-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K9ChE6eT4aK/Pt0vqsNbNwdLyFzJzaha+/9o+KPQInxcV6S8Ic6tu9gZtfsQf98b hjC/2VcqQT/ayeOYy3arXg== /in/edgar/work/20000815/0000891554-00-002010/0000891554-00-002010.txt : 20000922 0000891554-00-002010.hdr.sgml : 20000921 ACCESSION NUMBER: 0000891554-00-002010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PATAGONIA GOLD CORP /BC CENTRAL INDEX KEY: 0001049576 STANDARD INDUSTRIAL CLASSIFICATION: [1000 ] IRS NUMBER: 650401897 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-26531 FILM NUMBER: 702674 BUSINESS ADDRESS: STREET 1: 1060 ALBERNI STREET STREET 2: SUITE 1505 CITY: VANCOUVERBC STATE: A1 ZIP: V6C 2W2 BUSINESS PHONE: 6046874432 MAIL ADDRESS: STREET 1: SUITE 1505-1060 ALBERNI STREET CITY: VANCOUVER BC 10QSB 1 0001.txt QUARTERLY REPORT UNITED STATES 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 June 30, 2000 [_] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT For the transition period from _ _ _ _ _ _ _ _ _ _ to _ _ _ _ _ _ _ _ _ _ Commission file number 0-26531 PATAGONIA GOLD CORPORATION (Exact name of small business issuer as specified in its charter) Florida 65-0401897 (State or other jurisdiction of incorporation or (IRS Employer organization) Identification No.) 1505 - 1060 ALBERNI STREET, VANCOUVER B.C. CANADA V6E 4K2 (Address of principal executive offices) (604) 687-4432 (Issuer's Telephone Number) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the preceding 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 [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS 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 [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 13,000,000 shares of Common Stock were outstanding as of June 30, 2000. Transitional Small Business Disclosure Format (check one); YES [_] NO [X] PATAGONIA GOLD CORPORATION This quarterly report contains statements that plan for or anticipate the future and are not historical facts. In this Report these forward looking statements are generally identified by words such as "anticipate", "plan", "believe", "expect", "estimate", and the like. Because forward looking statements involve future risks and uncertainties, these are factors that could cause actual results to differ materially from the estimated results. These risks and uncertainties are detailed in Part 1 - Financial Information - Item 1. "Financial Statements", Item 2. "Management's Discussion and Analysis or Plan of Operation". The Private Securities Litigation Reform Act of 1995, which provides a "safe harbor" for such statements, may not apply to this Report. PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PAGE Consolidated Balance Sheets 3 Consolidated Statements of Stockholders' Equity 4 Consolidated Statements of Operations 5 Consolidated Statements of Cash Flows 6 Notes to the Consolidated Financial Statements 7-10 2
- ------------------------------------------------------------------------------------------- PATAGONIA GOLD CORPORATION (An exploration stage enterprise) Consolidated Balance Sheets (Expressed in US Dollars) June 30 December 31 (Unaudited, prepared by management) 2000 1999 - ------------------------------------------------------------------------------------------- ASSETS Current Cash $ 2,448 $ 22,913 Receivables 21 7 Investments 901,196 921,332 - ------------------------------------------------------------------------------------------- 903,665 944,252 Mineral property costs 12,250 12,250 - ------------------------------------------------------------------------------------------- Total assets $ 915,915 $ 956,502 - ------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Current Accounts payable and accrued liabilities $ 41,279 $ 35,000 Notes payable 87,579 76,879 - ------------------------------------------------------------------------------------------- Total liabilities 128,858 111,879 - ------------------------------------------------------------------------------------------- Stockholders' deficiency, Share capital Authorized: 50,000,000 common shares, with par value of $0.001 each Issued: 13,000,000 common shares 13,000 13,000 Additional paid-in capital 1,827,000 1,827,000 Accumulated deficit (662,598) (625,168) Accumulated other comprehensive income (loss) Unrealized gains/(losses) on securities available for sale (390,345) (370,209) - ------------------------------------------------------------------------------------------- Stockholders' equity 787,057 844,623 - ------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 915,915 $ 956,502 - -------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 3
