UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the quarter ended: February 28, 2005
Commission File Number: 000-31168
CONDOR GOLD CORP.
-----------------------------------------------
(Translation of registrant's name into English)
50 Richmond Street East, Toronto, Ontario M5C 1N7
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover 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): [ ]
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): [ ]
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) 82.
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CONDOR GOLD CORP.
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIOD
ENDED FEBRUARY 28, 2005
CONTENTS
Balance Sheet
Statement of Shareholders' Deficit
Statement of Earnings
Statement of Cash Flows
Notes to Financial Statements
2
CONDOR GOLD CORP.
Consolidated Balance Sheet
(Stated in Canadian Dollars)
February 28, 2005
(prepared by Management)
Period Ended Year ended
February 28, November 30,
2005 2004
(unaudited) (audited)
----------- -----------
ASSETS
Current
Cash $ 157 $ 157
Deferred Expenses -- 12,500
Property and Equipment 6,480,812 6,480,812
----------- -----------
$ 6,480,969 $ 6,493,469
=========== ===========
LIABILITIES
Current Liabilities
Accounts Payable $ 627,562 $ 607,530
Due to related parties 879,737 835,679
Notes payable, current portion 3,115,092 3,025,092
----------- -----------
4,622,391 4,468,301
Non Controlling Interest 444,097 444,097
----------- -----------
5,066,488 4,912,398
----------- -----------
SHAREHOLDERS' EQUITY
Share Capital 8,536,967 8,536,967
Contributed Surplus 127,493 127,493
Cumulative Translation Adjustment 636,380 636,380
Deficit (7,886,359) (7,719,769)
----------- -----------
1,414,481 1,581,071
$ 6,480,969 $ 6,493,469
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
CONDOR GOLD CORP.
Consolidated Statement of Shareholders' Deficit
(Stated in Canadian Dollars)
For the Period Ended February 28, 2005
(prepared by Management)
Period Ended Year ended
February 28, November 30,
2005 2004
(unaudited) (audited)
----------- -----------
Deficit - beginning of period $ 7,719,769 $ 6,674,329
Net profit/(loss) for the period (166,590) 99,497
----------- -----------
Deficit - end of period $ 7,886,359 $ 6,574,832
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
CONDOR GOLD CORP.
Consolidated Statement of Earnings & Expenses
(Stated in Canadian Dollars)
For the Period Ended February 28, 2005
(prepared by Management)
Period Ended Year ended
February 28, November 30,
2005 2004
(unaudited) (audited)
----------- -----------
Expenses
General and administrative $ 9,545 $ 51,873
Consulting fees -- 26,420
Interest expense 110,045 112,090
Management fees 35,000 128,400
Professional fees 12,000 37,000
Forgiveness of debt -- (66,172)
Reversal of reserve for loss contingency -- (458,147)
----------- -----------
Total expenses 166,590 (168,536)
Non controlling interest -- 69,039
----------- -----------
NetProfit/(Loss) $ (166,590) $ 99,497
=========== ===========
The accompanying notes are an integral part of these financial statements.
5
CONDOR GOLD CORP.
Consolidated Statement of Cash Flows
(Stated in Canadian Dollars)
For the Period Ended February 28, 2005
(prepared by Management)
Period Ended Year ended
February 28, November 30,
2005 2004
(unaudited) (audited)
----------- -----------
Cash Flows from Operating Activities
Net profit/(loss) $(166,590) $ 99,497
Adjustments to reconcile net loss to net
cash used in operating activities
Accounts Payable 20,032 (15,927)
Reserve for loss contingency -- (462,000)
Non cash interest expense 90,000 74,590
Non cash financing charge 12,500 37,500
Non Controlling interest -- 69,039
--------- ---------
(44,058) (197,301)
--------- ---------
Cash Flows from Investing Activities -- --
--------- ---------
Cash Flows from Financing Activities
Proceeds from issuance of common shares 56,100
Proceeds from notes payable (15,000)
Advances from related parties 44,058 156,201
--------- ---------
44,058 197,301
--------- ---------
Net (Drecease) Increase in Cash -- --
Cash beginning of year 157 --
--------- ---------
Cash - end of period $ 157 $ --
========= =========
The accompanying notes are an integral part of these financial statements.
