SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ x ] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for quarter period ended
September 30, 2000
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from __________ to __________.
Commission file number 0-23726
GOLDEN EAGLE INTERNATIONAL, INC.
--------------------------------------------------------
(Exact name of Golden Eagle as specified in its charter)
Colorado 84-1116515
(State of incorporation) (IRS Employer Identification No.)
12401 South 450 East, Building D2, Suite A, Salt Lake City, UT 84020
---------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Golden Eagle's telephone number, including area code: (801) 619-9320
-----------------
Securities registered pursuant to Section 12(b) of the Act: None
Name of each exchange on which registered: None
Securities registered pursuant to Section 12(g) of the Act:
$.0001 par value Common Stock
-------------------------------------
(Title of class)
Check whether the issuer (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 issuer was required
to file such reports), and (2) has been subject to the filing requirements for
the past 90 days.
[ X ] Yes [ ] No
At September 30, 2000, there were 163,852,410 shares of common stock
outstanding.
Transitional Small Business Disclosure Format: [ ] Yes [ X ] No
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
The unaudited Financial Statements for the Quarter Year ended September
30, 2000, 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
--------------------------------------
Liquidity and Capital Resources
-------------------------------
At September 30, 2000, and subsequently, Golden Eagle has had significant
working capital shortages. In fact, since its inception through the third
quarter of 2000, Golden Eagle's current liabilities have substantially
exceeded and continue to exceed current assets. This situation has created a
significant hardship for Golden Eagle in meeting its obligations to pay its
bills currently, although at September 30, 2000, Golden Eagle was able to pay,
or was in the process of arranging for the payment of, all salaries for
employees of its Bolivian operations, as well as most of its suppliers'
billings and other current expenses associated with the Bolivian operations.
As discussed below, Golden Eagle's working capital deficit as of September 30,
2000 $4,725,169, was due, in part, to short-term loans made from affiliates
and unrelated parties; unpaid compensation to Golden Eagle's president and
former corporate secretary; and certain other payables primarily to vendors in
Bolivia. A significant portion of the working capital deficit is due to a $1
million revolving line of credit with a Texas bank. This line of credit has
been fully extended to Golden Eagle. The note underlying this line of credit
came due on June 1, 2000, but was extended to December 1, 2000. Management
believes, but cannot assure, that this note will be renewed for an additional
year, through December 1, 2001, with the sole obligation on the company's part
to continue paying the monthly interest. No additional compensation has been
requested by, nor offered to, the affiliated guarantors of this obligation for
their continued guarantee.
With respect to the unpaid executive compensation and short-term
operating loans made by affiliates over the past 3 years, management has not
negotiated a satisfactory solution to date. No demand has been made, however,
those compensation and loan obligations are past due, and in some cases,
significantly past due. Golden Eagle is committed to proposing and negotiating
solutions to those compensation and debt obligations within the fourth quarter
2000, however, again, there can be no guarantees that those solutions will be
acceptable to the parties to whom the amounts are owed. Because Golden Eagle's
president and former corporate secretary/treasurer are included among these
creditors, any resolution will be negotiated and approved by the disinterested
members of Golden Eagle's board of directors.
Golden Eagle has historically financed its significant operating losses
and cash flow deficits through working capital loans from affiliates and,
occasionally, from non-affiliates. In addition, Golden Eagle also used its
common stock directly to raise capital and to satisfy some of its obligations.
The situation requiring use of Golden Eagle's stock to raise working capital
has continued throughout the third quarter of 2000 and subsequently, and will
continue to result in dilution to Golden Eagle's current shareholders (See,
Part II, Item 2, "Changes in Securities"). During the nine months ended
September
<PAGE>
30, 2000, Golden Eagle raised approximately $478,360 from the sale of
15,842,926 shares of its common stock and approximately $650,000 from the sale
of convertible debt from accredited investors (including some existing
shareholders and other related and unrelated parties). Golden Eagle has used
these funds to finance its operating losses and working capital deficit
generated in the third quarter of 2000 and previous periods. In each case,
Golden Eagle has relied on exemptions from registration for transactions with
accredited investors only, not involving public offerings. In most cases,
funds are raised as they are needed to satisfy Golden Eagle's operational
requirements. Management would prefer to plan further in the future and to
have funds available for business operations planned for future periods, but
Golden Eagle has not be able to obtain the financing necessary to achieve such
a status to date.
