As filed with the Securities and Exchange Commission on January 31, 2000
Registration No. 333-94695
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
Amendment No. 1 to
Form SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------
GoHealth.MD, Inc.
(Name of small business issuer in our charter)
--------------------
Nugget Exploration, Inc.
(Former Name of small business issuer)
--------------------
Nevada 7370 83-0250943
------ ---- ----------
(State of jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
--------------------
2051 Springdale Road
Cherry Hill, New Jersey 08003
(800) 204-1902
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
Dr. Leonard Vernon, President
2051 Springdale Road
Cherry Hill, New Jersey 08003
(800) 204-1902
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices and name, address
and telephone number of agent for service)
Copies of Communications to:
Kevin S. Woltjen, P.C.
900 Jackson Street, Suite 600
Dallas, Texas 75202
Telephone: 214-712-5673
Facsimile: 214-712-5674
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
<PAGE>
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of each class of securities Amount of Proposed Amount of
to be registered securities to be maximum registration
registered aggregate fee
offering price
- -------------------------------------------- ----------------------- ------------------------- ----------------------
<S> <C> <C> <C>
Common Stock, par value 1,514,500 (1) $4.00 (2) $1,600
$0.01, per share
============================================ ======================= ========================= ======================
</TABLE>
(1) All of the shares of common stock being registered hereby are being offered
by selling stockholders who acquired such shares in private transactions. No
other shares of the registrant's common stock are being registered in this
offering.
(2) Estimated pursuant to Rule 457(c) under the Securities Act of 1933 solely
for purposes of computing the amount of the registration fee. The fee for the
common stock was based on the average of the bid and ask price of the common
stock reported on the Over-the-Counter (OTC) Bulletin Board on January 7, 2000.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant will file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
ii
<PAGE>
SUBJECT TO COMPLETION DATED _______________, 2000
Prospectus
1,514,500 SHARES
NUGGET EXPLORATION, INC.
COMMON STOCK
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
The selling stockholders are offering to sell 1,514,500 shares of common stock.
We will not receive any proceeds from the offering of common stock. Because
989,500 shares offered hereby are issuable upon exercise of our options and
warrants, we will receive approximately $1,387,000 if all of the warrants and
options are exercised. These proceeds will be used for our general corporate
purposes.
Our common stock is traded and quoted on the Over-the-Counter (OTC) Bulletin
Board under the symbol "NUGT." On January 7, 2000, the last reported bid price
of our common stock was $4.00 and the last reported ask price of our common
stock was $5.00.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The securities offered in this prospectus involve a high degree of risk. You
should carefully consider the factors described under the heading "Risk Factors"
beginning on page 6.
iii
<PAGE>
NUGGET EXPLORATION, INC.
(A Development Stage Company)
Unaudited Financial Statements as of the
Quarter Ended August 31, 1999
C O N T E N T S
Balance Sheet (Unaudited) .................................................F-3
Statements of Operations (Unaudited) .......................................F-4
Statements of Stockholders' Equity (Deficit) (Unaudited)....................F-5
Statements of Cash Flows (Unaudited)........................................F-7
Notes to the Financial Statements (Unaudited)...............................F-8
The accompanying notes are an integral part of these unaudited
financial statements.
F-31
<PAGE>
NUGGET EXPLORATION, INC.
(A Development Stage Company)
Unaudited Balance Sheet
ASSETS
------
August 31,
1999
----
CURRENT ASSETS
Cash $ 3,253
-----------------
Total Current Assets 3,253
-----------------
TOTAL ASSETS $ 3,253
=================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 22,622
Note payable - (Note 3) 7,380
Accrued Interest - (Note 3) 8,906
-----------------
Total Current Liabilities 38,908
-----------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.01 par value, 25,000,000 shares authorized,
697,117 shares issued and outstanding 6,971
Additional paid-in capital 3,536,930
Deficit accumulated during the development stage (3,579,556)
-----------------
Total Stockholders' Equity (Deficit) (35,655)
-----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 3,253
=================
The accompanying notes are an integral part of these unaudited
financial statements.
F-32
<PAGE>
NUGGET EXPLORATION, INC.
(A Development Stage Company)
Unaudited Statements of Operations
<TABLE>
<CAPTION>
From
Inception on
For the July 24,
Three Months Ended 1980 Through
August 31, August 31,
----------------------------------------------------------
1999 1998 1999
------------------ ------------------ -----------------
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES
Total Expenses 5,288 - 5,552,466
------------------ ------------------ ------------------
LOSS FROM OPERATIONS (5,288) - (5,552,466)
------------------ ------------------ ------------------
OTHER INCOME
Gain on Sale of Asset - - (588,499)
------------------- ------------------ ------------------
Total Other Income - - (588,499)
------------------ ------------------ ------------------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM (5,288) - (4,963,967)
------------------ ------------------ ------------------
EXTRAORDINARY ITEM
Gain on extinguishment of debt - - 1,384,411
------------------ ------------------ ------------------
Total Extraordinary Item - - 1,384,411
------------------ ------------------ ------------------
NET LOSS $ (5,288) $ - $ (3,579,556)
================== ================== ==================
BASIC LOSS PER SHARE $ (.01) $ -
================== =============
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 697,117 -
================== =============
</TABLE>
The accompanying notes are an integral part of these unaudited
financial statements.
