UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2004
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to _____________
Commission File number 2-95836NY
GOLDTECH MINING CORPORATION
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(Exact name of registrant as specified in charter)
Nevada 13-3250816
- ------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4904 Waters Edge Drive, Suite 160, Raleigh, NC 27606
- ----------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
919- 851-2239
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Registrant's telephone number, including area code
(Former name, former address, and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), Yes [x ] No [ ] and (2) has been
subject to such filing requirements for the past 90 days. Yes [x] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date.
Class Outstanding as of May 6, 2004
--------------------- -----------------------------
Common Stock, $0.001 12,290,920
GOLDTECH MINING CORPORATION
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
ITEM 1.
Consolidated Balance Sheets........................................4
March 31, 2004 (unaudited) and December 31, 2003
Unaudited Consolidated Statements of Operations
Three months ended March 31, 2004 and 2003....................5
Unaudited Consolidated Statements of Cash Flows
Three months ended March 31, 2004 and 2003.....................6
Notes to Consolidated Financial Statements.........................7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...................10
ITEM 3. Controls and Procedures...........................................11
PART II. Other Information 11
ITEM 1. Legal Proceedings.................................................11
ITEM 2. Changes in Securities and Small Business Issuers Purchases
of Equity Securities..............................................11
ITEM 3. Defaults upon Senior Securities...................................12
ITEM 4. Submission of Matters to a Vote of Security Holders...............12
ITEM 5. Other Information.................................................12
ITEM 6. Exhibits and Reports on Form 8-K..................................12
Signatures........................................................12
Certifications
2
PART I - FINANCIAL INFORMATION
This filing contains certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. For this purpose any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, words
such as "may," "will," "expect," "believe," anticipate," "estimate" or
"continue" or comparable terminology are intended to identify forward-looking
statements. These statements by their nature involve substantial risks and
uncertainty, and actual results may differ materially depending on a variety of
factors, many of which are not within the Company's control. These factors
include but are not limited to economic conditions generally and in the
industries in which the Company and its customers participate; competition
within the Company's industry, including competition from much larger
competitors; technological advances which could render the Company's products
less competitive or obsolete; failure by the Company to successfully develop new
products or to anticipate current or prospective customers' product needs; price
increase or supply limitations for components purchased by the Company for use
in its products; and delays, reductions, or cancellations of orders previously
placed with the Company.
3
ITEM 1. FINANCIAL STATEMENTS
GOLDTECH MINING CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Unaudited (Audited)
Mar 31, Dec 31,
2004 2003
---------- ----------
ASSETS
CURRENT ASSETS
Cash $ 219,610 $ 13,048
Accounts receivables 25,855 44,001
Inventory 4,187 4,107
-------- -------
Total Current Assets 249,652 61,156
-------- -------
EQUIPMENT - net of accumulated depreciation 4,499 8,756
------- -------
$ 254,151 $ 69,912
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable - note 4 $ 25,000 $ -
Accounts payable 6,448 26,309
-------- -------
Total Current Liabilities 31,448 26,309
-------- -------
STOCKHOLDERS' EQUITY
Preferred stock
5,000,0000 shares authorized at $.001 - none issued - -
Common stock
95,000,000 shares authorized, at $.001 par value;
12,290,920 shares issued and outstanding 12,291 11,874
Capital in excess of par value 5,773,974 5,461,495
Accumulated deficit (5,563,562) (5,429,766)
--------- ----------
Total Stockholders' Equity 22,703 43,603
--------- ----------
$ 254,151 $ 69,912
========= ==========
The accompanying notes are an integral part of these
financial statements.
GOLDTECH MINING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended March 31
(unaudited)
Mar 31, Mar 31,
2004 2003
-------- --------
REVENUES $ 108,806 $ 103,107
-------- --------
EXPENSES
Cost of sales 2,120 3,930
Selling and administrative 188,984 122,549
Exploration and concession expense 46,000 -
Royalties 1,240 453
Depreciation and amortization 4,258 72,294
------- --------
242,602 199,226
NET LOSS $(133,796) (96,119)
======= ========
NET LOSS PER COMMON SHARE
Basic and diluted $ (.01) $ (1.05)
------- --------
AVERAGE OUTSTANDING SHARES
(stated in 1,000's)
Basic 12,083 189
------- --------
Diluted 17,083 -
------- --------
The accompanying notes are an integral part of these
financial statements.