In addition, Golden Eagle has a number of future commitments for which
it does not presently have the cash necessary to satisfy. These commitments
include the payment of the short-term indebtedness to affiliated and
unaffiliated parties described in the preceding paragraphs, as well as the
ongoing purchase of interests from the shareholders of the UCL (which we have
a standing offer to purchase at the rate of $5,000 per share). In the third
quarter of 1999, we purchased seven shares (certificates of contribution)
outright, and have made cash deposits of amounts ranging between $500 and
$2,000 per share for the purchase of an additional 42 shares. (This is
described in more detail below.)
Because of the Company's ongoing working capital shortages, technical and
financial issues resulting from the need to conduct its own operations, and
because of the size and nature of the Cangalli gold deposit, Golden Eagle has
focused its efforts and expenditures on its priority obligations. These
obligations include maintaining in good standing its obligations to its staff
in Bolivia and in the United States.
Golden Eagle is continuing to seek joint venture partners or other
industry participants who would be interested in joining with Golden Eagle in
the development of its Cangalli prospect. We cannot, however, offer any
assurance that any potential joint-venture partners will be interested in
evaluating the Cangalli prospects or in negotiating a relationship with the
Company on reasonable or acceptable terms. Any industry participant who may
choose to enter into a joint venture with Golden Eagle would likely initially
require a significant interest in the project in exchange for the necessary
investment. However, Golden Eagle believes that it has some negotiating
leverage to compromise on a more reasonable allocation of a direct or indirect
interest in the Cangalli project in exchange for an appropriate investment.
Among the areas of possible negotiating leverage include Golden Eagle's
acquisition of a portion of the shares in the UCL, which owns the property
underlying the original Cangalli project, and to which an 18% royalty on gross
production is owed. In addition, Golden Eagle's management has and continues
to maintain important contacts with governmental officials and UCL agents in
Bolivia. Also, the Company has acquired four additional mining concessions
surrounding the original Cangalli concession, which total 69,000 acres and
are approximately 14 times as large as the Cangalli claims. Golden Eagle
believes that these, and other intangible factors, add value to the Cangalli
project.
As another factor of negotiating leverage, Golden Eagle has been studying
recommencing its gold production from the Cangalli project based on the mining
and metallurgical study of the project by one of its directors, when and if
adequate financing becomes available. Dr. Ronald L Atwood's investigation
indicates that Golden Eagle may be able to establish an 11,000 ton-per-day
operation on the Cangalli property at a capital cost of approximately
$6,000,000. As is apparent from the financial statements attached hereto,
Golden Eagle does not have that amount of capital available and there can be
<PAGE>
no assurance that Golden Eagle will be able to obtain the necessary capital.
Golden Eagle has had discussions with several potential financing sources. Any
financing will be contingent on the preparation of definitive agreements,
satisfactory due diligence by the financing source, and other conditions and
contingencies. There can be no assurance that any of these sources will
provide the necessary financing or, if they are willing to provide the
financing, the terms will be reasonable. Investors in Golden Eagle should
anticipate that their interests in the Cangalli project will be significantly
diluted by any financing, joint venture, or other industry participation,
either through the issuance of additional shares of Golden Eagle common stock
or through a reduction in Golden Eagle's direct interest in the Cangalli
project or its Bolivian subsidiary.
While Golden Eagle has been seeking financing sources for its Bolivian
operations, Golden Eagle has also been required to seek financing for its
general and administrative operations, as well as mine maintenance, from other
sources, including affiliates and their family members. This financing, which
the Board of Directors believes that Golden Eagle has obtained this financing
from accredited investors (including some existing shareholders and other
related and unrelated parties) on terms more favorable to Golden Eagle than
would have been available from strictly third party financing sources. This
financing has also allowed Golden Eagle to continue its exploration and
evaluation operations on its Bolivian properties, and to pay its general and
administrative expenses in the United States and Bolivia. Although Golden
Eagle has been successful in obtaining funds to date, there can be no
assurance that it will be able to continue to be successful in doing so.
Golden Eagle's ability to finance its operations will, in the end, be
dependent on its ability to generate cash flow from operations, of which there
can be no assurance.
