Advantego Corp - Quarter Report: 2012 June (Form 10-Q)

goldeneagle10q.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for quarter period ended

June 30, 2012

[ ]	Transition report pursuant to 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.

(Exact name of registrant as specified in its charter)

Colorado	84-1116515
(State of incorporation)	(IRS Employer Identification No.)

9653 South 700 East, Salt Lake City, UT 84070

(Address of principal executive offices) (Zip Code)

Golden Eagle's telephone number, including area code:

(801) 619-9320

____________________________________

Former Address if Changed Since Last Report

Indicate by check mark whether the registrant (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 registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.

[ X ] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer and “smaller reporting company” in rule 12b-2 of the Exchange Act.

Large accelerated filer |_| Accelerated filer |_|

Non-accelerated filer |_| Smaller reporting company |X|

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

|_| Yes |X| No

At July 18, 2012, there were 23,366,328 shares of Company common stock outstanding.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The unaudited Financial Statements for the three and six months ended June 30, 2012, are attached hereto and incorporated by reference herein. Please refer to pages F-1 through F-5 following the signature page.

Item 2. Management's discussion and analysis of financial condition and results of operations

Throughout this Quarterly Report on Form 10-Q Golden Eagle International, Inc. is referred to as “we”, “our”, “us”, the “Company” and “Golden Eagle.”

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Because we want to provide you with more meaningful and useful information, this Quarterly Report on Form 10-Q contains certain “forward-looking statements” (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended). These statements reflect our current expectations regarding our possible future results of operations, performance and achievements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, regulations of the Securities and Exchange Commission and common law.

Wherever possible, we have tried to identify these forward-looking statements by using words such as “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend,” and similar expressions. These statements reflect our current beliefs and are based on information currently available to us. Accordingly, these statements are subject to certain risks, uncertainties, and contingencies, including those set forth under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2011, which could cause our actual results, performance, or achievements to differ materially from those expressed in, or implied by, such statements. Readers are cautioned that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those expressed or implied in the forward-looking statements.

We are under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.

Overview; Plan of Operations

The following discussion should be read in conjunction with our financial statements and related notes appearing elsewhere in this Form 10-Q and our Annual Report on Form 10-K for our fiscal year ended December 31, 2011.

A. Assets and Operations

The Gold Bar Mill.

In 2004, we purchased the 3,500 to 4,500 ton-per-day (“tpd”) Gold Bar CIP gold mill (the “Gold Bar Mill” or the “Mill”) located 25 miles northwest of Eureka, Nevada. Initially, our plan was to disassemble the Gold Bar Mill and transport it to Bolivia to be reconstructed on our former A Zone project in eastern Bolivia. However, for various reasons we determined that the best course of action with regards to the Gold Bar Mill was to leave it in place and explore other options related to the Mill in Nevada. The Mill was not in operation when we acquired it, and it has not been in operation during our period of ownership. At the present time, the Gold Bar Mill is our only material capital asset. The Mill is currently listed on our balance sheet at a cost of $3,980,000. We continually evaluate this asset to determine if it requires impairment or an adjustment. Based on the valuation reports which we have received and the interest that has been shown by various parties for the Mill, we believe that the Mill has a value in excess of the book value on our balance sheet.

In the event we enter into a joint venture, refurbish, or operate the milling facility on our own, we are likely to require a significant amount of additional capital. To bring the Mill back into operation would require a significant commitment both in terms of time and financial resources as we would need to take actions such as applying for various permits and constructing a new tailings impoundment facility for disposal. Even if we are able to bring the Gold Bar Mill back into operation, larger mining companies providing similar services with greater financial resources in the area may affect our ability to attract toll refining partners or customers.

Because the Gold Bar Mill is our principal remaining capital asset shareholder approval may be required if we choose to sell or transfer the Gold Bar Mill or enter into any type of merger arrangement.

Although the Company is not currently involved in active business operations, because of the significant value of the Gold Bar Mill, the Company does not believe it is a shell company as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934 (the “Exchange Act”).

B. Bolivia

As part of the sale of our Bolivian operations and assets during 2010, we received a 3% net smelter royalty on all minerals produced from the properties which may be sold, up to $3 million. The net smelter royalty will be paid to us on a quarterly basis if and when mineral production is achieved from the mining concessions previously owned by the Bolivian subsidiary, and will likely be subject to compliance with Bolivian law regarding the expatriation of capital. Through June 30, 2012, we have not received any payment or accrual of any obligations under the net smelter return, and we have no expectation of receiving any payments in the foreseeable future.

