10QSB 1 f10q_july312006fischerwatt.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 July 31, 2006 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ______________ Commission File Number 0-17386 FISCHER-WATT GOLD COMPANY, INC. --------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Nevada 88-0227654 --------------------------------- ------------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 2582 Taft Court, Lakewood, CO 80215 ---------------------------------------- (Address of principal executive offices) (303) 232-0292 --------------------------- (Issuer's telephone number) 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 --- --- State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: September 15, 2006. Common Stock, par value $.001 70,116,819 ----------------------------- ---------------- Title of Class Number of Shares Transitional Small Business Disclosure Format Yes [ ] No [X] Index Exchange Rates............................................................... 3 Conversion Table............................................................. 3 Forward Looking Statements................................................... 3 PART I - FINANCIAL INFORMATION Item 1 - Financial Statements................................................ 4 Consolidated Balance Sheets July 31, 2006 (Unaudited) and January 31, 2006.......................................................... 4 Consolidated Statements of Operation (Unaudited)............................. 5 Consolidated Statements of Cash Flow (Unaudited)............................. 6 Notes to Consolidated Financial Statements (Unaudited)....................... 7 Item 2 - Management's Discussion and Analysis or Plan of Operation........... 10 Item 3 - Controls and Procedure.............................................. 13 PART II- OTHER INFORMATION Item 1 - Legal Proceedings.................................................. 14 Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds........ 14 Item 3 - Defaults Upon Senior Notes......................................... 14 Item 4 - Submission of Matters to a Vote of Security Holders................ 14 Item 5 - Other Information.................................................. 14 Item 6 - Exhibits........................................................... 14 SIGNATURES.................................................................. 15 -2- Exchange Rates Except as otherwise indicated, all dollar amounts described in this 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. -3- PART I - FINANCIAL INFORMATION Item 1 - FINANCIAL STATEMENTS
Fischer-Watt Gold Company, Inc. (An Exploration Stage Company) Consolidated Balance Sheets July 31, 2006 (Unaudited) January 31, 2006 -------------- ---------------- ASSETS Current Assets: Cash $ 144,097 $ 177,146 ------------ ------------ Total current assets $ 144,097 $ 177,146 ============ ============ LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current Liabilities: Accounts payable and accrued expenses $ 89,157 $ 73,060 Note payable - shareholders 781,045 781,045 Accounts payable and accrued expenses- shareholders 1,053,898 1,093,898 ------------ ------------ 1,924,100 1,948,003 ------------ ------------ Note payable - shareholders, net of current portion 288,023 288,023 ------------ ------------ Stockholders' (Deficit): Preferred stock, non-voting, convertible, $2 par value, 250,000 shares authorized, none outstanding -- -- Common stock, $.001 par value, 200,000,000 shares authorized, 70,116,819 and 53,469,111 shares issued and outstanding, respectively 70,116 69,166 Additional paid-in capital 15,878,591 15,695,041 Common stock subscriptions 12,750 12,750 Accumulated deficit prior to exploration stage (15,353,115) (15,353,115) Accumulated deficit during the exploration stage (2,676,368) (2,482,722) ------------ ------------ (2,068,026) (2,058,880) ------------ ------------ $ 144,097 $ 177,146 ============ ============
See the accompanying notes to the consolidated financial statements -4-
Fischer Watt Gold Company, Inc. (An Exploration Stage Company) Consolidated Statements of Operations February 1, 2001 Three Months Ended July 31, Six Months Ended July 31, (Inception of 2006 2005 2006 2005 Exploration Stage) (Restated) (Restated) to July 31, 2006 -------------- -------------- -------------- -------------- -------------------- Revenue $ -- $ -- $ - $ 43,954 $ 44,240 ----------- ----------- ----------- ----------- ----------- Costs and expenses: Cost of sales -- -- -- 50,000 50,000 Exploration 23,628 3,809 23,628 11,739 650,840 Writedown of inventory to market value -- -- -- -- 125,000 Stock compensation 31,500 -- 31,500 -- 103,100 Stock option expense 106,000 -- 106,000 -- 106,000 General and administrative 45,650 64,680 80,089 120,425 1,814,972 ----------- ----------- ----------- ----------- ----------- 206,778 68,489 241,217 182,164 2,849,912 ----------- ----------- ----------- ----------- ----------- (Loss) from operations (206,778) (68,489) (241,217) (138,210) (2,805,672) ----------- ----------- ----------- ----------- ----------- Other income (expense) Interest expense (2,562) (10,606) (5,125) (12,925) (44,511) Relief of payables and other indebtedness -- -- -- -- 66,935 Interest income 1,509 -- 2,696 -- 2,696 Other income 25,000 -- 50,000 -- 104,184 ----------- ----------- ----------- ----------- ----------- 23,947 (10,606) 47,571 (12,925) 129,304 ----------- ----------- ----------- ----------- ----------- Net (loss) $ (182,831) $ (79,095) $ (193,646) $ (151,135) $(2,676,368) =========== =========== =========== =========== =========== Per share information - basic and fully diluted Net (loss) per share $ (0.00) $ (0.00) $ (0.00) $ (0.00) =========== =========== =========== =========== Weighted average shares outstanding 69,579,319 56,675,182 69,376,488 55,581,975 =========== =========== =========== ===========
