SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to
the Securities Exchange Act of 1934
Fiscal Year Ended March 31, 1997 Commission file number 0-12139
COLORADO GOLD & SILVER, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 82-0379959
------------------------ -------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
c/o 10200 W. 44th Ave., #400, Wheat Ridge, CO 80033
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303)422-8127
Securities registered pursuant to Section 12(g) of the Act:
No Par Value Common Stock
--------------------------
Title of each class
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
--- ---
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and no disclosure will be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year. $0
There were 64,217,400 shares of the Registrant's no par value common stock
outstanding as of March 31, 1997.
The aggregate market value of the 44,426,600 shares of voting common stock held
by nonaffiliates of the Registrant is approximately $0. This calculation is
based upon the average of the per-share bid ($.00) prices of the stock on March
31, 1997.
This Form 10-K contains 10 pages.
1
<PAGE>
PART 1
Item 1. BUSINESS
Development of Business
Colorado Gold & Silver, Inc. (the Company) was organized under the laws
of Colorado on March 3, 1980. The Company was organized for the
principal purpose of acquiring, exploring, and, if warranted,
developing mineral prospects. The Company became publicly held in
October 1981, through a public offering registered on Form S-18.
Financial Information About Industry Segments
See "Financial Statements and supplementary Data," Item 7
below.
Narrative Description of Business
The Company has been involved in several unsuccessful ventures since
its inception.
The Company's capital resources for the past several years have been
primarily provided by M. Coke Reeves, founder and President of the
Company, in the form of shareholder advances. Such shareholder advances
totalled $888,919 at March 31, 1997. The Company has no active
operations at this time but has reclamation obligations in Lake City,
Colorado on its remaining 2 claims.
The Company does not own any patents, trademarks, licenses, franchises,
or concessions except mineral interest granted by governmental
authorities and private land owners. The Company has no material
portion of its business which may be subject to renegotiation of
profits or termination of contracts or subcontracts at the election of
the government.
The Company's business is generally not seasonal in nature. The Company
has not experienced any such delays in the past.
The Company is not dependent upon a single customer or a few customers
for its products. Backlog is not material to an understanding of the
Company's business and the Company has no backlog of orders. During the
fiscal year ended March 31, 1997, the Company had no operations in
foreign countries.
At the present time, the existence of environmental laws does neither
materially hinder nor adversely affect the Company's business. Capital
expenditures relating to environmental control facilities have not
2
<PAGE>
been material to the operations of the Company since its inception.
Item 2. PROPERTIES
Facilities
The Company has no offices at this time. Records are maintained at
10200 W. 44th Avenue, #400, Wheat Ridge, CO 80033.
Mineral Properties
The following table sets forth relevant information concerning the
owned, patented, and unpatented mining claims held by the Company as of
March 31, 1997:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Number
Type of of
Name of Claim Claim Claims Gross Acres Net Acres
- -----------------------------------------------------------------------------------------------------
Gladiator Group Patented 4 33 33
Doctor Group Patented 4 15 15
</TABLE>
The Company has not realized any revenues as of its fiscal year ended
March 31, 1997 from its mining or joint venture activities.
Item 3. LEGAL PROCEEDINGS
As of March 31, 1997, the Company was neither a party nor were any of
its properties subject to any material legal proceedings threatened
against it.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
No matters were submitted to a vote of the Company's shareholders
through the solicitation of proxies or otherwise during the fiscal year
ended March 31, 1997.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's common stock, no par value, began trading on October 26,
1981 and is traded in the over-the-counter market. As of March 31,
1997, there were approximately 2,100 shareholders (this does not
include the number of beneficial owners who hold stock in street names
and brokerage accounts). No dividends have been paid on the Company's
common stock. The Company has no present intention of paying dividends.
3
<PAGE>
Set forth below is the range of high and low bid prices for the
quarters indicated of the shares of common stock the Company has
reported by the National Daily Quotation Service (Pink Sheets) or local
brokers. The quotations reflected inter-dealer prices without retail
markup, markdown, or commission and may not necessarily represent
actual transactions.