C.	Cash and Marketable Securities

As of June 30, 2012 we held 1,112,405 shares of Yukon-Nevada Gold (“YNG”) common stock. The market price of YNG stock declined to $0.327 per share as of June 30, 2012 with a total value of $363,756.

We expect to sell the shares over time as market conditions permit and as necessary to allow us to meet our financial obligations. Although the YNG common stock we acquired as part of the YNG settlement constitutes a significant asset on our balance sheet at June 30, 2012, the Company does not intend to engage in, and does not believe it is engaged in the business of investing or reinvesting in, holding, or trading securities of other companies. Instead (as noted above) the Company is focused on executing upon business opportunities with respect to its primary asset – the Gold Bar Mill.

Liquidity and capital resources

Until the completion of the YNG settlement described above, our working capital deficit and lack of liquidity for at least the preceding five years limited our ability to fund our operations and fully pursue our business plan. The YNG settlement and the sale of our Bolivian assets resulted in our ability to repay our current obligations and created positive working capital. The following table sets forth our working capital position at June 30, 2012 as compared to December 31, 2011.


	June 30, 2012			December 31, 2011

Cash and cash equivalents	$	39,132		$	118,835
Marketable securities*		363,756			458,825
Prepaid expenses		1,100			1,100
Accounts receivable		725			6,744
Current Assets (Total)		404,713			585,504
Current Liabilities		(7,405	)		(129,978	)
Working Capital	$	397,308		$	455,526

* We held 1,567,500 YNG shares (valued at $0.242 per share) at December 31, 2011, and 1,112,405 YNG shares (valued at $0.327 per share) at June 30, 2012.

Our current liabilities as of June 30, 2012, totaled $7,405 compared to $129,978 as of December 31, 2011. Our working capital decreased at June 30, 2012, by $58,218 from December 31, 2011 to $397,308 from $455,526. The statement of cash flows indicates that this derived from a use of $276,646 in operating activities and was offset by $130,779 received from the sale of the YNG shares and $66,163 through the sale of our common shares for cash in a private placement.

Because we have no continuing active business operations, we have no revenues from operations and our on-going cash flow commitments are related primarily to our office lease, salaries, accounting and legal expenses associated with maintaining our status as a company reporting under the Exchange Act. Inasmuch as we have no revenues, we can expect our working capital and available cash and other liquid assets to continue to decrease as we pay our corporate obligations. We have no prospects at the current time of generating any revenues from operations. Although we expect to be able to use our cash on hand and the proceeds from potential sales of our marketable securities to be sufficient to satisfy our basic corporate needs through the remainder of fiscal 2012, such resources are not sufficient to allow us to engage in any significant operations at the Gold Bar Mill or elsewhere.

We expect to continue to focus our efforts on identifying and executing upon a strategic transaction with respect to the Gold Bar Mill. However, to date we have not been able to execute upon such a transaction or otherwise engage in any revenue producing activities with respect to the Gold Bar Mill.

Results of Operations

Three and Six Months Ended June 30, 2012

The following sets forth certain information regarding our results of operations for the three and six month period ended June 30, 2012, compared with the same period in 2011.

Revenue and Production Costs. We had no revenues from operations during the three and six month periods ended June 30, 2012 and the three and six month periods ended June 30, 2011.

General and administrative expenses. General and administrative expenses for the three and six month periods ended June 30, 2012 decreased by $56,855 to $152,824 and $113,461 to $325,792 during the respective 2012 periods from $209,679 and $439,253 respectively during the same 2011 periods. This decrease was primarily the result of decreased wages, legal expenses and additional cost cutting of general and administrative expenses. We expect these expenses to remain relatively flat or continue to decrease until if and when we increase our current business activity.

Interest Expense. Interest expense for the three and six month periods ended June 30, 2012, decreased by $9,279 to 869 and $46,088 to $2,165 for the respective 2012 periods, from $10,139 and $48,253 respectively during the same 2011 periods. The decrease was primarily the result of the payoff of all remaining debt of the company with the proceeds from our legal settlement with YNG and through the issuance of our restricted common stock. We anticipate that interest expense will continue to decline or remain low as we have retired our remaining debt.

Loss on debt extinguishment. During the three month period ended June 30, 2012 we recorded a loss on debt extinguishment of $65,207. We had no loss during the three or six month period 2011. This loss during the three month period ended June 30, 2012 resulted from the conversion of our last remaining debt of $83,837, which included principal of $65,000 and accrued interest of $18,837.

