<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 MARCH 31, 1999
Commission file number 0-4846-3
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CONSIL CORP.
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(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 April 30, 1999
- -------------------------------------- -------------------------------
Common stock, no par value 9,449,707 shares
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CONSIL CORP.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1999
I N D E X
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Page
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PART I. - Financial Information
Item l - Consolidated Balance Sheets - March 31,
1999 and December 31, 1998 3
- Consolidated Statements of Operations -
Three Months Ended March 31, 1999 and 1998 4
- Consolidated Statements of Cash Flows -
Three Months Ended March 31, 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 10
Item 6 - Exhibits and Reports on Form 8-K 10
* Items omitted are not applicable
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PART I - FINANCIAL INFORMATION
CONSIL CORP.
Consolidated Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
----------- ----------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,514 $ 11,236
Other receivables 491 120
Income tax refund receivable 16,000 16,000
--------- ---------
Total current assets 20,005 27,356
--------- ---------
Total assets $ 20,005 $ 27,356
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable - Hecla Mining Company $ 248,554 $ 247,762
Accrued interest payable - Hecla
Mining Company 163,617 147,250
Note payable - Hecla Mining Company 700,000 700,000
--------- ---------
Total current liabilities 1,112,171 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 (3,200,380) (3,175,870)
Less: Common stock reacquired at cost;
1999 and 1998 - 5,982 shares (3,461) (3,461)
---------- ---------
Total stockholders' deficit (1,092,166) (1,067,656)
---------- ---------
Total liabilities and stockholders'
deficit $ 20,005 $ 27,356
========== ==========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
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PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
Consolidated Statements of Operations(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31, March 31,
1999 1998
------------ ------------
<S> <C> <C>
Revenue:
Interest $ 30 $ 5,988
Miscellaneous Income - - 5,228
------------ ------------
30 11,216
------------ ------------
Expenses:
Interest expense on note payable
to Hecla Mining Company 16,367 17,500
General and administrative 7,377 10,135
Foreign exchange loss 796 1,627
------------ ------------
24,540 29,262
------------ ------------
Loss before income taxes (24,510) (18,046)
Income tax provision - - - -
------------ ------------
Net loss $ (24,510) $ (18,046)
============ ============
Basic and diluted loss per common
share $ nil $ nil
============ ============
Cash dividends per share $ - - $ - -
============ ============
Weighted average number of
common shares outstanding 9,449,707 9,449,707
============ ============
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
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PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------
March 31, March 31,
1999 1998
---------- ----------
<S> <C> <C>
Operating activities:
Net loss $ (24,510) $ (18,046)
Change in:
Accounts and other receivables (371) 60,324
Accounts payable and accrued
liabilities 792 (74,465)
Accrued interest payable on note to
Hecla Mining Company 16,367 17,500
---------- ----------
Net cash used by operating activities (7,722) (14,687)
---------- ----------
Net decrease in cash
and cash equivalents (7,722) (14,687)
Cash and cash equivalents at
beginning of period 11,236 38,267
---------- ----------
Cash and cash equivalents at
end of period $ 3,514 $ 23,580
========== ==========
</TABLE>
The accompanying notes are an integral part of
the consolidated financial statements.
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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 (the Company or ConSil) 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 March 31, 1999, the Company had 9,449,707 common shares outstanding
of which Hecla Mining Company (Hecla, the majority stockholder of the
Company) 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 March 31, 1999,
$700,000 was payable to Hecla, excluding accrued interest of $163,617,
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 March 31, 1999, the
Company had negative working capital of $1,092,166 and a stockholders'
deficit of $1,092,166. Included in current liabilities are the
$700,000 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
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PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
are unavailable, Hecla has committed to fund the reasonable
minimum financial requirements of the Company through March 31, 2000.
Note 4. The Company prepares its consolidated financial statements in
accordance with generally accepted accounting principles (GAAP) in the
United States. The Company 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 March 31,
1999 or 1998 and the three 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
the Company'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 the Company's judgment as of the
date of this filing. The Company disclaims, however, any intent or
obligation to update these forward-looking statements.
Following the sale of the Company's Silver Summit mine in 1995, the
Company was actively involved in exploration and acquisition
activities, primarily in Mexico. The Company was unsuccessful in its
exploration and acquisition activities, and since the fourth quarter
of 1997, the Company has been inactive.
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PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
RESULTS OF OPERATIONS
---------------------
FIRST THREE MONTHS 1999 COMPARED TO FIRST THREE MONTHS 1998
-----------------------------------------------------------
The Company reported a net loss of $24,510, or $0.00 per share, for
the quarter ended March 31, 1999 compared to a net loss of $18,046
($0.00 per share) in the same period in 1998. The increase in the net
loss was due primarily to decreases in interest income of $5,958 and
miscellaneous income of $5,228. Partially offsetting these
unfavorable items, was a decrease in general and administrative
expense of $2,758.
FINANCIAL CONDITION AND LIQUIDITY
---------------------------------
At March 31, 1999, assets totaled $20,005 and stockholders'
deficit totaled $1,092,166. Cash and cash equivalents decreased by
$7,722 to $3,514 at March 31, 1999 from $11,236 at December 31, 1998.
Operating activities used $7,722 of cash during the first three months
of 1999. The primary use of cash was for funding general and
administrative costs.
Working capital decreased $24,510 during the first three months
of 1999, from a negative $1,067,656 at December 31, 1998 to a negative
$1,092,166 at March 31, 1999. The decrease in working capital is
primarily the result of funding operating losses.
The Company's planned 1999 expenditures include the necessary
expenditures to maintain the current inactive status of the Company.
The Company 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 to
Notes to Consolidated Financial Statements) which extended the due
date to March 31, 2000. As of March 31, 1999, $700,000 was payable to
Hecla, excluding accrued interest of $163,617, 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.
-8-
<PAGE> 9
PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
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 March 31, 1999, the
Company had negative working capital of $1,092,166 and a stockholders'
deficit of $1,092,166. Included in current liabilities are the
$700,000 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
unavailable, Hecla has committed to fund the reasonable minimum
financial requirements of the Company through March 31, 2000.
YEAR 2000
---------
The Company has completed an assessment of its Year 2000
Compliance issues, and based upon the limited activities of the
Company, the Company does not believe Year 2000 Compliance issues will
be material to the Company.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
At March 31, 1999, the Company'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, the Company's management does not believe it is at
material risk with respect to changes in market interest rates.
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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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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: May 5, 1999 By: /s/ George R. Johnson
-------------------------------------
George R. Johnson
President, Chairman of the Board
and Director
Date: May 5, 1999 By: /s/ David F. Wolfe
--------------------------------------
David F. Wolfe
Treasurer (principal accounting
and financial officer)
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<PAGE> 12
CONSIL CORP.
Form 10Q - Period Ending March 31, 1999
EXHIBIT LIST
Exhibit No. Description
- ------------ --------------------------
27 Financial Data Schedule
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 3,514
<SECURITIES> 0
<RECEIVABLES> 16,491
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,005
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,005
<CURRENT-LIABILITIES> 1,112,171
<BONDS> 0
0
0
<COMMON> 2,111,675
<OTHER-SE> (3,203,841)
<TOTAL-LIABILITY-AND-EQUITY> 20,005
<SALES> 0
<TOTAL-REVENUES> 30
<CGS> 0
<TOTAL-COSTS> 8,173
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,367
<INCOME-PRETAX> (24,510)
<INCOME-TAX> 0
<INCOME-CONTINUING> (24,510)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24,510)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
