First Quarter Report 10QSB
March 31, 2000
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________ to _________
Commission file 02-69494
GLOBAL GOLD CORPORATION
(Name of small business issuer in its charter)
DELAWARE 13-3025550
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
734 FRANKLIN AVENUE, SUITE 383, GARDEN CITY, NEW YORK 11530-4525
----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (516) 773-8975
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 /X/ No / /.
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes / / No / /. Not applicable.
As of March 31, 2000 there were 4,358,114 Shares of the registrant's Common
Stock outstanding.
Transitional Small Business Disclosure Format (check one): Yes /__/ No /X/.
GLOBAL GOLD CORPORATION
(A Development Stage Company)
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet - as of March 31, 2000 ............................. 1
Statement of Income and (Loss) for the three month periods
ended March 31, 2000 and March 31, 1999 and for the
development stage period from January 1, 1995 through
March 31, 2000.................................................... 2
Statement of Cash Flows - for the periods January 1, 2000
through March 31, 2000 and January 1, 1999 through March 31,
1999 and the development stage period from
January 1, 1995 through March 31, 2000 ........................... 3
Notes to Financial Statement (unaudited) ........................4-5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation ..............................6-7
PART II - OTHER INFORMATION
Item 2. Other information .............................................. 8
SIGNATURE ................................................................. 9
GLOBAL GOLD CORPORATION
(A Development Stage Company)
BALANCE SHEET
MARCH 31, 2000
(Unaudited)
ASSETS
Cash $ 855
Other Assets:
Investment in First Dynasty Mines, Ltd.
Common Shares 240,000
----------------
TOTAL ASSETS $ 240,855
================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 56,429
STOCKHOLDERS' EQUITY:
Common stock $0.001 par, 100,000,000 shares authorized
4,358,114 shares issued and outstanding 4,358
Paid capital - dormant period 3,236,602
Paid capital - development stage 1,596,713
Deficit - dormant period (2,907,648)
Deficit - development stage (1,789,599)
Unrealized gain on securities 44,000
---------------
TOTAL STOCKHOLDERS' EQUITY 184,426
---------------
$ 240,855
===============
See notes to financial statements
1
GLOBAL GOLD CORPORATION
(A Development Stage Company)
STATEMENTS OF INCOME AND (LOSS)
(Unaudited)
January 1, 1995
January 1, January 1, (development stage)
2000 through 1999 through through
March 31, 2000 March 31, 1999 March 31, 2000
----------------- ------------------- --------------------
REVENUES $ - $ - $ -
----------------- ------------------- --------------------
EXPENSES:
Officers' compensation - - 550,834
Legal 3,584 16,003 608,787
Accounting and auditing 600 7,250 132,048
Transfer agent and securities fees - - 12,446
Proxy costs - 26,555
Rent - 54,000
Office expense 6,402 7,482 151,499
Travel - - 43,234
----------------- ------------------- --------------------
TOTAL EXPENSES (10,586) (30,735) (1,579,403)
----------------- ------------------- --------------------
OPERATING (LOSS) (10,586) (30,735) (1,579,403)
----------------- ------------------- --------------------
OTHER INCOME (EXPENSES)
Interest and royalty income 338 11 5,766
Organization costs - - - (4,800)
Interest Expense - - - (15,422)
Provision for bad debt - - - (325,000)
Write-off investment in Georgia - - -
mining interests - - - (135,723)
Gain on sale of interest in - -
Global Gold Armenia - - - 268,874
----------------- ------------------- --------------------
TOTAL OTHER INCOME (EXPENSES) 338 11 (206,305)
----------------- ------------------- --------------------
LOSS BEFORE INCOME TAXES (10,248) (30,724) (1,785,708)
Income taxes 200 (170) (3,891)
----------------- ------------------- --------------------
NET LOSS $ (10,048) $ (30,894) $ (1,789,599)
----------------- ------------------- --------------------
NET LOSS PER SHARE $ (0.003) $ (0.007)
================== =================== =====================
WEIGHTED AVERAGE SHARES OUTSTANDING 3,519,447 4,358,114
================= =================== =====================
NET LOSS $ (10,048) $ (30,894) $ (1,789,599)
OTHER COMPREHENSIVE
GAIN/(LOSS), NET OF TAX
Unrealized gain on available-
FOR-SALE SECURITIES 44,000 - 44,000
----------------- ------------------- --------------------
COMPREHENSIVE