Since we converted the note at an approximate 50% discount to the market price on the date of conversion, we recognized a loss on debt extinguishment which represents the difference between the reacquisition price as determined by the estimated fair value of the common stock and the net carrying amount of the notes and accrued interest.

Loss on sale of securities. During the six months ended June30, 2012 we sold a total of 455,095 shares of YNG common stock at prices ranging from $.4236 per share to $.265 per share. Additionally, during the three month period ended June 30, 2012 we distributed 87,500 shares of YNG for previous obligations and for services at prices ranging from $.576 to $.278 per share. The sale and distribution of shares resulted in a cumulative realized loss of $92,012 through June 30, 2012. We expect to continue to liquidate these securities as our liquidity needs require.

Off balance sheet arrangements

None

Critical Accounting Policies

As of June 30, 2012 we did not have any accounting policies or practices that require significant judgment or estimation by our management.

Item 4. Controls and procedures

Our management, with the participation of our principal executive officer and our principal financial officer has evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of June 30, 2012 (the end of the period covered by this report). Based on that evaluation, our principal executive officer and our principal financial officer have concluded that, because of the material weakness identified in our disclosure controls described in our annual report for the year ended December 31, 2011 on Form 10-K along with no material changes in controls, our disclosure controls and procedures were not effective as of June 30, 2012. Due to a lack of financial resources, we are not able to, and do not intend to, immediately take any action to remediate the material weaknesses identified.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal proceedings

We are not currently a party to any on-going litigation that is likely to have a material impact on our financial position, results of operations, or cash flows.

Item 1A Risk Factors.

There have been no material changes to the information included in risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2011.

Item 2. Unregistered sales of equity securities and use of proceeds.

We issued the following shares of our common stock during the quarter ended June 30, 2012 that have not been previously disclosed.

On June 5, 2012, we issued 407,950 shares of our restricted common stock to Tracy A. Madsen our Chief Financial Officer as bonus valued at $14,686. The issuance was completed at a price of $0.036 per share which of the previous 10 day average market closing price for our shares. We relied on the exemptions from registration provided in Sections 3(a)(9), 4(2) and 4(5) of the Securities Act for this issuance because the issuance was an exchange with an existing security holder, did not involve a public offering and was made without general solicitation or advertising. The investor previously represented to us that he is an “accredited investor”, and that he acquired the restricted common stock for investment purposes only and not with a view to, or for resale in connection with, any distribution thereof.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Reserved

Item 5. Other Information

Subsequent events

On July 27, 2012, our Board of Directors terminated Terry C. Turner, without cause, and appointed Tracy A. Madsen as the Company’s President and Chief Executive Officer. Mr. Turner will remain as Chairman of the Board of Directors. Mr. Madsen has served as the Company’s Chief Financial Officer, Secretary and Treasurer since February 13, 2003 and as the Vice President US Administration since November 12, 2003. Mr. Madsen will remain in those positions as well as act as the Company’s President and CEO.

On July 27, 2012, in accordance with the termination of Terry C. Turner as the Company’s President and Chief Executive Officer, the Company executed a Promissory Note and Security Agreement in the amount of $350,000 in favor of Mr. Turner. Mr. Turner agreed to accept the Promissory Note in lieu of payment of severance due to him within 60 days after his termination. The Promissory Note matures on July 27, 2013 and is subject to acceleration upon the occurrence of certain events listed therein. The Promissory Note is secured by the Company’s Gold Bar Mill property located in Eureka, Nevada.

On July 27, 2012, upon appointment of Tracy A. Madsen, the Board and Mr. Madsen entered into an amendment to Mr. Madsen’s Executive Employment Agreement, dated October 7, 2009, revising the positions held by Mr. Madsen, increasing his salary and extending the term.

On July 27, 2012, our Board of Directors accepted the resignations of Harlan M. DeLozier II and Alvero Riveros Tejada as directors of the Company. In their resignations, neither Mr. DeLozier or Riveros expressed any disagreement with management or disclosure issues.

On July 27, 2012, our Board of Directors appointed Mr. Madsen and Mark A. Bogani as directors of the Company. Mr. Bogani is the Manager of Gulf Coast Capital, LLC. Gulf Coast has recently increased its shareholdings of the Company to 42.75% of the outstanding stock of the Company.

