Second Quarter Report 10QSB
June 30, 2002
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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 June 30, 2002
/ / 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 June 30, 2002 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 (Unaudited)
Balance Sheet - as of June 30, 2002 1
Statements of Operations and Comprehensive Income (loss) for the
three month periods and six month periods ended June 30, 2002 and
June 30, 2001 and for the development stage period from January 1,
1995 through June 30, 2002 2
Statements of Cash Flows - for the six months ended June 30, 2002 and
June 30, 2001 and for the development
stage period from January 1, 1995 through June 30, 2002 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition
and plan of Operation 5-6
PART II OTHER INFORMATION
Item 1. Legal Proceedings 6
Item 2. Changes in Securities and Use of Proceeds 6
Item 3 Default Upon Senior Securities 6
Item 4 Submission of Matters to a Vote of Security Holders 6
Item 5 Other Information 6
Item 6. Exhibits and Reports on Form 8-K 6
SIGNATURE 7
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
BALANCE SHEET
JUNE 30, 2002
(Unaudited)
ASSETS
Cash $ 315
Accounts receivable 2,500
Investment in First Dynasty Mines, Ltd. 417,793
----------------
$ 420,608
================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 42,603
Due to related parties 35,718
----------------
78,321
----------------
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 (4,761,294)
Unrealized gain on investment 264,258
----------------
TOTAL STOCKHOLDERS' EQUITY 342,287
----------------
$ 420,608
================
See notes to financial statements.
1
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended Six Months Ended January 1, 1995
June 30, June 30, through
--------------------------- --------------------------- June 30,
2002 2001 2002 2001 2002
------------ ----------- ------------ ------------ --------------
REVENUES $ - $ - $ - $ - $ -
------------ ----------- ------------ ------------ --------------
EXPENSES:
Selling, general and administrative 198 7,185 3,323 12,260 775,512
Legal fees 7,142 1,918 11,706 5,573 643,001
Compensation - - - - 550,834
Write-off investment in Georgia
mining interests - - - - 135,723
Gain on sale of interest in
Global Gold Armenia - - - - (268,874)
Gain on sale of interest in
First Dynasty Mines, Ltd. (10,496) - (1,207) - (1,207)
Miscellaneous other - - 100 - 18,657
------------ ----------- ------------ ------------ --------------
TOTAL EXPENSES (3,156) 9,103 13,922 17,833 1,853,646
------------ ----------- ------------ ------------ --------------
NET INCOME (LOSS) $ 3,156 $ (9,103) $ (13,922) $ (17,833) $ (1,853,646)
------------ ----------- ------------ ------------ --------------
NET INCOME (LOSS) PER SHARE-BASIC AND DILU$ED 0.00 $ (0.00) $ (0.00) $ (0.00) $
============ =========== ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 4,368,114 4,368,114 4,368,114 4,360,568
============ =========== ============ ============
NET INCOME (LOSS) $ 3,156 $ (9,103) $ (13,922) $ (17,833) $
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized gain (loss) on available-
FOR-SALE SECURITIES 259,094 (30,000) 385,258 15,000
------------ ----------- ------------ ------------
COMPREHENSIVE INCOME (LOSS) $ 262,250 $ (39,103) $ 371,336 $ (2,833)$
============ =========== ============ ============
See notes to financial statements
2
GLOBAL GOLD CORPORATION
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended January 1, 1995
June 30, through
-------------------------- June 30,
2002 2001 2002
----------- ------------ ---------------
CASH FLOWS FROM DEVELOPMENT STAGE
ACTIVITIES:
Net Loss $ (13,922) $ (17,833) $ (1,853,646)
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
Gain on sale of First Dynasty Mines, Ltd. interest (1,207) - (1,207)
Changes in assets and liabilities: -
Organization costs - - (9,601)
Accounts receivable and deposits (2,500) - (2,654)
Accounts payable and accrued expenses (39,608) 13,778 325,924
----------- ------------ ---------------
NET CASH USED IN OPERATING ACTIVITIES (57,237) (4,055) (1,349,335)
----------- ------------ ---------------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of Armenia mining interests - - 1,891,155
Proceeds from sale of First Dynasty Mines, Ltd. interests 43,672 43,672
Investment in certain mining
interests - net of financing - - (153,494)
Deferred costs - mining interests - - (878,858)
----------- ------------ ---------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 43,672 - 902,475
----------- ------------ ---------------
CASH FLOW FROM FINANCING ACTIVITIES:
Net proceeds from private
placement offering - - 421,573
Due from related party - - 13,500
Sale of warrants - - 650
Warrants exercised - - 100
----------- ------------ ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES - - 435,823
----------- ------------ ---------------
NET DECREASE IN CASH (13,565) (4,055) (11,037)
