UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1999
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( ) 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 0-25989
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PEPPERMILL CAPITAL CORPORATION
(Exact name of registrant as specified in charter)
Nevada 98-0186841
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 - 1177 W. Hastings Street
Vancouver, BC V6E 2K3
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(Address of principal executive offices) (Zip Code)
1-604-684-3301
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Registrant's telephone number, including area code
N/A
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(Former name, address, and fiscal year, 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), Yes [X] No [ ] and ( ) has been
subject to filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.
Class Outstanding as of October 26, 1999
----------------------------------- -----------------------------------
Common Stock, $0.001 per share 11,239,700
<PAGE>
INDEX
<TABLE>
<CAPTION>
<S> <C>
Page
PART 1. Number
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ITEM 1. Financial Statements (unaudited)............................................... 3
Balance Sheet as at September 30, 1999......................................... 4
Statement of Operations
For the three months ended September 30, 1999, for the
nine months ended September 30, 1999, for the three
months ended September 30, 1998, for the nine months
ended September 30, 1998 and for the period from
April 9, 1998 (Date of incorporation) to September 30, 1999................ 5
Statement of Changes in Shareholders' Equity
For the period from April 9, 1998 (Date of
Incorporation) to September 30, 1999.................................... 6
Statement of Cash Flows
For the three months ended September 30, 1999,
for the nine months ended September 30,
1999, for the three months ended September 30, 1998, for
the nine months ended September 30, 1998 and for the period
from April 9, 1998 (Date of incorporation) to
September 30, 1999........................................................ 7
Notes to the Financial Statements.................................. 8
ITEM 2. Plan of Operations............................................................. 11
PART 11 SIGNATURES ............................................................... 12
</TABLE>
2
<PAGE>
PART 1 FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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The accompanying balance sheet of Peppermill Capital Corporation. (an
exploration stage company) at September 30, 1999 and the statement of operations
and statement of cash flow for the three months ended September 30, 1999, for
the nine months ended September 30, 1999, for the three months ended September
30, 1998, for the nine months ended September 30, 1998 and for the period from
April 9, 1998 (date of incorporation) to September 30, 1999 and the statement of
stockholders' equity for the period from April 9, 1998 (date of incorporation)
to September 30, 1999 have been prepared by the Company's management and they do
not include all information and notes to the financial statements necessary for
a complete presentation of the financial position, results of operations, cash
flows, and stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the quarter ended September 30, 1999, are not necessarily
indicative of the results that can be expected for the year ending December 31,
1999.
3
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
BALANCE SHEET
September 30, 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
<S> <C> <C>
SEPTEMBER 30 DEC 31
1999 1998
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ASSETS
CURRENT ASSETS
Bank $ 1,570 $ 1,125
Note Receivable - 15,000
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1,570 16,125
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OTHER ASSETS
Mining claim - Note 3 2,129 2,129
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$ 3,699 $ 18,254
========= ======
LIABILITIES
Accounts payable - related parties $ 9,800 $ 6,800
Accounts payable and accrued liabilities 1,561 1,316
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11,361 8,116
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STOCKHOLDERS' EQUITY
Common stock
200,000,000 shares authorized, at $0.001 par
value, 11,239,700 shares issued and outstanding 11,240 11,240
Capital in excess of par value 21,930 21,930
Deficit accumulated during the development stage (40,832) (23,032)
--------- --------
Total Stockholders' Equity (7,662) 10,138
--------- --------
$ 3,699 $ 18,254
========== ========
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
4
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
STATEMENT OF OPERATIONS
For the three months ended September 30, 1999, for the nine months ended
September 30, 1999, for the three months ended September 30, 1998, for the nine
months ended September 30, 1998 and for period from April 9, 1998 (Date of
Inception) to September 30, 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE NINE FOR THE THREE FOR THE NINE FROM DATE OF
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED INCEPTION TO
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1999 1999 1998 1998 1999
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
SALES $ - $ - $ - $ - $ -
-------- -------- -------- -------- --------
GENERAL AND
ADMINISTRATIVE EXPENSES:
Accounting and audit 300 1,850 1,500 1,500 3,700
Assessment work - - - - 1,800
Bank charges and interest 2 3 - 30 61
Consulting - 1,000 4,000 4,000 10,000
Filing fees - Edgar system 283 1,351 - - 1,351
Geological report - - - 618 618
Incorporation costs written-off - - 640 640
Legal - - 2,500 2,500 2,500
Office expenses (27) 161 339 399 950
Salary - 12,000 - - 12,000
Transfer agent's fees - 1,435 522 1,808 4,212
Travel - - 3,000 3,000 3,000
------------ ------------ ----------- --------- -------
NET LOSS $ 558 $ 17,800 $11,861 $ 14,495 $ 40,832
============ ============ ========== ========= =========
NET LOSS PER
COMMON SHARE
Basic $0.00005 $ 0.002 $ 0.001 $ 0.002 $ 0.004
============ ============ ========== =========== ==========
AVERAGE OUTSTANDING
SHARES
Basic 11,239,700 11,239,700 11,165,939 6,755,314 9,786,427
============ ========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
5
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the period from April 9, 1998 (Date of Inception)
to September 30, 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
CAPITAL IN
COMMON STOCK EXCESS OF ACCUMULATED
SHARES AMOUNT PAR VALUE DEFICIT
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<S> <C> <C> <C> <C>
BALANCE APRIL 9, 1998 (date of inception) - $ - $ - $ -
Issuance of common shares for cash at
$0.001 - June 6, 1998 4,000,000 4,000 - -
Issuance of common shares for cash at
$0.001 - June 23, 1998 6,000,000 6,000 - -
Issuance of common shares for cash at
$.001 - June 25, 1998 1,150,000 1,150
Issuance of common shares for cash at
$0.10 - June 26, 1998 2,700 3 267 -
Issuance of common shares for cash at
$0.25 - September 17, 1998 87,000 87 21,663 -
