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Gold/Mining/Energy : Golden Eagle Int. (MYNG) -- Ignore unavailable to you. Want to Upgrade?

To: marianna who wrote (29659)	11/2/2002 11:18:29 AM
From: Jim Bishop	Read Replies (1) \| Respond to of 34075

"Golden Eagle incurred a significantly higher interest expense in the second quarter of 2002 of ($1,442,629), as compared to second quarter 2001 interest of ($93,957). This increase in interest expense is due, in large part, from benefits resulting to convertible debenture holders, accredited investors who are current shareholders, who entered into convertible debenture agreements with Golden Eagle beginning in 2000. The accumulation of the first and second quarter 2002 intrinsic value of the beneficial conversion feature (the market price of the stock at the commitment date in excess of the conversion rate) has been recorded as additional paid-in capital and as non-cash interest expenses using the interest method to allocate the conversion benefit to the affected quarters. The amount recorded as interest expense accordingly was $408,245 and 942,578 for the three and six months ended June 30, 2002. (See, Note C at F-6, Notes to the Financial Statements that are attached to this Report.) Interest costs will continue during the balance of 2002 and through the foreseeable future because of increased borrowings necessary to maintain liquidity for operating purposes." "Note C - Convertible Debentures In January and February 2002, the Company issued convertible debentures totaling $905,000. The debentures are due in a two years; interest accrues at 10% per annum; conversion of loan amount and any accrued interest, or any part of those sums, at the election of the holder, to shares of common stock of the Company; at a conversion rate of the lesser of $.03 per share or one-half of the average closing price during the last three days prior to conversion. The intrinsic value of the beneficial conversion feature (the market price of the stock at the commitment date in excess of the conversion rate) is recorded as additional paid-in capital and as non-cash interest expenses using the interest method to allocate the conversion benefit to the affected periods. The amount recorded as interest expense accordingly, was $408,245 and $942,578 for the three and six months ended June 30, 2002." freeedgar.com