- ------------------------------------------------------------------------------------------------------------------------------------ Patagonia Gold Corporation (An exploration stage enterprise) Statements of Stockholder's Equity (Expressed in US Dollars) (Unaudited, prepared by management) For the period ended June 30, 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Accumulated Compre- Other Common Stock Additional hensive Compre- Total ------------------------ Paid-In Income Accumulated hensive Stockholder's Shares Amount Capital (loss) Deficit Income (loss) Equity - ------------------------------------------------------------------------------------------------------------------------------------ Balance, January 1, 1998 13,000,000 $ 13,000 $ 1,827,000 $ -- $ (28,577) $ 151,673 $ 1,963,096 - ------------------------------------------------------------------------------------------------------------------------------------ Net loss for the year -- -- -- (135,708) (135,708) -- (135,708) Change in unrealized gains -- -- -- 98,086 -- 98,086 98,086 - ------------------------------------------------------------------------------------------------------------------------------------ Total comprehensive income -- -- -- (37,622) (135,708) 98,086 (37,622) - ---------------------------------------------------------------------------===========---------------------------------------------- Balance, December 31, 1998 13,000,000 13,000 1,827,000 (164,285) 249,759 1,925,474 - ----------------------------------------------------------------------- ------------------------------------------ Net loss for the year -- -- -- (460,883) (460,883) -- (460,883) Change in unrealized gains -- -- -- (619,968) -- (619,968) (619,968) Total comprehensive income -- -- -- (1,080,851) (460,883) (619,968) (1,080,851) - ---------------------------------------------------------------------------===========---------------------------------------------- Balance, December 31, 1999 13,000,000 13,000 1,827,000 (625,168) (370,209) 844,623 - ----------------------------------------------------------------------- ------------------------------------------ Net loss for the period -- -- -- (37,473) (37,430) -- (37,430) Change in unrealized gains -- -- -- (20,136) -- (20,136) (20,136) - ------------------------------------------------------------------------------------------------------------------------------------ Total comprehensive income -- -- -- (57,609) (37,430) (20,136) (57,566) - ---------------------------------------------------------------------------===========---------------------------------------------- Balance, June 30, 2000 13,000,000 $ 13,000 $ 1,827,000 $ (662,598) $ (390,345) $ 787,057 - ----------------------------------------------------------------------- ------------------------------------------
The accompanying notes are an integral part of these financial statements. 4
PATAGONIA GOLD CORPORATION (An exploration stage enterprise) Consolidated Statements of Operations For the six month ended June 30, 2000 and 1999 (Expressed in US Dollars) (Unaudited, prepared by management) - -------------------------------------------------------------------------------------------- March 31 Six months ended 1993 (inception) June 30 to June 30 ---------------------------- 2000 2000 1999 - -------------------------------------------------------------------------------------------- General and administrative expenses Administrative and general $ 61,786 $ 9,599 $ 5,589 Professional fees - accounting and legal 73,139 9,855 9,220 Salaries and consulting fees 95,475 16,979 19,810 - -------------------------------------------------------------------------------------------- 230,400 36,433 34,619 Exploration expenses 152,419 1,135 5,142 Writedown of mineral property costs 297,000 -- -- - -------------------------------------------------------------------------------------------- 679,819 37,568 39,761 - -------------------------------------------------------------------------------------------- Less: Income (loss) Interest income 33,562 117 642 Dividend income 2,835 -- -- Realized gain (loss) on sale of investments (1,875) -- -- Interest expense (14,884) (212) (2,143) Foreign exchange gain (loss) (2,417) 233 (921) - -------------------------------------------------------------------------------------------- 17,221 138 (2,422) - -------------------------------------------------------------------------------------------- Net loss for the period $ 662,598 $ 37,430 $ 42,183 ============================================================================================ Loss per share $ 0.00 $ 0.00 ============================================================================================ Weighted average common shares outstanding 13,000,000 13,000,000 ============================================================================================
The accompanying notes are an integral part of these financial statements. 5
