EX-99.2 3 ex99_2.htm EXHIBIT 99.2 Exhibit 99.2
CORAL GOLD RESOURCES LTD.
Consolidated Balance Sheets
(In Canadian Dollars)
(Prepared by Management)
 
 
  
October 31, 2006
  
January 31, 2006
  
   
(Unaudited)
  
(Audited)
  
ASSETS
              
               
Current
              
Cash and cash equivalents
  
$
3,282,620
  
$
663,071
  
Advances receivable (note 9(b))
    
128,676
   
62,358
 
Interest receivable
    
14,845
   
-
 
Prepaid expenses
    
59,522
   
69,856
 
     
3,485,663
   
795,285
 
               
Investment securities 
    
147,408
   
147,408
 
Loan receivable (note 9(e))
    
83,000
   
83,000
 
Equipment
   
3,091
   
3,634
 
Mineral properties (note 6)
    
11,362,659
   
10,095,609
 
Reclamation deposit (note 7)
    
321,694
   
260,976
 
               
 
  
$
15,403,515
  
$
11,385,912
  
               
LIABILITIES
              
               
Current
              
Accounts payable and accrued liabilities (note 9(d))
  
$
530,859
  
$
696,810
  
Advances payable (note 9(c))
    
34,328
   
61,956
 
 
    
565,187
   
758,766
 
               
Site restoration obligation
   
16,000
   
16,000
 
               
Future income tax liability
   
1,448,662
   
1,448,662
 
               
Non-controlling interest
    
10,317
   
10,320
 
               
SHAREHOLDERS' EQUITY
              
               
Subscriptions received in advance
   
-
   
60,000
 
Share capital (note 8)
    
36,590,191
   
31,560,337
 
Contributed surplus
   
2,162,510
   
1,428,173
 
Deficit
    
(25,389,352
)
  
(23,896,346
)
 
    
13,363,349
   
9,152,164
 
               
 
  
$
15,403,515
  
$
11,385,912
  

NOTE 1 - NATURE OF BUSINESS AND GOING CONCERN
NOTE 10 - COMMITMENTS

Approved by the Directors:

“Louis Wolfin”
  
Director
  
“Gary Robertson”
  
Director


 
 
 
 
 
CORAL GOLD RESOURCES LTD.
Consolidated Interim Statements of Operations and Deficit
(In Canadian Dollars)
(Unaudited - Prepared by Management)
 
   
Three Months ended
  
Nine Months ended
  
   
October 31,
  
October 31,
  
 
  
2006
  
2005
  
2006
  
2005
  
General and administrative expenses
                          
Amortization
  
$
181
  
$
205
  
$
543
  
$
648
  
Consulting fees
    
7,875
   
7,656
   
100,175
   
27,676
 
Directors fees
    
-
   
-
   
50,000
   
-
 
Investor relations and shareholder information
    
27,229
   
16,467
   
96,301
   
55,893
 
Legal and accounting
    
80,295
   
45,253
   
305,763
   
96,865
 
Listing and filing fees
    
-
   
6,124
   
31,411
   
13,705
 
Management fees
    
35,140
   
22,500
   
95,615
   
67,500
 
Office and miscellaneous
    
25,272
   
11,482
   
65,499
   
46,403
 
Salaries and benefits
    
21,386
   
21,649
   
58,589
   
71,384
 
Stock-based compensation
    
734,337
   
-
   
734,337
   
36,400
 
Transfer agent fees
    
1,855
   
1,621
   
12,399
   
6,511
 
Travel
    
9,361
   
9,343
   
48,004
   
48,758
 
                           
     
(942,931
)
  
(142,300
)
  
(1,598,636
)
  
(471,743
)
                           
Other items
                          
Interest income
    
35,905
   
3,071
   
106,873
   
8,968
 
Recovery of bad debt
    
-
   
-
   
3,464
   
-
 
Foreign exchange gain (loss)
    
703
   
(29,024
)
  
(4,710
)
  
(35,764
)
                           