Quarter Ended High Low
- -------------------------------------------------------------
June 30, 1995 .001 .000
September 30, 1995 .001 .000
December 31, 1995 .001 .000
March 31, 1996 .001 .000
June 30, 1996 .001 .000
September 30, 1996 .001 .000
December 31, 1996 .001 .000
March 31, 1997 .001 .000
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition and Changes in Financial
Condition
Liquidity and Capital Resources
No operations were conducted and no revenues were generated in the
fiscal year. The Company at year end had no capital, no cash, and no other
assets. The Company at year end was totally illiquid and needed cash infusions
from shareholders to provide capital, or loans from any sources. Its liabilities
exceeded assets by $2,235,980.
Results of Operations
Year Ended March 31, 1997 Compared to Same Period Ended March 31,
1996
During the fiscal year ended March 31, 1997, the Company incurred $0 in
general and administrative expenses, and accrued $0 for services of officers. In
year ended March 31, 1996 the Company incurred $0 in General and Administrative
expenses, and $0 for services rendered by officers. At present, the Company has
no business income or operations. Accordingly, the reported financial
information herein may not be indicative of future operating results. Loss on
operations in 1997 was ($50,000)
4
<PAGE>
compared to the 1996 loss on operations of ($50,000) as a result of accrual of
interest on debt in both 1997 and 1996.
Year Ended March 31, 1996 Compared to Same Period Ended March 31, 1995
During the fiscal year ended March 31, 1996, the Company incurred $0
general and administrative expenses, and $0 for services contributed by
officers. In the year ended March 31, 1995 the Company incurred $0 in General
and Administrative expenses, and $0 for services rendered by officers.
Accordingly, the reported financial information herein may not be indicative of
future operating results. Loss on operations in 1996 was ($50,000) compared to
the 1995 loss on operations of ($50,000) resulting from accrual of interest on
debt.
Item 7. Financial Statements and Supplementary Data
Please refer to pages F-1 through F-11.
Item 8. Changes in and Disagreements on Accounting
and Financial Disclosure
In connection with audits of two most recent fiscal years and any
interim period preceding resignation, no disagreements exist with any former
accountant on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope of procedure, which disagreements if not
resolved to the satisfaction of the former accountant would have caused him to
make reference in connection with his report to the subject matter of the
disagreement(s).
The audit report by Michael B. Johnson & Co. LLC for the year ended
March 31, 1997, contained an opinion which included a paragraph discussing
uncertainties related to continuation of the Registrant as a going concern.
The principal accountants' reports on the financial statements for any
of the past two years contained no adverse opinion or a disclaimer of opinion
nor was qualified as to uncertainty, audit scope, or accounting principles
except for the "going concern" qualification.
5
<PAGE>
PART III
Item 9. Directors and Executive Officers of the
Registrant and Compliance with Section 16(a)
The directors and executive officers of the Company as of March 31,
1997, are as follows:
Name Age Position
- ------------------ ----- -------------------------
M. Coke Reeves 85 President, Director
M.R. Reeves 67 Vice President, Director
The principle occupations of each director and officer of the Company
for at least the past five years are as follows:
M. Coke Reeves has been employed on a full-time basis with the Company
as its President since inception in March 1980. Prior to that time, Mr. Reeves
had been in the mining and home-building business as Reeves of Texas, Inc. from
1973 to 1980. He has mined tungsten in Nevada as Reeves Mining, Inc. He was
involved in the operation of the Gold Bond Mine in Cripple Creek, Colorado
through Reeves Minerals, Inc. from 1973 to 1980. He was President and a director
and the sole shareholder of the foregoing companies, all of which were sold or
discontinued by Mr. Reeves in 1980. He was the President and founder of Bentex
Pharmaceutical Company from 1950 to 1971, which was subsequently sold to ICN
Pharmaceuticals, Inc. He resigned as Vice-President of ICN Pharmaceuticals in
1973. Prior thereto, he was involved in various businesses associated with coal
mining and marketing. Mr. Reeves received a B.A. degree from Westminster
College, Fulton, Missouri in 1933.
M.R. Reeves has been Secretary of the Company since 1984. Mrs. Reeves
served as Secretary of Reeves of Texas, Inc., a company involved in the mining
and home-building business from 1973 to 1980. From 1960 to 1970, she was
employed by Bentex Pharmaceutical Company as a buyer and in charge of its direct
mail department.
M. Coke Reeves and M.R. Reeves are husband and wife.
The term of office of each director and executive officer ends at, or
immediately after, the next annual meeting of shareholders of the Company.
