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, 1999
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.)
2201 Kipling Street, Suite 100
Lakewood, Colorado 80215-1545
(Address of principal executive offices)
(303) 238-1438
(Issuers 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 8, 1999
Common Stock, $0.10 par value 13,964,714
U.S. GOLD CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
ASSETS September 30, 1999
Current assets:
Cash and cash equivalents $478
Project payments receivable 540,000
Total current assets 540,478
Project payments receivable, long term 675,000
Investment in Tonkin Springs LLC 2,262,578
Marketable securities available for sale,
Globex common stock at market 64,400
Other assets, net 88,928
$3,631,384
LIABILITIES, DEFERRED CREDIT AND
SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable and accrued liabilities $30,630
Installment purchase contracts 10,473
Related party payables 163,158
204,261
Installment purchase contracts, long term 35,717
Deferred credit, project payments 1,215,000
Reserve for reclamation 640,000
Total liabilities and deferred credit 2,094,978
Shareholders equity:
Common stock, $.10 par value, 18,000,000
shares authorized; 13,927,469 shares issued
and outstanding 1,392,747
Additional paid-in capital 31,969,415
Accumulated deficit (31,847,396)
Unrealized gain on securities
available for sale 21,640
Total shareholders equity 1,536,406
$3,631,384
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Nine Months Ended September 30 1999 and 1998
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Revenues:
Project payments $135,000 $60,000 $505,000 $60,000
Interest income 22 489 73 8,906
Gain (loss) on
disposition of assets - - (6,606) -
Total revenues 135,022 60,489 498,467 68,906
Other costs and expenses:
General and administrative 128,656 216,341 497,772 731,118
Depreciation and amortization 4,211 3,751 12,659 10,344
Total expense 132,867 220,092 510,431 741,462
Income (loss) before
income taxes 2,155 (159,603) (11,964) (672,556)
Provision for income taxes - - - -
Net income (loss) $2,155 $(159,603) $(11,964)$(672,556)
Basic and diluted per share data:
Basic $0.00 $(0.01) $(0.00) $(0.05)
Diluted $0.00 $(0.01) $(0.00) $(0.05)
Weighted average
shares outstanding 14,208,595 13,927,469 13,927,469 13,927,469
U.S. GOLD CORPORATION
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
Nine Months Ended September 30, 1999 and 1998
(unaudited)
September 30, 1999 September 30, 1998
Net loss $(11,964) $(672,556)
Comprehensive item-
unrealized gain (loss)
on securities available
for sale 21,640 (1,804,801)
Comprehensive income (loss) $9,676 $(2,477,357)
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1999 and 1998
(unaudited)
September 30, 1999 September 30, 1998
Cash flows from
operating activities:
Project Payments $505,000 $60,000
Interest received 73 8,906
Cash paid to suppliers
and employees (520,205) (672,211)
Cash used in operating activities (15,132) (603,305)
Cash flows from investing activities:
Sale of marketable securities
and assets 21,720 -
Capital expenditures (1,193) (5,418)
Cash provided by (used in)
investing activities 20,527 (5,418)
Cash flows from financing activities:
Payments on installment
purchase contracts (6,871) -
Cash used in financing activities (6,871) -
Decrease in cash and
cash equivalents (1,476) (608,723)
Cash and cash equivalents,
beginning of period 1,954 615,999
Cash and cash equivalents,
end of period $478 $7,276
Reconciliation of net loss to
cash used in operating activities:
Net loss $(11,964) $(672,556)
Items not requiring (providing) cash:
Loss on sale of assets 7,778 -
Depreciation and amortization 12,659 10,344
Increase (decrease) in current
liabilities related to operations (757) 77,327
Decrease (increase) in other
assets, long term (22,848) (18,420)
Cash provided used in
operating activities $(15,132) $(603,305)
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 the wholly-
owned Tonkin Springs Venture Limited Partnership (TSVLP). Significant
intercompany accounts and transactions have been eliminated.