Golden Eagle's ability to use its capital stock and other securities to
raise working capital and to pay its indebtedness is subject to extensive
federal and state regulation. Although Golden Eagle has exerted its best
efforts to comply with all applicable regulations, there can be no assurances
that it has been able to do so. To the extent there may be any
non-compliance, Golden Eagle may incur certain liabilities.
To date, Golden Eagle, through its operating subsidiary GEBM, has only
been able to achieve limited cash flow from the limited non-commercial mining
operations it has conducted. Specifically, to date GEBM has been able to
produce and sell approximately 22,000 grams of gold, with post-royalty
revenues of $161,077. During the third quarter of 2000, Golden Eagle's
operations in Bolivia only produced 115 grams of gold for sale due to some
flooding of the Cangalli shaft that resulted in adverse working conditions.
Those flooding and pumping issues were resolved in the first quarter of 2000,
and the shaft was in the process of rehabilitation from the impacts of the
flooding during the third quarter. The small sales of gold were the
by-product of rehabilitation efforts. Golden Eagle intends to put the
rehabilitated shaft back into production in the fourth quarter of 2000, but
does not expect this production from the shaft to reach the levels of
commercial production it is projecting, but cannot guarantee, from its Chaco
Playa operations. All revenues generated to date have been used in the
Bolivian operations. Although Golden Eagle believes that it will be able to
generate a significant amount of additional revenues from mining gold from the
Cangalli properties under contract, and those that it owns outright, no
reserves have been established to date pursuant to Guide 7, SEC Regulations,
and there can be no assurance that any revenues received will exceed expenses
incurred. Golden Eagle's ability to generate revenues from mining operations
depends in part on its ability to finance substantial additional capital
expenditures for a new production plant, which ability is subject to
substantial risks to Golden Eagle and its shareholders as discussed above.
<PAGE>
Golden Eagle's ability to pursue any mine plan is dependent on a number
of factors, including obtaining necessary government and local consents and
permits and, most importantly, obtaining a significant amount of additional
financing. However, there can be no assurance that Golden Eagle will be able
to meet the requirements necessary to overcome these factors and be able to
pursue its mine plan as currently contemplated, if at all.
Golden Eagle has no significant capital commitments regarding operations
other than to continue to rehabilitate, maintain and explore the Cangalli
shaft, and continue its evaluation and exploration of its Cangalli and Tipuani
Valley properties in Bolivia (a commitment estimated to be from $100,000,
minimum, to more that $300,000, as a maximum during the remaining quarter of
the current fiscal year); and to complete its purchase obligations for any UCL
shares which accept Golden Eagle's offer (a commitment we estimate to be
$200,000 during the remaining quarter of the current fiscal year). Golden
Eagle's stated objective is achieving commercial production if the properties
are capable of producing gold commercially. Golden Eagle is contractually
committed to investing $3 million in the development and exploration of the
Cangalli property over the 25-year life of the initial contract period, which
requirement has already been met in Golden Eagle's estimation. In addition,
Golden Eagle has liabilities that require debt service and other financial
arrangements that are set out in detail at page F-1 in the attached Financial
Statements.
The Company believes that a substantial and material risk exists, which
Management has termed the "cooperative risk factor." This risk relates to
various aspects of Golden Eagle's relationship with UCL, an organization
consisting of 118 members of all socio-economic, education, and political
levels and criteria. Golden Eagle's Management has sought and received,
repeatedly, assurances from UCL's president and board of directors that the
Company's subsidiary's contract position and right to the quiet pursuit of its
contract rights of exploration, development, and mining will remain
undisturbed. Over the course of the contract between Golden Eagle's
subsidiary and UCL, approximately four years, the Company has received
informal and formal complaints from UCL's administration regarding the
Company's contract compliance. However, Golden Eagle believes it has always
been able to satisfactorily resolve any complaint or dispute. The Company's
management believes that this problem resolution process will continue for the
life of the contract, 25 years from January 1996. Factors which are somewhat
out of the Company's management's control regarding the "cooperative risk
factor" are: tortious interference by unrelated third parties; force majeure;
commodities and metals market fluctuations; or the failure of governmental
institutions to support Golden Eagle's legitimate rights vis-a-vis some
illegal action on the part of UCL or third parties. Golden Eagle is aware
that certain third parties have attempted to disrupt the Company's
relationship with UCL. However, the Company has defended, and intends to
continue to defend, its rights aggressively. Although management believes it
will be able to defend its rights, there can be no assurance that it will be
successful. While Golden Eagle's management's analysis is very positive for
future relations, any potential investors or current shareholders must take
notice of the "cooperative risk factor," and weigh it carefully when making
any investment decision regarding Golden Eagle's securities.