GAIN/(LOSS) $ 33,952 $ (30,894) $ (1,745,599)
================== =================== =====================
See notes to financial statements
2
GLOBAL GOLD CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
January 1, 1995
January 1, 2000 January 1, 1999 (development stage)
through through through
March 31, 2000 March 31, 1999 March 31, 2000
---------------- --------------- ---------------------
CASH FLOWS FROM DEVELOPMENT STAGE
ACTIVITIES:
Net Loss $ (10,048) $ (30,894) $ (1,789,599)
---------------- --------------- ---------------------
Adjustments to reconcile net loss
to net cash used in operating activities:
Provision for bad debt - - 325,000
Gain on sale of Armenia mining interests - - (268,874)
Write-off of mining investment in Georgia - - - 135,723
Decrease (increase) in:
Organization costs - - (9,601)
Accounts receivable and deposits - 9,287 (154)
Accounts payable and accrued expenses 9,471 7,482 316,532
---------------- --------------- ---------------------
NET CASH USED IN OPERATING ACTIVITIES (577) (14,125) (1,290,973)
---------------- --------------- ---------------------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of Armenia mining interests - - 1,891,155
Investment in certain mining
interests - net of financing - - (153,494)
Deferred costs - mining interests - - (878,858)
---------------- --------------- ---------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES - - 858,803
---------------- --------------- ---------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Net proceeds from private
placement offering - - 421,573
Warrants exercised - - 100
---------------- --------------- ---------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES - - 421,673
---------------- --------------- ---------------------
NET DECREASE IN CASH (577) (14,125) (10,497)
CASH - beginning of period 1,432 24,623 11,352
---------------- --------------- ---------------------
CASH - end of period $ 855 $ 10,498 $ 855
================== ================== ======================
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ (200) $ 170 $ 2,483
================== ================== ======================
Interest paid $ - $ - $ 15,422
================== ================== ======================
See notes to financial statements.
3
GLOBAL GOLD CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL STATEMENTS:
The accompanying financial statements are unaudited. In the opinion of
management, all necessary adjustments (which include only normal recurring
adjustments) have been made to present fairly the financial position, results of
operations and cash flows for the periods presented. Certain information and
note disclosure normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted. It
is suggested that these consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the December 31,
1999 annual report on Form 10-KSB. The results of operations for the three month
period ended March 31, 2000 are not necessarily indicative of the operating
results to be expected for the full year.
USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts in these financial statements and
accompanying notes. Actual results could differ from those estimates.
INVESTMENTS:
At March 31, 2000, investment in securities consisted of common stock
of First Dynasty Mind Ltd. classified as available-for-sale and stated at quoted
fair value of $240,000. The cost of the securities was $194,000. The unrealized
gain as of March 31, 2000 was $44,000 which is shown as a separate component of
stockholders' deficit. The change in net unrealized gains on securities during
the three months ended March 31, 2000 was an increase in the holding gain of
$60,000.
LOSS PER SHARE:
Basic loss per common share is computed by dividing net loss by the
weighted-average number of common shares outstanding during the period. Diluted
loss per share reflects
4
potential dilution which could occur if all potentially issuable common shares
from stock purchase warrants and options resulted in the issuance of common
stock. In the present position, diluted loss per share is the same as basic loss
per share because the inclusion of potentially issuable common shares at March
31, 2000 and 1999, respectively, would have decreased the loss per share and
have been excluded from the calculation.
COMPREHENSIVE INCOME/(LOSS):
Comprehensive income/(loss) provides a measure of overall Company
performance that includes all changes in equity resulting from transactions and
events other than capital transactions.
