U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 1999
[ ] TRANSITION REPORT PURSUANT SECTION 13 OF 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 0-27953
GOLDEN RIVER RESOURCES INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 98-0187538
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2420 PANDOSY STREET, KELOWNA, BRITISH COLUMBIA, CANADA V1Y 1T8
(Address of principal executive offices)
(250) 717-1049
(Issuer's telephone number)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
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 No X
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the last practicable date:
17,005,072 SHARES OF COMMON STOCK, $.001 PAR VALUE, AS OF
DECEMBER 31, 1999
Transitional Small Business Disclosure Format (check one); Yes No X
---- -----
Consolidated Financial Statements of
GOLDEN RIVER RESOURCES INC.
(An Exploration Stage Enterprise)
Six month period ended, December 31, 1999
(Unaudited - Prepared by Management)
2
GOLDEN RIVER RESOURCES INC.
(An Exploration Stage Enterprise)
Consolidated Balance Sheet
$ United States
December 31, 1999 and 1998
(Unaudited - Prepared by Management)
================================================================================================================
1999 1998
================================================================================================================
ASSETS
Current Assets
Cash $ 8,561 $ 90,757
Prepaid expense 4,688 -
================================================================================================================
13,249 90,757
Capital assets, net of amortization 9,915 -
================================================================================================================
$ 23,164 $ 90,757
================================================================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities $ 140,570 $ 13,536
Due to shareholders 22,228 97,473
Shares to be issued for cash - 498,832
Long term debt (note 2) 100,233 -
================================================================================================================
263,031 609,841
Stockholders' Deficiency
Capital stock 1,642,475 469,994
Additional paid in capital 78,700
Deficit accumulated during the exploration stage (1,973,889) (1,014,718)
Accumulated other comprehensive income
Cumulative translation adjustment 12,847 25,640
================================================================================================================
(239,867) (519,084)
================================================================================================================
$ 23,164 $ 90,757
================================================================================================================
See accompanying notes to consolidated financial statements.
On behalf of the Board:
/s/ "ROGER D. WATTS"
- ---------------------------- Director
/s/ "R. BRUCE MANERY"
- ---------------------------- Director
3
GOLDEN RIVER RESOURCES INC.
(An Exploration Stage Enterprise)
Consolidated Statement of Loss
$ United States
Six month period ended December 31, 1999 and 1998
(Unaudited - Prepared by Management)
===============================================================================================================
From Inception
(June 13, 1997)
to December 31, 1999 1999 1998
===============================================================================================================
Expenses
Amortization $ 794 $ 562 $ -
Consulting fees 97,586 94,765 -
Exploration of mineral properties 358,379 42,406 78,974
General and administrative 84,370 21,977 14,507
Management fees 125,308 - 12,593
Option payments to acquire mineral
properties written off 860,489 30,000 297,602
Professional fees 228,836 44,465 66,918
Travel and promotion 217,127 28,355 34,916
================================================================================================================
1,973,889 262,530 505,510
================================================================================================================
Loss $ (1,973,889) $ (262,530) $ (505,510)
================================================================================================================
Weighted average number of shares 6,918,865 15,376,079 3,469,808
Loss per share $ (0.29) $ (0.02) $ (0.15)
================================================================================================================
See accompanying notes to consolidated financial statements.
4
GOLDEN RIVER RESOURCES INC.
(An Exploration Stage Enterprise)
Consolidated Statement of Stockholders' Deficiency and Comprehensive Income
$ United States
Six month period ended December 31, 1999
(Unaudited - Prepared by Management)
===================================================================================================================
Deficit
Accumulated Accumulated
Additional During the Other Total
CAPITAL STOCK Paid in Exploration Comprehensive Stockholders
Shares Amount Capital Stage Income Equity
===================================================================================================================
Golden River Balance,
June 30, 1999 14,822,872 $ 1,537,475 $ - $(1,711,359) $ 12,922 $ (160,962)
Issued for services 1,932,200 193,220 - - - 193,220
Share issue costs - (118,220) - - - (118,220)
Compensation cost of
options issued to
non-employees - - 78,700 - - 78,700
Shares issued pursuant
to Mineral Property
agreement @ $.12
per share 250,000 30,000 - - - 30,000
- -------------------------------------------------------------------------------------------------------------------
17,005,072 1,642,475 78,700 (1,711,359) 12,922 22,738
Comprehensive income:
Loss - - - (262,530) - (262,530)
Foreign currency
translation adjustment - - - - (75) (75)
- -------------------------------------------------------------------------------------------------------------------
Comprehensive loss - - - (262,530) (75) (262,605)
- -------------------------------------------------------------------------------------------------------------------
Balance December 31,
1999 (Unaudited) 17,005,072 $ 1,642,475 $ 78,700 $(1,973,889) $ 12,847 $ (239,867)
===================================================================================================================
See accompanying notes to consolidated financial statements.
