U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED April
30, 1996.
TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE TRANSITION PERIOD FROM
__________________TO _________________
Commission file number 0-25798
Heritage Mines, Ltd.
(Exact name of small business issuer as specified in its charter)
Colorado 84-1293168
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
660 Newport Center Drive, Suite 1030, Newport
Beach, CA 92660
(Address of principal executive offices) (Zip Code)
(714) 760-8001
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (a) 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 registrant was required to file such reports),
and (2) has been subject to such filing requirements for
the past 90
days. . Yes..X.. No....
Applicable only to issuers involved in bankruptcy
proceedings during the preceding five years
Check whether the registrant filed all documents and
reports required to be filed by Section 12, 13 or 15(d)
of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes.... No....
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. 10,169,000 shares as of
July 31, 1996
Transitional Small Business Disclosure Format
(Check one):
Yes.... No.X..
Form 10-QSB
<PAGE>
PART 1-FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS AND EXHIBITS
Consolidated financial statements for Heritage Mines,
Ltd. as and for the quarter ending April 30, 1996, and
the comparable period of the preceeding fiscal year.
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION
As of the end of the first quarter, the Company
had not yet begun revenue generating operations. The
Company plans to complete a geological report on its
mining claims and to commence revenue producing
operations during its current fiscal year.
Subsequent to the end of the first quarter, and as
of July 31, 1996, the Company had raised $140,000.00
in new debt financing and $355,125.00 in additional
equity capital through a $500,000.00 private placement
offering. Assuming the Company is able to complete
its current equity private placement offering,
Management believes that such funds will be sufficient
to enable the Company to commence revenue
generating operations, and to complete the geological
report on its mining claims. There are no assurances,
however, that such funds will be sufficient to
accomplish the specified objectives, or that Company
operations will be profitable.
It is anticipated that the Company will require
additional capital in the future for further development
expenses in order to determine additional ore reserves.
Management has not yet determined the amount of
additional capital which may be required, nor has it
determined whether the Company will seek to raise
such additional capital during the current fiscal year.
No adjustments have been made to the
accompanying financial statements to provide for any
of the foregoing uncertainties.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27 - FINANCIAL DATA SCHEDULE
(b) REPORTS ON FORM 8-K. Three reports on
Form 8-K were filed during the quarter for which this
report is filed. Two of such reports, both of which were
dated February 22, 1996, were filed to report a change
in the registrant's certified public accountant. The third
report on Form 8-K was dated March 6, 1996, and
reported a change in control of the Company as well as
an acquisition of assets.
Signatures:
In accordance with the requirements of the
Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
HERITAGE MINES, LTD.
_____________________________________
(Registrant)
Date: August 6, 1996
/s/ James D. Stout
______________________________________
James D. Stout, President, (Signature)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> APR-30-1996
<CASH> 106,448
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 120,501
<PP&E> 1,334,511
<DEPRECIATION> 86,533
<TOTAL-ASSETS> 1,428,818
<CURRENT-LIABILITIES> 301,743
<BONDS> 0
0
0
<COMMON> 221,514
<OTHER-SE> 1,663,413
<TOTAL-LIABILITY-AND-EQUITY> 1,428,818
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,550
<INCOME-PRETAX> (448,657)
<INCOME-TAX> 0
<INCOME-CONTINUING> (448,657)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (448,657)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
CONSOLIDATED FINANCIAL STATEMENTS
(A Development Stage Company)
HERITAGE MINES, LTD.
Quarter Ended April 30, 1996<PAGE>
HERITAGE MINES, LTD.
(A Development Stage Company)
Index to
Consolidated Financial Statements
Consolidated Financial Statements 1
Consolidated Statement of Operations 4
Consolidated Statement of Cash Flows 5
Notes to Consolidated Financial Statements 8
<PAGE>
HERITAGE MINES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE QUARTER ENDED
APRIL 30, 1996
(UNAUDITED)
_______________
The following consolidated balance sheet
(unaudited) as of April 30, 1996 and the
consolidated statement of operations (unaudited) for
the quarter ended April 30, 1996, give effect to the
acquisition of all the outstanding shares of Heritage
Gold Mines, Inc. by Heritage Mines, Ltd., which
acquisition was completed on March 6, 1996 and
accounted for as a reverse merger. The
consolidated information is based on the historical
financial statements of Heritage Gold Mines, Inc.