F-33
<PAGE>
NUGGET EXPLORATION, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
------------------------------------ Paid-In Development
Shares Amount Capital Stage
------------------ --------------- ----------------- -----------
<S> <C> <C> <C> <C>
At inception on July 24, 1980 - $ - $ - $ -
Common stock issued for property
at approximately $19.62 per share 10,452 104 204,940 -
Common stock issued for cash
at approximately $30.33 per share 2,374 24 71,976
Common stock issued for cash
at approximately $77.50 per share 9,677 97 749,903 -
Stock offering costs - - (18,854) -
Common stock issued for cash
at approximately $77.52 per share 258 3 19,997 -
Common stock issued for cash
at approximately $96.68 per share 16,129 161 2,499,839 -
Stock offering costs - - (482,517) -
Stock issued for property
at approximately $96.68 per share 2,581 26 249,502 -
Warrant issued for cash - - 100 -
Common stock issued for cash
and services at approximately
$43.41 per share 645 6 27,994 -
Common stock issued for services
at approximately$3.10 per share 323 3 997 -
Common stock issued for debt
at approximately $3.10 per share 5,968 60 18,440 -
Net loss for the period from
inception on July 24, 1980 to
May 31, 1995 - - - (5,103,532)
-------------- --------------- ----------------- --------------------
Balance, May 31, 1995 48,407 484 3,342,317 (5,103,532)
</TABLE>
The accompanying notes are an integral part of these unaudited
financial statements.
F-34
<PAGE>
<TABLE>
<CAPTION>
NUGGET EXPLORATION, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Common Stock Additional During the
-------------------------------------- Paid-In Development
Shares Amount Capital Stage
------------------ --------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Net loss for the year ended
May 31, 1996 - - - (35,851)
------------------ --------------- ----------------- -----------------
Balance, May 31, 1996 48,407 $ 484 $ 3,342,317 $ (5,139,383)
Net loss for the year ended
May 31, 1997 - - - (78,967)
------------------ --------------- ----------------- -----------------
Balance, May 31, 1997 48,407 484 3,342,317 (5,218,350)
Net loss for the year ended
May 31, 1998 - - - (78,524)
------------------ --------------- ----------------- -----------------
Balance, May 31, 1998 48,407 484 3,342,317 (5,296,874)
Common stock issued for cash
$0.31 per share 48,710 487 14,613 -
Common stock issued for services
at $0.31 per share 600,000 6,000 180,000 -
Net income for the year ended
May 31, 1999 - - - 1,722,606
------------------ --------------- ----------------- -----------------
Balance, May 31, 1999 697,117 $ 6,971 $ 3,536,930 $ (3,574,268)
================== =============== ================= =================
Net loss for the quarter ended
August 31, 1999 (unaudited) - - - (5,288)
------------------ --------------- ----------------- -----------------
Balance, August 31, 1999 697,117 $ 6,971 $ 3,536,930 $ (3,579,556)
(unaudited) ================== =============== ================= =================
</TABLE>
The accompanying notes are an integral part of these unaudited
financial statements.
F-35
<PAGE>
NUGGET EXPLORATION, INC.
(A Development Stage Company)
Unaudited Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
For the July 24,
Three Months Ended 1980 Through
August 31, August 31,
--------------------------------------
1999 1998 1999
------------------ ------------------ ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (5,288) $ - $ (3,579,556)
Adjustments to reconcile net loss to net cash
used by operating activities:
Common stock issued for services
property and debt - - 550,571
Gain on sale of asset - - (588,499)
Gain on extinguishment of debt - - (1,384,411)
Changes in operating assets and liabilities:
Increase (decrease) in accrued expenses 204 - 1,271,644
Increase (decrease) in accounts payable 2,157 - 59,099
------------------ ------------------ ------------------
Net Cash Used by Operating Activities (2,927) - (3,671,152)
------------------ ------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property - - (111,502)
Cash received on sale of property - - 700,000
------------------ ------------------ ------------------
Net Cash Provided by
Investing Activities - - 588,498
------------------ ------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of Common stock for cash - net of
stock offering costs - - 2,993,330
Cash payments of notes payable - related - - (561,679)
Proceeds from notes payable - - 654,356
------------------ ------------------ ------------------
Net Cash Provided by
Financing Activities - - 3,086,007
------------------ ------------------ ------------------
NET INCREASE (DECREASE) IN CASH (2,927) - 3,253
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 6,180 - -
------------------ ------------------ -------------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 3,253 $ - $ 3,253
================== ================== ==================
</TABLE>
The accompanying notes are an integral part of these unaudited
financial statements.