As stated above, implementation of any or all of Golden Eagle's planned
strategies requires significant infusions of working and operating capital,
and the Company cannot assure that it will be successful in raising that
capital through loans, secondary offering or private placements.
As noted, the future conduct of Golden Eagle's business and its response
<PAGE>
to issues raised by third parties are dependent upon a number of factors, and
there can be no assurance that Golden Eagle will be able to conduct its
operations as contemplated. Certain statements contained in this report using
the terms "may," "expects to," and other terms denoting future possibilities,
are forward-looking statements. The accuracy of these statements cannot be
guaranteed as they are subject to a variety of risks that are beyond Golden
Eagle's ability to predict or control and which may cause actual results to
differ materially from the projections or estimates contained herein. These
risks include, but are not limited to, the risks described above, and the
other risks associated with start-up mineral exploration operations, and
operations with insufficient liquidity and no historical profitability. It is
important that each person reviewing this report understands the significant
risks attendant to Golden Eagle's operations and that of its subsidiaries. As
noted, the future conduct of Golden Eagle's business and its subsidiaries is
dependent upon a number of factors, and there can be no assurance that any of
these companies will be able to conduct its operations as contemplated herein.
Golden Eagle disclaims any obligation to update any forward-looking statement
made herein.
Results of Operations
---------------------
Golden Eagle's operations in the third quarter of 2000 resulted in
significant continuing losses and negative cash flow. During the third quarter
of 2000, Golden Eagle's subsidiary operations in Bolivia only produced 115
grams of gold for sale due to some flooding of the Cangalli shaft that
resulted in adverse working conditions. Those flooding and pumping issues were
resolved in the first quarter of 2000, and the shaft was in the process of
rehabilitation during the third quarter. The small sales of gold were the
by-product of rehabilitation efforts. Golden Eagle intends to put the
rehabilitated shaft back into production in the fourth quarter of 2000, but
does not expect this production from the shaft to reach the levels of
commercial production it is projecting, but cannot guarantee from its Chaco
Playa operations. As described above all revenues generated to date have been
used in Bolivian operations. Golden Eagles' general, administrative and other
costs have vastly outstripped the revenues generated by Golden Eagle's
operations. As described above in "Liquidity and Capital Resources," Golden
Eagle has been dependent on loans from affiliated and unaffiliated parties
(including certain family members of affiliates) and stock issuances to meet
its working capital obligations and to finance Golden Eagle's continuing
operating losses. There can be no assurance that Golden Eagle will be able to
continue to finance its operating losses and negative cash flow in such a
manner.
The following sets forth certain information regarding Golden Eagle's
results of operations during the three months of the third quarter of 2000
compared with the same period in 1999.
Golden Eagle incurred operating expenses totaling $347,390 in the third
quarter of 2000, as compared to $406,007 in the same period in 1999, a
decrease of 14%. As a result of having no revenues from operations, Golden
Eagle incurred operating losses of ($347,390) in the third quarter of 2000 and
($406,007) during the same period in 1999, a decrease of 14%.
As of September 30, 2000, Golden Eagle had accrued cumulative unpaid
compensation and related payroll taxes of approximately $1,251,934 principally
owing to Golden Eagle's president and its former secretary/treasurer (who
resigned in October 1999), Golden Eagle has not paid any current or past due
salary to its president, or past due salary to its former secretary/treasurer
during the third quarter of 2000 or subsequently. The president's salary will
continue to accrue in the fourth quarter of 2000. As set forth above, Golden
Eagle has paid salaries to its United States and Bolivian employees
<PAGE>
currently.
Golden Eagle's costs and operating expenses for third quarter of 2000
decreased substantially as to general and administrative expenses, totaling
$280,014 compared to $324,260 during the same period in 1999, a 14% decrease.
Third quarter 2000 exploration expenses also decreased substantially from
$62,011 in 1999 to $47,419 in 2000 (See, following paragraph).
