10QSB 1 f10q_30april2007fwg.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 April 30, 2007 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: June 1, 2007. Common Stock, par value $.001 70,516,819 ----------------------------- ---------------- Title of Class Number of Shares Transitional Small Business Disclosure Format Yes [ ] No [X] 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. -2- PART I - FINANCIAL INFORMATION Item 1 - FINANCIAL STATEMENTS
Fischer-Watt Gold Company, Inc. (An Exploration Stage Company) Consolidated Balance Sheets April 30, 2007 January 31, 2007 (Unaudited) ---------------------- ------------------------ ASSETS Current Assets: Cash $ 520,268 $ 466,370 Prepaid and other current assets 1,500 - ---------------------- ------------------------ Total current assets $ 521,768 $ 466,370 ====================== ======================== LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current Liabilities: Accounts payable and accrued expenses $ 16,740 $ 98,586 Income taxes payable - 173,750 Notes payable - shareholders 493,022 781,045 Accounts payable and accrued expenses - shareholders 1,008,885 962,898 ---------------------- ------------------------ Total current liabilities 1,518,647 2,016,279 ---------------------- ------------------------ 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, 70,516,819 shares issued and outstanding 70,516 70,516 Additional paid-in capital 15,894,191 15,894,191 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 (1,621,221) (2,174,251) ---------------------- ------------------------ (996,879) (1,549,909) ---------------------- ------------------------ $ 521,768 $ 466,370 ====================== ======================== See the accompanying notes to the consolidated financial statements
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Fischer-Watt Gold Company, Inc. (An Exploration Stage Company) Consolidated Statements of Operations (Unaudited) February 1, 2001 (Inception of Three Months Ended Three Months Ended Exploration Stage) April 30, 2007 April 30, 2006 to April 30, 2007 ---------------------- ------------------- ---------------------- Revenue $ - $ - $ 44,240 ---------------------- ------------------- --------------------- Costs and expenses: Cost of sales - - 50,000 Exploration 15,279 - 686,275 Writedown of inventory to market value - - 125,000 Stock compensation - - 103,100 Stock option expense - - 106,000 General and administrative 30,605 34,439 1,941,310 ---------------------- ------------------- --------------------- 45,885 34,439 3,011,686 ---------------------- ------------------- --------------------- (Loss) from operations (45,885) (34,439) (2,967,446) ---------------------- ------------------- --------------------- Other income (expense) Interest expense (2,563) (2,563) (52,199) Relief of payables and other indebtedness - - 141,935 Interest income 4,477 1,187 828,661 Other income 795,000 25,000 799,577 ---------------------- ------------------- --------------------- 796,915 23,624 1,717,975 ---------------------- ------------------- --------------------- Income (loss) before income taxes 751,030 (10,815) (1,249,471) Income taxes (198,000) - (371,750) ---------------------- ------------------- --------------------- Net income (loss) $ 553,030 $ (10,815) $ (1,621,221) ====================== =================== ===================== Per share information - basic and fully diluted Net income (loss) per share Basic $ 0.01 $ (0.00) $ (0.03) Fully-diluted $ 0.01 $ (0.00) $ (0.03) Weighted average shares outstanding Basic 70,516,819 69,166,819 53,217,495 Fully-diluted 86,816,819 69,166,819 53,217,495 See the accompanying notes to the consolidated financial statements
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Fischer-Watt Gold Company, Inc. (An Exploration Stage Company) Consolidated Statements of Cash Flows (Unaudited) February 1, 2001 (Inception of Three Months Ended Three Months Ended Exploration Stage) April 30, 2007 April 30, 2006 to April 30, 2007 ------------------ ------------------ ------------------ Cash flows from operating activities: Net cash provided by (used in) operatin$ activities $ 341,921 $ (9,502) $ (269,127) ------------- ------------ ------------ 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 notes payable - shareholders - - 40,500 Repayment of note payable - shareholder (288,023) - (576,046) Capital contribution by shareholder - - 689,068 -------------- ------------- ------------- Net cash provided by (used in) financing activities (288,023) - 769,008 -------------- ------------- ------------- Increase (decrease) in cash and cash equivalents 53,898 (9,502) 499,881 Cash and cash equivalents, beginning of period 466,370 177,146 20,387 -------------- -------------- ------------- Cash and cash equivalents, end of period $ 520,268 $ 167,644 $ 520,268 ============== ============== ============= Supplemental cash flow information: Cash paid for interest $ - $ - $ - Cash paid for income taxes $ 198,000 $ - $ 198,000 Non cash investing and financing activities: Reclassification of capital contributions to note payable $ - $ - $ 864,068 Conversion of notes payable and accrued interest to common stock $ - $ - $ 150,000 Conversion of amounts due to shareholders to common stock $ - $ - $ 150,000 Common shares issued for stock subscriptions $ - $ - $ 433,813 Conversion of amounts due to affiliate to stock subscription $ - $ - $ 131,282 Purchase of inventory via direct payment by shareholder $ - $ - $ 175,000 See the accompanying notes to the consolidated financial statements
