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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark one)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
---------- EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE
---------- EXCHANGE ACT OF 1934 For the transition period from __________
to ___________
Commission File Number: 0-6334
AURIC METALS CORPORATION
(Exact name of small business issuer as specified in its charter)
NEVADA 87-0281240
(State of Incorporation) (IRS Employer ID Number)
4243 DUNWOODY CLUB DRIVE, SUITE 200, ATLANTA, GEORGIA 30305
(Address of principal executive offices)
(678) 731-0007 X 206
(Issuer's telephone number, Including area code)
1800 E. SAHARA, SUITE 107, LAS VEGAS, NEVADA 89104
(Former name, former address and former fiscal year, if changed since last
report)
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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 [ ]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 953,600 shares as of
August 30, 2000.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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AURIC METALS CORPORATION
INDEX TO FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 2000
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1 FINANCIAL STATEMENTS PAGE
<S> <C> <C>
Condensed Consolidated Balance Sheet of Auric Metals
Corporation and Subsidiary as of June 30, 2000................................... 3
Condensed Consolidated Statements of Operations of Auric
Metals Corporation and Subsidiary for the Three Months Ended
June 30, 2000 and June 30, 1999.................................................. 4
Condensed Consolidated Statements of Cash Flows
of Auric Metals Corporation and Subsidiary for the
Three Months Ended June 30, 2000 and June 30, 1999............................... 5
Notes to Condensed Consolidated Financial Statements.................................. 6
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.......... 7
PART II - OTHER INFORMATION
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS........................... 7
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K ................................... 7
SIGNATURES .................................................................... 8
</TABLE>
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AURIC METALS CORPORATION AND SUBSIDIARY
BALANCE SHEET
JUNE 30, 2000
<TABLE>
<S> <C>
ASSETS
------
Cash and cash equivalents $ 1,493,000
Investments 125,000
-----------
$ 1,618,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Income taxes payable $ 337,000
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STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value;
authorized: 25,000,000 shares;
issued: 1,000,000 shares 10,000
Additional paid-in capital 2,532,000
Deferred compensation (866,000)
Unrealized loss on securities
available for sale (8,000)
Retained earnings (deficit) (387,000)
-----------
1,281,000
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$ 1,618,000
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</TABLE>
See notes to financial statements
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AURIC METALS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
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June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Interest $ 1,000 $ 2,000
Dividends 10,000 10,000
Realized gain on sale of
securities, net 1,139,000
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$ 1,150,000 $ 12,000
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EXPENSES:
Lease expense 3,000
General and administrative
expense 185,000 5,000
Non-cash compensation charge 1,527,000
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1,512,000 8,000
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NET (LOSS) INCOME BEFORE
INCOME TAXES (362,000) 4,000
Provision for income taxes 330,000
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NET (LOSS) INCOME $ (692,000) $ 4,000
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NET (LOSS) INCOME PER COMMON
SHARE - basic and diluted $ (0.69) $ --
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Weighted average number of shares
Outstanding 1,000,000 996,000
Dilutive effect of options 13,000
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Diluted average number of shares 1,000,000 1,009,000
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</TABLE>
See notes to financial statements
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AURIC METALS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOW
For The Three Months Ended
<TABLE>
<CAPTION>
June 30, June 30,
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income (692,000) $ 4,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of securities (1,139,000)
Non-cash compensation charge 1,327,000
Income taxes payable 330,000
Accrued expenses 1,000
----------- -----------
Net cash (used in) provided by operating activities (174,000) 5,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of investments 1,411,000
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1,411,000
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of treasury stock 8,000
Purchase of treasury stock (2,000)
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Net cash provided by (used in) by financing activities 8,000 (2,000)
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NET INCREASE IN CASH AND EQUIVALENTS 1,245,000 3,000
Cash and equivalents, beginning of period 248,000 203,000
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Cash and equivalents, end of period $ 1,493,000 $ 206,000
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</TABLE>
See notes to financial statements
5
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AURIC METALS CORPORATION AND SUBSIDIARY
NOTES
THE COMPANY AND BASIS OF PRESENTATION
Auric Metals Corporation (the "Company") is a Nevada corporation which
was previously engaged in the exploration, development and production of
natural resource properties primarily through participation with other parties
in natural resource joint ventures or other arrangements. The Company held
interests in certain natural resource properties and the Company's wholly owned
subsidiary, Auric Minerals Corporation (the "Subsidiary"), held a minority
interest in Corporacion de La Fonda ("La Fonda") which owns and operates a
hotel in Santa Fe, New Mexico.
In May 2000, the Company nominated new directors to the board and
hired new executive officers. With the election of new officers and directors,
the business strategy of the Company was changed to developing, investing in
and operating internet and other technology companies primarily in the
Southeastern United States. In line with this new strategy, the Subsidiary sold
its holdings in La Fonda back to La Fonda and, in addition, the Company sold
certain other equity securities and a 25% interest in a partnership to its
former President. As a result of these transactions, the Company does not
currently have any active natural resource projects.
