3
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 033-37099-S
GOLDEN QUEST, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 91-1465664
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5882 South 900 East, Suite 202, Salt Lake City, Utah 84117
(Address of principal executive offices)
801-269-9500
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the
Exchange Act subsequent to the distribution of securities under
a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as of March 31, 2000: 33,941,927
shares of common stock.
Transitional Small Business Format: Yes [ ] No [ X ]
<PAGE>
FORM 10-QSB
GOLDEN QUEST, INC.
INDEX
Page
PART I. Financial Information
Item I. Financial Statements (unaudited) 3
Review Report of Independent Certified 4
Public Accountants
Condensed Balance Sheets - March 31, 2000 5
(unaudited) and December 31, 1999
Condensed Statements of Operations
(unaudited) for the Three Months Ended 6
March 31, 2000 and from Re-entry of
Development Stage on January 1, 1993
through March 31, 2000
Statements of Cash Flows (unaudited) for
the Three Months Ended March 31, 2000 and 7
1999, from Re-entry of Development Stage
on January 1, 1993 through March 31, 2000
Notes to Consolidated Financial 8
Statements
Item 2. Management's Discussion and
Analysis of Financial Condition or Plan 12
of Operation
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
(Inapplicable items have been omitted)
2
<PAGE>
PART I.
Financial Information
Item 1. Financial Statements (unaudited)
In the opinion of management, the accompanying unaudited
financial statements included in this Form 10-QSB reflect all
adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of the results of operations
for the periods presented. The results of operations for the
periods presented are not necessarily indicative of the results
to be expected for the full year.
3
<PAGE>
ACCOUNTANTS' REVIEW REPORT
Board of Directors
GOLDEN QUEST, INC.
Salt Lake City, Utah
We have reviewed the accompanying condensed balance sheet of
Golden Quest, Inc. (A Development Stage Company) as of March 31,
2000, and the related condensed statements of operations and cash
flows for the three months ended March 31, 2000, and for the
period from the re-entering of development stage on January 1,
1993 through March 31, 2000. All information included in these
financial statements is the representation of the management of
Golden Quest, Inc..
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is
substantially less in scope than an audit 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 condensed financial
statements reviewed by us, in order for them to be in conformity
with generally accepted accounting principles.
The accompanying condensed financial statements have been
prepared assuming the Company will continue as a going concern.
As discussed in Note 5 to the financial statements, the company
has no on-going operations, has incurred substantial losses since
its inception, has liabilities in excess of assets and has no
working capital. These factors raise substantial doubt about its
ability to continue as a going concern. Management's plans in
regards to these matters are also described in Note 5. The
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
PRITCHETT, SILER & HARDY, P.C.
May 1, 2000
Salt Lake City, Utah
4
<PAGE>
GOLDEN QUEST, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited - See Accountants' Review Report]
ASSETS
March 31, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash in bank $ - $ -
___________ ___________
Total Current Assets - -
___________ ___________
$ - $ -
___________ ___________
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 123,140 $ 123,140
Interest payable 773,709 752,357
Notes payable 853,889 853889
Advances from officers 16,296 10,648
___________ ___________
Total Current Liabilities 1,767,034 1,740,034
___________ ___________
STOCKHOLDERS' (DEFICIT):
Common stock, $.001 par value, 50,000,000
shares authorized, 33,941,927 shares issued
and outstanding 33,942 33,942
Additional Paid In Capital 649,254 649,354
Retained deficit (1,812,410) (1,812,410)
Deficit accumulated during the
development stage (637,820) (610,920)
___________ ___________
Total Stockholders' (Deficit) (1,767,034) (1,740,034)
___________ ___________
$ - $ -
___________ ___________
Note: The balance sheet at December 31, 1999 was taken from the
unaudited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
condensed financial statements.
5
<PAGE>
GOLDEN QUEST, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited - See Accountants' Review Report]
From Re-entry of
For the Three Development Stage
Months Ended on January 1,
March 31, 1993 through,
_____________________ March 31,
2000 1999 2000
_______________________________
REVENUE:
Sales $ - $ - $ -
_______________________________
Total Revenue - - -
_______________________________
EXPENSES:
General and administrative 5,648 - 6,296
_______________________________
Total Expenses 5,648 - 16,296
_______________________________
LOSS FROM OPERATIONS (5,648) - (16,296)
_______________________________
OTHER EXPENSE:
Interest expene 21,352 21,352 621,524
_______________________________
Total Other Expense 21,352 21,352 621,352
_______________________________
LOSS BEFORE INCOME TAXES (27,000) (21,352) (637,820)
CURRENT INCOME TAXES - - -
DEFERRED INCOME TAX - - -
_______________________________
NET LOSS $(27,000) $(21,352) $(637,820)
_______________________________
LOSS PER SHARE $ (.00) $ (.00) $ (.02)
______________________________
The accompanying notes are an integral part of these unaudited
condensed financial statements.
