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U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-12809
GOLDEN CHIEF RESOURCES, INC.
(Exact name of small business issuer as specified in its charter)
State of Kansas 48-0846635
(State or other jurisdiction of (IRS Employer
incorporation or organization) I. D. Number)
106 S. Parkdale, Wichita, KS 67209
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (316) 722-3442
Check whether the issuer (1) filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act during the past 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. Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
There were 62,690,890 shares of common stock, No Par Value,
outstanding as of June 30, 1999.
Transitional Small Business Disclosure Format (check one); Yes [ ] No [X]
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Golden Chief Resources, Inc.
Wichita, Kansas
We have reviewed the accompanying balance sheet of Golden Chief Resources,
Inc. (a development stage enterprise) (the "Company") as of March 31, 1999,
and the related statements of operations, stockholders equity, and cash flows
for the three and six months ended March 31, 1999 and 1998. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of September 30, 1998, and the related
statements of operations, stockholders' equity and cash flows for the year
then ended (not presented herein); and in our report dated May 27, 1999, we
expressed an opinion on those financial statements which was qualified based
on the Company's ability to continue as a going concern. In our opinion, the
information set forth in the accompanying balance sheet as of September 30,
1998 is fairly stated in all material respects in relation to the balance
sheet from which it has been derived.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 of the
selected information for financial statements, the Company discontinued
previous operations in 1986 and is in the process of re-emerging from
dormancy. At the date of these financial statements, the Company had limited
assets and is reliant on the infusion of capital or the completion of a
merger. These facts raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters
are also discussed in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Robert Early & Company
ROBERT EARLY & COMPANY, P.C.
Abilene, Texas
July 2, 1999
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Golden Chief Resources, Inc.
(A Development Stage Enterprise)
Balance Sheets
March 31, September 30,
1999 1998
(Unaudited)
---------- ----------
ASSETS
Current Assets:
Cash $ 8,293 $ -
Marketable securities 13,416 -
---------- ----------
TOTAL ASSETS $ 21,709 $ -
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Total Liabilities $ - $ -
---------- ----------
Stockholders' Equity:
Common stock, no par value
(500,000,000 shares authorized,
62,290,890 & 48,158,050 outstanding) 1,018,175 996,234
Accumulated deficit (994,640) (994,640)
Deficit accumulated during
the development stage (1,826) (1,594)
---------- ----------
Total Stockholders' Equity 21,709 -
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 21,709 $ -
========== ==========
See accompanying selected information.
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Golden Chief Resources, Inc.
(A Development Stage Enterprise)
Statement of Operations
For Three and Six Months and Cumulative Period
Ended March 31, 1999 and 1998
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
Cumulative
During the
Development Three Months Six Months
Stage 1999 1998 1999 1998
--------- --------- --------- --------- ---------
Revenues:
Miscellaneous income $ 861 $ 861 $ - $ 861 $ -
--------- --------- --------- --------- ---------
Operating Expenses:
Directors and officers
compensation 1,300 - - 300 -
Professional fees 1,800 - - 1,800 -
Transfer fees 915 302 - 676 -
Filing fees and other 411 35 - 56 -
--------- --------- --------- --------- ---------
Total Operating Expenses 4,426 337 - 2,832 -
--------- --------- --------- --------- ---------
Income/(Loss) from Operations (3,565) 524 - (1,971) -
Other Income/(Expenses):
Gain on sale of securities 886 886 - 886 -
Unrealized gain on secur-
ities held for trading 853 853 - 853 -
--------- --------- --------- --------- ---------
Income/(Loss) before income taxes (1,826) 2,263 - (232) -
Income taxes - - - - -
--------- --------- --------- --------- ---------
Net Income/(Loss) $ (1,826) $ 2,263 $ - $ (232) $ -
========= ========= ========= ========= =========
Earnings per Share $ (0.00) $ (0.00) $ - $ (0.00) $ -
========= ========= ========= ========= =========
Weighted Average Shares
Outstanding 54,490,512 61,601,583 32,217,050 56,610,924 32,217,050
========== ========== ========== ========== ==========
</TABLE>
See accompanying selected information.
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Golden Chief Resources, Inc.