F-36
<PAGE>
NUGGET EXPLORATION, INC.
(A Development Stage Company)
Notes to the Unaudited Financial Statements
August 31, 1999
NOTE 1 - ORGANIZATION AND HISTORY
Nugget Exploration, Inc. (the Company) was incorporated under the laws of Nevada
on July 24, 1980 for the purpose of exploring for and developing uranium, gold
and other mineral properties. The Company has had limited operations to date and
its activities have consisted primarily of raising equity capital and the
acquisition and exploration of mineral properties; accordingly, the Company is
considered to be a development stage enterprise as defined in SFAS 7. Current
operations are being funded by borrowing from the Company's officers.
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a May 31 calendar year end.
b. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
c. Basic Loss Per Share
The computations of basic loss per share of common stock are based on the
weighted average number of shares outstanding during the period of the
financial statements.
d. Provision for Taxes
At August 31, 1999, the Company had net operating loss carry forwards of
approximately $3,500,000 that may be offset against future taxable income
through 2018. No tax benefit has been reported in the financial statements,
because the Company believes there is a 50% or greater chance the carry
forwards will expire unused. Accordingly, the potential tax benefits of the
loss carry forwards are offset by a valuation allowance of the same amounts.
e. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and 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.
f. Basis of Presentation
For the quarter ended August 31, 1998, the financial information required by
Part I of Form 10-QSB was not required pursuant to Exchange Act Regulations Rule
13a-13(c)(2). Such information is not required for mining companies not in the
production state but engaged primarily in the exploration for or the development
of mineral deposits other than oil, gas or coal, if all the following conditions
are met: (i) The registrant has not been in production during the current fiscal
year or the two
F-37
<PAGE>
NUGGET EXPLORATION, INC.
(A Development Stage Company)
Notes to the Unaudited Financial Statements
August 31, 1999
years immediately prior thereto; except that being in production for an
aggregate period of not more than eight months over the three-year period shall
not be in violation of this condition. (ii) Receipts from the sale of mineral
products or from the operations of mineral producing properties by the
registrant and its subsidiaries combined have not exceeded $500,000 in any of
the most recent six years and have not aggregated more than $1,500,000 in the
most recent six fiscal years.
Up until the sale of the Company's mining properties on May 24, 1999, the
Company was therefore not required to file the financial information required by
Part I of Form 10-QSB pursuant to Exchange Act Regulations Rule 13a-13(c)(2).
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. It is the
intent of the Company to seek a merger with an existing, operating company.
Until that time, shareholders of the Company have committed to meeting its
minimal operating needs.
NOTE 3 - NOTES PAYABLE
Notes payable at May 31, 1999 and August 31, 1999 consisted of the following:
May 31, August 31,
1999 1999
------------ ------
Note payable to an individual, interest at 9%
per annum, due on demand, unsecured. $ 2,290 $ 2,290
Note payable to an individual, interest at 9%
per annum, due on demand, unsecured. 5,090 5,090
--------- ---------
Totals 7,380 7,380
Accrued interest 8,702 8,906
--------- ---------
Total Amounts Due $ 16,082 $ 16,286
========== ==========
F-38
<PAGE>
NUGGET EXPLORATION, INC.
(A Development Stage Company)
Notes to the Unaudited Financial Statements
August 31, 1999
NOTE 4 - SUBSEQUENT EVENTS
a. Annual Meeting of Shareholders
An annual meeting of shareholders was held on August 16, 1999 in Sandy, Utah. To
1) ratify the election of new board members: 2) ratify the Rescission of the
Purchase and Sale Agreement dated December 9, 1998 and rescinded May 10, 1999;
3) vote on amending the Company's Articles of Incorporation to increase the
number of authorized shares of the Company's Common Stock, par value $0.01, from
5,000,000 to 25,000,000; 4) ratify and vote on the selection of Jones, Jensen &
Company as the Company's auditors for the fiscal year ending May 31, 2000; 5)
that an article be added to the Articles of Incorporation, whereby waiving and
precluding the application of the anti- takeover provisions of the Nevada
Revised Statutes 78.378 to 78.3793, 78.434 and 78.444. All items were voted in
favor for by shareholders owning a majority of the Company's issued and
outstanding shares either present in person or proxy.
b. Stock Exchange Agreement
On September 31, 1999 a Stock Exchange Agreement and Plan of Merger (the
"Agreement") was entered into between and among the Company, Nugget Holding
Company, a Delaware corporation ("Newco"), and GoHealth.md Inc., a Delaware
corporation ("GoHealth.md"). Pursuant to the Agreement, Newco is to merge with
and into GoHealth.md which is to survive the merger and became a wholly owned
subsidiary of the Company ("Merger"). Newco is to be formed for the purpose of
facilitating the Merger.
Closing is expected to take place within approximately 30 days, and is subject
to, among other things, approval by the shareholders of GoHealth.md.