4
GOLDTECH MINING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended March 31
(unaudited)
Mar 31, Mar 31,
2004 2003
--------- ----------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (133,796) $ (96,119)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation and amortization 4,258 72,294
Changes in current assets and liabilities
Accounts receivable 18,146 5,604
Inventory (80) 3,930
Accounts and note payable 5,138 13,880
Net Change in Cash From Operations (106,334) (411)
---------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES
- -
---------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of stock 312,896 -
---------- ---------
Net change in Cash 206,562 (411)
Cash at Beginning of Period 13,048 10,643
---------- ---------
Cash at End of Period $ 219,610 $ 10,232
========== =========
The accompanying notes are an integral part of these
financial statements.
5
GOLDTECH MINING CORPORATION AND SUBSIDIARY
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 2004
1. ORGANIZATION
The Company was incorporated in 1987 under the laws of the state of Delaware
with authorized common stock of 30,000,000 shares at $.05 par value with the
name "Egan Systems, Inc." The domicile was changed to the State of Nevada on
November 5, 2003 in connection with a name change to "Goldtech Mining
Corporation" and an increase in the authorized common stock to 95,000,000 shares
with a par value of $.001 and the addition of preferred stock of 5,000,000
shares with a par value of $.001. The terms of the preferred stock has not been
determined.
On November 17, 2003 the Company completed a reverse stock split of one share
for 100 outstanding shares. This report has been prepared showing after stock
split shares from inception.
The Company is engaged in the business of developing, selling, and supporting
computer software products. During 2003 the Company also entered the business of
exploration of mineral claims.
2. CONDENSED FINANCIAL STATEMENTS AND FOOTNOTES
The interim consolidated financial statements presented herein
have been prepared by the Company and include the unaudited accounts of the
Company and its subsidiaries. All significant inter-company accounts and
transactions have been eliminated in the consolidation.
These condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and the instructions to Form 10-QSB and Item 310 (b) Regulation S-B.
Certain information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting principles
have been condensed or omitted. The Company believes the disclosures made are
adequate to make the information presented not misleading. The condensed
consolidated financial statements should be read in conjunction with the
Company's consolidated financial statements for the year ended December 31, 2003
and notes thereto included in the Company's Form 10-KSB.
In the opinion of management, the unaudited condensed consolidated
financial statements reflect all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position of the
Company as of March 31, 2004, the results of operations for the three months
ended March 31, 2004 and 2003, respectively. Interim results are not necessarily
indicative of full year performance because of the impact of seasonal and
short-term variations.
6
GOLDTECH MINING CORPORATION AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2004
3. ACQUISITION OF MINING CLAIMS
During 2003 the Company acquired the mining claims listed below by the issuance
of 11,110,000 common shares to an affiliate, and other non related parties, and
the issuance of 575,000 common shares to a consultant. The terms of the
acquisition includes an obligation to pay $1,500,000 upon completion of
subsequent financing and the start of development of the properties. The
affiliate is a pre-exploration company. Minable ore reserves have not been
proven and therefore all costs of acquisition and exploration have been
expensed.
Tofino Group - Alberni Mining Division
The Tofino Group consists of 35 claims in the Tofino Group containing
approximately 1,700 acres located on the west coast of Vancouver Island.
Topographical and control surveys have been undertaken to augment the property
database. The claims require Can $7,350 each year in work or fees The claims
will expire in August 2004.
Mets Lease - Liard Mining Division
The Mets Leases consists of 200 claims containing approximately 500 acres
located in the new Todoggone Mining Camp in North Western British Columbia. Part
of the purchase included several years of records and data still to be analyzed.