Item 6. Exhibits:

Exhibits required by Item 601 of Regulation S-K:

31. Certifications pursuant to Rule 13a-14(a)

31.1 Certification of the Chief Executive Officer and Chief Financial Officer

32. Certifications pursuant to 18 U.S.C. §1350.

32.1 Certification of the Chief Executive Officer and Chief Financial Officer

101 Interactive Data Files required by Rule 405 of Regulation ST, and Item 601(101) of Regulation SK

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Golden Eagle has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GOLDEN EAGLE INTERNATIONAL, INC.
	(Golden Eagle)

July 31, 2012	/s/ Tracy A. Madsen
	Tracy A. Madsen
	President, Principal Executive Officer and Principal Accounting Officer

Golden Eagle International, Inc.
Consolidated Balance Sheets
	(Unaudited)
	June 30,			December 31,
	2012			2011

ASSETS

CURRENT ASSETS
Cash & cash equivalents	$	39,132		$	118,835
Marketable securities		363,756			458,825
Prepaid expenses		1,100			1,100
Accounts receivable		725			6,744
Total current assets		404,713			585,504

PROPERTY AND EQUIPMENT
Plant and mill - idle		3,980,000			3,980,000
Office equipment, net		-			51
Total property and equipment		3,980,000			3,980,051

Total Assets	$	4,384,713		$	4,565,555

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	2,341		$	43,244
Notes payable		-			15,000
Debentures (net)		-			50,000
Accrued interest payable		5,063			21,734
Total current liabilities		7,405			129,978

Total Liabilities		7,405			129,978

Commitments and contingencies		-			-

STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share; 10,000,000 shares authorized,
80,000 and 80,000 issued and outstanding		800			800
Common stock, par value $.0001 per share; 2,000,000,000 authorized shares;
23,366,328 and 14,625,044 issued and outstanding shares, respectively		2,336			1,462
Additional paid-in capital		64,596,082			64,337,063
Accumulated (deficit)		(59,944,921	)		(59,459,693	)
Accumulated other comprehensive income (loss)		(276,989	)		(444,055	)
Total stockholders' equity		4,377,308			4,435,577
Total Liabilities and Stockholder's Equity	$	4,384,713		$	4,565,555

F-1

Golden Eagle International, Inc.
Consolidated Statements of Operations and Other Comprehensive Income (Unaudited)
For the Three and Six Months Ended
		Three months ended						Six months ended
		June 30,			June 30,			June 30,			June 30,
		2012			2011			2012			2011


REVENUES		$	-		$	-		$	-		$	-

OPERATING EXPENSES
	Exploration and development		-			5,906			-			9,544
	General and administration		152,824			209,679			325,792			439,253
	Depreciation and depletion		-			51			51			102

	Total operating expenses		152,824			215,636			325,843			448,899

OPERATING (LOSS)			(152,824	)		(215,636	)		(325,843	)		(448,899	)

OTHER INCOME (EXPENSE)
	Interest expense		(869	)		(10,139	)		(2,165	)		(48,253	)
	Accretion of note discount		-			-			-			(6,458	)
	Loss on debt extinguishment		(65,207	)		-			(65,207	)		-
	Gain (Loss) on sale of securities		(36,933	)		(12,016	)		(92,012	)		(12,016	)

	Total other (expense)		(103,009	)		(22,155	)		(159,384	)		(66,727	)

	Loss before income taxes		(255,833	)		(237,791	)		(485,228	)		(515,626	)
	Income taxes		-			-			-			-
Net Loss			(255,833	)		(237,791	)		(485,228	)		(515,626	)


Basic and diluted gain (loss) per share on continuing operations		$	(0.02	)	$	(0.02	)	$	(0.03	)	$	(0.05	)
Weighted average shares outstanding - basic and diluted			17,026,496			9,723,979			15,185,986			10,456,464

OTHER COMPREHENSIVE INCOME
	Unrealized gain (loss) on securities		35,366			(479,560	)		167,066			(857,560	)
NET COMPREHENSIVE INCOME (LOSS)		$	(220,467	)	$	(717,351	)	$	(318,162	)	$	(1,373,186	)

F-2

Golden Eagle International, Inc.
Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended
	June 30,			June 30,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(485,228	)	$	(515,626	)
Adjustments to reconcile net income (loss)
to net cash (used) by operating activities:
Officer compensation contributed		30,000			30,000
Stock issued for services		25,000			4,200
Loss on debt extinguishment		65,207			-
Depreciation		51			102
Accretion of note discount		-			6,458
Loss on sale of marketable securities		92,012			12,016
Changes in operating assets and liabilities
Decrease (increase) in accounts receivable		6,019			(9,514	)
Increase (decrease) in deferred wages		-			(51,782	)
Increase (decrease) in accounts payable		(11,873	)		(11,189	)
Increase (decrease) in accrued interest		2,166			(434,523	)

