FISCHER-WATT GOLD COMPANY, INC.
_______________________________________________________________________
2582 Taft Court, Lakewood, CO 80215
January 9, 2009
Ms. Jill Davis
Branch Chief
US SEC
Washington
DC 20549 – 7010
Re: Fischer-Watt Gold Company, Inc.
Form 10-K for the Fiscal Year Ended Jan. 31, 2008
Filed on April 30, 2008
Response Letter Dated May 2, 2008
Response Letter Dated July 14, 2008
Response Letter Dated November 12, 2008
File No. 000-17386
Dear Ms. Davis,
In response to your letter of December 3, 2008, we offer the following answers to your comments in the same numbered order as in your letter.
Draft Consolidated Financial Statements as of and for the Years Ended January 31, 2008 and January 31, 2007
1.
We have included the $360,000 of compensation expense in general and administrative expense as opposed to offsetting the proceeds from the sale of Montoro in Other Income. Please see the revised draft of the consolidated financial statements included with this letter.
2.
The financial statements have been revised to include the caption “Restated”. The following has been included in Note 1 to our financial statements: The January 31, 2008 financial statements have been restated to reflect the correction of an error in the amount of $360,000. This amount represents the fair market value of options granted to The Astra Ventures Inc. The result of this correction was an increase in additional paid in capital and accumulated deficit of $360,000 at January 31, 2008, an increase in general and administrative and stock option expense, and a reduction of net income in the amount of $360,000 for the year ended January 31, 2008. There was no effect on previously reported net income per share.
__________________________________________________________________
Ms. Jill Davis
Branch Chief
January 9, 2009
Page 2
3.
We have noted your reference to SFAS 123(R) and have booked the transaction in the quarter ending July 31, 2007 when the transaction closed. The value of the options booked is $360,000.
4.
We have noted your comment and the disclosure will not be repeated.
5.
We have revised our citation to reference the correct rules.
Closing Comments
If you have any further questions or comments please contact me.
Sincerely,
FISCHER-WATT GOLD COMPANY, INC.
/s/ Peter Bojtos
Peter Bojtos P.Eng.
President and CEO
______________________________________________________________________________
Fischer-Watt Gold Company, Inc. | |||||
(An Exploration Stage Company) | |||||
Consolidated Balance Sheets | |||||
January 31, 2008 and 2007 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2008 |
| 2007 |
| ASSETS |
| (Restated) |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
| |
| Cash | $ | 182,391 | $ | 466,370 |
| Prepaid and other current assets |
| 48,436 |
| - |
|
|
|
|
|
|
| Total current assets | $ | 230,827 | $ | 466,370 |
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
| |
| Accounts payable and accrued expenses | $ | 98,462 | $ | 98,586 |
| Income taxes payable |
| - |
| 173,750 |
| Note payable - shareholders |
| 30,000 |
| 781,045 |
| Accounts payable and accrued expenses - shareholders |
| 659,937 |
| 962,898 |
|
|
|
|
|
|
| Total current liabilities |
| 788,399 |
| 2,016,279 |
|
|
|
|
|
|
Stockholders' (Deficit): |
