Second Quarter Report 10QSB
June 30, 2000
WARNING
This filing is best viewed using a larger screen resolution (greater than 580px). Viewing this page at a lower resolution will be difficult.
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 June 30, 2000
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________ to _________
Commission file 02-69494
GLOBAL GOLD CORPORATION
(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
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 / / No / /. Not applicable.
As of June 30, 2000 there were 4,368,114 Shares of the registrant's Common Stock
outstanding.
Transitional Small Business Disclosure Format (check one): Yes /__/ No /X/.
TABLE OF CONTENTS
PART I Financial Information
Item 1. Financial Statements
Balance Sheet - as of June 30, 2000 1
Statement of Income and (Loss) for the periods April 1, 2000
through June 30, 2000 and April 1, 1999 through June 30,1999 2a
Statement of Income and (Loss) for the periods January 1, 2000
through June 30, 2000 and January 1, 1999 through June 30,
1999 and for the development stage period from January 1, 1995
through June 30, 2000 2b
Statement of Cash Flow - for the periods January 1, 2000
through June 30, 2000 and January 1, 1999 through June 30,
1999 and the development stage period from
January 1, 1995 through June 30, 2000 3
Notes to Financial Statements (unaudited) 4-5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation 6
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Balance Sheet
June 30, 2000
(Unaudited)
ASSETS
CURRENT
CASH $ 314
------------
Other Assets
Investment in First Dynasty Mines, Ltd.
COMMON SHARES 120,000
------------
TOTAL ASSETS $ 120,314
------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 67,634
----------
STOCKHOLDERS' EQUITY - Exhibit C
Common stock $0.001 par, 100,000,000 shares authorized
4,358,114 shares issued and outstanding 4,368
Paid capital - dormant period 3,236,602
Paid capital - development stage 1,597,703
Deficit - dormant period (2,907,648)
DEFICIT - DEVELOPMENT STAGE (1,802,345)
Unrealized gain/(loss) on securities (76,000)
DEDUCT COST OF TREASURY STOCK -
------------
SHAREHOLDERS' EQUITY/(DEFICIT) 52,680
------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 120,314
============
See Notes to the Financial Statements
1
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Statement of Income and (Loss)
April 1, 2000 April 1, 1999
through through
June 30, 2000 June 30, 1999
------------- -------------
REVENUE $ - $ -
------------- -------------
EXPENSES
Legal 6,119 14,358
Accounting and auditing 5,000 -
Transfer agent and securities fees 156 -
Office expense 1,376 9,287
------------- -------------
OPERATING (LOSS) ( 12,651) (23,645)
OTHER INCOME (EXPENSES)
Interest and royalty income - 12
INCOME/(LOSS) BEFORE
INCOME TAXES ( 12,651) (26,633)
INCOME TAXES 95 ( 170)
------------ -----------
NET LOSS $( 12,746) $(23,803)
============ ===========
NET LOSS
PER SHARE $( .003) $( .005)
============ ===========
NET LOSS $ ( 12,746) $(23,803)
OTHER COMPREHENSIVE
LOSS, NET OF TAX
Unrealized gain/(loss) on available-
FOR-SALE SECURITIES $ (104,000) $ -
----------- -----------
COMPREHENSIVE
LOSS $ (116,746) $(23,803)
=========== ===========
See Notes to the Financial Statements
2a
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Statement of Income and (Loss)
January 1, 2000 January 1, 1999 January 1, 1995
through through (development stage)
JUNE 30, 2000 JUNE 30, 1999 THROUGH JUNE 30, 2000
------------- ------------- ---------------------
REVENUE $ - $ - $ -
------------- ------------- ---------------------
EXPENSES
Officers' compensation - - 550,834
Legal 9,703 30,361 614,906
Accounting and auditing 5,600 7,250 137,048
Transfer agent and securities fees 156 - 12,602
Proxy costs - - 26,555
Rent - - 54,000
Office expense 7,778 16,769 152,875
Travel - - 43,234
------------- ------------- ------------
OPERATING (LOSS) ( 23,237) ( 54,380) ( 1,592,054)
OTHER INCOME (EXPENSES)
Interest and royalty income 338 23 5,766
Organization costs - - ( 4,800)
Interest Expense - - ( 15,422)
Provision for bad debts - - ( 325,000)
Write-off investment in Georgia
mining interests - - ( 135,723)
Gain on sale of interest in
Global Gold Armenia - - 268,874
LOSS BEFORE
