UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month ofOctober 2004
Commission File No.0-32255
BALATON POWER INC.
(Translation of registrant's name into English)
19 East Fourth Avenue, Hutchinson, Kansas 67501
(Address of principal executive office)
[Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F]
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [ ]
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) [ ]
Note:Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):N/A
Page 1
Balaton Power Inc.
Consolidated Balance Sheets
(Expressed in US Dollars)
(Unaudited)
ASSETS | June 30, 2004 | Dec. 31, 2003 |
Current |
|
|
Cash | $154,674 | $1,690 |
Prepaid expenses and sundry | - | 1,241 |
| 154,674 | 5,931 |
Note receivable | 481,724 | 481,724 |
Mineral property | 1,145,163 | 1145,163 |
| $1,781,561 | $1632,818 |
LIABILITIES |
|
|
Current |
|
|
Accounts payable and accrued liabilities | $1,348,069 | $1491,038 |
Convertible loans | 179,779 | 179,779 |
Loan payable (Note 3) | 30,000 | - |
| 1,557,843 | 1,670,817 |
Minority interest | 26,995 | 26,995 |
Loan payable (Note 3) | - | 30,000 |
| 1,584,838 | 1,727,812 |
SHAREHOLDERS' EQUITY (DEFICIENCY) |
|
|
Share capital (Note 4) | 3,719,783 | 2,815,892 |
Deficit | (3,523,060) | (2,910,886) |
| 196,723 | (94,994) |
| $1,781,561 | $1,632,818 |
Page 2
Balaton Power Inc.
Consolidated Statements of Operations and Deficit
(Expressed in US Dollars)
For the Six Month Period Ended June 30, 2004
(Unaudited)
2004 | 2003 | |
Revenue | $ - | $ - |
Expenses |
|
|
Administration and general | 111,814 | 94,370 |
Consulting fees and commissions | - | 72,000 |
Professional fees | 499,384 | 12,814 |
Interest | 976 | 3,000 |
| 612,174 | 183,184 |
Net loss | (612,174) | (183,184) |
Deficit, beginning of period | (2,910,886) | (2,596,689) |
Deficit, end of period | $(3,523,060) | $(2,779,873) |
Loss per common share | $(0.0089) | $(0.0028) |
Page 3
Balaton Power Inc.
Consolidated Statements of Operations and Deficit
(Expressed in US Dollars)
For the Three Month Period Ended June 30, 2004
(Unaudited)
| 2004 | 2003 |
Revenue | $ - | $ - |
Expenses |
|
|
Administration and general | 86,158 | 9,429 |
Professional fees | 476,325 | 7,728 |
Depletion | 488 | - |
| 562,970 | 17,157 |
Net loss | (562,970) | (17,157) |
Deficit, beginning of period | (2,960,089) | (2,762,716) |
Deficit, end of period | $(3,523,060) | $(2,779,873) |
Loss per common share | $(0.0082) | $(0.0003) |
Page 4
Balaton Power Inc.
Consolidated Statement of Cash Flows
(Expressed in US Dollars)
For the Six Month Period Ended June 30, 2004
(Unaudited)
| 2004 | 2003 |
Cash provided by (used in): |
|
|
Operating activities |
|
|
Net loss | $(612,174) | $(183,184) |
Shares issued and to be issued for services, an item not affecting cash | 552,891 | 117,402 |
| (59,283) | (65,782) |
Changes in non-cash working capital components |
|
|
Prepaid expenses | 1,241 | 9,441 |
Accounts payable and accrued liabilities | (142,974) | 28,893 |
| (201,016) | (27,448) |
Financing activities: |
|
|
Sale of common shares for cash | 351,000 | - |
Increase (decrease) in cash | 149,984 | (27,448) |
Cash, beginning of period | 4,690 | 28,080 |
Cash, end of period | $154,674 | $632 |
Page 5
Balaton Power Inc.
