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 June 30, 2002.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to .
Commission file number: 000-27691
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GOLDEN OPPORTUNITY DEVELOPMENT CORPORATION
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(Exact name of small business issuer as specified in its charter)
Nevada 87-0067813
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
268 West 400 South, Suite 300, Salt Lake City, Utah 84101
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(Address of principal executive office) (Zip Code)
(801) 575-8073
(Issuer's telephone number)
Check whether the issuer: (1) 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 XX No
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The number of outstanding shares of the issuer's common stock, $0.001 par
value (the only class of voting stock), as of July 29, 2002 was 7,758,050.
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS..................................................1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............2
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................................6
SIGNATURES.....................................................................7
INDEX TO EXHIBITS..............................................................8
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ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to Golden Opportunity Development
Corporation, a Nevada corporation, and its subsidiaries and predecessors unless
otherwise indicated. Unaudited, condensed interim financial statements including
a balance sheet for the Company as of the quarter ended June 30, 2002, and
statements of operations, and statements of cash flows for the interim period up
to the date of such balance sheet and the comparable period of the preceding
year are attached hereto as Pages F-1 through F-4 and are incorporated herein by
this reference.
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1
Golden Opportunity Development Corporation
Unaudited Condensed Balance Sheet
June 30, 2002
(Unaudited)
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ASSETS
Current Assets: $
Cash and cash equivalents 166
Other -
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Total current assets 166
TOTAL ASSETS $ 166
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LIABILITIES AND STOCK HOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable $ 1,984
Accounts payable-related party 84,088
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Total current liabilities 86,072
Stockholders' deficit
Common stock $.001 par value shares, 100,000,000 shares
authorized; 7,969,280 shares issued and outstanding on
June 30, 2002 7,969
Additional paid in capital 1,307,971
Accumulated Deficit (1,401,846)
Total stockholders' deficit (85,906)
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TOTAL LIABILITIES AND DEFICIT $ 166
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See notes to financial statements
F-1
Golden Opportunity Development Corporation
Unaudited Condensed Statements of Operations
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
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REVENUE
Hotel Revenue $ - $ 46,044 1,097 110,661
Lease Revenue - 690 - 814
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Total Revenue - 46,734 1,097 111,475
EXPENSES
Hotel Direct Costs 404 67,647 3,469 161,974
Selling, general & administrative 17,946 4,000 30,632 14,820
Depreciation - 12,167 - 24,645
Expenses related to sale of motel - - 100,702 -
Interest Expense - 27,032 9,337 54,173
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Total Operating Expenses 18,350 110,846 144,140 225,612
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NET LOSS $ (18,350) $ (64,112) (143,043) (144,137)
BASIC AND DILUTED LOSS
PER COMMON SHARE $ - $ (0.01) (0.02) (0.02)
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BASIC AND DILUTED
WEIGHTED AVERAGE
SHARES OUTSTANDING 7,969,000 7,758,000 7,969,000 7,758,000
See notes to financial statements
F-2
Golden Opportunity Development Corporation
Unaudited Condensed Statements of Cash Flows
Six Months Six Months
Ended Ended
June 30, 2002 June 30, 2001
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CASH FLOWS FROM OPERATION ACTIVITIES
Net loss $ (143,043) $ (144,137)
Adjustments to reconcile net loss to net cash provided
(used) by operating activities:
Expenses related to sale of motel 100,702 -
Depreciation and amortization - 24,645
Changes in operating assets and liabilities (net of
effect from acquisitions)
Bank overdrafts - 2,646
Accounts Payable (34,513) (6,503)
Accrued Expenses 1,984 8,344
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NET CASH USED BY OPERATING ACTIVITIES (74,870) (115,005)
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CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
Proceeds from sale of property, plant, and equipment 391,539 -
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- -
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of related party payables (318,088) (122,100)
Principle payment on long term notes - (14,176)
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NET CASH USED BY FINANCING ACTIVITIES (318,088) (136,276)
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NET INCREASE (DECREASE) IN CASH EQUIVALENTS (1,419) (7,081)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,585 7,096
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 166 $ 15
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $ - $ 54,173
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NON-CASH TRANSACTIONS
During the six months ended June 30, 2002, the Company retired debt in the amount of $1,780,660 from the proceeds of
the sale of the motel property.
