<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1999
Commission file number 0-4846-3
----------------------------------------------
CONSIL CORP.
- ----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Idaho 82-0288840
- --------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6500 Mineral Drive
Coeur d'Alene, Idaho 83815-8788
- --------------------------------- ------------------------------
(Address of principal executive offices) (Zip Code)
208-769-4100
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(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 Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for at least
the past 90 days. Yes XX . No .
---- ----
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding July 30, 1999
- ----------------------------- ---------------------------
Common stock, no par value 9,449,707 shares
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ConSil Corp.
Form 10-Q
For the Quarter Ended June 30, 1999
Index *
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Page
Part I. - Financial Information
Item l - Consolidated Balance Sheets - June 30,
1999 and December 31, 1998 3
- Consolidated Statements of Operations -
Three Months and Six Months Ended
June 30, 1999 and 1998 4
- Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1999 and 1998 5
- Notes to Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. - Other Information
Item 1 - Legal Proceedings 11
Item 6 - Exhibits and Reports on Form 8-K 11
* Items omitted are not applicable.
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<TABLE>
Part I - Financial Information
ConSil Corp.
Consolidated Balance Sheets (Unaudited)
(U.S. Dollars)
______________
<CAPTION>
June 30, December 31,
1999 1998
--------- ------------
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 5,470 $ 11,236
Other receivables 90 120
Income tax refund receivable 16,000 16,000
--------- ---------
Total current assets 21,560 27,356
--------- ---------
Total assets $ 21,560 $ 27,356
========= =========
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable - Hecla Mining Company $ 248,877 $ 247,762
Accrued interest payable - Hecla Mining Company 180,242 147,250
Note payable - Hecla Mining Company 711,000 700,000
--------- ---------
Total current liabilities 1,140,119 1,095,012
--------- ---------
Stockholders' deficit:
Preferred stock; $0.25 par value; authorized
10,000,000 shares; issued and outstanding, none - - - -
Common stock; no par value; authorized
100,000,000 shares; issued 9,455,689 shares 2,111,675 2,111,675
Accumulated deficit (3,226,773) (3,175,870)
Less: Common stock reacquired at cost;
1999 & 1998 - 5,982 shares (3,461) (3,461)
--------- ---------
Total stockholders' deficit (1,118,559) (1,067,656)
--------- ---------
Total liabilities and stockholders'
deficit $ 21,560 $ 27,356
========= =========
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
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<TABLE>
Part I - Financial Information (Continued)
ConSil Corp.
Consolidated Statements of Operations (Unaudited)
(U.S. Dollars)
<CAPTION>
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Interest $ - - $ 73 $ 30 $ 6,061
Miscellaneous Income - - - - - - 5,228
------- ------- ------- -------
- - 73 30 11,289
------- ------- ------- -------
Expenses:
General and administrative 9,474 7,793 16,851 17,928
Interest expense on note payable
to Hecla Mining Company 16,625 17,695 32,992 35,195
Loss on sale of equipment - - - - - - - -
Foreign exchange loss 294 127 1,090 1,754
------- ------- ------- -------
26,393 25,615 50,933 54,877
------- ------- ------- -------
Loss before income taxes (26,393) (25,542) (50,903) (43,588)
Income tax provision - - - - - - - -
-------- -------- -------- --------
Net loss $(26,393) $(25,542) $(50,903) $(43,588)
======== ======== ======== ========
Basic and diluted loss per
common share $ nil $ nil $ (0.01) $ nil
========= ======== ======== ========
Cash dividends per share $ - - $ - - $ - - $ - -
========= ======== ======== ========
Weighted average number of
common shares outstanding 9,449,707 9,449,707 9,449,707 9,449,707
========= ========= ========= =========
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
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<TABLE>
Part I - Financial Information (Continued)
ConSil Corp.
Consolidated Statements of Cash Flows (Unaudited)
(U.S. Dollars)
<CAPTION>
Six Months Ended
----------------------
June 30, June 30,
1999 1998
-------- --------
<S> <C> <C>
Operating activities:
Net loss $ (50,903) $ (43,588)
Change in:
Accounts and other receivables 30 59,931
Accounts payable and accrued
liabilities 1,115 (74,185)
Accrued interest payable on note
to Hecla Mining Company 32,992 35,194
---------- ---------
Net cash used by operating activities (16,766) (22,648)
---------- ---------
Financing activities:
Borrowing on Hecla note payable 11,000 - -
---------- ---------
Net cash provided by financing
activities 11,000 - -
---------- ---------
Net decrease in cash
and cash equivalents (5,766) (22,648)
Cash and cash equivalents at
beginning of period 11,236 38,267
---------- ---------
Cash and cash equivalents at
end of period $ 5,470 $ 15,619
========== =========
The accompanying notes are an integral part of
the consolidated financial statements.
