UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1998 Commission File Number 0-25658
------------------ -------
Kalan Gold Corporation
(Exact name of registrant as specified in its charter)
COLORADO 84-1357927
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Tower I, Suite 340, 12835 E. Arapahoe Road, Englewood, Colorado 80112
(Address of principal executive offices) (Zip code)
(303) 706-1606
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check whether the registrant (1) has filed all reports required to
be filed by Section 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. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock, $.00001 par value 10,290,999
Class Number of shares outstanding at November 1, 1998
- --------------------------------------------------------------------------------
This document is comprised of 10 pages.
<PAGE>
FORM 10-QSB
2ND QUARTER
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements *
Condensed balance sheet as of
September 30, 1998 (Unaudited)......................................3
Condensed statements of operations - Three and Nine Months Ended
September 30, 1998 and 1997 (Unaudited)............................4
Condensed statements of cash flows - Nine Months Ended
September 30, 1998 and 1997 (Unaudited)...........................5
Notes to condensed financial statements (Unaudited).....................6
Item 2. Plan of operation..............................................8
PART II - OTHER INFORMATION..................................................8
Item 1. Legal Proceedings
Item 2. Changes In Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters To A Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures..............................................................9
* The accompanying financial statements are not covered by an
Independent Certified Public Accountant's report.
2
<PAGE>
Part I. Item 1. Financial information
KALAN GOLD CORPORATION
(A Development Stage Company)
Condensed Balance Sheet
(Unaudited)
September 30, 1998
CASH................................................. $ 331
FURNITURE AND EQUIPMENT, NET......................... 1,760
---------------
TOTAL ASSETS 2,091
===============
LIABILITIES AND SHAREHOLDERS' DEFICIT
LIABILITIES
Accounts payable.................................. $ 12,377
Accrued liabilities............................... 31,710
Advance from affiliate (Note B)................... 123,226
Due to affiliate (Note B)......................... 13,000
---------------
TOTAL LIABILITIES 180,313
===============
SHAREHOLDERS' EQUITY (DEFICIT) (Notes C)
Preferred stock, $.10 par value, 1,000,000
shares authorized, -0- shares issued and
outstanding...................................... -
Common stock, $.00001 par value, 100,000,000
shares authorized, 7,290,999 shares issued
and outstanding.................................. 73
Outstanding common stock options.................. 129,500
Additional paid-in capital........................ 30,383
Deficit accumulated during development stage...... (338,178)
---------------
TOTAL SHAREHOLDERS' DEFICIT (178,222)
---------------
$ 2,091
===============
See accompanying notes to condensed financial statements
3
<PAGE>
KALAN GOLD CORPORATION
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
January 1,
1993
(Inception)
Three months ended Nine Months Ended through
September 30, September 30, Sept. 30,
1998
1998 1997 1998 1997
<S> <C> <C> <C> <C> <C>
COSTS AND EXPENSES
General and administrative $ 27,332 $ 38,761 $ 64,852 $ 134,292 $ 293,410
Stock option expense - - - - 129,500
Depreciation. 754 290 2,262 871 3,685
--------- --------- --------- --------- ---------
Operating Loss (28,086) (39,051) (67,114) (135,163) (426,595)
NONOPERATING INCOME
Gain on sale and
termination of agreement 4,517 - 4,517 86,041 103,164
Interest expense (2,465) (1,209) (6,277) (3,626) (18,724)
--------- --------- --------- --------- ---------
NET LOSS $ (26,034) $ (40,260) $ (68,874) $ (52,748) $(342,155)
========= ========= ========= ========= =========
Basic weighted average
shares outstanding 7,290,999 7,090,000 7,260,110 7,069,167 3,416,717
========= ========= ========= ========= =========
Basic (Loss) per share * * $ (.01) * $ (.10)
========= ========= ========= ========= =========
Diluted weighted average
Shares outstanding 7,715,999 NA 7,715,999 NA 3,543,619
========= ========= ========= ========= =========
Diluted (Loss) per share * NA $ (.01) NA $ (.10)
========= ========= ========= ========= =========
* Less than $(.01) per share
</TABLE>
See accompanying notes to condensed financial statements
4
<PAGE>
KALAN GOLD CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Condensed Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
January 1, 1993
(inception)
Nine Months Ended Through
September 30, Sept. 30,
1998 1997 1998
<S> <C> <C> <C>
NET CASH (USED IN)
OPERATING ACTIVITIES $ (42,937) $(134,869) (243,376)
--------- --------- ---------
INVESTING ACTIVITIES
Purchase of equipment............................. - - (5,446)
Proceeds from sale of property.................... - 145,945 145,945
--------- --------- ---------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITES - 145,945 140,499
--------- --------- ---------
FINANCING ACTIVITIES
Proceeds from stock options exercised............ 4,000 - 4,750
Proceeds from advances from affiliate............ 38,300 37,000 230,671
Repayments to affiliate.......................... - (54,945) (107,447)
Principal payments on long-term debt............. - - (30,000)
Capital contribution............................. - 750 3,700
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES 42,300 (17,195) 101,674
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH..................... (637) (6,119) (1,203)
Cash, beginning of period........................... 968 7,228 1,534
--------- --------- ---------
CASH, END OF PERIOD................................. $ 331 $ 1,109 $ 331
========= ========= =========
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest and income taxes............ $ - $ - $ -
========= ========= =========
NONCASH INVESTING AND FINANCING
Common stock issued for services................... $ - $ - $ 15
========= ========= =========
</TABLE>
See accompanying notes to condensed financial statements
5
<PAGE>
KALAN GOLD CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1998
Note A: Basis of presentation
The financial statements presented herein have been prepared by the Company in
accordance with the accounting policies in its annual 10-KSB report dated
December 31, 1997 and should be read in conjunction with the notes thereto.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
Interim financial data presented herein are unaudited.