See notes to financial statements
F-3
Golden Opportunity Development Corporation
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2002
1. Basis of Presentation
The accompanying consolidated unaudited condensed financial statements have been
prepared by management in accordance with the instructions in Form 10-QSB and,
therefore, do not include all information and footnotes required by accounting
principles generally accepted in the United States and should, therefore, be
read in conjunction with the Company's Annual Report to Shareholders on Form
10-KSB for the fiscal year ended December 31, 2001. These statements do include
all normal recurring adjustments which the Company believes necessary for a fair
presentation of the statements. The interim operations results are not
necessarily indicative of the results for the full year ended December 31, 2002.
2. Related Party Transaction
During the quarter ended June 30, 2002, the Company paid back amounts previously
advanced by its parent to cover operating deficiencies in the amount of $62,852.
The total amount payable owed to related parties at June 30, 2002 was $84,088.
3. Sale of Building
On June 10, 2001, the Company entered into a sales agreement to sell the
building and land to Lafayette Development Holding LLC for $2,332,000. During
2001, the Company received $55,000 of earnest money. At the time of the sales
agreement, the Company anticipated a loss of approximately $117,946 on the sale.
As a result, the Company booked an impairment loss on the value of the building
for that amount in the third quarter of 2001. On January 3, 2002, the Company
finalized the sale of the building and land for $2,332,000 and recorded an
additional $100,702 in closing costs. Net proceeds received after payment of the
mortgage note balance, taxes, and other related charges were approximately
$330,000. This transaction is fully reflected in the above financial statements.
4. Additional footnotes included by reference
Except as indicated in Notes above, there have been no other material changes in
the information disclosed in the notes to the financial statements included in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 2001.
Therefore, those footnotes are included herein by reference.
F-4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
The Company has historically been engaged in the business of operating and
acquiring hospitality property. Prior to January 4, 2002, the Company owned the
General Lafayette Inn, a 134 unit motel and restaurant, and four adjacent
office/retail buildings, located at 427 Lafayette Street, Baton Rouge, Louisiana
(the "Motel"). On January 4, 2002, the Company sold the Motel, its principal
asset. The Motel was sold for cash, in the amount of $2,332,000, to Lafayette
Development Holdings, LLC. ("Lafayette"), a Louisiana Limited Liability Company.
After payment of taxes, real estate commissions, and the mortgage on the
property, the Company realized net cash of $337,000. There is no material
relationship between Lafayette and the Company, or any of their affiliates, or
any of their officers or directors, or any associate of such officers or
directors. This transaction was brokered by Brooks Hearn, a real estate broker
in Baton Rouge, LA.
Since the Company discontinued operations on January 4, 2002, by divesting
itself of its Motel property, the Company is attempting to identify and acquire
another hospitality property for purchase. Several properties in Florida and
California have been reviewed and due diligence is progressing on a few,
however, there is currently no agreement to acquire any property.
Results of Operations
Revenues
Revenues for the quarter ended June 30, 2002 decreased to $ 0 from $46,734 for
the quarter ended June 30, 2001, a decrease of 100 %. The decrease in revenues
was attributable to no longer operating the motel.
Losses
Net losses for the quarter ended June 30, 2002, decreased to $18,350 from
$64,112 for the quarter ended June 30, 2001, an decrease of 71.4%. The decrease
in losses is attributable to a lack of costs associated with the formerly owned
motel.
The Company expects to continue to incur losses at least through fiscal 2002,
unless a profitable acquisition is made prior to that time, and there can be no
assurance that the Company will achieve or maintain profitability or that
revenue growth can be achieved or sustained in the future.