Consolidated Statement of Cash Flows
(Expressed in US Dollars)
For the Three Month Period Ended June 30, 2004
(Unaudited)
| 2004 | 2003 |
Cash provided by (used in): |
|
|
Operating activities |
|
|
Net loss | $(562,971) | $(17,157) |
Shares issued and to be issued for services, an item not affecting cash | 518,763 | - |
| (44,208) | (17,157) |
Changes in non-cash working capital components |
|
|
Prepaid expenses | 20,000 | - |
Accounts payable and accrued liabilities | (153,169) | 11,965 |
Convertible loans | - | 1,241 |
| (177,377) | (3,951) |
Financing activities: | 351,000 | - |
Sale of common shares for cash | 81,000 | - |
Decrease in cash | (96,377) | (3,951) |
Cash, beginning of period | 251,051 | 4,583 |
Cash, end of period | $154,674 | $632 |
Page 6
Balaton Power Inc.
Notes to Consolidated Financial Statements
(Expressed in US Dollars)
June 30, 2004
(Unaudited)
1. Significant accounting policies
The disclosure contained in the unaudited consolidated financial statements does not include all the requirements of generally accepted accounting principles for annual financial statements. The unaudited interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2003.
Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end and the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal year. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments, which are necessary to present fairly the financial position of the company as of June 30, 2004 and the results of operations and cash flows for the six months ended June 30, 2004 and June 30, 2003.
2. Income taxes
At June 30, 2004 the Company's income tax expense was nil.
3. Loan Payable
The loan payable is due to a company related to a shareholder of the Company, bears interest at 6.5% per annum, payable at maturity June 30, 2005.
4. Share Capital
Authorized: 700,000,000 common shares without par value
Issued and fully paid | Shares | Amount |
Balance - December 31, 2003 | 66,762,214 | $ 2,815,892 |
Private placement for cash | 1,000,000 | 250,000 |
Exercise of warrants for cash | 310,000 | 101,000 |
Issued for fees and services | 284,576 | 34,128 |
Issued July 13, 2004 for fees and services | 2,075,054 | 518,763 |
| 70,431,844 | $ 3,719,783 |
Page 7
Balaton Power Inc.
Notes to Consolidated Financial Statements
(Expressed in US Dollars)
June 30, 2004
(Unaudited)
The private placement was for 1,000,000 units at a price of $0.25 per unit. Each unit consists of one common share and one warrant to purchase one common share at a price of $0.40 per share expiring on September 30, 2005.
The shares issued for fees and services on July 13, 2004 was for 2,075,054 units at a price of $0.25 per unit. Each unit consists of one common share and one warrant to purchase one common share at a price of $0.40 per share expiring on July 13, 2006.
At June 30, 2004, the following warrants were outstanding:
Amount | Price | Expiry |
150,000 | $0.20 | July 17, 2004 (83,333 subsequently exercised, balance expired) |
1,780,000 | 0.30 | July 17, 2004 (745,000 subsequently exercised, balance expired) |
600,000 | 0.20 | August 9, 2004 (subsequently exercised) |
60,000 | 0.20 | August 15, 2004 (subsequently exercised) |
730,000 | 0.30 | September 15, 2004 |
200,000 | 0.20 | September 15, 2004 |
225,000 | 0.20 | September 30, 2004 |
2,592,980 | 0.50 | December 31, 2004 |
1,000,000 | 0.40 | September 30, 2005 |
At June 30, 2004, the following employee stock options were outstanding:
3,000,000 | $0.50 | December 31, 2005 |
400,000 | 0.50 | January 2, 2007 |
1,300,000 | 0.40 | June 25, 2009 |
Page 8
Balaton Power Inc.
Notes to Consolidated Financial Statements
(Expressed in US Dollars)
June 30, 2004
(Unaudited)
5. Comments for U.S. readers
Differences in the Generally Accepted Accounting Principles ("GAAP") between those utilized in Canada and those utilized in the United States create differences in the treatment of certain transactions and the disclosures contained in the financial statements. Accordingly, disclosure of those differences and a reconciliation with United States accounting practices is appropriate for United States readers of the financial statements.