5
GOLDEN RIVER RESOURCES INC.
(An Exploration Stage Enterprise)
Consolidated Statement of Cash Flows
$ United States
Six month period ended December 31, 1999 and 1998
(Unaudited - Prepared by Management
==================================================================================================================
From Inception
(June 13, 1997)
to December 31, 1999 1999 1998
==================================================================================================================
Loss $ (1,973,889) $ (262,530) $ (505,510)
Cash flows from operating activities:
Items not involving cash:
Amortization 1,794 562 -
Option payments to acquire mineral
properties written off 60,000 30,000 -
Compensation cost of options issued
to non-employees 78,700 78,700 -
Accounts payable and accrued liabilities 80,242 (5,999) (23,244)
Other changes in non-cash operating
Working capital 17,541 11,570 92,472
==================================================================================================================
(1,735,612) (147,697) (436,282)
Cash flows from investing activities:
Purchase of capital assets (12,467) (1,049) -
Cash flows from financing activities:
Proceeds from long term debt 100,233 100,233 -
Proceeds from share subscriptions - - 498,832
Issuance of capital stock 903,971 - 6,614
Proceeds from realization of assets acquired from
the business combination with Golden River 739,589 - -
==================================================================================================================
1,743,793 100,233 505,446
Foreign currency translation adjustment 12,847 (75) 8,795
==================================================================================================================
Increase (decrease) in cash 8,561 (48,588) 77,959
Cash position, beginning of period - 57,149 12,798
==================================================================================================================
Cash position, end of period $ 8,561 $ 8,561 $ 90,757
==================================================================================================================
See accompanying notes to consolidated financial statements.
6
GOLDEN RIVER RESOURCES INC.
(An Exploration Stage Enterprise)
Notes to Consolidated Financial Statements
$ United States
Six month period ended December 31, 1999 and 1998
(Unaudited - Prepared by Management)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES:
a) In the opinion of management, all adjustments (consisting of normal
recurring items) necessary for the fair presentation of these
unaudited financial statements in conformity with generally accepted
accounting principles have been made.
b) Translation of Financial Statements
The Company's subsidiary, Rob Roy Resources Ltd., operates in Canada
and its operation are conducted in Canadian currency.
These consolidated statements are presented in United States currency
for the convenience of readers accustomed to United States Currency.
The method of translation applied is as follows:
i) Monetary assets and liabilities are translated at the rate of
exchange in effect at the balance sheetdate, being US $1.00 per
Cdn $1.4721.
ii) Non-monetary assets and liabilities are translated at the rate of
exchange in effect at the date transaction occurred.
iii) Revenues and expenses are translated at the exchange rate in
effect at the transaction date.
iv) The net adjustment arising from the translation is recorded in a
separate component of stockholders' equity called "Cumulative
translation adjustment" which is included in "Accumulated other
comprehensive income".
c) Loss per share
Loss per share has been calculated using the weighted average number
of common shares outstanding during the period. The effect of the
contingent stock issues pursuant to the La Mexicana agreement, and the
stock options issued during the period (note 3) have not been included
in the computation because to do so would be anti-dilutive.
2. LONG TERM DEBT:
The long term debt is demand in nature, does not bear interest and has no
fixed terms of repayment.
7
GOLDEN RIVER RESOURCES INC.
(An Exploration Stage Enterprise)
Notes to Consolidated Financial Statements
$ United States
Six month period ended December 31, 1999 and 1998
(Unaudited - Prepared by Management)
================================================================================
3. STOCK OPTION PLAN:
During 1999, the Company adopted a stock option plan whereby directors,
officers and employees of the Company were granted the right to subscribe
for up to 10% of the issued and outstanding shares of the Company at prices
to be fixed at the time the options are granted. Options issued pursuant to
the Plan have a vesting period of three months, and expire five years from
the date of issue. The Company applies APB Opinion NO. 25 in accounting for
its employee stock option plan whereby compensation cost is recorded only
to the extent that the market price exceeds the exercise price at the date
of grant and, accordingly, no compensation cost is recognized for its stock
options in these financial statements. Options granted to non-employees
will be accounted for at their fair value at the date of grant.
During the period ended December 31, 1999, the Company issued 1,450,000
common share stock options. These stock options have an exercise price of
$0.10 per share, a vesting date of December 23, 1999 and expire on
September 23, 2004.