|
|
|
| |
| Preferred stock, non-voting, convertible, $2 par value, 250,000 shares authorized, none outstanding |
| - |
| - |
| Common stock, $.001 par value, 200,000,000 shares authorized, 72,866,819 and 70,516,819 shares issued and outstanding, respectively |
| 72,866 |
| 70,516 |
| Additional paid-in capital |
| 16,589,341 |
| 15,969,191 |
| Common stock subscriptions |
| 12,750 |
| 12,750 |
| Accumulated (deficit) prior to exploration stage |
| (15,353,115) |
| (15,353,115) |
| Accumulated (deficit) during the exploration stage |
| (1,879,414) |
| (2,249,251) |
|
|
|
|
|
|
|
|
| (557,572) |
| (1,549,909) |
|
|
|
|
|
|
|
| $ | 230,827 | $ | 466,370 |
See the accompanying notes to the consolidated financial statements
F-3
______________________________________________________________________________
Fischer-Watt Gold Company, Inc. | |||||||
(An Exploration Stage Company) | |||||||
Consolidated Statements of Operations | |||||||
Years Ended January 31, 2008 and 2007, and | |||||||
February 1, 2001 (Inception of Exploration Stage) to January 31, 2008 | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| February 1, 2001 |
|
|
|
|
|
|
| (Inception of |
|
|
|
|
|
|
| Exploration Stage) |
|
|
|
|
|
|
| to January 31, |
|
|
| 2008 |
| 2007 |
| 2008 |
|
|
| (Restated) |
|
|
| (Restated) |
Revenue | $ | - | $ | - | $ | 44,240 | |
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
| |
| Cost of sales |
| - |
| - |
| 50,000 |
| Exploration |
| 152,471 |
| 36,784 |
| 816,467 |
| Writedown of inventory to market value |
| - |
| - |
| 125,000 |
| General and administrative |
| 669,370 |
| 320,322 |
| 2,796,175 |
|
|
|
|
|
|
|
|
|
|
| 821,841 |
| 357,106 |
| 3,743,642 |
|
|
|
|
|
|
|
|
| (Loss) from operations |
| (821,841) |
| (357,106) |
| (3,743,402) |
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
| |
| Interest expense |
| (8,383) |
| (10,250) |
| (58,019) |
| Relief of payables and other indebtedness |
| - |
| - |
| 66,935 |
| Other income |
| 1,205,000 |
| 770,000 |
| 2,029,184 |
| Interest income |
| 18,179 |
| 4,577 |
| 22,756 |
|
|
|
|
|
|
|
|
|
|
| 1,214,796 |
| 764,327 |
| 2,060,856 |
|
|
|
|
|
|
|
|
| Income (loss) before income taxes |
| 752,955 |
| 407,221 |
| (1,322,546) |
|
|
|
|
|
|
|
|
Income taxes |
| (383,118) |
| (173,750) |
| �� (556,868) | |
|
|
|
|
|
|
|
|
Net income (loss) | $ | 369,837 | $ | 233,471 | $ | (1,879,414) | |
|
|
|
|
|
|
|
|
Per share information – basic and fully diluted |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Net income (loss) per share |
|
|
|
|
|
| |
|
| $ | 0.01 | $ | 0.00 | $ | (0.03) |
| Fully-diluted | $ | 0.00 | $ | 0.00 | $ | (0.03) |
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
| |
| Basic |
| 71,400,016 |
| 69,910,792 |
| 54,968,664 |
| Fully-diluted |
| 97,600,016 |
| 87,260,792 |
| 54,968,664 |
See the accompanying notes to the consolidated financial statements
F-4
______________________________________________________________________________
Fischer-Watt Gold Company, Inc. | ||||||||
(An Exploration Stage Company) | ||||||||
Consolidated Statements of Cash Flows | ||||||||
Years Ended January 31, 2008 and 2007, and | ||||||||
February 1, 2001 (Inception of Exploration Stage) to January 31, 2008 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| February 1, 2001 |
