-----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, NHJp/n82n11nOLVX+XNqrP68hfUFMFSQ7rzmoGmWbANRMQJ+Qj10Xdmj9iLweAkR w922KkVSQiQLEU/aZDLNXQ== 0001014909-06-000150.txt : 20061213 0001014909-06-000150.hdr.sgml : 20061213 20061213115352 ACCESSION NUMBER: 0001014909-06-000150 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20051031 FILED AS OF DATE: 20061213 DATE AS OF CHANGE: 20061213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FISCHER WATT GOLD CO INC CENTRAL INDEX KEY: 0000844788 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 880227654 STATE OF INCORPORATION: NV FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-17386 FILM NUMBER: 061273415 BUSINESS ADDRESS: STREET 1: 2582 TAFT COURT CITY: LAKEWOOD STATE: CO ZIP: 80215 BUSINESS PHONE: 3032320292 MAIL ADDRESS: STREET 1: 2582 TAFT COURT CITY: LAKEWOOD STATE: CO ZIP: 80215 FORMER COMPANY: FORMER CONFORMED NAME: FISCHER WATT GOLD CO INC DATE OF NAME CHANGE: 19991025 FORMER COMPANY: FORMER CONFORMED NAME: FISCHER WATT GOLD CO INC DATE OF NAME CHANGE: 19920703 10QSB 1 f10q_31oct2006fischerwatt.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 October 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: December 8, 2006. Common Stock, par value $.001 70,516,819 - ----------------------------- ---------------- 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 Sheet (Unaudited)....................................... 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.............................................. 14 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 October 31, 2006 (Unaudited) January 31, 2006 -------------- ---------------- ASSETS Current Assets: Cash $ 81,461 $ 177,146 ============== ============== LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current Liabilities: Accounts payable and accrued expenses 68,726 $ 73,060 Note payable - shareholders 781,045 781,045 Accounts payable and accrued expenses- shareholders 1,053,898 1,093,898 -------------- -------------- Total current liabilities 1,903,669 1,948,003 -------------- -------------- Note payable - shareholders 288,023 288,023 -------------- -------------- Stockholders' (Deficit): Preferred stock, non-voting, convertible, $2 par vlaue, 250,000 shares authorized, none outstanding - - Common stock, $.001 par value, 200,000,000 shares authorized, 70,516,819 and 69,166,819 shares issued and outstanding, respectively 70,516 69,166 Additional paid-in capital 15,894,191 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 (2,734,573) (2,482,722) --------------- -------------- (2,110,231) (2,058,880) --------------- -------------- $ 81,461 $ 177,146 =============== ==============
See the accompanying notes to the consolidated financial statements -4-
Fischer Watt Gold Company, Inc. (An Exploration Stage Company) Consolidated Statement of Operations February 1, 2001 Three Months Ended October 31, Nine Months Ended October 31, (Inception of 2006 2005 2006 2005 Exploration Stage) (Restated) (Restated) to October 31, 2006 -------------- -------------- -------------- -------------- ------------------- Revenue $ - $ - $ - $ 43,954 $ 44,240 ------------- ------------- ------------- ------------- -------------- Costs and expenses: Cost of sales - - - 50,000 50,000 Exploration 18,433 - 42,061 11,739 669,273 Writedown of inventory to market value - - - - 125,000 Stock compensation - - - - 71,600 Stock option expense - - 106,000 - 106,000 General and administrative 38,443 31,530 150,032 177,224 1,884,916 ------------- ------------- ------------- ------------- -------------- 56,876 31,530 298,093 238,963 2,906,789 ------------- ------------- ------------- ------------- -------------- (Loss) from operations (56,876) (31,530) (298,093) (195,009) (2,862,549) ------------- ------------- ------------- ------------- -------------- Other income (expense) Interest expense (2,563) (4,530) (7,688) (12,925) (47,074) Relief of payables and other indebtedness - - - - 66,935 Interest income 1,234 - 3,930 - 3,930 Other income - - 50,000 - 104,184 ------------- ------------- ------------- ------------- -------------- (1,329) (4,530) 46,242 (12,925) 127,975 ------------- ------------- ------------- ------------- -------------- Net (loss) $ (58,205) $ (36,060) $ (251,851) $ (207,934) $ (2,734,574) ============= ============= ============= ============= ============== Per share information - basic and fully diluted Net (loss) per share $ (0.00) $ (0.00) $ (0.00) $ (0.00) ============= ============= ============= ============= Weighted average shares outstanding 70,355,949 57,566,819 69,706,563 56,486,518 ============= ============= ============= =============
See the accompanying notes to the consolidated financial statements -5-
