<PAGE>
<PAGE> U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to __________________
Commission File No. 0-24688
G/O INTERNATIONAL, INC.
-----------------------
(Name of Small Business Issuer in its Charter)
COLORADO 76-0025986
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
11849 Wink
Houston, Texas 77024
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (713) 783-1204
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
N/A
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
June 30, 1998
Common Voting Stock - 6,155,372 shares
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
---------------------
The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management and commence below,
together with related Notes. In the opinion of management, the Financial
Statements fairly present the financial condition of the Registrant.
<PAGE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 and December 31, 1997
<PAGE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Balance Sheet
<CAPTION>
ASSETS
September 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 32,184 $ 9,848
Accounts receivable 1,928 -
Total Current Assets 34,112 9,848
OTHER ASSETS
Organization costs - 1,920
Horses 104,700 70,700
Total Other Assets 104,700 72,620
TOTAL ASSETS $ 138,812 $ 82,468
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 10,558 $ 58
Accrued interest - 165
Advances from stockholders 146,885 39,385
Total Current Liabilities 157,443 39,608
MINORITY INTEREST 42,906 72,879
STOCKHOLDERS EQUITY (DEFICIT)
Common stock, $0.01 par value, 20,000,000
shares authorized: 6,155,372 and
6,135,372 shares issued and outstanding,
respectively 61,554 61,354
Additional paid-in capital 2,349,028 2,339,228
Accumulated deficit prior to the
development stage (2,330,609) (2,330,609)
Deficit accumulated during the
development stage (141,510) (99,992)
Total Stockholders Equity (Deficit) (61,537) (30,019)
TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY (DEFICIT) $ 138,812 $ 82,468
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
From
Inception on
For the For the January 1,
Nine Months Ended Three Months Ended 1991 to
September 30, September 30, September 30,
1998 1997 1998 1997 1998
<S> <C> <C> <C> <C> <C>
REVENUES
Sales $ 77,850 $ 136,500 $ - $ - $ 192,775
Cost of Sales 27,100 95,260 - - 106,110
Gross Profit (Loss) 50,750 41,240 - - 86,665
EXPENSES
General and
administrative 114,402 74,646 44,814 8,227 277,536
Total Expenses 114,402 74,646 44,814 8,227 277,536
NET LOSS FROM
OPERATIONS (63,652) (33,406) (44,814) (8,227) (190,871)
OTHER INCOME (EXPENSE)
Interest income - - - - 58
Interest expense (8,004) (1,739) (2,367) (406) (9,896)
Total Other Income
(Expense) (8,004) (1,739) (2,367) (406) (9,838)
MINORITY INTEREST 30,138 11,262 21,430 3,369 59,199
NET LOSS $(41,518) $ (23,883) $(25,751) (5,264) $ (141,510)
LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
<CAPTION>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance, January 1, 1991
(inception of development stage) 323,866 $3,239 $2,321,443 $(2,330,609)
Net loss for the year ended
December 31, 1991 - - - (72)
Balance, December 31, 1991 323,866 3,239 2,321,443 (2,330,681)
Net loss for the year ended
December 31, 1992 - - - (1,466)
Balance, December 31, 1992 323,866 3,239 2,321,443 (2,332,147)
Net loss for the year ended
December 31, 1993 - - - (1,678)
Balance, December 31, 1993 323,866 3,239 2,321,443 (2,333,825)
Shares issued to directors in
lieu of services rendered and
offset of advances, 1,500,000
shares at $0.01 per share on
May 6, 1994 1,500,000 15,000 - -
Issuance of shares for legal
services at $0.01 per share on
July 26, 1994 150,000 1,500 - -
Net loss for the year ended
December 31, 1994 - - - (24,350)
Balance, December 31, 1994 1,973,866 19,739 2,321,443 (2,358,175)
Shares returned back to the
Company and canceled in
February 1995 (18,494) (185) 185 -
Issuance of shares for cash,
October 23, 1996 at $0.01
per share 2,000,000 20,000 - -
Shares issued to directors
in lieu of services rendered,
November 1995 at $0.01 per share 30,000 300 - -
Net loss for the year ended
December 31, 1995 - - - (4,095)
Balance, December 31, 1995 3,985,372 39,854 2,321,628 (2,362,270)
Issuance of 2,000,000 shares
for cash, March 12, 1996
at $0.01 2,000,000 20,000 - -
Issuance of 50,000 shares for
services on October 31, 1996
at $0.01 per share 50,000 500 - -
Liquidating dividend - - (6,400) -
Net loss for the year ended
December 31, 1996 - - - (25,510)
Balance, December 31, 1996 6,035,372 60,354 2,315,228 (2,387,780)
Issuance of 40,000 shares for
cash on October 2, 1997
at $0.25 per share 40,000 400 9,600 -
Issuance of 60,000 shares for
services on October 29, 1997
at $0.01 per share 60,000 600 14,400 -
Net loss for the year ended
December 31, 1997 - - - (42,821)
Balance, December 31, 1997 6,135,372 61,354 2,339,228 (2,430,601)
Issuance of 20,000 shares for cash
on September 14, 1998 at $0.50
per share
(unaudited) 20,000 200 9,800 -
Net loss for the nine
months ended
September 30, 1998
(unaudited) - - - (41,518)
Balance, September 30, 1998
(unaudited) 6,155,372 $ 61,554 $2,349,028 $(2,472,119)
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
From
Inception on
For the For the January 1,
Nine Months Ended Three Months Ended 1991 to
