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 June 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 March 1, 1998 to June 30, 1998
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Commission File number 0-25989
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PEPPERMILL CAPITAL CORPORATION
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(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, B.C. Canada 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 June 30, 1999
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Common Stock, $0.001 per share 11,239,700
<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE
PART 1. NUMBER
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<S> <C>
ITEM 1. Financial Statements (unaudited)................................ ............. 3
Balance Sheet as at June 30, 1999.................................... 4
Statement of Operations
For the three months ended June 30, 1999, for the
Six months ended June 30, 1999, for the
three Months ended June 30, 1998, for the
six months Ended June 30, 1998 and for the
period from April 9, 1998 (Date of
incorporation) to June 30, 1999........................... 5
Statement of Changes in Shareholders' Equity
For the period from April 9, 1998 (Date of
Incorporation) to June 30, 1999.......................... 6
Statement of Cash Flows
For the three months ended June 30, 1999, for
the six Months ended June 30, 1999, for the
three months Ended June 30, 1998, for the six
months ended June 30, 1998 and for the period
from April 9, 1998 (Date of incorporation) to
June 30, 1999............................................. 7
Notes to the Financial Statements.................................. 8
ITEM 2. Plan of Operations.......................................................... 11
PART 11 Signatures.................................................................. 12
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2
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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 June 30, 1999 and the statement of operations and
statement of cash flow for the three months ended June 30, 1999, for the six
months ended June 30, 1999, for the three months ended June 30, 1998, for the
six months ended June 30, 1998 and for the period from April 9, 1998 (date of
incorporation) to June 30, 1999 and the statement of stockholders' equity for
the period from April 9, 1998 (date of incorporation) to June 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 June 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
June 30, 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
JUNE 30 DEC 31
1999 1998
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<S> <C> <C>
ASSETS
CURRENT ASSETS
Bank $ 1,168 $ 1,125
NOTE RECEIVABLE -- 15,000
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1,168 16,125
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OTHER ASSETS
Mining claim - Note 3 2,129 2,129
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$ 3,297 $18,254
======== ========
LIABILITIES
Accounts payable - related parties $ 6,800 $ 6,800
Accounts payable and accrued liabilities 3,601 1,316
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10,401 8,116
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STOCKHOLDERS' EQUITY
Common stock
200,000,000 shares authorized, at $0.001 par
value, 11,239,700 shares issued and outstanding 11,240 11,240
Capital in excess of par value 21,930 21,930
Deficit accumulated during the development stage (40,274) (23,032)
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Total Stockholders' Equity (7,104) 10,138
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$ 3,297 $ 18,254
======= ========
The accompanying notes are an integral part of these unaudited financial statements.
</TABLE>
4
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
STATEMENT OF OPERATIONS
For the three months ended June 30, 1999, for the six months ended
June 30, 1999, for the three months ended June 30, 1998, for the
six months ended June 30, 1998 and for period from
April 9, 1998 (Date of Inception) to June 30, 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FROM
THREE SIX THREE SIX DATE OF
MONTHS MONTHS MONTHS MONTHS INCEPTION
ENDED ENDED ENDED ENDED TO
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 1999 1998 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SALES $ -- $ -- $ -- $ -- $ --
------------ ------------ ---------- ----------- -----------
GENERAL AND
ADMINISTRATIVE EXPENSES:
Accounting and audit 350 1,550 -- -- 3,400
Assessment work -- -- -- -- 1,800
Bank charges and interest 1 1 30 30 59
Consulting 1,000 1,000 -- -- 10,000
Filing fees -- Edgar system 1,068 1,068 -- -- 1,068
Geological report -- 618 618 618
Incorporation costs written-off -- -- 640 640 640
Legal -- -- -- -- 2,500
Office expenses 189 189 60 60 977
Salary 12,000 12,000 -- -- 12,000
Transfer agent's fees 1,435 1,435 1,285 1,285 4,212
Travel -- -- -- -- 3,000
----------- --------- ---------- ---------- ---------
NET LOSS $ 16,043 $ 17,243 $ 2,633 $ 2,633 $ 40,274
=========== ========== ========= ========== =========
NET LOSS PER
COMMON SHARE
Basic $ 0.001 $ 0.002 $ 0.001 $ 0.001 $ 0.004
========== ========== ========= ========= ========
AVERAGE OUTSTANDING
SHARES
Basic 11,239,700 11,239,700 1,866,428 1,866,428 9,487,987
========== ========== ========= ========= =========
The accompanying notes are an integral part of these unaudited financial statements.
</TABLE>
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 June 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 June 30, 1999 -- -- -- (40,274)
---------- ---------- ---------- ----------
BALANCE JUNE 30, 1999 11,239,700 $ 11,240 $ 21,930 $ (40,274)
========== ========== ========== ==========
The accompanying notes are an integral part of these unaudited financial statements.
</TABLE>
6
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
For the three months ended June 30, 1999, for the six months ended
June 30, 1999, for the three months ended June 30, 1998, for the six
months ended June 30, 1998 and for the period from
April 9, 1998 (Date of Inception) to June 30, 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FROM
THREE SIX THREE SIX DATE OF
MONTHS MONTHS MONTHS MONTHS INCEPTION
ENDED ENDED ENDED ENDED TO
JUNE 30, JUNE 30, JUNE 30, JUNE 30, MARCH 31,
1999 1999 1998 1998 1999
---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $(16,043) $(17,243) $ (2,633) $ (2,633) $(40,274)
Adjustments to reconcile net loss
to net cash provided by operating
activities
Due from a director 15,000 15,000 -- -- 6,800
Increase in accounts payable 1,197 2,286 -- -- 3,601
-------- -------- -------- -------- --------
Net Cash from Operations 154 43 (2,633) (2,633) (29,873)
-------- -------- -------- -------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Mineral claim -- -- (2,129) (2,129) (2,129)
-------- -------- -------- -------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of common
stock -- -- 11,420 11,420 33,170
-------- -------- -------- -------- --------
Net Increase in Cash 154 43 6,658 6,658 1,168
Cash at Beginning of Period 1,014 1,125 -- -- --
-------- -------- -------- -------- --------
CASH AT END OF PERIOD $ 1,168 $ 1,168 $ 6,658 $ 6,658 $ 1,168
======== ======== ======== ======== ========
The accompanying notes are an integral part of these unaudited financial statements.
</TABLE>
7
<PAGE>
PEPPERMILL CAPITAL CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 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
June 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 estimated and assumption 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 Merrit, 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
June 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
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ITEM 2. PLAN OF OPERATIONS
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The Company's management will concentrate its efforts on the Star Claims
property near the town of Merritt, British Columbia during 1999. It is the
intention of management to investigate other mineral properties in the future
but no effort has been made to date to identify or to negotiate the terms for
acquiring additional mineral properties. Continuation of the Company as a going
concern is dependent upon obtaining additional working capital either from
advances from its officers and/or directors, bank financing or by way of an
issuance of its capital stock. Until financing has been arranged it is the
intention of the directors and officers of the Company to pay for future
expenses of the Company as short term loans.
Liquidity and Capital Resources
The Company will need additional working capital to finance its activities on
the Semple mineral claims.
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)
September 4, 1999 /s/ "Michael Mitsiadis"
- ---------------------------- --------------------------------
Date Michael Mitsiadis - President and Director
September 4, 1999 /s/ "Raymon Paquette"
- ---------------------------- --------------------------------
Date Raymon Paquette - Secretary Treasurer and
Director
12
