<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------------
FORM 10-QSB
---------------------------
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the quarterly period ended June 30th, 2000
-------------------
( ) TRANSITION REPORT PERSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File Number: 1-1767
---------
GOLD CHAIN MINING COMPANY, INC.
------------------------------
(Exact name of Registrant as specified in charter)
UTAH 87-0267213
(State or other jurisdiction of incorporation) (I.R.S. EMPLOYER ID NO.)
44 West Broadway, Suite 704-S, Salt Lake City, UT 84101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(801) 355-6044
(REGISTRANT'S TELEPHONE NUMBER)
Indicate by check mark whether the Issuer (1) has filed all reports
required to be filed by section 13 or 15(d) of the Exchange Act during the
preceeding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
(1) Yes [x] No [ ] (2) Yes [x] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date
Class Outstanding as of June 30th, 2000
------- ----------------------------------
Common stock, $0.01 2,002,975
<PAGE>
PART 1. The accompanying balance sheets of The Gold Chain Mining Company (a
development stage company) disclose the Company's financial position as of June
30, 2000, March 31st 2000 and the statement of stockholders' equity from
inception on August 19, 1907 through June 30th, 2000. These financial statements
are the responsibility of the Company's management.
This report includes, to the best of Management's knowledge, all the
information and notes to the financial statements necessary for a complete
presentation of the financial position, results of operations, cash flows, and
stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the quarter ended June 30th, 2000, are not
necessarily indicative of the results that can be expected for the year ending
December 31, 2000.
<PAGE>
THE GOLD CHAIN MINING COMPANY
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS June 30th, March 31st,
______________________________
2000 2000
_____________ _____________
<S> <C> <C>
Assets:
Cash and Cash Equivalents $ 96 $ 96
============= =============
Liabilities:
Accounts Payable $ 965 $ 965
Related Party Payables 11,504 11,504
_____________ ______________
Total Liabilities 12,469 12,469
_____________ ______________
Stockholders' Equity:
Common Stock, Par value $.01
Authorized 10,000,000 shares,
Issued 2,002,975 and 1,227,975 shares at
June 30, 2000 and March 31, 2000 respectively 20,030 20,030
Paid in Capital 340,275 340,275
Deficit Accumulated During the Development Stage (372,678) (372,678)
_____________ ______________
Total Stockholders' Equity (12,373) (12,373)
_____________ ______________
Total Liabilities and Stockholders' Equity $ 96 $ 96
============= ==============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
THE GOLD CHAIN MINING COMPANY
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the period ended Cumulative
June 30th, March 31, Since inception
of
---------------------- Development
2000 2000 Stage
---------- ---------- ----------
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES
General and administrative 20,614 20,614 271,257
---------- ---------- ----------
Net Loss from Operations (20,614) (20,614) (271,257)
---------- ---------- ----------
OTHER INCOME (EXPENSES)
Loss on valuation of assets (60,000) (60,000) (101,421)
---------- ---------- ----------
Net Loss $ (80,614) (80,614) (372,678)
---------- ---------- ----------
Basic & Diluted loss
per share $ (0.05) $ (0.05)
========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
THE GOLD CHAIN MINING COMPANY
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock During the
----------------------- Paid in Development
Shares Amount Capital Stage
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Balance at inception
on August 19, 1907 - $ - $ - $ -
Issuance of Common stock
at approximately
$0.23 per share 1,227,975 12,280 270,319 -
Net loss from
inception through
December 31, 1995 - - - (233,865)
----------- ---------- ---------- -----------
Balance at
December 31, 1995 1,227,975 12,280 270,319 (233,865)
Net Loss (48,834)
----------- ---------- ---------- -----------
Balance at
December 31, 1996 1,227,975 12,280 270,425 (282,805)
Capital Contribution - - 106 -
Net loss balance at
December 31, 1997 1,227,975 12,280 270,425 (2292,064)
----------- ---------- ---------- -----------
Capital Contribution - - 100 -
Net loss balance at
December 31, 1998 1,227,975 12,280 270,525 (292,064)
----------- ---------- ---------- -----------
Issuance of Stock for
services in Lieu of
Cash at $0.10 per share 175,000 1,750 15,750 -
Issuance of Stock for
mining claims in Lieu of
Cash at $0.10 per share 600,000 6,000 54,000 -
Net loss - - - (80,614)
