SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter period ended September 30, 1996
Commission file number 023726
GOLDEN EAGLE INTERNATIONAL, INC.
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Colorado 84-1116515
---------------------- ------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
4949 South Syracuse Street, Ste. #300, Denver, CO 80237
-------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 694-6101
--------------
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 the filing
requirements for at least the past 90 days.
Yes No X
------- -------
As of September 30, 1996, there were 41,839,825 shares of common stock, par
value $.0001, outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
The unaudited Financial Statements for the Quarter Year ended September 30,
1996 are attached hereto. Please refer to pages F-1 through F-6.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
-----------------------------------------------------------------------
Results of Operations for the Quarter ended September 30, 1996
The Company had no revenues in this quarter. It incurred operating expenses
in the amount of $173,554 and incurred an operating loss of $173,554. For the
same period in 1995, the Company incurred operating expenses of $261,096 and had
no revenue, for an operating loss of $261,096. The Company expects that losses
will continue due to investment in the mineral prospect in Bolivia, which is
producing no revenues and, as well, the Company will incur promotional expenses,
and legal and accounting fees. General and administrative expenses and salaries
or consulting fees will continue at an increased rate, and mine development
expenditures will increase.
Net income (loss) for the period was ($193,729) for a loss of ($.004) per
share as compared to net loss for the same period in 1995 of ($260,673) for a
loss of ($.007) per share.
Comparison of Results of Operations for the Nine Months ended September 30, 1996
and Nine Months ended September 30, 1995
The Company incurred total operating expenses of $1,428,623 for the period
ended September 30, 1996; for the same period in 1995, the operating expenses
were $491,921. The Company had no revenue for the 1996 period, nor any for the
1995 period.
The net income (loss) for the nine month period in 1996 was ($1,485,900)
and in 1995 it was ($488,018). The per share loss for the nine month period was
($.034) in 1996 and ($.017) in 1995. Changes in Financial Conditions and
Liquidity The Company had $15,813 in cash at period end. As of period end the
Company had $713,060 in total assets, of which $129,376 consisted of prepaid
expenses, $359,912 represented exploration and development costs of the Bolivian
prospect, and $153,387 and $33,569 were mining equipment. At period end, the
Company had total liabilities of $1,428,045, of which $505,576 were current,
compared to $515,271 total liabilities at 1995 year end. Of the liabilities,
$55,000 consisted of notes payable, and $329,216 consisted of accounts payable
and a bank overdraft. Loans from officers and related parties were $24,900, and
payroll taxes and interest were accrued of $96,460.
The Company had $15,813 cash at quarter end, and no other liquid assets.
2
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
There is an active civil investigation of the Company and its officers by
the Denver Regional Office of the Securities and Exchange Commission into
violations of the Securities Act of 1933 and Securities Exchange Act of 1934.
There is no disposition at this date but it could result in SEC actions against
the Company and its officers, directors, or control shareholders for injunctive
relief and penalties.
The Company is Plaintiff in Case No. 96-043428 in Superior Court, Pinal
County, Arizona. The Company sued Mineral Mountain Mining Co. and James and
Diane Brown alleging fraud and misrepresentations and for refund of monies paid
and benefits received. A jury trial has been set for October 15, 1997. The
future outcome cannot be predicted at this time.
During 1995, the Company engaged a person it believed was an independent
mining engineer as a consultant. In 1996, the consultant claimed the Company
liable for unpaid services and expenses totaling $78,440. The Company believes
that the consultant did not provide the services contracted, usurped business
opportunities, and tortiously interfered with the Company. No litigation has
been filed to date between the parties and the Company is still assessing its
position. An evaluation as to the outcome of this matter cannot be made at this
time.
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
-----------------
Common stock issuable pursuant to obligations and contracts: 2,527,833
shares.
Item 6. Exhibits and Reports on Form 8-K:
---------------------------------
(a) The following are filed as Exhibits to this Quarterly Report. The
numbers refer to the Exhibit Table of Item 601 of Regulation S-K:
27.1 Financial Data Schedules
(b) Reports on Form 8-K filed during the three months ended September 30,
1996 (incorporated by reference):
September 18, 1996.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has fully caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GOLDEN EAGLE INTERNATIONAL, INC.
(Registrant)
Dated: May 29, 1997 by: /S/ MARY A. ERICKSON
----------------------------------
Mary A. Erickson, Secretary
4
<PAGE>
- --------------------------------------------------------------------------------
Golden Eagle International, Inc.