Basic per share data includes no dilution and is computed by dividing loss
available to common shareholders by the weighted-average number of shares
outstanding during the period (13,927,469 for 1999 and for 1998). Diluted
per share data reflect the potential dilution of securities that could share in
the earnings of the Company, similar to fully diluted earnings per share. For
the three months ended September 31, 1998 and nine months ended
September 30, 1999 and 1998, options are not considered in the computation
of diluted per share data since inclusion of options would be antidilutive. For
the three months September 30, 1999, options are considered in the
computation of diluted per share data with 281,126 equivalent shares
included in the computation.
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.
2. Tonkin Springs Project
From December 31, 1993 until February 26, 1999, TSVLP, a partnership
owned by subsidiaries of the Company, held a 40 percent undivided interest
in the Tonkin Springs Properties (the Properties) subject to a mining joint
venture, the Tonkin Springs Project Joint Venture as amended ( the 1993
Agreement), with Gold Capital Corporation (Gold Capital) being the holder
of 60 percent undivided interest and project manager. In August 1997, Gold
Capital became a wholly-owned subsidiary of Globex Mining Enterprises, Inc.
(Globex), a Canadian corporation with shares traded on the Toronto stock
exchange (symbol: GMX) pursuant to the merger of Gold Capital with a
subsidiary of Globex (the Gold Capital Merger). With the Gold Capital Merger
the Company and TSVLP received an aggregate of 631,905 shares of Globex
common stock in exchange for shares of Gold Capital. During the nine
months ended September 30 1999, the Company sold 200,000 shares of
Globex for aggregate $20,970 recognizing a gain on the sale of $1,172.
Effective February 26, 1999 (the Effective Date) TSVLP and Gold Capital
terminated the 1993 Agreement and each retained their respective 40 percent
and 60 percent undivided interests in the Properties. Gold Capital then
immediately sold its 60 percent undivided interest in the Properties to Tonkin
Springs Holdings Inc., a Colorado corporation (TSHI) which is owned by
subsidiaries of Sudbury Contact Mines Limited, an Ontario, Canada
corporation (Sudbury)(SUD:TSE), which is itself a subsidiary of Agnico-Eagle
Mines Limited, an Ontario, Canada corporation (Agnico-Eagle) (AME:NYSE).
TSHI then immediately contributed its 60 percent undivided interest in the
Properties into a new limited liability company, Tonkin Springs LLC (TSLLC)
in exchange for 60 percent of the equity membership interest of TSLLC, and
TSVLP contributed its 40 percent undivided interest in the Properties into
TSLLC in exchange for 40 percent of the equity membership interest of
TSLLC. The deemed amount of the Initial Contribution of TSVLP to TSLLC
is $2 million and for TSHI the Initial Contribution to TSLLC is $3 million. The
objective of TSLLC is the exploration, evaluation and, if justified, the
development and mining of mineral resources in the Properties.
Under the Members Agreement and the Operating Agreement of the TSLLC,
TSHI is required to fund all costs related to the Properties, including all
holding, administrative, operational and exploration costs, until TSHI has first
expended $4 million on Exploration (exploration costs only) of the Properties
(the Cut-Off Date). All expenditures funded by TSHI prior to the Cut-Off
Date, including Exploration, holding, administrative or other operational costs
of the Properties, shall be added to TSHIs Recoupable Amount which has as
its opening balance the sum of $5,625,000, which was intended to
represented approximately one-half of the recoupment account balance of
Gold Capital under the 1993 Agreement as of the Effective Date. TSHI has
reported that through September 30, 1999 the balance of Exploration
expenditures on the Properties is approximately $228,280 and that the
balance of the Recoupable Amount as of that date is approximatley
$6,855,185. If TSHI should withdraw from the TSLLC prior to Cut-Off, TSHI
shall have no further right, title or interest in the Properties of TSLLC and
its ownership interest shall be deemed transferred to TSVLP. In addition, TSHI
shall remain obligated to TSVLP: (i) to fund the remaining balance of the
adopted Program and Budget in effect upon termination, (ii) to complete its
Minimum Work Commitment for Exploration of the Properties in the amount
of $2 million, or pay to TSVLP the deficiency, (iii) to pay any unpaid Monthly
Minimum Payments to TSVLP (as described further below) that are due and
payable, and (iv) to fund and satisfy all unfunded liabilities to third parties
arising out of operations conducted subsequent to the Effective Date but prior
to the date of TSHIs withdrawal or deemed withdrawal. TSVLP and TSHI
(the Members) have designated Tonkin Springs Management Co., a Colorado
corporation (TSMC, and an affiliate of TSHI) as the initial Manager of the
Properties with overall management responsibilities for operations.