The claims require Can $2,000 in work or fees each year. The claims expire in
April 2005
Silvercup Claims - Revelstoke Mining Division
The Silvercup Claims consist of 85 claims containing 4,400 acres in the
Revelstoke Mining Division which are adjacent to an existing and historic gold
and silver mining camp in British Columbia. The claims require Can $18,060 in
work or fees each year. The claims expire in September 2004.
4. ACQUISITION OF MINING PROPERTIES - SPAIN
On March 26, 2004 the Company entered into an Asset Acquisition Agreement with
Solid Resources, Ltd., a publicly held Alberta corporation, to acquire
undeveloped mining properties located near Salamanca, Spain. The purchase price
is $25,000 with Solid to maintain a carried interest of 25% of the property for
any and all net profits and 25% of the funds in the event that the Property is
sold. The Company issued a note for the $25,000 at no interest for 60 days and
agrees to spend a minimum of $600,000 of recordable exploration work on the
property by September 15, 2007 at a rate of a minimum of $150,000 per year
beginning with the work to be performed by September 15, 2004. Solid has the
right to convert the 25% carried interest for up to 5,000,000 restricted common
shares of the Company at a rate of 200,000 shares for each 1% at any time up to
24 months from the signing of the Agreement.
7
5. COMMON CAPITAL STOCK
On March 31, 2004 the Company sold 417,195 shares of common stock at $.75 per
share to Glen Lockton Investments, Inc., an Ontario corporation, for $312,896.
Glen Lockton Investments, Inc. has the right to acquire an additional share of
common stock for $1.50 per share within one year.
6. CONTINUING LIABILITIES
On March 16, 2004, the Company entered into a one-year agreement with Pan
American Relations to conduct investors relations for 25,000 restricted shares
of common stock to be issued by April 30, 2004, plus approved expenses. There
are no monthly fees.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
Plan of Operations
The Company has two lines of business; the development marketing and supporting
of computer software products and service and since November 2003, the
acquisition and development of mining properties.
Comparison of the quarter ended March 31, 2004 to the quarter ended March 31,
2003
Revenues for the quarterly period ended March 31, 2004 increased by $5,699 or
5.5% to $108,806 from $103,107 for the quarterly period ended March 31, 2003.
The principal reason for this increase in revenue was a price increase which
went into effect on July 1, 2003.
Cost of sales for the quarterly period ended March 31, 2004 decreased by $1,810
or 46.1% to $2,120 from $3,930 for the quarterly period ended March 31, 2003.
The decrease in the cost of sales resulted from the decrease in the sale of
tools.
Selling and administrative expenses for the quarterly period ended March 31,
2004 increased by $66,435 or 54.2% to $188,984 from $122,549 for the quarter
ended March 31, 2003. The increase in selling and administrative expenses is
principally attributable to the cost of the expansion into the exploration of
mineral claims.
Exploration and concession expense of $ 46,000 resulted from the purchase of and
exploration of mining claims during the quarterly period ended March 31, 2004.
Royalty expense for the quarterly period ended March 31, 2004 increased by $787
or 173.7% to $1240 from $453 for the quarterly period ended March 31, 2003. The
increase in royalty expense is attributable to an increase in the sale of third
party software.
Depreciation and amortization expenses for the quarterly period ended March 31,
2004 decreased by $68,036 or 94.1% to $4,258 from $72,294 for the quarterly
period ended March 31, 2003. The decrease in depreciation and amortization
expense was caused by the final write off of capitalized costs of the software
development.
There were no provisions for income taxes for either the quarter ended March 31,
2004 or March 31, 2003 as the Company incurred losses in both periods.
Liquidity and Capital Resources
As of March 31, 2004 the Company had cash of $219,610 and working capital of
$218,204. This compares with cash of $13,048 and working capital of $34,847 as
of December 31, 2003. Cash used by operating activities totaled $106,334 for the
quarter ended March 31, 2004. This compares with cash used by operations of $411
for the quarter ended March 31, 2003. This change resulted from a decrease
change in the current accounts and a large operating loss which was partially
offset by a reduction in depreciation and amortization.
