<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 March 31, 1999
[ ] 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
---------------------
(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 22, 1999
Common Voting Stock - 6,215,372 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
March 31, 1999 and December 31, 1998
<PAGE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Balance Sheets
<CAPTION>
ASSETS
March 31, December 31,
1999 1998
(Unaudited)
CURRENT ASSETS
<S> <C> <C>
Cash $ 8,586 $ 32,129
Accounts receivable - 754
Total Current Assets 8,586 32,883
OTHER ASSETS
Horses - 136,900
Total Other Assets - 136,900
TOTAL ASSETS $ 8,586 $ 169,783
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 58 $ 23,890
Accrued interest - 10,880
Advances from stockholders 14,385 14,385
Notes payable - related parties - 165,000
Total Current Liabilities 14,443 214,155
MINORITY INTEREST - 48,765
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.01 par value, 20,000,000 shares
authorized; 6,215,372 shares issued and outstanding 62,154 62,154
Additional paid-in capital 2,466,224 2,378,426
Accumulated deficit prior to the
development stage (2,330,609) (2,330,609)
Deficit accumulated during the development stage (203,626) (203,108)
Total Stockholders' Equity (Deficit) (5,857) (93,137)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 8,586 $ 169,783
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
From
Inception on
January 1,
For the Three Months Ended 1991 Through
March 31, March 31,
1999 1998 1999
<S> <C> <C> <C>
REVENUES
Horse sales $ - $ 70,000 $ 189,425
Other income - - 58
Total Revenues - 70,000 189,483
COST OF SALES - 27,100 124,130
GROSS MARGIN - 42,900 65,353
EXPENSES:
General and administrative 518 32,544 327,150
Interest expense - 2,751 12,772
Total Expenses 518 35,295 339,922
NET INCOME (LOSS) FROM OPERATIONS (518) 7,605 (274,569)
MINORITY INTEREST - 5,323 70,943
NET INCOME (LOSS) $ (518) $ 12,928 $ (203,626)
BASIC INCOME (LOSS) PER SHARE $ (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 shares for cash
on August 17, 1998 at $0.50
per share 20,000 200 9,800 -
Issuance of shares for
services on October 29,
1998 at $0.50 per share 60,000 600 29,400 -
Net loss for the year ended
December 31, 1998 - - - (103,116)
Balance, December 31, 1998 6,215,372 $ 62,154 $2,387,426 $(2,533,717)
Capital recognized from subsidiary
(unaudited) - - 87,798 -
Net loss for the three months ended
March 31, 1999 (unaudited) - - - (518)
Balance, March 31, 1999
(unaudited) 6,215,372 $ 62,154 $2,466,224 $(2,534,235)
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
From
Inception on
January 1,
For the Three Months Ended 1991 Through
March 31, March 31,
1999 1998 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET (LOSS) INCOME $ (518) $ 12,928 $ (203,626)
Reconciliation of net loss to
cash provided (used)
in operating activities:
Common stock issued in lieu of services
rendered and offset of advances - - 62,300
Amortization expense - - 1,280
Minority interest - (6,118) (53,173)
(Increase) decrease in accounts
receivable - (70,000) (754)
(Increase) decrease in prepaid expenses - - 1,920
(Increase) decrease in organization
costs - 960 -
Increase (decrease) in accounts payable - 14,500 17,959
Increase in accrued expenses - (165) 10,880
Increase (decrease) in advances from
stockholders - 102,500 14,385
Net Cash (Used) by Operating
Activities (518) 54,605 (148,829)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments - - (69,400)
(Increase) Decrease of horses - (34,000) (70,700)
Net Cash (Used) by Investing
Activities - (34,000) (140,100)
CASH FLOWS FROM FINANCING ACTIVITIES
Disposition of cash from Waterbury (23,025) - (23,025)
Proceeds from notes payable -
related parties - - 210,000
Payments on notes payable - related
parties - - (45,000)
Payment of dividend - - (6,400)
Cash from minority shareholders - - 101,940
Cash from sales of stock - - 60,000
Net Cash Provided from Financing
Activities (23,025) - 297,515
NET CHANGE IN CASH (23,543) 20,605 8,586
CASH AT BEGINNING OF PERIOD 32,129 9,848 -
CASH AT END OF PERIOD $ 8,586 $ 30,453 $ 8,586
CASH PAID FOR:
Interest $ - $ - $ -
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
Capital recognized from
subsidiary $ 87,798 $ - $ 87,798
</TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Unaudited Consolidated Financial Statements
March 31, 1999 and December 31, 1998
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 March 31, 1999
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, 1998 audited consolidated financial statements. The results of operations
for the periods ended March 31, 1999 and 1998 are not necessarily indicative
of the operating results for the full year.
