6-K 1 condor-6k113003.txt CONDOR 6K 113003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6K Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the year ended: November 30, 2003 ----------------- Commission File Number: 000-31168 CONDOR GOLD CORP. ----------------------------------------------- (Translation of registrant's name into English) 50 Richmond Street East, Toronto, Ontario M5C 1N7 ------------------------------------------------- (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F Form 20-F [X] Form 40-F [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ] Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b) 82. CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED NOVEMBER 30, 2003 AND 2002 CONTENTS Auditors' Report 1 Consolidated Balance Sheets 2 Consolidated Statements of Deficit 3 Consolidated Statements of Earnings 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6 - 15 AUDITORS' REPORT To the Shareholders of Condor Gold Corp. (A Development Stage Company) We have audited the consolidated balance sheets of Condor Gold Corp. (A Development Stage Company) as at November 30, 2003 and 2002 and the consolidated statements of deficit, earnings and cash flows for the years then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Condor Gold Corp. (A Development Stage Company) as at November 30, 2003 and 2002, and the results of its operations and its cash flows for the year then ended in conformity with Canadian generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is in the development stage, has incurred losses since inception and has negative working capital and cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from these plans. "SF PARTNERSHIP, LLP" /s/ SF PARTNERSHIP, LLP ------------------------- Toronto, Canada CHARTERED ACCOUNTANTS April 20, 2004 - 1 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Consolidated Balance Sheets (Stated in Canadian Dollars) November 30, 2003 2003 2002 ---- ---- ASSETS Current Cash $ -- $ 24,804 Deferred Expenses (note 3) 162,500 -- Property and Equipment (note 4) 5,779,753 5,498,572 ----------- ----------- $ 5,942,253 $ 5,523,376 =========== =========== LIABILITIES Current Liabilities Accounts payable $ 634,341 $ 203,409 Deposits 100,000 100,000 Advances from related parties (note 5) 490,322 533,678 Notes payable, current portion (note 6) 554,000 554,000 Reserve for loss contingencies (note 7) 462,000 -- ----------- ----------- 2,240,663 1,391,087 Notes Payable (note 6) 1,775,000 -- ----------- ----------- 4,015,663 1,391,087 ----------- ----------- SHAREHOLDERS' EQUITY Share Capital (note 8) 8,473,426 7,259,171 Contributed Surplus (note 2) 127,493 -- Deficit (6,674,329) (3,126,882) ----------- ----------- 1,926,590 4,132,289 ----------- ----------- $ 5,942,253 $ 5,523,376 =========== =========== APPROVED ON BEHALF OF THE BOARD "ALEXANDER G. STEWART" "L. KIRK BOYD" /s/ ALEXANDER G. STEWART /s/ L. KIRK BOYD ------------------------ ---------------- Director Director The accompanying notes are an integral part of these financial statements. - 2 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Consolidated Statements of Deficit (Stated in Canadian Dollars) Year Ended November 30, 2003 Cumulative from inception 2003 2002 on March 7, 2001 ----------- ----------- ---------------- Deficit - beginning of year $(3,126,882) $ (484,287) $ -- Net loss (2,881,095) (2,642,595) (6,007,977) ----------- ----------- ----------- (6,007,977) (3,126,882) (6,007,977) Deficiency in equity of acquired company (note 2) 666,352 -- 666,352 ----------- ----------- ----------- Deficit - end of year $(6,674,329) $(3,126,882) $(6,674,329) =========== =========== =========== The accompanying notes are an integral part of these financial statements. - 3 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Consolidated Statements of Earnings (Stated in Canadian Dollars) Year Ended November 30, 2003

The accompanying notes are an integral part of these financial statements. - 4 -

The accompanying notes are an integral part of these financial statements. - 5 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 1. Operations and Summary of Significant Accounting Policies Operations The Corporation was originally incorporated on June 19, 1997 under the Business Corporations Act (Ontario) under the name Findore Gold Resources Ltd. and was in the business of investing in resource related activities. On October 17th, 2001 the shareholders approved the name change to Ripped Canada Artists Inc. ("RCA") and a change of business to the entertainment industry and TV, Film and Video production and distribution. On September 20, 2002, Ripped Canada Artists Inc. ("RCA") and the shareholders of Northville Gold Corp. ("Northville") entered into a Securities Exchange Agreement ("Agreement") whereby RCA acquired all of the issued and outstanding securities of Northville in exchange for equivalent securities on a one for one basis. Upon consummation, the shareholders of Northville exchanged each of their common shares for one post-consolidation common share of RCA. Northville shareholders acquired control of RCA, a