9
There was no cash used or provided by investing activities for either the
quarterly period ended March 31, 2004 or March 31, 2003.
There was an increase in cash provided by financing activities for the quarterly
period ended March 31, 2004 from the issuance of capital stock for $312,896.
There were no financing activities for the corresponding period of the prior
year.
Historically, the Company has funded its operations through the sale of its
shares or borrowings from its principal shareholders. However, the company
continues to incur net operating losses and with the acquisition of the mining
claims, the Company has obligated itself to significant future exploration
costs. Therefore, unless the Company's operations became profitable, or it is
able to sell additional shares, it will be unable to continue as a going
concern.
ITEM 3 CONTROL AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Our chief executive
officer and our chief financial officer, after evaluating the effectiveness of
the Company's "disclosure controls and procedures" (as defined in the Securiteis
Exchange Act of 1934 Rule 13a-14(c) and 15-d-14(c) as of a date (the "Evaluation
Date") within 90 days before the filling date of this quarterly report, have
concluded that as of the Evaluation Date, our disclosure controls and procedures
were adequate and designed to ensure that material information relating to us
and our consolidated subsidiaries would be made known to them by others within
those entities.
(c) Changes in internal controls. There were no significant changes in our
internal controls or to our knowlege, in other factors that could significantly
affect our disclosure controls and procedures subsequent to the Evaluation Date.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
During the quarter ended March 31, 2004 the Company issued 417,195 common shares
for cash of $312,896.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
On March 26, 2004 the Company entered into an Asset Acquisition Agreement with
Solid Resources, Ltd., a publicly held Alberta corporation, to acquire
undeveloped mining properties located near Salamanca, Spain. The purchase price
is $25,000 with Solid to maintain a carried interest of 25% of the property for
any and all net profits and 25% of the funds in the event that the Property is
sold. The Company issued a note for the $25,000 at no interest for 60 days and
agrees to spend a minimum of $600,000 of recordable exploration work on the
property by September 15, 2007 at a rate of a minimum of $150,000 per year
beginning with the work to be performed by September 15, 2004. Solid has the
right to convert the 25% carried interest for up to 5,000,000 restricted common
shares of the Company at a rate of 200,000 shares for each 1% at any time up to
24 months from the signing of the Agreement
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
None
b. Reports on Form 8-K
1. Form 8-K dated March 23, 2004 reporting a change in certifying
accountants.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GOLDTECH MINING CORPORATION
By: /s/ Ralph Jordan
----------------------------------------
Dated: May 12, 2004 Ralph Jordan
Executive Officer & Chief Financial Officer
11
CERTIFICATIONS
I, Ralph Jordan, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Goldtech Mining
Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
1. The registrant's other certifying officers and I are responsible for
establishing and maintaining
2. disclosure controls and procedures (as defined in Exchange Act Rules 13a-14
and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated: May 12 , 2004
By: /s/ Ralph Jordan
- ------------------------
Ralph Jordan
Chief Executive Officer
12
I, Ralph Jordan, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Goldtech Mining
Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated: May 12 , 2004
By: /s/ Ralph Jordan
- -----------------------
Ralph Jordan
Chief Financial Officer
13
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
- --------------------------------------------------------------------------------
I, Ralph Jordan, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of Goldtech Mining Corporation; on Form 10-QSB for the quarter ended
March 31, 2004 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 and that information contained in such Form
10-KSB fairly presents in all material respects the financial condition and
results of operations of Goldtech Mining Corporation.
By: /s/ Ralph Jordan
- ----------------------------
Name: Ralph Jordan
Title: Chief Executive Officer
May 12, 2004
14
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
- --------------------------------------------------------------------------------
I, Ralph Jordan, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of Goldtech Mining Corporation; on Form 10-QSB for the quarter ended
March 31, 2004 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 and that information contained in such Form
10-QSB fairly presents in all material respects the financial condition and
results of operations of Goldtech Mining Corporation.
By: /s/ Ralph Jordan
- ------------------------------
Name: Ralph Jordan
Title: Chief Financial Officer
May 12, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized
15