<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB/A-1
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 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.
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(Name of Small Business Issuer in its Charter)
COLORADO 76-0025986
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(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
N/A
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(Former Name or Former Address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: $0.01 par
value common voting stock
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company 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
--- --- --- ---
Check if there is no disclosure of delinquent files in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year: December 31, 1998 -
$74,500.
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of a specified
date within the past 60 days.
June 22, 1999 - $14,000. There are approximately 1,400,022 shares of
common voting stock of the Company held by non-affiliates. During the past
two years there has been no "established public market" for shares of common
voting stock of the Company, so the Company has arbitrarily valued these
shares based on $0.01 par value per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
N/A
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
June 22, 1999
6,215,372
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained
in Item 13 of this report.
Transitional Small Business Issuer Format Yes X No ___
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<PAGE>
PART II
Item 7. Financial Statements.
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Consolidated Financial Statements for the year ended
December 31, 1998
Independent Auditor's Report
Consolidated Balance Sheets - December 31, 1998
Consolidated Statements of Operations from inception
on January 1, 1991 to December 31, 1998
and the Years ended December 31, 1998 and
1997
Consolidated Statements of Stockholders' Equity (Deficit)
for the period January 1, 1991 to December 31,
1998
Consolidated Statements of Cash Flows from inception
on January 1, 1991 to December 31, 1998
and the Years ended December 31, 1998 and
1997
Notes to Consolidated Financial Statements
<PAGE>
Jones, Jensen & Company [letterhead]
INDEPENDENT AUDITOR'S REPORT
Directors and Stockholders
G/O International, Inc.
(A Development Stage Company)
Houston, Texas
We have audited the accompanying consolidated balance sheet of G/O
International, Inc. (a development stage company) as of December 31, 1998 and
the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the years ended December 31, 1998 and 1997 and
from inception of the development stage (January 1, 1991) to December 31,
1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements band on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatements. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, In all material respects, the consolidated financial position
of G/O International, Inc. (a development stage company) at December 31, 1998
and the consolidated results of their operations and their cash flows for the
years ended December 31, 1998 and 1997 and from Inception of development stage
(January 1, 1991) to December 31, 1998 in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 9, the
Company is in the development stage and has limited assets, limited working
capital, and has sustained during its development stage and has capital
deficiencies which together raise substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters are
also discussed in Note 9. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
April 30, 1999
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Balance Sheet
<CAPTION>
ASSETS
December 31,
1998
<S> <C>
CURRENT ASSETS
Cash $ 32,129
Accounts receivable 754
Total Current Assets 32,883
OTHER ASSETS
Horses 136,900
Total Other Assets 136,900
TOTAL ASSETS $ 169,783
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 23,890
Accrued interest 10,880
Advances from stockholders (Note 4) 14,385
Notes payable - related parties (Note 8) 165,000
Total Current Liabilities 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
Additional paid-in capital 2,378,426
Accumulated deficit prior to the
development stage (2,330,609)
Deficit accumulated during the
development stage (203,108)
Total Stockholders' Equity (Deficit) (93,137)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 169,783
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Operations
<CAPTION>
From
Inception on
January 1,
For the Years Ended 1991 to
December 31, December 31,
1998 1997 1998
<S> <C> <C> <C>
REVENUES
Horse sales $ 74,500 $ 114,925 $ 189,425
Other income - 20 58
Total Revenues 74,500 114,945 189,483
COST OF SALES 45,120 79,010 124,130
GROSS MARGIN 29,380 35,935 65,353
EXPENSES
General and administrative 163,498 89,013 326,632
Interest expense 10,880 1,532 12,772
Total Expenses 174,378 90,545 339,404
NET LOSS FROM OPERATIONS (144,998) (54,610) (274,051)
MINORITY INTEREST 41,882 11,789 70,943
NET LOSS $ (103,116) $ (42,821) $(203,108)
BASIC LOSS PER SHARE $ (0.01) $ (0.01)
</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)
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
<CAPTION>
From
Inception on
January 1,
For the Years Ended 1991 to
December 31, December 31,
1998 1997 1998
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS $(103,116) $ (42,821) $ (203,108)
Reconciliation of net loss to cash
provided (used) in operating
activities:
Common stock issued for services
rendered and offset of advances
received 30,000 15,000 62,300
Amortization expense - 1,280 1,280
Minority interest (24,114) (11,787) (53,173)
Changes in operating assets and liabilities:
(Increase) decrease in accounts
receivable (754) - (754)
(Increase) decrease in prepaid
expenses 1,920 986 1,920
Increase (decrease) in accounts
payable 23,830 (16,076) 17,959
Increase (decrease) in accrued
expenses 10,715 165 10,880
Increase (decrease) in advances from
stockholders - - 14,385
Net Cash (Used) by Operating
Activities (61,519) (53,253) (148,311)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (66,200) - (69,400)
Decrease of horses - 14,010 (70,700)
Net Cash Provided (Used) by
Investing Activities (66,200) 14,010 (140,100)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable -
related parties 140,000 50,000 210,000
Payments on notes payable -
related parties - (45,000) (45,000)
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 from Financing
Activities 150,000 15,000 320,540
NET CHANGE IN CASH 22,281 (24,243) 32,129
CASH AT BEGINNING OF PERIOD 9,848 34,091 -
CASH AT END OF PERIOD $ 32,129 $ 9,848 $ 32,129
CASH PAID FOR:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
NON-CASH ITEMS
Common stock issued in lieu
of services rendered
and offset or advances $ 30,000 $ 15,000 $ 62,300
Common stock returned and
canceled $ - $ - $ 185
</TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 1998
NOTE 1 - ORGANIZATION
G/O International, Inc. (the Company) was initially incorporated under
the laws of the State of Colorado in June, 1973 as Rocky Mountain Ventures,
Inc. During mid 1978, the Company experienced financial difficulties, at
which time new officers and directors were elected, the Company changed its
business activity from hard rock mining to oil and gas exploration,
development and production, and offices were relocated from Denver, Colorado,
to its present location in Houston, Texas.
