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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 March 31, 1999 Commission File Number 0-25658
Kalan Gold Corporation
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(Exact name of registrant as specified in its charter)
COLORADO 84-1357927
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Tower II, Suite 100, 12835 E. Arapahoe Road, Englewood, Colorado 80112
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(Address of principal executive offices) (Zip code)
(303) 706-1606
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(Registrant's telephone number, including area code)
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(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 94,990,999
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Class Number of shares outstanding at May 13, 1999
This document is comprised of 9 pages.
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FORM 10-QSB
1ST QUARTER
INDEX
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Page
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS *
Condensed balance sheet - March 31, 1999 (Unaudited) ................ 3
Condensed statements of operations - Three months ended
March 31, 1999 and March 31, 1998 (Unaudited) .................... 4
Condensed statements of cash flows - Three months ended
March 31, 1999 and March 31, 1998 (Unaudited) ..................... 5
Notes to condensed financial statements (Unaudited) ................. 6
ITEM 2. PLAN OF OPERATION .......................................... 7
PART II - OTHER INFORMATION ........................................... 7
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 .......................................................... 8
</TABLE>
* The accompanying financial statements are not covered by an independent
Certified Public Accountant's report.
2
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PART I. ITEM 1. FINANCIAL INFORMATION
KALAN GOLD CORPORATION
(A Development Stage Company)
Condensed Balance Sheet
March 31, 1999
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<S> <C>
CASH............................................................ $ 1,587
FURNITURE AND EQUIPMENT, NET.................................... 2,571
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TOTAL ASSETS 4,158
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LIABILITIES AND SHAREHOLDERS' DEFICIT
LIABILITIES
Accounts payable............................................. $ 44,038
Accrued liabilities.......................................... 750
Advance from affiliate (Note B).............................. 10,000
Due to affiliate (Note B).................................... 3,000
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TOTAL LIABILITIES 57,788
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SHAREHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.10 par value, 1,000,000 shares authorized,
-0- shares issued and outstanding......................... -
Common stock, $.00001 par value, 100,000,000 shares
authorized, 7,990,999 shares issued and outstanding....... 80
Additional paid-in capital................................... 392,341
Deferred compensation........................................ (36,000)
Deficit accumulated during development stage................. (410,051)
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TOTAL SHAREHOLDERS' DEFICIT (53,630)
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$ 4,158
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</TABLE>
See accompanying notes to condensed financial statements
3
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KALAN GOLD CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Condensed Statements of Operations
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<CAPTION>
January 1, 1993
(inception)
March 31, Through
---------------------------- March 31,
1999 1998 1999
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<S> <C> <C> <C>
COSTS AND EXPENSES
General and administrative .................... $ 23,354 $ 18,830 $ 360,324
Stock option expense .......................... - - 129,500
Depreciation .................................. 290 754 2,875
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INCOME (LOSS) FROM OPERATIONS (23,644) (19,584) (492,699)
OTHER INCOME (EXPENSE)
Gain on sale and termination of agreement ..... - - 103,164
Interest expense .............................. - 1,941 (20,516)
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NET INCOME (LOSS) $ (23,644) $ (21,525) (410,051)
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BASIC WEIGHTED AVERAGE
SHARES OUTSTANDING 7,290,999 7,198,333 3,773,327
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BASIC (LOSS) PER SHARE $ * $ * $ (.11)
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DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING 7,290,999 7,198,333 3,773,327
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DILUTED (LOSS) PER SHARE $ * $ * $ (.11)
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</TABLE>
* Less than $(.01) per share
See accompanying notes to condensed financial statements
4
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KALAN GOLD CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Condensed Statements of Cash Flows
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<CAPTION>
January 1, 1993
(inception)
March 31, Through
---------------------------- March 31,
1999 1998 1999
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<S> <C> <C> <C>
NET CASH (USED IN)
OPERATING ACTIVITIES $ (8,900) $ (14,531) $(250,519)
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INVESTING ACTIVITIES
Purchase of equipment .......................... - - (5,446)
Proceeds from sale of property ................. - - 145,945
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NET CASH PROVIDED BY
INVESTING ACTIVITES - - 140,499
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FINANCING ACTIVITIES
Proceeds from stock options exercised ......... - 4,000 4,750
Proceeds from advances from affiliate ......... 10,000 12,100 239,070
Repayments to affiliate ....................... - - (107,447)
Principal payments on long-term debt .......... - - (30,000)
Capital contribution .......................... - - 3,700
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NET CASH PROVIDED BY
FINANCING ACTIVITIES 10,000 16,100 110,073
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NET INCREASE IN CASH ............................. 1,100 1,569 53
Cash, beginning of period ........................ 487 968 1,534
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CASH, END OF PERIOD .............................. $ 1,587 $ 2,537 $ 1,587
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</TABLE>
See accompanying notes to condensed financial statements
5
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KALAN GOLD CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1999
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, 1998 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 March 31, 1999 the Company has accrued $3,000,
which is included in the accompanying financial statements as due to
affiliate.
