Third Quarter Report 10QSB
September 30, 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 September 30, 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 sorter
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 September 30, 2000 there were 4,368,114 shares of the registrant's Common
Stock outstanding.
Transitional Small Business Disclosure Format (check one): Yes / / No /X/.
TABLE OF CONTENTS
PART I FINANACIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet - as of September 30, 2000 1
Statements of Income and Loss for the periods
July 1, 2000 through September 30, 2000 and
July 1, 1999 through September 30, 1999 2
Statements of Income and Loss for the periods January 1, 2000
through September 30, 2000 and January 1, 1999 through
September 30, 1999 and for the development stage period from
January 1, 1995 through September 30, 2000 2a
Statements of Cash Flow - for the periods January 1, 2000
through September 30, 2000 and January 1, 1999 through
September 30, 1999 and the development stage period from
January 1, 1995 through September 30, 2000 3
Notes to Financial Statements 4-5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operation 6-7
PART II OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities and Use of Proceeds 8
Item 3 Default Upon Senior Securities 8
Item 4 Submission of Matters to a Vote of Security Holders 8
Item 5 Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
SIGNATURE 9
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Balance Sheet
September 30, 2000
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 295
------------
OTHER ASSETS
Investment in First Dynasty Mines, Ltd. (Common Shares)
120,000
------------
$ 120,295
============
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 71,994
------------
STOCKHOLDERS' EQUITY
Common stock $0.001 par, 100,000,000 shares authorized 4,368,114 shares
issued and outstanding 4,368
Paid-in capital - dormant period 3,236,602
Paid-in capital - development stage 1,597,703
Deficit - dormant period (2,907,648)
Deficit - development stage (1,806,724)
Unrealized gains/(loss) on securities (76,000)
------------
Total 48,301
deduct cost of treasury stock -0-
------------
48,301
------------
$ 120,295
============
See notes to financial statements.
1
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Statements of Income and Loss
July 1, 2000 July 1, 1999
through through
September 30, 2000 September 30, 1999
------------------ ------------------
REVENUE $ -0- $ -0-
---------- ----------
EXPENSES
Officers' compensation -0- -0-
Legal 3,094 3,041
Accounting and auditing 1,115
Transfer agent and securities fees -0- -0-
Proxy costs -0- -0-
Rent -0- -0-
Office expense 75 3,150
Travel -0- -0-
--------- ---------
OPERATING (LOSS) (4,284) (6,191)
OTHER INCOME (EXPENSES)
Interest and royalty income -0- 12
Organization costs -0- -0-
Interest expense -0- -0-
Provision for bad debts -0- -0-
Write-off investment in Georgia mining interest -0- -0-
Gain on sale of interest in Global Gold Armenia -0- -0-
--------- ----------
LOSS BEFORE INCOME TAXES (4,284) (6,179)
Income taxes (95) (170)
--------- ----------
NET LOSS $(4,379) $(6,349)
========= =========
NET LOSS PER SHARE $(.001) $(.001)
========= =========
NET LOSS $(4,379) $(6,349)
========= =========
WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTATION 4,368,114 4,348,114
========= =========
OTHER COMPREHENSIVE GAIN/(LOSS), NET OF TAX
Unrealized gain/(loss) on available
For-Sale Securities -0- (16,000)
--------- ---------
COMPREHENSIVE LOSS $(4,379) $(22,349)
========= ==========
See notes to financial statements.
2
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Statements of Income and Loss
JANUARY 1, 1995
JANUARY 1, 2000 JANUARY 1, 1999 (DEVELOPMENT STAGE)
THROUGH THROUGH THROUGH
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999 SEPTEMBER 30, 2000
------------------ ------------------ ------------------
REVENUE $ -0- $ -0- $ -0-
----------- ----------- -----------
EXPENSES
Officers' compensation -0- -0- 550,834
Legal 12,797 33,402 618,000
Accounting and auditing 6,715 7,250 138,163
Transfer agent and securities fees 156 -0- 12,602
Proxy costs -0- -0- 26,555
Rent -0- -0- 54,000
Office expense 7,853 19,919 152,950
Travel -0- -0- 43,234
----------- ----------- ----------
OPERATING (LOSS) (27,521) (60,571) (1,596,338)
OTHER INCOME (EXPENSES)
Interest and royalty income 338 35 5,766
Organization costs -0- -0- (4,800)
Interest expense -0- -0- (15,422)
Provision for bad debts -0- -0- (325,000)
Write-off investment in Georgia mining interest (135,723)
-0- -0-
Gain on sale of interest in Global Gold Armenia
-0- -0- 268,874
--------- --------- -------
LOSS BEFORE INCOME TAXES (27,183) (60,536) (1,802,643)
Income taxes 10 (510) (4,081)
--------- --------- ------------
NET LOSS $(27,173) $(61,046) $(1,806,724)
========== ========== ===========
NET LOSS PER SHARE $( .006) $( .014)
========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTATION 4,368,114 4,348,114
========== ==========
NET LOSS $(27,173) $(61,046) $(1,806,724)
OTHER COMPREHENSIVE GAIN/(LOSS), NET OF TAX
Unrealized gain/(loss) on available
For-sale securities $(60,000) $16,000 $(76,000)
-------- --------- -----------
COMPREHENSIVE GAIN/(LOSS) $(87,173) $(77,046) $(1,882,724)
======== ========== ===========
See notes to financial statements.
