U.S. 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 May 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from _____________to_______________
Commission file number: 0-32237
GALAXY INVESTMENTS, INC.
_________________________
(Name of small business issuer in its charter)
Colorado 98-0347827
_______________________________ ____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 604-750 West Pender Street
Vancouver, B.C. Canada V6C 2T7
_______________________________________ ________________
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (604) 689-0188
Indicate by checkmark whether the registrant (1) has 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 [X] No [ ]
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date:
Outstanding at May 31, 2001
_________________________________
9,002,000
$.001 par value common stock
GALAXY INVESTSMENTS, INC.
FORM 10-QSB
TABLE OF CONTENTS
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements............................................... 3
ITEM 2. Management Discussion and Analysis of Financial Condition
and Results of Operations..........................................10
PART II--OTHER INFORMATION
ITEM 1. Legal Proceedings..................................................11
ITEM 2. Changes in Securities and Use of Proceeds..........................11
ITEM 3. Defaults Upon Senior Securities....................................11
ITEM 4. Submission of Matters to a Vote of Security Holders................11
ITEM 5. Other Information..................................................11
ITEM 6. Exhibits and Reports on Form 8-K...................................11
2
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements
GALAXY INVESTMENTS, INC.
(An Exploration Stage Company)
BALANCE SHEETS
May 31, 2001 and November 30, 2000
ASSETS
------
May 31, November 30,
2001 2000
------------ ------------
Current Assets
Cash $ 1,854 $ 2,904
-------- --------
Total current assets 1,854 2,904
-------- --------
Other assets
Option to purchase mineral claims - Note 3 - -
-------- --------
$ 1,854 $ 2,904
======== ========
LIABILITIES
___________
Current Liabilities
Accounts payable - related parties $ 7,500 $ 4,500
Accounts payable 1,000 1,015
-------- --------
Total current liabilities 8,500 5,515
-------- --------
STOCKHOLDERS' EQUITY
____________________
Preferred stock
25,000,000 shares authorized at $0.001
par value, none outstanding - -
Common stock
100,000,000 shares authorized, at $0.001
par value, 9,002,000 shares issued and
outstanding 9,002 9,002
Capital in excess of par value - -
Deficit accumulated during the
exploration stage ( 15,648) ( 11,613)
--------- ---------
Total stockholders' deficiencY ( 6,646) ( 2,611)
--------- ---------
$ 1,854 $ 2,904
========= ========
SEE ACCOMPANYING NOTES
3
GALAXY INVESTMENTS, INC.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
for the three months and six months ended May 31, 2001 and May 31, 2000
and for the period December 17, 1999 (Date of Inception) to May 31, 2001
_____________________________________________________________________________
December 17,
1999 to
3 months ended May 31, 6 months ended May 31, May 31,
______________________ ______________________
2001 2000 2001 2000 2001
____ ____ ____ ____ _____
Revenues $ - $ - $ - $ - $ -
Expenses 2,010 - 4,035 - 15,648
------------ ------------ ---------- -------- --------
Net loss 2,010 - 4,035 - 15,648
============ ============ ========== ======== ========
Net loss per common share
Basic $ - $ - $ - $ -
============ ============ ========== =========
Average outstanding shares
Basic 9,002,000 8,559,000 9,002,000 8,559,000
============ ============ ========== ==========
SEE ACCOMPANYING NOTES
4
GALAXY INVESTMENTS, INC.