At the Effective Date, TSHI paid to TSVLP $190,000, and commencing March
1, 1999 TSHI began making additional payments to TSVLP in the amount of
$45,000 per month through December 1, 2001 (collectively Minimum
Payments to TSVLP). During the nine months ended September 30, 1999, the
Company received $505,000 in Minimum Payments to TSVLP which are
reflected in revenue in the Statements of Operations. One half of Minimum
Payments to TSVLP are added to TSHIs Recoupable Amount as discussed
further below (and included in the September 30, 1999 balance as reported
above). As of September 30, 1999, there remains recorded a $1,215,000
receivable due from the TSLLC reflecting remaining Minimum Payments to
TSVLP, of which $540,000 is classified as a current asset, offset by a
$1,215,000 deferred credit, with the effect that the entire receivable is offset
by a deferred credit.
The Operating Agreement of the TSLLC defines Commencement of
Commercial Production (CCP). After CCP 60 percent of positive cash flow
from the operations of the Properties (Cash Flow), if any, shall be distributed
to TSHI until TSHI has recovered its Recoupment Amount, and the remaining
40 percent of Cash Flow shall be distributed to the Members based upon their
respective ownership interest on a calendar quarter basis. After TSHI has
recovered the Recoupment Amount, 100 percent of Cash Flow shall be
distributed to the Members in proportion to the Member's ownership interest.
Therefore, initially during the period in which TSHI is thus receiving
preferential payments, TSVLP shall receive 16 percent of Cash Flow, if any,
from operations. Cash Flow otherwise due TSVLP shall first be applied to
reduce any Elected Loans outstanding from TSHI, as discussed further below.
On the last day in the calendar month in which CCP is achieved, TSHI shall
pay TSVLP an additional amount to be calculated by multiplying $15,000
times the number of months from the Effective Date through the month in
which CCP is achieved (the Lump-Sum Payment).
After the Cut-Off Date, TSHI is required to exercise reasonable efforts to
attempt to obtain third party project financing for any development of the
Properties requiring funding of more than $20 million. After the Cut-Off
Date, TSVLP is required to fund its 40 percent share of all costs of the
Properties or be subject to dilution under a formula. Either party may elect
to contribute a lesser amount or none towards its share of an adopted
program and budget. However, as long as TSHI owns at least 50 percent
interest in TSLLC, TSHI is obligated to loan TSVLP its share of funding of an
adopted program and budget after the Cut-Off Date under one-year term loans
(the Elected Loan) with an interest rate of LIBOR plus 2 percent. If, however,
TSVLP does not repay an Elected Loan when due, TSHI shall have no further
obligation to make additional Elected Loans to TSVLP and the amounts of
defaulted Elected Loans and accrued interest thereon shall be incorporated
into the computation of dilution of TSVLP's working interest under a formula.
If the ownership interest of any Member falls to 10 percent or less as a result
of the dilution formula, then such Member shall be deemed to have
withdrawn from the TSLLC and to have automatically relinquished and
transferred its interest to the other Member and upon such relinquishment the
withdrawing Member shall be granted an overriding 2 percent net smelter
royalty (the NSR) on products subsequently extracted, removed and sold from
the Properties.
The Company recognized neither a gain nor a loss on the termination of the
1993 Agreement or with the contribution of its 40 percent undivided interest
in the Properties to the TSLLC.