6
<PAGE>
GOLDEN QUEST, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited - See Accountants' Review Report]
From Re-entry of
For the Three Development Stage
Months Ended on January 1,
March 31, 1993 through,
_____________________ March 31,
2000 1999 2000
_______________________________
Cash Flows From Operating Activities:
Net loss $(27,000) $(21,352) $(637,820)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in assets and liabilities:
Increase in interest payable
-related party 21,352 21,352 621,524
Increase in advances from
officers 5,648 - 16,296
________________________________
Net Cash (Used) by
Operating Activities - - -
________________________________
Cash Flows From Investing Activities:
- - -
________________________________
Net Cash (Used) by
Investing Activities - - -
________________________________
Cash Flows From Financing Activities:
- - -
________________________________
Net Cash Provided by
Financing Activities - - -
________________________________
Net Increase in Cash - - -
Cash at Beginning of the Period - - -
________________________________
Cash at End of the Period $ - $ - $ -
________________________________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the three months ended March 31, 2000:
None
For the three months ended March 31, 1999:
None
The accompanying notes are an integral part of these unaudited
condensed financial statements.
7
<PAGE>
GOLDEN QUEST, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Golden Quest, Inc. (the Company) was organized
under the laws of the State of Utah on August 8, 1984. On May 8
1989 the Company changed its domicile to Nevada. The Company was
formed to engage in any lawful activity. From 1989 to 1992 the
Company engaged in the locating and recovering of archeological
artifacts, precious metals and other valuables from shipwrecks.
During 1993, Management determined it was in the best interest of
the Company to discontinue its previous operations. The Company
is considered to have re-entered into a new development stage
January 1, 1993.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at March
31, 2000 and 1999 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1999 audited financial
statements. The results of operations for the periods ended
March 31, 2000 are not necessarily indicative of the operating
results for the full year.
Development Stage Company - The Company is considered a
development stage company as defined in Statement of Financial
Accounting Standards (SFAS) No. 7.
Loss Per Share - The computation of loss per share of common
stock is based on the weighted average number of shares
outstanding during the periods presented, in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" [See Note 6].
Cash and Cash Equivalents - For purposes of the financial
statement of cash flows, the Company considers all highly liquid
debt investments purchased with a maturity of three and six or
less to be cash equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimated by management.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others", and SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB statement No. 133 ( an amendment of FASB
Statement No. 133.)," were recently issued. SFAS No. 132, 133,
134, 135, 136 and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
8
<PAGE>
GOLDEN QUEST, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - DISCONTINUED OPERATIONS
The accompanying financial statements as of March 31, 2000
reflect management's decision to discontinue the Company's
operations of locating and recovering of archeological
artifacts, precious metals and other valuables from shipwrecks.
The following liabilities related to the former operations are
still owed by the Company:
March 31,
2000
___________
Accounts payable $123,140
Interest payable 773,709
Notes payable 853,889
___________
Total liabilities $ 1,750,738
___________
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" which requires an asset and liability approach
for the effect of income taxes.
The Company has available at March 31, 2000, unused operating
loss carryforwards of approximately $2,450,000, which may be
applied against future taxable income and which expire in various
years through 2020. If certain substantial changes in the
Company's ownership should occur, there could be an annual
limitation on the amount of net operating loss carryforward which
can be utilized. The amount of and ultimate realization of the
benefits from the operating loss carryforwards for income tax
purposes is dependent, in part, upon the tax laws in effect, the
future earnings of the Company and other future events, the
effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards
the Company has established a valuation allowance equal to the
tax effect of the loss carryforwards and, therefore, no deferred
tax asset has been recognized for the loss carryforwards. The
net deferred tax assets are approximately $830,000 and $820,000
as of March 31, 2000 and December 31, 1999, respectively, with an
offsetting valuation allowance at each period end of the same
amount, resulting in a change of approximately $10,000 during the
nine months ended March 31, 2000.
9
<PAGE>
GOLDEN QUEST, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - During the periods presented, the
Company did not pay any compensation to its officers and
directors.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his office as a mailing address, as needed, at no
expense to the Company.
Expenses - During the three months ended March 31, 2000, an
Officer of the Company paid expenses amounting to $5,648. This
amount is included as a liability in advances from officers.