PATAGONIA GOLD CORPORATION (An exploration stage enterprise) Consolidated Statements of Cash Flows Six months ended June 30, 2000 and 1999 (Expressed in US Dollars) (Unaudited, prepared by management) - --------------------------------------------------------------------------------------------------- March 31 Six months ended 1993 (inception) June 30 to June 30 -------------------------- 2000 2000 1999 - --------------------------------------------------------------------------------------------------- Cash flows from (used in) operating activities Net loss for the period $ (662,598) $ (37,430) $ (42,183) Adjustments to reconcile net loss to net cash used in operating activities : - realized loss (gain) on sale of investments (1,875) -- -- - writedown of mineral property costs 297,000 -- -- - --------------------------------------------------------------------------------------------------- (367,473) (37,430) (42,183) Changes in assets and liabilities - decrease (increase) in accounts receivable (21) (14) 52 - increase(decrease) in accounts payable 41,279 6,279 33,657 - --------------------------------------------------------------------------------------------------- (326,215) (31,165) (8,474) - --------------------------------------------------------------------------------------------------- Cash flows from (used in) investing activities Purchase of available for sale securities (2,178,119) -- (22,523) Proceeds on sale of available-for-sale securities 888,453 -- -- Mineral property costs (12,250) -- -- - --------------------------------------------------------------------------------------------------- (1,301,916) -- (22,523) - --------------------------------------------------------------------------------------------------- Cash flows from financing activities Proceeds from issuance of common stock 1,540,000 -- -- Proceeds from notes payable 90,579 10,700 -- - --------------------------------------------------------------------------------------------------- 1,630,579 10,700 -- - --------------------------------------------------------------------------------------------------- Increase (decrease) in cash for the period 2,448 (20,465) (30,997) Cash and cash equivalents, beginning of period -- 22,913 73,974 - --------------------------------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 2,448 $ 2,448 $ 42,977 ===================================================================================================
The accompanying notes are an integral part of these financial statements. 6 Notes to Interim Consolidated Financial Statements (Unaudited) 1. Nature of Business and Going Concern The Company was incorporated under the laws of the State of Florida on March 31, 1993 and is in the business of exploration and development of mineral properties. On October 13, 1997, the Company changed its name to Patagonia Gold Corporation. The recovery of the amounts shown for interests in mineral properties is dependent upon the discovery of economically recoverable reserves or proceeds from the disposition thereof, confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain financing to complete development of the properties and on future profitable operations. 2. Significant Accounting Policies (a) Basis of Consolidation These consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States, include the accounts of the Company and its wholly-owned subsidiary, Patagonia Gold Mines Ltd., a company incorporated in 1994 under the laws of Bermuda. Significant inter-company accounts and transactions have been eliminated. (b) Cash and Cash Equivalents Cash equivalents are comprised of certain highly liquid instruments with a maturity of three months or less when purchased. There were no cash equivalents as of June 30, 2000. (c) Mineral Properties and Exploration Expenses Exploration costs are charged to operations as incurred as are normal development costs until such time that proven reserves are discovered. From that time forward, the Company will capitalize all costs to the extent that future cash flow from reserves equals or exceeds the costs deferred. As at June 30, 2000 and December 31, 1999, the Company did not have proven reserves. Cost of initial acquisition of mineral rights and concessions are capitalized until the properties are abandoned or the right expires. Exploration activities conducted jointly with others are reflected at the Company's proportionate interest in such activities. Costs related to site restoration programs are accrued over the life of the project. (d) Investments Available-for-sale securities are carried at fair market value with unrealised holding gains and losses included in stockholders' equity. Realized gains and losses are determined on an average cost basis when securities are sold. (e) Concentration of Credit Risk The Company places its cash and cash equivalents with high credit quality financial institutions. The Company routinely maintains balances in a financial institution beyond