<PAGE> 1
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
[ ] 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 0-12761
BRUSH CREEK MINING AND DEVELOPMENT CO., INC.
--------------------------------------------
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
NEVADA 88-0180496
- ------------------------------ ---------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
970 EAST MAIN STREET, SUITE 200
GRASS VALLEY, CALIFORNIA 95945
- ------------------------ -------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (916) 477-5961
Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Exchange Act of 1934 during the past
12 months (or for such shorter period that Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
----- ----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuers' classes of
common equity as of the latest practicable date:
Shares of common stock outstanding as of February 13, 1997: 18,526,584
Transitional Small Business Disclosure Format.
Yes No X
--- --
<PAGE> 2
BRUSH CREEK MINING AND DEVELOPMENT CO., INC. AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
Condensed consolidated balance sheets as of December 31, 1996
(unaudited) and June 30, 1996. 3
Condensed consolidated statements of operations (unaudited) for the
three months ended December 31, 1996 and 1995. 4
Condensed consolidated statements of operations (unaudited) for the six
months ended December 31, 1996 and 1995 and for the period July 1, 1989
(date of resumption of development stage enterprise activities) through
December 31, 1996. 5
Condensed consolidated statements of cash flows (unaudited) for the
six months ended December 31, 1996 and 1995 and for the period July 1, 1989
(date of resumption of development stage enterprise activities) through
December 31, 1996. 6
Notes to condensed consolidated financial statements (unaudited) 7
Item 2. Management's discussion and analysis of financial condition
and results of operations. 10
PART II. OTHER INFORMATION 11
</TABLE>
2
<PAGE> 3
BRUSH CREEK MINING AND DEVELOPMENT CO., INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
December 31, 1996 June 30, 1996
----------------- -------------
<S> <C> <C>
Current Assets:
Cash $ 17,517 $ 1,275,413
Prepaid expenses 45,117 51,290
Inventory 2,851 24,290
Accounts receivable, employees 29,750 40,462
------------ ------------
Total current assets 95,235 1,391,455
Office furniture and equipment, net 98,641 115,837
Mineral properties and mining
equipment, net 10,409,849 10,600,827
Deposits 372,147 377,147
------------ ------------
Total assets $ 10,975,872 $ 12,485,266
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 1,456,216 $ 1,440,268
Current portion of long term debt 1,916,851 2,279,861
------------ ------------
Total current liabilities 3,373,067 3,720,129
Other liabilities 3,700 3,700
------------ ------------
Total liabilities 3,376,767 3,723,829
------------ ------------
Shareholders' Equity:
Common Stock, no par value;
authorized 100,000,000 shares;
issued and outstanding
18,526,584 and 14,963,369 shares
as of December 31, 1996 and June 30,
1996, respectively 44,768,690 43,752,439
Accumulated deficit (11,260,214) (11,260,214)
Accumulated deficit during the
development stage (25,909,371) (23,730,788)
------------ ------------
Total shareholders' equity 7,599,105 8,761,437
------------ ------------
Total liabilities and shareholders'
equity $ 10,975,872 $ 12,485,266
============ ============
</TABLE>
See notes to Condensed Consolidated Financial Statements
3
<PAGE> 4
BRUSH CREEK MINING AND DEVELOPMENT CO., INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months
Ended December 31
-----------------
1996 1995
---- ----
<S> <C> <C>
Revenues:
Interest income $ 5,527 $ 8,390
--------- -----------
Total Revenues $ 5,527 $ 8,390
Expenses:
General and administrative expenses 243,292 773,925
General mining and exploration 493,170 1,182,318
Depreciation and amortization 93,969 139,121
Gain on sale of mining equipment (116)
Interest expense 29,512 615
Litigation settlement 2,374,668
--------- -----------
Total expenses 859,943 4,470,531
--------- -----------
Net income (loss) $(854,416) $(4,462,141)
---------- -----------
Net income (loss) per common share before
extraordinary item $(0.05) $(0.56)
========== ==========
Net income (loss) per common share $(0.05) $(0.56)
========== ==========
Weighted average common shares
outstanding 18,248,180 7,939,797
========== ==========
</TABLE>
See notes to Condensed Consolidated Financial Statements.
