Document/Exhibit Description Pages Size
1: 10QSB Form 1-Qsb, Quarter Ended March 31, 20091 16 59K
2: EX-23 Consent of Independent Accountants 1 5K
FORM 10-QSB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal quarter ended
March 31, 2001
[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934. For the transition period from _____ to _____.
Commission File No. 0-26669
Can-Cal Resources, Ltd.
--------------------------------------------------------------------------------
(Name of Small Business Issuer in its charter)
Nevada 88-0336988
--------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8221 Cretan Blue Lane, Las Vegas, NV 89128
---------------------------------------- -----------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, ( 702 ) 243 - 1849
--------- ------------------ ---------------------
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
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 by a court.
Yes_____ No_____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding on March 31, 2001
--------------------------------------- ------------------------------------
Common Stock, Par Value $.001 9,372,791
Transitional Small Business Disclosure Format (Check one): Yes_____ No X .
------
1
CAN-CAL RESOURCES, LTD.
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
CONTENTS
PAGE
INDEPENDENT ACCOUNTANTS' REPORT 3
FINANCIAL STATEMENTS:
Interim balance sheets 4
Interim statements of operations 5
Interim statements of changes in stockholders' deficit 6
Interim statements of cash flows 7
Notes to interim financial statements 8-11
SUPPLEMENTARY SCHEDULE:
Supplemental schedule I --
Operating, general and administrative expenses 12
2
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders
Can-Cal Resources, Ltd.
Las Vegas, Nevada
We have reviewed the accompanying condensed balance sheet of Can-Cal Resources,
Ltd., as of March 31, 2001, and the condensed statements of operations for the
three months ended March 31, 2001 and 2000, the condensed statements of cash
flows for the three months ended March 31, 2001 and 2000, and the condensed
statement of changes in stockholders' equity for the three months ended March
31, 2001. These financial statements are the responsibility of the company's
management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing standards,
the balance sheet as of December 31, 2000, and the related statement of changes
in stockholders' equity (deficit), and cash flows, and the related statements of
operations for the year then ended (not presented herein); and in our report
dated February 18, 2001, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the accompanying
condensed balance sheet as of December 31, 2000 and the condensed statement of
changes in stockholders' equity for the year then ended, is fairly stated in all
material respects in relation to the balance sheet and statement of changes in
stockholders' equity (deficit) from which they have been derived.
/s/ Murphy, Bennington & Co.
Las Vegas, NV
May 6, 2001
3
CAN-CAL RESOURCES, LTD.
BALANCE SHEETS
MARCH 31, 2001
(Rounded to the nearest hundred, except share data)
[Enlarge/Download Table]
MARCH 31, DECEMBER 31,
2001 2000
------------- -------------
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $ 293,100 $ 510,800
Notes receivable, related parties (note 2) 54,000 48,100
Note receivable 53,000 53,000
------------ ------------
Total current assets 400,100 611,900
PROPERTY AND EQUIPMENT, NET (NOTE 3) 68,500 72,400
OTHER ASSETS (NOTE 4) 53,700 53,700
LONG-TERM INVESTMENTS (NOTE 5) 586,100 586,100
------------ ------------
$ 1,108,400 $ 1,324,100
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 17,500 $ 51,300
Accrued expenses 41,200 26,300
Checks written against future deposits -- 14,200
Note payable, current portion (note 6) 32,500 32,500
------------ ------------
Total current liabilities 91,200 124,300
NOTE PAYABLE, NET OF CURRENT PORTION (NOTE 6) 300,000 300,000
NOTES PAYABLE, RELATED PARTIES (NOTE 7) 117,200 119,200
------------ ------------
508,400 543,500
------------ ------------
STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value; authorized, 15,000,000
shares; issued and outstanding, 9,372,791 shares 9,400 9,400
Preferred stock, $.001 par value; authorized, 10,000,000
shares; none issued or outstanding -- --
Additional paid-in-capital 3,408,600 3,408,600
Accumulated deficit (2,818,000) (2,637,400)
------------ ------------
600,000 780,600
------------ ------------
$ 1,108,400 $ 1,324,100
============ ============
4
CAN-CAL RESOURCES, LTD.