(including its post Reorganization subsidiaries GWZ
Management Company, Inc. (GWZ) and WAZCO,
Inc. (WAZCO) and Heritage Mines, Ltd. and
includes assumptions and adjustments set forth in
the accompanying notes to the consolidated financial
statements.<PAGE>
HERITAGE MINES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE QUARTER ENDED
APRIL 30, 1996
(UNAUDITED)
_______________
<TABLE>
<CAPTION>
April 30, 1996 April 30, 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents 106,448 1,121
Other current assets 14,053 -
Subscriptions
receivable - 5,000
TOTAL CURRENT
ASSETS 120,501 6,121
PROPERTY, PLANT,
EQUIPMENT AND MINE
DEVELOPMENT COSTS,
NET 1,247,978 611,773
OTHER ASSETS
Other Assets 60,338 49,100
TOTAL OTHER ASSETS 60,338 49,100
TOTAL ASSETS 1,428,818 676,994
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
LIABILITIES
Accounts payable 2,750 -
Accrued liabilities 204,719 20,662
Notes and advances to
stockholders and
related parties - 383,000
Notes payable 86,640 -
Accrued interest 7,634 16,248
TOTAL CURRENT
LIABILITIES 301,743 419,910
STOCKHOLDERS' EQUITY
(DEFICIT)
Common Stock 221,514 120,469
Additional paid-in
capital 1,663,413 -
Deficit accumulated
during the
development stage (757,853) 36,615
TOTAL STOCKHOLDERS'
EQUITY (DEFICIT) 1,127,075 257,084
TOTAL LIABILITIES
AND STOCKHOLDERS'
EQUITY (DEFICIT) 1,428,818 676,994
/TABLE
<PAGE>
HERITAGE MINES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
AS OF AND FOR THE QUARTER ENDED
APRIL 30, 1996
(UNAUDITED)
_______________
<TABLE>
<CAPTION> Period from
Quarter Quarter Inception
Ended Ended (5/11/92)
4/30/96 4/30/95 thru 4/30/96
<S> <C> <C> <C>
REVENUES
Operating Revenue - - 29,996
TOTAL REVENUES - - 29,996
OPERATING COSTS
General and
Administrative 303,070 3,530 793,681
Depreciation 12,036 6,250 88,199
TOTAL OPERATING
COSTS 315,106 9,780 881,880
LOSS FROM
OPERATIONS (315,106) (9,780) (851,880)
OTHER INCOME
(EXPENSE)
Interest expense, net (8,550) (398) (18,178)
Other Income - 823 237,210
Other expense (125,000) - (125,000)
NET LOSS (448,657) (9,354) (757,853)
NET LOSS PER SHARE (0.0416) - -
WEIGHTED AVERAGE
COMMON SHARE 10,794,789
/TABLE
<PAGE>
HERITAGE MINES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
AS OF AND FOR THE QUARTER ENDED
APRIL 30, 1996
(UNAUDITED)
_______________
<TABLE>
<CAPTION>
Period from
Quarter Quarter Inception
Ended Ended (5/11/92)
4/30/96 4/30/95 thru 4/30/96
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING
ACTIVITIES
Net Loss (448,657) (9,354) (757,853)
Adjustments to
reconcile net loss
to cash used in
operating activities:
Depreciation 12,036 6,250 88,199
Stock issued - - 1,045
Changes in assets
and liabilities - -
Other current assets 9,548 - (14,053)
Restricted cash - - (17,880)
Accounts payable 2,750 - 2,750
Accrued liabilities 54,198 2,923 204,718
Accrued interest 7,672 6,731 53,048
NET CASH AND CASH
EQUIVALENTS
PROVIDED (USED)
BY OPERATING
ACTIVITIES (362,453) 6,550 (440,026)
CASH FLOWS FROM
INVESTING
ACTIVITIES
Purchase of property
and equipment (65,730) (3,318) (152,790)
Mine development
costs (152,235) - (528,083)
Construction in
progress (16,001) (2,918) (175,936)
Deposits 3,000 - (7,458)
Mining Claims - - (20,000)
Other Investments - - -
NET CASH AND CASH
EQUIVALENTS PROVIDED
(USED) BY INVESTING
ACTIVITIES (230,966) (6,236) (884,267)
CASH FLOWS FROM
FINANCING
ACTIVITIES:
Issuance of common
stock for cash - - 112,500
Proceeds from notes
payable to related
parties 676,323 - 1,050,000
Proceeds from notes
payable - - 36,640
Advances from
related parties - - 280,000
Repayment of notes
payable (48,400)
NET CASH AND CASH
EQUIVALENTS
PROVIDED (USED)
BY FINANCING
ACTIVITIES 676,323 - 1,430,740
NET INCREASE
(DECREASE) IN
CASH AND CASH
EQUIVALENTS 82,905 314 106,448
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
YEAR 23,543 806 -
CASH AND CASH
EQUIVALENTS,
END OF YEAR 106,448 1,121 106,448
/TABLE
<PAGE>
HERITAGE MINES, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
AS OF AND FOR THE QUARTER ENDED
APRIL 30, 1996
(UNAUDITED)
_______________
1. GENERAL
The consolidated balance sheet (unaudited) as
of April 30, 1996 and the consolidated
statement of operations (unaudited) for the
quarter ended April 30, 1996 reflect the
following reorganization (the
"Reorganization"):
- Heritage Gold Mines, Inc. acquired 100%
of the stock of WAZCO and GWZ from
the common stockholders. In accordance
with SEC practice, the exchange of shares
between companies under common control
is accounted for as if the combinations
were a pooling of interest. Heritage Gold
Mines, Inc. is presented herein
consolidated with its two subsidiaries,
WAZCO and GWZ.
- On March 6, 1996, Heritage Gold Mines,
Inc. merged with Heritage Mines, Ltd., a
"public shell," with no major assets or
liabilities. From November 1995 through
April 1996, Heritage Mines, Ltd., through
its majority shareholder, obtained
$1,000,000 through a private placement,
which was used for mining development
costs and working capital.
- As part of the Reorganization, several
notes payable to shareholders and related
parties and related accrued interest thereon
were contributed to capital or converted to
stock.
2. SUBSEQUENT EVENTS
Subsequent to the quarter end, the Company
has raised $355,125 in equity capital through
a $500,000 private placement offering and an
additional $140,000 in debt financing as of
July 31, 1996. In addition, the Company
exchanged 80,000 shares of common stock
for the accrued salaries and expenses of
certain employees and curtailed future
accruals for salaries and expenses. In June
1996, a shareholder paid accrued legal fees
of $50,000 through the sale of stock..