On February 4, 1986, the Company filed for protection under Chapter 11
of the United States Bankruptcy Code. The Company ceased operations in 1988
and did not conduct any business activity other than the closing of its
bankruptcy filing and other organizational activities until it acquired
Waterbury Resources, Inc.
The Company is now considered to be in the development stage (effective
January 1, 1991 for accounting purposes) and has not commenced planned
principal operations. For disclosure purposes, the accompanying Statement
of Stockholders' Equity (Deficit) has been reflected from the date of the
inception of the development stage. The Company has paid a partially
liquidating dividend. The dividend was in the form of shares of two of its
former subsidiaries.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies
followed in connection with the preparation of the consolidated financial
statements.
Income Taxes - Income taxes have been provided on financial statement
income. There are no deferred income taxes arising from timing differences
which result from income and expense items being reported for financial
accounting and tax reporting purposes in different periods (see Note 7).
Basic Loss Per Share - The Company computes basic loss per share by the
weighted average method. Fully diluted earnings per share are not presented
because the Company does not have common stock equivalents. As discussed
below, the Company's Board of Directors authorized a reverse split of its
outstanding Common Stock. All loss per share disclosures have been
retroactively restated to reflect the reverse split.
Cash and Cash Equivalents - The Company considers all highly liquid
investments with maturities of three months or less to be cash equivalents.
Use of Estimates - The preparation of consolidated financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Principles of Consolidation - The accompanying financial statements
include the accounts of the Company and its wholly owned subsidiary Antares
Trading, Inc. and its 50.7% owned subsidiary Waterbury Resources, Inc.
NOTE 3 - BANKRUPTCY FILING
On February 4, 1986, the Company filed a voluntary petition pursuant to
Chapter 11 of Title 11 of the United States Bankruptcy Code. At the time of
its filing, the Company had liabilities in excess of $950,000.
In accordance with the Company's Second Amended Plan of Reorganization
the creditors were broken down into nine separate classes for individual
satisfaction. A total of $1,496 of debt was paid in cash, $562,098 of debt
was paid through transfer of secured property interest, and the balance of
$338,061 of debt was satisfied through the issuance of 338,062 shares of its
previously unissued common stock. On March 13, 1992 the Bankruptcy Court
issued its final decree and the Chapter 11 bankruptcy was closed.
NOTE 4 - ADVANCES FROM STOCKHOLDERS
Stockholders of the Company have advanced funds to the Company to cover
settlement of bankruptcy obligations and ongoing administrative expenses. The
advances bear no interest and are repayable on demand as funds become
available. Total advances amounted to $14,385 at December 31, 1998.
NOTE 5 - CAPITAL TRANSACTIONS
On May 6, 1994, the Company's Board of Directors authorized a reverse
split of its outstanding common stock. The reverse split was on a basis of 1
(one) share for each 100 shares outstanding (1 for 100). However, no
shareholders' holding was to be reduced to less than 100 shares. The total
number of shares of common stock outstanding after the split was 323,866.
The reverse stock split is reflected on a retroactive basis.
On May 6, 1994, the Company's shareholders adopted, ratified and
approved Board of Directors' resolutions authorizing the issuance of a total
of 1,500,000 post-split shares of its previously unissued common stock to a
director and the former legal counsel (750,000 shares each) in exchange for
services rendered and advances made totaling $15,000.