Except as otherwise indicated, no organization by which any director or officer
has been previously employed is an affiliate, parent or subsidiary of the
Company.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than 10% shareholders are required by the
6
<PAGE>
Securities and Exchange Commission regulation to furnish the Company with copies
of all Section 16(a) filings.
1. The following people did not file any reports under Section 16(a)
during the most recent fiscal year:
a. M. Coke Reeves President and Director
b. M.R. Reeves Secretary and Director
2. For each person, listed by subparagraph letter above:
Number of late Number of Known failures
reports transactions not to file forms
reported on a
timely basis
- ----------------- ------------------ ------------------
a. none none none
b. none none none
Item 10. Executive Compensation
The Company accrued a total of $0 in compensation to the executive
officers as a group for services rendered to the Company in all capacities
during the fiscal year ended March 31, 1997. No one executive officer received,
or has accrued for his benefit, in excess of $60,000 for the year. No cash
bonuses were or are to be paid to such persons.
The Company does not have any employee incentive stock option plans.
There are no plans pursuant to which cash or non-cash compensation was
paid or distributed during the last fiscal year, or is proposed to be paid or
distributed in the future, to the executive officers of the Company. No other
compensation not described above was paid or distributed during the last fiscal
year to the executive officers of the Company. There are no compensatory plans
or arrangements, with respect to any executive office of the Company, which
result or will result from the resignation, retirement or any other termination
of such individual's employment with the Company or from a change in control of
the Company or a change in the individual's responsibilities following a change
in control.
7
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE OF EXECUTIVES
Annual Compensation Awards
<S> <C> <C> <C> <C> <C> <C>
Name and Year Salary Bonus Other Annual Restricted Securities
Principal Ended ($) ($) Compensation Stock Underlying
Position March ($) Award(s) Options/
31 ($) SARs (#)
- ------------------------------------------------------------------------------------------------------------------------------
M. Coke 1995 0 0 0 0 0
Reeves,
President
-----------------------------------------------------------------------------------------------------------
1996 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------
1997 0 0 0 0 0
==============================================================================================================================
M.R. 1995 0 0 0 0 0
Reeves,
Secretary
-----------------------------------------------------------------------------------------------------------
1996 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------
1997 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------
</TABLE>
Option/SAR Grants Table (None)
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End
Option/SAR value (None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
(Except for compensation of Officers who are also Directors which Compensation
is listed in Summary Compensation Table of Executives)
<TABLE>
<CAPTION>
Cash Compensation Security Grants
<S> <C> <C> <C> <C> <C>
Name Annual Meeting Consulting Number Number of
Retainer Fees Fees/Other of Securities
Fees ($) ($) Fees ($) Shares Underlying
(#) Options/SARs(#)
- ------------------------------------------------------------------------------------------------------------------------
A. Director 0 0 0 0 0
M. Coke Reeves
B. Director 0 0 0 0 0
M.R. Reeves
</TABLE>
Item 11. Security Ownership of Certain Beneficial
Owners and Management
The following table sets forth information, as of March 31, 1997, with
respect to the beneficial ownership of the Company's no par value common stock
by each person known by the Company to be the beneficial owner of more than five
percent of the outstanding common stock.
8
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Percentage of
Number of Outstanding
Name Relationship Shares Owned Shares
- ------------------------------------------------------------------------------------------------------
M. Coke Reeves(1) President and 14,790,800 23.03%
Director
M.R. Reeves(1) Secretary and 5,000,000 7.78%
Director
All Officers and 19,790,800 30.81%
Directors as a group
(2 persons)
(1) M. Coke Reeves and M.R. Reeves are husband and wife.
</TABLE>
PART IV
Item 13. Exhibits and Reports on Form 8-K
The following documents are filed as part of this report:
1. Reports on Form 8-K: None
2. Exhibits:
INDEX
Form 10-K
Regulation Consecutive
S-K Number Exhibit Page Number
- ------------ --------------------------- --------------------------
3.1 Articles of Incorporation *Incorporated by reference
to Registration Statement
#2-87742-D
3.2 Bylaws *Incorporated by reference
to Registration Statement
#2-87742-D
27.1 Financial Data Schedule F-12
9
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
COLORADO GOLD & SILVER, INC.