|
|
|
|
|
|
|
| (Inception of |
|
|
|
|
|
|
|
| Exploration Stage) |
|
|
|
| 2008 |
| 2007 |
| to January 31, 2008 |
|
|
|
| (Restated) |
|
|
| (Restated) |
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
| ||
| Net income (loss) | $ | 369,837 | $ | 233,471 | $ | (1,879,414) | |
|
|
|
|
|
|
|
|
|
| Adjustments to reconcile net |
|
|
|
|
|
| |
|
| income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
| Income from sale of mineral interest |
| (1,490,000) |
| (695,000) |
| (2,235,000) |
|
| Writedown of inventory to market value |
| - |
| - |
| 125,000 |
|
| Gain on relief of payables and other indebtedness |
| - |
| - |
| (66,935) |
|
| Depreciation |
| - |
| - |
| 7,062 |
|
| Issuance of common stock for services and other non-cash items |
| 24,500 |
| 38,500 |
| 207,064 |
|
| Stock subscriptions related to services provided |
| - |
| - |
| 82,750 |
|
| Stock options issued for services |
| - |
| - |
| 75,500 |
|
| Stock option expense |
| 448,000 |
| 106,000 |
| 554,000 |
| Changes in assets and liabilities: |
|
|
|
|
|
| |
|
| Inventory |
| - |
| - |
| 50,000 |
|
| Other current assets |
| (48,436) |
| - |
| (48,436) |
|
| Accounts payable |
| (124) |
| 25,526 |
| 156,071 |
|
| Income taxes payable |
| (173,750) |
| 173,750 |
| - |
|
| Accounts payable and accrued expenses – shareholders |
| (190,461) |
| - |
| 555,856 |
|
|
|
|
|
|
|
|
|
|
| Total adjustments |
| (1,430,271) |
| (351,224) |
| (537,068) |
|
|
|
|
|
|
|
|
|
|
| Net cash provided by (used in) operating activities |
| (1,060,434) |
| (117,753) |
| (2,416,482) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
| ||
|
| Proceeds from sale of mineral interest |
| 1,490,000 |
| 695,000 |
| 2,235,000 |
|
| Net cash provided by investing activities |
| 1,490,000 |
| 695,000 |
| 2,235,000 |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
| ||
|
| Proceeds from issuance of common shares and stock subscriptions |
| - |
| - |
| 580,486 |
|
| Proceeds from exercise of options |
| - |
| - |
| 35,000 |
|
| Proceeds from notes payable – shareholders |
| - |
| - |
| 40,500 |
|
| Repayment of note payable – shareholder |
| (713,545) |
| (288,023) |
| (1,001,568) |
|
| Capital contribution by shareholder |
| - |
| - |
| 689,068 |
|
|
|
|
|
|
|
|
|
|
| Net cash provided by (used in) financing activities |
| (713,545) |
| (288,023) |
| 343,486 |
|
|
|
|
|
|
|
|
|
Increase in cash and cash equivalents |
| (283,979) |
| 289,224 |
| 162,004 | ||
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
| 466,370 |
| 177,146 |
| 20,387 | ||
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period | $ | 182,391 | $ | 466,370 | $ | 182,391 | ||
|
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
| ||
|
| Cash paid for interest | $ | - | $ | - | $ | - |
|
| Cash paid for income taxes | $ | 383,118 | $ | 173,750 | $ | 556,868 |
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
|
|
| ||
|
| Reclassification of capital contributions to note payable | $ | - | $ | 864,068 | $ | 864,068 |
|
| Conversion of notes payable and accrued interest to common stock | $ | 37,500 | $ | 150,000 | $ | 187,500 |
|
| Conversion of amounts due to shareholders to common stock | $ | 12,500 | $ | 40,000 | $ | 202,500 |
|