2a
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Statements of Cash Flow
January 1, 1995
January 1, 2000 January 1, 1999 (development stage
through through through
September 30, 2000 September 30, 1999 September 30, 2000)
------------------ ------------------ ------------------
CASH FLOW FROM DEVELOPMENT STAGE ACTIVITIES:
Net Loss $(27,173) $(61,046) $(1,806,724)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Provision for bad debts included in net loss -0- -0- 325,000
Write-off of mining investment in Georgia -0- -0- 135,723
Gain on sale of Armenia mining interests -0- -0- (268,874)
Changes in assets and liabilities:
Organization costs -0- -0- (9,601)
Accounts receivable and deposits -0- 21,612 (154)
Accounts payable, accrued expenses and
Miscellaneous 26,036 15,953 333,097
-------- -------- ---------
NET CASH USED IN DEVELOPMENT STAGE
ACTIVITIES ( 1,137) (23,481) (1,291,533)
--------- --------- ----------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of Armenia mining interest
(net of Note Receivable)
-0- -0- 1,891,155
Investment in certain mining interests- net of
Financing -0- -0- (153,494)
Deferred costs - mining interest -0- -0- (878,858)
--------- --------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES
-0- -0- 858,803
--------- --------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Net proceeds from private placement offering
-0- -0- 421,573
Warrants exercised -0- -0- 100
--------- --------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES -0- -0- 421,673
--------- --------- -------
NET DECREASE IN CASH
(1,137) (23,481) (11,057)
CASH - beginning 1,432 24,623 11,352
--------- --------- -------
CASH - end $ 295 $ 1,142 $ 295
========= ========= =======
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ (10) $ 510 $ 2,673
========= ========== =======
Interest paid $ -0- $ -0- $15,422
========= ========== =======
See notes to financial statements.
3
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Financial Statements
September 30, 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 nine month period
ended September 30, 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 September 30, 2000 investment in securities consisted of
common stock of First Dynasty Mines, Ltd. classified as
available for sale and stated at a quoted fair value of
$120,000. The cost of the securities was $196,000. The
unrealized loss as of September 30, 2000 was $76,000 which is
shown as a separate component of stockholders' deficit.
4
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 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 September 30, 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 out of its treasury 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 the Company, 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.
NINE MONTHS ENDED SEPTEMBER 30, 2000
AND NINE MONTHS ENDED SEPTEMBER 30, 1999
RESULTS OF OPERATIONS
During the three-month period July 1, 2000 through
September 30, 2000, the Company's administrative and
other expenses were $4,284 which represented a decrease
from the amount paid or accrued of $6,179 in the same
period last year. The expense decrease was attributable
to lower office expenses of $3,075 partially offset by
increased accounting fees of $1,115.
During the nine month period ended September 30, 2000,
the Company's interest and royalty income was $338, which
was more than the $35 for the same period last year.
The Company's administrative and other expenses for the
nine month period ended September 30, 2000 were $27,521,
which represented a decrease from the amount paid or
accrued of $60,571 in the same period last year. The
expense decrease was attributable to lower legal fees of
$20,605, office expenses of $12,066 and accounting
expenses of $535 due to reduced activity.
Thus, the Company had a loss of $27,173 for the nine
month period ended September 30, 2000 representing a
decrease from the loss of $61,046 for the nine month
period ended September 30, 1999.
6
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2000, the Company's total assets were
$120,295, of which $295 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 investment opportunities in
the mineral development and production areas
The Company needs financing to meet its anticipated monthly
administrative expenses of $3,000 (exclusive of 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. If the Warrants were exercised
in full, the Company would receive $50,000 in gross
proceeds. However, the Company does not believe that the
Warrants will be exercised under existing circumstances,
thus it does not anticipate that any amount thereof will be
exercised, 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
development 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 1. Legal Proceedings
None
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.I., 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 3 Default Upon Senior Securities
None
Item 4 Submission of Matters to a Vote of Security Holders
None
Item 5 Other Information
None
Item 6. Exhibits and Reports on Form 8-K
1. Exhibit Description
27 Financial Data Schedule
2. 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.
GLOBAL GOLD CORPORATION
By:_________________________
Drury J. Gallagher, Chairman,
Chief Executive Officer and Treasurer
9