(An Exploration Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
for the period December 17, 1999 (Date of Inception) to May 31, 2001
_____________________________________________________________________________
Capital in
Common Stock Excess of Accumulated
____________
Shares Amount Par value Deficit
______ ______ _________ ___________
Balance, December 17, 1999
(Date of Inception) - $ - $ - $ -
Issuance of common stock for
cash at $0.001
February, March and June 2000 9,000,000 9,000 - -
Issuance of common stock in
respect of resource property
acquisition 2,000 2 - -
Operating loss for the period
December 17, 1999 to
November 30, 2000 - - - ( 11,613)
--------- ------- ------ ------------
Balance, November 30, 2000 9,002,000 9,002 - ( 11,613)
Operating loss for the six
months ended May 31,2001 - - - ( 4,035)
--------- ------- ------ ------------
Balance, May 31, 2001 9,002,000 $ 9,002 $ - $( 15,648)
========= ======= ====== ============
SEE ACCOMPANYING NOTES
5
GALAXY INVESTMENTS, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
for the six months ended May 31, 2001 and May 31, 2000
and for the period December 17, 1999 (Date of Inception) to May 31, 2001
_____________________________________________________________________________
December 17,
1999 to
6 months ended May 31, May 31,
2001 2000 2001
____________ ____________ ___________
Cash flows from operating activities
Net loss $ ( 4,035) $ - $ ( 15,648)
Adjustment to reconcile net loss
to net cash provided by operating
activities
Change in accounts payable 2,985 - 8,500
Issuance of common capital stock
for expenses - - 2
---------- --------- ----------
Net cash used in operations ( 1,050) - ( 7,146)
---------- --------- ----------
Cash flows from investing activity - - -
---------- --------- ----------
Cash flows from financing activity
Proceeds from issuance of stock - - 9,000
---------- --------- ----------
Net increase (decrease) in cash ( 1,050) - 1,854
Cash at beginning of period 2,904 - -
---------- --------- ----------
Cash at end of period $ 1,854 $ - $ 1,854
========== ========= ==========
Non cash flows from operating activities
Issuance of 2,000 common shares for
mineral claims expense - - $ 2
--------- --------- ----------
SEE ACCOMPANYING NOTES
6
GALAXY INVESTMENTS, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2001
Note 1 Organization
------------
The Company was incorporated under the laws of the State of Colorado on
December 17, 1999 with authorized common stock of 100,000,000 shares at
$0.001 par value and preferred stock of 25,000,000 at $0.001 par value.
The preferred shares may be issued in one or more series with terms at
the discretion of the Board of Directors.
The Company was organized for the purpose of acquiring and developing
mineral properties. At the report date mineral claims, with unknown
reserves, have been acquired. The Company has not established the
existence of a commercially minable ore deposit and therefore has not
reached the development stage and is considered to be in the exploration
stage.
The Company has completed a private placement offering of 9,000,000
common shares.
Note 2 Summary Of Significant Accounting Policies
------------------------------------------
Accounting Methods
------------------
The Company recognizes income and expenses based on the accrual method
of accounting.
Dividend Policy
---------------
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
------------
On May 31, 2001 the Company had a net operating loss carry forward of
$15,648. The tax benefit of $4,694 from the loss carry forward has been
fully offset by a valuation reserve because the use of the future tax
benefit is doubtful since the Company has no operations. The net
operating loss will expire in 2022.
Basic and Diluted Net Income (Loss) Per Share
---------------------------------------------
Basic net income (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding. Diluted net
income (loss) per share amounts are computed using the weighted average
number of common shares and common equivalent shares outstanding as if
shares had been issued on the exercise of the preferred share rights
unless the exercise becomes antidilutive and then only the basic per
share amounts are shown in the report.
7
GALAXY INVESTMENTS, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2001
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Capitalization of Mineral Claim Costs
-------------------------------------
Cost of acquisition, exploration, carrying and retaining unproven
properties are expensed as incurred. Costs incurred in proving and
developing a property ready for production are capitalized and amortized
over the life of the mineral deposit or over a shorter period if the
property is shown to have an impairment in value. Expenditures for
mining equipment are capitalized and depreciated over their useful life.
Financial Instruments
---------------------
The carrying amounts of financial instruments, including cash, mineral
claims, and accounts payable are considered by management to be their
estimated fair values. These values are not necessarily indicative of
the amounts that the Company could realize in a current market exchange.
Estimates and Assumptions
-------------------------
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of the
assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses. Actual results
could vary from the estimates that were assumed in preparing these
financial statements.
Comprehensive Income
--------------------
The Company adopted Statement of Financial Accounting Standards No. 130.
The adoption of this standard had no impact on the total stockholder's
equity.
Recent Accounting Pronouncements
--------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
Note 3 Option to Purchase Mineral Claims
---------------------------------
On July 15, 2000 the Company acquired an option to purchase mineral
claims known as "Treadwell #1" Tenure #360,262 located in the Kamloops
Mining Division on Cannell Creek, British Columbia. The claims have an
expiration date of October 13, 2001.
The claims have not been proven to have a commercially minable ore
reserve and therefore all costs for exploration and retaining the
properties have been expensed.
8
GALAXY INVESTMENTS, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2001
Note 3 Option to Purchase Mineral Claims - (cont'd)
---------------------------------
The terms of the purchase to vest 100% in the claims includes total
payments of $40,000, the issuance of 100,000 shares of the Company and
by completing work commitments totalling $500,000 on the claims on the
dates in the following outline. The property is subject to a royalty of
one percent of the net smelter returns with a right to acquire the
rights to the royalty after start of commercial production.