6
CONDOR GOLD CORP.
Notes to Consolidated Financial Statements
For the Three Month Period Ended February 28, 2005
(Unaudited - prepared by management)
Readers are cautioned that these statements may not be appropriate for their
purposes
1. Operations
----------
The Corporation was originally incorporated on June 19, 1997 under the
Business Corporations Act (Ontario) under the name Findore Gold Resources
Ltd. and was in the business of investing in resource related activities.
On October 17th, 2001 the shareholders approved the name change to Ripped
Canada Artists Inc. ("RCA") and a change of business to the entertainment
industry and TV, Film and Video production and distribution.
On September 20, 2002, Ripped Canada Artists Inc. ("RCA") and the
shareholders of Northville Gold Corp. ("Northville") entered into a
Securities Exchange Agreement ("Agreement") whereby RCA acquired all of the
issued and outstanding securities of Northville in exchange for equivalent
securities on a one for one basis. Upon consummation, the shareholders of
Northville exchanged each of their common shares for one post-consolidation
common share of RCA. Northville shareholders acquired control of RCA, a US
publicly quoted company with 94.88% interest in the post consolidated
securities. Accordingly, this transaction has been accounted for as a
reverse takeover whereby Northville was deemed to have acquired RCA. The
ongoing business will continue as that of Northville. Subsequently, RCA has
changed its name to Condor Gold Corp. (the "Company").
The company is engaged in the exploration and development of gold and
diamond properties in Canada. Since inception, the efforts of the Company
have been devoted to assessing whether properties have sufficient mineral
reserves for production. To date, the Company has earned no revenues.
Condor owns or controls interests in gold properties in the townships of
Chester, Benneweis, and Yeo in Northern Ontario (collectively, the
"Northville Properties"). In addition, in the search for diamond
properties, the Company has staked over 95,000 acres of land in the James
Bay Lowlands of Northern Ontario.
2. Summary of Significant Accounting Policies
------------------------------------------
Management in accordance with generally accepted accounting principles in
Canada has prepared the financial statements of the Corporation. The
preparation of financial statements in conformity with Canadian generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
The financial statements, in management's opinion, have been properly
prepared using careful judgment with reasonable limits of materiality.
These interim financial statements do not contain all disclosures required
under generally accepted accounting principles for annual financial
statements and should therefore be read in conjunction with the most recent
annual financial statements. The auditor of Condor Gold Corp. has not
performed a review of the unaudited financial statements for the three
months ended February 28, 2005 and February 29, 2004 The significant
accounting policies follow that of the most recently reported annual
financial statements
7
CONDOR GOLD CORP.
Notes to Consolidated Financial Statements
For the Three Month Period Ended February 28, 2005
(Unaudited - prepared by management)
a) Going Concern
The Company's financial statements are presented on a going concern
basis, which contemplates the realization of assets and satisfaction
of liabilities in the normal course of business. The Company has
experienced recurring losses since inception and has negative working
capital and cash flows from operations that raise substantial doubt as
to its ability to continue as a going concern. For the three months
ended February 28, 2005 and the year ended November 30, 2004, the
Company experienced net losses of $166,590 and $1,045,440,
respectively.
The Company's ability to continue as a going concern is also
contingent upon its ability to secure additional financing, initiating
sale of its product and attaining profitable operations.
On January 5, 2005 the Treelawn note came due and payment was
demanded. The Company is in discussions with Treelawn with a view to
restructuring the loan. Management is pursuing various sources of
equity financing. Although the Company plans to pursue additional
financing, there can be no assurance that the Company will be able to
secure financing when needed or obtain such on terms satisfactory to
the Company, if at all.