On July 26, 1994, the Company's Board of Directors entered into a
compensation agreement calling for the issuance of 150,000 post-split shares
of its previously unissued common stock, valued at $1,500, in exchange for
legal services rendered by its current legal counsel.
During 1995 18,494 shares of common stock were returned to the Company
and canceled due to the rounding of shares in the reverse split of the
Company's common stock.
On October 23, 1995 the Company issued 2,000,000 shares of its common
stock at $0.01 per share for a total of $20,000.
During November 1995, 30,000 shares of common stock was issued to
Directors of the Company in lieu of services rendered, valued at $0.01 per
share.
In March of 1996, 2,000,000 shares of common stock were issued for cash
of $20,000 or $0.01 per share.
In October of 1996, 50,000 shares of common stock were issued for
services valued $0.01 or $500.
On October 2, 1997, the Company issued 40,000 shares of its common
stock for $10,000 cash or $0.25 per share.
On October 29, 1997, the Company issued 60,000 shares of its common
stock for services valued at $15,000 or $0.25 per share.
On August 17, 1998, the Company issued 20,000 shares of its common
stock for $10,000 cash or $0.50 per share.
On October 29, 1998, the Company issued 60,000 shares of its common
stock for services valued at $30,000 or $0.50 per share.
NOTE 6 - RELATED PARTY TRANSACTIONS
The President of the Company provides office space and other clerical
services at no cost to the Company.
NOTE 7 - INCOME TAX
During 1993 the Company adopted Statement of financial Accounting
Standards No.109 - "Accounting for income Taxes" (SFAS 109). SFAS 109 is an
asset and liability approach that requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that
have been recognized in the Company's consolidated financial statements or
tax returns. In estimating future tax consequences, SFAS 109 generally
considers all expected future events other than enactments of changes in the
tax law or rates. Previously, the Company accounted for income taxes under
APB Opinion No. 11. Under SFAS 109, in the year of adoption, previously
reported results of operations for that year should be restated to reflect the
effects of applying SFAS 109, and the cumulative effect of adoption on prior
years' results of operations should be shown in the income statement n the
year of change it was determined that there was no cumulative effect on the
prior year earnings. For tax purposes, the Company had available at December
31, 1998, not operating loss ("NOL") carry forwards for regular Federal Income
Tax purposes of an estimated $2,094,357 which are estimated to expire as shown
below. A valuation, allowance has been established for estimated tax benefits
of the loss carry overs which are not expected to be realized.
Year Amount
1999 $ 1,891,249
2006 72
2007 1,466
2008 1,678
2009 24,350
2010 4,095
2011 25,510
2012 42,821
2013 103,116
Totals $ 2,094,357
NOTE 8 - NOTES PAYABLE - RELATED PARTIES
Notes payable - related parties consisted of the following:
December 31,
1998
Notes payable to a related company, interest at 8.0%,
principal and interest due on demand, unsecured. $ 125,000
Notes payable to a related company, interest at 8.0%,
principal and interest due on demand, unsecured. 40,000
Total notes payable - related parties 165,000
Less: current portion (165,000)
Long-term notes payable - related parties $ -
Maturities of notes payable - related parties are as follows:
Year Ending
December 31,
1999 $ 165,000
2000 -
2001 -
2002 -
2003 -
2004 and thereafter -
Total $ 165,000
NOTE 9 - GOING CONCERN
The Company has experienced losses totaling $203,108 from inception of
its development stage. The Company also has limited assets and operating
capital with a stockholders' deficit of $93,137 at December 31, 1998. In
light of these circumstances, the ability of the Company to continue as a
going concern is substantially in doubt. The consolidated financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
Management plans are to seek another entity that wants to consummate
an acquisition by allowing the purchasing entity to buy or exchange unissued
shares of the Company's common stock in order to become a part of a public
company. Management believes its plans will provide the Company with the
ability to continue in existence. In the interim management has committed
to meeting its operating expenses.
NOTE 10 - SUBSEQUENT EVENTS
In March of 1999, there was a 504 offering of the shares of the
Company's subsidiary, Waterbury Resources, Inc. (Waterbury). 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 Island, 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.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: 3/13/2000 By/s/Jack L. Burns
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Jack L. Burns, Director
President and Treasurer
Date: 3/13/2000 By/s/Michael L. Caswell
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Michael L. Caswell, Director,
Vice President and Secretary
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this Report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated:
G/O INTERNATIONAL, INC.
Date: 3/13/2000 By/s/Jack L. Burns
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Jack L. Burns, Director
President and Treasurer
Date: 3/13/2000 By/s/Michael L. Caswell
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Michael L. Caswell, Director
Vice President and Secretary
