Global Gold Corporation - International Gold Mining, Development and Exploration in Armenia and Chile

1999 Annual Report 10-KSB


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                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

         ACT OF 1934 (No Fee  Required)  For the fiscal year ended  December 31,

         EXCHANGE ACT OF 1934 (No Fee Required)

For the transition period from _________ to _________

Commission file 02-69494

(Name of small business issuer in its charter)

DELAWARE                                                              13-3025550
(State or other jurisdiction of                                    (IRS Employer
 incorporation or organization)                              Identification No.)

734 FRANKLIN AVENUE, SUITE 383, GARDEN CITY, NEW YORK                 11530-4525
(Address of principal executive offices)                              (Zip Code)

Issuer's telephone number (516) 773-8975

Securities registered under Section 12(b) of the Exchange Act:

Title of each class                 (Name of each exchange on which registered)

------------------------            --------------------------------------------

------------------------            --------------------------------------------

Securities registered under Section 12(g) of the Exchange Act:


(Title of Class)

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 if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB /X/.

The issuer's  revenues for its most recent fiscal year ending  December 31, 1999
were $-0-.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Company  computed by reference to the price at which the stock was sold,  or the
average bid and asked  prices of such stock,  as of a specified  date within the
past 60 days was $123,966(1).

As of December 31, 1999 there were 3,348,114 Shares of the  registrant's  Common
Stock outstanding (2) (3).

(1)      The Company's Common Stock is not publicly traded.  However,  the Board
         of  Directors of the Company  determined  that the fair market value of
         the Common Stock was $0.10 per share.

(2)      This number is computed  after taking into account the 1 for 10 reverse
         split of the shares of Common  Stock of the  Company,  effective  as of
         December 31, 1996 (the "Reverse Split").

(3)      This number excludes  1,000,000  shares  repurchased  and  recorded  as
         Treasury Stock.



         The Company now holds 3,000,000 shares of common stock of First Dynasty
         Mines,  Ltd., a publicly traded Canadian  corporation.  The Company was
         previously  engaged  in the  development  of a gold  mining  project in
         Armenia,  a member  of the  Commonwealth  of  Independent  States.  The
         Company is currently in the pre-development  stage and has not received
         any revenues from mining  activities as of December 31, 1999 other than
         such shares of stock and cash  previously  paid by First Dynasty Mines,
         Ltd.  Prior  thereto,  the  Company  did not engage in any  substantial
         business  activities,  except as described in the section 1(D) entitled
         "Prior History of the Company" in the annual reports  previously  filed
         by the Company with the Securities and Exchange Commission ("SEC").


         In 1996, the Company  acquired  rights under a Joint Venture  Agreement
         with the  Ministry  of  Industry  of Armenia  and  Armgold,  S.F.,  the
         Armenian state enterprises, to provide capital and multistage financing
         of the Armenian gold industry, which rights were finalized under

         the Second Armenian Gold Recovery Company Joint Venture Agreement dated
         as of September 30, 1997.

         As of January 31, 1997,  the Company and Global Gold  Armenia  Limited,
         the Company's  wholly-owned Cayman Islands subsidiary ("GGA"),  reached
         an agreement  with First  Dynasty  Mines,  Ltd.  ("First  Dynasty"),  a
         Canadian  public  company  whose shares are traded on the Toronto Stock
         Exchange and on NASDAQ.  Under such agreement,  First Dynasty  acquired
         the  right to  acquire  all of the  stock of GGA,  subject  to  certain
         conditions,   by   advancing   funds  in  stages   necessary   for  the
         implementation   of  the  tailing   project  and  the   preparation  of
         engineering  and business plan  materials  for the  remaining  Armenian
         mining projects.

         The Company,  GGA and First Dynasty entered into a definitive agreement
         dated May 13, 1997  reflecting the final  agreement of the parties with
         respect  to the  above  project  (the  "FDM  Agreement").  The  parties
         thereafter amended the FDM Agreement on July 24, 1998.

         In connection with First Dynasty's purchase of the Company's  remaining
         20% interest in GGA, the Company  received a  certificate  representing
         special  warrants to purchase  4,000,000 shares of First Dynasty common
         stock.  In September  1999,  the warrants were  exchanged for 4,000,000
         shares of First Dynasty common stock.

         For a further  description  of the  background  concerning the Armenian
         mining  project,  an  interested  person can review the  quarterly  and
         annual reports previously filed by the Company with the SEC.


         As of  December  31,  1997,  the Company  abandoned  its pursuit of any
         mining project in Georgia.