| Conversion of amounts due to shareholders upon exercise of stock warrants | $ | 100,000 | $ | 16,000 | $ | 116,000 |
|
| Common shares issued for stock subscriptions | $ | - | $ | 240,971 | $ | 433,813 |
|
| Conversion of amounts due to affiliate to stock subscription | $ | - | $ | - | $ | 131,282 |
|
| Purchase of inventory via direct payment by shareholder | $ | - | $ | - | $ | 175,000 |
See the accompanying notes to the consolidated financial statements
F-5
Fischer-Watt Gold Company, Inc. | ||||||||||
(An Exploration Stage Company) | ||||||||||
Consolidated Statement of Stockholders’ (Deficit) | ||||||||||
Years Ended January 31, 2002 to 2008(Restated) | ||||||||||
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| Accumulated (Deficit) |
| ||
|
|
|
|
|
|
| Prior to | During |
| |
|
| Common Stock | Additional | Capital Stock | Deferred | Exploration | Exploration |
| ||
|
| Shares | Amount | Paid-in Capital | Subscribed | Compensation | Stage | Stage | Total | |
|
|
|
|
|
|
|
|
|
| |
Balance, January 31, 2001 |
| 44,398,384 | $ 44,398 | $ 14,476,921 | $ 41,250 | $ - | $ (15,353,115) | $ - | $(790,546) | |
|
|
|
|
|
|
|
|
|
| |
Contribution to capital |
| - | - | 263,263 | - | - | - | - | 263,263 | |
Issuance of subscribed shares |
| 825,000 | 825 | 40,425 | (41,250) | - | - | - | - | |
Issuance of stock for services at $0.03 per share |
| 1,000,000 | 1,000 | 24,000 | - | - | - | - | 25,000 | |
Net (loss) |
| - | - | - | - | - | - | (634,552) | (634,552) | |
|
|
|
|
|
|
|
|
|
| |
Balance, January 31, 2002 |
| 46,223,384 | 46,223 | 14,804,609 | - | - | (15,353,115) | (634,552) | (1,136,835) | |
|
|
|
|
|
|
|
|
|
| |
Contribution to capital |
| - | - | 271,305 | - | - | - | �� - | 271,305 | |
Issuance of stock options for services |
| - | - | 75,500 | - | - | - | - | 75,500 | |
Issuance of stock for services at $0.10 per share |
| 250,000 | 250 | 24,750 | - | - | - | - | 25,000 | |
Stock subscriptions for cash at $0.03 per share |
| - | - | - | 30,000 | - | - | - | 30,000 | |
Stock subscriptions for services at $0.04 per share |
| - | - | - | 12,750 | - | - | - | 12,750 | |
Net (loss) |
| - | - | - | - | - | - | (586,422) | (586,422) | |
|
|
|
|
|
|
|
|
|
| |
Balance, January 31, 2003 |
| 46,473,384 | 46,473 | 15,176,164 | 42,750 | - | (15,353,115) | (1,220,974) | (1,308,702) | |
|
|
|
|
|
|
|
|
|
| |
Contribution to capital |
| - | - | 129,500 | - | - | - | - | 129,500 | |
Issuance of subscribed shares |
| 1,000,000 | 1,000 | 29,000 | (30,000) | - | - | - | - | |
Discount on stock issued to affiliates |
| - | - | 57,000 | - | - | - | - | 57,000 | |
Stock subscriptions for cash at $0.02 to $0.14 per share |
| - | - | - | 166,282 | - | - | - | 166,282 | |
Issuance of stock for cash at $0.04 per share |
| 3,169,000 | 3,169 | 114,035 | - | - | - | - | 117,204 | |
Net (loss) |
| - | - | - | - | - | - | (561,865) | (561,865) | |
|
|
|
|
|
|
|
|
|
| |
Balance, January 31, 2004 |
| 50,642,384 | 50,642 | 15,505,699 | 179,032 | - | (15,353,115) | (1,782,839) | (1,400,581) | |
|
|
|
|
|
|
|
|
|
| |
Reclassification of subscription |
| - | - | (12,560) | 12,560 | - | - | - | - | |
Issuance of subscribed shares |
| 1,906,727 | 1,407 | 156,435 | (157,842) | - | - | - | - | |
Issuance of stock for options |
| 500,000 | 500 | 4,500 | (5,000) | - | - | - | - | |