Net cash flows (used by) operating activities		(276,646	)		(969,858	)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of marketable securities		130,780			68,685
Net cash flows provided by investing activities		130,780			68,685

CASH FLOWS FROM FINANCING ACTIVITIES
Stock issued for cash		66,163
Repayments of notes payable		-			(386,410	)

Net cash flows (used in) provided by financing activities		66,163			(386,410	)

NET CHANGE IN CASH		(79,703	)		(1,287,583	)

CASH - BEGINNING OF PERIOD		118,835			1,670,949
CASH - END OF PERIOD	$	39,132		$	383,366

SUPPLEMENTAL CASH FLOW INFORMATION

Preferred and common stock issued for debt		83,837			80,368

Cash paid for
Interest	$	-		$	464,733
Income taxes		-			-

F-3

Golden Eagle International, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note A – Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company are presented in accordance with the requirements for Form 10-Q and Article 8-03 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP’) have been condensed or omitted pursuant to such SEC rules and regulations. The accompanying financial statements are unaudited. However, in our opinion, the accompanying financial statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for fair presentation. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2011.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying footnotes. Our actual results could differ materially from these estimates. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Report and any documents incorporated herein by reference, as well as the Annual Report on Form 10-K for the year ended December 31, 2011.

Note B - Organization and Nature of Business

The Gold Bar Mill (“Mill”), our only remaining significant non-current asset, is currently idle and has been since we acquired it in 2004. We continue to monitor the Mill for impairment on a periodic basis or whenever circumstances arise that indicate the carrying amount of the Mill may not be recoverable. An impairment loss is recognized when the carrying value of the Mill exceeds the estimated undiscounted future cash flows. As of and through June 30, 2012 we have not recognized any impairment on the Mill.

Note C – Notes Payable

On May 1, 2012 we were notified by Gulf Coast Capital, LLC that they had purchased and caused to be assigned a $50,000 convertible debenture from The John Saunders Trust that originally purchased the same from us on July 7, 2008, plus $15,572 in interest. Additionally, we were notified that Gulf Coast had purchased and caused to be assigned a note payable to John Saunders in the amount $15,000 plus accrued interest in the amount of $3,265. On May 21, 2012 we received a demand letter requiring full payment by May 31, 2012 of the $50,000 debenture and the $15,000 note, plus accrued interest, now owned by Gulf Coast.

By means of a subscription agreement between Gulf Coast and us dated May 31, 2012, we have agreed to retire the last remaining debt of the company by exchanging this debt for 4,657,626 shares of our restricted common stock at a negotiated a price of $.018 per share, or 50% of the average closing price for the last 10-day period. Following the conversion of this debt into our restricted common stock we have no other debt outstanding with the exception of $5,063 in accrued interest.

Since we converted the note at an approximate 50% discount to the market price on the date of conversion, we recognized a loss on debt extinguishment totaling $65,207 which represents the difference between the reacquisition price as determined by the estimated fair value of the common stock and the net carrying amount of the notes and accrued interest.

F-4

Golden Eagle International, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

During the three and six months ended June 30, 2012 we recognized $869 and $2,165 respectively of interest expense.

Note D – Recent Accounting Pronouncements

There are no recently issued accounting pronouncements that are expected to have a material impact on our financial position, results of operations, or cash flows.

Note E – Marketable Securities

As part of our settlement with YNG, we received 2,000,000 restricted common shares of YNG with an initial fair value of $1,152,000 (utilizing the sale price quoted on the Toronto Stock Exchange of $.576 a Level 1 input). We have classified the shares as available for sale.

Through the six months ended June 30, 2012 we sold a total of 455,095 YNG shares for total proceeds of $130,780. Additionally, we distributed 43,400 shares of YNG stock during the three months ended June 30, 2012 to Blane Wilson, a former officer of the Company, for final payment of commissions payable to him related to our Jerritt Canyon operations. Additionally, we transferred 37,100 shares of YNG stock to Tracy A. Madsen, our Chief Financial Officer as part of his annual bonus. These shares were valued at $10,314.

As of June 30, 2012, we had 1,112,405 shares available for sale. Subsequent adjustments to the fair value of the shares are reflected in the carrying amount as of the balance sheet date, and fluctuations in the fair value affect other comprehensive income. As of June 30, 2012, the market price for YNG shares was $.327.

Note F – Subsequent Events

F-5

Golden Eagle International, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

F-6