average balance outstanding under
the Promissory Note. General and Administrative expenses decreased
approximately $120,288 in the 1997 period compared to 1996, primarily
reflecting lower compensation paid to employees.
PART II
1. No report required.
2. No report required.
3. No report required.
4. No report required.
5. No report required.
6.a No report required.
6.b No report required.
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: August 11, 1997
By William W. Reid, President and
Chairman of the Board
Dated: August 11, 1997
By William F. Pass, Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRATED FROM THE 6/30/97 FORM 10-QSB
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
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<NAME> U.S. GOLD CORPORATION
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (331,041)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
U.S. GOLD CORPORATION
Exhibit 11 to Form 10-Q
for the Three and Six Month Period Ended June 30, 1997 and 1996
Computation of Weighted Average Shares Outstanding Used in Earnings Per Share
Calculations (1)(2):
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Total shares issued,
beginning 13,853,894 13,806,505 13,854,119 13,806,505
Weighted average
treasury shares acquired
and retired (43) 0 (190) 0
Weighted average shares
issued 13,853,851 13,805,505 13,853,929 13,806,505
Weighted average of common
stock equivalents:
Unexercised stock options 0 0 0 0
Less: Buy back of common
shares under treasury
stock method using average
price. 0 0 0 0
13,853,851 13,806,505 13,853,929 13,806,505
(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%.