</TABLE>
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<PAGE> 6
Part I - Financial Information (Continued)
ConSil Corp.
Notes to Consolidated Financial Statements
Note 1. The notes to the consolidated financial statements as
of December 31, 1998, as set forth in ConSil Corp.'s 1998
Annual Report on Form 10-K, substantially apply to these
interim consolidated financial statements and are not
repeated here. All amounts are in U.S. dollars unless
otherwise indicated.
Note 2. The financial information given in the accompanying
unaudited interim financial statements reflects all
adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim
periods reported. All such adjustments are of a normal
recurring nature. All financial statements presented herein
are unaudited. However, the balance sheet as of December 31,
1998, was derived from the audited consolidated balance
sheet described in Note 1 above.
Note 3. At June 30, 1999, ConSil had 9,449,707 common shares
outstanding of which Hecla Mining Company, the majority
stockholder of ConSil, owned 7,418,300 shares or 78.503% of
the outstanding shares.
On June 28, 1996, ConSil and Hecla entered into a loan
agreement whereby Hecla agreed to make available to ConSil a
loan not to exceed $500,000, due in its entirety on or
before December 31, 1996. This loan agreement was
subsequently amended on six separate occasions, increasing
the amount available to borrow to $725,000 and extending the
repayment date until March 31, 2000. As of June 30, 1999,
$711,000 was payable to Hecla, excluding accrued interest of
$180,242, under the loan agreement.
The financial statements have been prepared on a going
concern basis which assumes realization of assets and
liquidation of liabilities in the normal course of business.
At June 30, 1999, ConSil had negative working capital of
$1,118,559 and a stockholders' deficit of $1,118,559.
Included in current liabilities are the $711,000 note
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<PAGE> 7
Part I - Financial Information (Continued)
ConSil Corp.
payable and the related accrued interest due to Hecla which
are due upon demand by authorized representatives of Hecla,
but in no event later than March 31, 2000. If other sources
of funds are unavailable, Hecla has committed to fund the
reasonable minimum financial requirements of ConSil through
March 31, 2000.
Note 4. ConSil prepares its consolidated financial statements
in accordance with generally accepted accounting principles
(GAAP) in the United States. ConSil also has regulatory
reporting requirements in Canada. There are no differences
between U.S. GAAP and Canadian GAAP with respect to
stockholders' deficit or net loss at June 30, 1999 or 1998
and the six months then ended.
Item 2. Management's Discussion and Analysis of Financial Condition
- ------ -----------------------------------------------------------
and Results of Operations
-------------------------
Introduction
------------
Except for the historical information contained herein,
the matters discussed that are forward-looking statements
involve risks and uncertainties, including the timely
development of future projects, the impact of metals prices,
changing market conditions and regulatory environment, and
other risks detailed from time to time in ConSil's Form 10-K
and Form 10-Qs filed with the United States Securities and
Exchange Commission. Actual results may differ materially
from those projected or implied. Forward-looking statements
included herein represent ConSil's judgment as of the date
of this filing. ConSil disclaims, however, any intent or
obligation to update these forward-looking statements.
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<PAGE> 8
Part I - Financial Information (Continued)
ConSil Corp.
Following the sale of ConSil's Silver Summit mine in
1995, ConSil was actively involved in exploration and
acquisition activities, primarily in Mexico. ConSil was
unsuccessful in its exploration and acquisition activities,
and since the fourth quarter of 1997, ConSil has been
inactive.
Results of Operations
---------------------
First Six Months of 1999 Compared to First Six Months of 1998
-------------------------------------------------------------
ConSil reported a net loss of $50,903, or $0.01 per share,
for the first six months of 1999 compared to a net loss of
$43,588, or nil per share in the same period in 1998. The
increase in the net loss is due primarily to decreases in
interest income of $6,031 and miscellaneous income of $5,228.
Partially offsetting the unfavorable items is the decrease in
interest expense of $2,203 on the note payable to Hecla (see
Note 3 of Notes to Consolidated Financial Statements).