See the accompanying notes to the consolidated financial statements -5-
Fischer-Watt Gold Company, Inc. (An Exploration Stage Company) Consolidated Statements of Cash Flows (Unaudited) February 1, 2001 Six Months Ended July 31, (Inception of 2006 2005 Exploration Stage) (Restated) to July 31, 2006 ------------ ---------- ------------------ Cash flows from operating activities: Net cash (used in) operating activities $ (33,049) $ (349) $(1,221,344) ----------- ----------- ----------- Cash flows from investing activities: Net cash provided by (used in) investing activities -- -- -- ----------- ----------- ----------- Cash flows from financing activities: Proceeds from issuance of common shares and stock subscriptions -- -- 580,486 Proceeds from exercise of options -- -- 35,000 Proceeds from note payable - shareholder -- 9,500 40,500 Capital contribution by shareholder -- -- 689,068 ----------- ----------- ----------- Net cash provided by financing activities -- 9,500 1,345,054 ----------- ----------- ----------- Increase (decrease) in cash and cash equivalents (33,049) 9,151 123,710 Cash and cash equivalents, beginning of period 177,146 921 20,387 ----------- ----------- ----------- Cash and cash equivalents, end of period $ 144,097 $ 10,072 $ 144,097 =========== =========== ===========
See the accompanying notes to the consolidated financial statements -6- FISCHER-WATT GOLD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS July 31, 2006 (UNAUDITED) (1) Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("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 and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended January 31, 2006. The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. Intercompany transactions and balances have been eliminated in consolidation. (2) Mineral Properties Since 1996, the Company has held a 65% interest in Minera Montoro S.A.de C.V. ("Montoro") which in turn has a 100% interest in mining concessions located in the state of Michoacan, Mexico, designated as the La Balsa property. Mr. Jorge E. Ordonez and his associates ("Ordonez") own the remaining 35% of Montoro. During the fiscal year ended January 31, 2006, the Company executed a binding letter of agreement to sell its 65% interest in Montoro to Nexvu Capital Corp for a total consideration of $2,235,000. An initial deposit of $50,000 was received during the year ended January 31, 2006, with the first payment of $695,000 due April 30, 2006. On April 30, 2006 Nexvu paid $25,000 to the Company in order to extend the closing date from April 30, 2006 to May 31, 2006. Furthermore, on May 31, 2006, Nexvu paid an additional $25,000 to the Company to extend the closing date to June 30, 2006. The Company has not yet closed the transaction as outlined above. Certain accounting issues are in the process of being resolved Both Nexvu and the Company have agreed to delay the closing until these issues are resolved. The payment terms for the total purchase price of $2,235,000 call for payment of $695,000 on June 30, 2006 and equal payments of $745,000 on October 31, 2006 and April 30, 2007. The June 30, 2006 payment has been delayed pending resolution of the accounting issues. Assuming this transaction completes in its entirety, the Company will no longer hold any interests in Mexico. In order to complete the sale to Nexvu Capital Corp, the Company repurchased a 21.6% interest in La Balsa project held by The Astra Ventures Inc. a holding company controlled by a former Chairman of the Company and a Director. The Company has agreed to repay capital contributions made by The Astra Ventures Inc. to Fischer Watt Gold in the sum of $864,068, to be repaid in conjunction with the receipt of proceeds from Nexvu Capital Corp. One-third of each payment received from Nexvu Capital Corp will be applied to the retirement of the debt to The Astra Ventures Inc. As consideration to The Astra Ventures Inc. for the lost business opportunity, the Company has agreed to grant an option to them for a total of 10,000,000 shares of common stock. The option granted is for 4,000,000 shares of common stock at $0.30 per share, 4,000,000 shares of common stock at $0.40 per share and 2,000,000 shares of common stock at $0.60 per share. -7- FISCHER-WATT GOLD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS July 31, 2006 (UNAUDITED) (3) Earnings Per Share The Company calculates net income (loss) per share as required by SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods presented, common stock equivalents were not considered, as their effect would be anti-dilutive. (4) Going Concern Consideration The Company has incurred substantial operating losses of $18,029,483 since inception and has a stockholders' deficit of $2,068,026 at July 31, 2006. The Company has negative working capital of $1,780,003 at July 31, 2006 and no revenue producing operations. These conditions raise substantial 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 metals, 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 assurance that its future efforts and anticipated operating improvements will be successful. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. (5) Stock-Based Compensation On July 27, 2006, the Company granted 2,500,000 options to directors of the Company and 150,000 options to two unaffiliated service providers. Effective February 1, 2006, the Company adopted SFAS 123(R), "Accounting for Stock-Based Compensation". Compensation cost for the Company's stock option plans had been determined in accordance with the fair value based method prescribed in SFAS 123(R). The fair value of the option grants is estimated on the date of grant utilizing the Black-Scholes option pricing model with the following weighted average assumptions for grants during the three months ended July 31, 2006: expected life of options of 2 years, expected volatility of 1.227, risk-free interest rate of 3.8% and no dividend yield. The weighted average fair value at the date of grant for options granted during the quarter ended July 31, 2006 approximated $.04 per option, or $106,000. (6) Stockholders (Deficit) Common Stock On May 5, 2006, the Company issued 400,000 shares of common stock in relief of accrued expenses - shareholder of $40,000. These shares were valued at the closing stock price on the date of the transaction. On July 26, 2006, the Company issued 200,000 shares of common stock valued at $14,000 to three unaffiliated service providers and 250,000 shares of common stock valued at $17,500 to the Company's President and CEO in exchange for services. These shares were valued at the closing stock price on the date of the transaction. On July 26, 2006, the Company issued 100,000 shares of common stock valued at $7,000 in connection with its acquisition of the Cruce Gold Property in Pinal County, Arizona. These shares were valued at the closing stock price on the date of the transaction. -8- FISCHER-WATT GOLD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS July 31, 2006 (UNAUDITED) (7) Subsequent Events On August 8, 2006, the Company entered into an option agreement with Grandcru Resources Corporation to acquire Grandcru's nineteen (19) claims in the Cambridge Mining District located south of Yerrington Nevada. After conducting due-diligence on the property, the Company paid the underlying property holder the sum of $10,000. Additional payments of $15,000, $20,000 and $25,000 are due the property holder on August 25, in the years 2007, 2008, and 2009. Payments to Grandcru are due as follows: $10,000 on July 31, 2007, $15,000 on July 31, 2008, $20,000 on July 31, 2009 and $25,000 on July 31, 2010. Annual work commitments for the four years are $50,000 year one, $75,000 in year 2, $125,000 in year three and $150,000 in year four. Upon completion of the above, the Company will have earned a 100% interest in this gold property subject to a 2% net smelter return royalty to the property holder and a 2% net smelter return royalty to Grandcru. These two royalties may be purchased for $2,000,000 and $1,000,000 respectively. On September 2, 2006, a director agreed in writing to forgive accrued expenses of $75,000. On September 6, 2006, a shareholder exercised 400,000 warrants at $0.04 per share in exchange for $16,000 in accrued expenses due to the shareholder. -9- Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Overview -------- Fischer-Watt Gold Company, Inc. (collectively with its subsidiaries, "Fischer-Watt", "FWG" or the "Company"), was formed under the laws of the State of Nevada in 1986. Fischer-Watt's primary business is mining and mineral exploration, and to that end to own, acquire, improve, sell, lease, convey lands or mineral claims or any right, title or interest therein; and to search, explore, prospect or drill for and exploit ores and minerals therein or thereupon. During the fiscal year ended January 31, 2006 the Company agreed to sell its 65% interest in Minera Montoro S.A. de C.V. ("Montoro") to Nexvu Capital Corp ("Nexvu") for a total consideration of $2,235,000. Of the total purchase, $50,000 was received as a deposit prior to the year end. Subsequent to the year end, Nexvu forwarded deposits of $25,000 each at the end of April and May, 2006 in order to defer the closing date to June 30, 2006. This transaction has not yet closed because of unresolved accounting issues. The Company is working on these issues and has mutually agreed with Nexvu that the closing will be delayed until these issues are fully resolved. Assuming this transaction completes in its entirety, the Company will no longer hold any interest in Mexico. The initial balance due on closing is $695,000 with remaining payments due of $745,000 on October 31, 2006 and $745,000 due on April 30, 2007. Montoro owns 100% of the La Balsa project. On December 5, 2005, the Company and The Astra Joint Venture ("Astra"), a company controlled by a director of Fischer-Watt, agreed to relinquish its 21.6% interest in the La Balsa project back to Fischer-Watt, thus returning Fischer-Watt's interest to 65%. Under terms of the agreement, the Company has agreed to repay Astra the loans it has advanced to date of $864,028, in three equal installments. Each installment of $288,000 will come from payments made to the Company by Nexvu as part of their acquisition commitment to the Company as outlined above. As further consideration, Astra has also received stock options in the Company as follows: Series #1 - being an option to acquire 4,000,000 common shares at $0.30 per share. This option will be exercisable for a period of five (5) years. Series #2 - being an