Statement of shareholders' deficiency
Share Capital
| Share Capital |
|
| |
| Shares | Amount | Deficit | Total |
Balance at December 31, 2003 | 66,762,214 | $2,815,892 | $(2,910,886) | $(94,994) |
Issued for cash | 1,310,000 | 351,000 | - | 351,000 |
Issued and to be issued for services | 2,359,630 | 552,891 | - | 552,891 |
Net loss | - | - | (612,174) | (612,174) |
Balance at June 30, 2004 | 70,431,844 | $3,719,783 | $(3,523,060) | $196,723 |
AMENDED
(October 5, 2004)
BALATON POWER INC.
MANAGEMENT DISCUSSION AND ANALYSIS FOR THE PERIOD ENDED JUNE 30, 2004
The following discussion and analysis of the operations, results and financial position of Balaton Power Inc. (the "Company") for the six-month period ended June 30, 2004, should be read in conjunction with the unaudited financial statements and notes for the six-month period ended June 30, 2004. Additional information for the Company may be obtained at www.sedar.com. This discussion is dated October 5, 2004, amending the Management Discussion and Analysis dated August 31, 2004. All funds are expressed in US dollars unless otherwise noted.
FORWARD LOOKING STATEMENTS
Except for historical information, the Management Discussion and Analysis may contain forward-looking statements. These statements involve known and unknown facts, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or other achievements to be materially different from any future results, levels of activity, performance or achievement expressed or implied by these forward-looking statements. Moreover, neither the Company or anyone else assumes responsibility for the accuracy and completeness of these forward-looking statements. The Company is under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on the forward-looking statements.
DESCRIPTION OF BUSINESS
The Company is engaged in developing a bauxite deposit situated in the State of Orissa, India (the "Gandhamardan Bauxite Deposit") through a joint venture agreement between the Company's wholly owned subsidiary Continental Resources (USA) Ltd. ("CRL") and Orissa Mining Corporation ("OMC"). Prior to the Company's focus on the Gandhamardan Bauxite Deposit, the Company pursued the sale of its patented process for a fish protection device (the "Pisces Process") and hydro electrical permits held by its wholly owned subsidiary Snoqualmie River Hydro Inc. ("Hydro Permits"). The Company plans to pursue a buyer for the Pisces Process at a later date. The Company wrote down its interests in the Pisces Process and Hydro Permits in its audited financial statements of 2002.
Gandhamardan Bauxite Deposit
The Gandhamardan Bauxite Deposit is located at the top of Gandhamardan hill near the town of Duragali, State of Orissa, India. This hill, which has a plateau top, is linear aligned in a Northeast-Southwest direction. The hill straddles the boundary, between Balangir District to the Southeast, and Sambalpur District to the Northwest, in the west central part of the State of Orissa, in eastern India.
Gandhamardan is bounded by Latitudes 20 degrees and 50 minutes and 20 degrees 55 minutes North, and Longitudes 82 degrees 451 and 82 degrees 54 minutes East. It plots on Survey of India topographic sheet NTS 64L/l3. Gandhamardan hill extends in a Northeast-Southwest direction for a length of 9.8 kms. Width ranges from 0.4 to 2.6 kms, and averages 0.75 km. The top of the hill is a plateau, with an areal extent of 7.4 kms2. The bauxite zone covers an area of 734 hectares. Due to its large size and lineal alignment, the deposit has been divided into 10 l-km wide blocks, numbered 1 to 10.
The bauxite is overlain by laterite, and the discontinuous layer of lateritic soil. This color, granular, and high in silica and iron a thickness of up to several centimeters.
The laterite is also rusty-red in color, and high in silica and iron. The weathered surface is irregular, porous, and craggy. The upper portion of the laterite is hard, reflecting a relatively higher silica content than the lower portion. Iron content also decreases with depth, while aluminous content increases. The laterite varies in. thickness from 0.3 to 12.0 meters, and averages 5.0 meters. The laterite grades downwards into bauxite.
The bauxite layer ranges from 4.3 to 35.0 meters in thickness, and averages 16.6 meters. It varies in color from pinkish-red to yellowish-brown, buff, or brown. It is medium to fine grained, massive and compact. Vesicular and pisolitic textures may be displayed. Hardness varies from 2.5 to 3.5. Banding and foliation are sometimes evident. The bauxite is composed mainly of the minerals gibbsite and hematite, which together comprise about 95%. The remaining 5% is a mixture of several oxide minerals in minor and trace amounts.
