SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from __________________
to __________________
Commission File Number 0-12825
GAENSEL GOLD MINES, INC.
(Exact Name of Registrant as specified in its Charter)
Nevada 84-0916272
(State or other Jurisdiction I.R.S. Employer Identi-
Incorporation or Organization fication No.)
45110 Club Drive, Suite B, Indian Hills, California 92210
(Address of Principal Executive Offices) (Zip Code)
(619) 360-1042
(Registrant's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (i) 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 (of for such shorter period that the
Registrant was required to file such reports) and (ii) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Common Stock 1,018,379
Title of Class Number of Shares outstanding
at April 30, 1997
No Exhibits included.
<PAGE>
<TABLE>
<CAPTION>
GAENSEL GOLD MINES, INC.
(A Company in the Development Stage)
BALANCE SHEETS
ASSETS
April 30, October 31,
1997 1996
CURRENT ASSETS
<S> <C> <C>
Cash $ 18,876 $ 576
Stock Subscription Receivable 800
Prepaid Rent 1,997
Total Current Assets $ 21,673 $ 576
OTHER ASSETS
Property and Equipment, net 155,057
Intangible Assets 1
TOTAL ASSETS 177,631 576
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Accounts payable $ 7,635 $ 7,635
Accrued Expenses 3,000
TOTAL LIABILITIES $ 10,635 $ 7,635
STOCKHOLDERS' EQUITY
Common stock 1,018 218
Additional paid in capital 560,862 3,471,741
Deficit accumulated during development stage (394,884) (3,479,018)
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) 166,996 (7,059)
$ 177,631 $ 576
</TABLE>
See accompanying Notes to Financial Statements
-2-
<PAGE>
<TABLE>
<CAPTION>
GAENSEL GOLD MINES, INC.
(A Company in the Development Stage)
STATEMENTS OF OPERATIONS
FOR THE SIX FOR THE SIX FOR THE THREE FOR THE THREE
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED
APRIL 30, 1996 APRIL 30, 1997 APRIL 30, 1996 APRIL 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
REVENUES $ -0- $ -0- $ -0- $
COSTS AND EXPENSES
Selling, General and Administrative (100,000) 11,917 (100,000) 11,917
Non Operating Income
Interest (expense)
Non Operating Expense
NET LOSS ACCUMULATED DURING
THE DEVELOPMENT STAGE $ (100,000) $ 11,917 $ (100,000) $ 11,917
LOSS PER COMMON SHARE $ (.10) $ (.02) $ (.10) $ (.02)
</TABLE>
See accompanying Notes to Financial Statements
-3-
<PAGE>
<TABLE>
<CAPTION>
GAENSEL GOLD MINES, INC.
(A Company in the Development Stage)
STATEMENTS OF CASH FLOWS
FOR THE SIX FOR THE SIX FOR THE THREE FOR THE THREE
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED
APRIL 30, 1996 APRIL 30, 1997 APRIL 30, 1996 APRIL 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net Loss (100,000) (283,785) (100,000) (283,785)
Adjustments -
shares issued for services 100,000 100,000
Increase in Accrued Expenses 3,000 3,000
Increase in Prepaid Rent 1,997 1,997
Increase in Stock Subscription Receivable 800 800
CASH USED BY OPERATING ACTIVITIES
Cash Flow from Investing activities
Acquisition of property and
equipment in acquisition (155,957) (155,957)
Cash used by investing activities (155,957) (155,957)
Cash flows from financing activities
Issuance of Common Stock 415,645 415,645
INCREASE (DECREASE) IN CASH 18,300 18,300
CASH BALANCE - BEGINNING 576 76 576
CASH BALANCE - ENDING $ $ 18,876 $ 76 $ 18,876
</TABLE>
See accompanying Notes to Financial Statements
-4-
<PAGE>
GAENSEL GOLD MINES, INC.
(A Company in the Development Stage)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
April 30, 1997
1. General
The accompanying financial statements are unaudited, but in the opinion
of the management of the Company, contain all adjustments, consisting
of only normal recurring accruals, necessary to present fairly the
financial position at April 30, 1997, the results of operations for the
three and six months ended April 30, 1996 and 1996, and the cash flows
for the three and six months ended April 30, 1996 and 1997. Certain
information and footnote disclosures normally included in financial
statements that have been prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to the rules and regulations of the Securities and Exchange Commission,
although management of the Company believes that the disclosures in
these financial statements are adequate to make the information
presented therein not misleading. For further information, refer to the
financial statements and footnotes thereto for the fiscal year ended
October 31, 1996 included in the Company's Form 10-K.
