UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSBA
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the Quarter ended June 30, 1997 Commission File No.33-2392-D
European American Resources, Inc. (formerly Merlin Mining Co.)
(Exact name of registrant as specified in its charter)
Delaware 87-0443214
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
1212 Court St., Suite C-2, Clearwater, FL 33756
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (813) 298 - 0636
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 shorter period that the registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes: X No:
Transitional Small Business Disclosure Format:
Yes: X No:
The number of shares outstanding of each of the registrant's classes of common
stock as of June 30, 1997 is 9,773,365 shares all of one class of $.0001 par
value common stock.
<PAGE>
EUROPEAN AMERICAN RESOURCES, INC. AND SUBSIDIARIES
(FORMERLY MERLIN MINING CO.)
INDEX
PAGE
PART I FINANCIAL INFORMATION
Consolidated Balance Sheet - June 30, 1997 1
Consolidated Statements of Operations - Three
and Six Months Ended June 30,1997 2
Consolidated Statement of Cash Flows - Six
Months Ended June 30, 1997 3
Notes to Financial Statements 4-5
Management's Discussion and Analysis of financial
conditions and results of operations 6
PART II OTHER INFORMATION
Item 1. Legal Proceedings 7
Item 2. Changes in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of
Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits on Reports on Form 8-K 7
Signature Page 8
<PAGE>
EUROPEAN AMERICAN RESOURCES, INC. AND SUBSIDIARIES
(FORMERLY MERLIN MINING CO.)
CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
Assets
Current Assets
Cash and cash equivalents $ 502
Prepaid rent on mining claims 55,297
Total Current Assets 55,799
Resource properties 1,125,949
Property and equipment, net 786
Other Assets
Investments, net of valuation reserve of $803,792 482,000
Other assets 9,353
Total Other Assets 491,353
Total Assets $1,673,887
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses $ 148,110
Due to Related Party 228,600
Total Current Liabilities 376,710
Stockholder's Equity
Preferred stock; $.0001 par value, 25,000,000
shares authorized, no shares issued or
outstanding
Common stock; $.0001 par value, 250,000,000
shares authorized, 9,733,365 shares issued
and outstanding 973
Additional paid in capital 6,472,366
Deficit accumulated during the exploration stage (5,176,162)
Total Stockholder's Equity 1,297,177
Total Liabilities and Stockholder's Equity $1,673,887
<PAGE>
EUROPEAN AMERICAN RESOURCES, INC. AND SUBSIDIARIES
(FORMERLY MERLIN MINING CO.)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Six Months
April - June January -
1997 June 1997
Revenue
Sales $ - $ -
Operating Expenses
Operating costs 22,735 44,470
General and administrative 56,340 75,050
Total Operating Expenses 79,075 119,520
Other
Total Other Income (Expense) - 427
Loss before income taxes (79,075) (119,093)
Income tax expense - -
Net Loss $ (79,075) $(119,093)
Weighted Average Shares Outstanding 9,733,365 9,733,365
Loss Per Share (.008) (.012)
<PAGE>
EUROPEAN AMERICAN RESOURCES, INC. AND SUBSIDIARIES
(FORMERLY MERLIN MINING CO.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1997
Cash Flows Operating Activities
Net Loss $ (119,093)
Adjustments to reconcile net loss to net cash
(used) by operating activities:
Changes in assets and liabilities:
(Increase) in prepaid rent (3,631)
Increase in accounts payable and accrued expenses 66,356
Net Cash Used By Operating Activities (56,368)
Cash Flows From Investing Activities
Additions to resource properties (56,081)
Net Cash (Used In) Investing Activities (56,081)
Cash Flows From Financing Activities
Advances from related party 112,000
Net Cash Provided By Financing Activities 112,000
Net (Decrease) in Cash and Cash Equivalents (449)
Cash and Cash Equivalents at Beginning of Period 951
Cash and Cash Equivalents at End of Period $ 502
<PAGE>
A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 1997 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1997. Earnings per share are based on weighted
average shares outstanding. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Registrant Company's annual report on form 10-KSB for the year ended
December 31, 1996.
Additionally, prior years amounts for the same period are unavailable as
the registrant was inactive during that period. The amounts in this
filing have been amended to include the capitalizing of costs to the
deferred exploration costs account. Previously the Company reported a
loss for the six months ended June 30, 1997 of $101,377 or $17,705 less
than the loss as restated.
B. RESOURCE PROPERTIES
The Company has incurred over $2,661,000 in direct exploratory activity
costs since acquisition of the right to these mining properties. In
accounting for these costs the Company selected an accounting policy which
capitalizes exploratory costs rather than expensing them as incurred.
Amortization of these costs is to be calculated by the units of production
method based upon proven or probable reserves. Costs incurred on
properties later determined to be unproductive are expensed by the Company
as that determination is made. As of March 31, 1997, the Company has
$1,125,949 in resource properties. If these remaining costs had been
expensed rather than capitalized, the accumulated deficit at June 30, 1997
would have been $6,302,111 rather than $5,176,162.
The Company is continuing its exploration stage activities on the
remaining properties to determine the amount of proven or probable
reserves, if any. Realization of the $1,125,949 in resource properties is
dependent on establishing proven or probable reserves in excess of amounts
capitalized.
<PAGE>
C. RESTATEMENT AND RECLASSIFICATION OF FINANCIAL STATEMENT PRESENTATION
Historically the Company has capitalized exploration costs as discussed in
Note B. Originally the Company filed Form 10-QSB for the period ending
June 30, 1997 with these costs treated as an expense. The statement of
operations presented herein differ from those previously reported due to
the correction of this error. A reconciliation of revenue and net loss
are as follows:
Six Months
Ended
June 30,
1997
Revenues - as previously restated 0
Revenues as restated 0
Net Income (Loss) - as previously reported (101,383)
Net (Loss) as restated (119,093)
D. RELATED PARTY TRANSACTIONS
Amounts due to related party at June 30, 1997 represent cash and expense
advances by a company affiliated with a stockholder and director of the
company totaling $228,600. Presently these amounts bear no interest.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying condensed financial
statements, as well as information relating to the plans of the Company's
current management.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997
The Company's historical results of operations for the six months ended June 30,
1997 consisted of a loss of $119,093. No comparison to prior year amounts can
be made as the registrant was inactive during that period.
Liquidity and Working Capital
The Company's working capital declined during the quarter ended June 30, 1997.
At June 30, 1997 the Company had a working capital deficit of $320,911 as
compared to a working capital deficit of $112,559 at December 31, 1996.
During the period the Company increased resource properties by $89,259.
<PAGE>
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
NONE
Item 6. Exhibits and Reports on Form 8-K
NONE
<PAGE>
SIGNATURES
In 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.
EUROPEAN AMERICAN RESOURCES, INC.
FORMERLY MERLIN MINING CO.
Dated: By:
Michael D. Ogilvie, President
<PAGE>
SIGNATURES
In 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.
EUROPEAN AMERICAN RESOURCES, INC.
FORMERLY MERLIN MINING CO.
Dated: By: /s/ Michael D. Ogilvie
Michael D. Ogilvie, President
<PAGE>
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<PERIOD-END> JUN-30-1997
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<RECEIVABLES> 0
<ALLOWANCES> 0
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<PP&E> 786
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<OTHER-SE> 1,296,204
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