(Registrant)
Date: _______________
/s/ M. Coke Reeves
------------------------------------
M. Coke Reeves, President
Pursuant to the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
COLORADO GOLD & SILVER, INC.
(Registrant)
Date: April 7, 1999
/s/ M. Coke Reeves
------------------------------------
M. Coke Reeves, Director
/s/ M.R. Coke Reeves
------------------------------------
M.R. Reeves, Director
------------------------------------
________________, Director
10
<PAGE>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
March 31, 1998, 1997 & 1996
F-1
<PAGE>
Michael Johnson & Co., LLC
Certified Public Accountants
9175 East Kenyon Ave., Suite 100
Denver, Colorado 80237
Michael B. Johnson C.P.A.
Member: A.I.C.P.A. Telephone: (303) 796-0099
Colorado Society of C.P.A.s Fax: (303) 796-0137
Board of Directors
Colorado Gold & Silver, Inc.
We have examined the accompanying balance sheet of Colorado Gold & Silver, Inc.
(A Development Stage Company) as of March 31, 1998, 1997, and 1996 and the
related statements of operations, cash flows, and changes in stockholders'
equity for the period March 3, 1980 (inception), through March 31, 1998, and the
fiscal years ended March 31, 1998, 1997 and 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, its well as evaluating the overall financial statements
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects the Financial position of Colorado Gold & Silver, Inc. at
March 31, 1998, 1997 and 1996, and the results of its operations and its cash
flows for the period March 3, 1980 (inception), through March 31, 1998, and the
fiscal years ended March 31, 1998, 1997 and 1996, in conformity with generally
acccepted accounting principles.
As shown in the Financial statements, the company incurred net losses of $50,000
for 1998, 1997, and 1996 and had incurred substantial losses in the prior years.
At March 31, 1998, current liabililies exceed current assets by $2,135,980.
These factors indicate that the Company has substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classification of liabilities that might be
neccessary in the event the company cannot continue in existence.
The financial statements for the years ended March 31, 1980 through March 31,
1992 were audited by other accountants, whose reports dated July 6, 1992 were
qualified as to a going concern. They have not performed any auditing procedures
since that date.
/s/Michael Johnson & Co. LLC.
Michael Johnson & Co., LLC
Denver, Colorado
February 04, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
March 31,
<S> <C> <C> <C>
ASSETS 1998 1997 1996
- -------- ------- ------ ------
Current Assets:
Cash - - -
--------- ------- -------
TOTAL ASSETS - - -
========= ======= =======
LIABILITIES AND SHAREHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable & Accrued expenses $ 335,058 $ 335,058 $ 335,058
Accrued salary, officer 390,000 390,000 390,000
Accrued interest payable 672,003 622,003 572,003
Shareholder advances 888,919 888,919 888,919
--------- ------- -------
Total Current Liabilities 2,285,980 2,235,980 2,185,980
---------- --------- ---------
Shareholders' (Deficit):
Common stock, no par value;
authorized 100,000,000 shares;
issued and outstanding at
March 31, 1998, 1997 and 1996
64,217,400 shares 2,714,603 2,714,603 2,714,603
Deficit accumulated during the
development stage (5,000,583) (4,950,583) (4,900,583)
---------- ---------- -----------
Total Shareholders' (Deficit) (2,285,980) (2,235,980) (2,185,980)
TOTAL LIABILITIES & SHAREHOLDERS' (DEFICIT) - - -
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (MARCH 3,1980) THROUGH MARCH 31,1998
<S> <C> <C> <C> <C>
Cumulative
Amounts from
Inception (March
3, 1980) through Year Ended
March 31,1998 March 31,1998 March 31,1997 March 31,1996
---------------- ------------- ------------- -------------
Costs and Expenses:
General and administrative,
including exploration costs $ 1,892,893 - - -
Interest expense 710,069 50,000 50,000 50,000
Bad debt expense 2,500 - - -
Depreciation 44,325 - - -
Write-down of deferred mine development
costs, mineral properties, and joint
ventures advances to estimated net
realizable value. 1,227,003 - - -
Write-down of milling equipment to
estimated net realizable value. 619,365 - - -
Write-off of abandoned mineral properties