option to acquire an additional 4,000,000 common shares at $0.40 per share. This option will be exercisable for a period of seven (7) years. Series #3 - being an option to acquire an additional 2,000,000 common shares at $0.60 per share. This option will be exercisable for a period of ten (10) years. The Company, on June 10, 2006, entered into an agreement with private individuals regarding a gold exploration project referred to as the Pinal Gold Project. This property is located in northwest Pinal County, Arizona and has a history of gold exploration. Under terms of the Agreement, the Company had a 60 day due diligence period to review details regarding the property. This was completed and payment of $15,000 has been made, for the purchase of a 100% mineral lease and the Company is in the process of issuing 100,000 restricted common shares of its stock. The vendors will retain a 2% net smelter return royalty and receive an advance royalty of $20,000 on the first anniversary and $25,000 thereafter. All royalties are deductible from production. On August 8, 2006, the Company entered into an option agreement with Grandcru Resources Corporation of Vancouver B.C. to acquire Grandcru's nineteen (19) claims in the Cambridge Mining District located south of Yerrington, Nevada. Located in the Walker Lane geological trend of western Nevada, the Cambridge Vein is a north-south trending, gold-bearing quartz vein in a granite host rock. The Company completed its due diligence and on August 25, 2006, paid $10,000 to the underlying property owner pursuant to the terms and conditions of its agreement. No payments are due to Grandcru Resources Corporation until July 31, 2007 when a payment of $10,000 is due. The Company issued a press release on August 8, 2006 outlining the option agreement. -10- The Company has cash on hand at July 31, 2006 of $144,097 and while its working capital deficit position of $1,780,003 brings to focus the ability of the Company to continue operations without further financing, a large portion of the current debt, being $1,834,943, is due to related parties where there are no specific terms of repayment for either of the Demand Notes, accrued expenses or interest owing. The following outlines results to date in the current fiscal year and outlines our plan of operation for the foreseeable future. It also analyzes our financial condition at July 31, 2006 and compares that condition to our financial condition at year-end January 31, 2006. Finally, we comment on the results of our operations for the six months ended July 31, 2006. This information should be read in conjunction with the other financial information and reports filed with the Securities and Exchange Commission ("SEC"), especially our Annual Report on Form 10-KSB for the year ended January 31, 2006. Plan of Operation ----------------- The Company's plan of operation for the fiscal year ending January 31, 2007 is to complete the sale of Montoro and to proceed with work on its recent property acquisitions in Arizona and Nevada. The Company continues to evaluate mining properties in the western United States for possible acquisition. Liquidity and Capital Resources ------------------------------- As of July 31, 2006, the Company had cash on hand of $144,097 and current liabilities of $1,924,100, including $1,834,943 owed to related parties. Current accounts payable amounted to $89,157. The working capital deficit at January 31, 2006 was $1,770,857 compared to $1,780,003 at July 31, 2006. This represents an increase in the working capital deficit of $9,146 for the six months ended July 31, 2006. This increase is the operating loss for the six months ended July 31, 2006. There is no specific term of repayment for either the Demand Notes, accrued expenses or other debt due to related parties. While the working capital deficit of $1,780,003 is up by $9,146 in the current fiscal year, and despite the fact that most of the deficit is reflected in loans to related parties without specific terms of repayment, management recognizes that the Company does not have sufficient funds to sustain its operations. While the Company fully expects to close on the Montoro sale to Nexvu, there is no assurance this will occur nor is there a date at the moment when it may occur. The Company continues to source out other appropriate financing in either equity or debt format, but there is no assurance said financing is available or will be obtained. Results of Operations --------------------- There was a modest reduction in administrative expenses for the three month period ending July 31, 2006 to $45,650 as compared to $64,680. The Company incurred exploration costs during the quarter ended July 31, 2006 of $23,628 compared to $3,809 for the period ended July 31, 2005. This was the result of work undertaken on the Pinal gold project in Arizona. During the three months ending July 31, 2006, the Company received $25,000 as a fee for extension of the closing date on the sale of its 65% interest in Minera Montoro. There was no sundry income for the three months ended July 31, 2005. For the six months ended July 31, 2006, the Company had a net loss of $193,646, compared to a net loss for the corresponding six month period ending July 31, 2005 of $151,135. Included in current period's net loss is $106,000 of expense recorded in connection with the granting of stock options during the quarter ended July 31, 2006. The Company has streamlined its administrative costs reducing administrative costs for the six months ended July 31, 2006 to $80,089 from $120,425 for the six months ended July 31, 2005. During the six months ended July 31, 2006, the Company received $50,000 in fees related to the extension of the closing date on the Montoro sale to Nexvu. There was no comparable sundry income in the six months ended July 31, 2005. Exploration expenses in the six months ended July 31, 2006 amounted to $23,628 compared to $11,739 for the six months ended July 31, 2005. Exploration in the current period related to the new Arizona property while exploration in 2005 related to projects no longer being pursued. -11- Commitments and Contingencies ----------------------------- Management is not aware of any legal action against the Company. 