SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
- ------------------- ----------------------
September 30, 1998 0-12139
COLORADO GOLD & SILVER, INC.
---------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 82-0379959
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(State of incorporation) (I.R.S. Employer
Identification No.)
c/o 10200 W. 44th Ave., #400, Wheat Ridge, CO 80033
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 422-8127
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.
Yes No X
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
64,217,400 common shares as of September 30, 1998
<PAGE>
Part I: FINANCIAL INFORMATION
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
ASSETS
<S> <C> <C>
September 30, September 31,
1998 1998
Current
Cash and cash equivalents $ 0 $ 0
Total current assets 0 0
----------------------------------------------------
TOTAL ASSETS $ 0 $ 0
====================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable & Accrued
Expenses 335,058 335,058
Accrued salary, officer 390,000 390,000
Accrued interest payable 672,003 672,003
Shareholder advances 888,919 888,919
----------------------------------------------------
Total current liabilities 2,285,980 2,285,980
----------------------------------------------------
STOCKHOLDERS' EQUITY
Common stock, $0.0001 par value;
1,000,000,000 shares authorized;
64,217,400 issued and outstanding 2,714,603 2,714,603
Retained earnings (deficit) (5,000,583) (5,000,583)
----------------------------------------------------
2,285,980 2,285,980
----------------------------------------------------
$ 0 $ 0
====================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-1
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited)
Three months ending Six months ending
<S> <C> <C> <C> <C>
Sept. 30 Sept. 30 Sept. 30, Sept. 30,
1998 1997 1998 1997
Revenue & interest $0 $0 $0 $0
--------------------------------------------------------------------------------------------
Expenses, general and
administrative 0 0 0 0
--------------------------------------------------------------------------------------------
Management fees 0 0 0 0
--------------------------------------------------------------------------------------------
Loss before the following: 0 0 0
Unauthorized distribution
Gain on Settlement of debt 0 0 0
--------------------------------------------------------------------------------------------
Net income (loss) for period 0 0 0 0
--------------------------------------------------------------------------------------------
Net income (loss) per share 0 0 0 0
============================================================================================
Weighted average number of
common shares outstanding
64,217,400 64,217,400 64,217,400 64,217,400
============================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
<S> <C> <C>
Three months ended
--------------------------------------------------------------------------
Sept. 30, 1998 Sept. 30, 1997
--------------------------------------------------------------------------
Cash flows from operating activities 0 0
Net income gain 0 0
Adjustments to reconcile net income 0
(loss) to net cash provided (used) by
operating activities
Accounts payable 0 0
Management fees 0 0
Amortization 0 0
Changes in non-cash items: 0 0
Accounts payable 0 0
--------------------------------------------------------------------------
Net cash used in operating activities 0 0
==========================================================================
Cash flows to investing activities 0 0
Organization costs
==========================================================================
Net cash used in investing activities: - -
==========================================================================
Cash flows to financing activties:
Proceeds from issuance of common stock - -
Payment of offering costs - -
Contributed capital - -
==========================================================================
Net cash provided by financing
activities - -
==========================================================================
Net increase in cash - -
==========================================================================
Cash at beginning of period 0 0
==========================================================================
Cash at end of period $ 0 $ 0
==========================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
Notes to Financial Statements
Note I - INTERIM REPORTING:
These financial statements have not been audited or reviewed and have been
prepared on a compilation basis only. Readers are cautioned that these
statements may not be appropirate for their purposes. While the information
presented in the accompanying interim six month financial statements is
unaudited, it includes all adjustments which are, in the opinion of management,
necessary to present fairly the financial position, result of operations, and
changes in cash flows for the interim period presented. It is suggested that
these financial statements be read in conjunction with the December 31, 1997
audited financial statements and notes thereon.
Note 2 - Organization and Summary of Significant Accounting
Policies:
Colorado Gold & Silver, Inc. (the Company) was incorporated under the laws of
the State of Colorado on March 3, 1980. The Company was organized for the
principal purpose of engaging in the business of acquiring, exploring, and if
warranted, developing mineral prospects. Activities through March 31, 1992,
during which time the Company was in the exploration stage (a development stage
company as defined by Statement of Financial Accounting Standards No. 7),
consisted principally of organizational activities, including the sale of shares
of its common stock, and the acquisition, evaluation, exploration and
development of certain mineral properties for future production. Certain of
these properties were acquired from certain of the Company's officers and
directors.
Cash and Cash Equivalents:
For purposes of the Statement of Cash Flows, the Company considers demand
deposits and all highly liquid-debt investments purchased with a maturity of
three months or less to be cash equivalents.