(A Development Stage Company)
Consolidated Financial Statements
Table of Contents
- --------------------------------------------------------------------------------
PAGE
----
Consolidated Balance Sheet F-1
Consolidated Statement of Operations F-2
Consolidated Statement of Cash Flows F-3
Consolidated Statement of Changes in Stockholders' Equity (Deficit) F-4
Notes to Consolidated Financial Statements F-5
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Golden Eagle International, Inc.
(A Development Stage Company)
Consolidated Balance Sheet
- ---------------------------------------------------------------------------------------------------------------
September 30,
1996 December 31,
(Unaudited) 1995
- ---------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash $ 15,813 $ 32,979
Marketable securities -- 9,666
Prepaid expense and other costs 129,376 --
Income tax refund receivable 8,946 --
- ---------------------------------------------------------------------------------------------------------------
Total current assets 154,135 42,645
- ---------------------------------------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT
Exploration and development costs of mining prospect 359,912 --
Mining equipment and vehicles not placed in service 153,387 --
Mining equipment 33,569 30,930
Office equipment 13,380 3,586
- ---------------------------------------------------------------------------------------------------------------
560,248 34,516
Less accumulated depreciation (6,098) (805)
- ---------------------------------------------------------------------------------------------------------------
554,150 33,711
- ---------------------------------------------------------------------------------------------------------------
DEPOSITS 4,775 2,675
- ---------------------------------------------------------------------------------------------------------------
$ 713,060 $ 79,031
===============================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable $ 55,000 $ 60,422
Loans from related parties 24,900 148,142
Accounts payable and bank overdraft 329,216 207,746
Accrued payroll taxes and interest 96,460 48,961
- ---------------------------------------------------------------------------------------------------------------
Total current liabilities 505,576 465,271
- ---------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT
Related parties 672,969 --
Convertible debentures 188,500 --
Other 61,000 50,000
- ---------------------------------------------------------------------------------------------------------------
922,469 50,000
- ---------------------------------------------------------------------------------------------------------------
Total liabilities 1,428,045 515,271
- ---------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, par value $.01 per share;
shares authorized 10,000,000; none issued -- --
Common stock, par value $.0001 per share; authorized
800,000,000 shares; issued and outstanding 41,839,825
and 38,478,675 shares, respectively 4,184 3,848
Common stock issuable, 2,527,833 and 745,833 shares, respectively 462,333 102,983
Additional paid-in capital 1,395,667 568,198
Receivable from stockholder -- (20,000)
Deficit accumulated during the development stage (2,577,169) (1,091,269)
- ---------------------------------------------------------------------------------------------------------------
Total stockholders' (deficit) (714,985) (436,240)
- ---------------------------------------------------------------------------------------------------------------
$ 713,060 $ 79,031
===============================================================================================================
See accompanying notes.
F-1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Golden Eagle International, Inc.
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------------
July 21, 1988
Three Months Ended Nine Months Ended (Inception)
September 30, September 30, Through
----------------------------- ---------------------------- September 30,
1996 1995 1996 1995 1996
- -------------------------------------------------------------------------------------------------------------------------------
REVENUE
<S> <C> <C> <C> <C> <C>
Interest from loans $ -- $ -- $ -- $ -- $ 11,727
Commissions -- -- -- -- 6,708
Other -- -- -- -- 3,681
- -------------------------------------------------------------------------------------------------------------------------------
Total revenue -- -- -- -- 22,116
- -------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES 173,554 261,096 1,428,623 491,921 2,521,505
- -------------------------------------------------------------------------------------------------------------------------------
OPERATING (LOSS) (173,554) (261,096) (1,428,623) (491,921) (2,499,389)
- -------------------------------------------------------------------------------------------------------------------------------
OTHER INCOME (EXPENSE)
Gain on marketable securities -- 3,222 19,167 9,666 124,336
Loss on sale of equipment -- -- (16,000) -- (17,314)
Write off advances to Mineral
Mountain Mining Co. -- -- -- -- (78,000)
Write off loan to investment advisor -- -- -- -- (15,000)
Interest expense (20,175) (2,799) (60,444) (5,763) (88,228)
Interest income -- -- -- -- 1,726
- -------------------------------------------------------------------------------------------------------------------------------
Total other income (expense) (20,175) 423 (57,277) 3,903 (72,480)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (193,729) $ (260,673) $ (1,485,900) $ (488,018) $ (2,571,869)
===============================================================================================================================
EARNINGS (LOSS) PER SHARE $ (.004) $ (.007) $ (.034) $ (.017) $ (.260)
===============================================================================================================================
WEIGHTED AVERAGE
SHARES OUTSTANDING 44,273,153 35,546,471 43,387,533 28,036,388 9,878,424
================================================================================================================================
See accompanying notes.