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Rounded to the nearest hundred, except share data)
[Enlarge/Download Table]
THREE MONTHS ENDED
-----------------------------
MARCH 31, MARCH 31,
2001 2000
------------- ------------
(UNAUDITED) (UNAUDITED)
SALES $ -- $ --
COST OF GOODS SOLD -- --
----------- -----------
GROSS PROFIT -- --
OPERATING EXPENSES,
GENERAL AND ADMINISTRATIVE 171,700 103,400
----------- -----------
LOSS FROM OPERATIONS (171,700) (103,400)
OTHER INCOME (EXPENSES):
Other income 800 5,200
Interest income 5,200 1,000
Interest expense (14,900) (1,700)
----------- -----------
INCOME(LOSS) FROM CONTINUING OPERATIONS (180,600) (98,900)
----------- -----------
PROVISION FOR INCOME TAXES -- --
----------- -----------
NET INCOME (LOSS) $ (180,600) $ (98,900)
=========== ===========
NET INCOME (LOSS) PER SHARE OF COMMON STOCK AND COMMON STOCK EQUIVALENTS:
BASIC EPS
Net loss from continuing operations $ (0.02) $ (0.01)
=========== ===========
Weighted average shares outstanding 9,372,791 8,308,727
=========== ===========
DILUTED EPS
Net loss from continuing operations $ (0.02) $ (0.01)
=========== ===========
Weighted average shares outstanding 9,372,971 8,308,727
=========== ===========
5
CAN-CAL RESOURCES, LTD.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
THREE MONTHS ENDED MARCH 31, 2001
(UNAUDITED)
(Rounded to the nearest hundred, except share data)
[Enlarge/Download Table]
ADDITIONAL CUMULATIVE TOTAL
PAID-IN ACCUMULATED TRANSLATION STOCKHOLDERS'
COMMON STOCK CAPITAL DEFICIT ADJUSTMENT EQUITY
----------------------- ----------- ------------ ------------ ------------
SHARES AMOUNT
--------- -----------
BALANCE, DECEMBER 31, 1998 7,005,161 $ 7,000 $ 1,887,600 $(1,397,800) $ 8,500 $ 505,300
Issuance of common stock 1,248,621 1,200 572,600 -- -- 573,800
Foreign currency translation adjustment -- -- -- -- (11,800) (11,800)
Realized foreign currency translation loss -- -- -- -- 3,300 3,300
Net income (loss) for the year -- -- -- (322,100) -- (322,100)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1999 8,253,782 8,200 2,460,200 (1,719,900) -- 748,500
Issuance of common stock 1,119,009 1,200 948,400 -- -- 949,600
Net income (loss) for the year -- -- -- (917,500) -- (917,500)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 2000 9,372,791 9,400 3,408,600 (2,637,400) -- 780,600
Net income (loss) for the period -- -- -- (180,600) -- (180,600)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, MARCH 31, 2001 9,372,791 $ 9,400 $ 3,408,600 $(2,818,000) $ -- $ 600,000
=========== =========== =========== =========== =========== ===========
6
CAN-CAL RESOURCES, LTD.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Rounded to the nearest hundred)
[Enlarge/Download Table]
THREE MONTHS ENDED
--------------------------
MARCH 31, MARCH 31,
2001 2000
----------- -----------
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $(180,600) $ (98,900)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 6,400 5,900
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expenses -- (2,000)
(Increase) decrease in other assets -- (2,800)
Increase (decrease) in accounts payable and
other current liabilities (33,100) 1,400
--------- ---------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (207,300) (96,400)
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (2,500) --
--------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES (2,500) --
--------- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (decrease) in related party debt (2,000) 29,200
Proceeds from issuance of common stock -- 375,000
Issuance of note receivable (5,900) (5,900)
--------- ---------
NET CASH USED BY FINANCING ACTIVITIES (7,900) 398,300
--------- ---------
NET INCREASE (DECREASE) IN CASH (217,700) 301,900
CASH AT BEGINNING OF PERIOD 510,800 51,800
--------- ---------
CASH AT END OF PERIOD $ 293,100 $ 353,700
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR:
Interest $ -- $ --
========= =========
Income taxes $ -- $ --
========= =========
7
CAN-CAL RESOURCES, LTD.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
1. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS:
These unaudited interim financial statements of Can-Cal Resources, Ltd
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission. Such rules and regulations allow the
omission of certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles as long as the statements are not
misleading.
In the opinion of management, all adjustments necessary for a fair
presentation of these interim statements have been included and are of a
normal recurring nature. These interim financial statements should be
read in conjunction with the financial statements of the Company included
in its 2000 Annual Report on Form 10-KSB. Interim results are not
necessarily indicative of results for a full year.
In the course of its activities, the company has sustained continuing
operating losses and expects such losses to continue for the foreseeable
future. The company plans to continue to finance its operations with
stock sales and, in the longer term, revenues from sales. The company's
ability to continue as a going concern is dependent upon future stock
sales and ultimately upon achieving profitable operations.