Change in Management - During 1999 the Company under went a
change in the Officers and Board of Director's of the Company.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has no on-going operations and has incurred
losses since its inception. Further, the Company has current
liabilities in excess of assets and has no working capital to pay
its expenses. These factors raise substantial doubt about the
ability of the Company to continue as a going concern. In this
regard, management is proposing to raise any necessary additional
funds not provided by operations through loans or through sales
of its common stock or through a possible business combination
with another company. There is no assurance that the Company
will be successful in raising this additional capital or
achieving profitable operations. The financial statements do not
include any adjustments that might result from the outcome of
these uncertainties.
10
<PAGE>
GOLDEN QUEST, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income
(loss) per share and the effect on income (loss) and the weighted
average number of shares of dilutive potential common stock for
the three months ended March 31, 2000 and 1999 and for the period
from the re-entering of development stage on July 1, 1994 through
March 31, 2000:
From Re-entry of
For the Three Development Stage
Months Ended on January 1,
March 31, 1993 through,
______________________ March 31,
2000 1999 2000
_______________________________
Loss from continuing
operations available to
common stockholders
(numerator) $(27,000) $(21,352) $(637,820)
________________________________
Weighted average number of
common shares outstanding
used in loss per share
during the period
(denominator) 33,941,927 33,941,927 33,941,927
________________________________
Dilutive earnings (loss) per share was not presented, as the
Company had no common equivalent shares for all periods presented
that would effect the computation of diluted earnings (loss) per
share.
11
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF OPERATION
Forward-Looking Statement Notice
When used in this report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend," and
similar expressions are intended to identify forward-looking
statements within the meaning of Section 27a of the Securities
Act of 1933 and Section 21e of the Securities Exchange Act of
1934 regarding events, conditions, and financial trends that may
affect the Company's future plans of operations, business
strategy, operating results, and financial position. Persons
reviewing this report are cautioned that any forward-looking
statements are not guarantees of future performance and are
subject to risks and uncertainties and that actual results may
differ materially from those included within the forward-looking
statements as a result of various factors. Such factors are
discussed under the "Item 6. Management's Discussion and
Analysis of Financial Condition or Plan of Operations," and also
include general economic factors and conditions that may directly
or indirectly impact the Company's financial condition or results
of operations.
Three Month periods Ended March 31, 2000 and 1999
The Company had no revenue from continuing operations for the
three-month periods ended March 31, 2000 and 1999.
General and administrative expenses for the three month periods
ended March 31, 2000 and 1999, consisted of general corporate
administration, legal and professional expenses, and accounting
and auditing costs. These expenses were $5,648 and $-0- for the
three-month periods ended March 31, 2000 and 1999, respectively.
The Company realized $21,353 in interest expense for the three-
month periods ended march 31, 2000 and 1999.
As a result of the foregoing factors, the Company realized a net
loss of $27,000 for the three months ended March 31, 2000, as
compared to a net loss of $21,352 for the same period in 1999.
Liquidity and Capital Resources
At March 31, 2000, the Company had -0- cash on hand and
liabilities in the amount of $1,767,034 in form of accounts
payable, interest payable, notes payable and advances from
officers.
Management believes that the Company will have adequate cash to
meet the anticipated needs of the Company's operations through at
least the next 12 months through advances and loans from officers
of the Company. However, there can be no assurances to that
effect, as the Company has no significant revenues and the
Company's need for capital may change dramatically if it acquires
an interest in a business opportunity during that period. The
Company's current operating plan is to (i) handle the
administrative and reporting requirements of a pubic company, and
(ii) search for potential businesses, products, technologies and
companies for acquisition. At present, the Company has no
understandings, commitments or agreements with respect to the
acquisition of any business venture, and there can be no
assurance that the Company will identify a business venture
suitable for acquisition in the future. Further, there can be no
assurance that the Company would be successful in consummating
any acquisition on favorable terms or that it will be able to
profitably manage any business venture it acquires.
12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
Reports on Form 8-K: No reports on Form 8-K were filed by the
Company during the quarter ended March 31, 2000.
Exhibits: Included only with the electronic filing of this report
is the Financial Data Schedule for the three month period ended
March 31, 2000 (Exhibit ref. No. 27).
13
<PAGE>
SIGNATURES
In accordance with the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
GOLDEN QUEST, INC.
Date: 5/10/00 By: /s/ Kip Eardley
President, Secretary and Treasurer
14
<PAGE>
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 1,767,034
<BONDS> 0
0
0
<COMMON> 33,942
<OTHER-SE> (1,800,976)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,648
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,352
<INCOME-PRETAX> (27,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (27,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (27,000)
<EPS-BASIC> (.00)
<EPS-DILUTED> (.00)
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