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 foreign operations 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. Going Concern Consideration --------------------------- As the independent certified public accountants have indicated in their report on the financial statements for the year ended January 31, 2006, and as shown in the financial statements, the Company has experienced significant operating losses that have resulted in an accumulated deficit of $18,029,483. 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 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 2006. 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. Cautionary Note Regarding Forward-Looking Statements ---------------------------------------------------- This Form 10-QSB contains or incorporates by reference "forward-looking statements," as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others: - statements concerning the benefits that we expect will result from our business activities and certain transactions that we contemplate or have completed, such as increased revenues, decreased expenses and avoided expenses and expenditures; and - statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts. These statements may be made expressly in this document or may be incorporated by reference to other documents that we will file with the SEC. You can find many of these statements by looking for words such as "believes," "expects," "anticipates," "estimates" or similar expressions used in this report or incorporated by reference in this report. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied by us in those statements. Because the -12- statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied. We caution you not to put undue reliance on these statements, which speak only as of the date of this report. Further, the information contained in this document or incorporated herein by reference is a statement of our present intention and is based on present facts and assumptions, and may change at any time and without notice, based on changes in such facts or assumptions. Risk Factors Impacting Forward-Looking Statements ------------------------------------------------- The important factors that could prevent us from achieving our stated goals and objectives include, but are not limited to, those set forth in our other reports filed with the SEC and the following: The worldwide economic situation; o Any change in interest rates or inflation; o Foreign government changes to laws or regulations related to Company activities; o The willingness and ability of third parties to honor their contractual commitments; o Our ability to raise additional capital, as it may be affected by current conditions in the stock market and competition in the gold mining industry for risk capital; o Our costs of production; Environmental and other regulations, as the same presently exist and may hereafter be amended; Our ability to identify, finance and integrate other acquisitions; and o Volatility of our stock price. We undertake no responsibility or obligation to update publicly these forward-looking statements, but may do so in the future in written or oral statements. Investors should take note of any future statements made by or on our behalf. Item 3. CONTROLS AND PROCEDURES The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-14(c). The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company's desired disclosure control objectives. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company's certifying officer has concluded that the Company's disclosure controls and procedures are effective in reaching that level of assurance. As of the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer/Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, the Company's Chief Executive Officer/Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. There have been no material changes in the Company's internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation. -13- PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None Item 3. DEFAULTS UPON SENIOR SECURITIES None Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None Item 5. OTHER INFORMATION None Item 6. EXHIBITS. Exhibit No. Document ----------- -------- 31 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Peter Bojtos. 32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Peter Bojtos. -14- SIGNATURES In accordance the requirements of the Exchange Act, the registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. FISCHER-WATT GOLD COMPANY, INC. Dated: September 25, 2006 By: /s/ Peter Bojtos ------------------------------------------- Peter Bojtos, Chairman of the Board, President, and Chief Financial Officer -15-