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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 10-QSB/A-1
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from:
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Commission file number 333-86331
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PAXTON MINING CORPORATION
(Exact name of Registrant as specified in its charter.)
NEVADA 88-0433489
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
400 Burrard Street
Suite 1950
Vancouver, British Columbia V6C 3A6
(Address of principal executive offices, including zip code.)
(604) 605-0885
Registrant's telephone number, including area code.
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 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 such filing requirements for the past 90 days. YES [ ]
NO [ x ]
The number of shares outstanding of the Registrant's Common Stock, no
par value per share, at December 31, 1999 was 5,510,400 shares.
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PART I
ITEM 1. FINANCIAL STATEMENTS.
WILLIAMS & WEBSTER, P.S.
Certified Public Accountants & Business Consultants
Bank of America Center
601 W. Riverside, Suite 1940, Spokane, WA 99201
(509) 838-5111 - FAX (509) 838-5114
ACCOUNTANT'S REVIEW REPORT
The Board of Directors
Paxton Mining Corporation
Las Vegas, Nevada
We have reviewed the accompanying balance sheet of Paxton Mining
Corporation (an Exploration Stage Enterprise), as of December 31, 1999,
and the related statements of operations, stockholders' equity, and
cash flows for the six month period ended December 31, 1999, and for
the period from June 10, 1999, (inception) to December 31, 1999. The
review was conducted in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these
financial statements is the representation of the management of Paxton
Mining Corporation.
A review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is substantially
less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements in order
for them to be in conformity with generally accepted accounting
principles.
The financial statements for the year ended June 30, 1999 were audited
by us and we expressed an unqualified opinion on it in our report dated
December 1, 1999. We have not performed any auditing procedures since
that date.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2,
the Company has been in the exploration stage since its inception on
June 10, 1999. Realization of a major portion of the assets is
dependent upon the Company's ability to meet its future financing
requirements, and the success of future operations. These factors
raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans regarding those matters also are
described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
February 8, 2000, except as to Note 4, which is as of May 4, 2000.
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PAXTON MINING CORPORATION
(AN EXPLORATION ENTERPRISE)
BALANCE SHEETS
December 31 June 30
1999 1999
---------- ---------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 51,135 $ 100
---------- ----------
Total Current Assets 51,135 100
---------- ----------
OTHER ASSETS
Mining claims 262 262
---------- ----------
TOTAL ASSETS $ 51,397 $ 362
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 19,172 $ -
Loans to a related party 15,000 12,000
---------- ----------
Total Current Liabilities 34,172 12,000
---------- ----------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock,100,000,000 shares
authorized, $0.00001 par value;
5,510,400 and 5,000,000 shares
issued and outstanding, respectively 55 50
Additional paid-in-capital 325,985 274,950
Deficit accumulated during
the exploration stage (308,815) (286,638)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 17,225 (11,638)
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 51,397 $ 362
========== ==========
See accompanying notes and accountant's review report.
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PAXTON MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
For the
For the For the Period
Three-Month Six-Month From 06/10/99
Period Period Inception (Inception)
Ending Ending Through Through
12/31/99 12/31/99 06/30/99 12/31/99
---------- ---------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited)
REVENUES $ - $ - $ - $ -
---------- ---------- ---------- ----------
EXPENSES
Executive compensation - - 273,356 273,356
Filing fees - - 400 400
Legal and professional 18,595 20,595 11,600 32,195
Office expense 1,123 1,582 31 1,613
Transfer agent - - - -
Mining exploration expense - - 1,251 1,251
---------- ---------- ---------- ----------
TOTAL EXPENSES 19,718 22,177 286,638 308,815
---------- ---------- ---------- ----------
NET LOSS FROM OPERATIONS (19,718) (22,177) (286,638) (308,815)
INCOME TAXES - - - -
---------- ---------- ---------- ----------
NET LOSS (19,718) (22,177) (286,638) (308,815)
ACCUMULATED DEFICIT,
BEGINNING BALANCE (289,097) (286,638) - -
---------- ---------- ---------- ----------
ACCUMULATED DEFICIT,
ENDING BALANCE $ (308,815) $ (308,815) $ (286,638) $ (308,815)
========== ========== ========== ==========
BASIC AND DILUTED NET LOSS
PER COMMON SHARE $ NIL $ NIL $ (0.06) $ (0.06)
========== ========== ========== ==========
BASIC AND DILUTED
WEIGHTED AVERAGE
NUMBER OF COMMON STOCK
SHARES OUTSTANDING 5,011,096 5,005,004 5,000,000 5,005,004
========== ========== ========== ==========
See accompanying notes and accountant's review report.
