SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(x) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934.
For the Quarterly Period Ended March 31, 1998.
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission File Number 33-4844-D
AMERICANA GOLD & DIAMOND HOLDINGS, INC.
DELAWARE 84-1023321
(State or other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
Calle Los Laboratorios,
Torre Beta, Piso 2, Ofic. 208
Caracas, Venezuela. 1071
(Address of principal executive offices) (Zip code)
(Telephone) (58-2) 238-23-32 (Fax) (58-2) 239-84-29
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 such filing
requirements for the past 90 days. Yes X No__
The number of shares outstanding of the registrant's common stock is 12,692,683
(as of May 15, 1998).
1
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AMERICANA GOLD & DIAMOND HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions for Form 10-QSB and therefore
do not include all information and footnotes necessary for a fair presentation
of financial position, results of operations and changes in cash flows in
conformity with generally accepted accounting principles. The unaudited
consolidated financial statements should be read in conjunction with the
financial statements and related notes for the year ended December 31, 1997,
included in the Company's Form 10-KSB. In the opinion of management the
unaudited consolidated financial statements contain all adjustments necessary
for a fair presentation of the results of operations for the interim period
presented and all such adjustment are of a normal and recurring nature. However,
the results of operations for the three months ended March 31, 1998 are not
necessarily indicative of the results which may be expected for the entire
fiscal year.
2
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AMERICANA GOLD & DIAMOND HOLDINGS, INC. & SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS - AS OF MARCH 31, 1998
(Expressed in U.S. dollars)
MARCH 31, DECEMBER 31,
1998 1997
---- ----
ASSETS
CURRENT ASSETS
Cash 4,695 14,524
Prepaid Expenses and Other Current Assets 59,745 61,630
---------- ----------
Total Current Assets 64,440 76,154
PROPERTY AND EQUIPMENT, net 249,007 263,538
MINING CONCESSIONS 9,595,390 9,595,390
OTHER ASSETS 514,688 514,879
---------- ----------
10,423,525 10,449,961
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank Loans 232,994 233,462
Accounts Payable 368,036 299,276
Accrued Liabilities 17,885 28,762
---------- ----------
Total Current Liabilities 618,915 561,500
LONG-TERM DEBT 2,958,288 2,958,604
PROVISIONS FOR EMPLOYEE SEVERANCE BENEFITS 12,875 13,899
---------- ----------
Total Liabilities 3,590,078 3,534,003
---------- ----------
STOCKHOLDERS' EQUITY
Capital Stock 11,483,079 11,430,829
Acumulated Losses (4,649,632) (4,514,871)
---------- ----------
Total Stockholders' Equity 6,833,447 6,915,958
---------- ----------
10,423,525 10,449,961
========== ==========
3
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AMERICANA GOLD & DIAMOND HOLDINGS, INC. & SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE QUARTER ENDED MARCH 31, 1998 AND MARCH 31, 1997
(Expressed in U.S. dollars)
THREE MONTHS ENDED MARCH 31,
1998 1997
---- ----
ADMINISTRATION EXPENSES (135,280) (96,374)
-------- --------
OTHER INCOME (EXPENSE):
Translation adjustment 519 (196)
-------- --------
Total other income (expense) 519 (196)
-------- --------
NET (LOSS) (134,761) (96,570)
======== =======
4
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AMERICANA GOLD & DIAMOND HOLDINGS, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Expressed in U.S. dollars)
<TABLE>
<CAPTION>
Total
Capital Stockholders'
Stock Deficit Equity
----- ------- ------
<S> <C> <C> <C>
BALANCE as of December 31, 1996 11,144,840 (3,939,658) 7,205,182
Capital Stock Increase (609,952 Common shares) 285,989 0 285,989
Net Loss 0 (575,213) (575,213)
---------- ---------- ----------
BALANCE as of December 31, 1997 11,430,829 (4,514,871) (6,915,958)
Contribution for future Increases in Capital 52,250 0 52,250
Net Loss 0 (134,761) (134,761)
---------- ---------- ----------
BALANCE as of March 31, 1998 11,483,079 (4,649,632) 6,833,447
========== ========== ==========
</TABLE>
5
<PAGE>