Loss for the period before non-controlling interest
  
$
(906,323
)
$
(168,253
)
$
(1,493,009
)
$
(498,539
)
                           
Non-controlling interest gain
    
-
   
-
   
3
   
-
 
                           
Loss for the period
    
(906,323
)
  
(168,253
)
  
(1,493,006
)
  
(498,539
)
                           
Deficit, beginning of period
    
(24,483,029
)
  
(21,159,158
)
  
(23,896,346
)
  
(20,828,872
)
                           
Deficit, end of period
  
$
(25,389,352
)
$
(21,327,411
)
$
(25,389,352
)
$
(21,327,411
)
                           
Loss per share
  
$
(0.13
)
$
(0.03
)
$
(0.23
)
$
(0.11
)
                           
Weighted average number of common shares outstanding
    
6,766,860
   
4,827,387
   
6,544,198
   
4,710,232
 

 

 
 
 
 
 
CORAL GOLD RESOURCES LTD.
Consolidated Interim Statements of Operations and Deficit
(In Canadian Dollars)
(Unaudited - Prepared by Management)
 
   
Three Months ended
  
Nine Months ended
  
   
October 31,
  
October 31,
  
 
  
2006
  
2005
  
2006
  
2005
  
Cash flows from (used in) operating activities
                  
 
                          
Loss for the year
  
$
(906,323
)
$
(168,253
)
$
(1,493,006
)
$
(498,539
)
Adjustments for items not involving cash:
                  
- amortization
    
181
   
205
   
543
   
648
 
- stock based compensation
    
734,337
   
-
   
734,337
   
36,400
 
- non-controlling interest
    
-
   
-
   
(3
)
  
-
 
                   
     
(171,805
)
  
(168,048
)
  
(758,129
)
  
(461,491
)
                           
Change in non-cash working capital:
                  
- advances receivable
    
(56,822
)
  
(13,979
)
  
(66,318
)
  
(9,601
)
- interest receivable
    
(2,260
)
  
-
   
(14,845
)
  
-
 
- prepaid expenses
    
21,895
   
12,021
   
10,334
   
(3,069
)
- share subscription receivable
    
-
   
-
   
-
   
11,945
 
- accounts payable and accrued liabilities
    
139,957
   
(95,862
)
  
(165,951
)
  
(44,642
)
- advances payable
    
(11,709
)
  
17,166
   
(27,628
)
  
10,861
 
                           
 
    
(80,744
)
  
(248,702
)
  
(1,022,537
)
  
(495,997
)
                           
Cash flows from (used in) investing activities
                  
                           
Mineral properties acquisition and exploration expenditures incurred
    
(729,674
)
  
(257,582
)
  
(1,267,050
)
  
(543,393
)
Loan receivable
    
-
   
-
   
-
   
(33,000
)
Reclamation deposit amounts
    
(58,512
)
  
237,777
   
(60,718
)
  
243,092
 
                           
 
    
(788,186
)
  
(19,805
)
  
(1,327,768
)
  
(333,301
)
                           
Cash flows from financing activities
                  
Issuance of shares for cash, net
    
176,700
   
-
   
4,969,854
   
900
 
                           
 
    
176,700
   
-
   
4,969,854
   
900
 
                           
Net increase (decrease) in cash and cash equivalents
    
(692,230
)
  
(268,507
)
  
2,619,549
   
(828,398
)
                           
Cash and cash equivalents, beginning of period
    
3,974,850
   
912,255
   
663,071
   
1,472,146
 
                           
Cash and cash equivalents, end of period
  
$
3,282,620
  
$
643,748
  
$
3,282,620
  
$
643,748
  

 

 
 
 
 
 
CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 31, 2006
(In Canadian Dollars)
(Unaudited - Prepared by Management)
1.    Nature of Business and Going Concern

These consolidated financial statements have been prepared on a going-concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business in the foreseeable future. The Company is in the process of exploring its mineral interests and has not yet determined whether these properties contain ore reserves that are economically recoverable. The continued operations of the Company and the recoverability of mineral property costs is dependent upon the discovery of economically recoverable mineral reserves, the ability of the Company to obtain necessary financing to complete the exploration and upon future profitable production. Management’s plan in this regard is to raise equity financing as required.