3. Condensed Financial Information of Tonkin Springs LLC
As noted in Footnote 2 above, effective February 26, 1999, the Companys
interest in the Tonkin Springs Properties were contributed into the TSLLC
with TSMC as manager. The following is the preliminary condensed balance
sheet of TSLLC as of September 30, 1999, and a preliminary condensed
statement of operations for the nine months then ended, both as reported by
TSLLC:
BALANCE SHEET September 30, 1999
Assets:
Cash $49,716
Property, plant and equipment 5,132,089
Restricted time deposit for reclamation bond 1,347,224
$6,529,029
Liabilities, Reserves and Shareholders Equity:
Current liabilities $44,522
Reserve for reclamation 1,469,000
1,513,522
Shareholders Equity-
TSHI 3,015,507
TSVLP 2,000,000
5,015,507
$6,529,029
Nine Months Ended
STATEMENT OF OPERATIONS September 30, 1999
Property holding and maintenance costs $755,751
Exploration expenses 228,280
Net loss $984,031
4. Loan Settlement Agreement with FABC
On February 21, 1992, the Company, among other related things, entered into
a Loan Settlement Agreement with its senior secured lender, The French
American Banking Corporation (FABC). The Company discharged its debt to
FABC and terminated all prior security interests related thereto. As part of
the consideration to FABC under the Loan Settlement Agreement, the Company
entered into an agreement between Tonkin Springs Gold Mining Company, a
wholly-owned subsidiary of the Company (TSGMC) and FABC entitled
Agreement To Pay Distributions, which requires TSGMC to pay a limited
portion of certain distributions from TSVLP through TSGMC to FABC. The
Company has complete control of such distributions, if any, from TSVLP to
TSGMC. Under the terms of the Agreement To Pay Distributions, TSGMC is
required to pay to FABC (i) the first $30,000 in cash or value of asset
distributions, as defined in such agreement, received from TSVLP, plus (ii) an
amount equal to 50% of such retained distributions in cash or value of asset
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 or upon disposition by TSGMC of
its interest in TSVLP.
5. Related Party Transactions
Effective November 15, 1997 through February, 1999, the Company and
Moyes & Newby & Co, (Moyes Newby) entered into a month-to-month
arrangement whereby Moyes Newby provided the Company general corporate
and financial advisory services for a retainer of $5,000/month plus
reimbursement of reasonable out of pocket expenses. The ramining balance
due under this commitment was fully paid as of June 30, 1999. Douglas J.
Newby, a director of the Company, is managing partner of Moyes Newby.
Commencing July 1, 1998, the three executive officers of the Company
voluntarily deferred a portion of their individual salaries in order to conserve
working capital of the Company. As of September 30, 1999, the total amount
of such voluntary deferral was $119,846. The Company also has not paid
certain salaries (at the voluntarily reduced rates) to the three executive
officers of the Company in the aggregate of $29,812 as of September 30,
1999. During the fourth quarter of 1998 and first quarter of 1999, the three
executive officers of the Company made personal cash loans to the Company
to allow the Company in pay critical obligations to third parties in the
aggregate amount of $28,579, which amounts were fully repaid to those
executives during March 31, 1999. In addition, certain of the director fees
accrued for the last half of 1998 and the nine months ended September 30,
1999 in the amount of $13,500 remain unpaid as of September 30, 1999. All
of these amounts are reflected as liabilities of the Company as of September
30, 1999.
MANAGEMENTS DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Recent Activities at Tonkin Springs LLC
During 1999 Tonkin Springs LLC, in which the Company has a 40 percent
ownership interest, has been primarily involved with the assembly of an
experienced exploration team of employees and contract personnel at the
Tonkin Springs Project, the organization and compilation of existing and
historic exploration data in a more useful computerized data base, and in the
addition of geologic mapping and surface rock chip sampling where
appropriate. From these activities the exploration team has identified five
locations considered high priority exploration areas. These areas of
exploration priority are generally outside of the mine corridor where the
Company had previously concentrated its exploration efforts and where the
existing ore grade mineralization is presently located. One of these target
areas had encouraging assay values from surface rock chip samples with all
samples reporting detectable gold with gold values ranging from 2 parts per
billion to 2,742 parts per billion which is equivalent to .08 ounce gold per
ton. Geophysical data are planned to be obtained over these targets as well as
other areas during the remainder of 1999. Tonkin Springs LLC anticipates
commencing drilling on some of these new exploration, high priority targets
in the near future. Other areas of exploration interest also remain to be
evaluated on the extensive 33 square mile property package.