4
<PAGE> 5
BRUSH CREEK MINING AND DEVELOPMENT CO., INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Period from
Ended December 31 July 1, 1989
----------------- through
1996 1995 December 31, 1996
---- ---- -----------------
<S> <C> <C> <C>
Revenue:
Sale of Joint Venture - - $4,232,000
Other Income - - 156,444
Interest 15,531 $19,387 181,044
----------- ----------- ------------
Total Revenues 15,531 19,387 4,569,488
----------- ----------- ------------
Expenses:
General and administrative expenses 507,099 1,153,039 14,406,864
General mining and exploration 1,388,778 2,541,494 10,302,803
Loss on lease abandonments - - 392,317
Depreciation and amortization 192,621 267,544 1,255,881
Loss (gain) on sale of mining equipment 46,853 (116) 133,763
Interest expense 58,763 1,026 434,431
Litigation settlement - 2,374,668 3,697,262
----------- ----------- ------------
Total expenses 2,194,114 6,337,655 30,623,321
----------- ----------- ------------
Income (loss) before extraordinary item (2,178,583) (6,318,268) (26,053,833)
Extraordinary item - net gain from
debt extinguishment, net of tax - - 144,462
----------- ----------- ------------
Net income (loss) $(2,178,583) $(6,318,268) $(25,909,371)
=========== =========== ============
Net income (loss) per common share before
extraordinary item $(0.13) $(0.81)
=========== ===========
Net income (loss) per common share $(0.13) $(0.81)
=========== ============
Weighted average common shares
outstanding 17,202,142 7,826,498
============ ===========
</TABLE>
See notes to Condensed Consolidated Financial Statements
5
<PAGE> 6
BRUSH CREEK MINING AND DEVELOPMENT CO. INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months ended
December 31 Period from
----------- July 1, 1989 through
1996 1995 December 31, 1996
----- ---- -----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(2,178,583) $(6,318,268) $(25,909,371)
----------- ---------- ------------
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Gain on debt restructuring - - (144,462)
Depreciation and amortization 192,621 267,544 1,255,881
Loss on lease abandonments - - 444,359
Loss on litigation settlement - 2,370,668 3,667,262
Loss (gain) on Sale of Mining Equipment 46,853 (116) 11,753
Other - - 43,576
Shareholder payment of services - - 105,055
Stock and debt for services - - 703,068
Change in stock purchase price adjusted receivable 284,749 -
Change in notes receivable - - 7,000
Change in inventory 21,439 59,144 (561)
Change in prepaid expenses 6,173 13,317 456,619
Change in deposits and other assets 15,712 (101,425) (234,366)
Change in accounts payable and
accrued liabilities 15,948 516,137 4,008,673
----------- ---------- ------------
Total adjustment 298,746 3,410,018 10,323,857
----------- ---------- ------------
Net cash provided by (used) in operating
activities (1,879,837) (2,908,250) (15,585,514)
----------- ---------- ------------
Cash flows from investing activities:
Acquisition of mineral properties
and deferred development (26,242) (551,582) (5,036,301)
Acquisition of office equipment (5,058) (34,092) (265,159)
Proceeds from sale of equipment - - 294,356
Proceeds from the acquisition of
Trans Russian Exploration - - 20,060
----------- ---------- ------------
Net cash used in investing activities (31,300) (585,674) (4,987,044)
Cash flows from financing activities:
Advances from (to) affiliates - - 2,009,127
Payments made to affiliates - - (343,798)
Proceeds from issuance of common stock 716,251 2,958,594 18,842,463
Proceeds from warrant extensions - - 207,750
Proceeds from issuance of notes payable - - 870,043
Payments on long-term debt (63,010) (14,488) (1,299,358)
Proceeds from convertible debenture - - 300,000
----------- ---------- ------------
Net cash provided by financing activities 653,241 2,944,106 20,586,227
----------- ---------- ------------
Net increase (decrease) in cash (1,257,896) (549,818) 13,669
Cash at beginning of period 1,275,413 684,153 3,848
----------- ---------- ------------
Cash at end of period $ 17,517 $ 134,335 $ 17,517
=========== ========== ===========
Cash paid during the period for interest
(net of amounts capitalized) - - $ 146,126
=========== ========== ===========
</TABLE>
See notes to Condensed Consolidated Financial Statements.
6
<PAGE> 7
BRUSH CREEK MINING AND DEVELOPMENT CO. INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of December 31, 1996, the
condensed consolidated statements of operations and cash flows for the three
months and six months ended December 31, 1996 and 1995 and for the period July
1, 1989 (date of resumption of development stage enterprise activities) through
December 31, 1996, have been prepared by the Brush Creek Mining & Development
Co., Inc. (the Company) without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows at
December 31, 1996 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these consolidated
statements be read in conjunction with the financial statements and notes
thereto included in the Company's June 30, 1996 Form 10-KSB\A. The results of
operations for the periods ended December 31, 1996 and 1995 are not necessarily
indicative of the operating results for the full year.