US publicly quoted company with 94.88% interest in the post consolidated securities. Accordingly, this transaction has been accounted for as a reverse takeover whereby Northville was deemed to have acquired RCA. The ongoing business will continue as that of Northville. Subsequently, RCA has changed its name to Condor Gold Corp. (the "Company"). The company is engaged in the exploration and development of gold and diamond properties in Canada. Since inception, the efforts of the Company have been devoted to assessing whether properties have sufficient mineral reserves for production. To date, the Company has earned no revenues. Condor owns or controls interests in gold properties in the townships of Chester, Benneweis, and Yeo in Northern Ontario with a total strike length of eighteen miles (collectively, the "Northville Properties"). In addition, in the search for diamond properties, the Company has staked over 95,000 acres of land in the James Bay Lowlands of Northern Ontario. To date, the Company has earned no revenues and is considered to be in the development stage. - 6 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 1. Operations and Summary of Significant Accounting Policies (cont'd) Summary of Significant Accounting Policies a) Going Concern The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses since inception and has negative working capital and cash flows from operations that raise substantial doubt as to its ability to continue as a going concern. For the years ended November 30, 2003 and 2002, the Company experienced net losses of $2,881,095 and $2,642,595, respectively. The Company's ability to continue as a going concern is also contingent upon its ability to secure additional financing, initiating sale of its product and attaining profitable operations. Management is pursuing various sources of equity financing. Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure financing when needed or obtain such on terms satisfactory to the Company, if at all. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. b) Unit of Measurement The Canadian dollar has been used as the unit of measurement in these financial statements. The functional currency of the operations are denominated in Canadian currency. c) Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned and controlled subsidiaries, Northville Gold Corp., Condor Diamond Corp., Dialex Minerals Inc., 1478837 Ontario Inc., and 1485210 Ontario Inc. Intercompany accounts and transactions have been eliminated on consolidation. These consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods reported. - 7 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 1. Operations and Summary of Significant Accounting Policies (cont'd) Summary of Significant Accounting Policies (cont'd) d) Property and Equipment Property and equipment are stated at cost. Amortization, based on the estimated useful lives of the assets, is provided using the undernoted annual rates and methods: Mining properties Straight-line Units of production Furniture and equipment 20% Straight-line Computer hardware 30% Declining balance Computer software 100% Declining balance Additions during the year are amortized at half the normal rate. Mineral Exploration Properties Property acquisition costs are capitalized until the property to which they relate is placed into production, sold, abandoned or management determines that there has been an impairment in value. On the commencement of commercial production, these costs will be charged to operations on the units-of-production method based upon estimated recoverable proven and probable reserves. As at November 30, 2003, there has not been any production at any of the properties. The amount shown for mineral property interests represents costs incurred and deferred to date and does not necessarily reflect present and future values. Exploration expenditures are expensed as incurred. e) Use of Estimates The preparation of the Company's financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions. These assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. f) Income Taxes Future income tax assets and liabilities are computed based on differences between the carrying amount of assets and liabilities on the balance sheet and their corresponding tax values, generally using the enacted income tax rates at each balance sheet date. Future income tax assets also result from unused loss carry-forwards and other deductions. The valuation of future income tax assets is reviewed quarterly and adjusted, if necessary, by use of a valuation allowance to reflect the estimated realizable amount. - 8 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 1. Operations and Summary of Significant Accounting Policies (cont'd) Summary of Significant Accounting Policies (cont'd) g) Foreign Currency Translation Monetary items in foreign currencies are translated at the year-end rates of exchange, except for hedged liabilities, which are translated at contract rates. Non-monetary items in foreign currency are translated at historical rates of exchange. Translation gains and losses are included