NOTE 2 - EQUITY INVESTMENT
As of March 31, 1999, the Company owned 42% of Waterbury Resources,
Inc. (Waterbury). As such, Waterbury has not been consolidated in the March
31, 1999 financial statements. The equity investment has been recorded at
zero. The Company recorded an addition to additional paid-in capital of
$87,798 in conjunction with the conversion from the consolidation method of
accounting to the equity method of accounting.
Item 2. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
- ------------------
As of March 31, 1999, the Company owned 42% of Waterbury Resources,
Inc. ("Waterbury"). Previously, all of the revenue received by the Company
was generated by Waterbury, which was a 50.7% owned subsidiary of the Company.
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 March 31, 1999, the Company
received revenues of $0.
Taking into account general and administrative expenses of $518 and
costs of sales of $0, the Company had a net loss from operations of ($518)
during this period, as compared to a net profit from operations of $12,928
during the quarterly period ended March 31, 1998.
Liquidity
- ---------
The Company had $8,586 in cash for the period ended March 31, 1999.
During the period ended March 31, 1999, the Company and its subsidiaries had
total expenses of $518, while receiving $0 in revenues.
Year 2000
- ---------
The Company presently has no material operations, and is presently
seeking a suitable candidate for a merger or acquisition transaction. Due to
its very limited activities and assets, management does not believe that the
change of year to the year 2000 will have any material effect on its business,
results of operations or financial condition.
In seeking out a merger or acquisition target, the Company will take
into account the ways in which the Year 2000 may materially affect the
operations of any such target. However, until such an entity has been
identified, management can not accurately predict how (if at all) the Year
2000 issue may affect the operations of the reorganized Company. At such time
as the Company completes such a reorganization, it will timely disclose all
material Year 2000 issues in the appropriate filing with the Securities and
Exchange Commission.
For the foregoing reasons, the Company has determined that the potential
consequences of the Year 2000 would not have a present material effect on its
business, results of operations or financial condition.
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.
------------------
On February 10, 1999, the Board of Directors of Waterbury resolved
to offer 200,000 ordinary shares, par value of $0.0001 per share, to
"accredited investors" and/or "sophisticated investors" pursuant to Rule 504,
in consideration of the sum of $0.25 per share for an aggregate total of
$50,000. Prior to the stock offering, there were 1,014,000 outstanding shares
of Waterbury, 513,999 of which were owned by the Company (approximately 50%),
and the remainder of which are owned by eight foreign corporations organized
under the laws of the Cayman Islands, BWI. With 200,000 shares being sold
pursuant to the offering, there were 1,214,000 outstanding shares, and
Waterbury was no longer a majority owned subsidiary of the Company as the
Company's ownership has decreased to approximately 42% of Waterbury.
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: 6/30/99 By/s/Jack Burns
-------------- -------------------
Jack Burns, Director
President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 8586
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8586
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8586
<CURRENT-LIABILITIES> 14443
<BONDS> 0
0
0
<COMMON> 62154
<OTHER-SE> (68011)
<TOTAL-LIABILITY-AND-EQUITY> 8586
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 518
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (518)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (518)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
