UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter period ended June 30, 1998 Commission File Number: 0-9736
HORN SILVER MINES, INC.
(Exact name of small business issuer as specified in its charter)
UTAH 87-0299832
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
4444 South 700 East, Suite 204,
Salt Lake City, Utah 84107
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 281-5656
Check whether the issuer (1) filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 X NO
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
8,118,621 shares of common stock, $.001 par value
<PAGE>
HORN SILVER MINES, INC.
FORM 10QSB
QUARTER ENDED JUNE 30, 1998
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Page
Balance Sheet................................................................ 3
Statements of Operations .................................................... 4
Statement of Cash Flows ..................................................... 5
Notes to Financial Statements................................................ 7
PART II - OTHER INFORMATION
Other Information............................................................ 8
Signature Page.............................................................. 10
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<PAGE>
HORN SILVER MINES, INC.
BALANCE SHEET
June 30, 1998
ASSETS
Current Assets:
<TABLE>
<S> <C>
Cash $ 3,688
-----------
Property and Equipment:
Leasehold Improvements 5,634
Structures and Equipment 8,441
-----------
14,075
Less Accumulated Depreciation (14,075)
-----------
Net Property Equipment --
-----------
Other Assets: 1,211
Total Assets $ 4,899
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 8,625
Accrued Liabilities Due to Related Parties 31,043
Accrued Expenses 156
-----------
Total Current Liabilities 39,824
-----------
Stockholder's Equity
Common Stock, par value $.001,
30,000,000 shares authorized;
8,118,621 shares issued
and outstanding 8,119
Additional Paid in Capital 1,695,609
Accumulated Deficit (1,738,653)
-----------
Total Stockholders' Deficit (34,925)
-----------
Total Liabilities and Stockholders' Deficit $ 4,899
===========
</TABLE>
Unaudited
-3-
<PAGE>
HORN SILVER MINES, INC.
STATEMENT OF OPERATIONS
Six Months Ended
June 30
-----------------
<TABLE>
<S> <C> <C>
1998 1997
REVENUES:
Mineral Royalties $ 18,000 $ 26,644
Other income 1,294 --
Interest Income 198 127
---------------------
Total Revenues 19,492 26,771
---------------------
EXPENSES:
Mineral Lease and Exploration Expenses 500 0
Salaries and Wages 1,700 2,040
General and Administrative 8,211 20,732
Legal and Accounting 13,760 7,390
Taxes and Licenses 376 663
Stockholders' Meeting and Proxy Fees -- 15,538
---------------------
Total Expenses 24,547 45,776
---------------------
NET LOSS $ (5,055) $(18,995)
=====================
Loss per share - basic and fully diluted $ (.00) $ (.00)
=====================
</TABLE>
Unaudited
-4-
<PAGE>
HORN SILVER MINES, INC.
STATEMENT OF OPERATIONS
Three Months Ended
June 30,
-------------------
1998 1997
REVENUES:
<TABLE>
<S> <C> <C>
Mineral Royalties $ 13,500 $ 25,139
Interest Income 191 102
-------------------
Total Revenues 13,691 25,241
-------------------
EXPENSES:
Mineral Lease and Exploration Expenses -- --
Salaries and Wages 800 1,020
General and Administrative 3,409 16,778
Legal and Accounting 9,600 3,000
Taxes and Licenses 36 238
Depreciation -- 13,200
-------------------
Total Expenses 13,884 34,236
-------------------
NET LOSS $ ( 193) $ (8,995)
===================
</TABLE>
Unaudited
-5-
<PAGE>
HORN SILVER MINES, INC.
STATEMENT OF CASH FLOWS
Six Months Ended
June 30
-----------------
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<TABLE>
<S> <C> <C>
Net loss $ (5,055) $(18,995)
Adjustments:
Increase/(Decrease) in Accrued Expenses 127 (235)
---------------------
(4,928) (19,230)
---------------------
CASH FLOWS FROM INVESTING ACTIVITIES -- --
---------------------
CASH FLOWS FROM FINANCING ACTIVITIES-
Cash received from stock options 6,400 --
---------------------
Net increase (decrease) in Cash and Cash Equivalents 1,472 (19,230)
Cash and Cash Equivalents at Beginning of Period 2,216 24,531
---------------------
Cash and Cash Equivalents at End of Period $ 3,688 $ 5,301
=====================
</TABLE>
Unaudited
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<PAGE>
HORN SILVER MINES, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
1. Basis of Presentation
Interim Period Accounting Policies
In the opinion of the Company's management, the accompanying unaudited
financial statements contain all normal recurring adjustments necessary
to present fairly the Company's financial position for the interim
period. Results of operations for the three and six months ended June
30, 1998 are not necessarily indicative of results to be expected for
the full fiscal year ending December 31, 1998.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for annual
financial statements. Although the Company believes that the
disclosures in these unaudited financial statements are adequate to
make the information presented for the interim periods not misleading,
certain information and footnote information normally included in
annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to the rules and regulations of the Securities and Exchange Commission,
and these financial statements should be read in conjunction with the
Company's audited financial statements included n the Company's annual
report to shareholders for the fiscal year ended December 31, 1997.