Of these options, $1,050,000 were granted to non-employees. The fair value
of these options has been determined to be $78,700 using the Black Scholes
Method using the expected life to be the life of the options, volatility
factor of 95%, risk free rate of 5.5% and no assumed dividend rate.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Effective March 10, 1999, the Company completed the acquisition of 100% of the
outstanding common shares of Rob Roy Resources Inc. ("Rob Roy"). As the Rob Roy
shareholders obtained effective control of the Company through the exchange of
their shares of Rob Roy for shares of the Company, the acquisition has been
accounted for in these consolidated financial statements as a reverse
acquisition. Consequently, the consolidated statements of loss and deficit and
changes in cash flows reflect the results from operations and changes in
financial position of Rob Roy, the legal subsidiary, since inception, combined
with those of the Company, the legal parent, from the date of acquisition on
March 10, 1999, in accordance with generally accepted accounting principles for
reverse acquisitions. In addition, the comparative figures are those of Rob Roy,
the legal subsidiary.
The Company's fiscal year end is June 30. The following is a summary of certain
selected financial information for the six months ended December 31, 1999, the
fiscal year ended June 30, 1999, and the period from its date of incorporation
to June 30, 1998. Reference should be made to the financial statements attached
to this registration statement to put the following summary in context. All
dollar figures referred to in this section relating to the Company are listed in
US dollars unless otherwise noted.
INCEPTION (JUNE 13,
SIX MONTHS ENDED YEAR ENDED 1997) TO JUNE 30,
DECEMBER 31, 1999 JUNE 30, 1999 1998 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------
Revenues -- -- --
- ------------------------------------------------------------------------------------------------------------------------
(Loss) from
continuing operations $ (262,530) $ (1,202,151) $ (509,208)
- ------------------------------------------------------------------------------------------------------------------------
(Loss) per common
share $ (0.02) $ (0.15) $ (0.26)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1999 JUNE 30, 1999 JUNE 30, 1998
- ------------------------------------------------------------------------------------------------------------------------
Working capital
(deficiency) $ (249,782) $ (170,390) $ (28,983)
- ------------------------------------------------------------------------------------------------------------------------
Total assets $ 23,164 $ 72,797 $ 12,798
- ------------------------------------------------------------------------------------------------------------------------
Long-term obligations -- -- --
- ------------------------------------------------------------------------------------------------------------------------
RESULTS OF OPERATIONS
During the six months ended December 31, 1999, the Company incurred a loss of
$262,530 due to expenditures for consulting fees ($94,765), exploration of
mineral properties ($42,406), professional fees ($44,465), travel and promotion
($28,355), and general and administrative ($21,977). In addition, $30,000 in
option payments to acquire mineral properties was written off. This compares to
a loss of $505,510 for the six months ended December 31, 1998, with the most
significant expenditure being $297,602 in option payments to acquire mineral
properties written off.
9
Due to the lack of any revenues, and the cumulative losses of $1,711,359
incurred through June 30, 1999, and $1,973,889 through December 31, 1999, there
is a substantial doubt about the Company's ability to continue as a going
concern, as noted in the report of the independent auditors on the Company's
financial statements. The Company requires additional financing to continue
operations and to undertake the exploration programs described below. If it is
unable to obtain such financing, it may be unable to continue operations or
engage in the exploration programs.
FINANCIAL CONDITION
Since inception, the Company's capital resources have been limited. The Company
has had to rely upon the sale of equity securities for cash required to fund the
administration of the Company. From its inception through December 31, 1999, the
Company has raised $730,823, net of share issuance costs from the sale of its
Common Stock. In addition, 850,000 shares have been issued for mineral property
options and 200,000 shares have been issued for services. Since the Company does
not expect to generate any revenues in the near future, it will have to continue
to rely upon sales of equity and debt securities to raise capital. It follows
that there can be no assurance that financing, whether debt or equity, will
always be available to the Company in the amount required at any particular time
or for any particular period or, if available, that it can be obtained on terms
satisfactory to the Company.
At December 31, 1999, the Company had a working capital deficiency of $249,782,
as compared to a deficiency of $170,390 at June 30, 1999. The increase was due
primarily to the loss incurred during the six months then ended.
PLAN OF OPERATION
In addition to option payments of $5,000 due toward the January 1, 2000
installment , the Company is required to invest a total of $300,000 on or before
June 12, 2000 and $1,000,000 on or before February 12, 2001 on work commitments.
The Company must also issue 750,000 shares of Common Stock by March 2002. The
Company issued the minimum of 250,000 shares by February 12, 2000, leaving
500,000 shares to be issued by March 2002. The Company plans to conduct a Phase
1 regional geochemical survey over the La Mexicana property at a cost of
approximately $19,000. The Phase 1 program will be followed by a Phase 2 program
at a cost of approximately $77,000. The Company does not presently have the
funds available for either the Phase 1 or Phase 2 program and will have to raise
additional funds by way of debt or equity in order to finance same. It does not
have any arrangements for such funding at present. If the Company were unable to
raise the funds necessary to satisfy the option payment and work commitment
requirements, the Company would seek an extension from the optionor of the
Mexicana I property. There is no assurance that the Company would be able to
obtain an extension. If the Company defaulted in its obligations, the option
agreement would be terminated and the Company would lose everything of value
paid for the property.