Three Months Ended June 30, 1999 Compared to Three Months Ended
-----------------------------------------------------------------
June 30, 1998
-------------
ConSil reported a net loss of $26,393, or nil per
share in the second quarter of 1999, compared to a net loss of
$25,542, or nil per share in the second quarter of 1998. The
increase in the net loss is due primarily to an increase in
general and administrative costs of $1,681, partially offset
by a $1,070 decrease in interest expense.
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<PAGE> 9
Part I - Financial Information (Continued)
ConSil Corp.
Financial Condition and Liquidity
---------------------------------
At June 30, 1999, assets totaled $21,560 and
stockholders' deficit totaled $1,118,559. Cash and cash
equivalents decreased by $5,766 to $5,470 at June 30, 1999
from $11,236 at December 31, 1998. Operating activities used
$16,766 of cash during the first six months of 1999. The
primary uses of cash for operating activities were for payment
of accounts payable and funding of operating losses. The
primary source of cash was from the Hecla note payable loan
proceeds.
Working capital decreased $50,903 during the first six
months of 1999, from a negative $1,067,656 at December 31, 1998
to a negative $1,118,559 at June 30, 1999. The decrease in
working capital is primarily the result of funding operating
losses, consisting principally of interest and general and
administrative costs.
ConSil's planned 1999 expenditures include the necessary
expenditures to maintain the current inactive status of ConSil.
ConSil intends to finance planned expenditures partially through
existing cash and cash equivalents and additional borrowings
under a loan agreement with Hecla. On December 31, 1998, ConSil
and Hecla entered into a sixth amendment to the loan agreement
(see Note 3 of Notes to Consolidated Financial Statements) which
extended the due date to March 31, 2000. As of June 30, 1999,
$711,000 was payable to Hecla, excluding accrued interest of
$180,242, under the loan agreement. Any further exploration
projects, potential acquisitions or even limited operations are
subject to ConSil being able to raise funds from external
sources.
The financial statements have been prepared on a going
concern basis which assumes realization of assets and
liquidation of liabilities in the normal course of business.
At June 30, 1999, ConSil had negative working capital of
$1,118,559 and a stockholders' deficit of $1,118,559. Included
in current liabilities are the $711,000 note payable and the
related accrued interest due to Hecla which are due upon
demand by authorized representatives of Hecla, but in no event
later than March 31, 2000. If other sources of funds are
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<PAGE> 10
Part I - Financial Information (Continued)
ConSil Corp.
unavailable, Hecla has committed to fund the reasonable
minimum financial requirements of ConSil through
March 31, 2000.
Year 2000
---------
ConSil has completed an assessment of its Year 2000
Compliance issues, and based upon the limited activities of the
company, ConSil does not believe Year 2000 Compliance issues
will be material to ConSil.
Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
At June 30, 1999, ConSil's note payable to Hecla (refer
to Note 3 of Notes to Consolidated Financial Statements) was
subject to changes in market interest rates. However, due to
the short-term nature of the debt, ConSil's management does
not believe it is at material risk with respect to changes
in market interest rates.
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<PAGE> 11
Part II - Other Information
ConSil Corp.
Item 1. Legal Proceedings
- ------ -----------------
There are no pending legal proceedings.
Item 6. Exhibits and Reports on Form 8-K
- ------ --------------------------------
(a) Exhibits
27 - Financial Data Schedule
(b) Reports on Form 8-K
None.
Items 2, 3, 4 and 5 of Part II are omitted from
this report as inapplicable.
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<PAGE> 12
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.
CONSIL CORP.
----------------------------------
(Registrant)
Date: August 11, 1999 By:
-------------------------------
George R. Johnson
President, Chairman of the
Board and Director
Date: August 11, 1999 By:
-------------------------------
David F. Wolfe
Treasurer (principal accounting
and financial officer)
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<PAGE> 13
ConSil Corp.
Form 10Q - Period Ending June 30, 1999
Exhibit List
------------
Exhibit No. Description
----------- ------------------------------
27 Financial Data Schedule
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 5,470
<SECURITIES> 0
<RECEIVABLES> 16,090
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,560
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,560
<CURRENT-LIABILITIES> 1,140,119
<BONDS> 0
0
0
<COMMON> 2,111,675
<OTHER-SE> (3,230,234)
<TOTAL-LIABILITY-AND-EQUITY> 21,560
<SALES> 0
<TOTAL-REVENUES> 30
<CGS> 0
<TOTAL-COSTS> 17,941
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,992
<INCOME-PRETAX> (50,903)
<INCOME-TAX> 0
<INCOME-CONTINUING> (50,903)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (50,903)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
