-----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, T9wfu7Hg7EMfsOX7Ir9F2GWLW8Vz1y61nkWjBWhW89Tw9kBK2YXae+PA/Kudbn1C ZYb0tcHhaTI9ltbSX4Sezw== 0001025894-99-000276.txt : 19991216 0001025894-99-000276.hdr.sgml : 19991216 ACCESSION NUMBER: 0001025894-99-000276 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991031 FILED AS OF DATE: 19991215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEWGOLD INC CENTRAL INDEX KEY: 0000878808 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AUTOMOTIVE REPAIR, SERVICES & PARKING [7500] IRS NUMBER: 161400479 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-20722 FILM NUMBER: 99775137 BUSINESS ADDRESS: STREET 1: 3090 BOEING RD CITY: CAMERON PARK STATE: CA ZIP: 95612 BUSINESS PHONE: 9166651840 MAIL ADDRESS: STREET 1: 3090 BOEING RD CITY: CAMERON PARK STATE: CA ZIP: 95612 FORMER COMPANY: FORMER CONFORMED NAME: WAREHOUSE AUTO CENTERS INC /DE DATE OF NAME CHANGE: 19950510 10QSB 1 QUARTERLY REPORT U.S. Securities And Exchange Commission Washington, D.C. 20549 Form 10QSB Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended October 31, 1999 Commission file number 0-20722 NEWGOLD, INC. - -------------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Delaware 16-1400479 - - - - - - - - - - - - - - - - - (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 3090 Boeing Road, Cameron Park, CA 95682 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (Address of principal executive offices) (530) 672-1116 - - - - - - - - - - - (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 --- Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. Yes X ; No The number of shares of Common Stock outstanding as of October 31, 1999: 37,866,882 - ---------- Transitional Small Business Disclosure Format (check one): Yes No X PART I. Financial Information. ---------------------- 1. Interim Financial Statements (unaudited) Balance Sheet - July 31, 1999..................................................1 Statements of Operations - Three months ended July 31, 1999 and July 31, 1998.............2 Statements of Cash Flows - Three months ended July 31, 1999 and July 31, 1998.............3 Notes to Financial Statements.......................................4 2. Management's Discussion and Analysis................................5 PART II. Other information ----------------- Signatures..........................................................8 NEWGOLD, INC. Balance Sheet October 31, 1999 (Unaudited) Assets Cash and cash equivalents $ 541 Prepaid expenses 3,600 -------------- Total current assets 4,141 -------------- Property, plant and equipment including undeveloped mineral properties of $800,000, net of $57,350 accumulated depreciation 841,413 Reclamation bonds 50,500 -------------- Total assets $ 896,054 ============== Liabilities and Stockholder's Equity Current liabilities Accounts payable $ 368,001 Accrued expenses 476,137 Due to affiliate 77,775 Notes payable to Business Web Inc. 425,000 Notes payable to stockholders 249,180 Notes payable to individuals 462,500 -------------- Total current liabilities 2,058,593 Other Liabilities Accrued reclamation costs 50,500 Deferred revenue 800,000 -------------- Total other liabilities 850,500 -------------- Total liabilities 2,909,093 Stockholders' equity Common stock - Authorized 50,000,000 shares par value $0.001; 37,866,882 shares outstanding 37,867 Additional paid-in capital 7,932,497 Accumulated deficit (9,983,403) -------------- Total stockholders' equity (2,013,039) -------------- Total liabilities and stockholders' equity $ 896,054 ============== 1 NEWGOLD, INC. Statements of Operations (Unaudited) For the three months ended October 31 October 31 1999 1998 Sales Net sales $ - $ - Cost of sales - - --------------- --------------- Gross Margin - - Operating expenses General and administrative expenses 33,572 125,119 Exploration costs 25,800 14,882 --------------- --------------- Total operating expenses 59,372 140,001 --------------- --------------- Loss from operations (59,372) (140,001) Other income (expense) Interest income Other income (loss) - - Loss on disposal of assets - - Interest expense - (56,563) --------------- --------------- Total other expense - (56,563) Income tax provision - - --------------- --------------- Net loss $ (59,372) $ (196,564) =============== =============== Loss per share $ (0.002) $ (0.008) =============== =============== Weighted average number of shares outstanding 37,866,882 24,942,611 =============== ===============
