CONSOLIDATED FINANCIAL STATEMENTS
(A Development Stage Company)
HERITAGE MINES, LTD.
Quarter Ended April 30, 1996
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
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.
HERITAGE MINES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE QUARTER ENDED
APRIL 30, 1996
(UNAUDITED)
_______________
April 30, 1996 April 30, 1995
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
LIABILITIES AND STOCKHOLDERS' EQUITY
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
HERITAGE MINES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
AS OF AND FOR THE QUARTER ENDED
APRIL 30, 1996
(UNAUDITED)
_______________
Period from
Quarter Quarter Inception
Ended Ended (5/11/92)
4/30/96 4/30/95 thru 4/30/96
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
HERITAGE MINES, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
AS OF AND FOR THE QUARTER ENDED
APRIL 30, 1996
(UNAUDITED)
_______________
Period from
Quarter Quarter Inception
Ended Ended (5/11/92)
4/30/96 4/30/95 thru 4/30/96
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
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..