-----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, FfbCtm/s4cM/XPP/Lz9m6HNzdER4fws0cSPNHpks1ZcT0Qca670wQALV81rW8ffq 2+5+Ed3RSSYW5xF12dw2Rg== /in/edgar/work/20000621/0000931731-00-000291/0000931731-00-000291.txt : 20000920 0000931731-00-000291.hdr.sgml : 20000920 ACCESSION NUMBER: 0000931731-00-000291 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000430 FILED AS OF DATE: 20000621 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FISHER WATT GOLD CO INC CENTRAL INDEX KEY: 0000844788 STANDARD INDUSTRIAL CLASSIFICATION: [1040 ] IRS NUMBER: 880227654 STATE OF INCORPORATION: NV FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-17386 FILM NUMBER: 658245 BUSINESS ADDRESS: STREET 1: 1621 NORTH 3RD STREET STREET 2: SUITE 1000 CITY: COEUR D'ALENE STATE: ID ZIP: 83814-3340 BUSINESS PHONE: 2086646757 MAIL ADDRESS: STREET 1: 1621 NORTH 3RD ST STREET 2: STE 1000 CITY: COEUR DALENE STATE: ID ZIP: 83814 FORMER COMPANY: FORMER CONFORMED NAME: FISCHER WATT GOLD CO INC DATE OF NAME CHANGE: 19920703 10QSB 1 0001.txt FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark One) [X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-17386 FISCHER-WATT GOLD COMPANY, INC. ------------------------------- (Exact name of registrant as specified in its charter) Nevada 88-0227654 ------ ---------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 1621 North 3rd Street, Suite 1000, Coeur d'Alene, ID 83814 ---------------------------------------------------------- (Address of principal executive office) (208)-664-6757 -------------- (Registrant's telephone number, including area code) 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), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The number of shares outstanding of each of Issuer's classes of common equity as of April 30, 2000. Common Stock, par value $.001 40,298,384 ----------------------------- ---------- Title of Class Number of Shares Transitional Small Business Disclosure Format yes [ ] no [X] Index Part 1 - Financial Statements...............................................1 1.1 Consolidated Balance Sheet...........................................2 1.2 Consolidated Statement of Operations.................................3 1.3 Consolidated Statements of Cash Flows................................5 1.4 Basis Of Presentation................................................5 1.5 Inventories..........................................................6 1.6 Stockholders' Equity.................................................6 1.7 Commitments and contingencies........................................6 Part 2 - Management's Discussion and Analysis or Plan of Operations.........6 2.1 Organization And Business............................................6 2.2 Liquidity and Capital Resources......................................6 2.2.1 Short Term Liquidity............................................6 2.2.2 Long Term Liquidity.............................................7 2.3 Results of Operations................................................7 2.4 Revenues.............................................................7 2.5 Costs and Expenses...................................................7 2.6 Commitments and Contingencies........................................8 2.7 Foreign Currency Exchange............................................8 2.8 Going Concern Consideration..........................................8 2.9 Subsequent Events....................................................9 2.10 Cautionary Note Regarding Forward-Looking Statements................9 Part 3 - Other Information..................................................9 3.1 Legal Proceedings....................................................9 3.2 Changes in Securities................................................9 3.4 Submission of Matters to a Vote of Security Holders..................9 3.5 Other information....................................................9 3.6 Exhibits and Reports on Form 8-K....................................10 EXCHANGE RATES Except as otherwise indicated, all dollar amounts described in this Form 10(k) Annual Report are expressed in United States (US) dollars. CONVERSION TABLE For ease of reference, the following conversion factors are provided: 1 mile = 1.6093 kilometers 1 metric tonne = 2,204.6 pounds 1 foot = 0.305 meters 1 ounce (troy) = 31.1035 grams 1 acre = 0.4047 hectare 1 imperial gallon = 4.5546 liters 1 long ton = 2,240 pounds 1 liter = 1.057 U.S. quarts FORWARD LOOKING STATEMENTS The Company desires to take advantage of the "safe harbor" provisions contained in Section 27A of the Securities Act of 1933, as amended (the "1933 Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is including this statement herein in order to do so: From time to time, the Company's management or persons acting on the Company's behalf may wish to make, either orally or in writing, forward-looking statements (which may come within the meaning of Section 27A of the 1933 Act and Section 21E of the 1934 Act), to inform existing and potential security holders regarding various matters including, without limitation, projections regarding financial matters, timing regarding transfer of licenses and receipts of government approvals, effects of regulation and completion of work programs. Such forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believes," "expect," "anticipate," "goal" or other words that convey the uncertainty of future events or outcomes. Forward-looking statements by their nature are subject to certain risks, uncertainties and assumptions and will be influenced by various factors. Should one or more of these forecasts or underlying assumptions prove incorrect, actual results could vary materially. FISCHER-WATT GOLD COMPANY, INC. AND SUBSIDIARIES Part 1 - Financial Statements 1 1.1 Consolidated Balance Sheet