Third Quarter Report 10QSB
September 30, 2001
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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 September 30, 2001
/ / 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) 627-2388
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 September 30, 2001 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 FINANACIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet - as of September 30, 2001 1
Statements of Income and Loss for the three months and
nine months ended September 30, 2001 and September 30, 2000 2
Statements of Cash Flows - for the nine months ended
September 30, 2001 and September 30, 2000 and for the
development stage period from January 1, 1995 through
September 30, 2001 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis or Plan of Operation 5-7
PART II OTHER INFORMATION
Item 1. Legal Proceedings 7
Item 2. Changes in Securities and Use of Proceeds 7
Item 3 Default Upon Senior Securities 7
Item 4 Submission of Matters to a Vote of Security Holders 7
Item 5 Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
SIGNATURE 8
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
BALANCE SHEET
SEPTEMBER 30, 2001
(Unaudited)
ASSETS
Cash $ 455
Investment in First Dynasty Mines, Ltd. 57,000
----------------
$ 57,455
================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 73,553
Due to related parties 22,218
----------------
95,771
----------------
STOCKHOLDERS' EQUITY:
Common stock $0.001 par, 100,000,000 shares authorized
4,368,114 shares issued and outstanding 4,368
Additional paid-in capital 4,834,955
Deficit accumulated during the development stage (4,738,639)
Unrealized loss on investment (139,000)
----------------
TOTAL STOCKHOLDERS' DEFICIT (38,316)
----------------
$ 57,455
================
See notes to financial statements.
1
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
Three months Ended Nine months Ended January 1, 1995
September 30, September 30, through
-------------------------- --------------------------- September 30,
2001 2000 2001 2000 2001
----------- ----------- ------------ ------------ ---------------
REVENUES $ - $ - $ - $ - $ -
----------- ----------- ------------ ------------ ---------------
EXPENSES:
Selling, general and administrative 75 1,190 12,335 14,724 765,224
Legal fees 416 3,094 5,989 12,797 629,682
Compensation - - - - 550,834
Write-off investment in Georgia
mining interests - - - - 135,723
Gain on sale of interest in
Global Gold Armenia - - - - (268,874)
Miscellaneous other (225) 95 (225) (348) 18,402
----------- ----------- ------------ ------------ ---------------
TOTAL EXPENSES (266) (4,379) (18,099) (27,173) (1,830,991)
----------- ----------- ------------ ------------ ---------------
NET LOSS $ (266) $ (4,379) $ (18,099) $ (27,173) $ (1,830,991)
----------- ----------- ------------ ------------ ===============
NET LOSS PER SHARE-BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.00) $ (0.01) $
=========== =========== ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 4,368,114 4,368,114 4,368,114 4,360,568
=========== =========== ============ ============
NET LOSS $ (266) $ (4,379) $ (18,099) $ (27,173) $ (1,830,991)
OTHER COMPREHENSIVE LOSS:
Unrealized loss on available-
FOR-SALE SECURITIES (33,000) - (33,000) (60,000) (139,000)
----------- ----------- ------------ ------------ ---------------
COMPREHENSIVE LOSS $ (33,266)$ (4,379) $ (51,099)$ (87,173)$ (1,969,991)
=========== =========== ============ ============ ===============
See notes to financial statements
2
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended January 1, 1995
September 30, through
-------------------------- September 30,
2001 2000 2001
----------- ------------ ----------------
CASH FLOWS FROM DEVELOPMENT STAGE
ACTIVITIES:
Net Loss $ (18,099) $ (27,173) $ (1,830,991)
----------- ------------ ----------------
Adjustments to reconcile net loss to net cash used in operating
activities:
Provision for bad debt - - 325,000
Gain on sale of Armenia mining interests - - (268,874)
Write-off of mining investment in Georgia - - 135,723
Changes in assets and liabilities:
Organization costs - - (9,601)
Accounts receivable and deposits - - (154)
Accounts payable and accrued expenses 14,194 26,036 356,874
----------- ------------ ----------------
NET CASH USED IN OPERATING ACTIVITIES (3,905) (1,137) (1,292,023)
----------- ------------ ----------------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of Armenia mining interests - - 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
Sale of warrants - - 650
Warrants exercised - - 100
----------- ------------ ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES - - 422,323
----------- ------------ ----------------
NET DECREASE IN CASH (3,905) (1,137) (10,897)
CASH - beginning of period 4,360 1,432 11,352
----------- ------------ ----------------
CASH - end of period $ 455 $ 295 $ 455
=========== ============ ================
-
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Income taxes paid $ - $ - $ 2,683
=========== ============ ================
Interest paid $ - $ - $ 15,422
=========== ============ ================
Non-cash financing and investing activities:
Settlement of accrued salary $ - $ - $ 162,500
=========== ============ ================
Issusance of stock in connection with
settlememt $ - $ - $ 2,000
=========== ============ ================
See notes to financial statements.