AMERICANA GOLD & DIAMOND HOLDINGS, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE QUARTER ENDED MARCH 31, 1998 AND 1997
(Expressed in U.S. dollars)
THREE MONTHS ENDED MARCH 31,
1998 1997
------------- ---------------
CASH FLOWS (USED IN)
OPERATING ACTIVITIES
Net Loss (134,761) (96,570)
Adjustments to reconcile net loss
with net cash used in operations -
Depreciation 14,531 14,541
Traslation adjustment (519) 196
Provision for employee severance benefits 2,212 0
Other 0 0
-------- --------
(118,537) (81,833)
NET CHANGES IN OPERATING ASSETS-
AND LIABILITIES:
Increase in prepaid expenses
and other current assets 1,885 (1,138)
Increase (Decrease) accrued liabilities (10,877) (10,546)
Increase (Decrease) accounts payable 68,760 26,851
Payment of employee severance benefits (3,236) (382)
-------- --------
Net cash used in operating activities (62,005) (67,048)
-------- --------
CASH FLOW USED IN INVESTING ACTIVITIES:
Purchase of fixed assets 0 0
Increase in mining concessions 0 (25,215)
Treasury Stock 0 (25,971)
Increase, (Decrease) in other assets 191 293
-------- --------
Net cash used in investing activities 191 (50,893)
-------- --------
CASH FLOWS PROVIDED BY FINANCING
ACTIVITIES:
(Decrease) in long term account
payable (316) (343)
Increase (Decrease) in bank loans (468) 0
Increase in capital stock 52,250 0
-------- --------
Net cash provided by financing Activities 51,466 (343)
-------- --------
EFFECT OF EXCHANGE RATE FLUCTUATION ON CASH 519 (196)
-------- --------
(DECREASE) INCREASE IN CASH (9,829) (118,480)
CASH AT BEGINNING OF PERIOD 14,524 133,280
-------- --------
CASH AT END OF PERIOD 4,695 14,800
======== ========
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
The Company has only recently begun its business activities and
accordingly has generated limited revenues. The Company had generated an
accumulated deficit of $4,649,632 through March 31, 1998, due to its significant
research, development, administrative and exploration expenses and insufficient
revenues in relation to its operating expenses. Management believes that the
Company will continue to have limited revenues and that losses will continue to
be incurred until it is able to successfully acquire or place a property in
operation. There can be no assurance that management will be successful in
accomplishing this task. The independent auditor's report for the fiscal year
ended December 31, 1997 has been prepared on the basis that the Company will
continue as a going concern.
RESULTS OF OPERATIONS
QUARTER ENDED MARCH 31, 1998 COMPARED TO QUARTER ENDED MARCH 31, 1997.
There was no income neither for the quarter ended March 31, 1998 nor
for the quarter ended March 31, 1997.
Administrative expenses were $134,761, for the quarter ended March
31, 1998 compared to $96,570 for the quarter ended March 31, 1997.
Due to the lack of income, the net loss for the quarter ended March
31, 1998 increased to $134,761 as compared to a net loss of $96,570 for the
quarter ended March 31, 1997.
CHANGES IN FINANCIAL CONDITION - FROM DECEMBER 31, 1997 TO MARCH 31, 1998.
The Company's Assets decreased from $10,449,961 for the year ended
December 31, 1997 to $10,423,525 due primarily to a decrease in cash.
LIQUIDITY AND CAPITAL RESOURCES
The Company had $52,250 in working capital as of March 31, 1998,
compared with working capital of $125,000 as of March 31, 1997.
The 1998 working capital was primarily obtained from the receipt of
proceeds from contributions for future increases in capital, offset by funding
of operations and the Company's investments in the La Fortuna and Bochinche
concessions.
At March 31, 1998, the Company had a note payable to a bank
outstanding in the amount of $185,000. The loan bears interest at 7.625% per
annum and matures on July 27, 1998. The Company's subsidiaries had three notes
payable to a Venezuelan Bank for the total equivalent amount of $ 47,994. These
loans bear interest at 34% per annum and mature in September, 1998. Long-term
debt of the Company relating to liabilities assumed by the Company for the
purchase of exploration and exploitation rights of mining concessions currently
amounts to $2,958,288. Such amount relates to approximately $390,000 in payments
due on the Fortuna I Concession, and the balance relates to the El Progreso
Concession, which the Company is currently renegotiating.