Additionally, Closing is to occur when shares have been exchanged by the
constituent parties, and a plan of merger is filed and deemed effective with the
state of Delaware.
As part of the transaction each issued common share, $0.001 par value, of
GoHealth.md as of the Closing (the "GoHealth.md Stock") shall be converted into
and exchanged for one share of fully paid and non-assessable Nugget Common
Stock, $0.01 par value ("Nugget Stock"). Additionally, the current board of the
Company will be replaced by nominees of GoHealth.md's board of directors.
Approximately 3,600,000 shares of the Company's stock will be issued in
connection with the transaction after accounting for the exercise of options and
warrants thereby resulting in approximately 4,300,000 total shares issued and
outstanding.
F-39
<PAGE>
January 21, 2000
To the Board of Directors
Nugget Exploration, Inc.
(A Development Stage Company)
2501 Springdale Road
Cherry Hill, NJ 08003
I have compiled the accompanying balance sheet of Nugget Exploration, Inc as of
November 30, 1999 and the related statements of operations and stockholders'
equity and the statement of cash flows for the quarter ended November 30, 1999
in accordance with the standards established by the American Institute of Public
Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. I have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
Sincerely,
/s/ Dennis Riley
Dennis Riley
F-40
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Balance Sheet
As of November 30, 1999
ASSETS:
Current Assets:
Cash $ 61,173
Accounts receivable 48
Stock subscription receivable 1,000
Domain names - available for sale 38,077
---------------
100,298
Other Assets:
Deposits 1,900
Prepaid Expenses 1,741,667
Furniture and Fixtures 7,554
Website costs 77,035
---------------
$ 1,928,454
=============
LIABILITES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 48,995
Accrued expenses 13,767
Notes payable 45,380
Due to officers 21,622
---------------
Total Liabilities 129,764
Stockholders' Equity:
Common stock: 25,000,000 shares authorized, 4,224,604
shares issued and outstanding 13,073
Additional paid-in capital 4,849,028
Warrants: 1,000,000 warrants authorized,
600,000 issued and outstanding) 850,000
Deficit accumulated during the period ended
November 30, 1999 (3,913,411)
--------------
Total Stockholders' Equity 1,798,690
-------------
$ 1,928,454
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-41
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Statement of Operations
For the Quarter Ended November 30, 1999
Sales:
Advertising Revenue $ 32
-------------------
Net Sales 32
-------------------
Other Expenses:
Accounting 3,000
Advertising 30,996
Chat room expense 2,000
Conferences 895
Consulting 168,533
Convention expenses 4,729
Dues 62
Fees 1,859
Interest expense 167
Legal 13,666
Postage 1,704
Printing 10,107
Secretarial 9,940
Telephone 667
Travel 1,833
----------------
250,158
Net loss $ (250,126)
==============
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-42
<PAGE>
Dennis Riley
Certified Public Accountant
<TABLE>
<CAPTION>
Nugget Exploration, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
For the Period Ended November 30, 1999
Common Stock
$.01 Par Value Deficit
Number of Shares Accumulated
---------------- Additional During the
Amount Paid-In Development
Capital Stage
<S> <C> <C> <C> <C>
At inception on July 24, 1980 $ $ $
Common stock issued for property at
approximately $19.62 per share 10,452 104 204,940
Common stock issued for cash at approximately
$30.33 per share 2,374 24 71,976
Common stock issued for cash at approximately
$77.50 per share 9,677 97 749,903
Stock offering costs (18,854)
Common stock issued for cash at approximately
$77.52 per share 258 3 19,997
Common stock issued for cash at approximately
$96.68 per share 16,129 161 2,499,839
Stock offering costs (482,517)
Stock issued for property at approximately
$96.68 per share 2,581 26 249,502
Warrant issued for cash 100
Common stock issued for cash and services at
approximately $43.41 per share 645 6 27,994
Common stock issued for services at
approximately $3.10 per share 323 3 997
Common stock issued for debt at approximately
$3.10 per share 5,968 60 18,440
Net loss for the period from inception on July
24, 1980 to May 31, 1995 (5,103,532)
Balance May 31, 1995 48,407 484 3,342,317 (5,103,532)
Net loss for the year ended May 31, 1996 (35,851)
Balance, May 31, 1996 48,407 484 3,342,317 (5,139,383)
Net loss for the year ended May 31, 1997 (78,967)
</TABLE>
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-43
<PAGE>
Dennis Riley
Certified Public Accountant
<TABLE>
<CAPTION>
Nugget Exploration, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
For the Period Ended November 30, 1999
<S> <C> <C> <C> <C>
$ $ $
Balance, May 31, 1997 48,407 484 3,342,317 (5,218,350)
Net loss for the year ended May 31, 1998 (78,524)
Balance, May 31, 1998 48,407 484 3,342,317 (5,296,874)
Common stock issued for cash $0.31 per share 48,710 487 14,613
Fractional shares 487
Common stock issued December 1998 for
services at $0.31 per share 600,000 6,000 180,000
Net income for the year ended May 31, 1999 1,722,606
Balance, May 31, 1999 697,604 6,971 3,536,930 (3,574,268)
Net loss for the quarter ended August 31, 1999
(unaudited) (5,288)