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary, B. Creek Acquisition Corp and Alpha Hardware Corp.
7
<PAGE> 8
BRUSH CREEK MINING AND DEVELOPMENT CO. INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 2 - BASIS OF PRESENTATION
The Company was incorporated in 1982 and operated as a mining and mineral
development company until April 17, 1989, at which time its mining operations
conducted through the Brush Creek Joint Venture (BCJV) (40% owned) were
terminated. Shortly thereafter, the Company became actively engaged in
acquiring additional mineral properties, raising capital, and preparing
properties for resumed production. The Company did not have any significant
operations or activities from April 17, 1989 through June 30, 1989.
Accordingly, the Company is deemed to have reentered the development stage
effective July 1, 1989.
In February 1992, the Company began limited production at the Ruby mine from
the Lawry and Ruby placer channels. In 1995, the Company paved 1.3 miles of
road in an effort to make production a year-round effort. The Company has
conducted limited production during certain periods from 1992 to 1995 and, in
fiscal year 1996 began limited production in the Wolf vein at the Ruby mine.
The Company has not commenced economic production and is still considered in
the development stage. In October 1996 the Company ceased mining and engaged
an investment banker to assist in pursuing a joint venture partner.
The Company's financial statements have been presented on the basis that it is
a going concern, which contemplates the realization of the mineral properties
and other assets and the satisfaction of liabilities in the normal course of
business. The Company has incurred losses of $37,169,585 from inception to
December 31, 1996, and it had a working capital deficit of $3,277,832 at
December 31, 1996. These factors may raise doubt about the Company's ability
to continue as a going concern. The Company defaulted on December 13, 1996 on
a settlement agreement entered into with the Royal Bank of Scotland on December
13, 1995. (See note 4). Management is actively seeking a joint venture
partner as a source of capital to fund current and future operations. However,
there can be no assurance that such capital will be obtained. There is no
assurance that the Company will be successful in establishing proven ore
reserves or determining if the mineral properties can be mined economically.
These condensed consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
Management of the Company periodically reviews the recoverability of the
capitalized mineral properties and mining equipment. Management takes into
consideration various information including, but not limited to, historical
production records from previous mine operations, results of exploration
activities conducted to date, estimated future metal prices, and reports and
opinions of internal and external geologists, mine engineers and consultants.
Accordingly, in management's opinion, based on such information, the
capitalized costs in mineral properties and mining equipment do not exceed
their estimated net realizable value.
NOTE 3 - STOCKHOLDERS' EQUITY
In September 1996, the Company received a net amount of $238,751 from the sale
of 757,576 shares of its common stock through a Regulation S offering. The
shares were sold at a 50% discount of the Company's closing bid price on the
day before the sale.
In July 1996, the Company issued 439,560 shares of its common stock per a two
year, $450,000, 7% convertible debenture where the subscriber had the option of
converting the principal to shares at 70% of the average share price for the
five days preceding conversion.
Also in July 1996, the Company issued 57,523 additional shares of the Company's
common stock per a Regulation S stock agreement with a purchase price
adjustment clause, which required the Company to issue additional shares if,
during a 45-day valuation period, the average share price fell below the
original purchase price.
Also, in July 1996, the Company placed 695,652 shares of its common stock in
escrow per a Regulation S stock purchase agreement. The agreement contained a
purchase price adjustment clause that required to Company to issue such shares
if the Company's low bid price fell below one dollar during the specific
valuation period. The valuation period ended on September 27, 1996, and the
purchaser requested that the Company issued 661,569 shares of common stock
pursuant to the terms of the agreement. The Company is currently disputing the
purchaser's claim. There can be no assurance that the dispute will be resolved
in the Company's favor.
8
<PAGE> 9
NOTE 3 - STOCKHOLDERS' EQUITY (continued)
In October 1996, the Company issued 1,612,904 shares of its common stock for a
net amount of $477,500 per a Regulation S stock agreement. Denison Capital
Group acted as the placement agent in that transaction. The shares were sold
at a 50% discount of the Company's closing bid price on the day prior to the
sale.
NOTE 4 - ROYAL BANK SETTLEMENT
The Company entered into a settlement agreement with the Royal Bank of Scotland
(the Plaintiffs) on December 13, 1995. Pursuant to the agreement, the Company
was required to make a final payment on December 13, 1996 of $600,000. The
Company defaulted on the payment and has entered into a Forbearance Agreement
with the Plaintiffs requiring the Company to make a payment of $629,100 on or
before March 20, 1997 and a payment of $175,000 on or before July 1, 1997. The
Company has the option to postpone the second payment ($175,000) by delivering
written notice to Plaintiffs no later than June 25, 1997 whereupon the second
payment shall be paid no later than December 15, 1997 and the amount shall be
increased to $250,000. The Company must also reimburse the Plaintiffs for
their attorney fees and costs.