INCOME TAXES ( 22,899) ( 54,357) ( 1,798,359)
INCOME TAXES 105 ( 340) ( 3,986)
--------- ----------- -------------
NET LOSS $( 22,794) $( 54,697) $(1,802,345)
NET LOSS
PER SHARE $( .005) $( .013)
========== ===========
NET LOSS $( 22,794) $( 54,697) $(1,802,345)
========== =========== ============
OTHER COMPREHENSIVE
GAIN/(LOSS), NET OF TAX
Unrealized gain/(loss) on available-
FOR-SALE SECURITIES $( 60,000) $ - $( 76,000)
---------- ----------- ------------
COMPREHENSIVE
LOSS ) $( 82,794) $( 54,697) $(1,878,345)
========= =========== ============
See Notes to the Financial Statements
2b
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Statement of Cash Flow
January 1, 1995
January 1, January 1, (development
2000 through 1999 though stage through
June 30, 2000 June 30, 1999 June 30, 2000)
-------------------- ------------------- ---------------------
CASH FLOW FROM
DEVELOPMENT STAGE
ACTIVITIES:
Net Loss $( 22,794) $( 54,697) $(1,802,345)
Adjustments to reconcile net income/
(loss) to net cash provided by operating
activities:
Increase (decrease) in:
Provision for bad debt included
in net loss - - 325,000
Write-off of mining investment
in Georgia - - 135,723
Organization costs - - ( 9,601)
Gain on sale of Armenia mining
interests - - ( 268,874)
Accounts receivable and deposits - 21,406 ( 154)
Accounts payable, accrued
Expenses and miscellaneous 21,676 15,191 328,737
------------- ------------- -------------
Net cash (used) by development
stage activities ( 1,118) ( 18,100) (1,291,514)
------------- ------------- --------------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of Armenia
mining interests (net of Note
Receivable) - - 1,891,155
Investment in certain mining
interests - net of financing - - ( 153,494)
Deferred costs - mining interests - - ( 878,858)
------------ -------------- ------------
Net cash provided by Investing
activities - - 858,803
------------ -------------- ------------
CASH FLOW FROM FINANCING ACTIVITIES:
Net proceeds from private
placement offering - - 421,573
warrants exercised - - 100
-------------- -------------- -----------
Net cash provided (used) by Financing
activities - - 421,673
-------------- -------------- ------------
NET INCREASE (DECREASE)
IN CASH ( 1,118) ( 18,100) ( 11,038)
CASH - BEGINNING 1,432 24,623 11,352
-------------- -------------- ------------
CASH - END $ 314 $ 6,523 $ 314
============== ============== =============
SUPPLEMENTAL CASH FLOW INFORMATION
INCOME TAXES PAID $ (105) $ 340 $ 2,578
============== ============== ==============
INTEREST PAID $ - $ - $ 15,422
============== ============== ==============
See Notes to Financial Statements.
3
GLOBAL GOLD CORPORATION
(A Development Stage Company)
Notes to Financial Statements
June 30, 2000
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL STATEMENTS:
----------------------------
The accompanying financial statements are unaudited. In the
opinion of management, all necessary adjustments (which
include only normal recurring adjustments) have been made to
present fairly the financial position, results of operations
and cash flows for the periods presented. Certain information
and note disclosure normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested
that these consolidated financial statements be read in
conjunction with the financial statements and notes thereto
included in the December 31, 1999 annual report on Form
10-KSB. The results of operations for the three and six month
periods ended June 30,2000 are not necessarily indicative of
the operating results to be expected for the full year.
USE OF ESTIMATES:
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts in these financial statements and accompanying notes.
Actual results could differ from those estimates.
INVESTMENTS:
-----------
At June 30, 2000, investment in securities consisted of common
stock of First Dynasty Mines, Ltd. classified as
available-for-sale and stated at quoted fair value of
$120,000. The cost of the securities was $196,000. The
unrealized loss as of June 30, 2000 was $76,000, which is
shown as a separate component of stockholders' deficit. The
change in net unrealized loss on securities during the six
months ended June 30, 2000 was an increase in the holding loss
of $60,000.