April 30, 2000 (Unaudited) ASSETS ------ Current assets: Cash $ 6,338 Accounts receivable 173,671 Inventory 313,649 Other current assets 36,061 ------------ Total current assets 529,719 ------------ Mineral interests, net 172,541 Property and equipment, net 268,349 ------------ 440,890 ------------ $ 970,609 ------------ LIABILITIES AND STOCKHOLDERS' (DEFICIT) --------------------------------------- Current liabilities: Accounts payable $ 2,143,062 Accounts payable and accrued expenses - shareholders 493,630 ------------ Total current liabilities 2,636,692 ------------ Note payable - shareholder 120,000 Stockholders' (Deficit): Preferred stock, non-voting, convertible, $2 par value, 250,000 shares authorized, none outstanding -- Common stock, $.001 par value, 50,000,000 shares authorized, 40,298,384 shares issued and outstanding 40,300 Additional paid-in capital 14,186,020 Capital stock subscribed 78,750 Accumulated deficit (16,710,320) Accumulated other comprehensive income: Currency translation adjustment 619,167 ------------ (1,786,083) ------------ $ 970,609 ============ 2 1.2 Consolidated Statement of Operations Three Months Ended April 30, 1999 and 2000 (Unaudited) 1999 2000 ------------ ------------ Sales of precious metals $ 488,174 $ 14,859 Costs applicable to sales 500,905 74,987 ------------ ------------ Income (loss) from mining operations (12,731) (60,128) Costs and expenses: Exploration 95,876 -- General and administrative 87,712 208,529 ------------ ------------ 183,588 208,529 (Loss) from operations (196,319) (268,657) Other income and (expense): Interest expense (25,000) -- Currency exchange (loss) (60,283) -- Other income (expense) 383,245 1,865 ------------ ------------ 297,962 1,865 Net income (loss) before income taxes 101,643 (266,792) Income taxes (benefit) 16,525 10,296 ------------ ------------ Net income (loss) 85,118 (277,088) Other comprehensive income: Foreign currency translation adjustment 232,726 43,590 ------------ ------------ Comprehensive income (loss) $ 317,844 $ (233,498) ============ ============ Per share information - basic and fully diluted Net (loss) per share $ 0.00 $ (0.01) ============ ============ Weighted average shares outstanding 38,188,384 40,298,384 ============ ============ See the accompanying notes to the consolidated financial statements. 3 1.3 Consolidated Statements of Cash Flows Three Months Ended April 30, 1999 and 2000 (Unaudited) 1999 2000 -------- -------- Cash flows from operating activities: Net cash provided by (used in) operating activities $ (7,397) $(29,847) -------- -------- Cash flows from investing activities: Disposition of property and equipment 20,363 -- -------- -------- Net cash provided by (used in) investing activities 20,363 -- -------- -------- Cash flows from financing activities: Proceeds from sale of common shares -- 10,000 Proceeds from note payable -- 20,000 -------- -------- Net cash provided by (used in) financing activities -- 30,000 -------- -------- Increase (decrease) in cash and cash equivalents 12,966 153 Cash and cash equivalents, beginning of period 18,736 6,185 -------- -------- Cash and cash equivalents, end of period $ 31,702 $ 6,338 ======== ======== 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS APRIL 30, 2000 (UNAUDITED) 1.4 Basis Of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and Item 310(b) of Regulation SB. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. For further information, refer to the financial statements of the Company as of January 31, 2000 and for the two years then ended, including notes thereto included in the Company's Form 10-KSB. The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) APRIL 30, 2000 (UNAUDITED) Loss per share Basic loss per common share was computed using the weighted average number of common shares outstanding for the periods presented. Diluted information is not presented as the effect of common stock equivalents would be anti-dilutive 1.5 Inventories Inventories consist of gold and silver produced by the Company's Colombian mining operations, work in process, raw materials used in the production process and operating supplies. Gold and silver inventories are stated at their selling prices reduced by the estimated cost of disposal. Raw materials and operating supplies used in the production process are stated at the lower of cost or replacement value. Production expenses are included in work in process inventories using an average cost of production method and work in process inventories are stated at their lower of cost or net realizable value. 1.6 Stockholders' Equity During the period ended April 30, 2000 the Company accepted subscriptions for 200,000 shares of common stock for cash aggregating $10,000. 1.7 Commitments and contingencies Oronorte is currently the defendant in several claims relating to labor contracts and employee termination's which occurred during a labor strike. This strike and the resulting termination's took place during the former ownership of Oronorte. The estimated amount of the claims against Oronorte totals approximately $200,000. Part 2 - Management's Discussion and Analysis or Plan of Operations. The following discussion and analysis covers material changes in financial condition since January 31, 2000 and material changes in the results of operations for the three months ended April 30, 2000, as compared to the same period in 1999. This discussion and analysis should be read in conjunction with "Management's Discussion and Analysis and Results of Operations" included in the Company's Form 10-KSB for the year ended January 31, 2000. 