</TABLE>
F-2
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Golden Eagle International, Inc.
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Unaudited)
- ---------------------------------------------------------------------------------------------------------------------
July 21, 1988
Nine Months Ended (Inception)
September 30, Through
------------------------- September 30,
1996 1995 1996
- ---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $(1,485,900) $ (488,018) $(2,571,869)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Stock issued and issuable for services 805,125 84,600 980,202
Depreciation 5,293 369 8,912
Loss (gain) from sale of investments (19,167) (9,666) (124,336)
Write off advances to Mineral Mountain Mining Co. -- -- 78,000
Write off loan to investment advisor -- -- 15,000
Other -- -- 21,314
Changes in operating assets and liabilities:
Marketable securities 9,666 -- 9,666
Prepaid expense and other costs (129,376) -- (129,376)
Income tax refund receivable (8,946) -- (8,946)
Accounts payable and accrued liabilities 168,969 200,847 425,676
- ---------------------------------------------------------------------------------------------------------------------
Net cash flows (used for) operating activities (654,336) (211,868) (1,295,757)
- ---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in property and equipment (525,732) -- (564,276)
Deposits (2,100) -- (4,775)
Advances to Mineral Mountain Mining Co. -- (68,000) (78,000)
Loan to investment advisor -- (25,000) (15,000)
Proceeds from investment sales 19,167 (3,476) 173,958
Purchase of investment securities -- -- (59,478)
Purchase of subsidiary (net of cash acquired) -- -- (2,700)
- ---------------------------------------------------------------------------------------------------------------------
Net cash flows from (used for) investing activities (508,665) (96,476) (550,271)
- ---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from related parties 666,227 95,443 1,064,084
Repayments of loans from related parties (116,500) (155,567) (333,202)
Proceeds from notes payable 16,000 59,963 126,422
Repayment of bank loan (10,422) -- (10,422)
Proceeds from convertible debentures 188,500 -- 188,500
Common stock issued and issuable 402,030 346,744 889,523
Stock issuance costs -- (38,395) (63,064)
- ---------------------------------------------------------------------------------------------------------------------
Net cash flows from financing activities 1,145,835 308,188 1,861,841
- ---------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH (17,166) (156) 15,813
CASH - BEGINNING OF PERIOD 32,979 156 --
- ---------------------------------------------------------------------------------------------------------------------
CASH - END OF PERIOD $ 15,813 $ -- $ 15,813
=====================================================================================================================
See accompanying notes.
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Golden Eagle International, Inc.
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock Common Additional
--------------------- Stock Paid-in Stockholder Accumulated
Shares Amount Issuable Capital Receivable Deficit Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Inception July 21, 1988 -- $ -- $ -- $ -- $ -- $ -- $ --
Issuance of common stock:
June 1, 1989 for cash
at $.00006 per share 1,666,665 167 -- (67) -- -- 100
June 30, 1990 for cash
at $.03 per share 300,000 30 -- 8,970 -- -- 9,000
July 3, 1990 for cash at
$.003 per share 366,665 37 -- 1,063 -- -- 1,100
50,000 to 1 stock split -- -- -- 4,900 -- -- 4,900
January and March 1991 for
cash at $.30074 per share
from stock offering 268,335 27 -- 59,253 -- -- 59,280
November 1, 1993 - deficit
of acquired subsidiary -- -- -- -- -- (5,300) (5,300)
Acquisition of subsidiary -- -- -- 2,600 -- -- 2,600
Fair value of officer salary -- -- -- 20,000 -- -- 20,000
November 7, 1994, convert debt
to equity at $.003 per share 2,640,830 264 -- 7,659 -- -- 7,923
November 8, 1994, $.00125 per share:
Note receivable from affiliate 20,000,000 2,000 -- 23,000 (25,000) -- --
Legal services 375,000 37 -- 432 -- -- 469
Other (70) -- -- 2,625 -- -- 2,625
Issued for cash in June and
August 1995 ($.01 to $.05
per share), less $41,644
in stock issuance costs 10,052,250 1,005 -- 164,044 -- -- 165,049
Issued for services in 1995
($.07 per share) 2,009,000 201 -- 148,799 -- -- 149,000
Convert notes payable in 1995
($.15625 per share) 800,000 80 -- 124,920 (20,000) -- 105,000
Payment of note by affiliate
in 1995 -- -- -- -- 25,000 -- 25,000
Issuable for cash in 1995($.125
to $.282 per share), 417,500 shares -- -- 80,000 -- -- -- 80,000
Issuable for services and additional
consideration forloan ($.07 per
share), 328,333 shares in 1995 -- -- 22,983 -- -- -- 22,983
Net loss for the periods -- -- -- -- -- (1,085,969) (1,085,969)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995 38,478,675 3,848 102,983 568,198 (20,000) (1,091,269) (436,240)
Unaudited:
Collection of receivable
January 9, 1996 -- -- -- -- 20,000 -- 20,000
Shares previously subscribed issued 225,000 23 (17,150) 17,127 -- -- --
Issued for cash ($.05 to $.25
per share) 21,150 2 -- 5,528 -- -- 5,530
Issuable for cash ($.10 to
$.20 per share), 2,007,000 shares -- -- 376,500 -- -- -- 376,500
Issued for services ($.15625 to
$.30 per share) 3,115,000 311 -- 804,814 -- -- 805,125
Net loss for the nine months
ended September 30, 1996 -- -- -- -- -- (1,485,900) (1,485,900)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 1996 (unaudited) 41,839,825 $ 4,184 $462,333 $ 1,395,667 $ -- $(2,577,169) $ (714,985)
==================================================================================================================================
See accompanying notes.