Note B: Related party transactions
The Company entered into a verbal agreement to rent office space from the
affiliate effective September 1, 1997. The agreement calls for monthly payments
of $1,000. As of September 30, 1998 the Company has accrued $13,000, which is
included in the accompanying financial statements as due to affiliate.
As of December 31, 1997, the Company owed an affiliate $84,926 for short-term
cash advances made during 1997 for working capital purposes. The affiliate
advanced an additional $20,600 during the first six months of 1998 and $17,700
during the three months ended September 30, 1998, The total $123,226 is recorded
in the financial statements as advance from affiliate.
Note C: Shareholders' equity (deficit)
An ex-officer and a current officer of the Company exercised a total of 200,000
options during the three months ended March 31, 1998 for total proceeds to the
Company of $4,000. The non-compensatory options were granted in 1997 at $.02 per
share. Of the 312,500 non-compensatory $.02 options granted in 1996, there are
75,000 options outstanding at September 30, 1998. All 350,000 options granted
for an exercise price of $1.00 per common share, resulting in compensation
expense in 1997 are still outstanding.
Note D: Income taxes
The Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". The Company incurred
net operating losses during the three months and nine months ended September 30,
1998 resulting in a deferred tax asset, which was fully allowed for, therefore
the net benefit and expense result in $0 income taxes.
Note E: Gain on termination of agreement
Management has determined not to pursue its option to extend its agreement with
respect to license rights obtained from Esikiman Mining Company Limited. At
December 31, 1997, the Company had recorded a deferred gain of $4,517 which has
been recognized in the third quarter 1998.
6
<PAGE>
KALAN GOLD CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1998
Note F: Subsequent events
Subsequent to September 30, 1998 the Company issued 1,300,000 shares of its
restricted common stock in exchange for four licenses to gold properties in the
African country of Burkina Faso. The properties are valued at $434,200.
The Company issued 1,000,000 shares of its restricted common stock in exchange
for services related to acquisition assistance valued at $334,000.
The Company issued 700,000 shares of its restricted common stock to affiliates
as payment for debt recorded at $233,800.
7
<PAGE>
Part I. Item 2. Plan of operation
KALAN GOLD CORPORATION
(A DEVELOPMENT STAGE COMPANY)
PLAN OF OPERATION
The plan of the Company's management, for the next twelve months, is to focus on
developing relationships with potential joint venture partners, in an attempt to
commence operations. Upon commencing operations, management expects positive
cash flow from operations, however there is no assurance that the Company will
achieve profitable operations. In addition, from time to time certain officers
infuse cash for working capital purposes on an as-needed basis. At September 30,
1998 the Company had two employees and, except for any potential mergers and/or
acquisitions, does not anticipate materially increasing the number of employees
in the next twelve months. On July 6, 1998 the Company's vice-president
resigned.
RESULTS OF OPERATIONS
No income producing operations were conducted during the most recent quarter.
Expenses, since year end, consisted of rent, salaries, legal, accounting and
audit fees, transfer agent costs, interest and depreciation.
FINANCIAL CONDITION
There have been no material changes to the Company's financial condition during
the three months ended September 30, 1998. All development stage activity has
been funded, in the form of cash working capital advances, by a major
shareholder and officer of the Company.
PART II - OTHER INFORMATION
Items 1 Through 5 - No response required.
Item 6 - Exhibits and reports on Form 8-K.
(a) Exhibits 27* Financial Data Schedule.
Reports on Form 8-K were filed on:
February 9, 1998 - Agreement to provide consulting services to Asean
Gold Industries, Inc.
July 7, 1998 - Resignation of Robert Goldman, Vice President and
Director
August 7, 1998 - Exploration option granted to SAMAX Exploration
Limited
August 14, 1998 - Resignation of Harry B. Ruskowsky, Director
August 19, 1998 - Resignation of Elmer B. Stewart, Director
November 3, 1998 - Issuance of restricted common shares
8
<PAGE>
SIGNATURES
The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of operations for the three months and nine months ended
September 30, 1998 have been included.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KALAN GOLD CORPORATION.
(Registrant)
DATE: November 10, 1998 BY:
Sanford Altberger
President and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0000940516
<NAME> KALAN GOLD CORP.
<MULTIPLIER> 1
<CURRENCY> U.S.DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 331
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,446
<DEPRECIATION> 3,686
<TOTAL-ASSETS> 2,091
<CURRENT-LIABILITIES> 180,313
<BONDS> 0
0
0
<COMMON> 73
<OTHER-SE> (178,295)
<TOTAL-LIABILITY-AND-EQUITY> 2,091
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 67,114
<OTHER-EXPENSES> (4,517)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,277
<INCOME-PRETAX> (68,874)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (68,874)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