As of March 31, 1999, the Company owed an affiliate $10,000 for short-term
cash advances made during the three months ended March 31, 1999, for working
capital purposes. The total $10,000 is recorded in the financial statements
as advance from affiliate.
NOTE C: SHAREHOLDERS' EQUITY (DEFICIT)
At December 31, 1998 the Company recorded deferred compensation to an officer
of $48,000. During the three months ended March 31, 1999, the Company
recorded compensation expense of $12,000, reducing the amount deferred at
March 31, 1999 to $36,000.
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 ended March 31,
1999 resulting in a deferred tax asset, which was fully allowed for,
therefore the net benefit and expense result in $0 income taxes.
NOTE E: EARNINGS PER SHARE
Diluted earnings per share do not include the increase in weighted average
shares outstanding that would result from the assumed exercise of outstanding
stock options, as the shares are anti-dilutive for all periods presented. Had
these shares been included in the calculation, diluted weighted average
common shares outstanding would have increased to 8,065,999, 7,715,000, and
3,900,743 for the three months ended March 31, 1999, the three months ended
March 31, 1998 and for the period January 1, 1993 (inception) through March
31, 1999, respectively.
NOTE F: SUBSEQUENT EVENT
On April 21, 1999, the Company acquired 100% of Animated Electronic
Industries Sdn Bhd, a private Malaysian company ("AEI"), in exchange for
87,000,000 shares of the Company's common stock. Concurrent with the merger
of the Company with AEI, the Company has commenced operations and is no
longer in the development stage.
6
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PART I. ITEM 2. PLAN OF OPERATION
KALAN GOLD CORPORATION
(A DEVELOPMENT STAGE COMPANY)
PLAN OF OPERATION
Concurrent with the Registrant's acquisition of Animated Electronic
Industries, a Malaysian company, the Registrant commenced operations in the
telecommunications industry. The Registrant also increased the board of
directors by appointing three individuals affiliated with AEI. During the
next twelve months the Registrant plans to focus on providing communications
services throughout the country of Malaysia.
RESULTS OF OPERATIONS
No income producing operations were conducted during the most recent quarter.
All operations of the Registrant will be those of AEI, and are attributable
to the Registrant subsequent to the most recent fiscal quarter. Expenses,
since year end and in the current quarter, consisted of rent, salaries,
accounting and audit fees, transfer agent costs, and depreciation.
FINANCIAL CONDITION
There were no material changes to the Company's financial condition during
the three months ended March 31, 1999. All development stage activity was
funded, in the form of cash working capital advances, by a major shareholder
and officer of the Company.
Subsequent to March 31, 1999, the Registrant completed an acquisition with a
Malaysian operating company, which the Registrant believes will provide
positive cash flow from operations. The registrant is anticipating a $50
million private placement of its securities during 1999. There is no
guarantee that the Registrant will generate positive income and cash flow
from its operations or will it be successful in its attempts to raise
additional capital.
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.
(b) Reports on Form 8-K were filed on:
April 21, 1999 - Changes in control of registrant, acquisition
of AEI, and change in directors.
7
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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 ended
March 31, 1999 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: May 14, 1999 BY:
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Patrick Soon-Hock Lim
President, Chief Executive Officer
and Director
DATE: May 14, 1999 BY:
------------------- ----------------------
Sanford Altberger
Director
8
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM KALAN GOLD
CORP. UNAUDITED BALANCE SHEET AS OF MARCH 31, 1999 AND THE RELATED STATEMENT OF
INCOME FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,587
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,446
<DEPRECIATION> 2,875
<TOTAL-ASSETS> 4,158
<CURRENT-LIABILITIES> 57,788
<BONDS> 0
0
0
<COMMON> 80
<OTHER-SE> (53,710)
<TOTAL-LIABILITY-AND-EQUITY> 4,158
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 23,644
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (23,644)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,644)
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>LESS THAN $.01 PER SHARE
</FN>
</TABLE>