The Company intends to research and analyze potential investment
opportunities and possibly make investments in the second quarter of 2000,
though there is no guarantee that any investments will be made. During the
first quarter of 2000 the Company made no investments in any other company or
property.
The accompanying unaudited, consolidated, condensed financial
statements include the accounts of the Company and the Subsidiary. All
intercompany balances and transactions have been eliminated. The accompanying
unaudited, consolidated, condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information in accordance with the instructions to Form 10-QSB. 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 normally recurring
accruals) considered for fair presentation have been included. Operating
results for the three-month period ended June 30, 2000 are not necessarily
indicative of the results that may be expected for the year ended March 31,
2001. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's 2000 Annual Report on Form
10-KSB.
NET LOSS PER SHARE
Net loss per share for the three month period ended June 30, 2000 is
computed based on the weighted average number of common shares outstanding.
Common shares issuable upon the exercise of options are not included in the
calculation of the net loss per share because their effect would be
antidilutive.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Certain statements contained in this Quarterly Report on Form 10-QSB
are "forward-looking statements," within the meaning of the Private Securities
Litigation Reform Act of 1995, and are thus prospective in nature. Such
forward-looking statements reflect management's beliefs and assumptions and are
based on information currently available to management. The forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements of Auric Metals
Corporation to differ materially from those expressed or implied in such
statements. There can be no assurance that such factors or other factors will
not affect the accuracy of such forward-looking statements
LIQUIDITY AND CAPITAL RESOURCES
Current assets as of June 30, 2000 of $1,493,000 represents an
increase in current assets of $1,245,000 from the March 31, 2000 fiscal year
end and an increase in current assets of $1,286,802 from the comparable period
ending June 30, 1999. Total assets as of June 30, 2000 of $1,618,000 represents
an increase in total assets of $1,042,000 from the March 31, 2000 fiscal year
end and an increase in total assets from the comparable period ending June 30,
1999 of $1,117,836. These increases in current assets and total assets were
primarily due to the sale by the Subsidiary of its remaining holdings in La
Fonda.
While management believes that this sale and the resulting increase in
cash should assist the Company with its plans to move in its new direction, the
Company continues to seek additional capital. As of the date of this report
there are no firm arrangements that provide for such additional capital.
RESULTS OF OPERATIONS
For the three months ended June 30, 2000 and 1999, the Company
recorded revenues of $1,150,000 and $12,000, respectively. This increase in
revenue of $1,138,000 is due principally to the gain on the sale of the
Subsidiary's holdings in La Fonda. Total expenses for the three months ended
June 30, 2000 and 1999 were $1,512,000 and $8,000, respectively. This increase
is primarily due to consulting fees of $120,000 and a non-cash compensation
charge of $1,327,000 related to non-qualified options granted to Mr. Ratajczak
and Mr. Schwartz prior to their appointment as officers, and options granted to
advisors, resulting in a net loss for the three months ended June 30, 2000 of
$692,000 compared to net income for the comparable period ended June 30, 1999
of $4,000.
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
On April 11, 2000, the Company granted stock options to purchase
300,000 shares at an exercise price of $1.25 per share to Mr. Schwartz in
conjunction with the consulting agreement between Mr. Schwartz and the Company.
In April, the Company granted stock options to purchase 150,000 shares at an
exercise price of $3.00 per share to Mr. Ratajczak in conjunction with Mr.
Ratajczak's appointment as an officer and director of the Company. In April and
June 2000, the Company granted options to advisors to purchase an aggregate
101,000 shares at exercise prices ranging from $3.90 to $4.81 The options
issued to Mr. Schwartz and Mr. Ratajczak are more thoroughly described in the
Company's 8-K for May 17, 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
7
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<TABLE>
<CAPTION>
(a) Exhibits
<S> <C>
(27) Financial Data Schedule.............................................9
</TABLE>
(b) Reports on Form 8-K
The Company filed two reports on Form 8-K for the three month period
ending June 30, 2000 as follows:
(i) On May 17, 2000, the Company filed a Current Report on Form
8-K to report or disclose: under Item 1 the change in control of the Company;
under Item 2 the sale of the the holdings in La Fonda by the Subsidiary; under
Item 6 the resignation of certain directors; and under Item 7 certain financial
statements and exhibits.
(ii) On July 5, 2000, the Company filed a Current Report on Form
8-K to report under Item 4 the change in the Company's certifying accountant.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AURIC METALS CORPORATION
By: /s/Marc J. Schwartz
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Marc J. Schwartz
Vice President/Treasurer
Dated: August 30, 2000
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