         For a further  description  of the  background  concerning the Georgian
         mining  project,  an  interested  person can review the  quarterly  and
         annual reports previously filed by the Company with the SEC.


         (a)      On October 13,  1999,  the Company  entered  into a settlement
                  agreement  with  Eyre   Resources,   N.L.   ("Eyre")  and  The

                  Parry-Beaumont Trust regarding the legal action brought by the
                  Company  and  the  counterclaim   asserted  by  Eyre  and  The
                  Parry-Beaumont Trust in 1998.

                  In the settlement,  600,000 shares of First  Dynasty's  common
                  shares acquired in connection with First Dynasty's purchase of
                  the Company's  20% interest in GGA were  exchanged for 600,000
                  Common  Shares of the Company held by Eyre and 400,000  common
                  shares of First  Dynasty  were  exchanged  for 400,000  Common
                  Shares of the Company held by The Parry-Beaumont Trust.

         (b)   The Company's  principal  activity at present consists of holding
               the remaining  3,000,000 shares of common stock of First Dynasty,
               which is traded on the Toronto  Stock  Exchange  and NASDAQ.  The
               closing  price of a share of such common  stock on  December  31,
               1999 was U.S. $0.06.  As of December 31, 1999,  First Dynasty had
               146,237,008  shares of common stock issued and  outstanding,  and
               warrants,  options and convertible  notes to purchase  41,740,000
               shares of common stock  outstanding on such date. Since there are
               outstanding  special  warrants to purchase 31.6 million shares of
               First  Dynasty  at prices  ranging  from  $0.29 to $0.42 over the
               period ending January 31, 2002, the shares purchasable thereunder
               will,  in the  Company's  view,  pose an  overhang on the trading
               market and  adversely  affect any upward  price  movement  in the
               shares of the common stock of First Dynasty.

         (c)   Employees.   As  of  December  31,  1999,  the  Company  had  one
               consultant,  who was in charge  of the  overall  business  of the
               Company  on  a  part-time   basis,  and  one  consultant  who  is
               principally  involved in overseeing the Company's proposed mining
               activities on a part-time basis,  and one independent  contractor
               who provides  administrative and clerical services on a part-time


         The following risk factors  should be considered in connection  with an
         evaluation of the business of the Company:

         No Prior Operating History; Failure to File Reports with the SEC

         The Company was  incorporated on February 21, 1980, and closed a public
         offering of the Common Stock in January 1981.  Several months after the
         closing of such  offering,  the  Company  withdrew  the  listing of the
         Common  Stock for  trading on  NASDAQ.  After the  consummation  of the
         public  offering,  the  Company  failed to file any  further  annual or
         periodic  reports  required  under the Exchange Act.  While the Company
         filed its Form 10- QSB commencing with the quarter ended March 31, 1995
         and each quarter  thereafter  through and including  September 30, 1999
         and  filed  audited  financial  statements  with  the Form  10-KSB  for
         calendar year 1994 covering  calendar  years 1987,  1988,  1989,  1990,
         1992,  1993 and 1994, and for calendar years 1995,  1996, 1997 and 1998
         with  the Form  10-KSB  filed  for  each  such  year,  there  can be no
         assurance that the SEC might not assert claims against the Company.

         Development Stage Company

         Since the  Company  never  engaged in the active  conduct of a trade or
         business, it has not generated any revenues to date, with the exception
         of interest  income and the 3,000,000  shares of First  Dynasty  common
         stock and cash  received from such source under the FDM  Agreement,  as
         amended.  The Company may  encounter  problems,  delays,  expenses  and
         difficulties  typically  encountered in the development  stage, many of
         which may be outside of the Company's control.

         Need for Additional Cash

         The Company needs  additional  funds if it is to conduct any operations
         in the  foreseeable  future,  none of which is contemplated at present.
         Moreover,  there can be no assurance  that any financing for any future
         projects will be available for such purposes or that such financing, if
         available, would be on terms favorable or acceptable to the Company.


         There is intense  competition  in the mining  industry.  If the Company
         does engage in any future mining activities,  it will be competing with
         larger  mining  companies,  many of which  have  substantially  greater
         financial  strength,  capital,  marketing and personnel  resources than
         those possessed by the Company.

         Need for Key Personnel

         The Company presently only has one officer intimately familiar with the
         operation of mining projects or the development of such projects. While
         the Company  does not believe  the loss of its  president  or any other
         director or officer of the Company will materially and adversely affect
         its  long-term  business  prospects,  the loss of any of the  Company's
         senior personnel might potentially adversely affect the Company until a
         suitable replacement could be found.