the insured amount. As of June 30, 2000 the Company had $ nil in a bank beyond insured limits. (f) Foreign Currency Transactions Foreign currency accounts are translated into U.S. dollars as follows: 7 At the transaction date, each asset, liability, revenue and expense is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities are translated into U.S. dollars by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations. (g) Advertising Expenses The Company expenses advertising costs as incurred. Total advertising costs charged to expenses for the six months ended June 30, 2000 and 1999 were $Nil and $Nil, respectively. (h) Impairment Certain long-term assets of the Company are reviewed when changes in circumstances require as to whether their carrying value has become impaired, pursuant to guidance established in Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of". Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. (i) Accounting 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 of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. (j) Fair Value of Financial Instruments The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, receivables, investments and accounts payable and accrued liabilities. Fair values were assumed to approximate carrying values for these financial instruments, except where noted, since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. Management is of the opinion that the Company is not exposed to significant interest, credit or currency risks arising from these financial instruments. (k) Income Taxes The Company has adopted Statement of Financial Accounting Standards (SFAS") No. 109, "Accounting for Income Taxes", which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. (l) Loss Per Share Loss per share is computed using the weighted average number of shares outstanding during the year. Effective for the year ended December 31, 1997, the Company adopted SFAS No. 128, "Earnings Per Share". (m) Comprehensive Income In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income", which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statement of Stockholders' Equity. Comprehensive income 8 comprises equity except those resulting from investments by owners and distributions to owners. SFAS No. 130 did not change the current accounting treatments for components of comprehensive income. (n) New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133 requires companies to recognize all derivatives contracts as either assets or liabilities in the balance sheet and to measure them at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. Historically, the Company has not entered into derivatives contracts either to hedge existing risks or for speculative purposes. Accordingly, the Company does not expect adoption of the new standards on January 1, 2000 to affect its financial statements. In April 1998, the American Institute of Certified Public Accountants issued Statement of Position 98-5, "Reporting on the Costs of Start-up Activities", ("SOP 98-5") which provides guidance on the financial reporting of start-up costs and organization costs. It requires costs of start-activities and organization costs to be expensed as incurred. SOP 98-5 is effective for fiscal years beginning after December 15, 1998 with initial adoption reported as the cumulative effect of a change in accounting principle. Adoption of this standard has no material effect on the financial statements. 3. Investments Investments consist of available-for-sale securities and are summarized as follows: Gross Gross unrealized unrealized Market Cost gains losses value - -------------------------------------------------------------------------------- June 30, 2000 Equity securities $1,291,541 $ 215,525 $ 605,870 $ 901,196 ================================================================================ December 31, 1999 Equity securities $1,291,541 $ 22,434 $ 392,643 $ 921,332 ================================================================================ Unrealised losses totalling $303,598 (December 31, 1999 - $7,949) relate to investments held by the Company's Bermuda subsidiary and are not subject to income tax. 4. Mineral Property Costs (a) Argentina Mineral concessions in the Province of La Rioja, Argentina, are as follows: o Piloncho 1, Sierra de Chepes o Piloncho 2, Sierra de Chepes o Piloncho 20, Sierra de Chepes o Piloncho 21, Sierra de Chepes o Carmelita 16, Sierra de Chepes o Carmelita 17, Sierra de Chepes o Carmelita 18, Sierra de Chepes 9 (b) Guatamala On October 1, 1999, the Company entered into an agreement that gives the Company the right to earn a 50% interest in the San Diego Mineral Exploration Reconnaissance Licence by paying: o A $9,250 acquisition fee (paid); and o $18,617 towards the Phase I exploration program. 