(A Development Stage Enterprise)
Statement of Stockholders' Equity
For the Six Months and Cumulative
Period Ended March 31, 1999
(Unaudited)
Deficit
Accumulated
During the
Common Stock Accumulated Development
Date Shares Amount Deficit Stage
----- ---------- ---------- --------- ---------
Balances, 09/30/97 32,217,050 $ 994,640 $ (994,640) $ -
Shares authorized for
issuance for services
and expenses 09/98 15,941,000 1,594 - -
Net income/(loss) for year - - - (1,594)
---------- ---------- --------- --------
Balances, 09/30/98 48,158,050 996,234 (994,640) (1,594)
Shares issued for:
Expenses 10/98 3,569,600 357 - -
Accounting fees 11/98 1,819,320 1,819 - -
Consulting services 11/98 300,000 300 - -
Investment in stocks 12/98 7,219,320 7,219 - -
Cash 01/99 180,000 1,800 - -
Investment in stocks 02/99 894,600 8,946 - -
Cash 03/99 150,000 1,500 - -
Net income/(loss) for
period - - - (232)
---------- ---------- --------- --------
Balances, March 31, 1999 62,290,890 $1,018,175 $(994,640) $ (1,826)
========== ========== ========= ========
See accompanying selected information.
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Golden Chief Resources, Inc.
(A Development Stage Enterprise)
Statement of Cash Flows
For the Six Months and Cumulative Period
Ended March 31, 1999 and 1998
(Unaudited)
Cumulative
During the
Development
Stage 1999 1998
--------- -------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (1,826) $ (232) $ -
Adjustments to reconcile net income
/(loss) to net cash provided by
operations:
Unrealized gain on securities (853) (853) -
Gain on sale of securities (886) (886) -
Services and expenses purchased
with stock 4,089 2,495 -
--------- -------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 524 524 -
--------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of securities 8,086 8,086 -
Purchase of securities (3,617) (3,617) -
--------- -------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES 4,469 4,469 -
--------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock issuance 3,300 3,300 -
--------- -------- ---------
Increase/(decrease) in cash for period 8,293 8,293 -
Cash, Beginning of period - - -
--------- -------- ---------
Cash, End of period $ 8,293 $ 8,293 $ -
========= ======== =========
Supplemental Disclosures:
Cash payments for:
Interest $ - $ - $ -
Income taxes - - -
See accompanying selected information.
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Golden Chief Resources, Inc.
(A Development Stage Enterprise)
Selected Information for Financial Statements
Six Months Ended March 31, 1999 and 1998
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions of Regulation S-B. They do not include
all information and footnotes required by generally accepted accounting
principles for complete financial statements. However, except as disclosed
herein, there has been no material change in the information included in the
Company's Annual Report on Form 10-KSB for the year ended September 30, 1998.
In the opinion of Management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
The report of Robert Early & Company, P.C. commenting on their review
accompanies the condensed financial statements included in Item 1 of Part 1.
Operating results for the six month period ended March 31, 1999, are not
necessarily indicative of the results that may be expected for the year ending
September 30, 1999.
Development Stage Enterprise -- The Company returned to the development stage
in August 1998 when its President began the process of reinitializing the
Company from its dormant state. This process includes identifying,
evaluating, structuring, and completing a merger with or acquisition of a
privately owned entity.
Going Concern Issues The Company has not had operations since 1986 and had
limited assets at the financial statement date. Subsequent activities since
the financial statement date have not included significant revenue generating
operations or acquisition of operating assets. While the Company could
continue in this non-operating mode for an extended period of time, Management
anticipates that the Company will be acquired in a reverse merger by an entity
seeking to go public. In the alternative, a third party or group may be
interested in providing capital for a new business. Management has received
inquiries and seen interest in one or both of these possibilities. Should
neither of these occur, the Company is not in significant danger of
dissolution as long as the officers and directors are willing to pay the
nominal costs of keeping it in good standing. However, without a merger
partner or some significant capital infusion, the Company is not currently in
a position to be considered an operating unit.