In addition to the property obligations described in the preceding paragraph,
the Company has only normal trade obligations. As of December 31, 1999, these
trade obligations were $140,570, of which $129,066 was outstanding for more than
90 days. The officers and directors of the Company and
10
the persons to whom the long-term debt of $100,233 is owed, have not given the
Company a fixed date for repayment.
As of December 31, 1999, the Company had approximately $8,500 cash on hand.
However, in January 2000, the Company borrowed $75,000, which will be sufficient
to satisfy its cash requirements for the next four to six months of minimal
operations. The Company would be able to maintain an office, but would not be
able to undertake the exploration programs on the property, make any option
payments, or service any existing debt. The Company does not intend to hire any
more full-time employees over the next 12 months. Subject to the availability of
funds the Company will hire additional employees and consultants on a part-time
basis in order to carry out its proposed work programs. The Company does not
intend to make any purchases of plant or equipment over the next 12 months.
If the Transmeridian transaction should be completed, the Company would be
required to arrange for a private placement in the minimum amount of $2,000,000
to cover immediate working capital and project costs. Since the Company has just
started its due diligence work on Transmeridian and no progress has been made in
recent months, management does not believe that the acquisition of Transmeridian
is probable. Accordingly, the Company has not made any plans with respect to a
proposed private placement.
YEAR 2000 READINESS DISCLOSURE
The Year 2000 issue refers to the inability of computer and other information
technology systems to properly process date and time information due to the
programming of a two digit year rather than a four digit year. The risk is that
a system will recognize the digits "00" as 1900 rather than the year 2000, or
that the system may not recognize "00" as a year at all. As a result, computers
and embedded processing systems may be at risk of malfunctioning, particularly
during the transition from 1999 to 2000.
The Company has completed its assessment of the impact of Year 2000 issues on
its business operations. The Year 2000 issue may affect the Company in four
principal areas including: (1) computer systems such as personal computers,
operating systems, business software, and application software including
accounting systems, technical support software and administration software; (2)
field assets (primarily embedded systems) such as programmable logic controllers
and equipment control panels; (3) other systems such as telephones, photocopiers
and facsimile machines; and (4) third-party suppliers and service providers such
as banks and insurance companies.
To date, the Company has implemented and tested its computer software and
hardware for Year 2000 compliance and has concluded that its hardware and
software is Year 2000 compliant.
The Company's Year 2000 program is designed to reduce the Company's risk of
material losses due to the Year 2000 issue. Management does not anticipate any
material adverse effect from the Year 2000 issue; however, the Company cannot be
certain that it will not suffer material adverse effects in the event that third
parties upon which the Company is dependent are unable to resolve their Year
2000 issues.
11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable.
ITEM 2. CHANGES IN SECURITIES
In November 1999, the Company issued 1,182,200 shares of Common Stock
to 67849 Capital Ltd. as payment for services valued at $118,220. In
addition, the Company issued 250,000 shares to Ing. Cuitlahuac Rangel
Alcaraz valued at $30,000, pursuant to the obligations set forth in
the amended Option Agreement on the La Mexicana property. The Company
relied upon the exemption from registration contained in Section 4(2)
of the Securities Act of 1933. No underwriters were used and no
underwriting commissions were paid.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A) EXHIBITS
REGULATION CONSECUTIVE
S-B NUMBER EXHIBIT PAGE NUMBER
2.1 Offer to Purchase (1) N/A
3.1 Articles of Incorporation (1) N/A
3.2 Bylaws (1) N/A
10.1 Mexicana I Agreement dated as of February 12, 1998 (1) N/A
10.2 La Lajita Agreement dated as of February 12, 1998 (1) N/A
10.3 1999 Stock Option Plan (1) N/A
10.4 Agreement with Transmeridian Exploration Inc., as amended (1) N/A
12
REGULATION CONSECUTIVE
S-B NUMBER EXHIBIT PAGE NUMBER
10.5 Letter of Intent with OREX Gold Mines Corporation (1) N/A
10.6 Mexicana I Agreement dated as of November 12, 1999 (1) N/A
10.7 Interim Financing Agreement N/A
27 Financial Data Schedule N/A
- ----------------------------
(1) Incorporated by reference to the exhibits filed with the Registration
Statement on Form 10-SB, File No. 0-27953
B) REPORTS ON FORM 8-K:
None.
13
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.
GOLDEN RIVER RESOURCES INC.
(Registrant)
Date: April 10, 2000 By: /s/ Robert Bruce Manery
----------------------------------------
Robert Bruce Manery, Secretary
(Principal financial officer)
14