and write-off of advance royalties on
abandoned or expired lease claims. 210,240 - - -
Write-down of inventories to lower of cost
or market. 18,401 - - -
Oil and gas dry-hole costs 25,000 - - -
Write-off of deferred mine development
costs on abandoned mine projects. 264,238 - - -
--------- -------- ------------- --------
Operating (Loss) (5,014,034) (50,000) (50,000) (50,000)
Other Income (Expenses):
Assay services 20,041 - - -
Interest income 212,754 - - -
Rental income 38,238 - - -
Other income 32,149 - - -
Loss on dispositions including
sale of milling equipment and
abandonments of mine equipment,
buildings and improvements,
furniture and equipment and vehicles. (311,542) - - -
--------- -------- ------------- --------
Net (loss) before income taxes
and extraordinary items. (5,022,394) (50,000) (50,000) (50,000)
Provision for income taxes - - - -
--------- -------- ------------- --------
Net (loss) before extraordinary item (5,022,394) (50,000) (50,000) (50,000)
--------- -------- ------------- --------
Extraordinary item:
Gain from forgiveness of debt 21,811 - - -
--------- -------- ------------- --------
Net (loss) (5,000,583) (50,000) (50,000)
========= ======== ============= ========
Net (loss) per share: 0.001 0.001 0.001
-------- ------------- --------
Weighted average shares outstanding 64,217,400 64,217,400 64,217,400
======== ============= ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY
(DEFICIT)
FOR THE PERIOD FROM INCEPTION (MARCH 3,1980) THROUGH MARCH 31,1998
<S> <C> <C> <C> <C>
Deficit
Accumulated
Common Stock During The Total
Number Exploration Shareholders'
of Shares Amount Stage Equity
--------- ------ ----------- -------------
Date of inception, March 3, 1980 $ $ $
Contributed property from officers
and directors ($.00786 per share
as of March 5, 1981) 28,250,000 222,048 - 222,048
Net (loss) for the period from
inception (March 3, 1980)
through March 31, 1981 - - (9,293) (9,293)
---------- ------- ------- --------
Balances at March 31, 1981 28,250,000 222,048 (9,293) 212,755
Sale of stock to officers and directors
for cash -
($.016 per share as of April 1, 1981) 1,250,000 20,000 - 20,000
($.025 per share as of April 7, 1981) 250,000 6,250 - 6,250
($.025 per share as of April 14, 1981) 250,000 6,250 - 6,250
Sale of stock (private placement)
during June 1981
($.05 per share) 6,000,000 300,000 - 300,000
Sale of stock in public offering
($.10 per share, net of offering costs
of $.0125 per share as of
October 26, 1981) 25,017,900 2,129,473 - 2,129,473
Net(loss)for the year ended
March 31, 1982 - - (18,559) (18,559)
---------- ------- ------- --------
Balances at March 31, 1982 61,017,900 2,684,021 (27,852) 2,656,169
Net (loss) for the year ended
March 31, 1983 - - (236,492) (236,492)
---------- ------- ------- --------
Balances at March 31, 1983 61,017,900 2,684.021 (264,344) 2,419,677
Net (loss) for the year ended
March 31, 1984 - - (538,995) (538,995)
---------- ------- ------- --------
Balances at March 31, 1984 61,017,900 2,684,021 (803,339) 1,880,682
Net (loss) for the year ended
March 31, 1985 - - (624,177) (624,177)
---------- ------- ------- --------
Balances at March 31, 1985 61,017,900 2,684,021 (1,427,516) 1,256,505
Issuance of restricted stock for cash
and repayment of advance royalty
payment made by a former director
on behalf of the company
($.01148 as of March 15, 1986) 1,750,000 20,082 - 20,082
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM INCEPTION (MARCH 3,1980) THROUGH MARCH 31,1998
<S> <C> <C> <C> <C> <C>
Deficit Net
Accumulated Unrealized Loss
Common stock During The on Noncurrent Total
Number of Exploration Marketable Shareholders'
Shares Amount Stage Equity Security Equity
--------- ------ ----------- ---------------
Net (loss) for the year ended
March 31, 1986 - $ - $ (847,308) $ $ (847,308)
---------- --------- ---------- --------- -------------
Balance at March 31, 1986 62,767,900 2,704,103 (2,274,824) 429,279
Issuance of restricted stock for
services ($.005 per share as of
March 31, 1987 1,000,000 5,000 - - 5,000
Net (loss) for the year ended
March 31, 1987 - - (526,070) (526,070)
---------- --------- ---------- --------- -------------
Balances at March 31, 1987 63,767,900 2,709.103 (2,800,894) - (91,791)