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NOTE 2: STOCK TRANSACTIONS
As indicated in the Statement of Stockholders' Equity, the Company has issued
shares in payment of various expenses and for the acquisition of a stock
investment. The consulting fees were paid to an entity for services to be
rendered in locating possible merger candidates and assistance in negotiating
a merger agreement. The investment, as presented below, was the acquisition
of 30,000 and 21,300 shares of Kit Karson Corporation.
In addition, the Company has issued 330,000 shares for cash proceeds of
$3,300.
NOTE 3: INVESTMENTS
In December 1998, the Company acquired 30,000 shares of Kit Karson
Corporation. Kit Karson is a bulletin board stock that has traded in the $.20
to $.56 price range in recent months. In February 1999, the Company sold all
30,000 shares and issued stock to acquire another 21,300 shares of Kit Karson.
The Company also purchased 6,000 shares of American Technologies Group during
March 1999. The Company plans to hold or sell the stock as needed in order to
pay costs of restarting the Company. The sale of the Kit Karson shares
resulted in a gain of $886.
Accounting rules require that securities held for trading purposes are to
adjusted to fair value at the balance sheet date and recognizing the gain or
loss in the statement of operations. At March 31, 1999, the securities held
exceeded their cost by $853.
NOTE 4: SUBSEQUENT EVENTS AND CURRENT ACTIVITIES
The Company has received inquires from several privately held companies
regarding a possible merger or acquisition. Management has held meetings and
discussions with some of these companies, but no proposals or deals have been
consummated as of the date of this report. Management plans to continue to
pursue these opportunities vigorously and has an agreement with a consultant
who is to assist in identifying merger candidates and contract negotiations.
Subsequent to March 31, 1999, the Company has issued 150,000 shares of common
stock in payment of transfer agent fees and 200,000 shares were issued for
cash.
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Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations.
General:
The quarter ended March 31, 1999 was a quarter of accomplishments as the
accounting was brought current and a compliance consultant was engaged to
assist the Company in getting an auditor and to file the necessary
documents with the Securities and Exchange Commission to regain its full
reporting status. The Company had been inactive since 1986 due to a
downturn in real estate and oil and gas economies during the mid-1980's
which caused the Company to sell, close or abandon all of its oil and gas
leases. The mortgagor on the Company's commercial real estate foreclosed
on the property to satisfy the outstanding mortgage. This series of
transactions resulted in substantial losses of income and operating assets.
Management decided to discontinue any further business operations and
completed the liquidation of the few remaining assets during 1986. The
Company remained inactive and did not operate since that time.
The Company initiated a funding campaign to cause the Company to become
current in its state filings and engaged compliance and accounting
personnel to bring the Company back into a full reporting status with the
SEC as well as with other regulatory agencies. The first issuance of stock
was on September 1, 1998 for expenses incurred in bringing the Company
current with the state filings in Kansas. On August 25, 1998 the Company
was in good standing and authorized to engage in business as a Kansas
corporation. During the first quarter the Company issued 12,908,240 for
assets, expenses and services.
Liquidity and Capital Resources:
Prior to September, 1998 several proposals were received to bring the
Company back into a viable operating status. These attempts included
contacting several companies or being contacted, all of which did not
materialize for various reasons.
During September, 1998, the management of the Company began the process of
bringing the Company back into compliance. The fiscal year end is
September 30; therefore, the first and second quarters were primarily
getting corporate documents together and bookkeeping records for the audit
of 1998 and 1997.
The assets on March 31, 1999 were $21,709 being $8,293 in cash and $13,416
in marketable securities. This increase in assets from $7,200 on December
31, 1998 is through the issuance of 1,224,600 restricted common shares.
The Company did not have any assets or liabilities on March 31, 1998.
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Management is actively searching for possible merger or acquisition
partners. This process will include identifying, evaluating, structuring
and completing a merger with or acquisition of a privately owned entity.
Meetings have been held with some interested parties, but no deals have
been consummated during this quarter. Management plans to continue to
actively pursue these opportunities. While seeking a merger or acquisition
candidate, the Company may continue in its non-operating mode for an
extended period of time. However, the Company is not in significant danger
of dissolution since Management is willing to pay the nominal costs of
keeping it in good standing.
There can be no assurance that the Company will find a merger or
acquisition partner, and should the Company become successful in locating a
merger or acquisition candidate, no assurance can be made that the result
of the merger etc. will be beneficial for the Company and its shareholders.