in determining net earnings. h) Stock Based Compensation The Company enters into transactions in which goods or services are the consideration received for the issuance of equity instruments. The value of these transactions are measured and accounted for, based on the fair value of the equity instrument issued or the value of the services, whichever is more reliably measurable. The services are expensed in the periods during which the services are rendered. i) Net Loss per Common Share Basic loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued. j) Goodwill Goodwill represents the excess purchase price paid on the acquisition of the assets or a business over the value assigned to the net identifiable assets acquired. Goodwill is written down (to fair value) when declines in value are considered other that temporary based on expected cash flows. Upon acquisition of RCA in 2002, the Company changed the nature of its business and the goodwill was deemed to be of no value and written off. 2. Acquisition On September 5, 2003, the Company acquired 20,452,000 shares (54.8% interest) of Dialex Minerals Inc. for $280,315 and in consideration issued 2,220,000 common shares of the Company for $152,822. This transaction resulted in contributed surplus of $127,493. At the date of acquisition, the Company's interest in the net book value of Dialex amounts to a deficiency of $386,037, which resulted in an adjustment to retained earnings in the amount of $666,352. - 9 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 3. Deferred Expenses On January 6th, 2003 the Company arranged for senior secured debt financing from Treelawn Investment Corp. in the gross aggregate amount of $1,500,000. the net proceeds from the loan were $1,200,000. The $300,000 financing charge was set up as deferred expenses with the amount expensed equally over the 24 month life of the loan, amounting to $ 25,000 expense per month. 4. Property and Equipment 2003 2002 Accumulated Accumulated Cost Amortization Cost Amortization ---------- ------------- ---------- -------------- Mining properties $5,765,672 $ -- $5,498,572 $ -- Furniture and equipment 10,264 1,026 -- -- Computer hardware 3,357 503 -- -- Computer software 3,978 1,989 -- -- ---------- ---------- ---------- -------------- $5,783,271 $ 3,518 $5,498,572 $ -- ---------- ---------- ---------- -------------- Net carrying amount $5,779,753 $ 5,498,572 ---------- -------------- 5. Advances from Related Parties Advances from related parties are due to shareholders and private companies which are owned by a shareholder. The advances are unsecured, non interest bearing and have no specified terms of repayment. - 10 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 6. Notes Payable

On January 6, 2003 the Company arranged for senior secured debt financing from Treelawn Investment Corp. ("Treelawn"), in the amount of $1,500,000 plus accrued interest of $275,000. As partial consideration for the note, the Company issued to Treelawn 20,000,000 two-year common share purchase warrants exercisable at $0.10 per common share and 20,000,000 three-year common share purchase warrants exercisable at $0.20 per common share. As a result of these transactions, Treelawn beneficially owns securities convertible into voting shares of the Company which, if fully exercised, would result in Treelawn's holding approximately 39% of the current issued and outstanding voting shares of the Company. During fiscal 2002, notes payable of $225,000 were retired through either payment in cash or issuance of shares. - 11 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 7. Reserve for Loss Contingencies The Company has recorded a $462,000 liability for loss contingencies. This reserve was established as a result of a potential liability of Dialex Minerals Inc. ("Dialex"), a controlled subsidiary, to the Internal Revenue Service (IRS) as a result of actions by the former principal of Video Home Shopping Inc., which has led to an investigation by the IRS. The Company has contacted the IRS for information and has no indication that the investigation concerns the Company directly. Management, nevertheless, believes that said IRS investigation may relate, in part, to unpaid Federal Withholding taxes, Social Security and Medicare taxes, employer's taxes, and other payroll taxes and out of prudence, the Company has elected to provide a reserve of $462,000. 8. Share Capital