Net (loss) for the year ended
March 31, 1988 - - (194,762) - (194,762)
---------- --------- ---------- --------- -------------
Balances at March 31, 1988 63,767,900 2,709,103 (2,995,656) - (286,553)
Issuance of restricted stock for
cash ($.015 per share as
of November 15, 1988) 199,500 3,000 - - 3,000
Issuance of restricted stock in
partial settlement of a disputed
liability ($.01 per share as
of March 18, 1989) 250,000 2,500 - 2,500
Net (loss) for the year ended
March 31, 1989 - - (165,082) (165,082)
---------- --------- ---------- --------- -------------
Balances at March 31, 1989 64,217,400 2,714,603 (3,160,738) (446,135)
Net (loss) for the year ended
March 31, 1990 - - (725,765) (725,765)
---------- --------- ---------- --------- -------------
Balances at March 31, 1990 64,217,400 2,714,603 (3,886,503) (1,171,900)
Net (loss) for the year ended
March 31, 1991 - - (134,961) (134,961)
Net unrealized (loss) on non-current
marketable equity security (3,276) (3,276)
---------- --------- ---------- --------- -------------
Balances at March 31, 1991 64,217,400 2,714,603 (4,021,464) (3,276) (1,310,137)
Net (loss) for the year ended
March 31, 1992 - - (345,090) (345,090)
---------- --------- ---------- --------- -------------
Balances at March 31, 1992 64,217,400 2,714,603 (4,366,554) (3,276) (1,655,227)
---------- --------- ---------- --------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM INCEPTION (MARCH 3,1980) THROUGH MARCH 31,1998
<S> <C> <C> <C> <C> <C>
Deficit Net
Accumulated Unrealized Loss
Common Stock During The on Noncurrent Total
Number of Exploration Marketable Shareholders'
Shares Amount Stage Equity Security Equity
--------- ------ ----------- --------------- ------------
Net (loss) for the year ended
March 31, 1993 - - (383,659) - (383,659)
Realized (loss) on security - - - 3,276 3,276
----------- --------- ----------- ------- -----------
Balances at March 31, 1993 64,217,400 2,714,603 (4,750,213) - (2,035,610)
Net (loss) for the year ended
March 31, 1994 - - (50,370) - (50,370)
----------- --------- ----------- ------- -----------
Balances at March 31, 1994 64,217,400 2,714,603 (4,800,583) - (2,085,980)
Net (loss) for the year ended
March 31, 1995 - - (50,000) - (50,000)
----------- --------- ----------- ------- -----------
Balances at March 31, 1995 64,217,400 2,714,603 (4,850,583) - (2,135,980)
Net (loss) for the year ended
March 31, 1996 - - (50,000) - (50,000)
----------- --------- ----------- ------- -----------
Balances at March 31, 1996 64,217,400 2,714,603 (4,900,583) - (2,185,980)
Net (loss) for the year ended
March 31, 1997 - - (50,000) - (50,000)
----------- --------- ----------- ------- -----------
Balances at March 31, 1997 64,217,400 2,714,603 (4,950,583) - (2,235,980)
Net (loss) for the year ended
March 31, 1998 - - (50,000) - (50,000)
----------- --------- ----------- ------- -----------
Balances at March 31, 1998 64,217,400 $ 2,714,603 $ (5,000,583) $ - $ (2,285,980)
=========== ========= =========== ======= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (MARCH 3,1980) THROUGH MARCH 31,1998
<S> <C> <C> <C> <C>
Cumulative
Amounts From
Inception
(March 3, 1980)
Through Year Ended
March 31, 1998 March 31, 1998 March 31, 1997 March 31, 1996
-------------------------------------------------------------------------------------
Cash flows from operating activities:
Net (loss) $ (5,000,583) $ (50,000) $ (50,000) $ (50,000)
Adjustments to reconcile net loss
to net cash (used by)
operating activities:
Depreciation and amortization 147,668 - - -
Write-down of deferred mine
development costs, mineral
properties and joint venture
advances to estimated net
realizable value 1,227,003 - - -
Write-down of milling equipment
to estimated net realizable value 619,365 - - -
Write off of abandoned mineral
properties and advance royalties 210,240 - - -
Write-off of deferred mine
development costs 264,238 - - -
Loss on disposition of mine
equipment, furniture and
equipment, and vehicles 311,542 - - -
Gain on disposition of
properly and equipment (17,054) - - -
Oil and Gas dry-hole costs 25,000 - - -
Bad debt expense 2,500 - - -
Decrease in other assets 555 - - -
(Decrease) Increase in accounts payable 335,058 - - -
Increase in accrued interest payable 672,003 50,000 50,000 50,000