         Failure to Satisfy NASDAQ Listing Rules

         Without increases in assets and capital surplus, the Company may not be
         eligible to have its securities traded on NASDAQ. Moreover, regulations
         issued by NASDAQ have increased the  thresholds  that have to be met in
         order for a security to be traded initially on the NASDAQ Small Cap and
         National  Markets,  which may adversely affect the Company's ability to
         have its  Common  Stock  traded on the  NASDAQ  Small  Cap or  National
         Markets.  Furthermore,  the Company could  experience  difficulties  in
         commencing the trading of its  securities on NASDAQ.  If the Company is
         unable to have its securities  traded on NASDAQ,  its  securities  will
         continue to be eligible for trading on the OTC Bulletin Board, although
         the market for shares of the Company's Common Stock may be reduced, and
         hence,  the liquidity of the shares of Common Stock and/or the Warrants
         may be reduced.  However, recent regulations adopted for the trading of
         securities may adversely affect the eligibility of the Company's Common
         Stock for trading on the OTC electronic bulletin board.

         No Dividends

         The Company currently anticipates that it will retain all of its future
         earnings,  if any, for use in its  operations  and does not  anticipate
         paying  any cash  dividends  in the near term  future.  There can be no
         assurance that the Company will pay cash dividends at any time, or that
         the failure to pay  dividends  for  periods of time will not  adversely
         affect the market price for the Company's Common Stock.

         Control of the Company

         Drury J.  Gallagher,  the Chairman  and Chief  Executive  Officer,  and
         Robert  A.  Garrison,   the  President  and  Chief  Operating  Officer,
         currently own 1,108,451 and 1,000,000 shares  respectively,  or a total
         of  2,108,451  shares,  out of the  3,348,114  shares of the  Company's
         Common Stock issued and outstanding as of December 31, 1999. If Messrs.
         Gallagher  and Garrison act in concert,  they control 63% of the issued
         and  outstanding  Common  Stock of the Company and they will be able to
         effectively  determine  the vote on any  matter  being  voted on by the
         Company's  stockholders,  including  the election of directors  and any
         merger, sale of assets or other change in control of the Company.


         The Company  currently  maintains a shared  office in Garden City,  New


         Except as noted below, there is no material pending legal proceeding to
         which  the  Company  is a party or to which  any of its  properties  is

         In January  1998,  the  Company  brought an action  against  Eyre,  the
         Parry-Beaumont  Trust  and Kevin  Parry,  individually,  in the  United
         States  District Court for the Southern  District of New York,  seeking
         damages  in excess of  $81,000,000  arising  out of the  alleged  fraud
         committed by the defendants.

         The defendants  denied such claims and asserted  counterclaims  against
         the  Company  seeking  damages in an  undetermined  amount  against the
         Company  and  seeking  a  declaratory   judgment   voiding  the  Second
         Restructuring Agreement. In addition, Eyre and the Parry-Beaumont Trust
         brought a third-party  complaint  against Drury J. Gallagher and Robert
         A.  Garrison,  individually,  seeking,  among other things,  damages in
         excess of $75,000  and  directing  Messrs.  Gallagher  and  Garrison to
         return the  2,000,000  shares of the  Company's  Common Stock issued to
         them by the Company in January 1997.

         A  settlement  was agreed to on October 13,  1999.  In the  settlement,
         600,000  common  shares of First  Dynasty  were  exchanged  for 600,000
         Common Shares of the Company held by Eyre and 400,000  common shares of
         First Dynasty were  exchanged for 400,000 shares of the Company held by
         the Parry-Beaumont Trust.

         Outstanding  warrants  held by Eyre and the  Parry-Beaumont  Trust were

         On October 4, 1999, Penn Med Consultants,  Inc.  ("PennMed"),  Drury J.
         Gallagher  ("Gallagher")  and other officers of PennMed  entered into a
         Settlement  Agreement  of a Civil  False  Claims Act  lawsuit  with the
         United States of America, the Office of Inspector General of the United
         States  Department  of Health  and  Human  Services,  the  Pennsylvania
         Department  of Public  Welfare  and qui tam  relators.  The  Settlement
         Agreement   ended   an   investigation   into   allegedly    fraudulent
         administrative expenses which adversely affected reimbursement from the
         Medicare and Pennsylvania Medicaid programs by PennMed.