2.    Prior Period Adjustment

During the year ended January 31, 2006 the Company recorded a prior period adjustment to account for an unrecorded future income tax liability arising from prior years. The effect of the restatement is that future income tax liability and deficit increased by $318,000 at January 31, 2005. The unrecorded future income tax liability pertained to periods prior to February 1, 2005, and as a result, the deficit, beginning of the period as disclosed in the consolidated statements of operations and deficit for the three and nine month periods ended October 31, 2005 also increased by $318,000. The unrecorded future income tax liability did not change the Company’s loss for either of the three or nine month periods ended October 31, 2005.


3.    Basis of Presentation

These unaudited interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) on a basis consistent with that followed in the most recent audited annual consolidated financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with Canadian GAAP have been condensed or omitted and therefore these unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the fiscal year ended January 31, 2006. These interim financial statements have not been reviewed by an auditor.

In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation of these unaudited interim consolidated financial statements have been included and all such adjustments are of a normal recurring nature. Operating results for the three and nine month periods ended October 31, 2006 are not necessarily indicative of the results that can be expected for the full fiscal year ending January 31, 2007.


 
 
 
 
 
CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 31, 2006
(In Canadian Dollars)
(Unaudited - Prepared by Management)

4.    Basis of Consolidation 

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Coral Resources, Inc. and Coral Energy Corporation of California and its 98.49% owned subsidiary Marcus Corporation. Significant inter-company accounts and transactions have been eliminated.


5.    Comparative Figures 

Certain of the comparative figures for 2005 have been reclassified, where applicable, to conform to the presentation adopted for the current year.


6.    Mineral Properties 

The following is a summary of mineral property expenditures for the nine months ended October 31, 2006:

Balance, beginning of period
        
$
10,095,609
  
               
Robertson Property
              
Assays
  
$
76,482
        
Consulting
    
286,982
       
Drilling
    
698,561
       
Field supplies and other
    
5,144
       
Lease payments
    
91,659
       
Reclamation
    
15,108
       
Taxes, licenses and permits
    
92,227
        
Water analysis
    
887
       
Total expenditures for Robertson Property
          
1,267,050
 
               
Balance, end of period
        
$
11,362,659
  


7.    Reclamation Deposit 

Due to the increase in exploration activities during the nine month period ending October 31, 2006, the Company was required by the State of Nevada Bureau of Land Management to increase its reclamation deposit from $260,976 (US$228,205) to $321,694 (US$282,268).

 
 
 
 
 
CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 31, 2006
(In Canadian Dollars)
(Unaudited - Prepared by Management)

8.    Share Capital

(a)   Authorized Unlimited common shares without par value

(b)   
Issued

   
2006
  
2005
  
   
Shares
  
Amount
  
Shares
  
Amount
  
Balance, January 31,
    
5,106,266
  
$
31,560,337
    
4,648,905
  
$
30,754,678
  
                           
Private placements
    
1,500,000
    
4,500,000
    
-
    
-
  
Exercise of warrants
    
58,212
    
160,064
    
-
    
-
  
Exercise of stock options
    
14,500
    
28,350
    
-
    
-
  
Warrants returned to
treasury
    
(2,000
)
  
(11,000
)
  
-
    
-
  
Share issuance costs
    
-
    
(17,009
)
  
-
    
-
  
                           
Balance, April 30,
    
6,676,978
    
36,220,742
    
4,648,905
    
30,754,678
  
                           
Exercise of warrants
    
67,232
    
173,624
    
-
    
-
  
Exercise of stock options
    
11,250
    
19,125
    
7,000
    
11,900
  
Cancelled shares
    
-
    
-
    
(2,500
)
  
(11,000
)
                           
Balance, July 31,
    
6,755,460
    
36,413,491
    
4,653,405
    
30,755,578
  
                           
Exercise of warrants
    
57,000
    
176,700
    
-
    
-
  
Share exchange (Marcus)
    