-5- FISCHER-WATT GOLD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS April 30, 2007 (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, 2007. 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. During the fiscal year ended January 31, 2007, the original closing date was extended because of certain accounting and legal issues that were not resolved until late 2006. The first of three installments of $695,000 was received January 30, 2007 and the second installment of $745,000 was received on March 29, 2007. The remaining installment of $745,000 is due May 31, 2007 but the purchaser retains the right to extend this payment by 30 days by paying the Company an additional fee of $25,000. 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. As of April 30, 2007, the Company had repaid the first two installments to The Astra Ventures Inc. totalling $576,046. 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. -6- FISCHER-WATT GOLD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS April 30, 2007 (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 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 operating losses of $16,974,336 since inception and has a stockholders' deficit of $996,879 at April 30, 2007. The Company has negative working capital of $996,879 at April 30, 2007 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) Subsequent Events On May 22, 2007, the Board of Directors granted 250,000 shares of restricted stock to the Chairman and CEO, and 100,000 shares of restricted stock to a consultant. The Board of Directors also authorized the issuance of stock options to each of the five directors at 300,000 shares each at a strike price of $0.10 per share. Additional options totaling 500,000 shares were issued to three consultants at the same strike price of $0.10 per share. All options are for a 5 year period. Rogue River Inc. has paid $50,000 to the Company subsequent to April 30, 2007 in order to extend the final payment due regarding Montoro to June 30, 2007. -7- 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. During the fiscal year ended January 31, 2007, Nexvu assigned its interests to Rogue River Inc., and the proposed closing was delayed because of administrative, accounting, and legal issues. These issues have been resolved and the Company completed the closing of the first of three tranches at January 30, 2007 in the amount of $695,000. On March 29, 2007, the second tranche of $745,000 was completed, leaving the third tranche of $745,000 due April 30, 2007. Rogue River Inc. has executed its option to extend this final tranche by payment of $50,000 and the final tranche is now due June 30, 2007. Once the sale of the interest in Montoro is completed, the Company will no longer hold any interest, other than a future royalty in Mexico. Montoro owns 100% of the La Balsa project. On December 5, 2005, 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 the 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 $288,023 will come from payments made to the Company by Rogue River Inc as part of their acquisition commitment to the Company as outlined above. As of April 30, 2007, the Company had repaid $576,046 to Astra. 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 currently holds interests in two mineral properties, being the Cruce Gold Project in Pinal County, Arizona, and the Cambridge Mine Project in Lyon County, Nevada. -8- The Company acquired a 100% interest in the mineral lease in Pinal County for $15,000 and the issuance of 100,000 restricted common shares of its stock valued at fair market value of $7,000. The vendors will retain a 2% net smelter return royalty and will receive an advance royalty of $20,000 on the first anniversary of the agreement and $25,000 on subsequent anniversaries. These advance royalties will be deductible from future production royalty payments. The original property is situated on a 60 acre State lease. The Company has now staked additional claims on surrounding BLM ground covering an area of approximately 760 acres. Gold mineralization on the property is hosted within faulted blocks in well-altered