<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 SEPTEMBER 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 September 30, 1999
- -------------------------- ------------------------------
Common stock, no par value 9,449,707 shares
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ConSil Corp.
Form 10-Q
For the Quarter Ended September 30, 1999
Index *
-----
Page
----
Part I. - Financial Information
Item l - Consolidated Balance Sheets -
September 30, 1999 and December 31, 1998 3
- Consolidated Statements of Operations -
Three Months and Nine Months Ended
September 30, 1999 and 1998 4
- Consolidated Statements of Cash Flows -
Nine Months Ended September 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.
<PAGE> 3
<TABLE>
Part I - Financial Information
ConSil Corp.
Consolidated Balance Sheets (Unaudited)
(U.S. Dollars)
______________
--------------
<CAPTION>
September 30, December 31,
1999 1998
----------- -----------
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 13,429 $ 11,236
Other receivables 23 120
Income tax refund receivable 8,000 16,000
--------- -----------
Total current assets 21,452 27,356
--------- -----------
Total assets $ 21,452 $ 27,356
========= ==========
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable - Hecla Mining Company $ 248,877 $ 247,762
Accrued interest payable - Hecla Mining Company 197,345 147,250
Note payable - Hecla Mining Company 711,000 700,000
--------- ----------
Total current liabilities 1,157,222 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 (3,243,984) (3,175,870)
Less: Common stock reacquired at cost;
1999 & 1998 - 5,982 shares (3,461) (3,461)
--------- ----------
Total stockholders' deficit (1,135,770) (1,067,656)
--------- ----------
Total liabilities and stockholders' deficit $ 21,452 $ 27,356
========= ==========
The accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 4
</TABLE>
<TABLE>
Part I - Financial Information (Continued)
ConSil Corp.
Consolidated Statements of Operations (Unaudited)
(U.S. Dollars)
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------- --------------------------
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Revenue:
Interest $ 1,006 $ 73 $ 1,036 $ 6,134
Miscellaneous Income - - - - - - 5,228
------------ ----------- ------------ -----------
1,006 73 1,036 11,362
------------ ----------- ------------ -----------
Expenses:
General and administrative 1,123 2,245 17,974 20,173
Interest expense on note
payable to Hecla Mining
Company 17,103 17,888 50,095 53,083
Foreign exchange loss (gain) (9) (3,517) 1,081 (1,763)
----------- ----------- ------------ -----------
18,217 16,616 69,150 71,493
----------- ----------- ------------ -----------
Loss before income taxes (17,211) (16,543) (68,114) (60,131)
Income tax provision - - - - - - - -
----------- --------- ------------ -----------
Net loss $ (17,211) $ (16,543) $ (68,114) $ (60,131)
=========== ========== ============ ===========
Basic and diluted loss per
common share $ nil $ nil $ (0.01) $ (0.01)
========== =========== ============ ===========
Cash dividends per share $ - - $ - - $ - - $ - -
========== =========== ============ ===========
Weighted average number of
common shares outstanding 9,449,707 9,449,707 9,449,707 9,449,707
========== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements
.
<PAGE> 5
<TABLE>
Part I - Financial Information (Continued)
ConSil Corp.
Consolidated Statements of Cash Flows (Unaudited)
(U.S. Dollars)
<CAPTION>
Nine Months Ended
---------------------------
September 30, September 30,
1999 1998
------------ -------------
<S> <C> <C>
Operating activities:
Net loss $ (68,114) $ (60,131)
Change in:
Accounts and other receivables 97 60,218
Income tax refund receivable 8,000 - -
Accounts payable 1,115 (77,888)
Accrued interest payable on note
to Hecla Mining Company 50,095 53,083
---------- -----------
Net cash used by operating activities (8,807) (24,718)
---------- -----------
Financing activities:
Borrowing on Hecla note payable 11,000 - -
---------- -----------
Net cash provided by financing
activities 11,000 - -
---------- -----------
Net increase (decrease) in cash
and cash equivalents 2,193 (24,718)
Cash and cash equivalents at
beginning of period 11,236 38,267
---------- -----------
Cash and cash equivalents at
end of period $ 13,429 $ 13,549
========== ===========
</TABLE>
The accompanying notes are an integral part of
the consolidated financial statements.