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PAXTON MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock Additional Total
Number Paid-In Accumulated Stockholders'
of Shares Amount Capital Deficit Equity
(Deficit)
Issuance of common stock
for compensation and in
payment of advances at
approximately $.055
per share 5,000,000 $ 50 $ 274,950 $ - $ 275,000
Loss for year ending,
June 30, 1999 - - - (286,638) (286,638)
--------- ---- --------- ---------- ----------
Balance
June 30, 1999 5,000,000 50 274,950 (286,638) (11,638)
Issuance of common stock
for cash at $.10
per share 510,400 55 1,035 - 51,040
Income (loss) for
the period ending
December 31, 1999 - - - (22,177) (22,177)
--------- ---- --------- ---------- ----------
Balance,
December 31, 1999
(Unaudited) 5,510,400 $ 55 $ 325,985 $ (308,815) $ 17,225
========= ==== ========= ========== ==========
See accompanying notes and accountant's review report.
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PAXTON MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
For the For the
Six Months Period from 06/10/99
Period Inception (Inception)
Ended Through Through
12/31/99 06/30/99 12/30/99
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (22,177) $ (286,638) $ (308,815)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Payment of expenses from
issuance of stock - 274,638 274,638
Changes in assets and
liabilities:
Accounts payable 19,172 - 19,172
--------- ---------- ----------
Net cash (used) in
operating activities (3,005) (12,000) (15,005)
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from advances - 100 100
Proceeds from short-term
loan payable 3,000 12,000 15,000
Proceeds from stock
issuance 51,040 - 51,040
--------- ---------- ----------
Net cash provided by
financing activities 54,040 12,100 66,140
--------- ---------- ----------
Change in cash 51,035 100 51,135
Cash,
beginning of period 100 - -
--------- ----------- ----------
Cash, end of period $ 51,135 $ 100 $ 51,135
========= =========== ==========
Supplemental disclosures:
Interest paid $ - $ - $ -
========= =========== ==========
Income taxes paid $ - $ - $ -
========= =========== ==========
NON-CASH TRANSACTIONS
Stock issued in payment
of compensation and
other expenses $ - $ 274,638 $ 274,638
Stock issued in payment
of advances $ - $ 100 $ 100
Stock issued in payment
of mining claims $ - $ 262 $ 262
See accompanying notes and accountant's review report.
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PAXTON MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1999 and June 30, 1999
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Paxton Mining Corporation (hereinafter "the Company") was incorporated
on June 10, 1999, under the laws of the State of Nevada for the purpose
of acquiring, exploring and developing mining properties. The Company
maintains offices in Las Vegas, Nevada and in Vancouver, British
Columbia. The Company's fiscal year end is June 30.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Paxton Mining
Corporation is presented to assist in understanding the Company's
financial statements. The financial statements and notes are
representations of the Company's management which is responsible for
their integrity and objectivity. These accounting policies conform to
generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Exploration Stage Activities
The Company has been in the exploration stage since its formation in
June 1999 and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition, exploration
and development of mining properties. Upon location of a commercial
minable reserve, the Company will actively prepare the site for its
extraction and enter a development stage.
Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company incurred
net losses of $22,177 and $286,638 for the six months ended December
31, 1999 and the year ended June 30, 1999, respectively, and had no
sales. The future of the Company is dependent upon its ability to
obtain financing and upon future successful explorations for and
profitable operations from the development of mineral properties.
Management has plans to seek additional capital through a private
placement and public offering of its common stock. The financial
statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts
and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.
Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
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PAXTON MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1999 and June 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Loss Per Share
Loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted
average number of shares was calculated by taking the number of shares
outstanding and weighting them by the amount of time that they were
outstanding. Diluted net loss per share is the same as basic net loss
per share as there are no common stock equivalents to be included in
the calculation.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or
less to be cash equivalents.
Provision for Taxes
At December 31, 1999, and June 30, 1999, the Company had cumulative net
operating losses of approximately $308,000 and $287,000, respectively.
No provision for taxes or tax benefit has been reported in the
financial statements, as there is not a measurable means of assessing
future profits or losses.
Use of Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions regarding certain types of assets,
liabilities, revenues, and expenses. Such estimates primarily relate
to unsettled transactions and events as of the date of the
financial statements. Accordingly, upon settlement, actual results
may differ from estimated amounts.
Impaired Asset Policy
In March 1995, the Financial Accounting Standards Board issued a
statement titled "Accounting for Impairment of Long-lived Assets."
In complying with this standard, the Company reviews its long-lived
assets quarterly to determine if any events or changes in
circumstances have transpired which indicate that the carrying value
of its assets may not be recoverable. The Company determines
impairment by comparing the undiscounted future cash flows estimated
to be generated by its assets to their respective carrying amounts.
The Company does not believe any adjustments are needed to the
carrying value of its assets at December 31, 1999, or June 30, 1999.
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PAXTON MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1999 and June 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Exploration Costs
In accordance with generally accepted accounting principles, the
Company will expense exploration costs as incurred.
NOTE 3 - MINING CLAIMS
In June, 1999, the Company acquired 100% of the rights, titles and
interests in three mining claims in the Twelve Mile Creek, Kalso Area,
Slocan Mining Division, B.C. Canada (See Note 4).
