<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, 2000
[ ] 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
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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
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:
March 31, 2000
Common Voting Stock - 6,315,372 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, 2000 and December 31, 1999
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors
G/O International, Inc.
Houston, Texas
We have reviewed the accompanying balance sheet of G/O International, Inc. as
of March 31, 2000 and the related statements of operations, stockholders'
equity (deficit) and cash flows for the periods ended March 31, 2000 and
1999. These financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which will
be performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying condensed financial statements referred to
above for them to be in conformity with accounting principles generally
accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet of G/O International, Inc. as
of December 31, 1999, and the related statements of operations, stockholders'
equity (deficit), and cash flows for the year then ended (not presented
herein) and in our report dated April 14, 2000, we expressed an unqualified
opinion on those consolidated financial statements.
HJ & Associates, LLC
Salt Lake City, Utah
May 3, 2000
<PAGE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Balance Sheets
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> <C>
CURRENT ASSETS
Cash $ 6,962 $ 7,295
Total Current Assets 6,962 7,295
TOTAL ASSETS 6,962 $ 7,295
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 492 $ 178
Advances from stockholders 14,385 14,385
Total Current Liabilities 14,877 14,563
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.01 par value, 20,000,000 shares
authorized:
6,315,372 shares issued and outstanding 63,154 63,154
Additional paid-in capital 2,490,224 2,490,224
Accumulated deficit prior to the
development stage (2,330,609) (2,330,609)
Deficit accumulated during the development stage (230,684) (230,037)
Total Stockholders' Equity (Deficit) (7,915) (7,268)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 6,962 $ 7,295
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Operations
<CAPTION>
From
Inception on
January 1,
For the Three Months Ended 1991 to
March 31, March 31,
2000 1999 2000
<S> <C> <C> <C>
REVENUES
Sales $ - $ - $ 189,425
Cost of Sales - - 124,130
Gross Profit - - 65,295
EXPENSES
General and administrative 647 518 354,208
Total Expenses 647 518 354,208
NET LOSS FROM OPERATIONS (647) (518) (288,913)
OTHER INCOME (EXPENSE)
Interest income - - 58
Interest expense - - (12,772)
Total Other Income (Expense) - - (12,714)
MINORITY INTEREST - - 70,943
NET LOSS $ (647) $ (518) $ (230,684)
BASIC LOSS PER SHARE $ (0.00) $(0.00)
BASIC WEIGHTED AVERAGE SHARES 6,232,632 6,215,372
</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)
Issuance of shares for services
on October 29, 1999 at $0.25
per share 60,000 600 14,400 -
Issuance of shares for cash on
October 29, 1999 at $0.25
per share 40,000 400 9,600 -
Capital recognized from subsidiary - - 87,798 -
Net loss for the year ended
December 31, 1999 - - - (26,929)
Balance, December 31, 1999 6,315,372 63,154 2,490,224 (2,560,646)
Net loss for the three months
ended March 31, 2000 - - - (647)
Balance, March 31, 2000 6,315,372 $ 63,154 $ 2,490,224 $(2,561,293)
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
<CAPTION>
From
Inception on
January 1,
For the Three Months Ended 1991 to
March 31, March 31,
2000 1999 2000
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (647) $ (518) $ (230,684)
Reconciliation of net loss to cash
provided (used) in operating
activities:
Common stock issued in lieu of
services rendered and offset
of advances - - 77,300
Amortization expense - - 1,280
Minority interest - - (53,173)
Change in operating assets and
liabilities:
(Increase) decrease in prepaid
expenses - - 1,920
Increase (decrease) in accounts
receivable - - (754)
Increase (decrease) in accounts
payable 314 - 18,393
(Increase) decrease in accrued
expenses - - 10,880
Increase (decrease) in advances from
stockholders - - 14,385
Net Cash Provided (Used) by Operating
Activities (333) (518) (160,453)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments - - (69,400)
(Increase) decrease of horses - - (70,700)
Net Cash Provided (Used) by Investing
Activities - - (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 - - 70,000
Net Cash Provided (Used) from
Financing Activities $ - $ (23,025) $ 307,515
NET CHANGE IN CASH $ (333) $ (23,543) $ 6,962
CASH AT BEGINNING OF PERIOD 7,295 32,129 -
CASH AT END OF PERIOD $6,962 $ 8,586 $ 6,962
CASH PAID FOR:
Interest $ - $ - $ 1,333
Income taxes $ - $ - $ -
NON-CASH ITEMS
Common stock issued in lieu of services
rendered and offset of advances $ - $ - $ 32,300
Common stock returned and canceled $ - $ - $ 195
Capital recognized from Subsidiary $ - $ - $ 87,798
</TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000 and December 31, 1999
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 March
31, 2000 and December 31, 1999.
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.
On October 29, 1999, the Company issued 60,000 shares to its officers
for services rendered and 40,000 shares to shareholders for cash valued
at $15,000 and $10,000, respectively, or $0.25 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 March 31, 2000 and December 31, 1999, net
operating loss ("NOL") carry forwards for regular Federal Income Tax
purposes of an estimated $2,100,000 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.
NOTE 8 - GOING CONCERN
The Company has experienced losses totaling $230,684 from inception of
its development stage. The Company also has limited assets and
operating capital with a stockholders' deficit of $7,915 and $7,268 at
March 31, 2000 and December 31, 1999. 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 9 - EQUITY INVESTMENT
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 of December 31, 1999, the Company owned 42% of Waterbury Resources,
Inc. As such, Waterbury has not been consolidated in the December 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 non-consolidation of Waterbury.
Item 2. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
- ------------------
As of March 31, 2000, 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 is presently attempting to determine which industries or
areas where the Company should concentrate its business efforts, and at that
determination, will formulate its business plan and commence operations.
Results of Operations.
- ----------------------
During the quarterly period ended March 31, 2000, the Company
had no revenues.
Taking into account general and administrative expenses of $647
and costs of sales of $0, the Company had a net loss from operations of
($647) during this period, as compared to a net loss from operations of
($518) during the quarterly period ended March 31, 1999.
Liquidity
- ---------
The Company had $6,962 in cash for the period ended March 31,
2000. During the period ended March 31, 2000, the Company and its
subsidiaries had total expenses of $647, while receiving $0 in revenues.
Liquidity has primarily been provided by sales of "restricted securities."
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: 5-15-2000 By/s/Jack Burns
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Jack Burns, Director
President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 6962
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6962
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6962
<CURRENT-LIABILITIES> 14877
<BONDS> 0
0
0
<COMMON> 63154
<OTHER-SE> (71069)
<TOTAL-LIABILITY-AND-EQUITY> 6962
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 647
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (647)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (647)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