2. Recently Issued Financial Accounting Standards
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This
Statement establishes standards for reporting and displaying
comprehensive income and its components (revenues, expenses, gains and
losses) in a full set of general-purpose financial statements. This
Statement requires the classification of items of comprehensive income
by their nature in a financial statement and the accumulated balance of
other comprehensive income separately from retained earnings and
additional paid-in capital in the equity section of the balance sheet.
For the three and six months ended June 30, 1998 and 1997,
comprehensive income is the same as net income.
In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments
of an Enterprise and Related Information," which supersedes FASB
Statement No. 14, "Financial Reporting for Segments of a Business
Enterprise" and changes the way public companies report information
about operating segments. SFAS No. 131, which is based on the
management approach to segment reporting, establishes requirements to
report selected segment information quarterly and to report entity-wide
disclosures about products and services, major customers and the
material countries in which the entity holds assets and reports
revenue. Management does not believe this Statement will have a
significant impact on the Company.
-7-
<PAGE>
HORN SILVER MINES, INC.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," Which supersedes SFAS No. 80,
"Accounting for Future Contracts," SFAS No. 105, "Disclosure of
Information about Financial Instruments with Off-Balance- Sheet Risk
and Financial Instruments with Concentration of Credit Risk," and SFAS
No. 119, "Disclosure about Derivative Financial Instruments and Fair
Value of Financial Instruments," and also amends certain aspects of
other SFASs previously issued. This statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. This
statement establishes accounting and reporting standards for derivative
instruments and hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value. Management does not believe this statement will have a
significant impact on the Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULT OF OPERATIONS
Liquidity and Capital Resources
-------------------------------
Working capital decreased by approximately $1,345 for the six months
ended June 30, 1998, for a current total deficit of $34,925 at June 30,
1998. Cash flow from operations was $1,472.
Results of Operations - Six Months Ended June 30, 1998
------------------------------------------------------
Revenues decreased by $7,279 for the first six month period ended June
30, 1998 as compared to the same period in 1997. This decrease was
primarily due to a reduction in lease payments from mining claims being
leased to other Companies.
Expenses also decreased by $21,229 for the six month period as compared
to the same period of time in 1997. This decrease was primarily due to
a reduction in general and administrative costs and costs related to
the annual stockholder's meeting.
Results of Operations - Three Months Ended June 30, 1998
--------------------------------------------------------
Revenues decreased by $11,550 for the second quarter of 1998 as
compared to the same period of time in 1997. This decrease was due to
fewer contracts with other companies for lease of mining properties.
Expenses decreased by $20,352 for the second quarter of 1998 as
compared to the same period of time in 1997. This decrease was
primarily due to a reduction in general and administrative costs and
costs related to the annual stockholders meeting.
-8-
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
-----------------
The Company is unaware of any threatened or pending litigation.
ITEM 2. Change in Securities
--------------------
None.
ITEM 3. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
ITEM 4. Other Information
-----------------
None
ITEM 5. Exhibits and Reports on Form 8-K
--------------------------------
There are no exhibits and the Company has not filed any report on
Form 8-K during the quarter for which this report is filed.
-9-
<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.
REGISTRANT
HORN SILVER MINES, INC.
-----------------------
Registrant
DATED: September 18, 1998 By: /s/ John P. Bogdanich
-------------------------
John P. Bogdanich, President
and Treasurer (Principal
Executive and Financial Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Horn Silver Mines financial statements and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Jun-30-1998
<CASH> 3,688
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,688
<PP&E> 14,075
<DEPRECIATION> 14,075
<TOTAL-ASSETS> 4,899
<CURRENT-LIABILITIES> 39,824
<BONDS> 0
0
0
<COMMON> 8,119
<OTHER-SE> (43,044)
<TOTAL-LIABILITY-AND-EQUITY> 4,899
<SALES> 18,000
<TOTAL-REVENUES> 19,492
<CGS> 0
<TOTAL-COSTS> 24,547
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,055)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,055)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,055)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