During the fourth quarter of 1998, the Company submitted samples of Tonkin
Springs sulfide ore to Newmont Mining Corporation for the purposes of
having Newmont test the ore with their proprietary and commercially proven
N2TEC flotation technology. The test work involved grinding the ore followed
by flotation using the N2TEC process to concentrate the gold bearing sulfides.
While the test work was limited in sample size and scope, the tests did
indicate that the sulfide ores from Tonkin Springs are amenable to N2TEC
flotation with the gold in the ore recovered either in a concentrate form or
through cyanidation resulting in a combined recovery of up to 91 percent.
This test work indicates that an additional, commercially proven technology
is available to process the Tonkin Springs ores and would use with minimal
addition the existing 2,000 ton per day mill facility located at the Project.
The Company understands that Tonkin Springs LLC is continuing discussions with
Newmont which could result in additional test work using the N2TEC
technology.
Tonkin Springs LLC is also progressing with its Mine Plan for the Tonkin
Springs Project which is anticipated to be submitted to the appropriate
government regulatory authorities in the near future. Other environmental
activities include hydrological studies and evaluation which would be required
to be completed prior to commencing any operations at the Project, and the
care and maintenance of areas of prior disturbances.
Changes in Financial Condition
From December 31, 1993 until February 26, 1999, TSVLP, a partnership
owned by subsidiaries of the Company, held a 40 percent undivided interest
in the Tonkin Springs Properties (the Properties) subject to a mining joint
venture, the Tonkin Springs Project Joint Venture as amended ( the 1993
Agreement) with Gold Capital Corporation (Gold Capital) which is a
subsidiary of Globex Mining Enterprises, Inc. (Globex), a Canadian corporation
with shares traded on the Toronto stock exchange (symbol: GMX).
Effective February 26, 1999 (the Effective Date) TSVLP and Gold Capital
terminated the 1993 Agreement and each retained their respective 40 percent
and 60 percent undivided interests in the Properties. Gold Capital then
immediately sold its 60 percent undivided interest in the Properties to Tonkin
Springs Holdings Inc., a Colorado corporation (TSHI) which is owned by
subsidiaries of Sudbury Contact Mines Limited, an Ontario, Canada
corporation (Sudbury)(SUD:TSE), which is itself a subsidiary of Agnico-Eagle
Mines Limited, an Ontario, Canada corporation (Agnico-Eagle) (AME:NYSE).
TSHI then immediately contributed its 60 percent undivided interest in the
Properties into a new limited liability company, Tonkin Springs LLC (TSLLC)
in exchange for 60 percent of the equity membership interest of TSLLC, and
TSVLP contributed its 40 percent undivided interest in the Properties into
TSLLC in exchange for 40 percent of the equity membership interest of
TSLLC. The objective of TSLLC is the exploration, evaluation and, if justified,
the development and mining of mineral resources in the Properties.
Under the Members Agreement and the Operating Agreement of the TSLLC,
TSHI is required to fund all costs related to the Properties, including all
holding, administrative, operational and exploration costs, until TSHI has first
expended $4 million on Exploration (exploration associated costs only) of the
Properties (the Cut-Off Date). Through September 30, 1999, TSLLC has
reported the balance of Exploration expenditures on the Properties is
approximatley $228,280. After the Cut-Off Date, TSVLP is required to fund
its 40 percent share of all costs of the Properties or be subject to dilution
under a formula. However, as long as TSHI owns at least 50 percent interest
in TSLLC, TSHI is obligated to loan TSVLP its share of funding of an adopted
program and budget after the Cut-Off Date under one-year term loans (the
Elected Loan) with an interest rate of LIBOR plus 2 percent. If, however,
TSVLP does not repay an Elected Loan when due, TSHI shall have no further
obligation to make additional Elected Loans to TSVLP and the amounts of
defaulted Elected Loans shall be incorporated into the computation of dilution
of TSVLPs working interest under a formula. If the ownership interest of any
Member falls to 10 percent or less as a result of the forgoing calculation, then
such Member shall be deemed to have withdrawn from the TSLLC and to
have automatically relinquished and transferred its interest to the other
Member and upon such relinquishment the withdrawing Member shall be
granted an overriding 2 percent net smelter royalty (the NSR) on products
subsequently extracted, removed and sold from the Properties. After the Cut-
Off Date, TSHI is required to exercise reasonable efforts to attempt to obtain
third party project financing for any development of the Properties requiring
funding of more than $20 million.