Balance, August 31, 1999 (unaudited) 697,604 6,971 3,536,930 (3,579,556)
On November 10, 1999 acquire GoHealth.MD,
Inc. 3,102,000 3,102 (83,729)
Balance November 10, 1999 (unaudited) 3,799,604 (3,663,285)
Issue shares on November 16, 1999 for services
provided by MCOM Management Corp. 300,000 3,000
Net loss for the period ended November 30,
1999 (unaudited) (250,126)
Balance, November 30, 1999 (unaudited)
4, 099,604 13,073 3,536,930 3,913,411
---------- ------ --------- ---------
</TABLE>
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-44
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Quarter Ended November 30, 1999
Cash Flows from Operating Activities
Net loss $ (250,125)
Adjustment to reconcile net income to net
cash provided by operating activities:
Decrease in stock subscription receivable 400
Increase in Domain names - available for sale (10,500)
Decrease in accounts payable (32,058)
Increase in accrued expenses 167
---------------
(292,116)
Cash Flows from Investing Activities:
Deposits (1,900)
Prepaid Expenses (1,435,979)
Fixed Assets (7,554)
Purchase of Website (11,081)
---------------
Net cash provided by investing activities (1,456,514)
Cash Flows from financing Activities:
Proceeds from sale of stock and stock warrants 1,703,513
-------------
Net cash provided by financing activities: 1,703,513
Net Increase (Decrease)in Cash (45,117)
Cash - Beginning of Period (September 1, 1999) 106,291
--------------
Cash - End of Period (November 30, 1999) $ 61,173
===============
Supplemental Disclosures of Cash Flow Information:
Cash paid during the quarter for:
Interest $ 0
===========
Taxes $ 0
===========
Supplemental Disclosure of Noncash Investing
and Financing Activities:
Issuance of common stock and warrants for
consulting services 1,905,200
Adjustment of common shares due to reconciliation
of fractional shares 487
Total Noncash Investing and Financing Activities: $ 1,905,687
=============
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-45
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Nugget Exploration, Inc. acquired GOHEALTH.MD, Inc. on November 10, 1999.
GOHEALTH.MD, Inc., a development stage company, (the "Company") was incorporated
under the laws of the State of Delaware on February 23, 1999. The Internet
related operations of GOHEALTH.MD, Inc. now comprise virtually all our
operations. GOHEALTH.MD, Inc. will be engaged in providing through the Internet
an advertising network and Internet presence for independently owned health food
stores, health care providers and others.
Basis of Accounting
The financial statements of the Company have been prepared on the accrual basis
of accounting.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less to be cash equivalents.
Use of Management's Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as the date of the financial statements and
the reported amounts of revenues and expenses during the reported quarter.
Actual results could differ from those estimates.
Domain Names - Available for Sale
Domain name - available for sale consists of specific domain manes purchased and
are valued at the purchase price. Then a domain name is sold, the purchase price
for that specific name is removed out of cost.
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-46
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
Impairment of Long-Lived Assets
The company adopted Statement of Financial Accounting Standards No. 121 (SFAS
121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of". SFAS 121 requires that if facts and circumstances
indicate that the cost of fixed assets or other assets may be impaired, an
evaluation if recoverability would be performed by comparing the estimated
future undiscounted pre-tax cash flows associated with the asset to the asset's
carrying value to determine if a write-down to market value or discounted
pre-tax cash flow value would be required.
Advertising and Promotional Costs
Advertising expenditures of the Company's programs and services are expensed in
the quarter the advertising costs are incurred. Advertising and promotional
costs for the quarter from inception (February 23, 1999) to November 31, 1999
were $30,996.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS
130) "Reporting Comprehensive Income". This statement establishes rules for the
reporting of comprehensive income and its components which require that certain
items such as foreign currency translation adjustments, unrealized gains and
losses on certain investments in debt and equity securities, minimum pension
liability adjustments and unearned compensation expense related to stock
issuances to employees be presented as separate components of stockholders'
equity. The adoption of SFAS 130 had no impact on total stockholders' equity for
the quarter presented in these financial statements.
Start-Up Activities
The American Institute of Certified Public Accountants recently issued Statement
of Position ("SOP") 98-5, "Reporting the Costs of Start-Up Activities." SOP 98-5
requires start-up costs, as defined to be expenses as incurred and it effective
for the financial statements for fiscal years after December 15, 1998. The
Company currently expenses all start-up costs as incurred and the application of
SOP 98-5 will have no material impact on the Company's financial statements.