Revenues and Expenses:
No comparative analysis of revenues and expenses can be made between the
current quarter and the same period a year ago as there has been no
activity until September 30, 1998 when management began bringing the
Company back into compliance.
There were no revenues reported during the previous quarter ended December
31, 1998. Currently the Company does not have any income producing assets;
however, the Company did receive $861 in oil revenues from an unclaimed
account held in suspense since the 1980's during the second quarter ended
March 31, 1999.
The expenses incurred during the quarter were very nominal, being less than
$400. These expenses were primarily paid through the issuance of stock.
During the quarter ended December 31, 1998, the Company issued 5,388,920
for expenses and accounting fees that were also paid through the issuance
of shares.
A capital gain of $886 and an unrealized gain on securities held of $853
was reported during the quarter ended March 31, 1999. These gains caused
the Company to report net income of $2,263 for the quarter ended March 31,
1999 and a nominal net loss of $232 for the six months also ended March 31,
1999. The Company reported a loss of $2,495 for the three months ended
December 31, 1998
Management plans to do additional financing for the Company's operations
through private placements of the Company's common stock to carry the
Company forward during the process of locating a merger/acquisition
partner.
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The Company issued a total of 12,908,240 shares during the quarter ending
December 31, 1998 and issued 1,224,600 restricted common shares during the
quarter ended March 31, 1999. The number of shares outstanding at the
beginning of the fiscal year (October 1, 1998) was 48,158,050 and on
December 31, 1998 was 61,066,290 shares and on March 31, 1999 was
62,290,890 shares outstanding.
No filings were made during the quarter on Form 8K.
Disclosure Regarding Forward-Looking Statements:
Where this Form 10-QSB includes "forward-looking" statements within the
meaning of Section 27A of the Securities Act, the Company desires to take
advantage of the "safe harbor" provisions thereof. Therefore, the Company
is including this statement for the express purpose of availing itself of
the protections of such safe harbor provisions with respect to all of such
forward-looking statements. The forward-looking statements in this Form
10-QSB reflect the Company's current views with respect to future events
and financial performance. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
from those anticipated. In this Form 10-QSB, the words "anticipates,"
"believes, "expects," "intends," "future" and similar expressions identify
forward- looking statements. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that may arise after the date hereof. All subsequent written
and oral forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by this
section.
Year 2000:
The Company does not own or have any computers in its business or its
operations. In the event companies with which the Company does business
suffer significant problems within their systems, the Company could incur
an adverse impact. However, the Company has no way of anticipating or
controlling such failure on the part of its customers.
Recent Accounting Pronouncements:
In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 130, "Reporting Comprehensive Income" which establishes standards for
reporting and display of comprehensive income, its components and
accumulated balances. Among other disclosures, SFAS 130 requires that all
items that are required to be recognized under current accounting standards
as components of comprehensive income be reported in a financial statement
that is displayed with the same prominence as other financial statements.
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Also, in June 1997, FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information." SFAS 131 establishes standards
for the way that public companies report information about operating
segments in annual financial statements and requires reporting of selected
information about operating segments in interim financial statements issued
to the public. It also establishes standards for disclosure regarding
products and services, geographic areas and major customers.
Both SFAS 130 and 131 are effective for financial statements for periods
beginning after December 15, 1997 and require comparative information for
earlier years to be restated.
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The following schedule contains summary financial information which has
been extracted from the consolidated financial statements of GOLDEN CHIEF
RESOURCES INC. for the interim financial statements filed on Form 10-QSB
for the periods indicated. These summary schedules are qualified in their
entirety by reference to such financial statements and the notes thereto.
</LEGEND>
<CIK> 0000752391
<NAME> Golden Chief Resources, Inc.
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> SEP-30-1999 SEP-30-1998
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 8293 0
<SECURITIES> 13416 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 21709 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 21709 0
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 1018175 994640
<OTHER-SE> (996466) (994640)
<TOTAL-LIABILITY-AND-EQUITY> 21709 0
<SALES> 0 0
<TOTAL-REVENUES> 861 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 2832 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (232) 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (232) 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (232) 0
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
</TABLE>