NOTE 4 - COMMON STOCK
On December 29, 1999, the Company issued 510,400 shares of common stock
in a public offering at a cost of $0.10 per share.
On June 20, 1999, 5,000,000 shares of common stock were issued to
officers and directors only. There was no public offering of any
securities at this time. The above referenced shares were issued in
payment for compensation in the amount of $273,356 and repayment for
mining claim recording fees of $262, expenses of $1,282 and advances of
$100. These shares were issued pursuant to exemption from registration
contained in Section 4 (2) of the Securities Act of 1933.
In June, 1999, the Company, through Hugh Grenfal, President and a
member of the Board of Directors, acquired 100% of the rights, titles
and interests in three mining claims in the Twelve Mile Creek, Kalso
Area, Slocan Mining Division, B.C. Canada in exchange for $7 in cash.
In addition, payment of $255 was required to record the three mining
claims totaling 36 units. These amounts were paid by the shareholders
and repaid by the Company in the form of stock as denoted above. The
Company, through Mr. Grenfal, exercised the option and acquired the
mining claims. The claims are recorded in Mr. Grenfal's name for tax
purposes, however, title to the claims has been conveyed to the Company
via an unrecorded deed.
NOTE 5 - RELATED PARTIES
The Company occupies office space provided by the President of the
Company in his capacity as Vice President and Director of Callinan
Mines Limited at no charge. The value of this space is not considered
materially significant for financial reporting purposes.
The President of the Company has advanced monies to the Company to open
a checking account and in payment of expenses. The funds advanced to
open the checking account were repaid as part of the stock transaction
(See Note 4). The balance of the advances have been recorded as short-
term loans, bearing no interest and having no specific due date.
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PAXTON MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1999 and June 30, 1999
NOTE 6 - CONCENTRATION OF CREDIT RISK FOR CASH HELD AT BANKS
The Company maintains a United States dollar checking account at a bank
in Vancouver, British Columbia, Canada, which is not insured.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Foreign Operations
The accompanying balance sheet includes $51,397 relating to the
Company's assets in Canada. Although this country is considered
politically and economically stable, it is always possible that
unanticipated events in foreign countries could disrupt the Company's
operations.
Environmental Studies
The Company is engaged in the exploration and development of mineral
properties. At present there are no feasibility studies establishing
proven and probable reserves.
Although the minerals exploration and mining industries are inherently
speculative and subject to complex environmental regulations, the
Company is unaware of any pending litigation or of any specific past or
prospective matters which could impair the value of its mining claims
or cause the Company to pay for land remediation costs.
NOTE 8 - YEAR 2000 ISSUES
Like other companies, Paxton Mining Corporation could be adversely
affected if the computer systems the Company, its suppliers or
customers use do not properly process and calculate date-related
information and data from the period surrounding and including January
1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and devices
such as production equipment and elevators, etc. Any costs associated
with Year 2000 compliance are expensed when incurred. At this time,
the Company does not have any evidence of problems associated with the
Year 2000 issue.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Financial Condition, Liquidity and Capital Resources
Since inception on June 19, 1999, the Company has been engaged in
exploration and acquisition of mineral properties. The Company's
principal capital resources have been acquired through issuance of
common stock and from shareholder loans.
At December 31, 1999, there was positive working capital of $16,963
compared to deficit working capital of $(11,900) at June 30, 1999.
This change is primarily the result of the Company's stock issuance
proceeds of $51,040, more than offsetting increasing short-term debt.
At December 31, 1999, as a result of its stock sales, the Company's
total assets of $51,397 consist almost entirely of cash. This compares
favorably with the Company's assets at June 30, 1999 of $362, which
consisted of only $100 in cash.
At December 31, 1999, the Company's total liabilities climbed to
$34,172 from $12,000 at June 30, 1999, primarily reflecting a $19,172
build-up of accounts payable.
The Company has not had revenues from inception. Although there is
insufficient capital to fully explore and develop its mineral
properties, the Company expects to survive and exploit its resources
primarily with funding from sales of its securities and, as necessary,
from shareholder loans.
The Company has no long-term debt and does not regard long-term
borrowing as a good, prospective source of financing.
Results of Operations
The Company posted losses of $19,718 and $22,177 for the three months
and six months ending December 31, 1999, respectively. The principal
component of each loss was professional expenses.
Operating expenses for the six months ending December 31, 1999 were
$21,177, down almost $265,000 from the short year ending June 30, 1999,
primarily as a result of decreased executive compensation expenses,
which were $273,356 in the year ended June 30, 1999 and $0 thereafter.
EXHIBIT INDEX
Exhibit No. Description
27 * Financial Data Schedule
* Previously filed.
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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.
Dated this 5th day of May, 2000.
PAXTON MINING CORPORATION
(the "Registrant")
BY: /s/ Hugh Grenfal
Hugh Grenfal, President, Treasurer,
Chief Financial Officer and a Member of
the Board of Directors.