Purchase price;
$2,500 cash and 2,000 common shares as initial payment
$7,500 cash and 8,000 common shares by July 31, 2001
$10,000 cash and 40,000 common shares by July 31, 2002
$20,000 cash and 50,000 common shares by July 31, 2003
Work commitments;
$25,000 in work by July 31, 2001
$50,000 in work by July 31, 2002
$100,000 in work by July 31, 2003
$150,000 in work by July 31, 2004
$175,000 in work by July 21, 2005
Note 4 Related Party Transactions
--------------------------
Related parties have acquired 33% of the outstanding common stock.
The company has accounts payable due to related parties of $7,500.
Note 5 Going Concern
-------------
Continuation of the Company as a going concern is dependent upon
obtaining additional working capital to service its future obligations
and the management of the Company has developed a strategy, which it
believes will accomplish this objective through additional equity
funding, and long term financing, which will enable the Company to
operate for the coming year.
9
ITEM 2. Management Discussion and Analysis of Financial Condition
and Results of Operations.
This Form 10-QSB may contain trend information and forward-looking statements
that involve risks and uncertainties. The actual results of operations of
Galaxy could differ materially from Galaxy's historical result of
operations and those discussed in such forward-looking statements as a result
of certain factors set forth in this section and elsewhere in this Form 10-QSB,
including information incorporated by reference.
Galaxy is in the business of acquiring and exploring mineral properties and
does not have a source of revenue at this time.
RESULTS OF OPERATION.
Revenues
As of the three month period ended May 31, 2001, Galaxy generated $0 in
revenues as compared to $0 for the three month period ended May 31, 2000.
Operating Expenses
For the three month period ended May 31, 2001, Galaxy had total operating
expenses of $2,010 and $0 total operating expenses for the same quarter ended
May 31, 2000. The increase in total operating expenses was due to an increase
in general and administrative costs.
Galaxy has an accumulated deficit from December 17, 1999 (date of inception)
to May 31 2001 of ($15,648).
Operating Loss
As of the three month period ended May 31, 2001, Galaxy incurred a net loss of
$2,010 as compared to $0 for the same period from the previous year.
Additionally, as May 31, 2001, Galaxy had accounts payable due to related
parties of $7,500 and current liabilities exceeded its current assets by $6,646.
For the six month period ending May 31, 2001, Galaxy experienced a net loss
in cash flows from operating activities of ($4,035) as compared to $0 for the
same period ended May 31, 2000.
Galaxy does not expect any significant changes in the number of its employees
within the next 12 months.
Income Taxes
On May 31, 2001 Galaxy had a net operating loss carry forward of $15,648. The
tax benefit of $4,694 from the loss carry forward has been fully offset by a
valuation reserve because the use of the future tax benefit is doubtful since
the Company has no operations. The net operating loss will expire in 2022.
10
Liquidity and Financial Resources
Period from December 17, 1999, to May 31 2001.
From December 17, 1999, the date of incorporation, to May 31, 2001, Galaxy
raised $9,002 through the issuance of 9,002,000 common shares, as follows: from
February 2000 to June 2000, Galaxy issued 9,000,000 shares of its $.001 par
value common stock, at a price of $.001 per share, by virtue of Section 4(2) of
the Securities Act of 1933, as amended.
On October 11, 2000, Galaxy issued 2,000 shares of its $.001 par value common
stock as payment for mineral claims for a total value of $2 representing $.001
per share.
For the next 12 months, management of Galaxy plans to satisfy its cash
requirements by raising additional funds by way of private placements and/or a
public offering, to satisfy working capital needs.
PART II -- OTHER INFORMATION
ITEM 1. Legal Proceedings.
Galaxy has no current or pending material legal proceedings to which it
is or is likely to be a party or of which any of its property is or is
likely to be the subject of.
ITEM 2. Changes in Securities and Use of Proceeds.
There have been no changes in securities during this reporting period.
ITEM 3. Defaults Upon Senior Securities.
Galaxy has incurred no defaults upon senior securities during this
reporting period.
ITEM 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to a vote of security holders during
this reporting period.
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(b) Form 8-K
There were no reports filed on Form 8-K.
11
SIGNATURES
In accordance with 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 hereunto duly authorized.
Galaxy Investments, Inc.
(Registrant)
/s/Gregory C. Burnett
__________________________________
Gregory C. Burnett
Director/President
Date: July 10, 2001
12