Deferred Mine Development Costs, Mineral Properties and Advance
Royalties:
Mineral exploration costs were charged against income as incurred. Costs
incurred in developing mining properties for commercial production are
capitalized and reflected in the financial statements as deferred mine
development costs. Such costs consist primarily of labor, supplies, contract
construction services, allocated overhead and capitalized interest related to
mine development activities. The Company capitalized deferred mine development
costs at March 31, 1985 of $1,001,752 relating to the development of the
Company's Colorado mine. The Company had Suspended development of this mine and
F-4
<PAGE>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
Notes to Financial Statements
had written down the development costs to $250,000. During the year ended March
31, 1990, management of the Company made a decision to abandon this Colorado
mining project. The Company recorded a loss of $250,000 on the write down of
this Colorado deferred mine development cost to its estimated net realizable
value. In addition, the management of the Company also abandoned certain of its
California deferred mine development costs, which resulted in a loss of $93,386
during the year-end of March 31, 1990.
Costs of mineral properties acquired and advance royalties on expected future
production were deferred pending ultimate realization of such production. All
such costs will be amortized on a unit-of-production method if commercial
production from the Company's mineral properties occurs. Such costs were charged
against income when the mineral properties and advance royalties are abandoned.
Other Property and Equipment
Other property and equipment were carried at costs and were depreciated on the
straight-line method over their estimated useful lives which were as follows:
Vehicles 3 years
Furniture and equipment 5 years
Going Concern:
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company is in the
development stage and has not earned any revenues from operations.
The Company is currently devoting its efforts to locating merger candidates. The
Company's ability to continue as a going concern is dependent upon its ability
to develop additional sources of capital, locate a merger candidate and
ultimately, achieve profitable operations. The accompanying consolidated
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
Organization Costs:
Organization costs are being amortized over a 60-month period using the
straight-line method.
F-5
<PAGE>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
Notes to Financial Statements
Net (Loss) Per Share:
Net income (loss) per share is calculated by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the period.
Fuly diluted and primary earnings per common share are the same amounts for each
of the periods presented. Dilutive common stock equivalents consist of stock
warrants. In loss periods dilutive common stock equivalent shares are excluded
as the effect would be antidilutive.
Note 3 - Going-Concern consideration:
As shown in the financial statements, the Company incurred a net loss of $50,000
during the years ended March 31, 1998, 1997 and 1996, and as of March 31, 1998
the Company's current liabilities exceeded its current assets by $2,285,980.
Working Capital requirements of the Company have been provided primarily by Mr.
M. Coke Reeves, President of the Company. These factors indicate that the
F-6
<PAGE>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
Notes to Financial Statements
Company may be unable to continue in existence without future working capital
and future profitable operations. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue in existence.
Note 4 - Income Taxes:
As of March 31, 1998, the Company has financial reporting net operating loss
carryforwards of approximately $5,000,583 for which the tax effect has not been
recognized for financial reporting purposes. The Company also has approximately
$4,500,000 of tax net-operating losses available for carry forward to offset
future years' taxable income. Such losses expire at various times through 2013,
if not utilized earlier.
Note 5 - Related Party Transactions:
Shareholder advances totaling $888,919 at March 31, 1998, 1997 and 1996,
respectively, represent advances made to the Company by Mr. M. Coke Reeves,
president of the Company. The advances are due oil demand when funds become
available to the Company. Advances of $784,621, accrue interest at the rates of
certain lending institutions prime rates of interest plus 1 1/4%. The advances
have been classified as a current liability in the accompanying financial
statements due to the due-on-demand nature of the advances. During the years
ended March 31, 1998, 1997 and 1996, interest expense of $50,000 per year
related to the shareholder advances was charged to operations and remained
unpaid as of the audit date.
Accrued officer salary in the amounts of $390,000 represents salary due Mr. M.
Coke Reeves for services performed through March 31, 1992.
F-7
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company had experienced expenses for the three month period of $0 in 1998
and $0 in 1997. The Company had no revenues for the period in 1998 or 1997. The
Company recorded no income/loss for the period in 1997 compared to $0
income/loss in the same period 1998. The Company losses will continue until
income can be achieved. While the Company is seeking capital sources for
investment, there is no assurance that sources can be found.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998, COMPARED TO
THE SAME PERIOD IN 1997.
The Company had no revenues from operations for the six month period in 1998 or
in 1997. The Company incurred $0 in operating expenses in the period in 1998,
and no profit or loss compared to no expenses in 1997. In the period in 1997 and
1998, the Company had no income or loss.
Losses on operations may continue until business revenues can be achieved of
which there is no assurance.
LIQUIDITY AND CAPITAL RESOURCES
The Company had no cash capital at the end of the period. The Company will be
forced to either borrow or make private placements of stock in order to fund
operations. No assurance exists as to the ability to achieve loans or make
private placements of stock. Liabilities exceeded assets by $2,285,980.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were made for the period for which this report
is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: April 14, 1999
COLORADO GOLD & SILVER, INC.
/s/ M. Coke Reeves
---------------------------
President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 2,285,980
<BONDS> 0
0
0
<COMMON> 2,714,603
<OTHER-SE> 5,000,583
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
