SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the quarterly period ended: September 30, 1997
Commission File number: 0-114244
WHITE CLOUD EXPLORATION, INC.
(Exact name of registrant as specified in its charter)
Utah 84-0959153
State or Other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
116 Stanyan Street, San Francisco, CA 94118
(Address of principal Executive Offices Zip Code)
Registrant's telephone number, including area code: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.
Yes X No ____
As of September 30, 1997, there were 100,000 shares of common
stock, par value $.0001, outstanding.
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
WHITE CLOUD EXPLORATION, INC.
Consolidated Balance Sheet
(Unaudited)
September June
ASSETS 30, 1997 30, 1997
CURRENT ASSETS:
Cash and Cash Equivalents $100 $100
Prepaid Expenses - -
Accounts Receivable - -
Accrued Interest Receivable - -
Total Current Assets $100 $100
OTHER ASSETS:
Advance to Watchout! $200,000
TOTAL ASSETS $200,100 $100
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
CURRENT LIABILITIES:
Interest Payable $2,663 $ -
Accounts Payable $28,557 $27,055
Loan Payable $200,000 $ -
Total Current Liabilities $231,220 $27,055
STOCKHOLDER'S EQUITY (DEFICIT):
Common Stock, $.001 par value
- 50,000,000
shares authorized, 100,000
shares issued and outstanding $100 $100
Additional Paid In Capital $82,932 $82,932
Deficit accumulated during the
development stage (114,152) (111,489)
Total Stockholder's Equity $(31,120) (28,457)
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY $100 $100
The accompanying notes are considered an integral part of these
financial statements
<PAGE>
WHITE CLOUD EXPLORATION, INC.
Consolidated Statement of Income and Expense
(Unaudited)
Three Months
Ended September 30,
1996 1997
OPERATING REVENUES
Revenues - -
Gross Profit - -
OPERATING EXPENSES
Salaries - -
Office - -
Travel - -
Professional fees - -
Telephone & Utilities - -
Depreciation - -
Miscellaneous - -
Interest expense - -
Total Operating Expense - -
OTHER REVENUES & EXPENSES - -
Miscellaneous Income - -
Interest Accrual - (2,663)
Total Other Revenues & Expenses - (2,663)
NET INCOME (LOSS) - (2,663)
The accompanying notes are considered an integral part of these
financial statements.
<PAGE>
WHITE CLOUD EXPLORATION, INC.
Consolidated Statement of Cash Flows
(Unaudited)
Three Months
Ended September 30,
1996 1997
Cash flows from
Operating Activities: - -
Net Profit (Loss) - -
Depreciation - -
Stock issued for services - -
(Increase) decrease in Accts
Receivable - -
(Increase) decrease in Prepaids - -
(Increase) decrease in Deposits - -
(Decrease) increase in Accrued
Expenses - -
(Decrease) increase in Accts
Payable - -
(Decrease) increase in Advance
Payable - -
Net Cash Flows Used for
Operating Activities - -
Cash Flows from investing
activities
(Purchase) sale of Fixed Assets - -
(Purchase) sale of Note Receivable - -
(Purchase) sale of Lease Interests - -
Interest Accrual on Loan - 2,663
Total cash used for investing - 200,000
Cash flows from financing
activities - -
Increase (Decrease) in Note
Payable - 200,000
Sale of Common Stock - -
Total Cash from financing
activities - 200,000
Increase (Decrease) in cash - -
Cash and cash equivalents -
beginning of period 100 100
Cash and cash equivalents -
end of period 100 100
The accompanying notes are considered an integral part of these
financial statements.
<PAGE>
ITEM 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for Period ended September 30, 1997
The Company incurred no expenses for the three month period
ended September 30 in either 1996 or 1997. There were no
operations or revenues for the period in either 1997 or 1996.
The Company recorded neither profit nor loss for the period in
1996 but in 1997 had a loss of $2,663 due to interest accrual.
Loss per share was $.027 in the period in 1997 compared to no
loss or profit in the 1996 first quarter. While the Company is
seeking capital sources for investment through private placement,
there is no assurance that capital sources can be found.
Liquidity and Capital Resources
The Company had nominal cash capital at the end of the
period. The Company will be forced to make private placements of
stock in order to fund operations commencement. No assurance
exists as to the ability to make private placements of stock.
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 matters to a vote of security holders - None.
Item 5. Other information -
On September 3, 1997, the Company entered into a loan
arrangement with certain parties for loans totaling $200,000 to
the Company. The Company advanced such monies to Watchout! in
furtherance of its Agreement of May 30, 1997. The loans were
funded by:
(a) An 18% Senior note issued by the Company to
Raymond Larkin in the amount of $50,000 due September 3, 1998 in
full with interest.
(b) An 18% Senior note issued by the Company to
Watchout-Goldpoint Partners for $150,000 due September 3, 1998 in
full with interest.
In addition, the Company granted warrants to purchase common
shares at $.01/share as an inducement to the lenders to make the
loans. The options expire on September 3, 2002. The warrants
<PAGE>
are to Raymond J. Larkin for 75,000 shares and to Watchout Goldpoint
partners for 225,000 shares.
Further, the Company granted warrants to purchase 25,000
shares each to Mark Hollo and Sands Brothers & Co. The warrants
are exercisable at $.01 per share on or before September 3, 2002.
The Company, in a separate transaction related to the
Watchout! Agreement, agreed to issue warrants to purchase a total
of 250,000 common shares of the Company @ $.10 per share
exercisable two years from September 19, 1997. The warrants are
to be issued to John Bader and William Williams for 166,000 and
84,000, respectively.
Item 6. Exhibits and reports on Form 8-K
(a) The following are filed as Exhibits to this
Quarterly Report. The numbers refer to the Exhibit Table of Item
601 of Regulation S-K: None.
(b) Reports on Form 8-K filed during the three months
ended September 30, 1997. (incorporated by reference) None.
NOTE: Form 8-K dated September 24, 1997 and filed
October 3, 1997 should be reviewed by readers of this
Form 10-QSB, together with the exhibits thereto.
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 of the undersigned thereunto duly authorized.
Dated: January 15, 1998
WHITE CLOUD EXPLORATION, INC.
By: /s/ Robert Galoob
Robert Galoob, President