5. Notes Payable Loans payable are unsecured, non-interest bearing and are due on demand. 6. Share Capital On April 9, 1997, the Company amended its Articles of Incorporation to provide for the authorization of 50,000,000 common shares at $0.001 par value. Previously, the authorized capital was 200 common shares of no par value. Also, on April 9, 1997, the Company forward split its common stock 5,000:1, thus increasing the number of issued and outstanding common shares from 200 shares to 1,000,000 shares. This split has been reflected retroactively in these financial statements. 7. Comparative Figures Certain 1999 comparative figures have been reclassified to conform to the financial statement presentation adopted for 2000. 8. Related Party Transactions Related party transactions not disclosed elsewhere in these financial statements for the six months ended June 30, 2000, include salaries of $0 (1999 - $Nil), which were paid to a director of the Company and were charged to operations in 2000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (A) General Patagonia Gold Corporation (the "Company" or "Patagonia") was incorporated under the laws of the State of Florida on March 31, 1993, under the name "Cayman Purchasing & Supply, Inc." The Company was inactive until it redirected its business efforts in mid 1997 following a change of management, which occurred on June 25, 1997, to the acquisition, exploration and, if warranted, the development of mineral resource properties. The Company changed its name to Patagonia Gold Corporation on October 13, 1997 to more fully reflect its business activities. Since its redirection, the Company's activities have been limited primarily to the acquisition of rights to certain mineral properties and the implementation of preliminary exploration programs on these properties in which it has acquired an interest. The Company is engaged in the location, acquisition, exploration and, if warranted, development of mineral resource properties. All of the mineral properties in which the Company has an interest or a right to acquire an interest in are currently in the exploration stage. None of the properties have a known body of Mineral Reserves. The Company's primary objective is to explore for gold, silver, base metals and industrial minerals and, if warranted, to develop those 10 existing mineral properties. Its secondary objective is to locate, evaluate, and acquire other mineral properties, and to finance their exploration and development either through equity financing, by way of joint venture or option agreements or through a combination of both. Currently, the Company's activities are centered in Argentina and Guatemala. During 1999 and the first quarter of 2000, the Company conducted initial exploration programs for gold mineralization on it's property in Guatemala. In Guatemala, the Company entered into a joint venture agreement with Aurora Gold Corporation in October 1999 to conduct initial mineral exploration on the San Diego Exploration Reconnaissance Licence. The licence was granted to Aurora Gold Corporation in September 1999. Initial exploration work begun in 1999 continued during the first quarter of 2000. None of the Company's properties contain any known Mineral Reserves. The Company's common stock is traded on the NASD's OTC Bulletin Board. The Company has not declared or paid dividends on its shares since incorporation and does not anticipate doing so in the near future. The Company's offices are located at 1505 - 1060 Alberni Street, Vancouver, British Columbia, Canada, V6E 4K2. (B) Significant developments during the first and second quarter of 2000 In October 1999 the Company entered into a joint venture with Aurora Gold Corporation for preliminary exploration of the San Diego reconnaissance license located in Guatemala. The reconnaissance licence covers 800 square kilometers. An exploration program funded by Patagonia Gold Corporation commenced on the most prospective areas during the last quarter of 1999 and continued during the first and second quarter of 2000. The Company is currently reviewing its Argentina and Guatemala properties. (C) Financial Information Six Months Ended June 30, 2000 versus Six Months Ended June 30, 1999 For the six months ended June 30, 2000 the Company recorded a loss of $37,430 or $0.00 per share, compared to a loss of $42,183 or $0.00 per share in 1999. General and administrative expenses - For the six months ended June 30, 2000 the Company recorded general and administrative expenses of $9,599, compared to $5,589 in 1999. Professional fees - accounting and legal - For the six months ended June 30 the Company recorded accounting and management fees of $9,855, compared to $9,220 in 1999. Of this amount accounting and management fees of $8,375 (1999 - $8,375) relate to the management of the Company's wholly owned Bermuda subsidiary Patagonia Gold