As of September 30, 2000, property and equipment as assets included,
principally, $100,000 paid for prospect acquisition rights, $803,796 for
mining equipment, $68,566 for office equipment and $59,796 for vehicles, for a
total of property and equipment of $1,032,158, less accumulated depreciation
of $(285,169), resulting in a net figure of $749,989. Total assets, then,
would include this property and equipment figure, plus advanced royalties and
deposits of $100,388, for a total of assets on the balance sheet of
$1,144,729. Although these assets are reflected on Golden Eagle's balance
sheet, their recoverability is at issue as is set forth in the report of
Golden Eagle's independent public accountants attached to Golden Eagle's
financial statements for the year ended December 31, 1999 included as a part
of Golden Eagle's annual report on Form 10-KSB for the year then ended.
Golden Eagle incurred a decrease in interest expense in the third quarter
of 2000 of $83,089, as compared to third quarter 1999 interest of $92,734.
Interest costs will continue, and may rise significantly, during the balance
of 2000 and through the foreseeable future because of increased borrowings
necessary to maintain liquidity for operating purposes.
Golden Eagle had a net loss for the third quarter of 2000 of ($430,339),
or $(.003) per share, compared to its net loss during the same period in 1999
of ($497,417), or $(.004) per share. Golden Eagle anticipates that the trend
of net losses will continue through the balance of 2000. Those losses will
continue as it invests further in exploration on its gold prospects in
Bolivia; continues its pursuit of funding and implementation of mining and
recovery operations in Bolivia; and in general and administrative expenses in
the United States and Bolivia, without generating significant revenues from
those efforts. Golden Eagle's continued ability to survive notwithstanding
the continuing losses is, as described above, dependent on its ability to
raise necessary financing. This cannot continue indefinitely and, eventually,
Golden Eagle will have to generate positive cash flows from its operating
activities to be able to continue as a going concern.
Impact of Inflation and Changing Prices
---------------------------------------
Golden Eagle has not experienced any impact from the effects of inflation
during the last three operating periods, 1997, 1998, or 1999, and was not
impacted during the third quarter of 2000. Bolivian inflation, while
astronomical at points during the early 1980's, has been relatively stable, at
less than 10% since 1985, and during the last three years has been less than
8% per annum.
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
------------------
There are no other pending or threatened legal proceedings except as
disclosed in Golden Eagle's Annual Report on Form 10-KSB for the year ended
December 31, 1999; its Quarterly Report on Form 10-QSB for the period ended
March 31, 2000, and the following:
A civil complaint was filed on October 27, 2000 in the matter of Hunsaker
v. Golden Eagle International, Inc., 00CV3346, in the District Court, Arapahoe
County, Colorado. By this action plaintiff seeks to recover $30,497.16, plus
interest, for breach of an employment contract and pursuant to a promissory
note. Golden Eagle is asserting legitimate defenses of breach of contract, use
of corporate opportunity and tortious interference with business relations. In
addition, the Company is counterclaiming against the Plaintiff for a sum in
excess of Plaintiff's complaint for causes of action born out of her defenses.
Item 2. Changes in Securities
---------------------
During the nine months ending September 30, 2000, Golden Eagle used its
common stock directly to raise capital and to satisfy some of its obligations.
The Company issued a total of 15,842,926 restricted common shares for cash to
unaffiliated, accredited investors at $.03 per share. These offers and sales
were accomplished pursuant to the exemptions from registration found in
Sections 4(2) of the Securities Act of 1933, as amended, and the rules
thereunder. The funds received from these investors were used to satisfy
Golden Eagle's working capital obligations associated with its exploration and
evaluation activities in Bolivia, and to meet the company's goals under its
agreement with the UCL. There was no underwriter involved in these
transactions.
In addition, during the nine months ending September 30, 2000 the Company
entered into a Convertible Debenture Agreement with an accredited investor and
current shareholder in the cumulative amount of $650,000. The terms of the
Convertible Debenture are: a one year term; interest accruing at 10% per
annum; conversion of loan amount and any accrued interest, or any part of
those sums, at the election of the holder, to shares of restricted common
stock of the Company; a conversion rate of $.03 per share or one-half of the
average closing price during the last three days prior to conversion,
whichever is less.
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:
--------------------------------
<PAGE>
The following exhibits are filed with this Form 10-QSB or incorporated
herein by the following references:
a. 27.1 Financial Data Schedules
b. Reports on Form 8-K:
The following reports on Form 8-K were filed during the quarter ended
September 30, 2000, and subsequently, and are incorporated by reference
herein:
July 14, 2000, reporting events under Items 5 and 7 of Form 8-K.