sections of the pre-Cambrian age Oracle granite. Adits, shallow shafts and pits of unknown historic age are in evidence on the property. Early work by Spanish prospectors in the 1600's was centered around the Hot Boy inclined shaft. This shaft was deepened to a depth of 165 feet by a Mr. Cruce who made several shipments of ore before abandoning the property Between 1988 and 1990, Freeport McMoRan Gold Company carried out geological mapping, a four line Induced Polarization and Resistivity geophysical survey and a wide-spaced 14 hole reverse circulation drilling program totaling 5,805 feet. Hole CR-4 from surface to a depth of 60 feet returned an average grade of 0.032 oz. Au/t. Gold mineralization on the Cruce Gold property therefore defines a favorable structural setting that could be amenable to open-pit mining. Fischer-Watt has commenced an active field season with a close spaced soil and rock chip geochemical sampling program followed by a close spaced limited drilling program. The project currently has no reserves and there is no assurance that the project will advance from its present exploration stage. On August 1, 2006, the Company entered into an option agreement with Grandcru Resources Corporation ("Grandcru") of Vancouver B.C. to acquire Grandcru's rights to 19 claims in the Cambridge Mining District located 23 miles south of Yerrington, Nevada, in Lyon County. Under the terms of the agreement Fischer-Watt can acquire a 100% interest in the property by completing the following: Cash payments to an underlying claim holder of: $10,000 on August 25, 2006 $15,000 on August 25, 2007 $20,000 on August 25, 2008 $25,000 on August 25, 2009 and cash payments to Grandcru of: $10,000 on August 30, 2007 $15,000 on August 30, 2008 $20,000 on August 30, 2009 $25,000 on August 30, 2010 and by satisfying annual work commitments on the property of: $50,000 in the first year of the agreement $75,000 in the second year of the agreement $125,000 in the third year of the agreement $150,000 in the fourth year of the agreement Upon completion of the above, Fischer-Watt will have earned a 100% interest in the property subject to a 2% Net Smelter Return royalty to the underlying claim holder and a 2% Net Smelter Return royalty to Grandcru. These two royalties may be purchased by Fischer-Watt for $2,000,000 and $1,500,000 respectively. The property is comprised of 18 lode claims and 1 placer claim located entirely on BLM ground in the historic Cambridge Mining District. It covers an area of approximately 360 acres, at a moderate elevation of approximately 5,400 feet above Sea Level, which can be accessed year round via county maintained roads. -9- The District is in the Walker Lane geological trend of western Nevada. The Cambridge Vein is a structurally complex, shear hosted, north-south trending, quartz vein system. The veining is hosted in a weakly altered to unaltered coarse grained quartz monzonite granitoid of Cretaceous age. The veining is believed to be of a mesothermal nature and contains high-grade gold. The vein is known to extend along a strike of 1,200 meters and dips at approximately 60 degrees west. There are flexures along the strike and dip of the vein along with intersecting structures and splays. This geological complexity increases the potential of high-grade shoots occurring along the vein as well as multiple vein systems. The mineralization in the area was discovered in the 1860's and mining commenced shortly thereafter. Two shafts were sunk to a depth of 150 feet and were subsequently deepened to 250 feet. The property then became idle until 1940 when the Cambridge Mining Company deepened the North shaft to 400 feet. The vein was reported to be 5 to 7 feet wide at that depth. The mine was shut down in 1942 by the war order and no mining has been carried out since. No drilling has ever been carried out on the property. In a recent surface sampling campaign, by others, it was found that one third of the 32 samples taken along the outcropping vein had grades greater than 10 ppm gold, with several being over 30 ppm. The Company has planned its exploration program which will be carried out during the summer months of 2007. The work will include an initial drilling campaign designed to help trace the vein's geometry as well as help determine where high-grade gold shoots may occur. This will enable Fischer-Watt's geologists to begin defining the extent of the gold mineralization. The work program has been approved by the regulatory agency and an environmental reclamation bond of $2,956 has been deposited on May 24, 2007. The project has no reserves at present and there is no assurance that the project will advance from its present exploration stage. The Company has cash on hand at April 30, 2007 of $520,268 and while its working capital deficit position of $996,879 brings to focus the ability of the Company to continue operations without further financing, only $16,740 is due to trade creditors and the balance of the current liabilities, being $1,501,907, 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 further net proceeds from the sale of the Montoro transaction after repayment to Astra on completion of the payment of the third tranche of $745,000 from Rogue River Inc, due June 30, 2007. 