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 quarter period ended
March 31, 1998
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from __________ to __________.
Commission file number 0-23726
GOLDEN EAGLE INTERNATIONAL, INC.
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(Exact name of Golden Eagle as specified in its charter)
Colorado 84-1116515
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(State of incorporation) (IRS Employer Identification No.)
4949 South Syracuse Street, Suite 300, Denver, CO 80237
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(Address of principal executive offices) (Zip Code)
Golden Eagle's telephone number, including area code: (303) 694-6101
Securities registered pursuant to Section 12(b) of the Act: None
Name of each exchange on which registered: None
Securities registered pursuant to Section 12(g) of the Act:
$.0001 par value Common Stock
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(Title of class)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to the filing requirements for the past 90
days.
[ ] Yes [ X ] No
At December 15, 1998, there were 108,754,051 shares of common stock outstanding.
Transitional Small Business Disclosure Format: [ ] Yes [ X ] No
PART I-FINANCIAL INFORMATION
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Item 1. Financial Statements --------------------
The unaudited Financial Statements for the Quarter Year ended March 31,
1998, are attached hereto. Please refer to pages F-1 through F-6.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
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Liquidity and Capital Resources -------------------------------
At March 31, 1998, and subsequently, Golden Eagle has had significant
working capital shortages. In fact, since its inception through the first
quarter of 1998, Golden Eagle's current liabilities have substantially exceeded
current assets. This situation has created a significant hardship for the Golden
Eagle in meeting its obligations to pay its bills currently, although at March
31, 1998, Golden Eagle was able to pay or subsequently arrange for the payment
of all salaries for employees of its Bolivian operations, as well as most of its
suppliers' billings and other current expenses. As discussed below, Golden
Eagle's working capital deficit as of the first quarter of 1998 ($2,115,470) was
primarily due to short-term loans made from affiliates and unrelated parties,
and unpaid compensation.
In the first quarter of 1998, Golden Eagle issued a $250,000 convertible
debenture to a foreign corporation at 8%, of which $125,000 was paid to Golden
Eagle in the second quarter. This debenture was convertible at 50% of the
average closing bid price during the three-day period prior to the notice of
conversion. These funds were used primarily for working capital and operating
expenses. The $125,000 issued under this debenture was converted to 2,560,000
shares of Golden Eagle's common stock on October 15, 1998. Golden Eagle does not
expect to receive the balance due under this debenture.
Through 1997, Golden Eagle's majority-owned subsidiary, GEBM, received
loans totaling $35,850 in cash from Golden Eagle's president, Terry C. Turner,
and $90,331 (in equipment rentals and cash) from GEBM's president, Rene
Velasquez. The funds provided by these loans were used to maintain Golden
Eagle's ongoing operations in Bolivia. These loans bear interest at 24% per
annum and are repayable upon demand. In the first quarter of 1998, Mr. Turner
received substantial repayment of his debt and accrued interest through the
conveyance of a vehicle owned by Golden Eagle, valued at $27,575, and subsequent
to the first quarter, the payment of $9,500 in cash. Mr. Velasquez has not
indicated an intention to require repayment of his loan at the present time,
although Golden Eagle deems the debt due and payable.
Golden Eagle also used its common stock directly to raise capital and to
satisfy some of its obligations. During the first quarter of 1998, Golden Eagle
entered into an agreement with two related entities (which are not affiliated
with Golden Eagle) to provide certain services to Golden Eagle on a
non-exclusive basis. These services include introducing Golden Eagle to
investment bankers and accredited investors. These services do not include the
offer or sale of securities. Golden Eagle has agreed to pay these entities a
total of 1,500,000 shares of its restricted common stock as a fee for these
services.
Golden Eagle's ability to use its capital stock and other securities to
raise working capital and to pay its indebtedness is subject to extensive
federal and state regulation. Although Golden Eagle has exerted its best efforts
to comply with all applicable regulations, there can be no assurances that it
has been able to do so. To the extent there may be any non-compliance, Golden
Eagle may incur certain liabilities, although no such claims have, to Golden
Eagle's knowledge, been asserted to date.
The situation requiring use of Golden Eagle's stock to raise working
capital has continued throughout 1998. Golden Eagle has been required to seek
financing from other sources, including affiliates and their family members, to
allow it to continue its exploration and evaluation operations on its Bolivian
properties, and to pay its general and administrative expenses in the United
States and Bolivia. Although Golden Eagle has been successful in obtaining funds
to date, there can be no assurance that Golden Eagle will be able to continue to
be successful in doing so. Golden Eagle's ability to finance its operations
will, in the end, be dependent on Golden Eagle's ability to generate cash flow
from operations, of which there can be no assurance. |