The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may
result from the possible inability of the Company to continue as a
going concern.
b) Unit of Measurement
The Canadian dollar has been used as the unit of measurement in these
financial statements. The functional currency of the operations are
denominated in Canadian currency.
c) Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned and controlled subsidiaries, Northville
Gold Corp., Condor Diamond Corp., Dialex Minerals Inc., 1478837
Ontario Inc., 1485210 Ontario Inc., 1564447 Ontario Inc. and 1571218
Ontario Inc. Intercompany accounts and transactions have been
eliminated on consolidation. These consolidated financial statements
reflect all adjustments, which are, in the opinion of management,
necessary for a fair presentation of the results for the interim
periods reported.
d) Mineral Exploration Properties
Property acquisition costs are capitalized until the property to which
they relate is placed into production, sold, abandoned or management
determines that there has been an impairment in value. On the
commencement of commercial production, these costs will be charged to
operations on the units-of-production method based upon estimated
recoverable proven and probable reserves. As at February 28, 2005,
there has not been any production at any of the properties.
8
CONDOR GOLD CORP.
Notes to Consolidated Financial Statements
For the Three Month Period Ended February 28, 2005
(Unaudited - prepared by management)
The amount shown for mineral property interests represents costs
incurred and deferred to date and does not necessarily reflect present
and future values.
Exploration expenditures are expensed as incurred.
e) Use of Estimates
The preparation of the Company's financial statements in conformity
with Canadian generally accepted accounting principles requires
management to make estimates and assumptions. These assumptions affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial
statements, and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those
estimates.
3. Deferred Expenses
On January 6th, 2003 the Company arranged for senior secured debt financing
from Treelawn Investment Corp. in the gross aggregate amount of $1,500,000.
the net proceeds from the loan were $1,200,000. The $300,000 financing
charge was set up as deferred expenses with the amount expensed equally
over the 24 month life of the loan, amounting to $ 12,500 expense per
month.
4. Property February 28, 2005 November 30, 2004
----------------- -----------------
Accumulated Accumulated
Cost Amortization Cost Amortization
----------- ------------ ----------- ------------
Exploration Properties $6,471,139 0 $6,471,139 0
Net Carrying Amount -- $6,471,139 -- $6,471,139
5. Notes Payable February 28 November 30
------------ ------------
2004 2004
Notes payable, non-interest bearing
and maturing on April 15, 2005, and
repayable from proceeds of production
from one of the Company's properties $ 223,900 $ 223,900
Notes payable bearing interest at 12%
and has no specified terms of
repayment 255,000 255,000
Notes payable non-interest bearing and
has no specified terms of repayment 438,219 422,192
Notes payable bearing interest at 20%
and has no specified terms of
repayment 49,000 49,000
Note payable from Treelawn, bearing
interest at 20%, repayable from
proceeds of production from one
of the Company's properties and
matures on January 6, 2005 2,148,973 2,075,000
------------ ------------
$ 3,115,092 $ 3,025,092
9
CONDOR GOLD CORP.
Notes to Consolidated Financial Statements
For the Three Month Period Ended February 28, 2005
(Unaudited - prepared by management)
As at February 28, 2005, the senior secured debt financing from Treelawn
Investment Corp. ("Treelawn"), amounted to $1,500,000 principal and accrued
interest of $648,973.
6. Reserve for Loss Contingencies
In prior periods the Company had recorded a $462,000 liability for loss
contingencies. This reserve was established as a result of a potential
liability of Dialex Minerals Inc. ("Dialex"), a controlled subsidiary, to
the Internal Revenue Service (IRS) as a result of actions by the former
principal of Video Home Shopping Inc., which has led to an investigation by
the IRS. The Company has contacted the IRS for information and has no
indication that the investigation concerns the Company directly. The IRS
has further confirmed that the company is not indebted to it. The
Department of Justice has confirmed that its investigation is concluded
with no action taken affecting the Company. The Company has now determined
that the reserve can be eliminated.