NOTE 2 - STOCKHOLDERS' EQUITY
During the first quarter of 2000, the Company issued 1,000,000 restricted common
shares to the Company's Chairman and Chief Executive Officer, Drury J.
Gallagher, for accrued salary of $162,500 or $0.1625 per share. Also, 20,000
Common Shares of Global Gold Corporation were distributed in settlement of
obligations owed by the defendants in the Eyre Resources lawsuit.
5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
When used in this discussion, the words "expect(s)", "feel(s)",
"believe(s)", "will", "may", "anticipate(s)" and similar expressions are
intended to identify forward-looking statements. Such statements are subject to
certain risks and uncertainties, which could cause actual results to differ
materially from those projected. Readers are cautioned not to place undue
reliance on these forward-looking statements, and are urged to carefully review
and consider the various disclosures elsewhere in this Form 10-QSB.
THREE MONTHS ENDED MARCH 31, 2000 AND THREE MONTHS ENDED MARCH 31, 1999
RESULTS OF OPERATIONS
During the three-month period ended March 31, 2000, the Company's
interest and royalty income was $338, which was more than the $11 for the same
period last year.
The Company's administrative and other expenses for the three month
period ended March 31, 2000 were $10,586, which represented a decrease from the
amount paid or accrued of $30,735 in the same period last year. The expense
decrease was attributable to lower legal fees of $12,419 and reduced accounting
expenses of $6,650 due to reduced activity.
Thus, the Company had a loss of $10,048 for the three-month period
ended March 31, 2000, representing a decrease from the loss of $30,804 for the
three month period ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2000, the Company's total assets were $240,855 of which
$855 consisted of cash or cash equivalents.
The Company's plan of operation for calendar year 2000 is:
(a) to investigate opportunities, and possibly implement operations,
in the mineral development and production area; and
(b) to investigate other business opportunities in the Internet area
and possibly implement operations therein.
The Company needs financing to meet its anticipated monthly
administrative expenses of $3,000 (exclusive or accrued officers' compensation),
plus additional amounts for legal and accounting costs. The Company anticipates
that it might obtain additional financing in 2000 from the holders of its
Warrants to purchase 400,000 shares of Common Stock of the Company at an
exercise price of $0.125 per share, which expire on December 31, 2000. The
Company recently extended the expiration date until December 31, 2000.
6
If the Warrants were exercised in full, the Company would receive $50,000 in
gross proceeds. However, the Company does not believe theat the Warrants will be
exercised under existing circumstances and thus does not anticipate receiving
any amount from such source, although there can be no assurance of such result.
In the event that no contemplated financing is obtained through the
exercise of the Warrants (which the Company considers highly remote), the
Company does not have sufficient financial resources to meet its obligations.
The Company does not intend to engage in any research and developing during 2000
and does not expect to purchase or sell any plant or significant equipment.
The Company does not expect to hire any additional full-time employees
in 2000.
7
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
1. In March, 2000, the Company issued 1,000,000 shares of its Common Stock
to Drury J. Gallagher, its Chairman and Chief Executive Officer, for
accrued salary of $162,500 or $.1625 per share. The shares were issued
in reliance upon Section 4 (2) of the Securities Act of 1933, as
amended (the "Act"), and Rule 506 of Regulation D promulgated
thereunder. The Company believes that Mr. Gallagher is an accredited
investor.
2. In March, 2000, the Company issued 10,000 shares of its Common Stock to
each of William Van Horn and William Cormack in settlement of the
obligations owed to them by Eyre Resources N.L., at a price of $0.10
per share, based on the incurrence of such obligation over about 18
months prior thereto. The shares were issued in reliance upon Section 4
(2) of the Act and Rule 506 promulgated thereunder. The Company
believes that Messrs. Van Horn and Cormack are accredited investors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBIT DESCRIPTION
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27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the registrant during the
quarterly period covered by this report.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
DATE: AUGUST 22, 2000 GLOBAL GOLD CORPORATION
By: /s/ Drury J. Gallagher
-----------------------------
Drury J. Gallagher, Chairman, Chief
Executive Officer and
Financial Officer Principal
9