Contribution to capital |
| - | - | 25,000 | - | - | - | - | 25,000 | |
Issuance of stock and subscription for services at $0.08 per share |
| 20,000 | 20 | 1,580 | 70,000 | - | - | - | 71,600 | |
Issuance of stock for cash at $0.07 per share |
| 400,000 | 900 | 27,411 | - | - | - | - | 28,311 | |
Stock subscriptions for cash at $0.05 to $0.10 per share |
| - | - | - | 154,971 | - | - | - | 154,971 | |
Net (loss) |
| - | - | - | - | - | - | (474,858) | (474,858) | |
|
|
|
|
|
|
|
|
|
| |
Balance January 31, 2005 |
| 53,469,111 | 53,469 | 15,708,065 | 253,721 | - | (15,353,115) | (2,257,697) | (1,595,557) | |
|
|
|
|
|
|
|
|
|
| |
Reclassification of capital to shareholder loan |
| - | - | (864,068) | - | - | - | - | (864,068) | |
Contribution to capital |
| - | - | 50,500 | - | - | - | - | 50,500 | |
Issuance of subscribed shares |
| 3,392,308 | 3,392 | 237,579 | (240,971) | - | - | - | - | |
Issuance of stock for services at $0.05 per share |
| 505,400 | 505 | 24,765 | - | - | - | - | 25,270 | |
Issuance of stock for cash at $0.04 per share |
| 5,800,000 | 5,800 | 244,200 | - | - | - | - | 250,000 | |
Issuance of stock in settlement of debt at $0.05 per share |
| 6,000,000 | 6,000 | 294,000 | - | - | - | - | 300,000 | |
Stock options granted as compensation |
| - | - | 360,000 | - | (360,000) | - | - | - | |
Net (loss) |
| - | - | - | - | - | - | (225,025) | (225,025) | |
|
| - - | - - | - | - - | - | - - | - - | 75,000 | |
Balance January 31, 2006 |
| 69,166,819 | 69,166 | 16,055,041 | 12,750 | (360,000) | (15,353,115) | (2,482,722) | (2,058,880) | |
|
|
|
|
|
|
|
|
|
| |
Contribution to capital |
| - | - | 75,000 | - | - | - | - | 75,000 | |
Issuance of stock in settlement of shareholder payable at $0.10 per share |
| 400,000 | 400 | 39,600 | - | - | - | - | 40,000 | |
Issuance of stock for services at $0.07 per share |
| 550,000 | 550 | 37,950 | - | - | - | - | 38,500 | |
Issuance of stock options for services |
| - | - | 106,000 | - | - | - | - | 106,000 | |
Exercise of stock warrants at $0.04 per share |
| 400,000 | 400 | 15,600 | - | - | - | - | 16,000 | |
Net income |
| - | - | - | - | - | - | 233,471 | 233,471 | |
|
|
|
|
|
|
|
|
|
| |
Balance January 31, 2007 (restated) |
| 70,516,819 | 70,516 | 16,329,191 | 12,750 | (360,000) | (15,353,115) | (2,249,251) | (1,549,909) | |
|
|
|
|
|
|
|
|
|
| |
Issuance of stock in settlement of shareholder payable at $0.05 per share |
| 250,000 | 250 | 12,250 | - | - | - | - | 12,500 | |
Issuance of stock in settlement of note payable at $0.05 per share |
| 750,000 | 750 | 36,750 | - | - | - | - | 37,500 | |
Issuance of stock for services at $0.07 per share |
| 350,000 | 350 | 24,150 | - | - | - | - | 24,500 | |
Issuance of stock options for services |
| - | - | 448,000 | - | - | - | - | 448,000 | |
Exercise of stock warrants at $0.10 per share |
| 1,000,000 | 1,000 | 99,000 | - | - | - | - | 100,000 | |
Amortization of deferred compensation |
| - | - | - | - | 360,000 | - | - | 360,000 | |
Net income |
| - | - | - - | - | - | - | 369,837 | 369,837 | |
|
|
|
|
|
|
|
|
|
| |
Balance January 31, 2008(Restated) |
| 72,866,819 | $ 72,866 | $ 16,589 ,341 | $ 12,750 | $ - | $ (15,353,115) | $ (1,879,414) | $ (557,572) |
See the accompanying notes to the consolidated financial statements
F-6