-
    
-
    
318,014
    
502,462
  
Share exchange (Marcus)
    
-
    
-
    
29,950
    
47,323
  
                           
Balance, October 31,
    
6,812,460
  
$
36,590,191
    
5,001,369
  
$
31,305,363
  


 
 
 
 
 
CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 31, 2006
(In Canadian Dollars)
(Unaudited - Prepared by Management)
8.    Share Capital (continued)

(c)    
Share Purchase Warrants

A summary of share purchase warrants transactions for the nine month period ended October 31, 2006 is as follows:

   
Number of Underlying Shares
  
Balance, January 31, 2006
    
1,115,698
  
Exercised
    
(58,212
)
Returned to treasury
    
2,000
  
Expired
    
(252,720
)
         
Balance, April 30, 2006
    
806,766
  
Exercised
    
(67,232
)
         
Balance, July 31, 2006
    
739,534
  
Exercised
    
(57,000
)
Expired
    
(276,900
)
         
Balance, October 31, 2006
    
405,634
  

As at October 31, 2006, the following share purchase warrants were outstanding:

Number of Underlying Shares
Exercise Price
Expiry Date
192,500
$3.60
November 17, 2006
100,000
$3.90
December 19, 2006
113,134
$2.00
September 15, 2007
 
    
405,634
    
     


 
(d)
Stock Options

During the three month period ended October 31, 2006, the Company granted 280,000 stock options to directors, officers, employees and consultants of the Company at an exercise price of $3.92 per share and exercisable on or before September 5, 2011. 260,000 stock options vested immediately and expire over five years. 20,000 options will be vested over a period of one year from the grant date. The Company recorded a total of $734,337 for stock based compensation expense in the period. The Company will record a further $47,263 for stock based compensation expense over the course of a one year vesting period.



 
 
 
 
 
CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 31, 2006
(In Canadian Dollars)
(Unaudited - Prepared by Management)
8.    Share Capital (continued)

 
(d)          
Stock Options (continued)

A summary of the stock options activity for the nine month period ended October 31, 2006 is as follows:

   
Number
of Options
  
Weighted Average Exercise Price
  
Balance, January 31, 2006
    
697,900
  
$
2.67
  
Exercised
    
(14,500
)
$
1.96
  
               
Balance, April 30, 2006
    
683,400
  
$
2.68
  
Exercised
    
(11,250
)
$
1.70
  
               
Balance, July 31, 2006
    
672,150
  
$
2.70
  
Granted
    
280,000
  
$
3.92
  
Cancelled
    
(152,500
)
$
3.55
  
               
Balance, October 31, 2006
    
799,650
  
$
2.96
  


A summary of stock options outstanding and exercisable at the nine month period ended October 31, 2006 is as follows:

Exercise Price
Number Outstanding
Weighted Average
Remaining Contractual
Life (yr)
Weighted Average
Exercise Price
$1.70
309,150
3.12
$1.70
$3.55
210,500
4.12
$3.55
$3.92
280,000
4.85
$3.92


The fair value of each option granted in the three month period ended October 31, 2006 has bee estimated using the Black-Scholes option pricing model with the following assumptions: risk-interest rate of 4.0%, dividend yield of 0%, volatility factor of 89.18% and expected life of 5 years.


 
 
 
 
 
CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 31, 2006
(In Canadian Dollars)
(Unaudited - Prepared by Management)
9.    Related Party Transactions

Related party transactions not disclosed elsewhere in these statements are as follows:

a)    
During the three and nine month periods ended October 31, 2006, the Company paid, or made provision for the future payment, of the following amounts to related parties:

i)    
$12,500 for the three months ended and $57,500 for the nine months ended October 31, 2006 (three months ended October 31, 2005 - $22,500; nine months ended October 31, 2005 - $67,500) to a private company controlled by an officer and former director for management fees;

ii)    
$12,500 for the three months ended and $12,500 for the nine months ended October 31, 2006 (three months ended October 31, 2005 - $nil; nine months ended October 31, 2005 - $nil) to a private company controlled by an officer and former director for management fees;