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 April 30, 2007 and compares that condition to our financial condition at year-end January 31, 2007. Finally, we comment on the results of our operations for the three months ended April 30, 2007. 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, 2007. Plan of Operation ----------------- The Company's plan of operation for the fiscal year ended January 31, 2008 is to complete the sale of Montoro to Rogue River Inc on June 30, 2007, and to proceed with work on its mineral properties 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 April 30, 2007, the Company had cash on hand of $520,268 and current liabilities of $1,518,647, including $1,501,907 owed to related parties. Current accounts payable amounted to $16,740. The working capital deficit at January 31, 2007 was $1,549,909 compared to $996,879 at April 30, 2007. This represents a decrease in the working capital deficit of $553,030 for the three months ended April 30, 2007, being the net profit for the three months ended April 30, 2007. -10- As a result of the two tranches received from Rogue River Inc, the Company's financial position has improved as it has retired its obligations to related parties by $576,046 and reduced its working deficit by $553,030. There is no specific term of repayment for either the Demand Notes, accrued expenses or other debt due to related parties. Management recognizes that the Company does not have sufficient funds to retire its remaining debt and to sustain its operations. While the Company fully expects to close on the final tranche due from Rogue River Inc on June 30, 2007, there is no assurance this will occur. The Company continues to source out other appropriate financing in either equity or debt format, and it continues to seek out other mineral properties, but there is no assurance said financing is available or that said properties can be acquired on reasonable terms and conditions. Results of Operations --------------------- For the three months ended April 30, 2007, the Company had an operating profit of $553,030 compared to a net loss for the corresponding three month period ended April 30, 2006 of $10,815. The current three month period also includes sundry income of $50,000 from extensions received from Rogue River Inc. for extension of settlement date payments, regarding the sale of Montoro. There was comparable sundry income of $25,000 in the three months ended April 30, 2006. Exploration expenses in the three months ended April 30, 2007 amounted to $15,279 compared to zero for the three months ended April 30, 2006. Exploration in the current period related to the new Arizona property and the new Nevada property. The Company intends to carry out exploration programs on both its Cruce Gold Project and its Cambridge Mine Project during the summer of 2007. Montoro ------- The Company has owned 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. To date, two tranches have been received and there remains one tranche only outstanding and it is due June 30, 2007. The Rogue River Inc acquisition payments total $2,235,000 and Rogue River Inc. 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. Rogue River Inc. 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, Rogue River Inc. will be obligated at the discretion of Fischer-Watt, to acquire the 50% of the 1% NSR royalty for $1,000,000. 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 as of and for the year ended January 31, 2007, and -11- as shown in the financial statements, the Company has experienced significant operating losses that have resulted in an accumulated deficit of $16,974,336, at April 30, 2007. 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. Depending on the level of exploration activity, the Company does have adequate capital to continue its contemplated business plan through January 31, 2008, but does not have sufficient capital to carry out an extensive exploration program without additional capital. 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 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; -12- 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. 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. -13- 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: June 14, 2007 By: /s/ Peter Bojtos ------------------------------------------- Peter Bojtos, Chairman of the Board, President, and Chief Financial Officer -14-