Fischer-Watt Gold Company, Inc. (An Exploration Stage Company) Consolidated Statement of Cash Flows (Unaudited) February 1, 2001 Nine Months Ended October 31, (Inception of 2006 2005 Exploration Stage) (Restated) to October 31, 2006 ------------------ ------------------ ------------------- Cash flows from operating activities: Net cash (used in) operating activities $ (95,685) $ (21,641) $ (1,283,980) ---------------- ---------------- ----------------- 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 - 10,000 35,000 Proceeds from note payable - shareholder - 19,500 40,500 Capital contribution by shareholder - - 689,068 ---------------- ---------------- ----------------- Net cash provided by financing activities - 29,500 1,345,054 ---------------- ---------------- ----------------- Increase (decrease) in cash and cash equivalents (95,685) 7,859 61,074 Cash and cash equivalents, beginning of period 177,146 921 20,387 ---------------- ---------------- ----------------- Cash and cash equivalents, end of period $ 81,461 $ 8,780 $ 81,461 ================ ================ =================
See the accompanying notes to the consolidated financial statements -6- FISCHER-WATT GOLD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS October 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 The Company holds 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, taxation, and legal issues were outstanding but have now been resolved. Both Nexvu and the Company are now proceeding to final agreement and closing. 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, and October 31, 2006 payments have been delayed pending resolution of the issues. Assuming this transaction completes in its entirety, the Company will no longer hold any interests in Mexico. A closing is expected before the end of the fiscal year. -7- FISCHER-WATT GOLD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS October 31, 2006 (UNAUDITED) 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 the Company 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. (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 $18,087,688 since inception and stockholders' deficit of $2,110,232 at October 31, 2006. The Company has negative working capital of $1,822,208 at October 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. -8- FISCHER-WATT GOLD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS October 31, 2006 (UNAUDITED) 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. 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. (6) Stockholders' (Deficit) Common Stock On May 5, 2006, the Company issued 400,000 shares of common stock in exchange for debt of $40,000. 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. On July 26, 2006, the Company issued 100,000 shares of common stock valued at $7,000 to the vendors in connection with its acquisition of the Cruce Gold Property in Pinal County, Arizona. 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 per agreement. 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 $1,500,000 and $1,000,000 respectively. On September 7, 2006, the Company issued 400,000 shares of common stock to a shareholder who exercised a warrant to acquire said stock at $0.04 per share. Payment was realized by reduction of accrued expense owed 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. A deposit of $50,000 was received prior to the January 31, 2006 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. The Company advises that the administrative, accounting, and legal issues that have delayed final closing, have all been resolved and the Company expects to execute a final agreement and close this transaction in the near future. As part of the closing, the sum of $1,440,000 will be paid with the balance of $745,000 due April 30, 2007. Once the sale of the interest in Minera Montoro S.A. is completed, the Company will no longer hold any interest in Mexico. 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 known as the Pinal Gold Project. This is now referred to as the Cruce property. 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 due diligence was completed on August 7, 2006 and a payment of $15,000 has been made, for the purchase of a 100% mineral lease. The Company also reimbursed the vendors for the state bond. As part of the transaction the Company has issued 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. The Company continues to stake ground around the claims already purchased. -10- 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 granitic 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 and then started the earn-in period. 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. The Company has cash on hand at October 31, 2006 of $81,461 and while its working capital deficit position of $1,822,208 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 Company also expects to realize net proceeds from the sale of the Minera Montoro S.A. transaction after repayment to The Astra Joint Venture. 