NOTE 5 - SUBSEQUENT EVENTS
On January 10 , 1997 James S. Chapin, CEO and Chairman of the board of the
Company, withdrew $100,000 from a trust account held by the Company in his name
persuant to its employment agreement with Mr. Chapin. Also in January, the
Board approved a Private Placement to sell 3.2 million shares of the
Company's common stock at a price of $0.0625 per share. The total offering is
to raise a maximum of $200,000 under Regulation D. The Company has sold, as of
February , 1997, a total of 2,000,000 shares through the Private Placement for
an amount of $125,000. Three of the Company's directors bought 400,000 shares
each of common stock offered in the Private Placement for a total of $75,000.
NOTE 6 - SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING ACTIVITIES
Noncash investing and financing activities for the six months ended December
30, 1996 are as follows:
Company stock issued for:
Current portion of long term debt
Conversion of Convertible Debenture $300,000
9
<PAGE> 10
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company had a working capital deficit of $3,277,832 a
decrease compared to a working capital deficit of $2,328,674 at June 30,
1996.
The Company estimates its mining development and operating costs to be
approximately $2.0 to $2.5 million for the remainder of the 1996-1997 fiscal
year. If the Company is successful in finding a joint venture partner, the
majority of funds will be used for mining and exploration at its mines. No
assurance can be provided that the Company will be able to raise funds to
continue or expand its operations.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1996
The Company incurred a net loss of $854,416 for the quarter ended December 31,
1996, compared to a net loss of $4,462,141 during the quarter in 1995.
General and administrative expenses decreased by $530,633 from the same quarter
in the prior year primarily due to a reduction in litigation expenses. General
mining costs decreased by $689,148 due to the Company discontinuing its mining
operations.
The Company incurred interest expense of $29,250 under a promissory note issued
in connection with the settlement of the action brought against the Company by
Zuri Invest A.G. and others.
SIX MONTHS ENDED DECEMBER 31, 1996
The Company incurred a net loss of $2,178,583 for the six months ended December
31, 1996 compared to a $6,318,268 net loss for the same period in 1995.
General and Administrative expenses decreased by $645,940 primarily due to a
reduction in litigation expenses and a litigation settlement of $2,370,668 from
the same period in the prior year. General mining costs decreased by
$1,152,716 from the prior year due to the Company discontinuing its development
and mining operations.
The Company sold two wagner dump trucks and recognized a loss of $46,583. The
Company incurred interest expense in the amount of $58,500 under a promissory
note issued in connection with the settlement of the action brought against the
Company by Zuri Invest A.G. and others.
Management expects losses to continue until the Company has found a joint
venture partner. Historically, the price of gold has been volatile; since
the end of 1987 the price of gold has declined from a high of approximately
$500 per ounce to approximately $350 per ounce. Over the last twelve months
gold prices have been more positive, and have recently closed at the highest
level in more than three years. Management believes this positive trend is
likely to continue. However a downward trend in the price of gold will have an
adverse effect on the Company's revenues when it begins mining operations.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Litigation
On October 24, 1994, the Company filed an amended complaint against F. James
Anderson, Simon Anderson, Edward M. Lawson, Consolidated Sierra Gold Mines, Inc
("CSGM"), Independent Sierra Gold Mines, Inc., ("ISGM"), Bartel, Eng, Miller &
Torngren, attorneys, Robert Sibthorpe, Coopers & Lybrand and Yorkton Securities
as defendants in an action to recoverdamages. The suit was filed in the United
States District Court for the Northern District of California as Case No.
C94-3487 ("the Federal Action"). On April 28, 1995, Brush Creek Mining &
Development Co., Inc. filed an Amended Complaint against: F. James Anderson,
Simone Anderson, Edward M. Lawson, Consolidated Sierra Gold Mines, Inc.,
Independent Sierra Gold Mines, Inc., Bartel, Eng, Miller & Torngren, attorneys,
Robert Sibthorpe and Yorkton Securities as defendants in an action to recover
damages. Causes of action against some, but not all of the defendants, include
claims for Violations of Section 16(b) and Section 10b of the Securities
Exchange Act of 1934, Violation of California Corporations Code 25400(d) and
25401, Attorney Malpractice, Breach of Fiduciary Duty, Intentional
Misrepresentation, Negligent Misrepresentation, Megligence, Resission and
Restitution. The suit was filed in the United States District Court for the
Northern District of California as Case Number C94- 3487.