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-47
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
Stock-Based Compensation
The Company has elected the follow Accounting Principles Board Opinion No. 25,
(APB 25) "Accounting for Stock Issued to Employees" in accounting for its
employee stock option plans. Under APB 25, when the exercise price of the
Company's employee stock options equals or is above the market price of the
underlying stock on the date of the grant, no compensation expense is
recognized.
In accounting for options granted to persons other than employees, the
provisions of Financial Accounting Standards Board Statement No. 123, (FASB 123)
" Accounting for Stock Based Compensation" are applied. In accordance with FASB
123 the fair value of these options are to be estimated at the grant date using
the Black-Scholes option-pricing model.
Income Taxes
The Company follows Statement of Financial Accounting Standards No. 109, (SFAS
109) "Accounting for Income Taxes." SFAS 109 requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under
this method, deferred tax liabilities and assets are determined based in the
difference between the financial statement carrying amounts and tax bases of
assets and liabilities using enacted tax rates in effect in the years in which
the differences are expected to reverse. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized.
2. PLAN OF OPERATIONS
GOHEALTH.MD, Inc. is a development stage company and will be engaged in
providing through the Internet an advertising network and Internet presence for
independently owned health food stores, health care providers, and others
through an additional website owned by the Company, HEALTHMALL.COM.
GOHEALTH.MD, Inc has marketing rights to more than 40 domain names (such as:
HERB.MD, NUTRITION.MD, ARTHRITIS.MD, VITAMIN.MD, FAMILY.MD, and SPORTS.MD) in
the TLD (top level domain) .MD. A Florida company, Domain Name Trust , acquired
the .MD protocol from Moldova, a small European country formerly part
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
-
F-48
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
of the Soviet Union. Domain Trust had been licensed to sell registrations by
Moldova in Europe, Canada, and other English speaking countries. The country of
Moldova benefits economically from the arrangement, receiving $35 for each name
sold.
The Company believes that .MD is the first of a new generation of website
addresses and it is a natural and intuitive address that makes sense for
physicians and those in the broad medical community, as well as those whose
personal initials, corporate initials, state of residence (i.e. Maryland), or
title (i.e. Managing Director) are the letters .MD.
.MD is a top level domain (TLD), comparable in purpose to the top level domain
.COM, .NET, or .ORG. The difference is that these, and most other top level
domains created at the dawn of the Internet communications. The Company believes
that in the future a top level domain name will no longer be as primitive as the
first TLDs. Secondly, the names still available within these domains are finite.
Once a name is registered, it is not available to anyone else. Eventually, all
of the domains may be taken. .MD was first made available in 1998.
The Company believes it has several advantages over other companies that may be
offering a similar product. The Company expects to develop a significant revenue
stream over the next three years through the development and marketing of its
Internet domain names. The availability of capturing a large physician network
(medical doctors, chiropractors, dentists, podiatrists, osteopaths) to view
online advertising in exchange for the establishment of websites and hosting
services is one of the Company's primary goals. The availability of having tens
of thousands of physicians guaranteed viewing the websites establishes the
significant potential for advertising revenue. The Company also believes that
the same potential exists for the natural health food products market. It is
believed that individual health food stores could be provided with a webpage
either free of charge or for a nominal fee with free hosting and website design
in exchange for guaranteed viewing of certain web pages on a monthly basis. In
exchange, the Company could receive advertising revenue for the guaranteed
visits to that particular site.
The Company also owns the domains ACCIDENT.MD, ASK.MD and CALL911.MD and
believes that management will be able to obtain the necessary funding to
commence its planned principle operations in the fourth quarter of 1999.
The Company is only recently organized and does not have any material assets and
has no previous commercial operations, and therefore, there is no history of
earnings or operations upon which to judge its future success. To date, the
Company has been engaged in the development of its business plan and the
preparation of a Private
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-49
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
Placement Memorandum. The Company currently has not conducted any significant
business nor has the Company signed and definitive agreements with any health
food stores, health care providers, or others. Because of its lack of prior
operations, assets and industry position, the Company mist be considered a
development stage enterprise. Consequently, there can be no assurance that
viable commercial operations can be achieved or sustained by the Company even if
it is successful in raising all the capital it requires. As a development stage
enterprise, the Company is subject to all of the risks inherent in the
establishment if a new business, including the absence of a significant
operating history, lack of market recognition and limited banking and financial
relationships. There can be no assurance that the Company's proposed operations
will attract a sufficient customer base to establish viable commercial
operations or that it will generate sufficient cash flow to fund the future
operations if the Company. The Company's growth strategy is largely dependent on
the marketing of its home pages through various marketing media, including but
not limited to the Internet.
The market for the Company's products will be characterized by rapidly changing
technology and continuing development of customer requirements. The future
success of the Company's business will depend in large part upon its ability to
develop and market its products at an acceptable cost, develop and market
products which meet changing customer needs, and successfully anticipate or
respond to technological changes in customer requirements on a cost effective
and timely basis. There can be no assurance that the Company's product
development efforts will be successful or that the emergence of new
technologies, industry standards or customer requirements will not render the
Company's technology or products obsolete or noncompetitive. In addition, to the
extent that the Company determines that new technologies or equipment are
required to remain competitive, the acquisition and implementation of such
technologies and equipment are likely to require significant capital investments
by the company. There can be no assurance that sufficient capital will be
available in the future. Operating results can also be significantly adversely
affected by the development and introduction of new products or by the
establishment of better financed competition.