Balance at
June 30th, 2000 2,002,975 $ 20,030 $ 340,275 $ (372,678)
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
THE GOLD CHAIN MINING COMPANY
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
Since
For the period ended Inception
June 30, March 31, of
----------------------- Development
2000 2000 Stage
----------- ---------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss $ (80,614) $ (80,614) $ (372,678)
Stock issued for services 17,500 17,500 17,500
Loss on valuation of assists 60,000 60,000 101,421
Increase (Decrease) in
Accounts Payable 865 865 9,465
Net Cash Used in operating ----------- ---------- -----------
activities (2,249) (2,249) (244,292)
----------- ---------- -----------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Investment in Mining Claims - - (41,421)
----------- ---------- -----------
Net Cash provided by
investing activities - - (41,421)
----------- ---------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Capital Contributions - - 206
Shareholder Advances 2,345 2,345 3,004
Issuance of Capital Stock - - 282,599
----------- ---------- -----------
Net Cash Provided by
Financing Activities 2,345 2,345 285,809
----------- ---------- -----------
Net (Decrease) Increase
in Cash and Cash Equivalents 96 96 96
Cash and Cash Equivalents at
Beginning of Period - - -
----------- ---------- -----------
Cash and Cash Equivalents at
End of Period $ 96 $ 96 $ 96
=========== ========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION:
Cash paid during the period for:
Interest $ - $ - $ -
Franchise and income taxes $ 100 100 200
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
None.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
THE GOLD CHAIN MINING COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
THE QUARTER ENDED JUNE 30, 2000 AND MARCH 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies from Gold Chain Mining Company is
presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
Organization and Basis of Presentation
The Gold Chain Mining Company (the Company) was incorporated in the State
of Utah on August 19, 1907. The Company is a subsidiary of Mammoth Mining
Company, a Nevada corporation doing business in Utah. The Company is in the
development stage, and has not commenced planned principal operations.
Nature of Business
The company has no products or services as of June 30th, 2000. the Company
was organized to explore and develop mining properties through the sale, leasing
or joint venture of such properties.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required 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.
<PAGE>
THE GOLD CHAIN MINING COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
THE QUARTER ENDED JUNE 30, 2000 AND MARCH 31, 2000
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Loss per Share
The reconciliations of the numerators and denominators of the basic loss
per share computations are as follows:
Income Shares Per-Share Amount
------ ------ ----------------
(Numerator) (Denominator)
For the quarter ended June 30, 2000
-----------------------------------
Basic Loss per Share
Loss to common shareholders $ (80,614) 1,615,475 $ (0.05)
=========== =========== ==========
For the quarter ended June 30, 2000
-----------------------------------
Basic Loss per Share
Loss to common shareholders $ (80,614) 1,615,475 $ (0.05)
=========== =========== ==========
The effect of outstanding common stock equivalents would be anti-dilutive
for June 30, 2000 and March 31, 2000 and are thus not considered.
NOTE 2 - INCOME TAXES
As of June 30, 2000, the Company had a net operating loss carryforward for
income tax reporting purposes of approximately $236,000 that may be offset
against future taxable income through 2014. Current tax laws limit the amount of
loss available to be offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available to offset future
taxable income may be limited. 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 amount.
<PAGE>
THE GOLD CHAIN MINING COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
THE QUARTER ENDED JUNE 30, 2000 AND MARCH 31, 2000
(Continued)
NOTE 3 - DEVELOPMENT STAGE COMPANY
The company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company shares office space provided by the Company's parent company,
Mammoth Mining Company. The office space is located in certain buildings and
offices situated at the Main Tintic Project Mine. Mammoth mining Company leases
its office space, on an intermittent basis, from Keystone Surveys, Inc., a
company that is owned and operated by an officer and director of the Company who
is also a principal shareholder of Mammoth Mining Company. The monthly rent
expense is $500.00 due at the beginning of each month.