Expenses
General and administrative expenses for quarters ended June 30, 2002 and June
30, 2001, were $17,946 and $4,000 respectively.
Depreciation and amortization expenses for the quarters ended June 30, 2002 and
June, 2001 were $0 and $12,167, respectively. The decrease was due to no longer
having depreciable assets.
For the quarters ended June 30, 2002 and June 30, 2001, the Motel's direct
operating costs were $404 and $67,647 respectively, a decrease of 99%. This
decrease is due to not operating the motel.
2
Liquidity and Capital Resources
Cash flow used by operations were $74,870 for the six months ended June 30,
2002, compared to $115,005 for the six months ended June 30, 2001.
Cash flow provided by investing activities was $391,539 for the six months ended
June 30, 2002, compared to $0 for the six months ended June 30, 2001. The
Company's cash flow provided by investing activities was attributable to the
divestiture of the motel.
Cash flow used in financing activities was $318,088 for the six months ended
June 30, 2002, compared to cash flow used in financing activities of $136,276
for the six months ended June 30, 2001. The Company's cash flow used in
financing activities was for retirement of the payables to the parent for
advances over the years.
The Company has funded its cash needs through June 30, 2002, with net proceeds
from the sale of the building. The Company estimates the remaining cash may not
be sufficient to cover expenses for the rest of the year, while it seeks to
locate a replacement property. In the event there is a shortfall, the Company
anticipates that the Company's parent will provide it with sufficient resources
to complete its search for a business venture and continue meeting financial
responsibilities in the mean time. There is no guarantee however, that this will
occur.
Capital Expenditures
The Company has a working capital deficit at June 30, 2002, in the amount of
$85,906. However, $84,088 is owed to the Company's parent.
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations
over the past two years. The Company believes that it can offset inflationary
increases in the cost of materials and labor by increasing sales and improving
operating efficiencies.
Known Trends, Events, or Uncertainties
As the Company has no current operations there are no known trends, events or
uncertainties that apply to the Company at this point in time.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Exhibits required to be attached by Item 601 of Regulation S-B are
listed in the Index to Exhibits on page 7 of this Form 10-QSB, and are
incorporated herein by this reference.
(b) Reports on Form 8-K No filings on Form 8-K were made during the period
covered by this report.
3
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, there unto
duly authorized, this 26th day of July 2002.
Golden Opportunity Development Corporation
By: /s/ Bobby Welch
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Bobby Welch
Its: President, Chief Executive Officer and Director
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INDEX TO EXHIBITS
Exhibit
No. Page No. Description
2(i) * Articles of Incorporation of the Company dated May 7,
1997. (Incorporated by reference filed with the
Company's Form 10-SB/A-2 on May 2, 2000).
2(ii) * Amended Articles of Incorporation of the Company
dated April 26, 1999. (Incorporated by reference
filed with the Company's Form 10-SB/2 on May 2,
2000).
2(iv) * By-laws of the Company. (Incorporated by reference
filed with the Company's Form 10-SB/A-2 on May 2,
2000).
Material Contracts
Exhibit
No. Page No. Description
10(i) * Management Agreement between the Company and
Diversified Holdings, I, Inc. dated April 30, 1999.
(Incorporated by reference filed with the Company's
Form 10-SB/A-2on May 2, 2000).
10(ii) * Listing Contract between Brooks Hearn, Broker and
Golden Opportunity Development Corporation regarding
the General Lafayette Hotel in Baton Rouge,
Louisiana. ( Incorporated by reference filed with the
Company's Form 10KSB filed with the SEC on May 10,
2001)
10(iii) * Sales Agreement between LaFayette Development
Holdings LLC and Golden Opportunity Development
Corporation for the sale of the General LaFayette
Motel in Baton Rouge, Louisiana (Incorporated by
reference filed with the Company's 10KSB filed with
the SEC on March 29, 2002)
* Incorporated by reference to previously filed information as noted
5