SELECTED FINANCIAL INFORMATION
The following information is taken from the Company's Audited Financial Statements for the years ended December 31, 2003, 2002 and 2001. During the last quarter of 2002, the Company acquired CRL and such change is reflected in the financial statements for 2001 and 2002 below:
(US$) | 2003 | 2002 | 2001 |
Balance Sheet Data | |||
Total assets according to | |||
financial statements (CDN GAAP) | 1,632,818 | 1,664,408 | 257,722 |
Total assets (US GAAP) | 1,632,818 | 1,664,408 | 257,722 |
Total liabilities | 1,727,812 | 1,663,097 | 223,974 |
Share capital | 2,738,402 | 2,598,000 | 2,636,816 |
Retained earnings (deficit) | (2,910,886) | (2,596,689) | (3,058,184) |
Retained earnings (deficit) (US GAAP) | (2,910,886) | (2,596,689) | (3,058,184) |
Period End Balances (as at) | |||
Working capital | 1,664,886 | (1,598,581) | (23,471) |
Properties | 1,145,163 | 1,145,163 | 181,471 |
Shareholders' equity | (94,994) | 1,311 | (3,058,184) |
Number of outstanding shares | 66,762,2141 | 64,988,194 | 21,004,194 |
Statement of Operations Data | |||
Revenue | - | 24,899 | - |
Production costs | - | 22,398 | - |
Writedown of resource properties | - | 1,895,987 | - |
General and administrative expenses | 314,917 | 232,587 | 695,811 |
Income (loss) according to financial | |||
statements (CDN GAAP) | (314,917) | (2,126,073) | (696,160) |
Loss per common share (CDN GAAP) 2 | 0.01 | (0.05) | (0.03) |
Loss per common share (US GAAP)(2) | (0.01) | (0.05) | (0.03) |
Notes:
(1) During the year 2003, a shareholder subscribed for 1,200,000 common shares for net cash proceeds of $77,490 to the Company. Such shares were not issued to the shareholder until after the year-end. As such, the number of issued and outstanding shares and retained earnings as at December 31, 2003 do not reflect this transaction.
(2) Stock options and warrants outstanding were not included in the computation of diluted loss per share as their inclusion would be anti-dilutive.
OPERATIONS
During the end of March and beginning of April 2004, CRL held meetings with OMC to discuss terms and conditions for a new joint venture agreement to develop the Gandhamardan Bauxite Deposit. Based upon these discussions, CRL's interest in the mining phase would increase and would place 100% of the down stream facilities (alumina plant and aluminum smelter) in favour of CRL. The Company expects that a formal joint ventureagreement will be reached with OMC during the fourth quarter of 2004.
Financial statements of the Company are consolidated with that of CRL. The Company's business is solely focused on developing the Gandhamardan Bauxite Deposit which has incurred extensive professional fees during the quarter ended June 30, 2004. Total professional fees, including those incurred with respect to the Gandhamardan Bauxite Deposit, totaled $386,600 for the current quarter compared to $12,814 for the same period in 2003. This increase is directly related to expenses associated with North American and Indian consultants advising on the Gandhamardan Bauxite Deposit. The following is a list of expenditures incurred under the heading "professional fees" reported in the Statement of Operations for the period ended June 30, 2004:
Expenditure | Amount (US$) |
Administration | 90,000 |
Consulting | 20,000 |
Advisory | 30,000 |
Travel | 25,000 |
Public Relations | 72,000 |
Transfer Agent Fees | 6,750 |
Misc. expenses | 26,250 |
Financial & Strategic Planning Services | 75,000 |
Legal | 41,600 |
Total | 386,600 |
Currently, the Company's monthly working capital requirements exclusive of that required for the Gandhamardan Bauxite Deposit total approximately $17,500. The Company's anticipated working capital requirements, including working capital for the Gandhamardan Bauxite Deposit, would total approximately $2,000,000. The Company believes that the most efficient way to further explore and potentially develop the Gandhamardan Bauxite Deposit, including a required feasibility study, is through the establishment of a consortium of entities. The Company has not confirmed specific consortium partners although several parties have expressed interest. CRL is confident that a consortium will be formed where CRL will be sheltered from the majority of the feasibility study expenditures. Any relationship obtained with a major aluminum company would have a significant positive effect on the liquidity of the Company.