CASH - beginning of period 13,880 4,360 11,352
----------- ------------ ---------------
CASH - end of period $ 315 $ 305 $ 315
=========== ============ ===============
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
June 30, 2002
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL STATEMENTS:
The unaudited interim financial statements included herein
were prepared pursuant to the rules and regulations for
interim reporting under the Securities Exchange Act of 1934,
as amended. Accordingly, certain information and footnote
disclosures normally accompanying the audited financial
statements have been omitted. The unaudited interim financial
statements and notes thereto should be read in conjunction
with the audited financial statements and notes thereto
contained in the Annual Report on Form 10-K of Global Gold
Corporation (the "Company") for the year ended December 31,
2001. The unaudited interim financial statements accompanying
this report contain all adjustments, which in the opinion of
management are necessary to ensure that the financial
statements are not misleading. Results for the interim periods
are not necessarily indicative of results for the full year.
NOTE 2: INVESTMENTS:
At June 30, 2002 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 $417,793. The cost
of the securities was $153,535. The unrealized gain as of June
30, 2002 was $264,258, which is shown as a separate component
of stockholders' equity.
4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND PLAN 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.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2002 AND 2001
During the three-month ended June 30, 2002, the Company's
administrative and other expenses were $7,340, which
represented a decrease from the amount paid or accrued of
$9,103 in the same period last year. The expense decrease was
attributable to lower accounting expenses of $7,010 partially
offset by higher legal expenses of $5,224.
SIX MONTHS ENDED JUNE 30, 2002 AND 2001
During the six-month ended June 30, 2002, the Company's
administrative and other expenses were $15,129 which
represented a decrease from the amount paid or accrued of
$17,833 in the same period last year. The expense decrease was
attributable to lower accounting expenses of $7,010 partially
offset by higher legal expenses of $6,133.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2002, the Company's total assets were $420,608,
of which $315 consisted of cash or cash equivalents.
The Company's plan of operation for calendar year 2002 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 retains the right until December 31, 2009 to elect
to participate at a level of up to twenty percent with First
Dynasty or any of its affiliates in any exploration project
undertaken in Armenia.
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 2002 and does not expect to purchase or sell
any plant or significant equipment.
5
The Company does not expect to hire any additional full-time
employees in 2002.
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
six months ended June 30, 2002 and June 30, 2001
and exhibits which are
listed on the Exhibit Index attached hereto:
99.1 Certification of Chief Executive Officer and the
Treasurer (who is the Chief Financial Officer).
99.2 Certification of President and Chief Operating
Officer
(b) The following reports on Form 8-K were filed by
the Registrant during the quarter ended June 30,
2002: None
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:_________________________ August 19, 2002
-----------------
Drury J. Gallagher, Chairman,
Chief Executive Officer and Treasurer
6
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER ----------------------------------------------------------------
99.1 Certification of Chief Executive Officer and Chairman. **
99.2 Certification of President and Chief Operating Officer.**
* Filed previously
** Filed herewith.
+ Management contract or compensatory plan or arrangement filed previously.
7
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Global Gold Corporation (the
"Company") on Form 10-Q for the period ended June 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Drury J. Gallagher, Chairman, Chief Executive Officer and Treasurer of the
Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss.
906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
August 19, 2002 By: /s/ Drury J. Gallagher
-----------------------------------------------
Date Chairman, Chief Executive Officer and Treasurer
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Global Gold Corporation
(the "Company") on Form 10-Q for the period ended June 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Robert Garrison, President and Chief Operationg Officer of the Company, certify,
pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
August 19, 2002 By: /s/ Robert Garrison
-----------------------------------------------
Date Robert Garrison
President, Chief Operating Officer