The Company intends to comply fully with the rules and regulations. These
regulations vary dramatically, from region to region. The Company can make no
assurances that it will be able to meet or comply with all the regulatory
standards affecting Internet service in every jurisdiction in the world.
Furthermore, management cannot predict what changes may occur in such
regulations in the future or give any assurances as the Company's ability to
continue its planned operations in light of any such presently unknown changes
in regulations applicable to the Company. The Company may be faced
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-50
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
with the need to incur substantial legal and professional expenses in an effort
to meet the requirements of changing regulatory requirements.
The Company plans an aggressive growth strategy for its clientele and products.
There can be no assurances that the Company will be successful in these
endeavors. Forces that can contribute to the lack of success in implementing
this growth strategy include, among others,: (i) regulatory bodies and
governmental regulations affecting the Company and its operations, (ii)
availability of funding on a timely basis, (iii) functionality. The Company's
growth strategy relies on its ability to raise further capital and upon the
skills of its management.
3. NOTES PAYABLE
The following is a summary of the Company's notes payable at November 30, 1999:
Payable to Mr. Shamley on demand, with interest accrued
at 9% per annum, unsecured $ 2,290
Payable to Thomas Brightwell, PC on demand, with
interest accrued at 9% per annum, unsecured $ 5,090
Payable to William Hanna on demand, with interest accrued
at 5% per annum, unsecured $25,000
Payable to William Hanna Consultants on March 29, 2000,
with interest accrued at 5% per annum, unsecured 10,000
Payable to William Hanna Consultants on May 2, 2000,
with interest accrued at 5% per annum, unsecured 3,000
--------
$45,380
4. DUE TO OFFICERS
As of November 30, 1999 the Company is indebted to its officers in the amount of
$21,622. This is a non-interest bearing loan payable on demand.
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-51
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
5. PROVISION FOR INCOME TAXES
For the period of inception (February 23, 1999) to November 30, 1999 the Company
had a loss of $109,126. No tax expense or benefit has been reported in the
financial statements due to the uncertainty of future operations.
6. COMMON STOCK
The authorized capital stock of the Company consists of 10,000,000 shares of
Common Stock, par value $.001 per share.
The Company issued 3,000,000 shares of Common Stock of the Company for $3,000.
The Company has offered a total of 500 Units at a price of $5,200 per Unit,
which were offered on a "best efforts, all or none" basis with respect to the
first 20 shares of the Company's Common Stock and a detachable warrant entitling
the holder to purchase 2,000 shares of Common Stock. The Company is conducting
the Offering in such a manner that the Share will be sold only to certain
Accredited Investors as such term is defined in Rule 501 if Regulation D under
the Act, and to not more than 35 other non-accredited investors, and who satisfy
and additional requirements of their state of residency. The pricing and the
terms of the securities have been arbitrarily determined by the Company and bear
no relationship to the Company's assets, book value or results of operations or
any other generally accepted criteria of value. The Units are being offered and
sold exclusively through the Company by its Officers, as well as the selected
dealers, if any, and their officers, directors and employees may purchase the
Units on the same terms and conditions as other investors.
The minimum subscription price to investors is for $10,400 for 2 Units. The
Company may, in their sole discretion, accept subscription offers for lesser
amounts if deemed to be in the Company's best interest and insofar as permitted
by law. The Offering will continue until the close of business on September 15,
1999 (the "Offering Period").
Each Unit Warrant entitles the registered holder thereof to purchase 2,000
shares of Common Stock at a price of $2.50 per share (subject to adjustment as
described herein) at any time prior to the earlier of (I) May 31, 2003 or (ii)
the date that the respective Unit Warrant is redeemed. If the Company is able to
complete an initial public offering (AIPO) of the Common Stock, then beginning
12 months after the IPO, the Unit Warrant will be subject to redemption by the
Company and $0.10 per share of the Common Stock
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-52
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
that remains subject each Unit Warrant on thirty (30) days prior written notice
if the average closing sales price of the Common Stock over any 10 consecutive
trading days equals or exceeds 150% of the IPO price per share of Common Stock.
As of November 30, 1999 and in connection with the private placement, the
Company issued 76,000 shares of its Common Stock and 76,000 detachable Warrants
and received proceeds of $197,600.
Also as of November 30, 1999, the Company issued 4,000 Shares and 4,000 Warrants
valued at $10,400.
7. COMMITMENTS AND CONTINGENCIES
Employee Stock Options
The Company has reserved a total of 500,000 shares of its Common Stock for
grants of incentive stock options to employees. A total of 230,000 options with
and exercise price of $.50 per share with terms expiring seven (7) years from
the respective dates of the grant have been granted to two employees as of
November 30, 1999. All future grants will have an exercise price above $1.50 per
share.