During the year, common shares were issued as follows: a) 2,220,000 shares were issued for the acquisition of Dialex Minerals Inc. at a value of $152,822. b) 1,071,004 shares were issued for the acquisition of various properties worth $107,100. c) 4,500,000 shares were issued for services of $450,000. d) 5,044,000 shares were issued for a total cash consideration of $504,333. The Company issued to Treelawn 20,000,000 two-year common share purchase warrants exercisable at $0.10 per common share and 20,000,000 three-year common share purchase warrants exercisable at $0.20 per common share. As a result of these transactions, Treelawn beneficially owns securities convertible into voting shares of the Company which, if fully exercised, would result in Treelawn's holding approximately 39% of the current issued and outstanding voting shares of the Company - 12 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 9. Related Party Transactions The following table summarizes the Company's related party transactions, that occurred in the normal course of operations for the year, which are measured at the exchange amount: 2003 2003 --------- --------- Amounts Paid to Shareholders and Directors General and administrative expenses $ 156,711 $ 344,191 Management fees 330,178 347,025 Exploration expenses -- 62,853 Consulting 91,121 -- Financial 24,500 -- At the end of the year, the advances from related entities are as follows: Included in Accounts Payable - due to directors and management of the Company $ 319,249 $ -- Advances from shareholders and private companies controlled by the shareholder 490,322 533,678 Notes payable from a company related to a shareholder 304,000 304,000 10. Income Taxes The Company has generated tax loss carry-forwards, the amounts of which have not yet been determined, pursuant to the provincial and federal taxation in Ontario and Canada. No recognition has been given in these financial statements to the potential future tax benefits associated with these losses. 11. Financial Instruments The company's financial instruments recorded on the balance sheet consist of cash, accounts payable, deposits, notes payable and amounts due to and from related parties. At November 30, 2003, the face value of the company's financial instruments approximates their carrying value due to the short-term maturity of these instruments. The carrying amounts of these short-term financial instruments approximates the amount at which the financial instrument could be exchanged in a current arm's-length transaction between willing parties. - 13 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 12. Commitments and Contingencies a) On September 20, 2002, as part of the reverse takeover transaction, the Company issued 530,000 warrants. Each warrant is exercisable at $0.25 per common share and has a life of two years. These warrants were issued to replace similar Northville warrants that were outstanding before the reverse takeover. The fair value of the warrants issued during the year was $65,195. This fair value was estimated using the Black-Scholes model with the assumptions of a 2-year expected term, 200% volatility and a risk-free interest rate of 3%. The fair value was included in the purchase price of the reverse takeover transaction, as required by Canadian generally accepted accounting principles. b) A Gold Loan Option was issued by Condor Gold Corp. on September 20, 2002 to Alexander Stewart in trust, an officer and director of the Company. This option is exercisable into 12,000,000 common shares of Condor Gold Corp. for no additional consideration and warrants to acquire a further 8,000,000 common shares of Condor Gold Corp. at $0.25 per common share. The option expired on March 31, 2003. c) On January 6, 2003 the Company issued an option to enter into a Royalty Agreement with Treelawn. Upon the payment of the exercise price of $100,000 to the Company, the royalty agreement will entitle Treelawn to royalties from the Company of: (i) $100 per ounce of gold produced from the surface stockpile to a maximum of 70,000 ounces of gold less any repayments made towards the Note referred to in Note 6; and (ii) $50 per ounce of gold produced from the ramp of the Murgold Property located in Chester Township to a maximum of 68,000 ounces of gold. d) Condor Gold Corp. is the plaintiff in an action initiated on August 19, 2003 against former shareholders and directors of Condor. The purpose of Condor's action was to claim damages for negligence, defamation and breach of contract by the defendants. In a statement of defence and counterclaim filed on or about November 20, 2003, the defendants joined the subsidiary companies of Condor as defendants by counterclaim. The counter claim has not been formally served on the subsidiary companies. It is management's opinion and that of its legal counsel that the counterclaim action is frivolous, vexatious and without merit and as such, management has made no provision for it in these financial statements. - 14 - CONDOR GOLD CORP. (A DEVELOPMENT STAGE COMPANY) Notes to Consolidated Financial Statements November 30, 2003 13. Notes Receivable During 2003, notes receivable for a share subscription program were set-up in the amount of $286,666 and were retired through the receipt of cash within the fiscal year. 14. Comparative Information Certain figures for the year ended November 30, 2002 have been reclassified to conform with the current year's financial statement presentation. - 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. CONDOR GOLD CORP. Date April 22, 2004 /s/ Alexander G. Stewart ------------------------------------- Alexander G. Stewart Chief Executive Officer Date April 22, 2004 /s/ L. Kirk Boyd ------------------------------------- L. Kirk Boyd Chief Financial Officer - 16 -

CONDOR GOLD CORP 6-K