7
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In 1997, the Company raised approximately $285,989 from Private
Placements of Common Stock to investors who reside outside the United States
including officers and directors of the Company. The Company issued 609,952
shares of its Common Stock in connection with the Private Placements.
The Company's management is currently seeking to raise funds to
ensure that the Company's operations will continue and that the Company can
operate the La Fortuna concession. The Company is also exploring whether to
enter into joint ventures or partnerships with other mining companies in the La
Fortuna area. There can be no assurance that the Company will be successful in
raising the necessary funds or finding other alternatives to ensure that the
Company will continue and that the Company can operate the La Fortuna
concession. Moreover, the sale of additional equity or convertible debt
securities could result in additional dilution to the Company's Stockholders.
The Company will continue to rely upon management until additional
sources of financing are secured or a suitable property is acquired with
sufficient cash flow to sustain the Company.
FORWARD LOOKING STATEMENTS
This Form 10-QSB contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, amended. Investors are
cautioned that all forward looking statements involve risks and uncertainty,
including without limitation, the viability of gold mines, exploration costs,
foreign currency exchange rates and general market conditions. Although the
Company believes the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
contained in the report will prove to be accurate.
8
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proccedings
Not applicable.
Item 2. Changes in Securities
Not Applicable.
Item 3. Default Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders:
Not applicable.
Item 5. Other Information.
The Company's Common Stock has been trading below $ 1.00 per share.
Under new rules promulgated by the Nasdaq Stock Market ("NASDAQ"), a security is
subject to delisting from NASDAQ if its closing bid price is below $ 1.00.
NASDAQ has advised the Company that if the Company is unable to demonstrate
compliance with the minimun $ 1.00 bid price on or before July 1, 1998, the
Company's Common Stock will be subject to delisting, effective with the close of
business on July 1, 1998. If such delisting occurs, trading if any, of the
Common Stock would thereafter be conducted in the OTC Bulletin Board. As a
result of such ineligibility for quotations, an investor may find it more
difficult to dispose of, or to obtain accurate quotations as to the market value
of the Common Stock. Furthermore, the regulations of the Securities and Exchange
Commission ("Commission") promulgated under the Securities Exchange Act of 1934,
as amended ("Exchange Act"), require additional disclosure relating to the
market for penny stocks. Commission regulations generally define a penny stock
to be an equity security that has a market price of less than $ 5.00 per share,
subject to certain exceptions. A disclosure schedule explaining the penny stock
market and the risks associated therewith is required to be delivered to a
purchaser and various sales practice requirements are imposed on broker-dealers
who sell penny stocks to persons other than established customers and accredited
investors (generally institutions). In addition, the broker-dealer must provide
the customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. If the Company's securities become subject to the
regulations applicable to penny stocks, the market liquidity for the Company's
securities could be severely affected. In such an event, the regulations on
penny stocks could limit the ability of broker-dealers to sell the Company's
securities and thus the ability of purcharsers of the Company's securities to
sell their securities in the secondary market. In the absence of an active
trading market, holders of the Common Stock may experience substantial
difficulty in selling their securities.
9
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Item 6. Exhibits and reports on Form 8-K.
a) Exhibits - None.
b) Reports on Form 8-K - None.
10
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to the signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 12, 1998
/s/ HENRY BLOCH
---------------
HENRY BLOCH
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Consolidated Financial Statements as of March 31,1998 and is qualified in its
entirety by reference to each Financial Statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 5
<SECURITIES> 0
<RECEIVABLES> 60
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 65
<PP&E> 10,642
<DEPRECIATION> 283
<TOTAL-ASSETS> 10,424
<CURRENT-LIABILITIES> 632
<BONDS> 2,958
0
25
<COMMON> 11,458
<OTHER-SE> (4,649)
<TOTAL-LIABILITY-AND-EQUITY> 10,424
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 135
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (135)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (135)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