September 13, 2000, reporting an event under Item 5 of Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Golden Eagle has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GOLDEN EAGLE INTERNATIONAL, INC.
(Golden Eagle)
November 13, 2000 by: /s/ Terry C. Turner
---------------------------
Terry C. Turner, President
Pursuant to the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of Golden Eagle and in the
capacities and on the dates indicated.
GOLDEN EAGLE INTERNATIONAL, INC.
(Golden Eagle)
November 13, 2000 by: /s/ Terry C. Turner
---------------------------
Terry C. Turner,
Director and Principal
Executive Officer
November 13, 2000 by: /s/ Jennifer T. Evans
----------------------------
Jennifer T. Evans
Corporate Secretary/Treasurer
and Principal Financial Officer
<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>
_____________________________________________________________________________
Golden Eagle International, Inc.
(A Development Stage Company)
Consolidated Balance Sheet
_____________________________________________________________________________
September 30, December 31,
2000 1999
------------- -------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 242,676 $ 1,490
Prepaid expense and other costs 54,676 64,171
------------- -------------
Total current assets 297,352 65,661
------------- -------------
PROPERTY AND EQUIPMENT
Mining equipment 803,796 800,029
Acquisition cost of mining prospect 100,000 100,000
Office equipment 68,566 59,796
Vehicles 59,796 61,123
------------- -------------
1,032,158 1,020,948
Less accumulated depreciation (285,169) (222,706)
------------- -------------
746,989 798,242
------------- -------------
OTHER ASSETS
Advance royalties 95,768 90,568
Deposits 4,620 5,868
------------- -------------
100,388 96,436
------------- -------------
$ 1,144,729 $ 960,339
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Loans from related parties $ 1,294,821 $ 1,258,688
Bank loan payable 1,000,000 1,000,000
Other notes payable 733,674 462,250
Accounts payable 329,152 384,751
Accrued compensation and taxes 1,251,934 1,243,738
Accrued interest payable 412,940 314,949
------------- -------------
Total current liabilities 5,022,521 4,664,376
------------- -------------
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 163,852,410 and 128,053,812
shares, respectively 16,384 12,803
Additional paid-in capital 10,323,640 9,244,577
Deficit accumulated during the development stage (14,217,816) (12,961,417)
------------- -------------
Total stockholders' (deficit) (3,877,792) (3,704,037)
------------- -------------
$ 1,144,729 $ 960,339
============= =============
F-1
<PAGE>
_____________________________________________________________________________
Golden Eagle International, Inc.
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)
_____________________________________________________________________________
<TABLE>
<CAPTION>
July 21, 1988
(Inception)
Three Months Ended Nine Months Ended Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
REVENUES $ 876 $ - $ 876 $ 9,377 $ 161,077
COSTS AND OPERATING COSTS
General and administration 280,014 324,260 850,087 979,492 8,422,866
Exploration 47,419 62,011 111,740 138,022 1,158,143
Depreciation 20,833 19,736 62,464 60,015 285,715
------------- ------------- ------------- ------------- --------------
Total costs and
operating expenses 348,266 406,007 1,024,291 1,177,529 9,866,724
------------- ------------- ------------- ------------- --------------
OPERATING (LOSS) (347,390) (406,007) (1,023,415) (1,168,152) (9,705,647)
------------- ------------- ------------- ------------- --------------
OTHER INCOME (EXPENSE)
Interest expense (83,089) (92,734) (235,512) (237,142) (1,207,072)
Interest income - 24 - 69 15,483