Other Stock Options
On May 6, 1999 the Company granted 30,000 options to a consulting firm at an
exercise price of $.50 per share. These options will have no expiration date and
contain two piggyback registration rights.
On May 26, 1999 the Company granted10,000 options to investment banking
consultants at exercise prices of $.50 per share for 5,000 options and $1.00 for
5,000 options. These options contain piggyback registration rights.
In August 1999 the Company granted to two consultants nonqualified stock options
for the right to purchase 175,000 shares of the Company's Common Stock. The
options have an exercise price of $1.00 and expire on August 27, 2006 and
piggyback registrations rights.
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-53
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
On August 27, 1999 the Company granted 20,000 options to a professional
consultant. The options, which include piggyback registration rights, are
exercisable 10,000 at an exercise price of $1.00 and 10,000 at an exercise price
of $1.50.
The fair value of the other stock options were estimated according the FASB 123
at the grant dates using the Black- Scholes option pricing model and were
determined to be immaterial.
Government Regulation
The Company is subject to local state and federal laws of the jurisdiction that
it operates in. The Company also believes that it will be subject to all
jurisdictions of its participants and clients.
Litigation
The Company is not a party to any litigation, nor to the knowledge of
management, is any viable litigation currently threatened against the Company or
any of its officers or directors in their capacity as such.
Employment Agreements
The current officers and directors of the Company have entered into agreements
with the Company that state that they will forego salaries until the Company's
revenues exceed $1,000,000 or at the discretion of the Board of Directors.
Year 2000 Issues
The year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
2000 dates is processed. In addition, similar problems may arise in some systems
that use certain dates in 1999 to represent something other than a date. The
effects of the year 2000 issue may be experienced before, on or after January 1,
2000, and, if not addressed, the impact on operations and financial reporting
may range from minor errors to significant systems failures which could effect
and entity's ability to conduct normal business operations. It
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-54
<PAGE>
Dennis Riley
Certified Public Accountant
Nugget Exploration, Inc.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
is not possible that all aspects of the Year 2000 Issue affecting the Company,
including those related to the efforts of customers, or third parties, will be
fully resolved. The Company has verified that its significant service providers
are currently Year 2000 compliant.
8. SUBSEQUENT EVENTS
On December 13, 1999, MCOM Management Corp.("MCOM") exercised warrants to
purchase 50,000 shares of our common stock and tendered $50,000 constituting the
$1.00 warrant exercise price. The exercise of such 50,000 shares at $1.00 per
share was conducted in lieu of MCOM's agreement to provide the Company with a
$100,000 bridge loan, which was to accrue interest at 10% per annum. The Company
registered the share of common stock beneficially owned by MCOM as acquired in
the above manner before January 15, 2000.
MCOM also participated in the November 1999 private placement of warrants. MCOM
tendered $75,000 for warrants to purchase 75,000 shares of the Company's common
stock, and on January 10, 2000 exercised such warrants by tendering 75,000 for
75,000 shares of common stock. This purchase and the exercise of warrants
increase MCOM"s total ownership of the Company to 875,000 shares.
Through November 12, 1999 - January 11, 2000, the Company conducted a private
placement of warrants to purchase shares of their common stock. Each of these
warrants was purchased for $1.00, have an exercise price of $1.00 per share and
expire on December 31, 2002. The number of shares issuable upon exercise of
these warrants is 304,500. None of these warrants had been sold as of November
30, 1999.
On January 20, 2000, the Company paid the Note Payable due to William Hanna
Consultants. The note payable for $10,000 was due on March 29, 2000 and was to
accrue interest at the rate of 5% per annum. The interest of $412.60 was
forgiven and income on forgiveness of debt will be recorded in that amount.
The accompanying accountant's compilation report and notes are an integral part
of these financial statements.
F-55
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Cherry
Hill, State of New Jersey, on this 31st day of January 2000.
Nugget Exploration, Inc.
By: ___/s/ Leonard Vernon_____
Dr. Leonard Vernon
Title: President
POWER OF ATTORNEY
The undersigned directors and officers of Nugget Exploration, Inc. hereby
constitute and appoint Dr. Leonard Vernon, with full power to act without the
other and with full power of substitution and resubstitution, our true and
lawful attorney-in-fact with full power to execute in our name and behalf in the
capacities indicated below any and all amendments (including post-effective
amendments and amendments thereto) to this Amendment No. 1 to the Registration
Statement under the Securities Act of 1933 and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and hereby ratify and confirm each and every
act and thing that such attorney-in-fact, or his substitute, shall lawfully do
or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
__/s/ Leonard Vernon ____ President, Director January 31, 2000
Dr. Leonard Vernon
__/s/ William Hanna______ Vice President, Assistant January 31, 2000
William Hanna Secretary & Director