The results of operations for the three and six months ended April 30,
1997, are not necessarily indicative of the results of operations to be
expected for the full fiscal year ending October 31, 1997.
2. Shareholder's Equity
The Company effected a 1-for-100 reverse stock split in February 1997
and issued 800,000 additional shares
to acquire Lifeline Medical Information Systems, Inc. ("Lifeline").
3. Acquisition
The acquisition of Lifeline has been accounted for as a reverse
acquisition. The basis for the acqusition in transfer of assets from
Lifeline to Gaensel per the audited statements of Lifeline as of April
1997. The results of operations for the periods ended April 30, 1997
include the operations of Lifeline in April 1997.
The following is pro forma information regarding Lifeline:
5
<PAGE>
<TABLE>
<CAPTION>
GAENSEL GOLD MINES, INC. & SUBSIDIARIES
CONSOLIDATED PRO FORMA BALANCE SHEET
AS OF APRIL 30, 1997
To reflect acquisition of Lifeline Medical Information Systems, Inc.
Gaensel Lifeline (1)
Gold Medical Pro Forma
Mines, Inc. Information Consolidation Consolidated
& Subsidiary Systems, Inc. Adjustments Pro Forma
ASSETS
<S> <C> <C> <C> <C>
Current Assets
Cash $ 576 $ -- $ -- $ 576
Account Receivable Related Party -- 10,017 -- 10,017
Total Current Assets 576 10,017 -- 10,593
Property & Equipment, Net -- 143,878 -- 143,878
Other Assets
Intangibles -- 1 -- 1
Deposits -- 31,997 -- 31,997
Organization Costs - Net -- 491 -- 491
Investment in Lifeline Common Stock 50(3) -- 50(4) --
Total Other Assets 50 32,489 (50) 32,489
TOTAL ASSETS $ 626 $ 186,384 $ (50) $ 186,960
LIABILITIES & EQUITY
Current Liabilities
Accounts payable 7,635 4,732 -- 12,367
TOTAL LIABILITIES 7,635 4,732 -- 12,367
SHAREHOLDERS' EQUITY
Capital Stock
Preferred -- -- -- --
Common 1,018(2) 50 50(4) 1,018
Total Capital Stock 1,018 50 50 1,018
Shareholders' Earnings (Deficit)
Paid-in Capital (8,027) 193,519 -- 185,492
Accumulated Earnings (Deficit) (--) (11,917) -- (11,917)
Total Shareholders'
Retained Earnings (Deficit) (8,027) 181,602 -- 173,575
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (7,009) 181,652 50 174,593
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 626 $ 186,384 $ 50 $ 186,960
</TABLE>
The accompanying notes are an integral part of the
financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
GAENSEL GOLD MINES, INC. & SUBSIDINARIES
CONSOLIDATED PRO FORMA INCOME STATEMENT
AS OF APRIL 30, 1997
To reflect acquisition of Lifeline Medical Information Systems, Inc.
For the Six Months Ended For the Six Months Ended
April 30, 1997 April 30, 1996
Gaensel Lifeline Total Gaensel Lifeline Total
N/A
<S> <C> <C> <C> <C> <C> <C>
Net Sales $ -- $ -- $ -- $ -- $ $ --
Cost of Goods Sold -- -- -- -- --
Gross Profits -- -- -- -- --
General, Adminsitrative
and Selling Expenses -- 11,917 11,917 100,000 100,000
Operating Income (loss) -- (11,917) (11,917) (100,000) (100,000)
Income (Loss) Before
Taxes and Extraordinary
Items -- (11,917) (11,917) (100,000) (100,000)
Invome Taxes (Benefit) -- -- -- -- --
Income (Loss) Before
Extraordinary Items -- (11,917) (11,917) (100,000) (100,000)
Extraordinary Items -
Non Operating Income -- -- -- -- --
NET INCOME (LOSS) $ -- $ (11,917) $ (11,917) $ (100,000) $ (100,000)
Income (Loss) Per Share $ (0.019)
Weighted Average Number
of Shares 618,379*
</TABLE>
**Reflects 1 for 10 Gaensel
reverse Common Stock Split
Shares Outstanding:
@ 10/31/96 year end 218,379**
@ 04/31/97 1,018,379 (Includes 800,000 shares
issued for Lifeline Medical Information
Systems, Inc.
Avg. Number of Shares 04/30/97 618,379* Acquisition
The accompanying notes are an integral part of the
financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
GAENSEL GOLD MINES, INC. & SUBSIDIARIES
CONSOLIDATED PRO FORMA ADJUSTMENTS TO SHAREHOLDERSAE EQUITY
AS OF APRIL 30, 1997
To reflect acquisition ofLifeline Medical Information Systems, Inc.