Loan financing costs, net - - - - (2,475,000)
Write-down of mining
prospect - - - - (873,462)
Gain on marketable
securities - - - - 124,336
Commissions - - - - 6,708
Write off advances to
Mineral Mountain Mining Co. - - - - (78,000)
Write off loan to investment
advisor - - - - (15,000)
Loss on sale of equipment - - - - (17,314)
Other income - 1,300 2,835 2,146 35,969
Other expenses 140 - (307) - (23,517)
------------- ------------- ------------- ------------- --------------
Total other income
(expense) (82,949) (91,410) (232,984) (234,927) (4,506,869)
------------- ------------- ------------- ------------- --------------
NET INCOME (LOSS) $ (430,339) $ (497,417) $ (1,256,399) $ (1,403,079) $ (14,212,516)
============= ============= ============= ============= ==============
BASIC EARNINGS (LOSS)
PER SHARE $ (0.003) $ (0.004) $ (0.008) $ 7.000 $ (0.346)
============= ============= ============= ============= ==============
WEIGHTED AVERAGE SHARES
OUTSTANDING 159,519,533 116,196,804 151,623,178 113,408,588 41,021,728
============= ============= ============= ============= ==============
F-2
</TABLE>
<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, To September 30,
2000 1999 2000
-------------- -------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (1,256,399) $ (1,403,079) $ (14,212,516)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Stock issued for services 170,534 75,000 3,154,453
Depreciation expense 62,464 40,279 285,715
Stock issued for accrued interest 18,750 7,500 183,634
Stock issued for loan pledges and renewals - - 2,500,000
Write-down of mining prospect - - 873,462
Write off advances to Mineral Mountain Mining Co. - - 78,000
Fair value of officer salary expensed - - 20,000
Write off loan to investment advisor - - 15,000
Loss on retirement of vehicle, equipment and other - - 8,235
Loss (gain) from investments - - (114,670)
Changes in operating assets and liabilities:
Prepaid expense and other costs 9,495 (3,713) (54,676)
Payables and accrued liabilities 50,588 (239,627) 1,994,026
-------------- -------------- --------------
Net cash flows (used for) operating activities (944,568) (1,523,640) (5,269,337)
-------------- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in property and equipment (11,210) (7,377) (1,622,474)
Advance royalties (5,200) 5,770 (95,768)
Deposits 1,248 (3,407) (6,120)
Proceeds from investments sales - - 184,380
Advances to Mineral Mountain Mining Co. - - (78,000)
Loan to investment advisor - - (15,000)
Purchase of investment securities - - (59,478)
Purchase of subsidiary (net of cash acquired) - - (2,700)
-------------- -------------- --------------
Net cash flows from (used for) investing activities (15,162) (5,014) (1,695,160)
-------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from related parties 41,132 100,675 1,949,041
Repayments of loans from related parties (5,000) (57,364) (573,632)
Proceeds from other notes payable 39,624 25,000 673,922
Repayments of other notes payable (3,200) (38,617) (108,912)
Proceeds from bank loan - - 1,000,000
Proceeds from convertible debentures 650,000 - 1,063,500
Common stock issued 478,360 389,500 3,269,518
Stock issuance costs - - (63,064)
-------------- -------------- --------------
Net cash flows from financing activities 1,200,916 419,194 7,210,373
-------------- -------------- --------------
NET INCREASE (DECREASE) IN CASH 241,186 (1,109,460) 245,876
CASH - BEGINNING OF PERIOD 1,490 1,490 -
-------------- -------------- --------------
CASH - END OF PERIOD $ 242,676 $ (1,107,970) $ 245,876
============== ============== ==============
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
_______________________________________________________________________________________________
Golden Eagle International, Inc.