4
LOSS PER SHARE:
--------------
Basic loss per common share is computed by dividing net loss
by the weighted average number of common shares outstanding
during the period. Diluted loss per share reflects potential
dilution, which could occur if all potentially issuable common
shares from stock purchase warrants and options resulted in
the issuance of common stock. In the present position, diluted
loss per share is the same as basic loss per share because the
inclusion of potentially issuable common shares at June 30,
2000 and 1999, respectively, would have decreased the loss per
share and have been excluded from the calculation.
COMPREHENSIVE INCOME/(LOSS):
---------------------------
Comprehensive income/(loss) provides a measure of overall
Company performance that includes all changes in equity
resulting from transactions and events other than capital
transactions.
NOTE 2: STOCKHOLDERS' EQUITY
During the first quarter of 2000, the Company issued 1,000,000
restricted common shares out of its treasury to the Company's
Chairman and Chief Executive Officer, Drury J. Gallagher, for
accrued salary of $162,500 or $0.1625 per share. Also, 20,000
Common Shares of Global Gold Corporation were distributed in
settlement of obligations owed by the defendants in the Eyre
Resources lawsuit.
5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
When used in this discussion, the words "expect(s)", "feel(s)", "believe(s)",
"will", "may", "anticipate(s)" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these forward-
looking statements, and are urged to carefully review and consider the various
disclosures elsewhere in this Form 10-QSB.
SIX MONTHS ENDED JUNE 30, 2000
AND SIX MONTHS ENDED JUNE 30, 1999
RESULTS OF OPERATIONS
During the three-month period April 1, 2000 through June 30, 2000, the
Company's administrative and other expenses were $12,651 which
represented a decrease from the amount paid or accrued of $23,645 in
the same period last year. The expense decrease was attributable to
lower legal fees of $8,239 and lower office expenses of $7,911
partially offset by increased accounting fees of $5,000.
During the six-month period ended June 30, 2000, the Company's interest
and royalty income was $338, which was more than the $23 for the same
period last year.
The Company's administrative and other expenses for the six-month
period ended June 30, 2000 were $23,237, which represented a decrease
from the amount paid or accrued of $54,380 in the same period last
year. The expense decrease was attributable to lower legal fees of
$20,658, office expenses of $8,991 and accounting expenses of $1,650
due to reduced activity.
Thus, the Company had a loss of $22,794 for the six-month period ended
June 30, 2000 representing a decrease from the loss of $54,697 for the
six-month period ended June 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2000, the Company's total assets were $120,314, of which
$314 consisted of cash or cash equivalents.
6
The Company's plan of operation for calendar year 2000 is:
(a) to investigate opportunities, and possibly implement operations,
in the mineral development and production area; and
(b) to 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.
The Company anticipates that it might obtain additional financing in
2000 from the holders of its Warrants to purchase 400,000 shares of
Common Stock of the Company at an exercise price of $0.125 per share,
which expire on December 31, 2000. The Company 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
obligations.
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.
7
PART II OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
1. In March, 2000, the Company issued 1,000,000 shares of its Common Stock
to Drury J. Gallagher, its Chairman and Chief Executive Officer, for
accrued salary of $162,500 or $.1625 per share. The shares were issued
in reliance upon Section 4 (2) of the Securities Act of 1933, as
amended (the "Act"), and Rule 506 of Regulation D promulgated
thereunder. The Company believes that Mr. Gallagher is an accredited
investor.
2. In March, 2000, the Company issued 10,000 shares of its Common Stock to
each of William Van Horn and William Cormack in settlement of the
obligations owed to them by Eyre Resources, N.I., at a price of $0.10
per share, based on the incurrence of such obligation over about 18
months prior thereto. The shares were issued in reliance upon Section 4
(2) of the Act and Rule 506 promulgated thereunder. The Company
believes that Messrs. Van Horn and Cormack are accredited investors.
Item 6. Exhibits and Reports on Form 8-K
1. EXHIBIT DESCRIPTION
27 Financial Data Schedule
2. Reports on Form 8-K
No reports on Form 8-K were filed by the registrant during the
quarterly period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GLOBAL GOLD CORPORATION
(Registrant)
By: ______________________________
Drury J. Gallagher, Chairman, Chief
Executive Officer and Treasurer
8