2.1 Organization And Business Fischer-Watt Gold Company, Inc. ("Fischer-Watt" or the "Company"), its subsidiaries, and joint ventures are engaged in the business of mining and mineral exploration. Operating activities of the Company include locating, acquiring, exploring, developing, improving, selling, leasing and operating mineral interests, principally those involving precious metals. The Company presently has mineral interests in North Central Colombia. The Company's current operational focus is its Oronorte properties, a producing gold mine near Zaragosa, Colombia. The Company, together with its consolidated subsidiaries, currently operates in one business segment, mining. 2.2 Liquidity and Capital Resources 2.2.1 Short Term Liquidity As of April 30, 2000, the Company had $6,000 in cash and accounts payable and accrued expenses of $2.6 million. 6 On April 30, 2000, the Company's current ratio of current assets to current liabilities was less than 1:1 A current ratio of less than 1:1 indicates that the Company does not have sufficient cash and other current assets to pay its bills and other liabilities incurred at the end of its fiscal year and due and payable within the next fiscal year. The management intends to sell or joint venture the Colombian operations and concentrate its efforts in Mexico. The Colombian operations have experienced labor strikes, work slow downs and general unrest for the entire quarter. Every effort is being made to eliminate these problems but success can not be assured. Fischer-Watt incurred net income of $85,000 for the first three months of 1999 and a net loss of $234,000 for the period ended April 30, 2000. The loss was due to the lack of production at the Oronorte mine. On April 30, 2000 the accumulated deficit was $16.7 million. Throughout the most of last year and the entire first quarter of this year the Company has been beset by labor problems at its Oronorte Mine. This resulted in strikes and numerous work stoppages and slow work situations during the rest of the year. This situation is the result of political instability in the country and agitation of the work force by outside interests. This is not expected to change in the near future. As a result of the Colombian situation, and the depressed selling price of gold, the Company decreased the value of its Colombian assets by $2.4 million at the end of last fiscal year. This situation has continued during this quarter and the production has been minimal. The Company has had discussions with several Colombian companies concerning a possible sale and/or joint venture operation of the mine. 2.2.2 Long Term Liquidity It is likely that the Company will need to supplement anticipated cash from operations with future debt or equity financing and dispositions of or joint ventures with respect to mineral properties to fully fund its future business plan which includes exploration projects and property development. While the Company has been successful in capital raising endeavors in the past, there can be no assurance that its future efforts will be successful. There can be no assurance that the Company will be able to conclude transactions with respect to its mineral properties or additional debt or equity financing or that such capital raising opportunities will be available on terms acceptable to the Company, or at all. 2.3 Results of Operations The Company had net loss of $234,000 ($0.01 per share) compared to net income of $85,000 ($.00 per share) in the quarter's ended April 30, 2000 and 1999, respectively. 2.4 Revenues The Company had sales of precious metals of $15,000 in the quarter ended April 30, 2000. The Company had sales of precious metals of $489,000 during the quarter ended April 30, 1999. The Company does not presently employ forward sales contracts or engage in any hedging activities. Again, the decline in sales was due to labor and related production problems at the El Limon Mine. 2.5 Costs and Expenses Production costs totaled $75,000 and $501,000 for the three month period ended April 30, 2000, and April 30, 1999, respectively. The improvement of approximately $426,000 from the prior year relates to reduction in staff and operating expenses as the result of labor problems and lack of production. The cost of abandoned mineral interests was $-0- in quarters ended April 30, 2000 and 1999, respectively. Abandonment's are a natural result of the Company's ongoing program of acquisition, exploration and evaluation of mineral properties. When the Company determines that a property lacks continuing economic value, it is abandoned. It cannot be determined at this time when or if any of the Company's current property interests will be abandoned. 7 Selling, general and administrative costs increased $121,000 from $88,000 in quarter ended April 30, 1999 to $209,000 in the quarter ending April 30, 2000. This increase was the result certain fixed costs, which would normally be charged to operating expenses, being charged to G & A due to a lack of production. Exploration expense decreased to $0 in the first quarter of fiscal 1999 from $96,000 in the first quarter of fiscal 1998. This decrease is due to the elimination of all exploration in the United States and Colombia. Net interest expense decreased from $25,000 during the quarter ended April 30, 1999 to $0 during the quarter ended April 30, 2000. This decrease was due to the elimination of note due a third party in fiscal year 1999. Also, certain short term loans and lines of credit in Colombia were eliminated. The Company is subject to inflationary pressures of the Colombian economy. During the past year the rate of inflation in Colombia was approximately 20%, wherein the currency exchange rate of the U.S. dollar to the Colombian peso increased by only 8%. The Company is striving to implement cost-cutting measures in an effort to reduce per unit production costs and increase production efficiencies. These cost-cutting measures include overhead reduction at both the mine and Medellin office, and improved grade control. However, there can be no assurance that the Company will be able to achieve such cost cutting measures and production efficiencies. In addition, the Company cannot anticipate what the future inflation and exchange rates will be and therefore cannot accurately predict the aggregate effect of these factors. Other income (expenses) was $2,000 for the quarter ending April 30, 2000 and $383,000 for the same period in 1999. The change reflects that a large capital item was sold in 1999. 