<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 September 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 September 30, 1999,
$711,000 was payable to Hecla, excluding accrued interest of
$197,345, 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 September 30, 1999, ConSil had negative working capital of
$1,135,770 and a stockholders' deficit of $1,135,770.
<PAGE> 7
Part I - Financial Information (Continued)
ConSil Corp.
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 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 September 30, 1999 or
1998 and the nine 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.
<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.
Mr. George Johnson resigned as President and
Director of ConSil on September 10, 1999 as a result of
leaving his position with Hecla Mining Company, ConSil's
majority stockholder. Mr. Roger Kauffman has been
appointed by ConSil's Board of Directors to serve as the
current President and as Director. Mr. Kauffman also
serves as Hecla's Executive Vice President and Chief
Operating Officer.
Results of Operations
---------------------
First Nine Months of 1999 Compared to First Nine Months of 1998
---------------------------------------------------------------
ConSil reported a net loss of $68,114, or $0.01 per share, for
the first nine months of 1999 compared to a net loss of $60,131, or
0.01 per share in the same period in 1998. The increase in the net
loss was due primarily to decreases in miscellaneous income of
$5,228 and interest income of $5,098. Partially offsetting the
unfavorable items was a decrease in interest expense of $2,988 on
the note payable to Hecla (see Note 3 of Notes to Consolidated
Financial Statements).
<PAGE> 9
Part I - Financial Information (Continued)
ConSil Corp.
Three Months Ended September 30, 1999 Compared to Three Months
--------------------------------------------------------------
Ended September 30, 1998
------------------------
ConSil reported a net loss of $17,211, or nil per share in the
third quarter of 1999, compared to a net loss of $16,543, or nil
per share in the third quarter of 1998. The increase in the net
loss was due primarily to an unfavorable decrease in foreign
exchange gains of $3,508, partially offset by a $1,122 decrease in
general and administrative expense and an increase in interest
income of $933.
Financial Condition and Liquidity
---------------------------------
At September 30, 1999, assets totaled $21,452 and
stockholders' deficit totaled $1,135,770. Cash and cash
equivalents increased by $2,193 to $13,429 at September 30, 1999
from $11,236 at December 31, 1998. Operating activities used
$8,807 of cash during the first nine months of 1999. The primary
uses of cash for operating activities were for payment of general
and administrative costs. The primary source of cash was from the
Hecla note payable loan proceeds.
Working capital decreased $68,114 during the first nine months
of 1999, from a negative $1,067,656 at December 31, 1998 to a
negative $1,135,770 at September 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.
<PAGE> 10
Part I - Financial Information (Continued)
ConSil Corp.
As of September 30, 1999, $711,000 was payable to Hecla,
excluding accrued interest of $197,345, 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 September 30,
1999, ConSil had negative working capital of $1,135,770 and a
stockholders' deficit of $1,135,770. 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 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 September 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.
<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.
<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: October 15, 1999 By:
--------------------------------
Roger A. Kauffman
President and Director
Date: October 15, 1999 By:
--------------------------------
David F. Wolfe
Treasurer (principal accounting
and financial officer)
<PAGE> 13
ConSil Corp.
Form 10Q - Period Ending September 30, 1999
Exhibit List
------------
Exhibit No. Description
----------- -------------------------------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 13,429
<SECURITIES> 0
<RECEIVABLES> 8,023
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,452
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,452
<CURRENT-LIABILITIES> 1,157,222
<BONDS> 0
0
0
<COMMON> 2,111,675
<OTHER-SE> (3,247,445)
<TOTAL-LIABILITY-AND-EQUITY> 21,452
<SALES> 0
<TOTAL-REVENUES> 1,036
<CGS> 0
<TOTAL-COSTS> 19,055
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50,095
<INCOME-PRETAX> (68,114)
<INCOME-TAX> 0
<INCOME-CONTINUING> (68,114)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (68,114)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