Mines. Exploration expenditures - For the six months ended June 30, 2000 the Company recorded exploration expenses of $1,135, compared to $5,142 in 1999. (D) Financial Condition and liquidity At June 30, 2000, the Company had cash of $2,448 (1999 - $42,977) and working capital of $774,807 (1999 - $1,430,714) respectively. Total liabilities as of June 30, 2000 were $128,858 (1999 - $190,341), a decrease of $61,483. During the six months ended June 30, 2000 financing activities consisted of the following, proceeds from notes and 11 advances payable $10,700 (1999 - $0). For the six months ended June 30, 2000 investing activities consisted $0 (1999 - $22,523). The Company recorded a loss for the six months ended June 30, 2000 of $37,430, or $0.00 per share, compared to a loss of $42,183 ($0.00 per share) in 1999. The Company has sufficient working capital to (i) pay its administrative and general operating expenses through December 31, 2000 and (ii) to conduct preliminary exploration programs. However, without cash flow from operations, it may need to obtain additional funds (presumably through equity offerings and/or debt borrowing) in order, if warranted, to implement additional exploration programs on its properties. Failure to obtain such additional financing may result in a reduction of the Company's interest in certain properties or an actual foreclosure of its interest. The Company has no agreements or understandings with any person as to such additional financing. None of the Company's properties has commenced commercial production and the Company has no history of earnings or cash flow from its operations. While the Company may attempt to generate additional working capital through the operation, development, sale or possible joint venture development of its properties, there is no assurance that any such activity will generate funds that will be available for operations. The Company has not declared or paid dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. (E) Year 2000 issues The "Year 2000 problem", passed without incident at any of the Company's properties. The Year 2000 (YK2) issue is the result of computerized systems using two digits rather than four digits to identify an applicable year. Date-sensitive systems may recognize a date using "00" as the year 1900 rather that the year 2000. This could result in a system failure or miscalculation causing disruption to business operations. In 1999, the Company completed a review of its computer-based information systems and, where needed, Y2K compliant upgrades for the Company's core financial systems were installed and tested. To date, no Y2K problems have been encountered by the Company or the Company's vendors or others with whom it transacts business and none are expected. The Company's management and operations staff will again monitor critical operations during the December 31, 2000 - January 1, 2001 Y2K rollover dates. PART 11. OTHER INFORMATION ITEM 1. Legal Proceedings The Company is not party to any litigation, and has no knowledge of any pending or threatened litigation against it. ITEM 2. Changes in Securities Not Applicable ITEM 3. Defaults Upon Senior Securities Not Applicable ITEM 4. Submission of Matters to a Vote of Security Holders Not Applicable 12 ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 3.1 Article of Incorporation of Cayman Purchasing & Supply, Inc. * 3.2 Company By-laws for Cayman Purchasing & Supply, Inc. * 3.3 Notice of reinstatement for Cayman Purchasing & Supply, Inc. * 3.4 Amendment to the Articles of Incorporation of Cayman Purchasing & Supply, Inc. * 3.5 Notice of filing of Amendment to the Articles of Incorporation of Cayman Purchasing & Supply, Inc. * 3.6 Notice of filing of Amendment to the Articles of Incorporation of Cayman Purchasing & Supply, Inc. changing its name to Patagonia Gold Corporation * 10.1 Agreement dated July 30, 1997 between The Company and Carrington International Limited * 10.2 Joint Venture Agreement between the Company and Aurora Gold Corporation * 27.1 Financial Data Schedule - -------- * Previously Filed (b) Reports on Form 8-K 1. Change in registrant's certifying accountants (filed February 7, 2000) * - -------- * Previously Filed SIGNATURES 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 thereunder duly authorized. Date: August 10, 2000 BY: /s/ David Jenkins --------------- -------------------------- David Jenkins Director and President Date: August 10, 2000 BY: /s/ Cosme M. Beccar Varela --------------- -------------------------- Cosme M. Beccar Varela Director 13 EX-27 2 0002.txt FDS --
5 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 2,448 901,196 21 0 0 903,665 12,250 0 915,915 128,858 0 0 0 13,000 774,057 915,915 0 0 0 0 37,430 0 0 (37,430) 0 (37,430) 0 0 0 (37,430) (0.00) (0.00)
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