2.6 Commitments and Contingencies Oronorte is currently the defendant in several claims relating to labor contracts and employee termination's which occurred during a labor strike. This strike and the resulting termination's took place during the former ownership of Oronorte. The estimated amount of the claims against Oronorte totals approximately $200,000. 2.7 Foreign Currency Exchange The Company accounts for foreign currency translation in accordance with the provisions of Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation" ("SFAS No.52"). The assets and liabilities of the Colombian unit are translated at the rate of exchange in effect at the balance sheet date. Income and expenses are translated using the weighted average rates of exchange prevailing during the period. The related translation adjustments are reflected in the accumulated translation adjustment section of shareholders' equity. 2.8 Going Concern Consideration As the independent certified public accountants have indicated in their report on the financial statements for the year ended January 31, 2000, and as shown in the financial statements, the Company has experienced significant operating losses which have resulted in an accumulated deficits of $16.7 million. These conditions raise doubt about the Company's ability to continue as a going concern. The ability of the Company to achieve its operating goals and thus positive cash flows from operations is dependent upon the future market price of gold, future capital raising efforts, and the ability to achieve future operating efficiencies anticipated with increased production levels. Management's plans will require additional financing, reduced exploration activity, or disposition of or joint ventures with respect to mineral properties. While the Company has been successful in these capital raising endeavors in the past, there can be no 8 assurance that its future efforts, and anticipated operating improvements will be successful. The Company does not currently have adequate capital to continue its contemplated business plan beyond the early part of fiscal 2000. The Company is presently investigating all of the alternatives identified above to meet its short-term liquidity needs. The Company believes that it can arrange a transaction or transactions to meet its short-term liquidity needs, however there can be no assurance that any such transactions will be concluded or that if concluded they will be on terms favorable to the Company. 2.9 Subsequent Events On June 7, 2000, the Company announced that it had signed a letter on intent to sell the Oronorte operations to Groupo de Bullet, a Colombian Company. This sale included the El Limon mine and its related support facilities as well as all of companies the exploration and development properties in the country. The sale price was US$3.7 million which will be paid as a 3% NSR. If Groupe de Bullet vends the property to a third party within two years the full amount will due upon sale, less a sales commission. 2.10 Cautionary Note Regarding Forward-Looking Statements In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby providing cautionary statements identifying important factors that could cause the Company's actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of the Company herein or orally, whether in presentations, in response to questions or otherwise. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will result", "are expected to", "will continue", "is anticipated", "estimated", "projection" and "outlook") are not historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions, and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. Such uncertainties include, among other, the following: (i) the Company's ability to obtain additional financing to implement its business strategy; (ii) adverse weather conditions and other conditions beyond the control of the Company; (iii) imposition of new regulatory requirements affecting the Company; (iv) a downturn in general or local economic conditions where the Company operates; (v) effect of uninsured loss and (vi) other factors which are described in further detail in the Company's filings with the Securities and Exchange Commission. The Company cautions that actual results or outcomes could differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors. Further, management cannot assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Part 3 - Other Information 3.1 Legal Proceedings None 3.2 Changes in Securities None. 3.4 Submission of Matters to a Vote of Security Holders None 3.5 Other information None 9 3.6 Exhibits and Reports on Form 8-K A. Exhibits 27.1 Financial Data Schedule (For SEC purposes only) B. Reports on Form 8-K None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FISCHER-WATT GOLD COMPANY, INC. ------------------------------- Date: June 19, 1999 By:/s/George Beattie - ------------------- -------------------- George Beattie, President, Chief Executive Officer (Principal Executive Officer) EX-27 2 0002.txt FDS --
5 3-MOS JAN-31-2001 FEB-01-2000 APR-30-2000 6000 0 210000 0 314000 530000 441000 0 971000 2757000 0 0 0 40000 (1826000) 971000 15000 15000 0 282000 (2000) 0 0 0 10000 0 0 44000 0 (234000) (0.01) (0.01) Net of Depreciation & Depletion Other Income Foreign Currency Translation Adjustment
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