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
________________________________________________________________________________________________
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit Total
------------- --------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Inception July 21, 1988 - $ - $ - $ - $ -
Issued in 1989 for cash ($.00006 per share) 1,666,665 167 (67) - 100
Issued in 1990 for cash ($.003 to $.03
per share) 666,665 67 10,033 - 10,100
50,000 to 1 stock split - - 4,900 - 4,900
Issued in 1991 for cash ($.30074 per share) 268,335 27 59,253 - 59,280
Acquisition of subsidiary, November 1, 1993 - - 2,600 (5,300) (2,700)
Fair value of officer salary, 1993 - - 20,000 - 20,000
Convert debt to equity ($.003 per
share), 1994 2,640,830 264 7,659 - 7,923
Issued in 1994 for note receivable
($.00125 per share) 20,000,000 2,000 23,000 - 25,000
Issued in 1994 for legal services
($.00125 per share) 375,000 37 432 - 469
Issued for cash in 1995 ($.01 to $.282)
less issuance costs 10,469,750 1,047 244,002 - 245,049
Issued for services in 1995 ($.07 per share) 2,337,333 234 171,749 - 171,983
Convert notes payable in 1995 ($.15625
per share) 800,000 80 124,920 - 125,000
Issued in 1996 for cash ($.05 to $.25
per share) 2,250,650 222 401,808 - 402,030
Issued in 1996 for services ($.07 to $.30
per share) 5,448,985 545 1,230,297 - 1,230,842
Issued in 1997 for cash ($.10 per share) 10,126,350 1,013 1,011,622 - 1,012,635
Issued in 1997 for loan guarantees and
renewals ($.10 per share) 25,000,000 2,500 2,497,500 - 2,500,000
Issued in 1997 for services ($.03 to $.17
per share) 9,276,398 928 815,072 - 816,000
Issued in 1997 for equipment ($.10 per share) 2,993,161 299 299,017 - 299,316
Issued in 1997 for conversion of debt ($.09
and $.26 per share) 689,060 69 104,347 - 104,416
Issued in 1997 for vehicle ($.10 per share) 350,000 35 34,965 - 35,000
Issued in 1998 for cash ($.10 per share) 1,200,000 120 119,880 - 120,000
Issued in 1998 for services ($.10 to $.16
per share) 3,704,172 370 462,630 - 463,000
Issued in 1998 for conversion of debt ($.03
to $.07 per share) 8,396,268 840 434,122 - 434,962
Issued in 1998 for interest ($.13 per share) 558,333 56 72,444 - 72,500
Issued in 1999 for cash ($.02 to $.10
per share) 14,070,000 1,407 767,593 - 769,000
Issued in 1999 for services ($.04 to
$.10 per share) 4,385,927 438 298,562 - 299,000
Issued in 1999 for interest ($.03 to $.10
per share) 380,000 38 23,612 - 23,650
Other (70) - 2,625 - 2,625
Net loss for the periods - - - (12,956,117) (12,956,117)
------------- --------- ------------ ----------- ------------
Balance at December 31, 1999 128,053,812 12,803 9,244,577 (12,961,417) (3,704,037)
Issued for cash ($.03 per share) 15,842,926 1,584 476,776 - 478,360
Convert notes payable ($.03 per share) 13,833,333 1,384 413,616 - 415,000
Issued for services ($.03 per share) 5,497,339 550 169,984 - 170,534
Issued for interest ($.03 per share) 625,000 63 18,687 - 18,750
Net loss for the period - - - (1,256,399) (1,256,399)
------------- --------- ------------ ----------- ------------
Balance at September 30, 2000 163,852,410 $ 16,384 $10,323,640 (14,217,816) $(3,877,792)
============= ========= ============ =========== ============
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
precious mineral properties. Activities of the Company since November 1994
have been primarily devoted to organizational matters and identification of
precious 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, 1999.
The financial statements include the accounts of Golden Eagle International,
Inc. and its subsidiaries Golden Eagle Bolivia Mining, S.A. and Eagle Mining
of Bolivia, Ltd. All intercompany transactions and balances have been
eliminated.
The results of operations for the nine months ended September 30, 2000, are
not necessarily indicative of the results for the remainder of 2000.
Note B - Earnings (Loss) Per Share
Basic 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).
Note C - Issuance of Convertible Debentures
During the nine months ended September 30, 2000, the Company entered into a
Convertible Debenture Agreement with an accredited investor and current
shareholder in a cumulative amount of $650,000. The debenture is for a
one-year term, interest accrues at 10% per annum, and conversion of the loan
and any accrued interest, or any part of those sums, at the election of the
holder to shares of common stock at a rate of $.03 per share or one-half of
the average closing price during the last three days prior to conversion.
F-5
<PAGE>
_____________________________________________________________________________
Golden Eagle International, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)
_____________________________________________________________________________
Note D - Sale of Common Stock to Investors
During the nine months ended September 30, 2000, Golden Eagle used its common
stock directly to raise capital and to satisfy some of its obligations. The
Company issued a total of 15,842,926 restricted common shares for cash to
unaffiliated, accredited investors at approximately $.03 per share.
Note E - Adoption of the 2000 Employee and Consultant Stock Compensation Plan
On June 1, 2000, Golden Eagle's board of directors adopted the 2000 Employee
and Consultant Stock Compensation Plan, which provides for compensation
payable to employees and consultants to Golden Eagle (not including officers,
directors or others deemed to be insiders) by issuing shares of its common
stock or options to purchase its common stock. The plan reserves the right to
issue up to 20 million shares in the discretion of the board of directors.
F-6