September 30, September 30, September 30,
1998 1997 1998 1997 1998
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (41,518) $(23,883) $(25,751) $ (5,264) (141,510)
Reconciliation of
net loss to cash
provided (used) in
operating activities:
Common stock issued
in lieu of services
rendered and offset
of advances - - - - 32,300
Amortization expense - - - - 1,280
Minority interest (29,973) (11,264) (20,470) (3,371) (59,032)
Changes in operating
assets and liabilities:
(Increase) decrease
in prepaid expenses 1,920 986 960 - 1,920
(Increase) decrease
in organization costs
Increase (decrease)
in accounts
receivable (1,928) - (1,928) 70,000 (1,928)
Increase (decrease)
in accounts payable 10,500 (11,132) (4,751) (7,125) 4,629
(Increase) decrease
in accrued expenses (165) - - - -
Increase (decrease)
in advances from
stockholders 107,500 (20,000) 2,500 (25,357) 146,885
Net Cash Provided
(Used) by Operating
Activities 46,336 (65,293) (49,440) 28,883 (15,456)
CASH FLOWS FROM
INVESTING ACTIVITIES
Sale of horses - 79,010 - - -
Purchase of investments - - - - (3,200)
Purchase of horses (34,000) (20,000) - (20,000) (104,700)
Net Cash Provided
(Used) by Investing
Activities $(34,000)$ 59,010 $ - $ (20,000)$(107,900)
CASH FLOWS FROM
FINANCING ACTIVITIES
Payment of dividend $ - $ - $ - $ - $ (6,400)
Cash from minority
shareholders - - - - 101,940
Cash from sales of
stock 10,000 - 10,000 - 60,000
Net Cash Provided
by Financing
Activities 10,000 - 10,000 - 155,540
NET CHANGE IN CASH 22,336 (6,283) (39,440) 8,883 32,184
CASH AT BEGINNING OF
PERIOD 9,848 34,091 71,624 18,925 -
CASH AT END OF PERIOD $32,184 $ 27,808 $ 32,184 $ 27,808 $ 32,184
CASH PAID FOR:
Interest $ - $ 1,739 $ - $ 406 $ 1,333
Income taxes $ - $ - $ - $ - $ -
NON-CASH ITEMS
Common stock issued
in lieu of services
rendered and offset
or advances $ - $ - $ - $ - $ 32,300
Common stock returned
and canceled $ - $ - $ - $ - $ 185
</TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Unaudited Consolidated Financial Statements
September 30, 1998 and December 31, 1997
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated 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 September 30, 1998 and for all periods presented have
been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with general
accepted accounting principles have been condensed or omitted. It is
suggested that these condensed consolidated financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company s December 31, 1997 audited consolidated
financial statements. The results of operations for the periods ended
September 30, 1998 and 1997 are not necessarily indicative of the
operating results for the full year.
Item 2. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
- ------------------
All material operations of the Company during the quarterly period
ended September 30, 1998, were those of its 50.7%-owned subsidiary,
Waterbury Resources, Inc., a Cayman Islands corporation ("Waterbury"). The
Company intends to continue to seek out the acquisition of assets, property or
business that may be beneficial to the Company and its stockholders.
Results of Operations.
- ----------------------
The Company discontinued its operations on approximately December
15, 1989. During the quarterly period ended September 30, 1998, Waterbury,
the Company's 50.7%-owned subsidiary, received revenues of $0.
Taking into account general and administrative expenses of $44,814;
costs of sales of $0; and interest expense of $2,367, on a consolidated basis,
the Company had a net loss from operations of ($25,751) during this period, as
compared to a net loss from operations of ($5,264) during the quarterly period
ended September 30, 1997.
For the nine months ended September 30, 1998, the Company had Sales
of $77,850, with costs of sales of $27,100, General and Administrative
expenses of $114,402; and interest expense of $8,004, on a consolidated basis,
the Company had net loss from operations of ($41,518) for the nine months
ended September 30, 1998, as compared to a net loss from operations of
($23,883) for the nine months ended September 30, 1997.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
------------------
None; not applicable.
Item 2. Changes in Securities.
----------------------
None; not applicable.
Item 3. Defaults Upon Senior Securities.
--------------------------------
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
None; not applicable.
Item 5. Other Information.
------------------
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
G/O INTERNATIONAL, INC.
Date: 10/28/98 By /s/ J.L. Burns
-------------- -------------------
Jack Burns, Director
President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 32184
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 34112
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 138812
<CURRENT-LIABILITIES> 157443
<BONDS> 0
0
0
<COMMON> 61554
<OTHER-SE> (123091)
<TOTAL-LIABILITY-AND-EQUITY> 138812
<SALES> 77850
<TOTAL-REVENUES> 77850
<CGS> 27100
<TOTAL-COSTS> 27100
<OTHER-EXPENSES> 114402
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8004
<INCOME-PRETAX> (41518)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (41518)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