Net operating loss for the period from
April 9, 1998 to September 30, 1999 - - - (40,832)
------------ ---------- ---------- ---------
BALANCE SEPTEMBER 30, 1999 11,239,700 $11,240 $ 21,930 $ (40,832)
============ ========== ========== =========
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
6
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
For the three months ended September 30, 1999, for the nine months ended
September 30, 1999, for the three months ended September 30, 1998, for the nine
months ended September 30, 1998 and for the period from April 9, 1998 (Date of
Inception) to September 30, 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE NINE FOR THE THREE FOR THE NINE FROM DATE OF
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED INCEPTION TO
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1999 1999 1998 1998 1999
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<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (558) $ (17,800) $ (11,861) $ (14,495) $ (40,832)
Adjustments to reconcile net loss
to net cash provided by operating
activities
Note receivable - 15,000 (15,000) (15,000) -
Accounts payable - related party 3,000 3,000 - - 9,800
Accounts payable (2,040) 245 - - 1,561
------- -------- --------- --------- ----------
Net Cash from Operations 402 445 (26,861) (29,495) (29,471)
--------- -------- --------- -------- ---------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Mineral claim - - - (2,129) (2,129)
--------- -------- --------- -------- ---------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of common
stock - - 21,750 33,170 33,170
---------- -------- --------- -------- ---------
Net Increase in Cash 402 445 (5,111) 1,546 1,570
Cash at Beginning of Period 1,168 1,125 6,657 - -
----------- ---------- ---------- ----------- ---------
CASH AT END OF PERIOD $ 1,570 $ 1,570 $ 1,546 $ 1,546 $ 1,570
=========== =========== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
7
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
(Unaudited - Prepared by Management)
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on April
9, 1998 with the authorized common shares of 200,000,000 shares at $0.001
par value.
Since its inception the company has completed two Regulation D offerings of
7,239,700 shares of its capital stock for cash.
The Company is in the exploration stage and was organized for the purpose
of engaging in the business of mineral development.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
The Company's year end is December 31. On December 31, 1998, the Company
had a net operating loss carry forward of $23,023. The income tax benefits
from the loss carry forward has been fully offset by a valuation reserve
because the use of the future tax benefit is doubtful since the Company has
no operations. The loss carry forward will expire in the year 2019.
Loss per Share
Loss per share amounts are computed based on the weighted average number of
shares actually outstanding using the treasury stock method in accordance
with FABS Statement No. 128.
8
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
(Unaudited - Prepared by Management)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a
maturity, at the time of purchase, of less than three months, to be cash
equivalents.
Foreign Currency Translation
The translations of the Company completed in Canadian dollars have been
translated to US dollars. Assets and liabilities are translated at the year
end exchange rates and the income and expenses at the average rates of
exchange prevailing during the period reported on.
Amortization of Capitalized Mining Claim Costs
The Company will use successful efforts method to amortize the capitalized
costs of its mining claims which provides for capitalizing the purchase
price of the project and the additional costs directly related to providing
the properties, and amortizing these amounts over the life of the mineral
deposit. All other costs are expensed as incurred. Unamortized capital
costs will be expensed if the property is proven to be of no value.
Financial Instruments
The carrying amounts of financial instruments, including cash, prepaid
expenses and deferred offering costs are considered by management to be
their standard fair values. These values are not necessarily indicative of
the amounts that the Company could realize in a current market exchange.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of the assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial statements.
3. MINING CLAIMS
On June 18, 1998 the Company acquired mineral claims known as "Star Claims"
consisting of 11 units located near the town of Merritt, British Columbia,
for $2,129, with expiration dates in 1999. The units cover 587 acres.
9
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
(Unaudited - Prepared by Management)
4. RELATED PARTY TRANSACTIONS
Related parties acquired 36% of the common shares issued for cash.
The officers and directors of the Company are involved in other business
activities and they may, in the future, become involved in additional
business ventures which also may require their attention. If specific
business opportunities become available, such persons may face a conflict
in selecting between the Company and their other business interests. The
Company has formulated no policy for the resolution of such conflicts.
5. GOING CONCERN
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed
a strategy, which it believes will accomplish this objective through
additional equity funding, and long term financing, which will enable the
Company to operate in the future.
Management recognizes that, if it is unable to raise additional capital,
the Company cannot operate in the future.
10
<PAGE>
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ITEM 2. PLAN OF OPERATIONS
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The Company's management has not yet determined if there are other properties
available to it which it can explore over the next year. In the meantime, the
company will continue to explore the Star claims located near the town of
Merritt, British Columbia. Since the spring of 1999 no work has been done on the
Star claims and it is unlikely that any work will be done before the spring of
the year 2000 due to weather conditions in the area.
Liquidity and Capital Resources
The Company will need additional working capital to finance its activities on
the Star claims. Management has not yet decided where these funds will be
available from and what means of financing to use. In the interim the Company
will require funds to maintain the Company. Funds will be required for audit,
accounting, filing fees and general working capital.
Results of Operations
The Company has had no operations during this reporting period.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PEPPERMILL CAPITAL CORPORATION
(Registrant)
October 27, 1999 /s/ "Michael Mitsiadis"
- ----------------- ------------------------------
Date Michael Mitsiadis -
President and Director
October 27, 1999 /s/ "Raymon Paquette"
- ---------------- --------------------------------
Date Raymon Paquette - Secretary Treasurer
and Director
12