The Company recognized neither a gain nor a loss on the termination of the
1993 Agreement or with the contribution of its 40 percent undivided interest
in the Properties to the TSLLC.
Liquidity and Capital Resources
At the Effective Date, TSHI paid to TSVLP $190,000, and commencing March
1, 1999 TSHI began making additional payments to TSVLP in the amount of
$45,000 per month through December 1, 2001 (collectively Minimum
Payments to TSVLP). During the nine months ended September 30, 1999, the
Company received $505,000 in Minimum Payments to TSVLP which are
reflected in revenue in the Statements of Operations. As of September 30,
1999, there remains recorded a $1,215,000 receivable due from the TSLLC
reflecting remaining Minimum Payments to TSVLP of which $540,000 is
classified as a current asset offset by a $1,215,000 deferred credit, with the
effect that the entire receivable is offset by a deferred credit.
During the nine months ended September 30, 1999, the Company sold
200,000 shares of Globex for aggregate $20,970 recognizing a gain on the sale
of $1,172.
The Operating Agreement of the TSLLC defines Commencement of
Commercial Production (CCP). On the last day in the calendar month in
which CCP is achieved, TSHI shall pay TSVLP an additional amount to be
calculated by multiplying $15,000 times the number of months from the
Effective Date through the month in which CCP is achieved (the Lump-Sum
Payment).
As of September 30, 1999, the Company had working capital of $336,217
made up of current assets of $540,478 and current liabilities of $204,261.
During the next twelve months the Company anticipates receipt of $540,000
in Minimum Payments to TSVLP from TSHI. The Company may also sell a
portion or all of its common stock of Globex as well as possibly issue equity
in public or private transactions to raise additional working capital. These
items are the primary source of working capital presently anticipated during
1999. Net cash used in operations decreased to $(15,132) for the nine
months ended September 30, 1999 from ($603,305) for the corresponding
period of 1998, primarily reflecting the $505,000 in Minimum Payments to
TSVLP during the 1999 period as well as lower cash paid to suppliers and
employees. Cash flow from investing activities increased to $20,527 in 1999
from ($5,418) during the 1998 period, primarily reflecting the sale of
marketable securities in the 1999 period. Cash flows from financing activities
decreased from none for 1998 to ($6,871) for 1999.
Results of Operations - 1999 Compared to 1998
For the nine month period ended September 30, 1999, the Company recorded
a net loss of $11,964 compared to a loss of $672,556 in the corresponding
nine month period of 1998. During the 1999 period, $505,000 in Minimum
Payments to TSVLP were received and recognized in income while in 1998
$60,000 in payments under the agreement with Gold Capital Corporation
were recorded.
General and Administrative expenses decreased approximately $233,346 in the
1999 period compared to 1998, primarily reflecting lower salary expense and
lower office rent.
For the three month period ended September 30, 1999, the Company
recorded a net income of $2,155 compared to a loss of $159,603 in the
corresponding period of 1998. During the 1999 period, $135,000 in Minimum
Payments to TSVLP were received and recognized in income while in 1998
$60,000 in payments under the agreement wiht Gold Capital Corporation
were recorded. General and Administrative expenses decreased approximately
$87,685 in the 1999 period compared to 1998, primarily reflecting lower
salary expense and lower office rent.
Other
The Company has addressed Year 2000 Issue as relates to the computing
systems, software and programs for which the Company relies to determine
which are year 2000 compliant. The Company has concluded that such
systems, software and programs which are not year 2000 compliant will be
replaced prior to January 1, 2000 at an estimated cost of approximately
$5,000.
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 Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
U.S. GOLD CORPORATION
Dated: November 8, 1999 By /s/ William W. Reid
William W. Reid, President and Chairman
of the Board
Dated: November 8, 1999 By /s/ William F. Pass
William F. Pass, Vice President and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE 9/30/99 FORM
10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 478
<SECURITIES> 64,400
<RECEIVABLES> 0
<ALLOWANCES> 0
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<PP&E> 178,235
<DEPRECIATION> (123,453)
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0
0
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