2. NOTES RECEIVABLE (RELATED PARTIES):
Notes receivable, related parties, at March 31, 2001 consisted of the
following:
[Enlarge/Download Table]
Note receivable from S&S Mining, Inc., a joint venture partner, unsecured,
interest imputed at 8%, due on demand $ 27,800
Note receivable from an individual, unsecured, interest imputed
at 8%, due on demand 12,000
Note receivable from an individual, unsecured, interest imputed
at 6%, due on demand 5,000
Accrued interest receivable 14,800
-----------
59,600
Allowance for uncollectible accounts (5,600)
-----------
$ 65,200
===========
8
CAN-CAL RESOURCES, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
3. PROPERTY AND EQUIPMENT:
Property and equipment at March 31, 2001 consisted of the following:
[Enlarge/Download Table]
Machinery and equipment $ 97,600
Transportation equipment 18,400
Office equipment and furniture 14,200
-----------
130,200
Less accumulated depreciation (61,700)
-----------
$ 68,500
===========
<FN>
Depreciation expense for the three months ended March 31,2001 totaled $6,400.
</FN>
4. OTHER ASSETS:
Other assets at March 31, 2001 consisted of the following:
[Enlarge/Download Table]
Note receivable from Tyro, Inc., and principals, a corporation, secured
by equipment, interest accrued at 6% per annum, due on demand $ 53,300
Deposits 6,800
Non-destructive testing supplies 10,500
Mining claims 36,400
------------
107,000
Allowance for uncollectible notes (53,300)
------------
$ 53,700
============
5. LONG-TERM INVESTMENTS:
Long-term investments at March 31, 2001 consisted of the following:
[Download Table]
Pisgah property $ 567,100
Investment in S&S Mining joint venture 19,000
-------------
$ 586,100
=============
9
CAN-CAL RESOURCES, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
6. NOTES PAYABLE:
Note payable at March 31, 2001 consisted of the following:
[Download Table]
Note payable to lender; secured by 1st deed of trust; $ 32,500
interest at 8.00% per annum, matures July 31, 2001
Note payable to lender; secured by 2nd deed of trust;
interest at 16.00% per annum; matures November 24, 2005 300,000
---------
332,500
Less current portion (32,500)
---------
$ 300,000
=========
7. NOTE PAYABLE, RELATED PARTIES:
Note payable, related parties, at March 31, 2001 consisted of the
following:
[Download Table]
Note payable to shareholder; unsecured; interest
at prime plus 1.00% per annum, due on demand $ 112,700
Note payable to shareholder; unsecured; interest at
prime plus 1.00% per annum, due on demand 4,500
---------
$ 117,200
=========
8. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following table presents the carrying amounts and estimated fair
value of the Company's financial instruments at March 31, 2001:
[Download Table]
CARRYING FAIR
AMOUNT VALUE
---------- ----------
Financial assets:
Note receivable-related party $ 54,000 $ 54,000
Note receivable 53,000 53,000
Property and equipment 68,500 68,500
Other assets 53,700 53,700
Long-term investments 586,100 586,100
Financial liabilities:
Notes payable, related parties 117,200 117,200
Notes payable 332,500 332,500
10
CAN-CAL RESOURCES, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
8. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED):
The carrying amounts of cash, prepaid expenses, accounts payable and
accrued expenses approximate fair value because of the short maturity of
those instruments.
The fair value of notes payable is based upon the borrowing rates
currently available to the Company for bank loans with similar terms and
average maturities.
11
CAN-CAL RESOURCES, LTD.
SUPPLEMENTAL SCHEDULE I --
OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(UNAUDITED)
(Rounded to the nearest hundred)
[Download Table]
THREE MONTHS THREE MONTHS
ENDED MARCH ENDED MARCH
31, 2001 31, 2000
------------ -------------
OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES:
Mine exploration $ 59,300 $ 30,100
Consulting 33,400 5,500
Travel and entertainment 23,600 8,200
Office expense 18,400 3,500
Insurance 8,000 15,700
Office rent 7,900 9,200
Depreciation and amortization 6,400 5,900
Accounting and legal 3,000 17,200
Repairs and maintenance 2,900 --
Telephone 2,700 1,800
Miscellaneous 1,700 2,400
Equipment rental 1,600 2,600
Utilities 1,500 300
Advertising and promotion 1,200 800
Bank charges 100 200
-------- --------
$171,700 $103,400
======== ========
12
FORWARD LOOKING STATEMENTS
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 provide a "safe harbor" for forward looking
statements that are based on current expectations, estimates and projections,
and management's beliefs and assumptions. Words such as "believes," "expects,"
"intends," "plans," "estimates," "may," "attempt," "will," "goal," "promising,"
or variations of such words and similar expressions are intended to identify
such forward-looking statements. These statements are not guarantees of future
performance and involve certain risks and uncertainties which are difficult or
impossible to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward- looking
statements. The Company undertakes no obligation to update publicly any
forward-looking statement whether as a result of new information, future events
or otherwise.