There is no assurance that the Company will be able to form a consortium, or what the terms of any consortium formed will be. If the Company is unable to locate suitable partners, the Company will have to seek additional financing to carry out a feasibility study, which would put a significant strain on the Company's financial resources.
The Company believes that the impact of foreign currency fluctuations will not adversely affect the Company. The Canadian/U.S. dollar exchange rate has been improving in favor of the Canadian dollar. The current exchange rate is $1.30 Canadian dollars for each U.S. dollar. The Company does not take any steps to hedge against currency fluctuations.
SUMMARY OF QUARTERLY RESULTS
The following table provides a summary of the Company's financial statements for the past eight quarters. The material change in the Company's assets and liabilities are noticeable between September 30, 2002 and December 31, 2002 is when the acquisition of Continental Resources (USA) Ltd. occurred. This is the quarter reflecting the time when the operations of the Company became focused on the bauxite project in India.
(US$) | 2004 | 2003 | 2002 | |||||
| Mar. 31 | Dec. 31 | Sept. 30 | Jun. 30 | Mar. 31 | Dec. 31 | Sept. 30 | Jun. 30 |
Total Assets | 1,897,938 | 1,632,818 | 1,627,147 | 1,627,519 | 1,632,711 | 1,644,408 | 278,402 | 288,732 |
Total Liabilities | 1,738,007 | 1,727,812 | 1,714,353 | 1,691,990 | 1,680,025 | 1,663,097 | 244,819 | 254,833 |
Shareholders' Equity | 159,931 | (94,994) | (87,206) | (64,471) | (47,314) | 1,311 | 33,583 | 33,899 |
Revenue | -0- | -0- | -0- | -0- | -0- | 24,899 | -0- | -0- |
Major Expenses: |
|
|
|
|
|
|
|
|
Write down of resource properties | -0- | -0- | -0- | -0- | -0- | 1,542,210 | -0- | 0-0 |
Administration & General | 25,656 | 79,313 | 20,603 | 9,429 | 85,941 | 9,600 | 73,749 | 307,382 |
Consulting fees and commissions | -0- | -0- | -0- | -0- | 72,000 | 77,085 | 34,345 | 64,070 |
Professional fees | 23,059 | 34 | 22,132 | 7,728 | 5,086 | 2,035 | 2,722 | 15,559 |
Interest | 488 | 8,931 | -0- | -0- | 3,000 | 3,000 | -0- | -0- |
Net Loss | 49,203 | 88,278 | 42,735 | 17,157 | 166,027 | 1,609,031 | 110,816 | 393,835 |
Loss per Common Share | $0.0007 | $0.001 | $0.025 | $0.01 | $0.0025 | $0.004 | $0.02 | $0.0187 |
LIQUIDITY AND CAPITAL RESOURCES
Private Placements
On March 30, 2004, the Company closed a non-brokered private placement of one million units at a price of $0.25 per unit for gross proceeds of $250,000. Each unit consists of one common share of the Company and one non-transferable share purchase warrant. Each share purchase warrant entitles the holder for 18 months from the date of issue of the share purchase warrant to acquire one additional common share in the capital of the Company at an exercise price of $0.40. The share purchase warrant will expire on September 30, 2005. The shares were subject to a four month hold period which expired on July 30, 2004.
On August 31, 2004, the Company closed a non-brokered private placement of 600,000 units at a price of $0.30 per unit for gross proceeds of $180,000. Each unit consists of one common share of the Company and one non-transferable share purchase warrant. Each warrant entitles the holder for 24 months from the date of issue of the warrant share to acquire one additional common share in the capital of the Company at an exercise price of $0.40. The share purchase warrant will expire on August 31, 2006. These shares are subject to a four month hold period which expire on January 1, 2005.