7. Share Capital
Authorized
Unlimited number of common shares, no par value
Issued Number of Shares $ Value
------ ---------------- -----------
Balance beginning of period 76,678,683 $8,536,967
Issued during period 0 $ 0
Balance at end of period 76,678,683 $8,536,967
During the period, no common shares were issued
8. Related Party Transactions
Advances due to related parties are payable either to shareholders or to
private companies which are owned by shareholders who may be officers
and/or directors of the Company. The amounts payable are non-interest
bearing and have no specified terms of repayment
The following table summarizes the Company's related party transactions
that occurred in the normal course of operations for the three month
period.
Amounts Paid to Shareholders and Directors February 28 February 29
2005 2004
----------- -----------
General and administrative expenses $ 7,500 $ 16,050
Management fees 35,000 128,400
Consulting 0 6,420
10
CONDOR GOLD CORP.
Notes to Consolidated Financial Statements
For the Three Month Period Ended February 28, 2005
(Unaudited - prepared by management)
9. Commitments and Contingencies
a) On January 6, 2003 the Company issued an option to enter into a
Royalty Agreement with Treelawn. Upon the payment of the exercise
price of $100,000 to the Company, the royalty agreement will entitle
Treelawn to royalties from the Company of:
(i) $100 per ounce of gold produced from the surface stockpile to a
maximum of 70,000 ounces of gold less any repayments made towards
the Note referred to in Note 6; and
(ii) $50 per ounce of gold produced from the ramp of the Murgold
Property located in Chester Township to a maximum of 68,000
ounces of gold.
b) Condor Gold Corp. is the plaintiff in an action initiated on August
19, 2003 against former shareholders and directors of Condor. The
purpose of Condor's action was to claim damages for negligence,
defamation and breach of contract by the defendants. In a statement of
defence and counterclaim filed on or about November 20, 2003, the
defendants joined the subsidiary companies of Condor as defendants by
counterclaim. The counter claim has not been formally served on the
subsidiary companies. It is management's opinion and that of its legal
counsel that the counterclaim action is frivolous, vexatious and
without merit and as such, management has made no provision for it in
these financial statements.
10. Comparative Information
Certain figures for the periods and the year ended February 28, 2005,
February 29, 2004 and November 30, 2004 respectively, have been
reclassified to conform with the current period's financial statement
presentation.
11. Subsequent Events
On March 16, 2005, through a share purchase from certain shareholders there
was a change in controlling shareholders of Dialex Minerals Inc.
Contemporaneously with the acquisition of control the then board of
directors resigned. Dialex changed its name to Reliant Home Warranty
Corporation and approved a reverse split of its common stock on a 1 for 22
basis for the purpose of recapitalizing the Reliant for a potential
business transaction.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The following is a discussion of the consolidated financial position,
results of operations and cash flows of Condor Gold Corp. for the three
month period ended February 28, 2005 and February 29, 2004, and should be
read in conjunction with the company's most recent annual consolidated
financial statements as at and for the year ended November 30, 2004. The
financial statements are reported in accordance with Canadian GAAP.
References herein to "Condor", "the company", "we" and "our" mean Condor
Gold Corp. and its subsidiaries, unless otherwise noted.
This Management's discussion and Analysis of Financial Condition and
Results of Operations contains Condor Gold Corp forward-looking statements
that involve risks and uncertainties, which may cause actual results to
differ materially from the statements made. When used in this document, the
words "may", "would", "could", "will", "intend", "plan", "anticipate",
"believe", "estimate", "expect" and similar expressions are intended to
identify forward-looking statements. We believe that the assumptions and
expectations reflected in such forward-looking statements are reasonable,
based on information available to us on the date hereof, but we cannot
assure you that these assumptions and expectations will prove to have been
correct or that we will take any action that we may presently be planning.
Many factors could cause our actual results to differ materially from the
statements made, including those factors discussed in other filings made by
us with Canadian securities regulatory authorities. Should one or more of
these risks and uncertainties materialize, or should assumptions underlying
the forward looking financial statements prove incorrect, actual results
may vary materially for those described herein as intended, planned,
anticipated or expected. You should understand that forward-looking
statements made in this report are necessarily qualified by these factors.