Such risks and uncertainties include, but are not limited to, the
availability of ore, negative test results, the existence of precious metals in
the ore available to the Company in an amount which permits their production on
an economic basis; the Company's ability to drill holes and properly test and
assay samples, and its ability to locate and acquire mineral properties which
contain sufficient grades of precious metals and/or minerals; the Company's
ability to sell a portion or all of any of its properties to larger mining
companies, to enter into agreements with larger mining companies to explore and
possibly develop its properties, to produce precious metals on a commercial
basis, the prices of precious metals, obtaining a mill or refinery to extract
precious metals on an economic basis, the Company's ability to maintain the
facilities it currently utilizes; obtain permitting requirements for any mining
and milling operations and pay the costs thereof; have good title to claims and
equipment, and the Company's ability to obtain financing necessary to maintain
its operations.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
(a) Plan of Operation.
During the quarter ended March 31, 2001 and continuing thereafter, the
Company continued to expand its precious metal extractive techniques, procedures
and methodology program of testing volcanic cinder material from its patented
mineral claims at Pisgah, California. It had dedicated virtually all its efforts
to this testing. It conducts its operations at the facility in Nye County,
Nevada, which it leases. The purpose of the extractive metallurgical program is
to determine the nature and extent of precious metals contained in the volcanic
cinder material and to determine and verify the feasibility and the possible
commercial viability of the various extractive technologies developed to date.
The Company intends to continue its batch testing programs of
extractive testing volcanic cinders from its property at Pisgah, California.
However, there is no assurance that precious metals exist in the volcanic
cinders in commercial quantities or, if they do, that they can be profitably
extracted. The Company has no present plans to conduct any activities or
operations on any of its other properties.
It is not anticipated that the Company will purchase (or sell) any
significant amount of equipment or other assets, or experience any significant
change in the number of personnel who perform services for the Company, during
the 12 months ending March 2002. However, this depends on results of its ongoing
testing programs and financing available to it.
(b) Liquidity and Capital Resources and Results of Operations
As of March 31, 2001, the Company's working capital was $308,900.
Working capital as of December 31, 2000, was $487,600.
The Company had no operating income or cash flow from its mineral
operations for the three months ended March 31, 2001 or the three months ended
March 31, 2000. The Company sustained a loss from operations of $180,600 for the
three month period ended March 31, 2001, compared to a loss of $98,900 for the
three period ended March 31, 2000. The increased loss reflects the company's
expanded testing program.
During the three month period ended March 31, 2001, mine exploration
costs increased from $30,100 for the three month period ended March 31, 2000 to
$59,300 and consulting costs increased from $5,500 to $33,400, largely as a
result of the accelerated testing program on the volcanic cinders, consulting
fees paid to Bruce Ballantyne and other consultants, and assay expenses
associated with the testing program. Travel and entertainment costs increased to
$23,600 from $8,200. Those costs include increased travel relating to the
testing program on the volcanic cinders. Office expense increased from $3,500 to
$18,400 as a result of an additional office and increased activity. Insurance
costs decreased from $15,700 to $8,000. Accounting and legal expenses decreased
to $3,000 from $17,200.
14
Unless the Company is able to establish the economic viability of its
mining properties, the Company will continue writing off its expenses of
exploration and testing of its properties. Therefore, losses will continue
unless the Company locates and delineates reserves. If that occurs, the Company
may capitalize certain of those expenses.
The Company has no material commitments for capital expenditures other
than expenditures it chooses to make with respect to testing and/or exploration
of its mineral properties.
As a result of the Company's greatly expanded and accelerated program
for testing its volcanic cinders material during the quarter ended March 31,
2001, and continuing thereafter, the Company has expended its funds faster than
it had anticipated. The Company anticipates that, as long as results appear to
warrant it, it will continue its current level of testing and assaying and, if
results warrant it, seek to obtain equipment to produce precious metals from its
volcanic cinders material. The Company estimates that its cash will last until
about August or September 2001. It will require additional funds to continue its
operations. It is currently exploring various financing alternatives including
borrowing additional funds using its Pisgah volcanic cinders property as
collateral or a private placement of its securities. No financing arrangements
or facilities are in place as of this time.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On April 2, 2001 Josef Reschreiter resigned as a director and officer
of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
No. Description Page No.
--- ----------- -------
23 Consent of Independent Accountants..............17
(b) Reports on Form 8-K. There were no reports filed by the
Company on Form 8-K during the quarter ended March 31, 2001.
15
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CAN-CAL RESOURCES LTD.
(REGISTRANT)
Date: May 11, 2001 By: / s / Ronald D. Sloan
-------------------------------------
RONALD D. SLOAN, President
16
Dates Referenced Herein and Documents Incorporated by Reference
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