Debt Settlements
On March 30, 2004, the Company settled CAD$15,598.87 of outstanding debt at a deemed price of CAD$0.08 per share resulting in the issuance of 194,986 common shares in the capital of the Company. The Company also settled approximately $22,397.39 of outstanding debt, which was negotiated in February, 2004, at a deemed price of $0.25 per share resulting in the issuance of 89,590 common shares in the capital of the Company. No insiders of the Company participated in these debt settlement arrangements.
On July 13, 2004, the Company settled $518,763.30 of outstanding debt with three parties at a deemed price of $0.25 per unit resulting in the aggregate issuance of 2,075,054 units in the capital of the Company. Each unit consists of one common share and one non-transferable share purchase warrant entitling the holder to purchase one additional common share in the capital of Company up to 24 months after the date of issuance at an exercise price of $0.40 per common share. No insiders of the Company participated in these debt settlement arrangements. The share purchase warrant will expire on July 13, 2006. These shares are subject to a four-month hold period which expire on November 13, 2004.
On August 31, 2004 the Company settled $36,024.80 of outstanding debt at a deemed price of $0.30 per unit resulting in the issuance of 120,083 units in the capital of the Company. Each warrant share entitles the holder for 24 months from the date of issue of the warrant share to acquire one additional common share in the capital of the Company at an exercise price of $0.40. The warrant shares will expire on August 31, 2006. The shares are subject to a four-month hold period which will expire on January 1, 2005. No insiders of the Company participated in the shares for debt arrangement.
Exercise of Warrants
For the period ended June 30, 2004, the Company had 310,000 shares of its common stock purchased through the exercising of warrants providing the Company with $101,000.
Subsequent to the end of the quarter ended June 30, 2004, to the date of this Amendment, the Company had 2,388,333 shares issued from the exercise of warrants for an aggregate of $652,166.60. Additional warrants will expire during the second half of 2004, which could provide additional funding to the Company. See Note 4 of the financial statements for additional information.
Current Operations
Currently, the Company has adequate cash to maintain operations (exclusive of exploration and development of the Gandhamardan Bauxite Deposit) during the next twelve months due to successful financing as mentioned above. Additional sources for capital resources could come from the exercise of warrants that are scheduled to expire in the fourth quarter of 2004.
The Company continues to have capital requirements in excess of its current resources. As the Company continues to explore and develop the Gandhamardan Bauxite Deposit, the Company's operational expenses will continue to increase which will in turn increase the Company's losses until the Gandhamardan Bauxite Deposit earns a profit. Currently and for the foreseeable future, the Company's only source of capital is from the sale of its securities. The Company expects that this trend will continue until it finalizes an agreement with a major company or establishes a consortium for the development of the Gandhamardan Bauxite Deposit.
As at June 30, 2004, the Company had a $1,781,561 working capital deficit. Of these liabilities, $1.1 million are from CRL's expenditures on the Gandhamardan Bauxite Deposit through COMPL and $400,000 are from CRL's domestic resource operations. Subsequent to June 30, 2004, the Company's working capital deficit was reduced through debt settlements and the exercise of warrants. The parties to whom these expenditures are owed have not made demand for payment. Based upon the Company's relations with these parties, the Company does not expect them to make demand for repayment until the Company has sufficient resources. The Company is dependant on the continued forbearance of these creditors and there is no guarantee that such forbearances will continue. If such forbearances do not continue, the Company may be adversely affected. The remaining $180,000 working capital deficit is a disputed payable to S. J. Roth Capital Placement Inc.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has not entered into any off-balance sheet arrangements.
RELATED PARTY TRANSACTIONS
For the six-months ended June 30, 2004, the Company did not have any transactions with its officers, directors or control shareholders
DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE
The Company is a development stage resource company. No revenues were reported during the past three financial years and no revenues were reported during the six months of operations of 2004.
The Company ceased promoting the Pisces Process and devoted the majority of its business focus on CRL, the Gandharmardan Bauxite Deposit and to a lesser extent on discussions with interested parties who wish to purchase the subsidiary Snoqualmie River Hydro Inc.
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.
BALATON POWER INC.
Date: November 16, 2004
/s/ Robert Wyllie
________________________________
Name: Robert Wyllie
Title: Chief Financial Officer