F-4
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
Golden Eagle International, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
Note A - General
Golden Eagle International, Inc. (a development stage company, the
"Company,") was incorporated in Colorado on July 21, 1988. The Company is
to engage in the business of acquiring, developing, and operating gold,
silver and other mineral properties. Activities of the Company since
November 1994 have been primarily devoted to organizational matters and
identification of mineral properties considered for acquisition. Presently,
substantially all of the Company's operations and business interests are
focused on a prospect in the Tipuani River area of the Republic of Bolivia.
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-QSB and do not
include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all material adjustments, consisting of only normal recurring
adjustments considered necessary for a fair presentation, have been
included. These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-KSB for the
year ended December 31, 1995.
The financial statements include the accounts of Golden Eagle
International, Inc. and its subsidiary, Golden Eagle Bolivia Mining, S.A.
All inter-company transactions and balances have been eliminated.
The results of operations for the three months and nine months ended
September 30, 1996, are not necessarily indicative of the results for the
remainder of 1996.
Note B - Earnings (Loss) Per Share
Earnings (loss) per share of common stock are computed using the weighted
average number of shares outstanding during each period plus common
equivalent shares (in periods in which they have a dilutive effect).
Weighted average shares include common shares issuable from the date they
became issuable.
Note C - Long - Term Debt and Notes Payable
During the nine months ended June 30, 1996, the Company issued $188,500 of
six percent Convertible Debentures to a foreign corporation which are
convertible to common stock at the lesser of 80% of the NASDAQ closing bid
price the day prior to notice or $.30 per share. Also, during the period,
the Company issued a six percent unsecured note payable to an individual
for $11,000, and borrowed $5,000 from an individual pursuant to an eight
percent unsecured note payable that has been subsequently repaid. Also,
during the period, the Company repaid a $10,422 unsecured bank loan bearing
interest at 17.75%.
F-5
<PAGE>
- --------------------------------------------------------------------------------
Golden Eagle International, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
Note D - Common Stock
During the nine months ended September 30, 1996, the Company issued 21,150
shares of common stock to two individuals for $5,530 cash ($.25 and
approximately $.46 per share). In addition, during the nine month period an
additional 2,007,000 shares became issuable for $376,500 cash received
($.10 to $.20 per share); and 3,115,000 shares were issued for services
valued at $805,125 ($.15625 to $.30 per share).
Note E - Related Party Transactions
During the nine months ended September 30, 1996, an officer and relatives
of the officer (formerly its president) loaned the Company a total of
$666,227 on an unsecured basis with interest ranging from eight to twelve
percent. During the quarter, $116,500 was repaid the officer.
F-6
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 15,813
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 154,135
<PP&E> 560,248
<DEPRECIATION> (6,098)
<TOTAL-ASSETS> 713,060
<CURRENT-LIABILITIES> 505,576
<BONDS> 922,469
0
0
<COMMON> 4,184
<OTHER-SE> 1,858,000
<TOTAL-LIABILITY-AND-EQUITY> 713,060
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,428,623
<OTHER-EXPENSES> (3,167)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 60,444
<INCOME-PRETAX> (1,485,900)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,485,900)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,485,900)
<EPS-PRIMARY> (.034)
<EPS-DILUTED> (.034)
</TABLE>