Increase in accrued salary, officer 390,000 - - -
(Increase) in miscellaneous receivable (2,500) - - -
---------- ------ ------ ------
Total Adjustments 4,185,618 50,000 50,000 50,000
---------- ------ ------ ------
Net cash (used by) operating activities $ (814,965) $ - $ - $ -
========== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (MARCH 3,1980) THROUGH MARCH 31,1998
<S> <C> <C> <C> <C>
Cumulative
Amounts From
Inception
(March 3, 1980)
Through Year Ended
March 31, 1998 March 31, 1998 March 31, 1997 March 31, 1996
---------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from the disposition
of property and equipment $ 86,628 $ - $ - $ -
Additions to deferred mine
development costs (1,257,154) - - -
Acquisition of other property
and equipment (1,012,523) - - -
(Increase) in other assets (235,651) - - -
------------ ------- --------- -------
Net cash (used by) investing activities (2,418,700) - - -
------------ ------- --------- -------
Cash flows from financing activities:
Proceeds from issuance of
common stock 2,490,055 - - -
Issuance of long-term debt 81,250 - - -
Advance from an officer 36,350 - - -
Proceeds from other notes payable
including $14,809 reclassified from
accounts payable and $1,822 of
interest expense incurred during the
March 31, 1991 fiscal year 43,631 - - -
Payment on debt principal including
$2,000 for debt forgiveness in 1991 (83,250) - - -
Repayment of advances from officer (36,350) - - -
Advance to joint venture (186,940) - - -
Shareholder advances 888,919 - - -
------------ ------- --------- -------
Net cash provided by
financing activities 3,233,665 - - -
------------ ------- --------- -------
Net (decrease) increase in cash and
cash equivalents - - - -
Beginning cash and cash equivalents - - - -
------------ ------- --------- -------
Ending cash and cash equivalents - - - -
============ ======= ========= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-9
<PAGE>
<TABLE>
<CAPTION>
COLORADO GOLD & SILVER, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (MARCH 3,1980) THROUGH MARCH 31,1998
<S> <C> <C> <C> <C>
Cumulative
Amounts From
Inception
(March 3, 1980)
Through Year Ended
March 31, 1998 March 31, 1998 March 31, 1997 March 31, 1996
-------------------------------------------------------------------------------------------
Supplemental schedule of non-cash
investing and financing activities:
Issuance of stock for property 224,548 - - -
Investment in preferred stock
in exchange for mining claims 4,024 - - -
Investment in marketable equity
security and miscellaneous
receivable resulting from
disposition of milling equipment 13,276 - - -
Exchange of miscellaneous
receivable resulting from
milling equipment held for sale (10,000) - - -
Supplemental disclosures of cash
information:
Cash paid for:
Interest 33,211 - - -
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
Notes to Financial Statements
March 31, 1998, 1997 & 1996
Note I - 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
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
F-11
<PAGE>
COLORADO GOLD & SILVER, INC.
(A Development Stage Company)
Notes to Financial Statements
March 31, 1998, 1997 & 1996
Organization Costs:
Organization costs incurred by the Company totaling $5,000 had been capitalized
and have been amortized on the straight-line method over a five-year period.
Net (Loss) Per Share:
The net (loss) per common share has been computed oil the basis of the weighted
average number of shares of common stock outstanding during the year (64,217,400
in 1998, 1997 and 1996).
Note 2 - Going-Concern consideration:
As shown in the financial statements, thee Company incurred a net loss of
$50,000 during the years ended March 31, 1998, 1997 and 1996, and as of March 3
1,1998 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
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 3 - 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 4 - 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-12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 2,235,980
<BONDS> 0
0
0
<COMMON> 2,714,603
<OTHER-SE> (4,950,583)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50,000
<INCOME-PRETAX> (50,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (50,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