2 NEWGOLD, INC. Statements of Cash Flows (Unaudited) For the three months ended October 31 October 31 1999 1998 Cash flows from operating activities Net loss $ (59,372) $ (196,564) -------- --------- Adjustments to reconcile net loss to net cash used in operating activities Depreciation 3,963 5,074 Changes in operating assets and liabilities Other assets (10,000) Accounts payable (29,642) (27,155) Accrued expenses 14,087 120,829 Due to Business Web, Inc. 10,000 Due to affiliate (300) 8,052 Notes payable to stockholders 59,839 13,791 ---------- ---------- Total adjustments to net loss 57,947 110,591 ---------- ---------- Net cash provided (used) by operations (1,425) (85,973) Cash flows from investing activities Capital expenditures - - ---------- ---------- Net cash used in investing activities - - ---------- ---------- Net increase (decrease) in cash (1,425) (85,973) Cash and cash equivalents, beginning of period 1,966 87,617 ---------- ---------- Cash and cash equivalents, end of period $ 541 $ 1,644 ========== ==========
3 NOTES TO FINANCIAL STATEMENTS 1. Preparation of Interim Financial Statements: The accompanying financial statements have been prepared in accordance with the instructions to Form 10-QSB and, therefore, do not include all information and footnotes necessary for a presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. In the opinion of management, the referenced financial statements reflect all normal and recurring adjustments necessary for a fair presentation of the results of operations and financial position for the interim periods presented. Operating results for the three month period ended October 31, 1999, are not necessarily indicative of the results that may be expected for the fiscal year ended January 31, 2000. 2. Income Taxes: No income tax provisions have been made due to losses incurred. Deferred income tax benefits have been fully reserved due to the uncertainty of future realization. 3. Net (Loss) Per share: Net (loss) per share has been computed on the basis of the weighted average number of shares outstanding during the period. No options were outstanding at the end of the period. 4. Reclamation of Mining Areas: Reclamation costs, including the removal of production facilities at the end of their useful lives, are estimated and accrued on an undiscounted basis over the productive lives of properties. Remediation costs are expensed when the liability is probable and estimable. Based on current environmental regulations and known reclamation requirements, management has included its best estimate of these obligations in its reclamation accruals. However, it is reasonably possible that the Company's estimates of its ultimate reclamation liabilities could change as a result of changes in regulations or cost estimates. The Company performs concurrent reclamation to the extent possible. However, most of the accrued costs are anticipated to be expended at the end of the mine life. 5. The Company placed the Relief Canyon Mine, a developed exploration project, on care and maintenance in December 1997. The Company estimates the annual cost of maintaining the mine in this status may be approximately $100,000. Included in this cost estimate are the annual BLM rent for the claims, water testing for Nevada Department of Environmental Protection, and costs of utilities and security at the site. Charges for care and maintenance of Relief Canyon in the quarter ended October 31, 1999 were $25,800. 4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS Introduction. The Company formerly was engaged in the business of acquiring dormant, potential gold-producing properties located in the continental United States and developing such properties into commercial gold mining operation. The Company is the result of a merger (the "Merger") between Warehouse Auto Centers, Inc., a Delaware corporation ("WAC"), and Newgold, Inc., a Nevada corporation ("NGNV"), pursuant to a Plan of Reorganization (the "Plan") approved by the U.S. Bankruptcy Court for the Western District of New York, effective as of November 21, 1996. For accounting purposes, under the terms of the Merger, NGNV was treated as the acquirer. Financial Plan of Operation for the Next Twelve Months. On April 2, 1999, the Company issued a Letter of Intent to Business Web, Inc. (BWI) to effect a reverse merger of Newgold, Inc. and BWI with BWI being the acquirer corporation. A merger agreement, which has been approved by the Boards of Directors, will be submitted to the shareholders of both companies for their expected approval. Terms of the agreement allow a 3:2 split of the Company stock in June 1999, which will be treated as a dividend. After the merger, the Company shareholders will receive one share of BWI stock for each twelve shares of Newgold stock. This exchange of shares will give the Company shareholders approximately a 14% interest in BWI. BWI, a Texas corporation, is an Internet company specializing in the development of web sites for communities of like businesses and the development of e-trade shows