3
GLOBAL GOLD CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
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 disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
financial statements and notes thereto included in the December 31,
2000 annual report on Form 10-KSB. The results of operations for the
nine month period ended September 30, 2001 are not necessarily
indicative of the operating results to be expected for the full year.
2. INVESTMENTS:
At September 30, 2001 investment in securities consisted of common
stock of First Dynasty Mines, Ltd. classified as available for sale and
stated at a quoted fair value of $57,000. The cost of the securities
was $196,000. The unrealized loss as of September 30, 2001 was
$139,000, which is shown as a separate component of stockholders'
deficit.
4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
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.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2001 AND THREE MONTHS ENDED SEPTEMBER 30,
2000
During the three-month period ended September 30, 2001, the Company's
administrative and other expenses were $266, which represented a decrease
from the amount paid or accrued of $4,379 in the same period last year. The
expense decrease was attributable to lower legal expenses of $2,678 and
lower accounting expenses of $1,100.
Thus, the Company had a loss of $266 for the three-month period ended
September 30, 2001, representing an decrease from the loss of $4,379 for
the three-month period ended September 30, 2000.
NINE MONTHS ENDED SEPTEMBER 30, 2001 AND NINE MONTHS ENDED SEPTEMBER 30,
2000
During the nine-month period ended September 30, 2001, the Company's
administrative and other expenses were $18,099, which represented a
decrease from the amount paid or accrued of $27,173 in the same period last
year. The expense decrease was attributable to lower legal expenses of
$6,808.
Thus, the Company had a loss of $18,099 for the nine-month period ended
September 30, 2001, representing a decrease from the loss of $27,173 for
the nine-month period ended September 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2001, the Company's total assets were $57,455, of which
$455 consisted of cash or cash equivalents.
The Company's plan of operation for calendar year 2001 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
5
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 2002 from the holders of its
Warrants to purchase 330,000 shares of Common Stock of the Company at an
exercise price of $0.25 per share, which expire on October 31, 2003. If the
Warrants were exercised in full, the Company would receive $82,500 in gross
proceeds. However, the Company does not believe that the Warrants will be
exercised under existing circumstances, and 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 2001 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
2001.
6
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3 Default Upon Senior Securities
None
Item 4 Submission of Matters to a Vote of Security Holders
None
Item 5 Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) The following documents are filed as part of this report: Financial
Statements of the Company (unaudited), including Balance Sheet,
Statements of Income and Loss, Statements of Cash Flow and Notes to
Financial Statements as at and for the three months and nine months
ended September 30, 2001 and September 30, 2000 and exhibits which are
listed on the Exhibit Index attached hereto: None
(b) The following reports on Form 8-K were filed by the Registrant during
the quarter ended September 30, 2001:None
7
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
By:/S/Drury J. Gallagher Apirl 15 , 2002
-------------------------------------
Drury J. Gallagher, Chairman,
Chief Executive Officer and Treasurer
8