<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, 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
-------- ----------
(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:
September 30, 2000
Common Voting Stock - 6,665,372 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, 2000 and December 31, 1999
<PAGE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Balance Sheets
<CAPTION>
September 30, December 31,
2000 1999
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 67,247 $ 7,295
Accounts receivable 29,440 -
Total Current Assets 96,687 7,295
OTHER ASSETS
Horses 52,500 -
Goodwill - -
Total Other Assets 52,500 -
TOTAL ASSETS 149,187 $ 7,295
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 70,185 $ 178
Advances from stockholders 14,385 14,385
Loans Payable 408,500 -
Total Current Liabilities 493,070 14,563
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.01 par value, 20,000,000 shares
authorized: 6,665,372 and 6,315,372 shares issued
and outstanding, respectively 66,654 63,154
Additional paid-in capital 2,574,224 2,490,224
Accumulated deficit prior to the development stage (2,330,609) (2,330,609)
Deficit accumulated during the development stage (654,152) (230,037)
Total Stockholders' Equity (Deficit) (343,883) (7,268)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 149,187 $ 7,295
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
From
Inception of the
Development
Stage on
For the For the January 1,
Nine Months Ended Three Months Ended 1991 Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
REVENUES
Sales $ 104,040 $ - $ 104,040 $ - $ 293,465
Cost of Sales 117,326 - 117,326 - 241,456
Gross Profit (Deficit) (13,286) - (13,286) - 52,009
EXPENSES
General and
administrative 84,519 7,335 78,401 2,187 438,080
Total Expenses 84,519 7,335 78,401 2,187 438,080
LOSS FROM OPERATIONS (97,805) (7,335) (91,687) (2,187) (386,071)
OTHER INCOME (EXPENSE)
Write down of goodwill (306,761) - (306,761) - (306,761)
Interest income - - - - 58
Interest expense (19,549) - (19,549) - (32,321)
Total Other Income
(Expense) (326,310) - (326,310) - (392,393)
MINORITY INTEREST - - - - 70,943
NET LOSS $ (424,115) $ (7,335)$(417,997) $(2,187)$(654,152)
BASIC LOSS PER SHARE $ (0.07) $ (0.00)$ (0.07) $ (0.00)
BASIC WEIGHTED AVERAGE
SHARES OUTSTANDING 6,402,197 6,215,372 6,402,197 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)
Issuance of shares for cash on
July 31, 2000 at $0.25
per share (unaudited) 350,000 3,500 84,000 -
Net loss for the nine months
ended September 30, 2000
(unaudited) - - - (424,115)
Balance, September 30, 2000
(unaudited) 6,665,372 $ 66,654 $2,574,224 $(2,984,761)
</TABLE>
<TABLE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
From
Inception of the
Development
Stage on
For the For the January 1,
Nine Months Ended Three Months Ended 1991 Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $(424,115) $(7,335) $(417,997) $(2,187) $(654,152)
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)
Write down of Goodwill 306,761 - 306,761 - 306,761
Change in operating
assets and liabilities:
(Increase) decrease in
prepaid expenses - - - - 1,920
Increase (decrease) in
accounts receivable - - - - (754)
Increase (decrease) in
accounts payable 42,674 - 42,794 - 60,753
(Increase) decrease in
accrued expenses - - - - 10,880
Increase (decrease) in
advances from
stockholders - - - - 14,385
Net Cash Provided
(Used) by Operating
Activities (74,680) (7,335) (68,442) (2,187) (234,800)
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)
<PAGE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
<CAPTION>
From
Inception of the
Development
Stage on
For the For the January 1,
Nine Months Ended Three Months Ended 1991 Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM FINANCING
ACTIVITIES
Cash proceeds from
consolidation 47,132 - 47,132 - 47,132
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 87,500 - 87,500 - 157,500
Net Cash Provided
(Used) from Financing
Activities 134,632 (23,025) 134,632 - 442,147
NET CHANGE IN CASH 59,952 (30,360) 66,190 (2,187) 67,247
CASH AT BEGINNING OF PERIOD 7,295 32,129 1,057 3,956 -
CASH AT END OF PERIOD $ 67,247 $ 1,769 $ 67,247 $ 1,769 $ 67,247
CASH PAID FOR:
Interest $ 19,549 $ - $ - $ - $ 20,882
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 $ - $ - $ 87,798
<PAGE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 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.
<PAGE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Unaudited Financial Statements - The accompanying unaudited financial
statements include all of the adjustments which, in the opinion of
management, are necessary for a fair presentation. Such adjustments
are of a normal recurring nature.
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
September 30, 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.
<PAGE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 5 - CAPITAL TRANSACTIONS (Continued)
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.
On July 31, 2000, the Company issued 350,000 shares of its common
stock for $87,500 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.
<PAGE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
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 September 30, 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 $654,152 from inception
of its development stage. The Company also has limited assets and
operating capital with a stockholders' deficit of $343,883 and
$7,268 at September 30, 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.
As of September 30, 2000, the Company owned 50.49% of Waterbury
Resources, Inc. due to the purchase of 200,000 shares of common
stock. The Company also purchased all of the outstanding shares of
common stock of Waterbury Resources, Inc. subsidiaries.
<PAGE>
G/O INTERNATIONAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and December 31, 1999
NOTE 10 - SUBSEQUENT EVENTS
On October 29, 2000 the Company issued 60,000 shares of common stock
for services rendered.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
------------------
As of September 30, 2000, the Company owned 50.49% of Waterbury
Resources, Inc. ("Waterbury"), a company engaged in the purchase, training and
selling of thoroughbred horses in the United States and Europe. All of the
revenue received by the Company were generated by Waterbury. The Company is
presently attempting to determine other 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 September 30, 2000, the Company
had $104,040 in revenues.
Taking into account general and administrative expenses of $84,519
and costs of sales of $117,326, the Company had a net loss from operations of
($97,805) during this period, as compared to a net loss from operations of
($7,335) during the quarterly period ended September 30, 1999. In addition
this period there was a write down of goodwill of $306,761 and interest
expense that increase the net loss to ($424,115).
Liquidity.
----------
The Company had $67,247 in cash for the period ended September 30,
2000. During the period ended September 30, 2000, the Company and its
subsidiaries had total expenses of $201,845, while receiving $104,040 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: Nov. 20, 2000 By/s/Jack Burns
-------------- -------------------
Jack Burns, Director
President and Treasurer
</TABLE>