on the Internet for industries and professional organizations. To date, of the capital raised by BWI, $425,000 has been loaned to Newgold for payment of liabilities and current operating costs. Other Newgold liabilities will be settled with BWI stock and cash as required. The Relief Canyon Mine will be transferred to another corporation and a portion of any funds raised by this corporation will be committed to repay BWI for loans and other payments made for the benefit of Newgold. As of October 31, 1999, the Company had $541 in cash and a negative working capital of $2,054,452.. As the Company has been unable to obtain additional financing, it was required to curtail its development plans in November 1997 and cease operations except for care and maintenance of the Relief Canyon Mine. The Company's independent accountants have included an explanatory paragraph in their report on the Company's financial statements for the year ended January 31, 1999, indicating substantial doubt about the Company's ability to continue as a going concern. At the Relief Canyon Mine, the Company had placed all mining operations on hold and has placed the mine into care and maintenance. The Company has two experienced personnel in place at the mine site. The personnel have evaporated 80% of the water in the preg and barren ponds so these ponds can contain snow melt and rain run-off from the leach pads as required by a plan approved and monitored by the Nevada Department 5 of Environmental Protection (NDEP). This report, as well as certain of the notes to the financial statements, contain "forward-looking statements" within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended. Such statements include, but are not limited to, (i) expectations as to the funding of future capital expenditures and other cash needs, (ii) statements as to the projected development of certain ore deposits, including estimates of development and other capital costs and financing plans with respect thereto, (iii) estimates of future costs and other liabilities for certain environmental matters and (iv) statements as to the likelihood of the outcome of litigation matters. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the forward-looking statements or the results projected or implied by the forward-looking statements. For a more detailed discussion of the foregoing risks and uncertainties affecting the Company and its operations, see "Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995." and "Risk Factors" contained in Item 1 and 2 of the Company's annual Report on Form 10-KSB for the period ended January 31, 1999, as well as other filings made by the Company from time to time with the Securities and Exchange Commission. Many of these factors are beyond the Company's ability to control or predict. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly any forward-looking statements set forth in this discussion, whether as a result of new information, future events or otherwise. 6 PART II. OTHER INFORMATION. ITEM 1. Legal Proceedings. a) On December 3, 1996, the case of Christiansen v. Newgold, et al., a purported breach of contract action was filed in the Second Judicial District, Washoe County, Reno, Nevada. Christiansen prevailed in this action and the Company accrued the $250,000 judgement as of January 31, 1998; the Company is waiting for funds to complete the transaction. ITEM 2. Changes in Securities. Stock split 3:2 on June 17, 1999 for shareholders of record June 10, 1999. ITEM 3. Defaults on Senior Securities. None. ITEM 4. Matters Submitted to a Vote of Shareeholders. None. ITEM 5. Other Information. None. ITEM 6. Exhibits and Reports on Form 8-K. a) Exhibits. Exhibit 3.1 Certificate of Incorporation of the Registrant (1). Exhibit 3.2 Certificate of Amendment to Certificate of Incorporation of the Registrant (2). Exhibit 3.3 Bylaws of the Registrant (1). Exhibit 27 Financial Data Schedule. (1) Incorporated by reference to the Registrant's Registration Statement on Form SB-2 (File No. 33-49920) filed with the Commission on October 14, 1993. (2) Incorporated by reference to the Registrant's Annual Report on Form 10-KSB-40 for the fiscal year ended January 31, 1996 filed with the Commission on January 22, 1997. 7 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto authorized. NEWGOLD, INC. /s/ A. Scott Dockter Date: December 14, 1999 - -------------------- A. Scott Dockter Chief Executive Officer /s/ Robert W. Morris Date: December 14, 1999 - -------------------- Robert W. Morris Chief Financial Officer EX-27 2
5 3-MOS JAN-31-2000 OCT-31-1999 541 0 0 0 0 4,141 898,763 57,350 896,054 1,827,578 0 0 0 37,867 0 898,763 0 0 0 59,372 0 0 0 (59,372) 0 (59,372) 0 0 0 (59,372) (0.002) (0.002)
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