Paid-in Retained Total
Number Capital Capital Earnings Equity
of Shares Stock Surplus (Loss) (Deficit)
<S> <C> <C> <C> <C> <C>
Gaensel Gold Mines, Inc.
Parent Company Restated for
acquisition of Lifeline
Common Stock & Equity 1,018,379** $ 1,018(2) $ (8,027)(2) -- $ (7,009)
*Includes 800,000 shares issued
for acquisition of Lifeline in
exchange for 50,000 shares of
Lifeline Common Stock carried
as an Investment/Other Assets
on Gaensel's books)
Lifeline Medical Information
Systems, Inc.
Common Stock & Equity 50,000 50 193,519 (11,917) 181,652
Adjustments/Eliminations for
04/30/97 Consolidated Financials
- -- Eliminate Lifeline Common
Stock 50,000 shares @ $0.001/sh (50,000) (50)(4) -- -- (50)
ADJUSTED CONSOLIDATED SHAREHOLDERS'
EQUITY APRIL 30, 1997 AFTER
ACQUISITION OF LIFELINE MEDICAL
INFORMATION SYSTEMS, INC. 1,018,379 $ 1,018 $ 185,492 $ (11,917) $ 174,593
</TABLE>
The accompanying notes are an integral part of the
financial statements.
8
<PAGE>
GAENSEL GOLD MINES, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
AS OF APRIL 30, 1997
To reflect acquisition of Lifeline Medical Information Systems, Inc.
The following notes pertain to the the preparation of the Consolidated Pro
Forma Financial Statements for Gaensel Gold Mines, Inc. (The Parent Company) and
Lifeline Medical Information Systems, Inc. (A Wholly Owned Subsidiary of Gaensel
Gold Mines, Inc.).
1. Pro Forma Adjustments
The consolidation adjustments pertain to the Balance Sheet Consolidation
(Page 2 of these statements) and the Shareholders' Equity Statement (Page 4
of these statements).
2. Adjustments to Gaensel Gold Mines Capital Stock
The Gaensel Gold Mine Common Stock Account has been adjusted to reflect
corrections in prior years' par value errors (from $0.0001/sh to
$0.001/sh). The offsets to the Capital Stock Account adjustments were made
to the Paid-in Capital Surplus Account.
3. Setup of Gaensel's Investment In Lifeline
The original entry on Gaensel's books was a debit to Subscription
Receivable for $800.00 with the corresponding credit to Gaensel Common
Stock Account for $800.00 for the acquisition of Lifeline. This entry was
to record the issuance of the 800,000 shares of Gaensel Common Stock in
exchange for all of the outstanding shares of Lifeline Common Stock. The
value of the acquired Lifeline 50,000 shares outstanding was $50.00; the
$750.00 difference went to the Gaensel Paid-In Capital Surplus Account
4. Elimination of Lifeline Common Stock
This entry was required as part of the consolidation process in view of the
fact that Gaensel Gold Mines now owns all of the shares of Lifeline Common
Stock.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL
CONDITION
The Company has no operations prior to the acquisition of Lifeline Medical
Information Systems, Inc. on March 31, 1997, for 800,000 shares of common
stock. Lifeline has not generated revenues from operations. The loss from
March 31, 1997 to April 30, 1997 was $11,917. The Company's need to finance
its operating deficit will be funded by an officer and director.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
See Item 2.
Item 5. OTHER INFORMATION
None.
9
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
A Form 8-K dated March 31, 1997 was filed to report the acquisition of
Lifeline Medical Information Systems, Inc.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 18, 1997 By: /s/ Dempsey K. Mork
Dempsey K. Mork
President (chief financial
officer and accounting
officer and duly authorized officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 1997 AND AS OF
APRIL 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000357049
<NAME> GAENSEL GOLD MINES, INC.
<MULTIPLIER> 1
<CURRENCY> US dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Oct-31-1997
<PERIOD-START> Nov-01-1996
<PERIOD-END> Apr-30-1997
<EXCHANGE-RATE> 1
<CASH> 18,876
<SECURITIES> 0
<RECEIVABLES> 800
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,673
<PP&E> 155,057
<DEPRECIATION> 0
<TOTAL-ASSETS> 177,631
<CURRENT-LIABILITIES> 10,635
<BONDS> 0
0
0
<COMMON> 1,018
<OTHER-SE> 165,978
<TOTAL-LIABILITY-AND-EQUITY> 177,631
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (11,917)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (11,917)
<INCOME-TAX> 0
<INCOME-CONTINUING> (11,917)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,917)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