We do not intent and do not assume any obligation to update these
forward-looking statements.
Results of Operations
---------------------
Revenues
--------
The company is engaged in the exploration and development of gold and
diamond properties in Canada. To date, the Company has earned no
revenues.
Expenses
--------
Three Month Period Ended February 28, 2005 Compared To The Three Month
Period Ended February 29, 2004
----------------------------------------------------------------------
For the three-month period ended February 28, 2005 operating losses
totaled $166,590 compared to a profit of $168,536 for the same period
2004. The operating profit in 2004 resulted from the write down of
Accounts Payable of $66,172 and the elimination of a reserve of
$458,147 in the Dialex Minerals subsidiary. In the first quarter 2005,
there was an overall reduction in expenses in all categories
reflecting cutback in activity. General and administrative expenses
decreased from $51,873 in 2004 to $9,545 in 2005 reflecting reductions
in salaries and office overheads. Management and Consulting fees in
total decreased by $119,820 and Professional fees decreased by $25,000
in the period reflecting decrease in legal fees. Interest expense was
lower by $2,045 as the deferred interest expense was fully amortized
in January 2005.
12
Liquidity and Capital Resources
-------------------------------
The Company's ability to continue as a going concern is also
contingent upon its ability to secure additional financing, initiating
sale of its product and attaining profitable operations. Management is
pursuing various sources of equity financing. Although the Company
plans to pursue additional financing, there can be no assurance that
the Company will be able to secure financing when needed or obtain
such on terms satisfactory to the Company, if at all.
For the three month period ended February 28, 2005 the Company issued
no shares and raised no capital during the period. Activity was
financed through increased trade payables and advances from related
parties. During the three month period ended February 29, 2004, the
Company received $30,000 through the sale of common shares, and issued
shares in the amount of $26,100 to note holders to retire $15,000 of
notes payable and pay $11,100 of accrued interest.
Off-Balance Sheet Arrangements
------------------------------
The Company is not party to any off-balance sheet arrangements that
have, or are reasonably likely to have, a current or future effect on
the Company's results of operations or financial condition.
Contractual Obligations and Commitments
---------------------------------------
As at February 28, 2005, the Company did not have any long term debt,
capital lease obligations, operating leases, purchase obligations or
contractual obligations and commitments
Proposed Transactions
---------------------
None.
Critical Accounting Policies
----------------------------
The preparation of its consolidated financial statements requires the
Company to use estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue and expenses. The Company's
accounting policies are described in Note 2 to its interim
consolidated financial statements.
Changes in Accounting Policies including Initial Adoption
---------------------------------------------------------
None.
Financial Instruments and Other Instruments
-------------------------------------------
None.
Investor Relations
------------------
No investor relations activities were undertaken by or on behalf of
the Company during the period.
13
Management's Responsibility for Financial Statements
----------------------------------------------------
The information provided in this report, including the financial
statements, is the responsibility of management. In the preparation of
these statements, estimates are sometimes necessary to make a
determination of future values for certain assets or liabilities.
Management believes such estimates have been based on careful
judgments and have been properly reflected in the accompanying
financial statements. Management maintains a system of internal
controls to provide reasonable assurance that the Company's assets are
safeguarded and to facilitate the preparation of relevant and timely
information.
Other MD&A Requirements
-----------------------
Additional information relating to the Company, including the
Company's Annual Information Form, is available on SEDAR at
www.sedar.com/ Filings for SEC are available at www.sec.gov
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.
CONDOR GOLD CORP.
Date April 29, 2005 /s/* Alexander G. Stewart
------------------------------------
(Signature) Alexander G. Stewart
Chief Executive Officer
Date April 29, 2005 /s/* L. Kirk Boyd
------------------------------------
(Signature) L. Kirk Boyd
Chief Financial Officer
*Print the name and title of each signing officer under his signature.
14