As to the progress of the case to date, an initial round of discovery has been
completed. On November 15, 1996, the court granted defendants Yorkton
Securities and Robert Sibthorpe's Motion for Summary Judgment. On Nobember 15,
1996, the court also set a trial date for the remaining parties of November 24,
1997.
On June 18, 1996, Hinton & Alfert substituted in as counsel for Brush Creek in
the case Royal Bank of Scotland et al. v. Brush Creek Mining & Development,
et al. in the United States District Court for the Eastern District, case
number CV-S-94-0962 GEB GGH. Hinton & Alfert represents Brush Creek in its
cross-complaint against attorneys Bartel, Eng, Miller & Torngren for
Professional Negligence and against Simone Anderson for Contractual Indemnity.
The Company entered into a settlement agreement with the Royal Bank of Scotland
(the "Plaintiffs") on December 13, 1995. Pursuant to the agreement, the
Company was required to make a final payment on December 13, 1996 of $600,000.
The Company defaulted on the payment. The Company has entered into a
Forbearance Agreement with the Plaintiffs requiring the Company to make a
payment of $629,100 on or before March 20, 1997 and a payment of $175,000 on or
before July 1, 1997. The Company has the option of postponing the second
payment ($175,000) by delivering written notice to Plaintiffs no later than
June 25, 1997 whereupon the second payment will be paid no later than December
15, 1997 and the amount will be increased to $250,000. The Company must also
reimburse the Plaintiffs for their attorney fees and costs.
The Company is a party to various claims, legal actions and complaints arising
in the ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
business or financial position of the Company.
ITEM 2 - CHANGES IN SECURITIES - NONE
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NONE
ITEM 5 - OTHER INFORMATION -
The Company currently has 18,526,584 shares issued and outstanding. With a
recent bid price of $0.25, the market value of the public float of Brush Creek
is $4,631,646. The Company's capital and surplus exceeds $2,000,000.
Therefore the Company complies with NASDAQ requirements for listings.
11
<PAGE> 12
PART II - OTHER INFORMATION (CONTINUED)
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
(A) Exhibit 11.1 Computation of (Loss) Income Per Share
(B) Reports on Form 8-K filed for the quarter for which this report is filed:
<TABLE>
<S> <C> <C>
Items Reported Financial Statements Filed Date of Report
-------------- -------------------------- --------------
Other matters - Royal Bank of Scotland None December 31, 1996
</TABLE>
12
<PAGE> 13
SIGNATURES
BRUSH CREEK MINING AND DEVELOPMENT CO., INC.
Accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
<TABLE>
<S> <C> <C>
BRUSH CREEK MINING & DEVELOPMENT CO, INC.
Signature Capacity Date
- --------- -------- ----
/s/ James S. Chapin Chief Executive Officer and February 13, 1997
- ------------------------------ Chief Accounting Officer -----------------------------
James S. Chapin
</TABLE>
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Page
- ------- ----
<S> <C> <C>
11.1 Computation of (Loss) Income per Share for 14
the Three and Six Months Ended
December 31, 1996 and 1995
</TABLE>
14
<PAGE> 1
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months
Ended December 31
----------------
1996 1995
--- ----
<S> <C> <C>
Net Income (Loss) $ (854,416) $(4,462,141)
Weighted Average
Common Shares
Outstanding 18,248,180 7,939,797
------------ -----------
Net Income
(Loss) per
Common Share $(0.05) $(0.56)
============ ===========
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ending December 31
------------------
1996 1995
---- ----
<S> <C> <C>
Net Income (Loss) $(2,178,583) $(6,318,268)
Weighted Average
Common Shares
Outstanding 17,202,142 7,826,498
------------ -----------
Net Income
(Loss) per
Common Share $(0.13) $(0.81)
============ ===========
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S.DOLLAR
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-1-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 62,634
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 2,851
<CURRENT-ASSETS> 95,235
<PP&E> 11,305,586
<DEPRECIATION> 895,737
<TOTAL-ASSETS> 10,975,872
<CURRENT-LIABILITIES> 3,373,067
<BONDS> 0
0
0
<COMMON> 44,768,690
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,975,872
<SALES> 0
<TOTAL-REVENUES> 15,531
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,194,114
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 58,763
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,178,583)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,178,583)
<EPS-PRIMARY> $(0.13)
<EPS-DILUTED> 0
</TABLE>