At December 31, 1998, the company owed $2,500.00 accrued rent for the five
months between August 1, 1998 and December 31, 1998. The company paid that
expense during 1999 by issuing 25,000 shares with a basis of $0.10 per share to
Keystone Surveys, Inc. lieu of cash. Rent expense for 1999 was $6,000. The
company issued 45,000 shares of the Company's Common Stock at $0.10 during 1999,
in payment in lieu of cash of $4,500 with the remaining $1,500 owing at June 30,
2000.
In accordance with the stock option plan adopted by the Company on June 17,
1995, the Board of Directors authorized 5,000 shares to each director of the
Company per quarter of service. These shares were assigned a value of $0.10 per
share.
At December 31, 1998, the Company owed the directors, as a group, a total
of 60,000 shares, or $6,000, under the compensation agreement, although no
shares were issued at December 31, 1998. During 1999, the directors, as a group,
accrued an additional 115,000 shares, or $11,500, under the compensation
agreement. During 1999, the Company issued the directors a total of 105,000
shares, or $10,5000, to compensate the directors for the seven quarters of
service the directors had completed between January 1, 1998, and September 30,
1999. At June 30, 2000, the Company owed the directors, as a group, a total of
70,000 shares, or $7,000.
Also during 1999 and 1998, shareholders advanced the Company $2,345 and
$659, payable upon demand without interest.
In aggregate at June 30, 2000, the Company owed $11,504 to related parties.
<PAGE>
THE GOLD CHAIN MINING COMPANY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
THE QUARTER ENDED JUNE 30, 2000 AND MARCH 31, 2000
(Continued)
NOTE 5 - MINING CLAIMS
The Company holds an interest in 19 patented mining claims, totaling
approximately 84 acres and located in the Tintic Mining District, Juab County,
Utah.
On June 21, 1999, the Company's Board of Directors authorized the purchase
of nine patented mining claims from a company that is owned and operated by an
officer and director of the company who is also a principal shareholder of
Mammoth Mining Company. The Board approved the issuance of 600,000 shares of the
Company's stock, valued at $60,000.00, in exchange for the nine patented mining
claims.
During the year ended December 31, 1996, and again during the nine months
ended September 30, 1999, the Company determined a loss on the valuation of the
mining claims should be taken in accordance with its policy of valuing the
mining claims at the lower of cost or net realizable value. The ultimate
realization of the Company's investment in exploration properties is dependent
upon a number of factors, including success of mineralization, the ability of
the Company to obtain financing or to make other arrangements to further explore
and develop the properties, and the profitability of future production or
royalties from production, if any. The ultimate realization of the Company's
investment cannot be ensured or determined at this time and, accordingly, it was
determined the cost of the mineral properties, $41,421.00, and $60,000.00,
should be charged to operations.
NOTE 6 - COMMON STOCK AND OPTION AWARD PLAN
At an annual Board of Directors Meeting, held June 17, 1995, the Company's
Directors approved a plan for the granting of stock, stock options and stock
appreciation rights that would be registered with the Securities and Exchange
Commission. The plan was approved to enable the Company to attract and retain
experienced and able directors, officers, employees and similar individuals who
provide significant service to the Company and are eligible under the Plan to
receive qualified plan awards. As of June 30, 2000, the shareholders have not
authorized any amount of shares of common stock to be administered under the
plan and no shares, options, or stock appreciation rights have been awarded
under the Plan.
<PAGE>
NOTE 7 - SUBSEQUENT EVENTS
Subsequent to December 31, 1999, the Company approved the issuance of
15,000 shares of the Company's common stock in payment of office rental costs
and 70,000 shares of the Company's common stock in payment of directors fees.
(End of Financial Statements)
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.
GOLD CHAIN MINING COMPANY, INC.
(REGISTRANT)
/s/ Spenst Hansen
BY: -------------------------
SPENST HANSEN, PRESIDENT AND DIRECTOR
DATED: July 21, 2000