         Under  the  Settlement  Agreement,  PennMed,  Gallagher  and the  other
         PennMed  officers  agreed  to  pay  the  Federal   Government  and  the
         Pennsylvania  Department  of Public  Welfare a  restitution  amount and
         PennMed agreed to adhere to a comprehensive  compliance program without
         any admission of wrongdoing on behalf of the  defendants.  In addition,
         Gallagher  agreed  to  exclusion,  for a  period  of five  years,  from
         participation  in the  Medicare,  Medicaid  and all other  federal  and
         Pennsylvania  state  health  care  programs,   including  managed  care
         programs.  Such exclusion has national affect and also applies to other
         federal procurement and non-procurement programs.  Gallagher waived his
         right  under any  statute  or  regulation  to  payment  from  Medicare,
         Medicaid,  TRICARE, the Veterans Administration or the Federal Employee
         Health  Benefit  Program   administered  by  the  Office  of  Personnel
         Management during the subject  exclusion.  PennMed continues to operate
         the nursing home business previously conducted by it.

         The Company was never a defendant in such action and was not a party to
         the Settlement Agreement which concluded the investigation.


         Not applicable.



         (a)    The Company's Common Stock is not publicly traded on any market.

         (b)    As  of   December  31,  1999,  there  were  approximately  1,100
                holders of record of the Company's Common Stock.

         (c)    The Company  did  not pay or declare any cash  dividends  on its
                common stock   during  its last two fiscal years ended  December
                31, 1998 and December 31, 1999.

         (d)    As  of  December  31,  1999,  the Company  was  prohibited  from
                paying any   dividends  on  its common stock due to its negative
                equity position.

         (e)    The  Company's   transfer  agent  is   American  Registrar   and
                Transfer Company,  with offices at 342 E. 900 South,  Salt  Lake
                City, Utah 84111, having a telephone number of (801) 363-9065.


         As of December 31, 1999, the Company's  total assets were $181,432,  of
         which $1,432 consisted of cash or cash equivalents.

         The Company's plan of operation for calendar year 2000 is:

         (a)      to hold the 3,000,000 shares of First Dynasty common stock for
                  investment purposes thereafter; and

         (b)      investigate  other  investment  opportunities  in the  mineral
                  development and production areas.

         The  Company   needs   financing  to  meet  its   anticipated   monthly
         administrative  expenses  of $3,000  (exclusive  of  accrued  officers'
         compensation),  plus additional amounts for legal and accounting costs.
         Prior to the commencement of the litigation described in Part I, Item 3
         hereof,  the  Company  anticipated  that  it  might  obtain  additional
         financing  in 1999 from the  holders of its  Warrants.  Pursuant to the
         Offering of $500,000  principal amount of the Convertible  Notes of the
         Company,  the Company issued Warrants to purchase  4,000,000  shares of
         its Common  Stock.  By virtue of the Reverse  Split,  the Warrants were
         converted  into  Warrants to purchase  400,000  shares of the Company's
         Common Stock at an exercise price of $0.50 per share and the expiration
         date  extended  until  December  31, 1997.  On December  31, 1997,  the
         Company amended the Warrants to reduce the exercise price to $0.125 per
         share and to extend the  expiration  date until  December 31, 1999, and
         recently  extended the expiration  date until December 31, 2000. If the
         Warrants were exercised in full,  the Company would receive  $50,000 in
         gross proceeds. However, the Company does not believe that the Warrants
         will be  exercised  under  existing  circumstances,  thus  it does  not
         anticipate  that any amount  thereof will be exercised,  although there
         can be no assurance of such result.

         In the event that no  contemplated  financing  is obtained  through the
         exercise of the Warrants (which the Company  considers  highly remote),
         the Company does not have  sufficient  financial  resources to meet its

         The Company does not intend to engage in any  research and  development
         during  2000 and does  not  expect  to  purchase  or sell any  plant or
         significant equipment.

         The Company does not expect to hire any additional  full-time employees
         in 2000.


         The  audited  financial  statements,   notes  thereto  and  reports  of
         independent  certified public accountants  thereon for the fiscal years
         of the Company  ended  December 31, 1999 (by Feldman  Sherb  Horowitz &
         Co.,  P.C.) and December  31, 1998 (by Marks Shron & Company,  LLP) are
         attached hereto as a part of, and at the end of, this report.


         For the year ended  December 31, 1999,  Feldman  Sherb  Horowitz & Co.,
         P.C. replaced Marks Shron & Company, LLP as accountants.

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