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 October 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 nine months ended October 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 Minera Montoro and to proceed with work on its recent property acquisitions in Arizona and Nevada. The Company continues to evaluate other mining properties in the western United States for possible acquisition and continues to explore various financing alternatives for the Company. Liquidity and Capital Resources - ------------------------------- As of October 31, 2006, the Company had cash on hand of $81,461 and current liabilities of $1,903,669, including $1,834,943 owed to related parties. Current accounts payable amounted to $68,726. The working capital deficit at January 31, 2006 was $1,770,857 compared to $1,822,208 at October 31, 2006. This represents an increase in the working capital deficit of $51,351 for the nine months ending October 31, 2006. This increase is primarily due to the cash used in operations for the nine months ending October 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 $1,822,208 is up by $51,351 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 fixed date 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. -11- Results of Operations - --------------------- For the nine months ended October 31, 2006, the Company has operating losses of $251,851 compared to a net loss for the corresponding nine month period ended October 31, 2005 of $207,934. The current nine month loss of $251,851, includes a non-cash activity of $106,000 regarding granting of stock options and the resulting expense. The current nine month period also includes sundry income of $50,000 from payments received in connection with the sale of Minera Montoro S.A to Nexvu. There was no comparable sundry income in the nine months ended October 31, 2005. Exploration expenses in the nine months ended October 31, 2006 amounted to $42,061 compared to $11,739 for the nine months ended October 31, 2005. Exploration in the current period related to the new Arizona property and the new Nevada property while exploration in 2005 related to projects no longer being pursued. The Company on June 11, 2006 entered into an agreement with private individuals regarding the Cruce Gold Project in northwest Pinal County, Arizona. This property 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. The Company was satisfied with its findings and completed the initial payment of $15,000 and has issued 100,000 restricted common shares of the Company. 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. Minera Montoro - ---------------- The Company owns 65% of Montoro, which in turn owns 100% of the La Balsa copper property in the state of Michoacan, Mexico. On June 1, 2005 Fischer-Watt entered into a Letter of Intent with Nexvu Capital Corp. of Vancouver ("Nexvu"), B.C., Canada, for the development of the La Balsa. On December 5, 2005, the Company entered into a Letter of Agreement with Nexvu Capital Corporation wherein Nexvu agreed to acquire the entire 65% interest in Montoro held by the Company for a total consideration of $2,235,000. The Agreement calls for payments as follows: On or before January 15, 2006 - the sum of $50,000. April 30, 2006 - the sum of $695,000. October 31, 2006 - the sum of $745,000. April 30, 2007 - the sum of $745,000. Because of the delay in closing, payments due at April 30, 2006 of $695,000 and payment due October 31, 2006 of $745,000 will be combined and paid at closing. This will leave the balance of $745,000 outstanding, which is due April 30, 2007. The closing was deferred by the mutual consent of the parties while the Company resolves accounting issues. As these have now been resolved, closing should occur shortly. The foregoing payments total $2,235,000 and Nexvu will acquire the entire 65% position held in Montoro by the Company. In addition to the above stated payments, the Company retains a 1% NSR royalty on the porphyry portion of the deposit. Nexvu will have an option to acquire 50% of the 1% NSR royalty for $1,000,000. If the property is not in production in seven (7) years, Nexvu will be obligated to acquire the 50% of the 1% NSR royalty for $1,000,000. -12- Commitments and Contingencies - ----------------------------- Management is not aware of any pending or threatened 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 $18,087,688 at October 31, 2006. 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. -13- 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 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. -14- 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. 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. -15- 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: December 13, 2006 By: /s/ Peter Bojtos ------------------------------------------- Peter Bojtos, Chairman of the Board, President, and Chief Financial Officer. -16- EX-31 2 exh_31.txt Exhibit 31 CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER PURSUANT TO 18 U.S.C 1350, AS ADOPTED, AND THE REQUIREMENTS OF SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Peter Bojtos certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Fischer-Watt Gold Company, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: December 13, 2006 /s/ Peter Bojtos - -------------------------- Peter Bojtos Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer EX-32 3 exh_32.txt Exhibit 32 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002. In connection with the Quarterly Report on Form 10-QSB of Fischer-Watt Gold Company, Inc. for the quarterly period ending October 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the Report), Peter Bojtos, President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his/her knowledge, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Peter Bojtos - -------------------------- Chief Executive Officer December 13, 2006 -----END PRIVACY-ENHANCED MESSAGE-----