iii)    
$7,500 for the three months ended and $22,500 for the nine months ended October 31, 2006 (three months ended October 31, 2005 - $7,500; nine months ended October 31, 2005 - $22,500) in consulting fees to a private company owned by a Director;

iv)    
$9,800 for the three months ended and $31,800 for the nine months ended October 31, 2006 (three months ended October 31, 2005 - $5,200; nine months ended October 31, 2005 - $12,800) in geological consulting fees to a private company owned by a Director; and

v)    
$Nil for the three months ended and $50,000 for the nine months ended October 31, 2006 (three months ended October 31, 2005 - $nil; nine months ended October 31, 2005 - $nil) in directors fees to directors of the Company.

b)    
Included in advances receivable are amounts due from related parties, as well as third party receivables. These amounts due from related parties include $28,003 (January 31, 2006 - $28,003) due from a joint venture with common management and common directors; $1,404 (January 31, 2006 - $7,850) due from a company controlled by a Director; and $18,825 (October 31, 2006: $91,568 less an allowance for bad debt of $72,743; January 31, 2006: $89,992 less an allowance for bad debt of $76,868) with two public companies with common management and common directors.

c)    
Advances payable include $17,000 (January 31, 2006 - $31,620) due to Directors in regards to past directors’ fees; $7,848 (January 31, 2006 - $26,922) due to a private company with common management in regards to the cost sharing agreement for overhead expenses; $7,975 (January 31, 2006 - $nil) to an officer of the Company in regards to management fees and $1,505 (January 31, 2006 - $3,414) due to a private company controlled by a Director of the Company.

d)    
Bonuses payable to a director of the Company of $525,000 were included in accounts payable and accrued liabilities as at January 31, 2006. $300,000 of that amount has been paid to the director in the nine month period ended October 31, 2006. The balance still owing and included as part of accounts payable and accrued liabilities as of October 31, 2006 is $225,000.

 
 
 
 
 
CORAL GOLD RESOURCES LTD.
Notes to Consolidated Interim Financial Statements
October 31, 2006
(In Canadian Dollars)
(Unaudited - Prepared by Management)

9.     Related Party Transactions (continued)

e)    
The loan receivable of $83,000 (January 31, 2006 - $83,000) is due from a subsidiary of a related private company with common management that provides drilling services. The amount due is non-interest bearing, unsecured and due on demand.

f)    
An allowance in the amount of $209,840 (January 31, 2006 - $209,840) has been accrued in respect of advances made to a private company with common management.

These transactions are in the normal course of operations and are measured at the exchange amount, which is the consideration established and agreed to by the related parties, unless otherwise noted.


10.    Commitments

The Company entered into a cost-sharing agreement during 2005 to reimburse a related party for a variable percentage of its overhead expenses, to reimburse 100% of its out-of-pocket expenses incurred on behalf of the company, and to pay a percentage fee based on the total overhead and corporate expenses referred to above. The agreement may be terminated with one-month notice by either party. During the three and nine month periods ended October 31, 2006 a total of $37,083 and $95,364 (three months ended October 31, 2005 - $35,386; nine months ended October 31, 2005 - $127,392) respectively, were charged to operations in relation to the cost sharing agreement.

The Company entered into a 12 month Investor Relations Agreement with Investor Relations Group Inc., formerly called Investors Relations Services Group John Mullen & Partners (“IRS”), to provide investor relations services in Europe. In consideration for the services rendered, the Company has agreed to pay IRS fees totaling $24,000 plus expenses. 

The Company entered into a 3 month Investor Relations Agreement on August 30, 2006 with Agoracom Investor Relations Corp. (“Agoracom”), to provide online marketing services. In consideration for the services rendered, the Company has agreed to pay Agoracom fees totaling $9,000 and grant Agoracom the option to purchase 20,000 common shares at a price of $3.92 per share.


11.    Subsequent Events

Subsequent to October 31, 2006 the Company has had 8,750 share purchase warrants exercised for total proceeds of $17,500 and 11,150 stock options exercised for total proceeds of $18,955.